UNEMPLOYMENT AND DISTRESSED AREAS.

HC Deb 09 July 1935 vol 304 cc173-301

3.37 p.m.

Mr. ARTHUR GREENWOOD

I beg to move, That this House regrets the failure of His Majesty's Government to produce a considered plan to cope with unemployment and, in particular, their admitted failure to deal effectively with the problem of the distressed areas. We are moving this Motion in all seriousness, feeling that the situation with regard to the unemployed is one which is deserving of the very earnest attention of all Members of the House. Unfortunately, the Government have by their extensive poster campaign misled the country by half-truths, and by a suppression of the truth, which is even worse. Their statements have, I believe, bewildered even their own supporters. These hollow claims which have been made and shouted from almost every hoarding in the country will be proved by the test of time. What is it that the Government claim? Their first claim is that there is more work and more trade. Recently, the Prime Minister in a speech in the north of England, the Chancellor of the Exchequer in the House of Commons, and the Lord President of the Council over the wireless last Thursday congratulated themselves on the extent of industrial recovery in this country. The Lord President went so far as to say over the ether that no other industrial country in the world could show such improvement. [HON. MEMBERS: "Hear, hear!"] Well, we had better look at the facts.

During the period of the severe depression which began in this country towards the end of 1928 or the beginning of 1929 industrial depression reached its lowest point in 1932. Between the beginning of 1932 and the first quarter of this year industrial production in this country increased by 25 per cent. I fail to notice the cheers. [HON. MEMBERS: "Go on."] In the United States the increase was 39 per cent., in Canada 32 per cent., in Sweden 35 per cent., Norway 31 per cent., Denmark 30 per cent., Finland 41 per cent., Japan 38 per cent. [An HON. MEMBER: "What about Abyssinia?"] The hon. Member's irrelevancies do not help his case. He is disturbed by these figures. The only countries where the increase in industrial production was lower than in this country were those which were still on the Gold Standard or had only recently left the Gold Standard, important industrial countries like France, Czechoslovakia, Switzerland, Holland and Belgium. In the case of Germany and Italy, which are only nominally on the Gold Standard, during that period when our industrial production increased by 25 per cent. that of Germany increased by 42 per cent., and that of Italy by 34 per cent. In other words, apart from those countries which still remained anchored to the Gold Standard industrial production increased more in practically every other country than in Great Britain.

The reason, of course, is not far to seek. It is not an accident that those countries which have come off the Gold Standard have increased their industrial productivity at a greater rate than those which still remain on the Gold Standard. I think it is generally agreed that the fact of this country leaving the Gold Standard did a great deal to put a bounty upon our export trade. I want to ask the Government whether they claim credit for being forced off that Gold Standard which they were pledged to defend with their very lives. In the days of the first National Government the real fear, which was voiced by scores of newspapers, was that if the Labour Government had remained in office the country would have been forced off the Gold Standard, the pound would have become worth a penny and the country would have come to ruin. In September, I think it was, when the then Prime Minister was otherwise engaged—I believe he was at his country house and not paying very much attention to the Gold Standard—we departed from the Gold Standard, and the very newspapers which had denounced the Labour Government and predicted the ruin of this country if we went off the Gold Standard then sang great hymns of praise, saying this was the finest thing that had happened since the end of the War. And truly it was. It is the one big factor in the economic situation to-day responsible for the lightening of the economic burden, and it came about not because of a deliberate policy on the part of the Government but because they could not help it. They are now claiming on their posters credit for this improvement in trade, for which they are in no way responsible.

The Government also congratulate themselves on an increase in our exports. The Prime Minister, who must have been badly advised when he made his statement in Yorkshire 10 or 12 days ago, said that our exports were increasing at a time when the League of Nations' statistics showed that world trade is decreasing. If that were true it would be some sign that our economic recovery was a little more rapid than that of other countries, but, unfortunately for the facts, the statistics of the League of Nations are measured in gold values and those of British exports are measured in sterling values. If you translate the gold values of the world trade into sterling values during this period the total volume of world trade increased. I will, however, concede the right hon. Gentleman this point, that our rate of increase was rather larger than that of the world as a whole. We all know that world trade is better than it was three years ago—we are not denying that—but I am going on to say that this expansion of our export trades rests upon a very precarious basis.

The position is a very unstable one. If there were a devaluation of currency in, say, Germany or France—and neither of those things is impossible—if the German scheme to make levies on their internal trade to subsidise their export trade comes into operation—or if there were a cut in wages in the United States and prices in foreign markets were thereby reduced, Britain would be dethroned from her position. She is only in her advantageous position to-day because she has come off the Gold Standard, and if any other nation were to devaluate their currency or to cheapen their prices in foreign markets this temporary improvement in our export trade would vanish. Therefore, we cannot rely on an ever-expanding market for our export industries. Though it he true that, since the lowest point of industrial activity at the beginning of 1932, there has been an expansion of industrial and mining production in this country of 25 per cent., the most important feature internally from my point of view and that of my hon. Friends who sit with me is that there has not been a proportionate increase in employment. Whilst our figures of industrial production have increased by 25 per cent. the volume of employment in those industries has only increased by 13 per cent.

Take the position in the coal industry. There, there has been no improvement in wages during the last four years. The output per man-shift has steadily increased during those four years, but fewer men are being employed in the mines. In the first quarter of this year the Yorkshire mineowners, who are not in the worst of the depressed areas in this country, made a profit of nearly 1s. 5d. per ton. The figures issued this morning show that in practically every town in the West Riding of Yorkshire unemployment is higher than it was a month ago. It is little use the Government preening themselves with satisfaction because this month's figures show a net decrease. In the north-eastern district of this country there was an increase of unemployment last month of 23,000 people, mostly miners. In my division, not a large town, unemployment is up by 2,300 over the figures of a month ago.

The increasing activity in the coalfields, which is yielding 1s. 5d. per ton profit to Yorkshire mine owners, is being paid for out of the misery of miners, of whom there Are fewer at work. When the miners are working, their output is higher for no higher wages. Increasing mechanisation, which is going on not only in the coalfields but elsewhere, and the improvement of industrial processes, are not being capitalised to the advantage of the people in the industries but are being translated into unemployment. The advantages are being thrown away, with the result that in many areas there is an increasing number of people for whom the prospects of work are practically negligible. There has been some improvement since 1932. We have weathered the storm, but not because of the deliberate policy of the Government. It is certainly not because of tariffs and Ottawa. It is due to two primary causes. I defy contradiction in any quarter of the House when I say that what improvement there has been has been due, in the first place, to the fact that we have gone off the Gold Standard, and in the second place to the large resources which, as an exporting nation in the past, we had at our disposal. Our foreign investments have been a very present help in time of trouble. A sentence in the current issue of the "New Statesman and Nation" is worth recording in the records of this House. It is: In comparison with other countries, we have lived well in the desert because we have the largest hump. This country has been largely living on its hump, but even humps do not last for ever. We are not across the desert yet to the fair oasis beyond.

Let me look at the problem rather more broadly. [Hon. MEMBERS: "Hear, hear!"] I know that hon. Members do not like the figures which I have quoted. Perhaps they will not like my next point. The tide of trade ebbs and flows, rises and falls. [Laughter.] Hon. Members may think that is amusing. We may well be at the highest point of the wave upon a receding tide. We are economically much in the position in which we were in 1928, when we were on the crest of a wave. There was then an ebb tide. The tide is not really rising, but the wave has come back and again we are about at the apex. Before the War—I think these figures are indisputable—the general level of unemployment ranged between 2 and 3 per cent. in the best times and 8 or 9 per cent. in the slump times. In the 10 years after the War, the whole range of unemployment in good and bad times was lifted to a much higher level. In the best of those 10 years it was 10 per cent., and in the worst 20 per cent. In 1928 we were at the peak of a trade cycle. I believe we are at about the peak of another.

At the apex of our activities, we nevertheless have a hard core of 16 per cent. of people unemployed. Unemployment, which averaged about 5 per cent. before the War, and in the 10 years after the War was 20 per cent. in the worst times and 10 per cent. in the best times, is now 25 per cent. in the worst times and in the best times does not go down below 16 per cent. That does not indicate any success on the part of the Government in dealing with the hard core of unemployment, which is becoming larger every trade cycle. It may well be that the temporary expansion of trade is nearly at its end, and that we shall enter upon another trade cycle in which the lowest point of unemployment will not be 16 per cent.; it may be 20 per cent. We have probably reached the point when no further impression upon the problem can be made along the old lines.

Another claim made by the Government is that there are more people at work. I am surprised that there is no response to that from the Government supporters. It may seem extraordinary, but it is nevertheless true that there are more people at work than there were in the days of Queen Anne. There are more mouths to feed. Even in the hardest times, the number of people at work depends upon the number of mouths to feed. It is not satisfactory for the Government to say that there are more people at work than there were at the time of the Battle of Waterloo. Everybody knows that that is true. It is no proof of economic prosperity to say that there are more people at work than there were four years ago. There is another side to the matter. There are still 2,000,000 people out of work at any time in this country—

Mr. BATEY

Registered.

Mr. GREENWOOD

Yes. The total figure is, of course, rather higher. That figure contains a kernel of unemployed people, numbering 500,000 and likely to grow, for whom there seems not the slightest prospect of employment in the future. In spite of the increasing number of people at work, there is an increasing volume of poverty and destitution in many parts of the country. The lengthening period of unemployment, especially in the worst areas, causes loss of unemployment benefit, with the result that an increasing number of people have been driven to the Poor Law.

We are entitled to ask the Government to explain why, in this era of prosperity, of dogged cheerfulness, I think the Chancellor of the Exchequer calls it, there is a staggering army of over 1,500,000 people so destitute that they have to go to the local authorities for Poor Law relief. The figures take a good deal of explaining away. During the term of office of the Labour Government, the economic blizzard was sweeping the world. During those two and a-quarter years, although unemployment was increasing rapidly, the number of people who had to have recourse to the Poor Law was fewer when I left office than when I took office in 1929. Since I left office that figure has steadily mounted month by month. In September, 1931, when the first National Government had declared their policy, there were in Great Britain 953,000 people on the Poor Law. In December of last year the number was 1,620,000, an increase of nearly 700,000 men, women and children in a period of expanding trade. So that today in great centres of population like Cardiff and Sheffield one out of every ten persons living there is on the Poor Law. In places largely ruined by the Government's policy like Liverpool, Lincoln and Merthyr Tydvil, 12 per cent. of the whole population of those areas are now on the Poor Law.

Many hon. Members opposite realise what that tragedy means. When at the beginning of this year there was a spontaneous revolt in this House and outside against the unemployment regulations—and the author has now found an easier place in the Board of Education—a good deal of the fight was made by Conservative Members of this House who came from distressed areas. They knew that large numbers of our people in those districts were the victims of economic circumstances over which they had not a shred of control. They anew the hard lines in which their lives lay. They knew that injustice was being done to them and they rose, I may say very courageously, to demand, with other people, that the Government should change their policy. Whatever may be said on hoardings about the increased number of people at work, they cannot obliterate the growing misery of the distressed areas. In spite of what the Prime Minister has said, the Government have not been lacking in paeans of self-adulation. I think, on the whole, they have done it very well. The Prime Minister told us in his speech at Bramham Park that he wanted to take stock, because people really did not know the wonderful things that were being done by the Government. He went on to say: The fault, I think, lies perhaps in our speeches more than in our actions. We are, though I say it myself, a very good orchestra and we always play in tune. But we have hitherto lacked good trumpeters, and I am one of the worst performers on that instrument that ever was made. I am going to try a little bit and perform on it this afternoon. On the previous Monday I was addressing a large meeting of miners. He could not have got away with that story at the Yorkshire miners' meeting. His trumpeting would not have succeeded. Of course, what the Government are trying to do now in their waning months or weeks of office is to fan the smouldering embers which they ignited with all the fears they let loose in 1931. The truth, of course, is that the Government have not, and never have had, any coherent policy for dealing with this problem. They do not even see eye to eye as to the seriousness of it. I will give the Prime Minister credit for being really perturbed about the situation. He has said so more than once, but that does not accord with the complacency of the Chancellor of the Exchequer. When we had an historic Debate in this House on the reports of the investigations into distressed areas, when everybody was shocked by the disclosures of the three men appointed by the Government, two of them Members of the Government, the Chancellor of the Exchequer said: Although in the present case we need not describe the disease as desperate, it certainly is sufficiently exceptional to warrant exceptional treatment."—[OFFICIAL REPORT, 14th November, 1934; col. 1995, Vol. 293.] The disease is not desperate with him, but it is with 2,000,000 of his fellow-citizens. When he goes on to say, on the 14th February of this year: Of course, there can be no satisfaction with 2,000,000 unemployed."—[OFFICIAL REPORT, 14th February, 1935; col. 2211, Vol. 297.] he is showing a cynical disregard for the seriousness of this problem, which ill accords with the responsibility of a Member of a National Government. I could quote from further speeches to show that right hon. Members opposite do not even agree about the seriousness of the problem, and they certainly have not put forward any considered coherent policy. The right hon. Gentleman the Prime Minister said he wanted to take stock when he spoke at Bramham Park. He said: I want to do this particularly because many people, even among our friends, talk as though the work of the National Government was not co-ordinated, not planned, without design, happy-go-lucky. That is the charge which we make against the Government. The very first step which they took to deal with this problem of unemployment was the very old one of compelling the poor to economise, and cutting down the public services, and there were the most ruthless economies in schemes of production which would have added permanent assets to this country. There are hon. Members, supporters of the Government, who believe that that economy in public expenditure was unwise, very largely because it further contracted the purchasing power of the great mass of consumers, on whom the prosperity of this country must ultimately depend. Their next adventure in this sphere of policy was through the confused welter of tariffs, quotas, levies and goodness knows what. It is perfectly true that the Tory party have long been wedded to this policy. It is equally true that they had net the courage to apply their principles until they were able to exploit a national crisis for their own party ends under the guise of a National Government. They have given us all these tariffs, and the Chancellor of the Exchequer was chortling only last Saturday that Free Trade was finished for ever in this country. In 1924 the Tories said they had a positive remedy for unemployment, and that remedy was in a revolution of the fiscal system. They have got it, and what is the position to-day? It simply is not a cure. It is not even a poultice.

Look at the position in agriculture. Goodness knows, no industry has been more favoured by this Government than agriculture in all kinds of ways. The Prime Minister said in his last public speech outside the House that agriculture had been neglected for generations. His party have been in office during those generations. Money has been poured out literally by millions to farmers, a good deal of it creamed off by the landlords. But what is the position in the countryside? Are the agricultural workers one penny better off? [HON. MEMBERS: "Yes!"] I hope some of my friends will quote agricultural wage rates during the last four years. Are the agricultural workers any better housed than they were in 1931? [HON. MEMBERS: "Yes!" and "No!"] I hope some hon. Member opposite will obtain from the Minister of Health the number of agricultural workers' cottages which have been built to let since 1931. I can tell them of 38,000 rural cottages which have not been built. I can tell them of the last Act which the late Labour Government put on the Statute Book for 40,000 rural cottages, and this Government has not built 2,000. I can tell them they have robbed the rural workers of houses they might have had but were abandoned to balance the right hon. Gentleman's Budget by stealing £2,000,000 intended for the countryside. Has agriculture gained in the field of employment? It has not. There are fewer people on the land than there were. For all this policy of tariffs, quotas, levies and all those contributions which are to inure to the advantage of the farmer, there is nothing to show for the common people who work in that industry.

Does anybody suppose that this policy of insane economic nationalism has helped the coal miners? It has not. Does anybody believe that the shipping industry is any better off because of this policy of economic nationalism? This Government is acting day by day a whole series of contradictions. Its left hand does not know what its right hand doeth. The Minister of Agriculture is doing his best to help the farmers here, and is very much embarrassing the President of the Board of Trade. The Minister of Mines, it is admitted, is trying to help the President of the Board of Trade by the increase of coal exports, but the Secretary of State for the Dominions, by a silly little economic war with Ireland, is injuring both the President of the Board of Trade and the Minister of Mines. This policy is not a coherent policy; it is a policy for which fantastic claims have been made by the Government, but which certainly cannot be substantiated, and, indeed, now nobody dare get up on that side of the House and defend all these policies on their merits. They only say, "Protection is the one thing we can do to get other people not to do the same kind of thing." In an article in the "Times" yesterday this point was brought out. It was said A general tariff on imports obviously confers upon areas like Greater London or Birmingham, manufacturing largely for the home market, an advantage compared with towns like Swansea or Oldham, relying largely on foreign markets. Our return to the gold standard in 1925 had the same effect in penalising exporting areas: since 1931 devaluation has remedied this, in so far as it has not been offset by heavier devaluation oversea, or by tariffs, quotas and exchange restrictions. In other words, in the view of an apparently well-informed writer in an organ which invariably supports the Government, the effect of tariffs and quotas has been to restrict the total field of employment rather than to increase it. Having regard to the seriousness of our export trade, I am certain that nobody will pretend for one moment that there can be any direct improvement of our export trade by trying to keep imports out of this country. Sir Arthur Salter, in an article in the current number of the "Economist," writes: The expansion of internal activity, with the increase of employment which it has secured, has not, indeed, reached its limit, but its future progress must at the best be slower and more difficult. The greater part of our present unemployment is centred in our export industries, or industries dependent upon them. The process of transfer from them becomes increasingly difficult. If our export trade (which has lost about a quarter of its volume) could be restored, we might halve our unemployment figure. If it remains at its present level, still more if it further declines, we must probably be content for many years with an unemployment figure that is nearer two millions than one. This policy of quotas and tariffs is designed, and deliberately designed, in the interests of home producers here, to restrict our export industry. Tariffs, we claim, have failed. We never believed that Free Trade would bring in the economic millenium, but we are certain that tariffs and doles will not. As to the dole policy of the Government, I do not remember any Government in modern times that has squandered more money on the big vested interests than the National Government. It measures national prosperity by its effect on its own friends. Industry after industry has come on the dole, without any kind of humiliating conditions—without any family means test. It was sufficient to say to the Government, "We are in a very hard way; things are bad with us," for the Government, out of the kindness of its heart, to provide hard-earned money earned by other people, to assist these big industries.

It is not the masses that have been the Government's consideration, but the classes. The masses have been the last people to be considered. This bounty which the Government has so generously bestowed on landlords, farmers, shipowners, and all those other persons who are on the dole without a family means test, has not trickled through to the pockets of the masses. Where it has trickled through at all, it has been a very thin trickle; the majority of the advantage has remained in the pockets where it was put. As a result of the tariff policy of the Government some of it has come out of the pockets of the poor into the pockets of the well-to-do. Indeed, in so far as this Government has a policy, it is a policy for the penguins, and not a policy for the people.

The distressed areas are not, of course, a special problem, but they happen to be the high light of the problem of unemployment. On that the Prime Minister himself has admitted that the Government have failed, though it is true that he says, "We must do something more about it." What the Government have done about it is not much. When the new Minister of Thought—he was not Minister of Thought then—spoke, at the time when the Depressed Areas Bill was before the House, he had not very much opinion of the £2,000,000 which was going to be distributed. Indeed, he said that the real charge against the Government was that they had confined the Bill, introduced, as it was, with something of a flourish of trumpets, to the smallest part of the problem. It is not the smallest part of the problem, but it is equally certain that you cannot solve the problem of the depressed areas by sending commissioners with grants to spend money on tidying up slag heaps and building hospitals that ought to be built by local authorities, but cannot be because they are so impoverished. We look forward with interest to what the right hon. Gentleman may have to say with regard to his policy for the distressed areas. The Government at heart, on the larger issue, really believe that, if they could only let things alone, things would come out all right, and their interference has been confined to shoring up the crumbling foundations of a system that is no longer working very well.

A new economic revolution has been taking place, and the Minister of Thought will no doubt be able to hold a kindergarten and instruct members of the Cabinet upon it, because he spoke of it in the House of Commons during the debate on the distressed areas. A great economic revolution is taking place today. The old one of a century and a-half ago nobody understood, and the people of this country had to pay a very heavy price for it. There is no excuse for not understanding this one. The situation to-day is that our powers of production have outstripped that social organisation which might be used to enable consumption to keep pace with production. That is the real problem. The situation is that, with this enormous capacity to produce, we shall never again need art industrial army of the size of the one that we had in the past. We have, therefore, to deal with the problem in two ways, and the Government, in oar view, have neglected both. There used to be an International Economic Conference. Nobody has heard much about it for a long time, but it is certain that the policy of economic nationalism in which this country is playing a prominent Part is no alternative to honest international economic co-operation on a common problem that is afflicting mankind as a whole. We should like to know whether the Government intend to do anything in that field of economic co-operation and economic planning which everybody now realises is essential in dealing with this problem.

At home we have a problem which may be put in two different ways. We have the problem of poverty in the midst of plenty, and the problem of translating unemployment into new leisure for the people. Unemployment can only be translated into leisure by reducing the strength of our mobilised labour army. It can only be done by shortening the working life, by shortening the working week, by shortening the working day. It is right that this power to produce, when it is used, should be reflected in higher standards of leisure for the people. What have the Government done about the raising of the school-leaving age? Nothing. They have funked this question. The Parliamentary Secretary only this week—yesterday, I believe—said that they were waiting for public opinion. It is time, if they realise the problem as we realise it, for them to focus and educate public opinion on this question.

Seeing that we are now on the high road to a new prosperity, seeing that the Chancellor of the Exchequer has been able to hand out little doles here and there in his Finance Bill, the Government might spare a little of their thought to demobilising industrial workers at an earlier age than at present. That could be done if the new forces of plenty were released, instead of being damped down as they are by this Government. The attitude of the Government on the question of a shorter working week is a disgrace to a great State. Their bitter opposition to the proposal at Geneva for a 40-hour week cannot have increased the prestige of this country among the workers of the world, and certainly not among the workers of this country. I am not going to pretend that demobilisation of part of the labour force, either by a higher school-leaving age, or a lower pension age, or a shorter working week or day, will completely solve the problem, but at least it will convert into honourable leisure what is now degrading unemployment that is breaking the spirit of 2,000,000 of our people. But there is a larger problem, and in this connection I would like to read a paragraph from the last annual report, published this year, of the Director of the International Labour Organisation: This demand for Government action has been reinforced by the patent fact that the present scarcity is due not to any failure of nature but to a human failure to make the products of nature available to those who need them. … Nowadays the problem of shortage has been solved by science and the pooling of the world's resources. Not only need no one starve, but there is actually a super-abundance of food and raw material in relation to the visible consumption. The farmer is unable to secure the just reward of his labour, although millions are starving or grossly under-nourished for want of the supplies which he has actually placed ready to their hands. This paradox has sunk deep into the popular consciousness, and has probably done more than anything else to destroy popular faith in the economic system. The argument that where plenty exists its proper distribution to the best general advantage can and should be effected by human forethought and organisation is really irresistible. That it should be left to the caprice of some obscure law, which apparently does not function, does not seem tolerable, particularly in the light of the spectacular triumphs achieved by science and method in other spheres of human activity. I do not believe that any Member of the House will disagree with that analysis. The report goes on: It therefore now seems reasonable to expect Governments to devote the same energy, ingenuity and attention to the provision of the elementary needs of feeding, clothing, and shelter on a civilised scale as to the provision of air communications, wireless services and elaborate systems of national defence. That, I think, is one of the most damning indictments of the existing economic system that I have ever read. It is important because of its courageous indication that we have to do things in a different way, and to concentrate on different purposes, if we are to get rid of the spectre of poverty and the perpetual spectre of unemployment in our midst. The Government have not done these things. They will not do them. They have neither the inclination nor the courage to do them. They have never shown any originality. There is not one single original idea that the Government have brought forward and put into practice. It may be that they will go back to a modified scheme of development, but that will not be a cure for this situation. The only way to get out of it, however difficult it may be, is for the Government to go back on their track and have the courage now to see that the system is not producing the goods but is producing unemployment on a very large scale as an essential factor. There is no way in the immediate future on the old lines of reducing unemployment to the old level. It is because of that that we think the Government ought to be censured. They ought to be censured because they are living in a world which is not the world in which the common people are living to-day, because they are clinging to the old ways in new times and because, in spite of all their vaunted courage, which was the courage to defend the existing propertied classes, they had not the courage to adventure into the new world which is now being born. The agony of mind, the gnawing sense of hopelessness among hundreds of thousands of our people, and the lack-lustre eyes of the growing generation cannot be tolerated.

We cannot go on like this. Even the sufferers themselves, broken spirited as they are, will not tolerate it for ever, and the others will not continue to allow 7,000,000 or 8,000,000 people, the unemployed and their descendants, to be consigned to penury and the dwellers in the distressed areas to a hell upon earth. They proved it in January of this year, and it rests heavily on the Government with their great majority, and their new lease of dying life, to do something now. They have exploited the Gold Standard, they have done their best to dam up all the great channels of trade, but they have found no remedy. We know now that, in spite of all the extravagant claims that have been made, the preposterous claims on those enormous posters that are defiling the countryside, they have failed to solve this problem. We know that they have not destroyed that cancer that is destroying the hope of this generation and the lives of the next and, what is even more, destroying the sense of self respect of the nation as a whole. It cannot be that people in this House can look at that spectacle with any degree of complacency. There is not a Member of the House who in his heart of hearts is not ashamed. The Government have no remedy. They came in on a great wave of fear. They came in having aroused hopes which they have not been able to satisfy. They came in claiming that they, this Ministry of all the talents, had sufficient combined knowledge, wisdom and inspiration to deal with this problem. They have lamentably failed. I close with these words which I read in the early hours of this morning in my bedside book, written by G. K. Chesterton, called "An election echo, 1906." The first verse reads: This is their trumpet ripe and rounded, They have burnt the wheat and gathered the chaff, And we that have fought them, we that have watched them, Have we at least not cause to laugh? This is the last verse: Five years ago and we might have feared them, Been drubbed by the coward and taught by the dunce; Truth may endure and be told and re-echoed, But a lie can never be young but once. Five years ago, and we might have feared them, Now, when they lift the laurelled brow, There shall naught go up from our hosts assembled But a laugh like thunder, we know them now.

4.37 p.m.

The PRIME MINISTER (Mr. Baldwin)

The task to which I have to apply myself this afternoon is justifying, so far as I can, the actions of the Government in the light of this Vote of Censure which has been put down and to which the right hon. Gentleman has spoken. Once again I am reminded of the wise words of a Member of another place, who for many years was with us, and who said that in his advancing years if one thing struck him more than another it was not so much the diversity of testimony as the many-sidedness of truth, and it is to certain aspects of the truth from the sight of which the right hon. Gentleman turned away his head that I wish to call the attention of the House. We are being censured I see, first of all for having no considered plan. I have never been the slave of a word—I think you may make great mistakes by being a slave of a word—but there is a word which is being rather ridden to death today, and that is the word "plan." I have seen nothing of planning in any foreign country which would lead me to think that it is a universal panacea. The word "plan" itself seems to me rather to take the place of one that was very much in vogue three or four years ago, and that is the word "rationalisation." But I like "plan" better because I always prefer a monosyllable to a polysyllable.

I do not know exactly, either, what a "plan" is. Some kinds of plan exist in books and pamphlets undertaking to cure unemployment. I have never promised to cure unemployment, and I am sure if I ever had said it the right hon. Gentleman would have dug it up. I have taken risks on unemployment which many of my Friends perhaps thought very foolish. I threw away office and I threw away an election, as it turned out, because I was convinced, as I am now looking back, that among the things that were necessary to help to check the growing unemployment a tariff was a necessity. But a complete cure—that there shall be no unemployment—I have never promised, and I have never suggested. I do not promise it now, I shall never promise it on the platform, and I will never stand on a platform with anyone who does promise it. We have not had a plan in that sense, but we have had a policy. The right hon. Gentleman has denied that, but it is one of those aspects of the many-sidedness of truth to which I will call the attention of the House, because I think I can show that by our action during the time since we have been in office we have made a considerable contribution, and hon. Members must remember what the circumstances were at the time when we were asked to make that contribution. That was one aspect of the truth which the hon. Gentleman did not deny but which he ignored. It was not so much the tide that washed us in. It was the tide that washed him and his friends out of office, and it left such a mess on the beach that it was all that we could do to clear it up.

The right hon. Gentleman only referred for a moment to agriculture. By the terms of the Motion this matter deals primarily with industrial problems, and there will be opportunities for discussing the agricultural queston on another occasion. The right hon. Gentleman seems to think that undue attention and undue financial help has been given to agricultural areas. The agricultural problem is perhaps, I will not say the most difficult, but just as difficult in its way as the industrial. It has been extremely difficult to stem the rot that has set in in an industry exposed to unlimited competition in a world where the prices of primary products had fallen almost to zero. But whatever can be done in the agricultural areas even to hold the position so far as those who work in those areas are concerned we must remember, serves a two-fold purpose. It saves the constant drain from the country into the town of men seeking work, and the greatest tragedy of all is that when these men go into the towns to seek work it is in most cases taking away a skilled man and leaving him to compete for an unskilled job.

When we assumed office now very nearly four years ago, we found the foreign trade of the country contracted, we found that unemployment had been increasing and was increasing at an alarming rate; we found the financial position of the country precarious and increasingly precarious, and we found growing throughout the country a lack of confidence which, in itself, was doing a, great deal of harm and helping to create the very conditions in which recovery was made more or less impossible. Therefore, our first task—and a very hard task it was—was to try and improve the general condition of the country. The steps taken are well known to the House. They were steps that required a good deal of courage to take, and they were steps which we thought at the time would be highly unpopular, but they were necessary, because the first thing to do was to balance the Budget and restore the financial position. The result of the work of my right hon. Friend the Chancellor of the Exchequer, supported at all points as he was by the Government, through those early months and early years, was to bring our finances in this country into a more stable position than they had been for sometime.

We have been able, in addition to obtaining the balanced Budget, to make certain reductions of taxation and to give back to the people of this country the cuts that were made, the cuts which they authorised being made by their votes at the last General Election, to give them back now in toto. When you look back at what the finances have been able to do, at the increase in the retail sales of this country, which shows how gradually the stability of the better finances of this country is percolating through all classes of this country, you can see that at any rate that policy is justifying itself in its own process. It is quite true that there is nothing new about the basis of the policy which we have been pursuing. We have been bathing in Jordan rather than the rivers of Damascus. [An HON. MEMBER: "It is the other way round!"]

The result of our policy has been to create that atmosphere of confidence without which we do not believe that capital will be invested and that new work will be indulged in and that therefore by the fresh use of capital and new work employment may be effected; and in our view there has been no other cure that could have been directed to this object than the cure which has brought about these conditions of confidence and has made it possible for the employment of fresh capital and labour.

After securing the balancing of the nation's finances, there were other directions in which our policy moved. The balancing of the Budget we regarded as quite essential, but we had three main tasks to which we devoted ourselves in the first two years in which we were in office. There was the attaining of a reasonable degree of security, stable conditions in the home market, and we employed towards that end the imposition of a moderate tariff. There was the development of overseas markets, which we concluded could be assisted by the agreements we came to at Ottawa and the agreements we have made since with foreign countries. With regard to the change of fiscal policy in 1931, I think there was a general agreement that, quite apart from what the effect of that change of policy might be, it was rendered essential to combat the growing and dangerous adverse balance of trade. The balance of trade at that time was very adverse; it was growing very rapidly, and the most immediate and drastic means which could be employed was the tariff. The home industrial and agricultural situations have now certainly got a more stable market than they had before the imposition of the duties. I think that there is no doubt that a large part of the agricultural industry and a very large part of our industrial activities now hold the predominant situation for the the first time in the markets at home.

With regard to Ottawa, the House may remember that when we returned from Ottawa in 1932 I expressed the view in this House that it would be some time, a year at least, before we could feel any effects from the agreements that had been entered into. That indeed was the case. Our intentions at Ottawa were to stimulate Empire trade, to reduce the internal barriers within the Empire, and our main contribution was a very considerable one. We gave free entry into the United Kingdom, entry free of all duty for a whole range of goods from the Dominions and from India which otherwise would have been liable to the general duties which were imposed by Parliament under the new tariff. And to help the Dominions and India in certain cases we put on specific duties, new or increased, and the Dominions in their turn and India reduced their duties on a considerable line of goods coming from these islands. Perhaps the most interesting feature of Ottawa was that it was the first occasion on which by free negotiation Indian delegates representing Indian industry and commerce accepted and acted upon the principle of Imperial preference as between India and the other component parts of the Empire.

The Ottawa Agreements have been in force long enough, I think, for us to form a preliminary judgment, and I think that the general feeling of the House will be that they have played their part—not so large a part perhaps as we hope and believe they will in the future—in helping us through this most difficult time. Between the tariff which was put on, I think if my memory serves me, in 1931 and 1934 the imports into this country from the Dominions who made agreements under the Ottawa Agreements increased by £30,000,000 and similarly, if we take the year 1932, when the advantages given us by the Dominions first came into effect—between 1932–34, our exports to the Ottawa Dominions increased by £26,000,000. There you have that gradual growth of the British inter-Imperial trade which Ottawa was designed to foster, and it is, as I have often said before in this House, a foundation on which we may hope to build a good deal more in the years to come. The agreements are working better than they have been. I think that we are getting to understand each other better, and there is a more general desire on the part of all the countries in the Empire to develop Empire trade both in and out of these islands to the utmost possible extent.

We have employed the tariff instrument wherever possible, and we shall continue to do so. We followed Ottawa by a certain number of bi-lateral agreements made between this country and other countries. In the absence of a general tariff, I think the House will agree, agreements of this kind would have been impossible. Attempts have been made before the existence of a tariff to get agreements, but I am not aware of any in recent years that have been carried through with success. The creation of a tariff in this country brought home to foreign countries as they never realised before what the value of the British market is to them, and they have been willing in many cases to pay a certain price to get their share of that market. We have made agreements with 17 countries in the last three years. The benefits which we have obtained include certain reductions in foreign tariffs, certain undertakings to buy British goods, restrictions of the existing quotas, in one or two cases the payment of old debts, the provision of exchange and concessions on coal. It is very interesting, because that was referred to by the right hon. Member for Wakefield (Mr. Greenwood). The figures are not very large, I agree, but it is a start, and it is well known that one of the greatest difficulties in regard to trade in some of our most depressed areas comes from the fact that they have been so dependent on export trade and shipping. We find that with countries that have made no agreements on coal with us, in the two years ending last year the export of coal declined by 1,750,000 tons. We find that with the countries with whom agreements have been made in the same time there has been an increase of 2,500,000 tons. That is not large, but in that trade which has been so upset by world conditions, by international division, even when a bad tendency is checked, even when it can be turned round by only the smallest amount, that is something that we may be glad to see and to try on similar lines to better.

We have had guarantees for fairer quotas in trade generally—and we have been hit very hard by quotas—from Holland, Italy and France. It is interesting to see that these agreements—and there has been a good deal of criticism of them, in the House—are justifying themselves. I admit again that the figures are not very large, but they are in the right direction. I find that in the first quarter of this year the exports are up £4,500,000 with countries with whom we have made agreements compared to what they were in 1933 when there were no agreements with those countries. That represents a 20 per cent. increase—I do not like dealing in percentages because very often they are misleading; it all depends on the figure from which you start—whereas the increase in exports to all other countries with whom we have made no agreements is only just over £2,000,000, or 7½ per cent. The volume—I do not use value here, because volume is in some ways a safer test—the volume of world trade last year barely exceeded that of the year before, but our increase was 7 per cent. on our export trade—in a world trade that was practically stationary. In the first quarter of this year we are up by a large percentage on what we were two years ago. That increased bargaining power which the tariff has given us we have used to the best of our ability, and we shall continue to use it.

I want to make an observation here on cheap money. By the conversion of the 5 per cent. loan and other conversions that have been made, we have saved the country £38,000,000 a year. The reduction in rates on short-term money taken together with the savings on conversion have reduced the cost of management of the National Debt by 20 per cent. in the last four years. These savings, of course, represent an enormous assistance to the country, and that assistance is being obtained very largely now with the cheap money which we are beginning to utilise and which I hope in future we shall utilise much more. Conversions also of the higher-priced loans have taken place with regard to the Dominions and the Colonies and the local authorities, and in industry too, and I have been assured to-day that a good long-term bond in industry can obtain the money one-third cheaper than at any time since the War. This has been, and will be, an enormous help in housing, and it is of enormous help in providing the means of new capital subscribed. By new capital, I mean new capital and not conversion money, and, while new capital subscribed has not yet got back nearly to the figure at which it stood in the middle twenties, yet it has recovered considerably from the very low figure at which it stood about three years ago. During the last 12 months over £167,000,000 was raised, all of which, as I understand, may be classed as productive capital. In all these ways our aim has been as far as possible to get people back to their ordinary trades and into industry, because in our view, as we have always held, it is far preferable if that can be done to keeping men on relief work. We have, as a matter of fact, about 1,000,000 more in work than were in work four years ago, and 308,000 more than were in work at the time of the last Vote of Censure.

We claim that by a certain policy, closely adhered to and faithfully followed, we have helped at any rate to bring about, if we have not entirely brought about, a great improvement in the conditions of this country, and I should like to know at this point what His Majesty's Opposition are going to do about it if they are returned to power. The right hon. Gentleman reminded me that there will have to be a general election. He named no time, but we will assume that it will be within a year or two, and then he and his friends will have to tell the country whether they are going to continue the methods, which we claim up to this point have not been without success, or whether they have a remedy which is either going to put everybody into work or bring about a first-class crisis. No doubt the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) will tell us when he comes to speak, and also whether the programme is an authorised one or a tentative one. I challenge the hon. and learned Gentleman to show that any country in the world has made more progress during the last three or four years than this country. To maintain progress is not at all the same thing as being complacent. I have never been complacent since the War; I may have been before the War, but never since the War.

I do not want hon. Members in this House to imagine, when I am placing before them the good things that have resulted, as I believe, from our policy that I am content, or that I feel that we have yet half accomplished the task that was set us four years ago. But I do maintain that it is difficult to visualise that more could have been done in those four years when you have regard to the conditions under which we started. The general business improvement is shown, I think, by various official indices. The index of production, if you take it at 100, 11 years ago, was up to 97¼ in 1932, and last year it rose to 117.4, the highest figure recorded since those indices were prepared. The iron and steel production, which fell after 1929 to a very low figure, is now rapidly running up towards the 1929 figure, and I think that the results of the arrangement made with the general cartel are results of immense value to the trade and labour of both the iron and steel trade and the mining industry.

But I would like here to say a word or two on what the right hon. Gentleman said at one part of his speech about the want of stability in the situation. I think that possibly, and naturally in his position, his facet of the many-sided truth was what might happen if things came to their worst. The instability of the situation in any country to-day is the instability that arises from world conditions, the instability that arises from currency conditions in other countries and from a hundred and one other causes. It is the unsettled state of the world as opposed to the comparatively settled state in this country that makes us feel that it may well be that before we get very much farther there is always the possibility of some check coming from some unknown and unexpected quarter. But that makes it surely all the more necessary that we should take the utmost care that no step be taken in this country at least which could damage the national credit either externally or internally. Any damage to the internal national credit might demolish, or, at any rate, diminish that very confidence which exists to-day in business and which we believe to be one of the most hopeful signs. It was that alone which created the environment in which a continuing activity of business may be found, and anything that shakes externally our credit may set causes into action not dissimilar from those which caused us almost irreparable damage four years ago.

That brings me, of course, to a point that has been very much disputed among Members of the House and on which different opinions are held. In our view, as has frequently been expressed by the Chancellor of the Exchequer, a lavish expenditure, for example, on public works could be justified only if it gave such an incentive to industry as would at, the same time enable the country to bear the burden and also would create such a momentum as would give the necessary volume of employment when the expenditure came to an end. We have seen in another country, and a very great country, an attempt at State expenditure of unprecedented magnitude. Some good and useful results are observable, but it does not appear to me that up to the present it has succeeded in producing the desired natural revival of industry. We have always doubted whether State expenditure—and I would remind the House that experience shows that it is necessary to spend at the rate of £10,000,000 a year for each 40,000 people that you want to employ—on the lavish scale that would be necessary would in fact bring about a revival of industry, and we are convinced that such expenditure would be disastrous if it failed to bring about that revival. Again I repeat, we have tried to create conditions of confidence, of security and of cheap money, conditions in which, as we believe, the ordinary activities of the country will grow and spread so long as those conditions last. That does not mean—and you can tell from the actions of the Government—that we are unwilling to see money spent. Indeed, the contrary is the case.

I rather stress the use of the words "lavish" and "public works." As the House knows, we have assisted the building of the "Queen Mary," and we made that conditional on a reduction of wasteful competition in the Atlantic trade. We have proposed subsidies to tramp owners conditional upon reorganisation within the industry and upon strong efforts to agree with the foreigner as to redundant tonnage. We have proposed loans to cargo owners for the reconstruction or modernisation of ships conditional on the scrapping of old tonnage. We have proposed an Exchequer guarantee to aid the Lancashire scheme on the question of redundant spindles, and we have guaranteed the principle and interest of the London transport schemes which are at present before the House. I would like, on that, to say that we sympathise with the views that were put forward in the House and expressed by Members who represent large areas of London where they would be glad to have similar facilities, and we have appointed Sir Charles Bressey, helped by Sir Edwin Lutyens, to make a complete review of the highway planning of London. That in itself will be a most valuable jumping off ground, I hope, for further schemes for the development of London transport. If I am correctly informed, the last individual to draw up a plan of London highways was Sir Christopher Wren, and I think that London has suffered a good deal because his schemes were not adopted at the time that they were proposed. There is a clause in the agreement under the London transport scheme that in the execution of the work all plant, machinery and material as far as possible is to be of home make, with preference, other things being equal, to the specially depressed areas.

I desire to say a few words on that most difficult aspect of the problems that lie before us, the areas themselves. That conditions were likely to be peculiarly difficult in South Wales, in Durham, in Cumberland and in parts of Scotland I think was known to everyone interested in these things, socially or politically, soon after the termination of the War. Since 1922 successive Governments, including two Labour Governments, have had to consider this problem, and it yet remains, in spite of very slight improvement, perhaps the most difficult and most obstinate problem which can confront a Government. We ought to remember that the general improvement so far as it has gone has touched these areas. Since September, 1931, the total number of unemployed persons on the registers of the employment exchanges in these areas has fallen by 65,000, and the fall since June, 1932, which was perhaps the worst period, amounts to over 100,000. But that leaves—I do not shirk this question for one moment—far too large a number unemployed, and I shall give a few figures on that before I have finished.

I want to say a few words on a subject which was discussed in 1928, or I think in 1929, but which has not been discussed much later, and that is the question of transfers. I want to discuss it, because I do not think it has been debated in this House for some time, and there are certain things in connection with transfer which I should like to put forward, and no doubt Members will be prepared to debate the question. The transfer policy, as it was called, was introduced about 1928 or 1929, but it was almost dropped by the Labour Government in 1929, and then, as the right hon. Gentleman said, the blizzard came with such swiftness that I doubt if any transfer at that time would have been possible. It is only lately that the transfers, which have gone on quietly all the time, have been obtaining a rather more prominent place. It was never claimed—I want the House to remember this—for the transfer policy that it added to the total number of persons employed, although it could very well be argued that on balance it did, but what was claimed for it was that it gave a reasonable measure of priority of employment to a man or boy from an area where not only were his own chances poor but where other members of the household might also be unemployed. The policy is based on the divergence between the severity and the nature of unemployment in different parts of the country. We must remember that in some districts unemployment is well below 10 per cent. while in some towns in the depressed areas it is as much as 50 per cent. The contrast between the position in the different areas is not only in regard to the numbers unemployed, but in regard to the time of the unemployment, which is one of the gravest factors.

Here are one or two figures. At the end of May there were 107,000 men claimants in the North Eastern Division, over 70,000 in the North Western Division, and over 65,000 in Scotland and Wales who had been unemployed for 12 months or longer, which compares—here is a very remarkable figure—with only 10,000 similar cases in the whole London area, with 3,000 in the remainder of the South Eastern area, and with 10,000 in the whole of the South Western Division. A considerable volume of transference occurs naturally without the interposition of the Ministry of Labour, and, indeed, without their direct knowledge. For instance, large numbers of Welshmen, in addition to those transferred through the exchanges, are known to have gone to Kent and found employment in the Kent coalfields. This, again, is illustrated by the Registrar-General's estimate that for the two years 1931–33 the addition to the population of Greater London by migration was approximately 115,000, and over 250,000 were added to the population of the South Eastern area.

The object of industrial transference is to supplement the undirected movement of individual workmen from the depressed areas by the use of the machinery of the employment exchanges, and I do want to impress upon the House that regard is paid to the local position. The exchanges do not seek to transfer people into areas where numbers of workpeople of the same grade are unemployed. The steps taken to encourage and facilitate transfer are special facilities by the employment exchanges, training at the training centres, financial and other assistance in the removal of families, furniture and so on. All these various forms of assistance have been devised to meet the needs of men who have been reduced as to their resources by long terms of unemployment. The arrangements are constantly being reviewed, and we are only too anxious to see in what way further assistance can be given.

Very substantial assistance is available, and it is being used. Again, I want to repeat that transference does not consist, as is sometimes supposed, of attempts to settle persons in new areas in the mass or without regard to the unemployment position. It is a carefully fostered movement of individuals to suitable vacancies in districts where the local position affords openings for them. In 1932–33 transference fell off for obvious reasons, but in 1934 it improved, and this year there is a marked further improvement. I hope that both the London Transport scheme and the expansion of the Air defences which we have been obliged to sanction will find employment for suitable men from those areas, and I appeal through this House to employers generally to make use of the exchanges and to give the officials there an opportunity of submitting men and boys from those areas.

The Motion talks of an admitted failure. I have used the word "failure" Myself—I am supposed to be rather frank in my expressions—and when I have regard to the figures that I have read out from those areas and I compare them with the figures that I have read from other parts of the country I do say that in those areas we have failed to bring them up to anything like—

Mr. BATEY

Or to do anything.

The PRIME MINISTER

We have done more than the Opposition did when they were in power. The talk of admitted failure applies in some degree to every Government that has been in office since 1922. I hold very strongly, looking back and putting oneself in the position of 1931, that no one could have foreseen the improvement that has come about in most parts of the country in the short space of four years. We all know that the depressed areas are particularly affected by the export trade, which is the slowest to improve, and by the shipping trade; yet we did hope, and we looked for something approaching the same success in those areas, but we have not yet achieved it. We shall shortly have at our disposal the reports of the Commissioners of the various ways that they have been able to devise, and we shall have an opportunity of examining and I hope of utilising whatever schemes of development and amelioration they have been able to suggest. I have not yet seen the reports myself. Whether they will give us all that we hope for or not, I do want to express thanks to these men who have been carrying out for some months a task of extraordinary difficulty and extraordinary complexity.

Mr. LLOYD GEORGE

Can the right hon. Gentleman say when the reports will be available?

The PRIME MINISTER

I think there will be a question about the matter in a day or two. I hope they will be available quite soon. I understand that proofs are now being put into type. I have not yet seen them. Our desire is to publish them as soon as we have had time to read them. In a day or two I hope my right hon. Friend will be able to give an answer as to the date. My right hon. Friend now says that it may be in the course of next week. I am most anxious that the reports should be published. There is one point that I should like to make about these areas, and it is this. I do regret the fact that none of the new industries which have come down to the London area have thought fit to establish themselves in one of the depressed areas. I cannot see yet how we can bring the Government in by any form of direct action; it would be novel work and might bring in its train many difficulties, but I do appeal with such power as I am able to the men who are undertaking and laying down new works to show their gratitude to the country for protecting them with a tariff by doing something in exchange for the country and going where the country needs them most, and that is in these areas. There is room there, there is labour, both skilled and unskilled, transport, choice of sites and every facility that man can desire.

Sir HERBERT SAMUEL

Does the right hon. Gentleman include Lancashire in that appeal?

The PRIME MINISTER

I should be only too pleased to include Lancashire for any industry where the work of people whose hands have been used to handling delicate machinery and products of various kinds is required. For them there could be no more desirable spot than Lancashire. The same remark applies mutatis mutandis to any hon. Member who may mention his own constituency. I am afraid that I have taken a rather long time in trying to show the House the way in which our industrial policy since 1931 has brought about an improvement which, having regard to the conditions after 1931, I consider to be unprecedented. It is perfectly true that there is yet a great deal to be done. In particular, we have to try and increase the volume of our overseas trade, the lack of which is so adversely affecting our shipping trade and the industries which depend upon it. But a condition precedent to further improvement in my view is the maintenance of what we have already gained and a continuance of confidence. If confidence is not maintained, business conditions will not be maintained either. It is acknowledged that there has been a widespread improvement—no one can deny it, a marked improvement—but it is true that the improvement has been far too slow in reaching these special areas, and we shall continue to direct our efforts to this problem in every practical way. The first thing we have to do is to examine and, I hope, carry out the suggestions we may find in the reports which will shortly be published.

This I say without fear of contradiction, that there is hardly a country in the world to-day where the conditions of the unemployed over the whole of the country are better than in the United Kingdom, with all its faults. There has been a marked improvement in the level of real wages. Taking 1924 as the standard, the cost of living has fallen by 20 per cent. while the change in money wages has been less than 5 per cent. The average worker is far better off than we was, because each shilling buys as much as 1s. 3d. before, and, when allowance is made for a reduction in money wages, he is still 2d. in the 1s. better off. There will always be critics. I am always a critic myself; I shall never be satisfied with the progress that is made as long as I am in public life. We expect our critics, and welcome them, but I would say to them that when they have said their worst about us let them compare the conditions here with those in any other country. Have they met a foreigner who when he has once worked in this country wants to go and work in any other? Do they know of any of their friends working in this country, any Englishman, Scotsman, Welshman, or a North of Ireland man, who would change it to go and work in any other country in the world?

5.35 p.m.

Major Sir ARCHIBALD SINCLAIR

The right hon. Gentleman the Prime Minister has reminded us of the many-sidedness of truth. He was amply entitled to remind us of the effectiveness of the financial policy which the Government pursued in 1931–32 in dealing with the national crisis. Our complaints on that score are two: first, that the Government have failed to build upon the financial Foundations which they laid, and, secondly, that they have pursued an economic policy which has been an effective barrier against the restoration of our foreign trade, which has fallen with special weight upon the depressed areas. The right hon. Gentleman has referred us to the effect of the trading agreements which he says could not have been negotiated but for the introduction of the tariff. The comparison he makes of our exports to countries with which we have concluded agreements is a comparison with our trade in 1933, that is to say, after the imposition of tariffs and quotas had destroyed part of our export trade to these countries. He only illustrates the truth that the effect of these agreements has been to knock down a few of the additional bricks which had been added to the tariff barriers between us and these countries as a result of the Government's economic policy. It is also true, if you look at the result of these agreements or of the Ottawa Agreements, that such increases of our exports to these countries as have been achieved have been at the cost of diverting trade from foreign countries. The first effect of the Ottawa Agreements was to torpedo the World Economic Conference, on the successful result of which the restoration of prosperous international trade depended.

The House never fails to succumb to the right hon Gentleman's mesmeric touch, but if it means to respond to the country's demand for effective action against the canker of unemployment it must arouse itself from the trance and escape from the spell of the Prime Minister's enchantments. Unemployment was the test by which the Prime Minister declared four years ago that the Government would be judged to-day. This was the test by which he confessed failure at Himley last month, beaten, he said, by the problem of the depressed areas. He says that he and his Government have done as much for the depressed areas as the Labour Government. Surely, that is not the test with which Government supporters will be satisfied. In his speech this afternoon he offers no hope to the special areas or to the unemployed except transfer, and the reports of the Special Commissioners which have not yet been published. He says that he has never felt complacency.

The Prime Minister has certainly been more frank about the condition of the country than most of his colleagues, and I shall have to refer to one or two of his colleagues presently but he now proposes a new test of the efficiency of the Government's policy. He says: "What other country is there to which a British workman would wish to go?" I ask to what other country in any year in which I have been alive would a British workman have preferred to go rather than Great Britain? [An HON. MEMBER: "America!"]. I have met a few in America who were rather sorry that they had gone there on account of the high wages which were so attractive to them when they were in this country. They were much less attractive when they found the cost of the goods they had to buy in America. But I say, what other country is there to which a British workman would wish to go? A few might wish to go to America, and some might want to go to new countries in order to make their way there. That is true to-day, but it is less true to-day than at any time in my life that this country is more prosperous and has a higher standard of living than other countries. Ten days ago the Prime Minister delivered a speech in which he made the resounding declaration— We, the Government, though I say it myself, are a very good orchestra, and we always play in tune. Imagine my surprise when I found on the same page of my newspaper a speech delivered by the Chancellor of the Exchequer, the embodiment of bureaucratic efficiency and complacency, in which he referred to the Prime Minister's confession of failure and added: "I disagree with him." The orchestra was a little out of tune on that particular Saturday afternoon. The speeches of the Chancellor of the Exchequer are variations on two themes, one that no improvement is conceivable on the policy of the present Government, and the other that everybody is happy. The Prime Minister's discordant confession stung him into pained and indignant protest. "Our unemployment policy," declared the Chancellor of the Exchequer in this House in December, "is to continue as we have been doing"; and the Prime Minister's speech to-day shows that the Chancellor of the Exchequer is still dominating the policy of the Government and that the protests and constructive proposals of the Northern group of Members of Parliament, supporters of the present Government, have fallen as flat on the Government's doorstep as the proposals of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). Some grants to philanthropic bodies are suggested in the Commissioner's reports. The Government have recently announced some credit facilities for railways who are undertaking much incubated schemes of electrification, some tentative experiments in land settlement and home-crofting, but all the big proposals which would carve chunks out of unemployment, the raising of the school age, the pensioning off of old workers, schemes of national development and the nationalisation of mining royalties, are all turned down or shelved, and in essentials the unemployment policy of the Government is to continue as it has been doing.

The second theme of the Chancellor of the Exchequer is that everybody is happy. Within the last two months he declared: We meet in an atmosphere of such happiness and contentment as has not been seen since the War. That was not said in Cardiff or Swansea, in Durham or Newcastle, in Glasgow or Motherwell, but in London at the annual dinner of the Bankers' Association. Only last week in the House of Commons he declared in answer to a criticism from, these benches: The outlook remains persistently and doggedly cheerful."—[OFFICIAL REPORT, 5th July, 1935; col. 2142, Vol. 303.] A very pregnant phrase—"persistently and doggedly cheerful." What, though our exports in the first five months of this year are £174,000,000, as compared with £309,000,000 for the first five months of 1929. If cheerfulness is characterised by sufficient persistency it will, of course, be possible to find some other period with which this Government may make a more favourable comparison, and the Prime Minister when speaking at Bramham Park 10 days ago, took the first five months of 1933, when, with the possible exception of a few months in the previous year, our exports were lower than they have ever been since 1905. And in the same speech, presumably in order to keep in tune with the Chancellor of the Exchequer, and to keep everybody happy, the Prime Minister made the astonishing statement that it was the present Government which had enabled this country, and this country alone, to increase its exports during this period; but in answer to a question by the hon. Member for South-West Bethnal Green (Sir P. Harris) yesterday, we were informed that of the 24 principal commercial countries in the world no fewer than 13 show an increase and only 11 a decrease in exports this year as compared with the same months of 1933.

What though British shipping, entering with cargoes, declined by 347,000 tons, while foreign tonnage increased by 119,000 tons as compared with last year? The Chancellor of the Exchequer remains doggedly cheerful. What though the load of taxation remains within £4,000,000 of what it was in 1930, just before the world crisis reached its most critical phase, when we were paying our debt to the United States, when provision was being made for sinking fund, when the Chancellor of the Exchequer was borrowing on long term at 5 per cent., as against 3 per cent. now, and on short term at £2 5s. per cent., as compared with 12s. 4d. per cent. now? The resources of persistent cheerfulness are not exhausted and the Chancellor of the Exchequer, omitting all reference to the sinking fund, claims credit for restoring taxation to a level fractionally below what it was under a Socialist Government—£694,000,000, as against £690,000,000 when we were already caught in the maelstrom of the slump.

No reasonable man could or would wish to deny that things have improved since the worst of the crisis in 1931. The right hon. Gentleman who moved this Resolution mentioned two reasons for that improvement—the departure from the Gold Standard and the resources which we have accumulated on the basis of our great world trade during past generations. I would add two more—the restoration of public confidence and the cheapness of money which have been powerful aids to recovery. But in my submission we should be false to our duty if, influenced by the taunts of the Chancellor of the Exchequer we refused to confront this gaunt spectre of unemployment, the almost unrelieved misery of the people in the special areas and the depression in our seaport towns. For, remember that it is not in Birmingham where unemployment is only 6.3 per cent., or in our great inland cities, but in our seaport towns which are dependent on shipping and the export trade, cities like Glasgow where unemployment is 25.5 per cent. of the insured population or Liverpool where it is 28.7 per cent., that the problem is worst. And when the Chancellor of the Exchequer thinks of the special areas and the seaport towns he must require all his dogged persistence to remain cheerful.

It is not true however that unemployment is an evil the appalling consequences of which are confined to the special areas. When the Measure dealing with the special areas was passing through the House the Order Paper was covered with Amendments put down by Members in all parts of the House urging that the areas in which they were interested and the conditions in which they knew, should be added to the list of those areas in which a special effort was to be made to deal with this appalling evil of unemployment. The right hon. Gentleman suggested that transfer should play an important part in the solution of the problem of those areas. It may be that it will play a part but if it is confined within the limits which he suggested, that is to say that a man is not to be moved to another area unless there are no unemployed men in that area in the trade or industry to which he belongs so that he will not take the place of another man—if that stipulation is maintained, we can all support transfer but it is not likely to do very much good and is not likely to find many jobs for people from the special areas. But if it means that you are going to bring into these other areas outside the special areas large numbers of men many of whom will be taking the places of men already in those areas, then, I say it will be most unfair.

I speak with some experience. Under the road schemes of six or seven years ago men were brought to my part of the world in the Highlands of Scotland from the distressed areas. Now in Caithness and Sutherland we have an unemployment figure for men of no less than 42 per cent., and in my own town of Wick we have an insured population of 3,500 and the rate of unemployment among the insured men is actually 41 per cent. This is not a problem of the special areas only. The right hon. Gentleman said that there were 65,000 unemployed who had been unemployed for more than a year in Scotland and Wales and only 10,000 who had been unemployed for more than a year in London. But you do not want to bring men from these districts even to London because it would not be fair to those 10,000 men in London who have been out of work for more than a year if they were to be deprived by these transfers of work which they could do and which they might otherwise get. If there is other work available which they cannot do, then, indeed, on those terms, transfer would only be making a proper use of the labour of the Employment Exchanges.

It is not, as I have said, a problem of the special areas only and I am sure that my right hon. Friend the Member for Darwen (Sir H. Samuel) did a service to Lancashire which is often forgotten in these discussions in mentioning the importance of the problem in that county. Take the figures for the country as a whole. Before the War—500,000; from 1927 to 1929 1,000,000; now 2,000,000 and as the Labour correspondent of the "Times" reminds us this morning June is the most favourable month for employment in the annual cycle. Yet unemployment remains obstinately at the figure of 2,000,000, not counting agricultural workers and black-coated workers. When the Estimates for the Ministry of Labour were under discussion, the Minister told us that of the 12,000,000 insured workers in this country no fewer than 7,000,000 had made no claim upon the Insurance Fund last year. That means that 5,000,000 did claim. He also told us that the average experience of unemployment of those 5,000,000 was 20 weeks. What does that mean? It means that out of every five insured workers in industry two experienced unemployment and that their average experience was two weeks out of work for three weeks in work. That is a very serious position. If you rule out London and the Home Counties, it means that there are not many households in the land which are not visited during the year by unemployment and where even those in work are not cowering under its menace. Yet as we see from the speech of the Prime Minister this afternoon action is wanting.

Among the unemployed are over 100,000 boys and girls. The case for the raising of the school age has been conceded by the Government in principle. Why then delay action? It is just a year since the Unemployment Assistance Act was passed and yet the draft regulations for its administration still lie in the womb of time. Several Ministers, including the Chancellor of the Exchequer, have agreed in principle to the nationalisation of mining royalties which was recommended by more than one of the Government's own investigators but no action has followed. In short there has been no action, apart from housing and there, action has only been taken very tardily, with no proper foundation of town and country planning and with inadequate provision for workers needing houses to let at low rents—only 37,000 houses out of 320,000 built last year will be let at rents of 10s. or less. Apart from housing there has been no effort at the planning or development of our national resources and amenities on a bold scale.

To some extent it is true that this problem of the development of our national resources and of amenities is covered by the remit to the Commissioners of the special areas, but these are not problems which are peculiar to the special areas, nor have the Commissioners the scope and the power necessary to attempt a solution. When the appointment of these Commissioners was announced we were told that they would be given £2,000,000 which was to be regarded merely as a credit to carry them up to the end of the last financial year, and very severe were the rebukes administered by the Government's spokesmen to any speaker who suggested that £2,000,000 was the limit of the expenditure. Will the Government tell us now whether as much as or more than £2,000,000 is likely to be spent in the distressed areas in the whole of the current year? In the Debate on the Scottish Estimates last week we were told that an expenditure from State funds in the special area in Scotland of £767,000 had been approved but no information as to how much would be spent this year was vouchsafed. Much was to be spent on schemes of little employment value, and even allowing for an equivalent contribution from local authorities, it seemed unlikely that out of 330,000 unemployed in Scotland more than 3,000 would obtain employment on these schemes in that special area.

I have mentioned the need for raising the school age. We must all be concerned about the problem of juvenile unemployment and yet the lack of concentrated and co-ordinated action for dealing with it is appalling. I am glad to see the Parliamentary Secretary to the Ministry of Labour in his place, because I want to give one instance of official inertia in dealing with this problem. I am sure there is no hon. Member here who has not heard of the Fairbridge Farm School and the admirable work which is done there; but for every 20 Members who know it I doubt if there is one—though I am sure that among them the Parliamentary Secretary to the Ministry of Labour may be numbered—who knows that equally admirable work in a similar though not identical sphere is being done in this country, in settling our own boys on the soil of this country and in domestic service, by the Wallingford Farm Training Colony. This, unlike the Fair-bridge school, only takes boys and it only takes them after they have left school. They have accommodation for 250 boys between the ages of 14 and 19 and for 50 boys of over 19 and men on an outlying farm. The boys are trained for agriculture and for domestic service, and there is an increasing demand from farmers for them. In the year before last 71 boys and last year 106 boys were placed, and although many of the boys are backward and difficult when they arrive at the colony, there were only five failures out of this number. At the moment there is a waiting list not of local authorities wanting to get boys into the school but of farmers and other employers wanting to get the boys when they have been trained. The situations secured by these boys are almost all permanent, generally starting at 5s. a week with board and lodgings, and in a few months time many of them are earning £2 a week.

Mr. MAINWARING

Can the right hon. Gentleman tell me where they are getting £2 a week from farmers?

Sir A. SINCLAIR

I mentioned farmers, but I also mentioned that some of the boys were trained for domestic service, and if my hon. Friend wants further particulars I shall be delighted to give them to him if he will ask me afterwards. Yet the astonishing thing, in view of the record of this colony and the position in regard to juvenile unemployment generally, is that the local authorities are giving so little support to that Wallingford scheme that the vacancies in the school are not being filled. The charge to a local authority is only 22s. 9d. a week, and boys of average intelligence can be sure of a job in 12 months. Unless the Government give a lead the charges will have to be raised. Meanwhile, official inertia is at this moment depriving 40 boys for whom vacancies exist at this colony of the chance of good, healthy and lasting employment on the land.

I pass from this small but not unimportant to a more important and larger sphere of action, where this official inertia is frustrating the development of our national resources. I hold no brief for public works and State expenditure as such, but where, as in many directions, we can see useful and important work waiting to be undertaken, where private enterprise will not undertake it, is not equipped for undertaking it, and has no incentive to undertake it, surely there the Government will step in and take advantage of the present situation, where you have 2,000,000 of your men and women idle, where you have your idle money and cheap rates for borrowing money. The Prime Minister said he disliked lavish public works, but who advocates them? To what foreign country did the Prime Minister refer when he said they had been a failure? Certainly in Sweden the programme of public works which they have undertaken has been a great success, as has been testified by such an impartial authority as the Economic Committee of the League of Nations. The Prime Minister referred to the plans of Sir Christopher Wren, which were neglected at the time, and thought how much better it would have been if they had been taken up then. We need to plan now, and not only for London, but for the country as a whole, very much on the lines that Sir Christopher Wren had in mind at that time, but on a greater scale.

It was the Conservative party, when it was in power in 1929, that was responsible for beginning to damp down the plan for one vitally important piece of planning, namely, the planning of the communications of this country. It was they who were responsible for starting the Treasury's raids on the Road Fund. We were spending, they declared, so many millions out of the Road Fund, such vast additions were being made to the network of British roads, that it was justifiable to ignore the pledges given by the right hon. Gentleman the Member for Carnarvon Boroughs when he inaugurated the Road Fund, and those given by the right hon. Member for West Birmingham (Sir A. Chamberlain) when he restored the horse-power tax in 1921, that the proceeds of these taxes and the money in the Road Fund would be expended on the roads, and to divert the money in the Road Fund to other purposes. For my own part, I confess that, motoring about London and seeing so many evidences of fresh road construction, I was astonished when I investigated the figures and found that, while since 1912 the number of motor vehicles in this country had increased 10 times, and the speed and weight and frequency with which they used the roads had increased the wear and tear on the roads many times more, the actual amount of new road construction since 1910 was only 2,400 miles, an increase roughly of from 175,000 to 177,000, or a percentage increase of only 1.4 per cent. The Parliamentary Secretary to the Ministry of Transport told us last week that only 400 miles of new roads had been constructed since the War in this country. How different is the position in Germany, where, according to the German Institute for Business Research, 750 miles of new roads are now under construction.

Vice-Admiral TAYLOR

And some old roads have been reconstructed and broadened.

Sir A. SINCLAIR

Certainly they have, but when you consider the fact that the number of vehicles has increased 10 times, that the frequency, the weight and speed, the wear and tear on the roads have increased many times more, and when you see the choked condition of many of our roads at the present time, it is apparent that what is required is planning on a very much larger scale than the mere reconstruction of old roads.

Not only is the provision for motor transport so inadequate in this country, but I do not think the House realises how great has been the diversion of these road taxes from the uses to which they were pledged or how heavy is the burden of taxation on the motor industry at the present time. Vehicle licences and the petrol tax now amount to £75,000,000 a year, of which only one-third, or £25,000,000, goes to road expenditure. Indeed, the motor industry is now paying £20,000,000 a year more in taxation than the whole sum at present spent on the construction and maintenance of the road system of this country. This is hampering the development of the motor industry, it is preventing it from increasing its exports on the basis of mass production, and it is reducing its capacity to increase employment. It is also throwing an unfair and deeply resented burden upon the ratepayers of the country. In my county, out of a consolidated rate of 11s., we spend on housing 2½d., on police 6d., on public health 10d., on public assistance 1s. 9d., and on roads 3s. 10d., or more on roads than on all those other vital services.

The increase in the number of road accidents has indeed been checked by the emergetic measures taken by the Ministry of Transport for dealing with some of the contributory causes of this weekly toll of slaughter and injury in the country, but it is the main cause, the inadequacy of the road accommodation for our motor transport, which requires an effective remedy, without which the situation will not remain stationary during the next five or 10 years, but will rapidly deteriorate. Last year there were 120,000 motor vehicles added to the roads, and the Minister of Transport told us a few weeks ago that in the first four months of this year 151,000 new vehicles had been registered. Those figures show the dimensions of the problem with which we are faced and the absolute need, on its merits, for a great improvement of our roads. The present five year plan is merely scratching the surface. Too much of the burden is thrown on the ratepayers, and the Ministry of Transport has the hopeless task of stimulating and co-ordinating 2,000 local authorities who are resentful of the burden which is thrown upon their rates and each of which has its own ideas on such questions as the width, camber, and surface of the roads.

Let the Government tackle the problem on a national scale. Let them take over the main roads of the country, and let them improve them, reconstruct them, and plan them by raising a loan on the security of the revenues of the Road Fund, and thus make our roads fit for modern traffic. Nobody else can do the job except the Government. It means the building of new roads and thus giving employment; it means the reconstruction, of course, of old roads, it means rebuilding 2,000 weak bridges, the construction of new bridges over the Severn, the Tyne, the Forth, and the Tay. I would ask the Government to harness the energies of the Minister of Transport to a scheme on that scale, and thus they will not only increase the safety of the public and the employment of the people directly on these works, but they will also create the conditions in which our road transport industry, which already employs 1,250,000 people, will be able to expand its production and multiply its sales, both at home and abroad, and thus increase employment.

I have been amazed to hear, in the Debates on the Finance Bill, hon. Members opposite supporting the policy of the Chancellor of the Exchequer of piling burdens upon the road transport industry on the ground that it is so prosperous that it can afford to pay. It is the poor, decrepit, old railways that must always be coddled. They would do much more to help the prosperity of our country and employment of our people if they would do something to create the conditions in which youthful and vigorous industries like the road transport industry could expand freely and naturally, than by helping lame crocks over stiles with subsidies or by taxing their competitors.

It is because we believe that the central fact of our unemployment situation is that we can make no lasting impression upon unemployment, or upon the conditions in the special areas and our seaport towns, unless we adopt a vigorous and consistent policy for the removal of trade barriers, the stabilisation of currencies, and the restoration of our international trade; it is because the Government, in spite of encouraging portents in France, the United States of America, and elsewhere, are making no move in that direction; it is because the big legislative projects, such as the raising of the school age and the nationalisation of mining royalties, the case for which on their merits is almost universally admitted, are either shelved or at any rate not being undertaken at the present time; it is because the Government have no plan adequate for the emergency either to redeem their confessed failure in the special areas or to place any substantial number of the unemployed on works of national development which ought, on their merits, to be carried out, that we on these benches will vote for the Motion this evening.

6.11 p.m.

Sir ALAN ANDERSON

Among the many virtues for which this House is famed, the one to which I attach at the moment the most importance is its kindness to newcomers. When inexperience comes in the attractive guise of youth it carries its own recommendation, but to forgive the unnatural union between my inexperience and my age, die kindness of the House is indeed needed. I should not have ventured to rise so soon if it had not been that the years of youth which were wasted in not being spent here were spent in the City of London, and this subject of employment is the central subject for all of us in the City of London. Sometimes industrialists even in this country, where we are all close together, are inclined to think that the businesses located in the small area for which I am one of the representatives are not so much concerned with employment as those who see the men and women whom they employ walking in and out of their factories every day. That is a delusion. Employment is simply the human side of trade. To cure unemployment, it is possible either to employ, or to encourage someone else to employ, or to enable someone else to employ. I am not very keen about short cuts in these great economic movements. I believe that Governments often do better by enabling employment flan by actually employing themselves. Possibly my feeling about that is due to the fact that we in the City more often enable employment than employ directly ourselves, but we are conscious all the time that this need to restore employment to the world lies behind all our other difficulties and is an expression of them.

It is not at all difficult, it appears to me, for us, by using our own eyes to look at our neighbours, and by using the eyes of our foreign neighbours to look at ourselves at home, to decide whether we should agree with this Resolution and blame our Government for their failure to restore employment. Every nation all over the world has been set the same problem. Whether it is democratic, autocratic, Fascist or Bolshevist, the need to employ their own people and allow them to work happily to get their living is the central fact for every ruler and governor in these different societies. They have almost all started with the same plan. Almost every Government, when they became anxious about unemployment, adopted the same plan of trying to snatch for their own people work that was done by foreigners. They applied tariffs, quotas and so forth, with the result that by degrees they forced us, who were, and are still, the greatest trading nation in the world, to adopt certain defensive measures. I am not at all a fanatic for tariffs, but I believe that it was essential that we should adopt some such measures. They have been adopted with discretion and care, and I believe that on the whole they have done good, but the result of this scramble was that world trade was approximately halved. The nations of the world, looking upon world trade as a cake of which each one should get its own slice by scrambling, broke up the cake and it crumbled. I do not think we have done that; we have tried to stop nations snatching our bit of cake and have done our best to enlarge the total cake. At the Ottawa Conference with the Dominions and by trade treaties and contacts with nations all over the world we have endeavoured to restore the healthy growth of the world at its periphery which has been the salvation of the world for the last 50 years.

Then look at the currency question, which is often the next thing to which the nations turn. Partly they were driven to reduce the value of their currencies. They had overspent, they did not balance their budgets, and their currencies fell. What followed? A crash, and terrible suffering in one country after another. We were on the brink; we were over the brink. We, the richest nation in the world—as except for war debts we still are—were forced to repudiate our contracts to pay in the coin we had promised. It was a humiliating position, and the whole world gasped and expected us to go down to that abyss of ruin to which so many nations had sunk. Why did we not? Are we to censure His Majesty's Government because they rallied the whole nation to save itself? There are, I believe, signs now that the world is coming to its senses. His Majesty's Government have constantly repeated in their declarations of policy about trade and currency that they realised the need for those fundamental principles which are recommended from the opposite benches. It is clear that we cannot restore the trade of the world unless the currencies of the world are stabilised. I believe that at present sterling is the best currency, and is more stable than any other. It has maintained its stability in goods—a very important factor. Currencies based on gold have suffered because gold has been treated as a commodity and has been partially monopolised, and therefore its price has risen as expressed in goods.

Are we to seek to bring together all the nations to stabilise on sterling? I should say that that is hopeless. Sterling is too national a currency and they are all used to looking at gold as the proper basis for currency. If gold were swept away or became as cheap as lead, that would be another thing, but as things are now and as a practical policy, I suppose that our object must be to stabilise on gold, but not before gold resumes its proper place as a basis on which stability can be founded. I was in my age of innocence from party politics, about a fortnight ago, in France with the International Chamber of Commerce, and we debated this interesting point of stabilising currency on gold. We expected to be, and we were, attacked by all our colleagues in the gold standard countries, and we prepared ourselves by a careful analysis of our position and our views. We started by finding out what has been the policy of His Majesty's Government in their declarations, and it may interest the House to know that at that non-party gathering we practically adopted those declarations and found them in our opinion the practical thing to do.

I apologise for having intervened in the Debate so soon after my arrival here. I thank the House for its kind hearing. I suppose that as I have joined so lately I should be almost free to censure the Government under whom I am serving, but I do not want to do that. I want to praise them for having given us the lead, and for having rallied the people of our country at a time of crisis. We have lately heard questions in this House whether there was a crisis in 1931. I wonder what greater crisis anyone could wish than a crisis of money, of bankruptcy, of credit, of trade, and, worst of all, a crisis of democratic liberty which was built up here and has fallen in so many other parts of the world.

6.22 p.m.

Mr. DAGGAR

I am sure that I shall be acting in accordance with the desire of every Member in offering congratulations to the hon. Member who has just resumed his seat. We shall look forward to many contributions to our Debates, of a similar kind to that which he has just made. Had we on these benches been impressed by the speech of the Prime Minister in Yorkshire the week before last, I presume that this kind of Motion would not have been down on the Order Paper to-day. Like most of the right hon. Gentleman's speeches, it contained several very important statements. Some were extremely interesting and they justify this discussion. He said, among other things: If we could only abolish unemployment, we should have practically banished the spectre of poverty from this country. Unemployment is the worst enemy we have to fight, the most difficult. I have never promised, and never will promise, that I or any Government of which I am a Member has a cure for unemployment. We have all tried our hand at it. We are progressing with it, but we are a long way from conquering it. Everyone will agree that unemployment is the worst enemy we have to fight. We also accept the statement that neither the Prime Minister nor the Government of which he is the head has a solution for the greatest of our modern economic problems. Having no solution, it becomes incumbent upon the Government to deal with the results of unemployment, and their having failed to do so is a legitimate reason for the Motion of Censure. It cannot be accepted as a defence of the Government's inactivity and their treatment of the situation in the depressed areas to say, as the Prime Minister did in Yorkshire: We have 1,000,000 more in work than we had when we started, and people are saying all over the country 'Things are looking a lot better.' He knows, and every Member of the House knows, that things are not better all over the country. I admit that there are signs or indications of improvement, but no improvement has reached the distressed areas, with the exception of the distribution of a miserable £2,000,000. Surely those areas, with the people they contain, are still entitled to be considered a part of the country. What is it proposed to do in many parts of South Wales? Here let it be said that there is not a Member on these benches who is disposed at this stage to criticise the Commissioner himself, because we hold the opinion which is shared by no less an authority than Sir William Beveridge who, in addition to being an economist, is Chairman of the Statutory Commission under the Unemployment Insurance Act, 1934. He states that the Commissioner needs more power to his elbow, far more power than there is any sign of his having yet. What is being done to assist the distressed areas? I am in association with what has been done in seven depressed areas in South Wales, namely, Abertillery, which is in part of my own division, Abercarn, Brynmawr, Ebbw Vale, Nantyglo and Blaine., and Rhymney and Tredegar. These seven areas recently submitted schemes to the Commissioner, involving a considerable expenditure of money, and only one or two thousand pounds are to be handed out to these areas where no less than 50 per cent. of the insured population is unemployed. In some of those areas the percentage of unemployed varies from 70 to 82. During the three years 1932–3–4 no less than £2,908,462 was paid in unemployment benefit and transitional payment, and in each of the seven areas the local authorities are burdened with enormous sums of outstanding loam, uncollected rates and arrears of rent on houses owned by the authorities. These authorities could easily utilise a large proportion of the £2,000,000 which it is proposed to distribute throughout the whole of the distressed areas in Great Britain. Notwithstanding the number of Debates we have had in the House regarding the condition of the depressed areas, I am still disposed to think that even now people are not conscious of the position in those areas. I am not alone in that opinion, because at a meeting recently held at the Central Hall, Westminster, a supporter of this Government, Dr. S. M. Berry, stated that he never came back to London from the distressed areas without feeling that London simply did not know the truth. He said: I was visiting a little church the other day up in the North-East, and every one of the deacons was on the dole'—in fact, I believe it would be true to say that not a regular member of the church was in regular work. He declared that he had always been a supporter of the National Government, but he felt that it had not brought to the problem of unemployment anything like enough concentration of energy. Does this House yet realise, as stated in the Memorandum submitted by the seven depressed areas to the Commissioner, that Decay and desolation have proceeded unfettered and unless this process is soon arrested, we fear that a grave situation will arise which will be disastrous both to the communities we represent and to the nation. The effect of steadily worsening conditions upon the morale of our people is tragical and the sum total of misery and despair in these areas cannot be calculated. Those who live in those districts and know the conditions cannot question the accuracy of that statement. If Members of this House know the facts and refuse to act they must accept full and complete responsibility for the misery, despair and material degradation of the people who are compelled to exist in such areas.

In view of these facts it is strange that we should have a Prime Minister making this declaration in the speech to which I referred: And what does rebuilding England mean? It means, to my mind, the security and happiness that follows security for the men, women and the children of this island. I ask what security is there for the people to whom I refer? What happiness can there be in living on faith, hope and charity and political promises and pledges which are not to be fulfilled and redeemed? These local authorities have appealed to the Commissioners for the establishment of new industries in their areas, but the Government and development representatives have on more than one occasion declared that those who have the money—even foreigners—have the right to establish their undertakings where they like. And the Prime Minister talks about planning and rebuilding England. I agree with him that the word "planning" is freely used to-day, but I hold the opinion that the planning of the industries of this country is being undertaken, and will be completed by the people who own the industries, and not by this or any other Government. To talk about "security for children" and the "rebuilding of England" is, in any opinion, nothing short of cant, humbug and hyprocrisy, when in those seven areas there are 5,323 children being fed at school and over 8,240 persons who have to depend upon public assistance.

Let me extend the circle of my criticism. I have ventured to assert in this House on more than one occasion that there is little hope for either the depressed areas or South Wales without a resuscitation of the mining industry in one form or another. The truth of that statement can be demonstrated from the utterances of the Prime Minister himself and the late Secretary for Mines. Both have boasted of the general improvement in trade. It is true that the output of coal in Great Britain in 1934 showed an increase as compared with 1933 of approximately 14,000,000 tons, but as compared with 1930 there was a decrease of no less than 23,000,000 tons, and as compared with 1929 a decrease of no less than 37,000,000 tons. In South Wales in 1934 the output of coal as compared with 1929 showed a decrease of 13,000,000 tons and as compared with 1930 a decrease of 10,000,000 tons. It is true that even in South Wales the output of coal in 1934 as compared with 1933 was approximately 984,016 tons larger. With all this talk about improvement in coal production the share of South Wales was less than 1,000,000 tons out of the increase of 14,000,000 tons for the whole country.

When we consider the number of men employed in the mines the position is much worse. Although the output of coal increased in 1934 as compared with 1933 by 14,000,000 tons, the number of men employed increased by only the paltry figure of 660. If we compare the number of men employed in the mines in Great Britain in 1934 with the figures for 1930 there is a decrease of 140,028, and as compared with 1929 the decrease is no less than 165,000. In South Wales the position is much worse. Though South Wales showed an increase of 984,016 tons in the output of coal in 1934 as compared with 1933, the number of men employed was 3,249 less than in 1933, 38,249 less than in 1929 and 32,733 less than in 1930. These figures, I submit, prove my contention that the improvement of trade in the coalmining industry has not affected South Wales, and therefore cannot have affected the depressed areas. I anticipate the nature of the Government's reply, because in the course of his optimistic speech the Prime Minister stated that in the first five months of this year our export trade had risen by £27,000,000 as compared with the corresponding months two years ago. He added: How much extra employment do £27,000,000 of extra exports give? And these agreements this extra export trade, are due to the direct action of the Government, and they have lifted that terrible shadow of unemployment from thousands of homes, and from tens of thousands of men and women. No one disputes the accuracy of the figures given by the right hon. Gentleman, but to what extent has that improvement affected the people in the depressed areas whom we represent, many of whom have to exist upon less than is expended by some persons in this country upon the maintenance of prize dogs? It has had no effect whatever. Although there was that improvement in the export trade in the first five months of this year as compared with the first five months of 1933, if we take a similar period in either 1930 or 1929 we find that there is a decrease of over £106,000,000 as compared with 1930, and of over £162,000,000 as compared with 1929. The Prime Minister, with more discretion than the late Secretary for Mines, never referred to the export of coal, because the figures there were useless to a man unaccustomed, as he said in his speech, to the blowing of his own trumpet. Let me compare the exports of coal from this country for the same five months—January to May—with the exports in a similar period in previous years. In 1934, as compared with 1933, there was an increase of a little over 82,000 tons, but as compared with 1930—that is the year he did not take into consideration—there is a decrease of over 8,500,000 tons and as compared with 1929 of no less than 7,265,000 tons. If we take the figures for the year the position is much worse, but I am taking precisely the same periods—from January to May—as the Prime Minister took. I cannot give comparable figures for South Wales for the first five months of this year, but for the first three months of this year the output of coal compared with a similar period in 1933 shows a decrease of no less than 541,000 tons. The exports are down by 270,000 tons, and home consumption by no less than 271,000 tons.

Having been interested in the mining industry all my life, I hope the House will permit me to emphasise a point which I have endeavoured to make on several occasions, that several factors which up to now have been insufficiently considered by this House are bound to increase the number of unemployed miners in South Wales. I said in 1934: With the continued introduction of machinery, the concentration of production by amalgamation, improved methods of production, organised marketing, the general rationalisation of the industry and 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. That opinion is shared by no less an authority than the person who is responsible for writing some of the leaders in the "Times." This statement is to be found in one of the leaders of the "Times" for 1st April this year: There can be little doubt that the growth of the use of machines will operate against an increase in employment for miners unless new markets and new uses for coal can be found to counteract the greater productive capacity of the individual. Here is a striking observation: If the total output of coal in 1934 had been the same as in 1913 more than 100,000 fewer miners would have been required to produce it. Again, when the right hon. Gentleman opposite who has changed his position and who, I am sure, is capable of changing it many more times, was Secretary for Mines he was asked on 4th April whether he had read the statement made by the President of the Iron and Steel Federation in which it was shown that the Research Council of those two industries was saving no less than £4,500,000 per annum, and that on this basis of the quantity of coal saved in 1934 the saving amounted to 6,250,000 tons. That saving means that the services of 22,000 miners are no longer required. It is because the Government are doing nothing to face that situation that I support the Motion now before the House.

If the Government admit failure to solve the problem of unemployment, they must deal with its effects. The number of unemployed is the critical fact, and not the number in employment. This is what has been appropriately described by the "Times" as the abiding problem. In an article under that heading on 20th March this year, these words appeared in the "Times": As long as the distressed areas remain a social sore they will be a political danger. The reasons for taking bold action to revive them and to dissipate their distress do not grow less as time passes, but more and more strong. We want to know what steps the Government are taking in the direction of reviving the areas and dissipating their distress, The distribution of a miserable £2,000,000 is no good, neither is the political Couéism which consists in reciting: Day by day in every way, things are getting better and better. because that is deceit and delusion. The passing of a Prime Minister will do no harm. Some of us would like to read the news in the paper that he had done the best thing, and that was to go out and hang himself. His successor needs a reminder which the "Times" gave him in a leading article four days before he delivered that speech in Yorkshire. The article statedThe relief of poverty is not, however, the greatest need of the unemployed and the distressed areas. They look for a return of the opportunity to work. The distressed areas remain distressed. All that has been done for national recovery has left them unimproved. What is necessary to deal with the situation? What do we on these benches want? [An HON. MEMBER: "Hanging!"] It is not my intention to tell the Prime Minister in my own words, but in the words of one who, if he rose to speak this afternoon, would immediately get the ear of this Assembly. He said: What the country requires is a Government which will boldly face the problem of the abnormal element of the live register, and set itself strenuously to do everything to develop our natural resources, so that hundreds and thousands of people may be taken off the Fund and put to doing productive work. With that we agree. In the same speech he also stated: We are not discussing an abstract problem now, but a problem which affects not merely the whole foundation of this country, a problem which affects with menacing force 1,500,000 men and women directly, and another 2,000,000 or 3,000,000 indirectly in their homes. In the same speech he said: The nation cannot stand this sum total of human misery which is implied in an unemployment figure of 1,600,000."—[OFFICIAL REPORT, 28th March, 1930; cols. 807–812, Vol. 237.] Those are extracts from a speech delivered in this House on 28th March, 1930, when there were only 1,500,000 unemployed, by no less a person than the Minister of Labour. It will be very interesting to have his later and considered observations on a speech which he delivered in this House before the substantial increase to 2,000,000 in the numbers of the unemployed. If the speech was needed then it is needed to-day, and the distribution of £2,000,000 will not save the situation, nor will waiting for the report of a person appointed to distribute that amount solve the problem of the distressed areas. For those reasons I support the Motion before the House.

6.50 p.m.

Mr. MACMILLAN

As the first Member of his party who has spoken since he made his speech, I would like to be allowed to pay my tribute to the maiden speech delivered by the hon. Member for the City of London (Sir A. Anderson), both as to its matter and its form. We expected that the matter would be weighty, because of his great reputation in the subject which we are discussing, but he delighted and charmed the House with the form in which he delivered his speech.

The Prime Minister had no difficulty in dealing with the first half of the Motion. He found it fairly easy to answer the speech of the right hon. Gentleman who moved it. He was able to show a very great increase in prosperity in the period of his Government, and to make what, to the ordinary and impartial eye, was a sound defence of the conduct of the Government during the first three or four years of office. It was clear that while he was devoting himself to that part of the speech he was, so to say, batting upon a fairly easy wicket. He had only to compare the successes of his Government with the failures of the Government that preceeded him. When he came to the second part of his speech and told us how the policy of the Government was to be further developed and what were to be the fresh subjects with which legislation and administration would deal, I did not think he felt so comfortable. He gave us the impression that bowling was not quite so easy, and that he would have to play carefully if he were to avoid disaster.

He told us, in the course of a speech which will need careful reconsideration in writing in order to get the exact emphasis, that the Government were against lavish expenditure on public works. I pin my faith to the inclusion of that word. If by "lavish" you mean "imprudent and ridiculous," that is all very well, and the Prime Minister gave us to understand that the Government were not adverse to the expenditure of public money in certain directions. He gave us instances of what they have already done and of what they hoped still to do. I hope that the appointment of the distinguished architect Sir Edwin Lutyens will not be comparable to the appointment of Sir Christopher Wren, and that the Government, after receiving his report, will not wait 200 years to act upon it.

When he came to the distressed areas, which he called "special areas," as though changing the epithet would help the people who live in them, I was somewhat disappointed. He told us that we must rely largely upon a continuation of the policy of transfer. In a word, we are to go to our people and say "You are now depressed; you must become derelict." Is that the reply of the Government to the cry which goes up from the North-East, South Wales and Tyneside? The Prime Minister told us that the Commissioner's report would soon be available, and that there would be, he hoped, many useful things in it which would be developed. There were other reports a year ago presented by his own Commissioners. My hon. and gallant Friend who was at the Admiralty and is now at the Home Office presented a report which contained very important and definite suggestions, none of which has been carried out.

The Prime Minister, with engaging frankness, said that he realised that the problem of attracting new industries to the old areas was the essential problem for the Government. That the social capital which is now invested in those areas should be allowed to be drained away and become derelict is a very serious proposition for this country to face. He said that at present he had no ideas and no positive plan to suggest, in order to secure what one might call the return of industry and the putting of new industries into the old areas. Might I suggest one or two? Might I suggest that it is now common history that the Government should reconsider the policy of derating and revert to what was the original policy of de-rating before the Government of 1924–1925 materially altered it, before bringing it before Parliament. The original plan was totally to derate productive industry. It was the leaving in of the quarter which completely destroyed the object of the scheme, which was to say, "It will cost you just as much whether you are in this area or that." If you leave the quarter, the relative disadvantage of a high-rated area as against a low-rated area remains.

May I suggest another source of investigation What is the main reason why the new industries group around the London area? One of the reasons is that power has become mobile. There is no need to-day, as there used to be, to put down plant near the coalfields; modern industrial plant is run by power which is essentially mobile. What is more important is that it should be put near the market. The London area already comprises nearly a quarter of the people of these Islands, and, if we do not do something about it, within a generation it will comprise half the population. That market is the richest and most attractive. It attracts more and more industries, and as that process goes on it becomes still more attractive. Power is not now the main consideration, but transport.

I suggest for the Prime Minister's serious consideration that something might be done on the lines of modern transport. The railway companies have tried to make a contribution. Agreements are now possible under the Road and Rail Traffic Act, and those made by the railway companies and many of the other great users have opened up a completely new conception of transport. If something could be done to cheapen transport from the more congested areas, and to make transport a charge upon the total turnover rather than related to the exact cost of each particular piece of work, there might be a great field to be considered.

The next policy which might be considered is that of making the distressed areas really attractive commodities by undertaking, on a broad basis, to clear the whole of the site and form new factory sites. That has been done in some of the areas around London. Some of the sites which were left after the war have been made particularly attractive to modern light industries because they were cleared, made accessible by railway and provided with light, power and all those things. If that were done upon a large scale under Government control, it would do a great deal to make the old areas more attractive to new industries which may come.

The main difficulty—I say this not in criticism of the Government, because I would like much more carefully to consider exactly what the Prime Minister indicated—in all these arguments is one rather of emphasis than of principle. Everybody recognises the value of what the Government have done in recent years. Everybody realises that Budgets have been balanced and confidence restored and that the Government are entitled to take credit for the good that has been done. Nobody ever makes a concession to them when they run into a piece of bad luck. We have had this advantage. We have the good luck to do two things at the same time. We have been able to introduce a tariff system at a time when the world prices of the main raw materials were continuing to fall. That means that we have not had the reaction we might have had if the world prices of raw materials had started to rise. We have introduced and got all the benefits of a tariff system, and at the same time we have had the great benefit of having gone off gold and started on a managed currency.

The right hon. Gentleman who moved this resolution made a great point of the real benefit which the Government secured by going off gold. I would say, in reply, that if you are on a gold basis it is not so important to have confidence in the Government of the day, because your currency is operated on an automatic basis; but, if you are on a managed currency and you are no longer tied to any automatic control of the volume of credit, then it is very important that those who control credit, the Government of the day, should have the confidence of all classes. Therefore, I say, that the extent of these benefits is largely due to the action of the Government itself.

Nevertheless, we must not forget that we have now these two dangers. We have achieved for the moment the apparently impossible object of gaining both upon the swings and on the roundabouts. We have got a protectionist system which gives us the benefit of the home market and which has operated successfully because there has not been the pressure of rising prices of raw materials outside; and we have got all the benefit of a managed currency, which is a special advantage to us since so many of our competitors are clinging to a gold basis and in almost every case upon over-valued currencies. Those advantages may not be permanent, and without being a pessimist I think we must ask whether we ought not to take advantage of this temporary gain in order to advance more powerfully and with more decision, and with more ambitious hopes to exploit the gain which the Government claim for themselves. It is one thing for a general to win a tactical success and another thing for him to follow it up and turn it into an overwhelming victory. To do that needs elan, daring, courage and imagination. It is for that that we look to the Government of the day.

The problem raised by this Motion really falls into two categories. We have the whole series of economic problems, and we have the social problem. As regards the economic problem, we must recognise that recovery, though great, is not complete; though remarkable and welcome, it is not necessarily stable. Can we make it more complete and can we make it more secure? I believe we can. To make it more complete means a resolute determination to bring into production all those productive forces now idle. "We have the plant, we have the men, we have the money too." Can we marry the idle men and the idle money? Of course we can. Even those who see the dangers of this policy would not say that it was not economically possible. Of course it is possible. By a concerted effort upon a large number of lines pursued concurrently, of course it is possible to bring this into effect. The danger—and this is the very point which the Prime Minister made—is whether when the monetary support for the policy of expansion begins to be withdrawn there may not be a collapse. That is the really substantial point made by those who are opposing this policy.

How can we make it secure? That is what I mean by planning. Planning implies that as an essential preliminary of a policy of expansion there should be set up a national organisation by which the Government of the day, sitting as the supreme authority, with the help of a suitable body of technical advisers, can form a general survey of the economic problems and at any rate secure that their own policies are coherent and not mutually contradictory. This is necessary to secure that foreign trade policy is not in direct conflict with agricultural policy; to adapt agricultural policy to our industrial needs in the home as well as in foreign markets; to relate our tariff policies to both; to relate our monetary, policy to the existing situation industrially and economically; to relate our social policies, such as housing, slum clearance, pensions and the like, to all these considerations—and, in a word, to formulate and carry out as far as possible a coherent policy. In conjunction with this overriding duty of government, we should secure to industry the maximum freedom and encouragement to plan itself. There should be such a devolution towards industrial self-government, with proper safeguards, as will enable industry to develop a policy of mutual help instead of mutual destruction. A further aim would be to build into this the whole of the trade union movement and to secure in a much wider degree than has ever been secured before the partnership of labour and capital; and to achieve in each industry thereby the same harmonious progress which we attempt to achieve in the State as a whole.

With such an industrial structure on the way to development the old slogans disappear. The old question of interference goes by the board, and a new conception of mutual assistance between industry and the State becomes possible. This is the only possible solution of these problems. It is the only way that we shall bring new industries to the depressed areas. It is only when you have some idea of the location of industry and some machinery for using its resources in a useful and proper way that this can be done. Side by side with these aims, our monetary policy must always be in harmony with the general plan. The relationship of the Bank of England to the producing section of the community and the public as a whole needs to be redefined. The function of the money market and its technique needs to be brought up to date. The enormous problem of the optimum rate of savings needs to be considered; and our taxation and social policies brought into harmony with modern needs. We can then perhaps consider a possible re-orientation of our tariff policy to build up a group of low tariff countries who wish to promote a mutually beneficial increase of trade. We might even consider a short-term experimental stabilisation of currencies with such a low tariff group of countries.

All these are purely economic questions, and there are very great social questions also involved. I wish the Prime Minister had been able to give us some more light on these. What is the most marked change in public opinion in recent years? I should think it is the widespread recognition of the fantastic paradox of poverty in the midst of plenty, which is always before us. In bad times people have grumbled a bit, but they have tightened their belts and said: "Oh well, the depression will pass." If there happened to be a General Election during the depression, they voted Conservative. It was a very old tradition in bad times to do that, and they were quite right, because they felt that the best cure for a depression was a revival of confidence—that is the confidence of the capitalist class. But times have changed. The people have done their part; confidence has been restored and things are better. But all the time there is spreading the uneasy feeling that things might be far better still and that we might raise our standards much higher. And at the same time over some parts of the country—like the part I represent, where even in the last month we have had not a decrease but an increase of unemployment—there stalks this frightful shadow of long-continued unemployment, and moral and material decay spreads over the whole community. More and more people, whether employed or unemployed, are feeling that the standards of living are lower than they should be. They say: "Why should we tighten our belts in a world of plenty? In a beleaguered city, yes; we share and share alike; but in an open city to starve after the relieving armies have marched in with bands playing and colours flying is not common sense."

I think the people are patient. They recognise the immense difficulties placed upon any economic system which has been subjected to such strain as has come in the War and post-war years. They realise that in the organisation of the production of goods and services so that they will interchange there is a huge technical problem to be solved. They accept the necessity for bringing production and demand into some sort of relation if we are to maintain a stable economy at all—but they will only be patient if determined steps are being taken to solve these problems.

They will accept temporary hardships if they feel them to be temporary. They will accept regulation of production as a short-term policy; as a long-term policy they will insist on the increase and stimulation of demand. They will accept short commons for a bit while the transport and commissariat are being organised. But they will not consent to a permanent maintenance of siege conditions. In a word, while the people recognise the difficulty of re-organising the economic system to fulfil its functions and are prepared to wait patiently while determined efforts are being made they will not wait indefinitely. If they form the conclusion that the maintenance of poverty and plenty is an inseparable part of the profit-making system then sooner or later the profit-making system will go.

The Prime Minister spoke of the lack of stability all over the world. What is the cause of instability. It is caused all over the world because there is a spreading feeling that those who are in charge of profit-making, those who are running the machine, are not able to run it so as to solve these problems. All realistic minds therefore—more especially those who believe as I do that private enterprise has a great and useful part to play—must take note of this new phase of public opinion. Indeed, it meets us wherever we go. All kinds of panaceas are suggested. The Marxists have their policy; the official Socialists have their policy; Major Douglas has inspired a large number of his fellow citizens with an almost apostolic fervour in support of his nostrum; the followers of Professor Soddy and Mr. Hobson on the one side and of Dr. Hayeh and Professor Robbins on the other have all got their plan. The very enthusiasm with which these people study these questions shows how much importance they attach to them. They are like sheep; they are hungry; they look up and are not fed. Or at least they are fed only on the husks of conflicting and unsatisfying doctrine; they are not fed upon the satisfying bread of accomplished amelioration and the rise that should come in the standard of their living.

I know it is said—and I want just to strike a personal note—that anyone who puts forward a policy of this kind is in some way in league with the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). We are all very glad that the right hon. Gentleman has returned to active politics, but perhaps I may, without, I hope, saying anything to which he might object, say that I and my friends have been preaching this policy for four years. The northern group of our party, and friends who are associated with me in all kinds of activities, men of all parties and all groups—economists, thinkers, and people of all kinds who are studying these questions—have been preaching this policy for four years; and, even if we have fallen under the wiles of the wizard, he has not been able to ante-date his magic by that time; we have done this on our own account. I welcome, however, the right hon. Gentleman's return to politics. More than that, there is the new feeling that is growing up all over the country among all kinds of groups that a much more active policy is now possible, and I think any reasonably impartial man would say that it is possible largely because of what the Government have done. Whatever one may say of the past, with regard to the future we have now possibilities of wealth and power that were undreamed of before.

So far we have only been dealing with the question of the necessities of life. Mention has already been made to-day of housing, food, leisure, the possibility of old age pensions, and so on, and therefore I will not say what I was going to say on these matters. It is common knowledge, however, that a few months ago there arose a great dispute between the authorities of the Ministry of Health and the British Medical Association. The Ministry of Health alleged that life could be supported on an expenditure of 5s. 1½d. per week per person, while the British Medical Association asserted that a sum of 5s. 10½d. per week per person was required. After a certain time, the controversy was got over by the appointment of a fresh committee, and a compromise figure was arrived at. At the same time, however—and this is the point of my argument—certain other people undertook an investigation, not as to what in theory doctors said health could be maintained upon, but as to what in fact people spent upon their food per week per person. The investigation was made under the authority of the Pilgrim Trust, and it was found that, in the case of the samples taken, one in Poplar and one in Sunderland, the amount actually expended on food per week per person did not even reach the lower figure of 5s. 1½d., but was something like 3s. 2d. These investigations included, not only unemployed families, but employed families, and it was shown in Becontree that none of the employed families concerned, after paying for transport to and from their work, rent, clothing and so on, spent anything like that lower figure of 5s. 1½d. on food.

There are possibilities of expansion of demand. We have started to feed the children in our schools under the excellent scheme of the Minister of Agriculture and the Board of Education, whereby it is possible to buy milk at a cheaper rate, but, nevertheless, only those children who are shown on medical grounds to be underfed can receive free meals. That is not a very logical policy. There are immense possibilities in giving, if necessary, free food to all our schoolchildren, in increased expenditure upon free housing, if you like, or upon clothing for the unemployed. Why cannot you give away to the people some of this vast plenty which you are now finding it necessary to destroy? Public works, so far, have only dealt with the necessities of life. Are there no amenities of life upon which the expenditure of money is required? Are there no recreational facilities, no open spaces, no national parks that would preserve at once the threatened beauties of the countryside and be a lasting joy-giving possession to a great people? Are there not splendid public buildings to be erected? When was this gloomy, dismal view invented that a legitimate public work must always earn its exact amount of revenue? On that basis Pericles would not have built the Parthenon unless he could have shown to his colleagues on the front bench that the revenue from tourists who would come to look at it would pay interest and sinking fund on it for all time. Even our medieval ancestors—obscurantists, as I suppose the complete commercialist to-day would call them—built for us their abbeys, their cathedrals, their schools, their foundations, which we still regard as among the greatest of our architectural glories, and among which our youth are brought up and inspired and educated. Even the tyrants, old and new, Caesar and Mussolini, have followed this tradition, as witness Caesar's will, in which:

• "He hath left you all his walks,
• His private arbours, and new-planted orchards,
• On this side Tiber; he hath left them you,
• And to your heirs for ever; common pleasures,
• To walk abroad, and recreate yourselves."

When we have dealt with the education of our growing people, when we have raised the school-leaving age—for four years the Government have been going to raise it, but have not yet started to do anything except talk about educating public opinion—when we have looked after the education of our growing people and the pensions of our aged people, and when we have taken care of the housing, feeding, and clothing that our people require, there are still great educational possibilities, and great expense is still required to give them, not only a healthier life materially, but a nobler and fuller life spiritually. It is difficult for me now, after the Debate has already lasted for some hours, to express exactly and in as full detail as I should like the policy which I should have hoped the Government would have been able to outline to-day. I hope, at any rate, that we shall have within the next few weeks a much more complete and comprehensive statement than the Prime Minister has been able to give us to-day.

I am afraid it has been said of my contributions to these Debates—which, anyway, are not very frequent—that they are too dry, too academic, and too precise; but that is not because, either in private or in public affairs, those who speak most readily and babble most freely necessarily feel the most deeply. I am much concerned about the political future of this country. We have a situation almost unique in our history. The official party of the Left is in such a formation—I am not blaming them—that, unless anyone will accept the shibboleths in which they believe, unless one is prepared to tie oneself to acceptance of nationalisation of all the means of production, distribution and exchange, they are not prepared to co-operate with other parties. That has never happened in this country before. Previously, in operating the Parliamentary system, we have always had parties of the Right and groups of the Left, Governments formed with Whigs, Liberals and Radicals. That was so in the last century, and they worked together. To-day, because of the attitude of the official Labour party, no party of the Left can be formed. They do not themselves think that they are going to win the next election—[HON. MEMBERS: "Oh, yes!"]—and they are not very convinced that they are going to win the election after that.

What does that mean? It means that, although the English people may want a policy of the Left Centre, or even of the Centre, although they may want a policy far more advanced, far more ambitious, far more risky, if you like, than any upon which this Government will embark, there is no political mechanism by which they can obtain it. The only Government that can be formed is one which must depend mainly for its support upon the parties of the Right. That seems to me to be a very dangerous situation. At all events, it puts an enormous responsibility upon the Prime Minister and those who have faith in him. It puts upon him a double burden of responsibility—first, that he should not shirk the great responsibility he holds in this country in its present state of development; and, secondly, that he should not exploit for the benefit of one party this rather unnatural Parliamentary and political situation. If the people find that they cannot get what they want through the ordinary groupings of Parliamentary movements, through the ordinary Parliamentary machine, they may be driven ultimately to other means, and, if they are, the Prime Minister and his colleagues will be the only true begetters of revolution. There is still time. Let, the Prime Minister make a, different speech, a more inspiring speech, a greater speech than that which he has made to-day. Let him and his colleagues search their hearts; let them revive the generous emotions that brought men of every grade, party and class together four years ago. Let him appeal to that great common sense of justice which animates the people. Let him take all the credit, as I think he is entitled to do, for the gains that have been made up to date, and form a real national policy to exploit those gains in the future. The time is short; the sands are running out. There is a tide in the affairs of men Which, taken at the flood, leads on to fortune. Let the Prime Minister form his policy with courage, let him press it with determination. The tide still flows, though it is a slackening stream. Let him launch his bark upon it with faith and hope, before it ebbs for ever.

7.25 p.m.

Mr. SCRYMGEOUR-WEDDERBURN

My hon. Friend the Member for Stockton (Mr. Macmillan), towards the end of his speech, quoted from "Julius Caesar" the passage in which Mark Antony reads out Caesar's will to the citizens:

• "He bath left you all his walks,
• His private arbours, and new-planted orchards,
• On this side Tiber; he hath left them you,
• And to your heirs for ever; common pleasures,
• To walk abroad, and recreate yourselves."

I am not sure that that was a very happy quotation from my hon. Friend's point of view. He will remember that the motive of Antony in reading out the will was to stir up the citizens to mutiny, and persuade them to tear down the houses of Brutus and his colleagues; and when he had succeeded in doing that, and the citizens had departed, leaving him alone, Antony remarks with great satisfaction: Now let it work! Mischief, thou art afoot, Take thou what course thou wilt! My hon. Friend may remember the beginning of the next act, when Antony is found having a private conservation with Lepidus and Octavius, in which he asks for the will, which has now served its purpose, and says: We shall determine How to cut off some charge in legacies. My hon. Friend dealt at some length with the contrast that may be drawn between the existence of poverty on the one hand and the superfluity in certain kinds of commodities on the other—what he called the paradox of poverty in the midst of plenty. I think most people will probably agree with my hon. Friend that, if the productive power of modern society could be exerted to its full capacity and the products effectively distributed among those who need them, we should be able practically to abolish poverty, and certainly to raise our ordinary standard of comfort to a far higher level than that to which we are now accustomed. But before we begin to look for a remedy let us observe this. If it be true that we have poverty in the midst of abundance, it is the abundance that is new and not the poverty. In this country at least there is less poverty to-day than there has been at any period of history. The poverty that remains is not new, but it is only within the last dozen years or so that the sudden rapid excess of productive power over the effective demand has begun to be remarkable.

When we reflect that for centuries civilisation has been obliged from necessity to conduct its affairs on what are called scarcity economics, and when we consider that all our traditional economic ideas, both the ideas of capitalism and those of Socialism, have been formed on that basis, it is not a matter for surprise or for dismay that the world should take more than a few years to adapt itself to these changing conditions and to the difficulties which are attendant upon them. There has been no lack of experiments. In the United States we have witnessed the most heroic efforts to create a sufficiency of purchasing power by artificial methods. In Russia there has been for many years a powerful autocratic Government which has always made a speciality of economic science and which continues to produce one five-year plan after another, while in Germany economic affairs have been placed under a powerful and resolute dictatorship which is determined to control both the supply of money and the production of goods in the interest of the German people. But none of these countries have been nearly so successful in their struggle against economic depression as our own, which so far has proceeded empirically without paying too much regard to economic theory.

I think my hon. Friend meant to imply some criticism of the Government because their policy was not sufficiently co-ordinated. He said that the policy of the Ministry of Agriculture was sometimes in conflict with the policy of the Board of Trade. Ministers did not work together in order to produce what I think he called concerted effort. He mentioned one or two examples, particularly the Act of last year dealing with milk. I think most of us will agree that the principle cause of the present depression has been the deflation of wholesale prices, which has deprived the wholesale producer—by that we mean principally the farmer—both of the reward of his labour and of his purchasing power in the markets of the world. Therefore, every measure that the Government can take—I do not care how artificial it may seem—to revive agriculture is not only necessary for the sake of agriculture but for the sake of economic equilibrium as a whole, and I do not think you will get a better instance of that than the one that my hon. Friend gave, the Milk Act, which enables milk to be obtained at low prices, not by children who have rickets, not by children who are unhealthy, but by any who desire it. I was very interested indeed to see in the Prime Minister's speech the other day that the Government had been so much encouraged by the success of this milk distribution scheme that they intended to see how its provisions could be applied to a greater number of people.

May I turn from these general considerations to the subject of the depressed areas themselves, which certainly provide us with an example both of poverty and of productive power which is frustrated and inoperative. The former wealth of those areas depended on a volume of foreign trade which was always precarious and which is never likely to be restored in full, and, if we do not wish to see a considerable part of their population living for the rest of their lives on unemployment relief, I think we must accept, as I certainly accept, the statement of the Under-Secretary of State for the Home Department in his report that they can only be rescued by some form of positive external assistance. That kind of assistance which has so far held the foremost place in the activities of the Commissioner has been land settlement. By land settlement you may mean a great many different things. You may mean the provision of plots as a useful subsidiary occupation to an employed or an unemployed man; you may mean settlement on family holdings, or you may mean group settlements, such as are now being established, in which the settlers produce mainly for their own consumption.

But there is a fourth kind of settlement to which I would invite attention, and that is the new kind of land settlement that was started last year by the Department of Agriculture in Scotland, settling men not necessarily in groups on very small holdings of from five to nine acres, on which they grow generally vegetables or pig products or fruit or poultry; and it is notable that they do not have the same difficulty in disposing of those commodities, for which there is an increasing demand, as is experienced in the more staple products of agriculture. The Chancellor of the Exchequer last year provided £750,000, and it was estimated that this sum would settle 1,000 men on the land in a period of three years, and it was further estimated that the Scottish Office would derive a net return of 3 per cent. on that expenditure. That scheme has now been in operation for one year, and I think the results so far justify us in hoping that the estimate will be realised. I know that the obvious objection to the scheme is this. You cannot declare positively that it is a success until you have had several hundred men paying their rent and earning their living for three or four years. I agree that that is so, but I would ask the Government to examine very carefully the progress that has been made so far by the Scottish Office, and I submit that, if the evidence so far available makes it seem probable that the finance of the scheme will satisfy those conditions which the Chancellor always lays down, we ought not to wait three or four years before we proceed on the rapid extension of that policy.

There is one thing that the Commissioners cannot do. For obvious reasons, the Act does not allow them to give assistance to undertakings that are conducted for profit. I think we should mostly agree that the depressed areas will not be brought back to their normal place in the life of the country until they have attracted a great diversity of new industries that are run for profit. It would clearly be unfair that the Government should give direct financial assistance to an undertaking which might be competing with similar undertakings in other parts of the country. But there are two things which I think the Government could do without upsetting the economic balance in any branch of industry. They can to some extent control the course of investments, as they have recently done by the establishment of a holding company to finance the new developments for London traffic, and they can possibly acquire in the special areas estates which may be suitable for industrial development and which might very quickly attract new industries if they were prepared with that purpose in view. There is no lack of new industries waiting to be established. The only question is where shall they go. At present they are apt to crowd themselves together in the neighbourhood of London, urbanising a great part of the home counties and producing a congestion, both of factories and of dwellings, which constitutes a growing mass of ugliness in time of peace and a frightful danger in time of war. It should not be beyond the powers of a modern State to correct a mal-distribution of this kind, to direct investment into those parts of the country where employment is most needed and to check the unhealthy congestion of industry in the neighbourhood of the metropolis.

I have never complained that the Government for the last three years has acted with caution nor do I complain that the Prime Minister has spoken in very guarded terms on this subject. I think it ought to be remembered that, if we are to do anything effective in the depressed areas, we must continue to preserve confidence and an abundance of credit. The Government have established these two things, and any rash and precipitate action might easily destroy them and make it impossible to do anything at all. I hope the Government will not produce a great spectacular policy, because I believe the more spectacular and grandiloquent it is the more likely it is to be deceptive. No one who has any familiarity with these depressed areas, and with the difficulties of their population, can wish to see the misfortunes which they have endured with so much constancy, and the hopes that they have resolutely refused to abandon exploited in the interest of any old-fashioned political gamble which presents any policy for the sake of gaining votes and which most people know in their minds is not likely to produce the results that are represented. I hope the Government are preparing proposals. We do not expect them to work miracles. We only ask that their proposals shall be practical, we ask that they shall be directly related to their object, and we ask that they shall be of such a kind that we can conscientiously recommend them to the acceptance of the country.

7.45 p.m.

Mr. WEST

We on this side of the House listened attentively to the interesting, and at times, I think, rather menacing speech as far as the Government are concerned, of the hon. Member for Stockton-on-Tees (Mr. Macmillan). I was specially interested when he claimed that he had been propagating his ideas for four years. I have a dim memory of hearing very similar ideas propagated at the street corner 20 years ago by members of the Labour party, and if the hon. Member continues to go to the Left at the same rate, in 20 or 30 years from now he may be a member of the Labour party. I have not the time, unfortunately, to follow the hon. Member in regard to his interesting points, nor even to criticise the lack of policy of the Government, as I would like to do. I am going to forego that temptation and try to put forward an individual proposal, I hope modestly, of my own, which, if adopted, might bring some help and amelioration to thousands of men and women who are unemployed at the present time.

I believe that most Members of this House are at least agreed upon one essential point about unemployment. What we need, perhaps, most of all under the present system is to obtain more customers for the goods which we can so abundantly produce. The problem is how can we obtain those customers. Clearly we have not much hope of increasing our foreign customers. Foreign trade has declined enormously in the last five years, and there are but few optimists who believe that it will increase enormously in the next 10 years. Therefore, we must find new customers and greater markets. If we cannot find markets abroad we are left with the only alternative of trying to find markets at home. If we cannot get more extensive markets, how can we get more intensive markets? Here is something in connection with which we might get something practical done in our time. There is an enormous potential demand for goods of every kind in Great Britain, for boots, clothing, furniture, food, and for every commodity which we so adequately produce, and the only reason why those goods are not the subject of effective demand is because the people who would consume them are at present without the purchasing power to bring them into consumption.

I have a suggestion to make to the Government. I may be greatly daring, but I am going to risk it, and if there is any economic flaw in it I hope that somebody will be good enough to show me where it is. The Parliamentary Secretary to the Ministry of Labour told the House some time in March that there were over 2,000,000 adult males in Great Britain receiving wages of 45s. a week or less. I do not believe that the most diehard Member of the House will expect that an adult person with £2 5s. or less per week can live decently and purchase the goods that he, and perhaps his family, urgently need. My suggestion, therefore, is that if the average wage of those 2,000,000 adult males at the present time is £2 a week, and if we had a Minimum Wage Act of £3 a week, which sum is shockingly low from the point of view of a living standard, it would mean an increase of buying power of £2,000,000 a week or £100,000,000 a year. This afternoon the Prime Minister has told us that £10,000,000 spent in productive expenditure would give employment to 40,000 workers, and if that is so—and I have no reason to doubt it—my proposal to give an effective increase of buying power of £100,000,000 per year would on that assumption give employment to 400,000 men and women who are at present unemployed—one-fifth almost of the present total of unemployed. What is there in that suggestion that is unpracticable or uneconomic? I should like to know. I do not suppose that on the moral side of the question any hon. Member would say that £3 a week was too much. If there is any objection on moral grounds, let me read a quotation from a report to Congress by Mr. Davis, Secretary for Labour in the United States. He said: The employer who pays low wages is a parasite who throws on the community the expense of the unpaid grocery bills that should be met by the wages he should pay. … Sometimes it is argued that low wages lead to more foreign sales. The answer is that it reduces the home market far more than it increases the profits from abroad. Even dullards must see the folly of killing the purchasing power of the greatest buyer, the worker, in the home market. If we agree on that, what are the arguments against high wages? I will try to answer two or three of the arguments which I have heard in this House since I became a Member. The first is that we cannot pay the high wages which we should very much like to do because if we did we should not be able to compete with low-wage industries abroad. That is the commonest of the arguments one hears usually. The facts do not bear this out. If low wages give a country a definite advantage one would expect that Italy, Spain, Portugal and other low-wage countries would be in a most prosperous position and have an enormous foreign trade; but the opposite is the ease. The countries with the greatest export trade in the world are not the low-wage countries but the highest wage-paying countries, Great Britain, United States of America, Scandinavia, Holland, etc. The low-wage-paying countries are the poorest countries economically and from the export point of view. Our chief competitors are not low-wage-paying countries, not even Japan, but the United States of America where wages compare at least as favourably with those paid in our highest-wage-paying industries. The "Evening Standard," a paper which does not support this party, said: It is the United States of America rather than European lands that British paper manufacturers fear. We talk of competition from cheap labour countries, but it has no foundation in fact. We beat low-wage countries more frequently than they beat us as our export figures show year by year. If low-wage-paying was a great advantage, everyone would expect that China would have all the foreign trade in the world, but the reverse is the case. The second argument is that high wages cause high costs, and it is another, and perhaps even greater, fallacy. If that were true, why is it that some of our cheapest English goods are made by the highest paid labour while some of our dearest goods are made by low-paid labour, or why is it that some of our high-wage-paying industries show the greatest increase in foreign trade, as, for example, the electrical industry, and some of our lowest-wage-paying industries are suffering the greatest depression—coal, for example, and other industries? The answer is an easy one. It is that low wages often mean high costs of production, and that high wages often lead to low costs of production, because they result in more efficient workers and better organisation of the trades concerned. There is ample evidence available in support of my assertion. There is the case of the Ford Motor Company. Members of this House will be familiar with the statement of the chairman of that company in 1930 when he said that the company had factories in most European countries and that where they paid the highest wages, in Denmark, they had the lowest costs, and that where they paid the lowest wages, in Belgium, they had the highest costs, though they had the same tools and equipment, and the conditions were exactly identical. The Noble Lord the Member for Hastings (Lord E. Percy) told us in the House a few weeks ago that in New York wages in the building trade were double those of the London building workers, and yet the building costs in New York were lower than those in London. The chairman of the London Brick Company, Mr. P. Stewart, on 2nd March of this year, said: The advantages of raising wages are widespread … a large proportion of the extra wages finds its way through shops to factories, thus producing more goods and absorbing more unemployed. Better wages mean better trade. This company at that period increased the wages of all their workers, and in the same week reduced the price of bricks by 3s. per 1,000, which is convincing proof, if proof were needed, that high wages do not necessarily mean high costs, but, on the contrary, may even lead to lower costs.

I believe it is true to say that our foreign trade was never more than a quarter of our total trade, and to-day, owing to tariffs, etc., it is not more than an eighth of our total trade. Therefore the seven-eighths of home trade is very much more important to us than the one-eighth of foreign trade. Much of our foreign trade is what we might call non-competitive. We cannot grow coffee and oranges, etc. Most of our foreign trade is with Empire and high-wage-paying countries. Very little of our foreign trade is with low-wage-paying countries. There are many industries in this country which have no foreign competition whatever. There is no foreign competition against our distributive, catering, building and transport trades. There you have trades employing millions of workers which can never suffer from the dangers of foreign competition, and even where we have direct foreign competition—in the case of coal—everybody will agree that there is sufficient margin between the wholesale or pithead price of coal and the retail price in London, between 14s. a ton in Yorkshire and 44s. a ton on the London streets, to give every miner in this country double the wages he receives at the present time without increasing the price of coal even by a penny a ton. If evidence were needed of the truth of that assertion, it could be found in the fact that during the last 12 years the wages of miners have been halved, yet the price of coal in London is practically identical with the price 10 years ago. It is still 2s. 6d. a cwt., although a man may be paid only 2s. 6d. a ton for risking his life.

There is an easy opportunity for increasing wages in these trades without increasing prices at all. Better organisation and fewer middlemen, speculators and directors would give us economies quite ample enough to compensate for giving the better wages which are essential to give more buying power to the workers of this country. If this Government had spent the time I believe to have been wasted on the sedition Bill in trying to bring in minimum wage Acts to increase the spending power of the great mass of our workers to a reasonable level, to at least £3 a week, to give a very ordinary and still poor wage to our weekly workers, the result would have been to stimulate the demand for commodities to increase vastly the buying power of our best customers, the working people of this country, and to raise the standard of life of millions of our workers and at any rate to give the National Goverment a truthful reason for the boast that they have done something to help the unemployed victims of the system and to help the people of this country generally.

8.1 p.m.

Mr. STOREY

The resolution which is now before the House is not one which can command the support of anyone who has studied this problem, because the policy which the Government up to now have followed, that of general stimulation of industry, is the best that could possibly have been adopted. Although I feel that up to now that policy has been a right one, I would not go so far as to say that it would be the right one for the future. Although the country is mainly prosperous and though a large part of the unemployment is of short duration, we undoubtedly have that problem of the special areas which demands special treatment. The position in which the special areas find themselves is not one which is of their own creation. The extension of cheap power facilities and the availability of amenities have made it possible for the light industries to concentrate around their largest market, and, therefore, the special areas have lost that variety of industry which is essential to their well being. For that reason, I feel that the problem of the special areas is not a local one but a national one, and they are entitled to think and to expect that the prosperity of the remainder of the country and the credit and the resources of the country should be used in the solution of their problem.

As an hon. Member said just now, we do not expect the Government to perform miracles, but if they want at the next election to see a complacent look on the face of the special areas they must take some more definite steps than they have taken up to the present time. One approach to the problem is to allow hard economic facts to work out the solution for the special areas. I do not feel that we should follow any such solution; it would entail far too great a suffering to allow hard economic facts to play their part. We have also to face the fact that the Government's policy of the general stimulation of industry has involved interference with hard economic facts, and that interference will compel further interference. We have seen that devaluation of currency has helped the export trade of certain areas. On the other hand, it has made the raw materials of other areas more expensive. We have seen too that interference with economic facts, such as trade treaties, while it helps the coal exporting of the North of England has increased the competition which the coal exporters of Wales have to face. Therefore, we cannot allow hard economic facts to play their part, and the Government must continue their efforts for the general good by helping industry wherever it can.

Another approach is that of special schemes of work, of which we have heard a good deal this afternoon. A great deal can be done on the lines which the Prime Minister indicated, but I do not feel that therein lies the real solution. On the other hand, I think that there is room for a very big increase in the work of the special commissioner. I am glad to know that we may soon expect his report, for I am certain that we must redouble our efforts for the special areas to make them more attractive to industry, to encourage the light industries and the variety of industries which are necessary for the well being of the special areas. We must do all that we can through the special commissioner to improve the facilities of the special areas for these industries; provide sites with cheap power available, use the special commissioner to rehouse the people of these areas where housing conditions are so bad, improve the amenities of these areas so as to attract people to them, and use modern methods of publicity to break down the prejudice which exists against the special areas and their workers. As the closeness to a large market is so important a factor in the allocation of industry, as it is so undesirable from an amenity point of view that industries should migrate to the South and other parts, as it is so important from an economic point of view that the light industries should remain in the special areas and move there, the Government should consider very seriously whether by freight assistance they cannot induce the lighter industries and the variety of industries to stay in the special areas or go there.

The other approach is to provide special treatment for the special areas. After all, in the Services when there is a block of promotion it is customary to offer special terms of retirement to those who are willing to leave. Why cannot we deal with a special problem by special treatment? The cost would not really be greater. Unemployment assistance is equivalent to a pension of 26s. a week to a man and his wife. Surely it would be well if for a limited period under special terms we offered to make it easier for the older men who are willing to retire to make way for the younger men who are only too willing to work. For the future I should like to see the Government tackle the problem of higher pensions on an actuarial basis. There is a desire for such pensions, coupled with a willingness to pay increased contributions. When we realise that there are more people employed than ever at the present time a full share of the benefits of a mechanical age should go to the worker in enabling earlier retirement, in shorter hours and in holidays with pay. I hope that the Government are going to press on earnestly with the inquiries which they are making into these subjects and that they will take action to bring them nearer.

Particularly do I hope that they will press on with the raising of the school age, because I am absolutely convinced from my experience as an employer in a small way that we can get much better results, as I have done in my own firm, by refusing to take boys of 14 and recruiting from the secondary and junior technical schools at 16. If such treatment as I have suggested were adopted, it would not only benefit the special areas but the country as a whole. Therefore, it seems essential that it must be coupled with an increase in our work in industrial transference and with such training as the right hon. Member for Caithness (Sir A. Sinclair) indicated to us. There is very great scope, and it should be impossible for the Minister of Labour to have to record the fact that in some areas there is a shortage in the engineering industry while we know that in other areas there are many men unemployed. The need is urgent. The right of these special areas to special treatment is unquestioned, and therefore we do expect the Government to take prompt action in this matter.

8.14 p.m.

Mr. McGOVERN

I desire for a short time to offer my criticism of the speech of the Prime Minister. It is true to say that since I have come to this House I have never heard a flatter speech made from that Front Bench by a representative of any of the Governments which have gone before. During the time the speech was being made I drew the attention of a Member on the Liberal benches to the fact that there were at least 12 Members on the National Government benches who had fallen asleep. I am always prepared to be generous to people whether they belong to the opposite party or not if they give of their best and make a good defence and offer concrete suggestions for the future. I examined as carefully as I could the speech of the Prime Minister, and the only two things that I could get from it were, in the first place, an appeal to employers, in return for tariffs, to show their appreciation by starting new industries in the depressed areas. It is a new thing for me that employers in this country are going to be actuated by generosity because of the fact that the Government have given them something to fill their pockets.

The second part of the speech was that the Government were considering the moving of people from the depressed areas into other areas where employment might be found. That is a wonderful suggestion. I have heard it from almost every Tory platform by economic hacks since 1918. I remember a man in the area that I represent coming to me some years ago and saying: "John, they want to send me to England to a job where they are offering to pay low wages. They want to train my daughter and send her to the Highlands on domestic service. They want to send my sons to Canada and Australia to do farming, but I have made up my mind that if I am going to live and die in poverty I am going to live and die in the Shettleston area." That is the feeling in the minds of the people. It reminds me of a story that was told by the former Member for Shettleston, the right hon. John Wheatley, of a man who worked in the mines during Mr. Wheatley's early boyhood. The man was troubled by the presence of a collection of dirt in his working which obstructed him. He called the attention of the foreman to the presence of the dirt again and again but the foreman simply looked at it, shook his head and passed on. Finally, the man said: "You must tell me what to do with this dirt, for I cannot get on." The reply was, "Throw in one way or the other, and you may lose it in the process." That seems to be the policy of the Government in dealing with the people in the depressed areas.

All the discussion to-day has gone very badly against the Government. One of the most notable speeches of censure came from the hon. Member for Stockton (Mr. Macmillan). He approves of a National Government but not this type of National Government. He wants the old crocks on the Front Government Bench cleared off, and I agree with him. They are the failures of the parties in the past. They have got together because they have been failures in their individual parties, and now they come along and say: "Here we are again. We are not the old Tory party. We are not the old Liberal party. We are like Charlie Peace. We change our name but we have our false faces on." There is not a single intelligent or progressive idea among them. If I believed in a National Government I should say that the best thing that the present Prime Minister could do would be to resign office and then His Majesty could send for the hon. Member for Stockton to form a National Government of intelligent, progressive and capable men.

This is a very opportune moment for the Labour party to put down a Motion of Censure. It is the orthodox thing periodically to move a Vote of Censure. Whether orthodox or not, I agree that on this occasion a Vote of Censure is very essential, because of the fact that we have had a change in the Government. We have a new Prime Minister. This Government is run and has been run by Laurel and Hardy. Laurel has changed places with Hardy and Hardy has changed places with Laurel. Hardy takes Laurel's salary and Laurel takes Hardy's salary. Then they bring in a member of the former Prime Minister's family and put him into the Colonial Office. They bring in Jackie Coogan in order to assist them with their great national drive to deal with the affairs of the country. They also bring in Charlie Chaplin, the silent Minister, the Noble Lord the Member for Hastings (Lord Eustace Percy). He does not believe in the talkies. He is to be the silent Minister, the one who thinks for the Government. There have been tremendous changes. Then they bring in the hon. Member for Kilmarnock (Mr. Kenneth Lindsay) because he expects to be a member of the family of the late Prime Minister. The Government would not impress any intelligent man in the country or in this House.

The Prime Minister tells us to-day that he has never said on the platform or elsewhere that he has a cure for unemployment. What a confession of defeatism to say that he has no cure for unemployment and that he will not stand on a platform with any candidate and say that he can cure unemployment. Here is a confession that the Government are going to adopt a policy of drift. Like Micawber, they are going to wait for something to turn up. If something turns up and proves to be a success, they will claim that it is a success because of their genius. If it proves to be a failure, they will say that it is only another extension of the world hurricane. The Prime Minister tells us that we have cheap money. Is that an achievement of the Government? There is cheap money in France, in America and many other countries. We are not entitled to accept the view that it is because of any great gifts of the National Government that money is cheap.

The Prime Minister also says that unemployment has been falling. It has been falling in America and France and many other countries. To-morrow there may be a further descent, even at a more rapid rate, when unemployment will go down to a greater degree than before. Nobody knows what will happen. Many suggestions have been made to-day by supporters of the Government to show how capitalism can be kept going; how the capitalist system can be made to work. I cannot see how that system can be made workable in any country. The intelligent thing in statesmanship for the present Prime Minister to do would be to call a conference representing the Governments of the world and say to them, in no unmistakable language: "The old order is dead. We want experts to take stock of the whole of the available raw materials in the world, and we will take charge internationally of those raw materials. We will set people to work producing the essentials of life. The raw materials shall not be the possession of any one country, because nature intended them to be the common possession of mankind. They shall be rationed out according to the needs of the peoples and according to climate in every land. Unless we are prepared to move speedily there will be a tremendous reckoning. The old order will come down in chaos and revolt and will probably bring civilisation crashing to its very foundations. Therefore, we advise that the old order should be scrapped and a new order set up." That might mean that kings and emperors, capitalists and bankers, would go, but it would mean a common possession of the raw materials of this world and a common possession of the gifts which science has brought to us. If we could put this machinery into operation we could, by international effort, raise the standard of life of every person throughout the civilised world. We could give recreation and pleasure, opportunity and education, to all mankind. That is the only alternative I see to the present system of chaos and confusion, evident throughout the world to-day. Statesmen I know love power, and capitalists love to feel that they have wealth and power, and they do not look kindly on any idea that they should come down from their pedestal and make way for the masses of the people. If I had time I should like to have analysed the actions of the Government, but in connection with the depressed areas let me say that I do not think much of all the talk about Father Christmas moving about in these areas giving plots of land for them to grow a few turnips and cabbages. All the turnips and cabbages I want the farmers can grow. Henry Hall, on the British Broadcasting Corporation, has a good tune which is called "Here comes the Candyman." Sir Arthur Rose seems to me to be the candyman of the distressed areas, going round giving balloons and the candy rock to the people, trying to make them believe that they are going to add to the national prosperity in this country.

Any little device or trick will be attempted. The obvious thing to do is to make fundamental changes in the present organisation of society. On the one hand, you have a glutted market of all the goods which can be produced by mankind through the aid of machinery and, on the other hand, the unemployed, the underpaid man, the great starving multitudes. The problem is simply one of moving these goods, food and clothing, into the centre of the hungry multitude. The Government say that it is a tremendous problem. I have heard people talk of what it costs to feed a child. To me it is not whether it is 5s. 10½d. or 5s. 11½d. or 6s. When my child sits down at the table he eats until he is satisfied. That is the only proper measure; and it is the measure which hon. Members apply to themselves in the dining room and when they are lunching. They eat, drink and are merry, satisfy their wants, and then come and consider how little the people can live upon; let us keep them down to the bare standard of life and subsistence. To me there is no problem. All that is wanted is the will, the courage and determination to effect these changes and bring these goods into the home of the people. That means a fundamental change, a complete nationalisation, or internationalisation, of the ownership of the means of livelihood. Some people seem to stand aghast at Socialism. I do not care what you call it, but I do say that it would be an intelligent, humane and civilised order of society. The present system has broken down. The longer the present Government goes on the greater will be the poverty and degradation.

If schemes are wanted, I will suggest one or two. The things which will be wanted, if we are to have a National Government in the future, will be poorhouses, cemeteries, prisons and lunatic asylums. These are the things which follow a National Government because they are reducing the standards of the people. We are told that there are evidences of malnutrition; doctors say that women and children are deteriorating, and the physical unfitness of the people is such that recruits for the Army and Navy are turned away in thousands because they are not up to the standard required. The number of suicides since 1919 has increased from 3,000 to 17,000 last year, because of the present collapsing system of society. We have Hitler in Germany and Mussolini in Italy, and every attempt is being made to bring in by backdoor methods other means of dealing with the present system of society instead of withdrawing it and passing to a more happy episode.

There are the proposals of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). When are these proposals going to be placed before the House? He struts around the country like a peacock, telling us of the great plans he has for dealing with unemployment. It seems that brilliant ideas only get into the heads of politicians when they are out of office; when they are in office creeping paralysis of the brain seems to overtake them. They cannot formulate schemes when in office, but when out of office they have plans. The right hon. Member for Carnarvon Boroughs says that he is going to submit them to the Cabinet, he cannot state them on the platform; they are sub judice as the lawyers say, they are secret. This is the place to analyse any plans which may be brought forward. We can criticise and analyse and, if necessary, paralyse them. The right hon. Member for Carnarvon. Boroughs should bring his schemes before this House and not go round the country pretending that he has a remedy for unemployment. He has not. They are only a copy of the old ideas of the Yellow Book, the schemes of defeated politicians of the past. Why does not the right hon. Gentleman come to this House and discuss his plans? Why go to Glasgow and the industrial areas? Let him come to the national tribunal, put his plans before it so that they can be analysed and examined.

What is wanted is a vacuum cleaner on the Front Government Bench to suck all the old politicians off it and put new life into the Government. I wish I could see an alternative Government. It is a great tragedy that in this country we have an opposition going round saying that they believe they will get 180 to 200 seats in the next Parliament. If the leaders of the Labour party were worth their salt, they would imbue their people with the idea of victory and going ahead against this national discredited Government. If this Government comes back it will not be because of any ability on their part but because of the lack of a vigorous opposition in the country. I wish I could see the end of this Government because, in my estimation, as long as they remain in office they will continue to fill the pockets of their friends by their legislation and take out of the stomachs and off the backs of the poor of this country.

8.35 p.m.

Mr. KINGSLEY GRIFFITH

Those who have heard several Votes of Censure on the subject of unemployment debated under successive Governments are bound to find a certain family resemblance between these discussions. The Opposition always take the figures of unemployment as they are announced at the time and use them as a kind of club against the Government. No allowances whatever are made and indeed it is sometimes hinted that the figures ought to be a great deal larger than they are. The Government on the other hand take away from the figures here and take away from them there and argue that, a certain proportion of the unemployment is purely temporary and that too much account should not be taken of it. Indeed they almost lead one to suppose that unemployment is largely a matter of imagination. That contrast seems to hold good whoever happens to be sitting on the benches opposite and whoever happens to be sitting on this side of the House. My own sympathy I am bound to say is rather with the Opposition on these questions because a kind of complacency seems to overtake the people who sit on the benches opposite.

It is not enough that we should console ourselves, as the hon. Member for West Renfrewshire (Mr. Scrymgeour-Wedderburn) suggested in his interesting speech, with the fact that there is less poverty in this country than ever before. That may be true, but the aspirations and opinions of the people change as times go on and they are not to be satisfied merely with that assurance. If it be true that people on the dole to-day are earning more than their grandfathers earned when in full work, that is no answer to the demand of the present generation. A better answer will have to be found. I am content to take the figure which I saw in a publication favourable to the Government and issued by the National Labour party, according to which there are 600,000 people now who have been out of work for over six months. That is a terrible figure and although I freely admit, that in Middlesbrough employment is a, great deal better than it was and that there has been a substantial improvement, there is still, after the years of suffering through which that locality has passed, a terrible proportion of people, including people whose cases are known to me personally, who have been out of work not for six months but for years. I cannot help feeling that if this problem is merely left to natural development, no ordinary course of revival of trade is going to bring these people back into active work.

I want to consider, as other speakers have done, the problem of the special areas, and as the Minister of Labour is in his place I should like him to note for future reference—because he may not have an opportunity of replying to the point to-night—that in dealing with the special areas at present we are working on a rather artificial basis. The special areas have been given a definition in an Act of Parliament. That definition was not arrived at and it is not pretended that it was arrived at as the result of scientific examination. It is the result of accident. For instance, the hon. and gallant Gentleman who at the time was Civil Lord of the Admiralty and who conducted one of the investigations, said plainly in his report that one of his principal reasons for leaving out Teesside was that he had not time to get there. He said that if he had taken in all that area he would have had to cover so much ground that it would have prevented him from making a proper report, and he thought it was better to make a complete report about a small area than a scant report about a larger area. That is an intelligible reason but it means that whereas we now have plans and schemes to deal with depressed areas, we are not dealing with scientifically defined areas. We are leaving out a lot of depressed people who do not happen to live in depressed areas. I suppose I ought to follow the fashion and refer to them as special people but not living in special areas.

I sent a case recently to the predecessor of the present Minister of Labour. It was the case of a man from my own constituency who had been industrially transferred. That is generally supposed to be a desirable thing. This man got a job at Dagenham but his wife and family were left at Middlesbrough. He wanted to move them and his furniture to Dagenham but he had not enough money to do so. He applied for a grant and was told by the Ministry, no doubt properly, that because he did not come from a special area it could not be done. It would be a disaster if that man had to go back from the place where there is work for him to the place where there is no work for him. That kind of thing is happening because there has not been a proper scientific delimitation of the special areas. That however is a point of detail which perhaps can be dealt with at some future time.

I cannot help feeling that the kind of proposals we are likely to get out of the Commissioners, as at present appointed, are not likely to lead to much. I do not say that in any criticism of the Commissioners personally. I have no doubt they are excellent people, but I feel that this whole thing has been started on too small a scale. I wish I had heard in the speech of the Prime Minister anything which would give me the hope that something larger was going to come out of it. It is rather a shock to find the right hon. Gentleman building so much on the possibilities of transference. I am not pretending that nothing can be done by transference, but I thought I had secured from the previous Minister of Labour and the previous Parliamentary Secretary an admission that transference was "drying up," that although it was not stopped it was, on the whole, supplying fewer people and as a remedy, was growing less as time went on. I thought it almost inevitable that such would be the case. The areas to which transfers have been taking place have their own problem of unemployment to deal with and are not likely to welcome an indefinite influx of people from the special areas. If transference, strictly so called, is, as I believe, growing less as a remedy, what is to be done for the people in these special areas? It is not enough to leave it to natural forces to provide means of obsorbing those people. The drift is still going the other way.

In most of the areas, certainly in Durham at which I can look across the Tees from Middlesbrough, there seems little prospect of a natural revival of industry. If that be so, there must be some kind of artificial stimulus, some kind of starting or re-establishment of work. If the Government want schemes for giving employment and if they are shy, as they appear to be, of the mere name of the right hon. Gentleman the Member for Caernarvon Boroughs (Mr. Lloyd George)—though I am sure the Minister of Labour, for old time's sake, would be glad to listen to any suggestion from that quarter—they have had sufficient suggestions from their own benches this afternoon to make a very promising start and one which would give a great deal more encouragement to the country than anything we have had from the Prime Minister to-day. I was delighted with the speech of the hon. Member for Stockton (Mr. Macmillan). I do not know whether it is because we are neighbours on Tees-side or whether it is due to a natural community of mind, but when the hon. Member speaks I nearly always find that I agree with him, and afterwards I am distressed to find that we are in different Lobbies. I do not know whether that is going to happen to-night or not. But certainly in his speech there was enough inspiration, if the Government wanted to take it, to provide some kind of start.

We have to remember that, with great candour, the head of the Government has made a confession of failure with regard to these areas. Reasons of course were given for it. He said there were other tasks which had to be done. But the people who are the victims of the failure find it difficult to listen to explanations and excuses and if they are left, as they are left at the present moment, with the impression that their case is the last case for the Government to deal with, they will want a Government next time that will put their case first. I wish the Government would appreciate that fact. A campaign is going on with regard to peace and reconstruction. The papers try to make little of it. Even the hon. Member for Shettleston (Mr. McGovern) has tried to make little of it.

It is not so much the facts and the details of that campaign, which we shall get in due course, that are important to the Government as the fact that that campaign is there and that if one had not been started by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), it would certainly have been started by somebody else. If he had not spoken, I feel one might say that the very stones would have cried out, because the problem, though concentrated, is so urgent where it is that these people are bound to feel that something must be done, and they demand a bold programme of construction, for which the Government have the basis in the report of their own Commissioners, like that of the hon. Gentleman who was Civil Lord of the Admiralty. They could elaborate the suggestions made by the hon. Member for Stockton-on-Tees (Mr. MacMillan) and by others of their own party to-day, and if they will take vigorous action of that kind, they need not be afraid of any campaign. They can take the campaign along with them and make it their own campaign, and I should be very glad to see them do so.

I do not stand here in a spirit of opposition. I stand on this side because I found I had to vote against the Government too often, and it was not fair to continue to do so from that side. But as I stand here I am still delighted on every occasion when I can find the Government taking an active policy. It does not matter to us who does it, but it is better that it is the Government that should do it. I ask them to learn some lesson from the Debate to-day, a lesson which must surely be, if they will pay attention to the speeches of their own supporters, that they are, either openly or covertly, dissatisfied with the statement made by the Prime Minister, just as they have been dissatisfied with the statements made by the late Prime Minister, that they want a new policy, and that they will get it from somewhere.

8.48 p.m.

Mr. MARTIN

Following on the last speaker, I wish to emphasise the appeal he has just made and to underline his statement that he would not mind from what quarter a real, progressive policy came. He would support it if it came from the Government, although he sits on the benches of the Opposition Liberals. That sort of statement I welcome. It seems to me that at the present time—this Debate has shown it—the essentially important thing is to mobilise all the opinion in this House and outside which can support a Government which will, as I believe this Government will, put forward a progressive policy to deal with the problem which we are discussing this evening. I am interested too that he is able, as an Opposition Liberal, to forget some of the jibes that were cast from the official Opposition benches about what has been done and what has not been done by His Majesty's Government. I am glad to find that people in this part of the House are not only prepared but anxious to remember what has been accomplished.

I hope that whoever replies for the Government will not listen to the cheap jibes of the right hon. Gentleman who opened the Debate, but will answer the serious speeches that have been made. We all know that the Opposition's duty is to oppose. We all know that party politics are the rule in this country—thank God, we have party politics, instead of a dictatorship, either of the right or of the left—but we ask that His Majesty's Opposition should concentrate their opposition on some sound constructive criticism, and I hope that whoever replies for the Government will, as I say, ignore the cheap jibes of the right hon. Gentleman who opened the Debate and pay attention more to the speech which we have just heard and such speeches as that by the hon. Member for Stockton-on-Tees and the hon. Member for West Renfrew (Mr. Scrymgeour-Wedderburn). I hope I do not tarry behind anyone in this House in acknowledging the work accomplished by the Government. A great deal has been done.

The right hon. Gentleman who is now Minister for Labour has accomplished much in his former spheres, and I hope he will accomplish as much and more in his new office. I believe he has that spirit, that ability, which will lead on to greater things. He knows—who better than the Minister of Labour?—that there is still the fact at the present time that, although in Greater London there is one in 12 unemployed, Durham still has one in three unemployed. It is perhaps unnecessary to repeat that fact. I say "perhaps" because sometimes one gets a rude jar from the leaders of one's own party and Government, just as we have recently from the Chancellor of the Exchequer. The Prime Minister made a speech in the country, an admirable speech, in which he said, quite frankly, that there was one failure. May I quote his words: We have been beaten so far by a problem that has defeated the efforts of two Governments, the problem of the distressed areas. I feel it is up to us in the Government, it is up to all of us, to start again with renewed efforts and renewed intentions to tackle this problem which so far has defeated us. Those words cannot be changed or minimised. There they stand, and they are a challenge, not only to the right hon. Gentleman's own colleagues on the Front Bench, but to every hon. Member who supports the National Government. Therefore, it was somewhat of a jar to find the Chancellor of the Exchequer a few days later saying this: With all respect I disagree with the Prime Minister in that phrase. We have not failed, because we have not done with the depressed areas. When the Prime Minister has stated a rather unpleasant fact and we find the Chancellor of the Exchequer going back on his leader like that, it seems to me that it is unfortunate, that such an expression of what may not have been intentionally self-satisfaction or complacency should have been brought forward at this moment and should have been before us when we debate this particular subject. I hope the Chancellor of the Exchequer was not complacent. I hope and believe it does not mean that all the efforts which are to be made are going to be met by the Treasury with a blank refusal to move in any direction. I hope it does not mean that action will be continually deferred. If it does mean that, I see disaster ahead. I am reminded of the advertisements which we see in the papers at the present time of a very prehistoric animal, the brontosaurus, which is not changing his form with the changing times. I would remind the Minister of Labour that times are changing so quickly that we have no room for a brontosaurus on the Front Bench. But I believe that if the Chancellor of the Exchequer's spirit is encased on the weighty carcase of such an animal, the right hon. Gentleman's other colleagues, the Prime Minister and the Minister for Labour, will see to it that it is the fittest who will survive and not those who do not change with the changing times.

It has been acknowledged in several parts of the House that much has been done for agriculture. Coming from a distressed area, I realise as acutely as one who comes from an agricultural area that it is for the benefit of the country that so much attention should be paid to agriculture. I welcome it, and I would like to see things more flourishing for the agricultural community than they are at the present time. Recently in Newcastle the Royal Agricultural Society held their annual show. It was a great occasion. There was set before what were essentially the inhabitants of an industrial town, a great trading city, all the best work that has been accomplished throughout the year by the agricultural community in the whole of England, Wales, and Scotland. The people from the industrial areas went to see what the farmers had been doing. The Lord Mayor of the City was there, but he also had another duty to perform. He got into a boat and went down the River Tyne. On the river bank there was, a certain amount of activity, but there were also derelict yards, inactivity, and stagnation where formerly there had been busy hammers and active work, and he went out to the mouth of the river to greet a famous ship that was passing by on its way North to be broken up. That ship had been built on that river. It was the pride of the river. The "Mauretania" was going on her journey North, and as she passed from her home she said "Good-bye." May I draw the attention of hon. Members to the telegram that was sent by the captain of the "Mauretania" to the Lord Mayor of the great city where she had been built: For 28 years have I striven to be a credit to you, and now my day is done. Though I pass on, may Tyneside ever reach out to further and greater triumphs. With pride and affection. I greet you. Farewell.—Mauretania. Here was a ship which was an exhibition of all the skill and brains of that great riverside, and she hoped that the Tyneside would ever reach out to greater triumphs. I want to ask the Government whether they have any conception of the future industrial organisation of a great port in an industrial area like the Tyne. It is typical of several other areas which we are discussing to-night as special areas. Have the Government any coherent conception of its possible or probable future, has any industrialist any conception of what the future will be? Are we ever likely to be asked to build great ships like the "Mauretania" again? Is the population which formerly put its energy, its brains and its skill into a great work like that ever to be employed again on any appreciable scale, except perhaps in building ships of war, for which their skill is so highly fitted? It seems to me that the answer is that nobody knows. The Government, with their present fiscal policy and their policy of expanding trade, cannot judge what the future of the great basic industries will be, and I do not believe the industrialists can help the Government at the present time because they are all competing at great pressure instead of trying to co-ordinate and combine with the Government.

Therefore, a great problem is left to the Government. If the transference, about which we have heard so much, takes place and an area is denuded of its population, skilled and otherwise, what about the burden that will be laid on the remaining population? What will happen about the Government's policy of housing, health and all the social services? Is the Minister of Health to go forward and ask such a community to go on building houses? These problems will have to be met, and I would suggest that when people in many parts of the House and in the country get somewhat frightened at a suggestion that there should be any kind of plan, they should feel at least that there can be no harm, but only good, in looking ahead and forming some kind of coherent policy which can be stated categorically, but not necessarily in detail. If that can be done, it is what is meant in a great many minds by a plan. The alternative to that conception of planning is a continuance of chaos. It is no good suggesting that the people who talk in that strain are merely theorists, for it seems to me that we shall be bound in the end to adopt some form of straightforward policy of that kind. A great many industrialists throughout the country have changed their outlook on this problem, and the Government need not fear that there will be any opposition from the majority of industrialists if they launch on such a policy. There are a few people like the Lord Mayor of Newcastle who went out to greet the "Mauretania," who stick doggedly and with pathetic faith to the shibboleths of laissez faire Liberalism, which even liberals themselves admit is no longer existent. It is a dying part of the community.

Therefore, the Government will find great support if they will only go one step forward and say that they are not going to accept any kind of enforced reconstruction, either from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) or from any other party, and that they do not need to drag in God on their side as the right hon. Gentleman has dragged in God on the side of the minority Liberal party, and that only for election purposes. If they have faith and really believe, knowing the conditions of the people, that some such coherent policy will help to solve the problem, they will get a lot of support from workers who are unemployed and from industrialists who have long ago left the policy of laissez faire behind. An interesting thing in our national life is the number of books and plays dealing with the tragedies and difficulties of unemployed people. A play, which has been mentioned in the House before, is running in London, and a book dealing with the mining community in the north has been selling in vast numbers. The fact that such a book is a best seller and that such a play is running still seems to me to be an indication that the public conscience is awakened to such an extent that it is becoming more and more critical of the strategy of inaction, which it is sometimes hinted is the policy of the Government. When the public conscience is roused in this way, there can be no following for any Member of the Government who tries to minimise the situation.

It is right and proper that the Government should put forward their achievements. No one will deny their achievements, and we all take credit for some share, however small, in having supported the Government in bringing about those, achievements, but I believe the time has come, the achievements having been established and the state of confidence and stability having changed into a slow forward move, to announce a really forward programme. The right hon. Gentleman opposite has perhaps the key of the political situation in his hands at the present time. On him as Minister of Labour depends very largely the date of the next election. It is his onerous task to bring forward the new regulations in connection with unemployment relief. I know not what is in his mind. I hope he will not hurry things, but I do know that whenever he decides that it is the right moment to bring in those regulations, and however long he thinks they ought to be worked in practice before an appeal is made to the country, that however well he has done his work it will be of no avail as a piece of sound legislation to the credit of the National Government if all the other things have been put aside under a policy of steady inaction.

Therefore, I implore the right hon. Gentleman to use his influence in his high office to make not only the regulations a foremost point, but to make an industrial policy an even more important point, in the Government's programme. May I suggest two things to him? If we take transference as one solution of this problem we have got to face much that is difficult in the residual problem, and will still have our problem of unemployment with us; but I think the Government will cast that solution aside except in so far as individuals can be transferred, because an area cannot be left practically derelict. The right hon. Gentleman's Department are carrying on the work of individual transference very successfully, and I should like to pay a warm tribute to his officials at the Ministry of Labour and the officials of the Employment Exchanges for the admirable way in which they carry through that part of their work. Over and over again I find that the officials of the Employment Exchanges know their men, know the families of their men, give help where they find that help is really necessary, and, to a very large extent, encourage men who are suitable for transference to go to other parts of the country to find work. I have great admiration for the work that is done, but I realise that it provides only a small part of the solution of the problem in those areas.

If transference on any large scale is not to be attempted, what is left? Again we come back to the subject which has been debated so often in this House, and that is the revival of the heavy industries or the encouragement of new industries in those areas. Only by the latter course can we really hope to bring unemployment in those areas down to any manageable proportions. It would take too long at this time of night to go into the intricacies of the export trade, on which the heavy industries so largely depend. I would only refer to the steel industry, which was mentioned by the Prime Minister in his speech this afternoon, to point out that there we have an admirable example of careful planning on the part of industrialists. Not only have they formed a scheme for this country but they have gone into a scheme of international planning which the Prime Minister rightly says is saving the steel industry and will bring many more people back to employment. It is a good example of this particular type of planning, which has been carried out with great benefit and will bring further benefits to those engaged in that industry.

I want to deal for a few moments with another aspect of this subject. The Prime Minister in a recent speech used the phrase "Rebuilding England." No one would have a more enthusiastic following in this country than the Prime Minister if the people knew exactly what his programme was in his attempt to rebuild Britain. Unless something happens in international affairs—something which would mean that the Government must have all our support in the coming weeks—to take away their attention and energies from the state of affairs in industry at home we should look for a real lead which shall be coherent to the ordinary man in the street. It is no good just to say after something has improved "That was planned." It must be so obvious that it will arouse the enthusiasm of all the followers of the National Government throughout the country. I should like to put forward one proposal in conclusion. There is one Minister without Portfolio to whom no particular duties have yet been assigned.

I should like to propose, and I hope the Minister of Labour will pass this suggestion on to the Prime Minister, that that Minister without Portfolio should be given the duty of co-ordinating and bringing together all the schemes of the different Departments, all the proposals put forward in different parts of the country, not as a Minister for the special areas but as the main architect, with the Prime Minister, in a plan to make the rebuilding of Britain possible. After all, every architect has to put his plans on paper. The Noble Lord the Member for Hastings (Lord E. Percy) has the ear of most sections of the House. He is sympathetic to both what is called the right and the left of the parties which support the National Government, and perhaps no one better than he could carry out the task of bringing together and co-ordinating the points of view, the proposals, the enthusiasm, and the schemes of all sides of the House. I believe that if that task were undertaken immediately—not deferred until October—without any particular reference to the special areas, there might be some hope that a general agreement could be come to throughout the whole country, and particularly among the different sections in this House, which would be a real value before the election comes.

My last word is that I support the National Government. I recognise and applaud the great, things which it has accomplished, but unless some such co-ordination as I have suggested can be achieved, unless there can be a great move forward and a realistic facing of the situation as it may be not just now but in six months, 12 months, or three years time, I am afraid that my allegiance will weaken, and I shall feel, as I have felt before, disappointed. That disappointment will leave me, as it will leave a great many people in the country, in such a state of dissatisfaction that when the National Government appeal to the country next time they may not find the support which they hope to find. I know, and the right hon. Gentleman knows, the feeling in the depressed areas. People believe in the idealism, capabilities and mental powers of the National Government. We know that the Opposition rely mainly for their support upon the result of appeals to sentiment, and very often to class prejudice. Many Members of the Opposition rely on appeals to class prejudice and try to work that up in order to engender opposition to the National Government. If the National Government wish to make that process ineffective, they must put forward some plan or scheme of such simplicity that the average man-in-the-street will understand it and will give it his wholehearted support.

9.16 p.m.

Mr. BATEY

The last speaker said that we appeal to class prejudice in order to make opposition against the Government. He does not do that, but he does not seem to be satisfied with the Government. He seems just as dissatisfied as we are. I was greatly disappointed today with the speech of the Prime Minister. I wanted to hear what the Government were going to do for the distressed areas. A few days ago the Prime Minister confessed the Government's failure, but I could not imagine a Prime Minister coming to the House of Commons to-day to deliver a speech without propounding some remedies for the plight of the distressed areas. It was not sufficient for him to tell the House what the Government had done. We knew what the Government had been doing, which was nothing at all, or if they had done anything it was injury in the depressed areas. We wanted to know what the Government were prepared to do. When the Prime Minister talked about cheap money, tariffs and other things, he left me cold. I want the Prime Minister to face the question and let us know what he proposes to do.

The Prime Minister talked about the slight improvement in the depressed areas. If that is any encouragement to the Government in propounding remedies, I cannot understand it. Yesterday I had a question answered by the Minister of Labour. He said that in the County of Durham, which is one of the hardest hit of the depressed areas, we had, on 27th May this year, no fewer than 3,055 persons who had been unemployed continuously for five years and over, 9,400 who had been continuously unemployed for four years but less than five, 10,686 who had been continuously unemployed for three years but less than four, 10,581 who had been continuously unemployed for two years but less than three, and 13,188 who had been continuously unemployed for over a year. Reckoning up that total we have, in the County of Durham to-day, 46,892 who have been continuously unemployed for a year or more. We say to the Government, "What are you going to do for those men?" It is no use the Prime Minister saying that there is a slight improvement. There are the facts in the County of Durham, and we are entitled to ask the Prime Minister to face the question and not to evade it as he evaded it to-day.

If I understood the Prime Minister aright, he suggested two things. He said that the Commissioner who is in County Durham now is sending his report, which may be printed next week. He said also "When we get the report we may act upon it." That was one of the lamest excuses any Prime Minister ever offered. When the House appointed the Commissioners to make a further investigation in the distressed areas, we told the House that there was no need for the Government to appoint those Commissioners, because the Government then had all the material they needed. The Government, to waste time, appointed these Commissioners. The Civil Lord went to Durham. He was helped in Durham, and he gave his report, but the Government did nothing at all; yet the Prime Minister says to-day, "Here is another report, of a later Commissioner." What report can he get from this latest Commissioner? That Commissioner, who has been in Durham, has done absolutely nothing to find employment except what the local authorities could have done. When the House made the appointment we criticised the Vote of £2,000,000. We knew that merely to vote £2,000,000 for four distressed areas, the North of England, South Wales, Cumberland and Scotland, with the limited powers which were given to the Commissioners in the Bill, would mean that the Commissioners would do nothing. We are no better off, after the Commissioner has been there all this year, than we were when he was appointed.

Now the Prime Minister says quite clearly, as if there were something in the proposition, "When we get the Commissioner's report we will study it, and we may act upon some of it." Why, the position in the county of Durham has become ridiculous. I was addressing a meeting in a county village two or three weeks ago, and a man said to me, "Joe, there is some work being done, and some unemployed men are being sent out for the job from this village. Will you tell us where the money is coming from? Is it coming from the Government, from the Commissioner, or from the Council of Social Service If you don't know, I don't know. They don't know in the village who is finding the money to do this job." I replied, "I will tell you what I will do. If you wish, I will try to find out for you." "Ah, no," he said "don't." "Believe me," he said, "there is a lot of money knocking about just now in the County of Durham." He mentioned the office of some of the officials connected with the organisation and said: "Each one has a Rolls Royce motor car. They have one each to take them about to inquire what jobs there are to be done." That is what is happening in the County of Durham at the present time. There is nothing being done for the unemployed. But there are some officials having a really good time and simply doing nothing and leaving the unemployed with very little help. [Interruption.] If they were check-weighmen they would never belong to the Tory party. I do not mind telling the hon. Member where that place is if he contests my statement.

I was interested in the statement of the Prime Minister that all the Government were settling down to do to help the distressed areas was to encourage the policy of transference. That policy has been tried again and again and again. I remember when it was first started in 1927 and the Industrial Transference Board was set up and when there were such high hopes that the board would be able to do something to help men in the distressed areas. That proved a failure. Then 12 months ago the Government talked of doing something more about transference. Whenever the Government are in a hole they think of transference and say, "We will transfer some of the men from the distressed areas to some other place." There is no hope in transference. The report of the Commissioners and the policy of transference were the only two proposals which the Prime Minister put before the House. If that be all the Government are going to do in the distressed areas, the Prime Minister had far better never have spoken, for we shall be as bad next year as we are to-day. There is no hope for the people in the distressed areas along these lines.

I wish to say just a word to the Minister of Labour. He was speaking at a big Tory meeting a week or two ago, and of course he had to justify his position at that meeting. At that meeting he spoke of a boy in a class being shown a white sheet of paper with a black spot on it and being asked what it was. The boy said it was a black spot. The Minister of Labour said it was not that, but a white sheet of paper with a small black spot upon it, and he added that that was typical of this country—that the small black spot represented the distressed areas and that the big white sheet of paper represented the rest of the country. I hope the Minister of Labour is going to get the impression out of his mind—that the distressed areas do not matter. [An HON. MEMBER "He did not say so!"] But that is the impression which his speech has caused. You can—

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

The hon. Member must not address other Members but must address the Chair.

Mr. BATEY

I am sorry. The most important thing which I wished to say to the House was that the proposals which the Prime Minister made to-day mean nothing to the distressed areas. We shall be no better next year than we are today. We want the Government to help in re-organising the coal industry, especially in die direction of the extraction of oil from coal. I am satisfied that we need money in County Durham for the purpose of starting these by-product works to extract oil from coal. The Government have been prepared to give a guarantee of £40,000,000 to the London and North Eastern Railway for the purpose of transport in London. If the Government would find £10,000,000 for the county of Durham, I am satisfied that we need not have a single miner out of employment. There are two plants already on the East Coast, but we can do with far more than two plants. If the Government would find £10,000,000, they could cure the problem of the distressed areas and put every one of our men back into work. I have received a letter from a clerk to a local authority with regard to one of our collieries which is typical of what is happening in Durham. He says: My council are given to understand that the above colliery (Littleburn Colliery, Langley Moor) is expected to close down in about one month's time, which will result in a considerable number of men being thrown out of employment. At a meeting of my council held last night I was instructed to ask if you would kindly approach the Special Commissioner with a view to inquiring whether he can do anything with a view of establishing some industry in Langley Moor, with the object of employing the men who will be thrown out of work by the closing of the colliery. That is typical of the position in Durham. Since 1924 we have had no less than 86 pits closed, and many of them are not to be re-opened. Here is another colliery which is to close down. We want the Government to find the money to come to the rescue of Durham. The Government can do it, but they will never do it by relying upon transference and the report of the Commissioner.

9.32 p.m.

Mr. WISE

If it be true that a Government in order to be effective must have an effective Opposition, this Government starts under a very serious handicap. I have listened to most of the speeches of hon. Members opposite, and at no time have I seen so much contradiction of one Member of a party by the next speaker of the same party—even during some of their previous efforts in this Parliament. We have here a Socialist party which on every possible occasion has opposed subsidies and tariffs. Then we have the hon. Member for Spennymoor (Mr. Batey) demanding a subsidy for an industry in Durham—the same sort of subsidy which he opposes for every other industry. He also demands this for an industry which could not possibly produce its product except under an extremely high protective tariff. No man in his senses would claim that the production of oil from coal is going to compete on level terms with making a hole in the ground and letting the oil come up. If the oil-from-coal industry is to be fostered in any way, it demands a very high protective duty and a permanent protective duty. Yet the hon. Member belongs to a party which opposes protective duties and which cannot stand the sound of the word "subsidy." As long as attacks on the Government are confined to that sort of contradiction, the Government have a very easy row to hoe. I think the most dangerous attack on them came, not from the official Opposition, but from certain members of their own party—the hon. Member for Stockton (Mr. Macmillan) and the hon. Member for Blaydon (Mr. Martin), both of whom almost filled me with wonder, because I began to think that at least both they, and I could not be Tories, that either they were or I was not; and I am not quite sure which in fact it is.

Mr. CURRY

You are.

Mr. WISE

I am very glad to hear from a member of the Liberal party that I at least am a Tory. The attack from that quarter was most dangerous because it was delivered with a good deal more confidence, although from just as misguided a thesis, as the attack of the official Opposition. I cannot agree with the hon. Member for Blaydon that his theories would make an attractive election cry for the Government to appeal to the country with at the next election. As far as I can see, his idea of putting a "punch" into election questions would be to outline the rather complicated details of the Steel Cartel, and I cannot believe that the country would readily assimiliate any such idea. I would also like to suggest that this form of planning—an odious and detestable word, but it must be used—is not a cure for unemployment. It is a cure for bad profits in industry, and they are not necessarily the same thing. It is in fact a form of hyper-rationalisation, and rationalisation does not necessarily mean the employment of more people. It may ultimately do so after a long period, but its immediate effect is entirely the opposite.

For some reason or other, there has been a constant objection to the idea of transference which the Prime Minister outlined in his speech. It came from the left wing of the Conservative party, it came from the Socialist party, and it came from the hon. Member for Sunderland (Mr. Storey), who wanted new Industries taken into the distressed areas. Looking at the distressed areas, however, what new industries can be taken into most of them? Industry has not migrated from those areas for fun; it has migrated because other areas are economically more suitable. You cannot take new light industries into the South Wales valleys. There is not a factory site in all those valleys; the coalpits are going to work on reduced production; and the population of those valleys are not going to be employed again in those areas, so that work must be found for them elsewhere.

Indeed, all industrial history is the history of transference. The county of Sussex was once the centre of the iron trade of Great Britain. It migrated northwards to Staffordshire, and finally further north to Durham; and labour followed the migration of raw materials and capital. It must occur, as one form of trade is worked out or one source of raw material is worked out, that creative effort is transferred somewhere else. Further, I would like to suggest to my right hon. Friends that transference does not necessarily stop inside one island. Transference will take place to countries where raw materials are most plentiful and where there is most room. If there is to be transference from one area to another, let us consider that there are far better areas to which these people could go, where they would have far more chance of earning a really good living than if they were moved to already crowded industrial areas, even though they may be prosperous ones, in this country.

That, after all, is the only long-term policy that we can face. It may be possible to produce palliatives to absorb all that we produce in this island at the moment, but with a normal increase of population, or even without an increase of population, industry is sunk anyhow, because consuming capacity will be outstripped even more than it is now by production. With the normal increase of population, in 100 years' time we shall be trying to feed 80,000,000 people in this island—an impossible task, however efficient industry or agriculture may be, or whether there is public ownership, private ownership, a soviet or capitalism. Our long-term policy must be a wider transference than we are contemplating at the moment. I believe that to be the right policy; I believe it to be the policy for which the men who are out of work are themselves waiting; and I believe that it would meet with an instantaneous response to an appeal to the country that would be far more effective than anything else we could put to them.

9.43 p.m.

Sir STAFFORD CRIPPS

I do not want to follow the argument of the hon. Member for Smethwick (Mr. Wise), but I fail to understand what he thinks transference is going to effect if it is not to increase the productive capacity and the production of the country. He seems to think that these people can be transferred from doing nothing in Durham to doing nothing somewhere else. The Debate must have been a most disappointing one for His Majesty's Government. It is on a Vote of Censure on the most vital matter of domestic politics, and yet I think it is fair to say that there has been hardly a single speech in whole-hearted support of the Government. Even the Government's own supporters who have spoken have very largely spoken with veiled opposition, and certainly with unveiled criticism of the Government's inertia. It has been suggested to me that it might be helpful to the Prime Minister if he were to consider, after his speech, the appointment of a new Commissioner for Depressed Areas, the depressed area in question being the area behind him on the Government benches.

The right hon. Gentleman invited me to elaborate an alternative programme, and I adopt the answer which he uniformly gave when he was on the Opposition side of this House, namely, that, this being a Vote of Censure on the Government for their lack of policy, it is not the occasion for the Opposition to put forward their policy which they would be prepared to follow when they occupy the benches opposite. I have a suspicion that the question was put at the instigation of the Home Secretary. Familiarity with his methods of advocacy leads me to suspect that, as often before, when he has a thoroughly bad case himself he makes a feint of attack on the other side. The House will be able to judge, when they hear his speech, whether I am right or not in suspecting that the paucity of his own arguments will lead him into an attack upon the Labour party's programme.

The most noticeable thing in the Prime Minister's speech was his complete failure even to attempt to answer the overwhelming case put forward by the right hon. Gentleman the Member for Wakefield (Mr. Greenwood). A more feeble defence of four years' policy can seldom, I think, have been heard from the Front Bench of the Government in this House. What did it amount to, when one strips it of the pleasant verbiage which the right hon. Gentleman uses so adeptly? "We believe," he says, "that the existing system is all right. We have done our best to shore it up, and we hope it will not fall down. We admit that we have been unable to deal with these worst evils in the devastated areas, but we hope the Commissioners may provide us with some brain wave, because we have not any ourselves. All we can think of is the old idea; of transference, which we admit does nothing at all to increase employment, but we hope people will use the employment exchanges more freely in the future than they have done in the past." What a policy to put before the hundreds of thousands of people who are suffering in the devastated areas. Then, adding insult to injury, he makes an appeal to the charity of the private employer, an appeal which never yet has accomplished anything, to go into the distressed areas with his factory. As he made it, my mind went back to the time when his predecessor one Christmas eve made an appeal for old clothes for miners in the devastated areas. That does not seem to us to be a very adequate attitude for His Majesty's Government. There was one phrase that he used that struck me as curious. He spoke of the mess left on the beach when the Labour Government went out. I was aware that there was not a feeling of complete unanimity in the Cabinet to-day, but I hardly expected the Prime Minister to refer to the Lord President and the Dominions Secretary in quite those terms.

When he came to the matter of agriculture, which I can understand his shying at, he stated that in his opinion it was a separate problem. Nothing can illustrate better the complete lack of planning in the ideas of this Government than the fact that they are prepared to treat the great industry of agriculture as something that is divorced as a problem from the whole industrial situation of the country. It is a vital part of it. It cannot be separated from it, and it must be dealt with, owing to its repercussions on the whole industrial life of the country, as one unit in that industrial life. Then we got that curious claim that comes up whenever the Government are trying to justify themselves, that they have been responsible for the provision of cheap money. I should like to know one day how they say they have provided it. It is true that there is cheap money, but it is also true that the cause of the cheap money is the failure of the Government to bring about a revival of industry. Everyone knows that the accumulation of profits, which they have fostered so carefully, without any outlet is that which has caused the fall in the price of money, and, if they could cure the position, they would only too gladly do so. They would be delighted if they could see the cost of money rising and money no longer so cheap. When that happened, the vaunted economy, on which Mae Prime Minister placed so much reliance, of the reduction in the amount of interest paid on short-term money would, of course, automatically disappear and the already unbalanced Budget would be still further unbalanced. Just as the fall off the Gold Standard, that unwilling acrobatic feat of the Government, is constantly called to its aid as being a matter of pride and a matter of achievement, so this provision of cheap money, for which they are not responsible, and which they have done everything they can to avoid, is also brought forward as being one of their star turns. Indeed, both these things are marks of the failure of that which they set out to do.

Then we come to the old cry, "We have restored confidence and security." [Interruption.] Hon. Members are prepared to cheer me when I say that, but they were singularly silent when the Prime Minister made the remark. To whom has this confidence and security come? Not to the people in the distressed areas, nor indeed to the workers of the country, but to the profit owners and the bankers. [HON. MEMBERS "And the lawyers!"] They are the people who feel the confidence and the security—not alas the lawyers. They have not yet reached the same high position in the estimation of His Majesty's Government as the bankers. The right hon. Gentleman says that this confidence and security is something which must at all costs be preserved. If you are going to preserve the present system, with the economic power in private hands, you must, of course, I agree, allow those people in whose hands it resides to have confidence in the continuance of their profit, but that is cold comfort to those who cannot buy Rolls-Royces. I suggest to hon. and right hon. Gentlemen that, if any of them were subjected to the means test, they would neither feel confidence nor security, and low wages and unemployment produce neither of those sensations in the ordinary man.

It is really only when you look at this problem through the spectacles of a profit earner, and not through the spectacles of the worker, that yo[...]n talk about confidence and security returning. Indeed, the speeches that we have heard to-day, the frightened speeches, from Government supporters from the distressed areas, show well enough that there is no feeling of confidence or security in those areas, and this outlook of His Majesty's Government through the spectacles of the profit earner is, of course, an outlook that is forced upon any Government that is attempting to operate our present economic system. No one denies our potential power to employ everyone if we liked, and to produce a much higher standard for all the people in the country, even without any redistribution of wealth, if only the system would allow us to make use of that wasted energy which is at present represented by this body of 2,000,000 unemployed persons. Indeed, the unemployed are the measure of the failure of the Government to give the people what science and technology has made it right that they should expect to get.

It is suggested by the Prime Minister that, after all, things are getting better than they were. Of course, no one in the world denies the very simple fact that booms and depressions, coming in cycles, are inherent in our economic system. It is, indeed, one of the main criticisms that have been made of the system by the adherents of the system themselves, and always when the depression slackens or the sign of the boom comes the most rosy pictures are painted that we are on the upward grade, and that we shall progress and go on for ever. Nevertheless, those pictures have never materialised because the ensuing depression always cuts off the hopes and leads to all those so-called economies which are brought in to try to right the system immediately depression starts, and thus employment is undoubtedly tending to become more and more rapid in the world as the technique and science of manufacture advances and increases. The liability to what is called over-production increases, the more rapidly it is possible to erect factories and to develop natural products and bring them under cultivation.

We have witnessed in this country during the last few years one of the most acute depressions of the system, and we have witnessed the slow return of a profit boom, encouraged, it is perfectly true, by the policy of restriction which the Government have imposed upon the country, tariffs and quotas and all other restrictions which they have utilised, quite properly according to the capitalist theory, in order to try to restrict the markets so as to give the system the possibility of recovery. It indeed always has been, and always must be, the technique of capitalist industry to restrict production or to destroy goods that are produced in order to try as far as possible to maintain prices and profits. There is the old familiar example which we know so well of the fish that were thrown back into the sea because the price was too low at which to sell them, not because there were not thousands and tens of thousands of people anxious to consume the fish, but merely as a matter of regulating the market price in order that a profit might be earned from the catching of the fish. Such restrictions may be quite pleasant to those who are living by the profits of the enterprise which is producing the goods for the restricted market, but they certainly are not pleasant for the consumers in this country who are living in many cases on a standard which is on the verge of starvation, as has been fully certified by many medical authorities.

The feeling of returning prosperity in this boom, just as in previous booms, does nothing, or very little, to meet the right and just demands of the workers for better conditions. It may transfer a few persons from a miserably inadequate dole to a miserably inadequate wage. In some cases there may be small rises in wages, but, on the whole, the profit boom which has been experienced in the last few years, and which is referred to as the gradual return to prosperity, has done little or nothing to touch the standard of the workers in this country be they employed or unemployed, and, as we know from previous experience, that little difference is quickly withdrawn as soon as depression comes. The actions of this Government cannot be judged by the benefits they confer upon their wealthy supporters. They are better judged by the permanent changes that they have failed to make to cure the recurrent evils of society as they affect the workers of this country. The late Sir Arthur Steel-Maitland, when he was speaking in this House in April, 1934, said very truly of the capitalist system: We are clearly getting over this slump, but, unless something is done to prevent others, all the signs go to prove that slumps in the future will not be less but more acute than slumps have been in the past. If, therefore, nothing is done, I make a present to the right hon. Gentleman who is going to speak after me of the suggestion that the capitalist system will then indeed be on its trial and will deserve to be so."—[OFFICIAL REPORT, 19th April, 1934; col. 1238, Vol. 288.] That was from a very thoughtful and eminent Conservative who, we all deeply regret, is not with us now, and since the date when that speech was made not a thing has been done in any direction to remove the dangers of the slump, or even to deal with the immense problems, as they are admitted to be, of the present so-called boom. It is of interest in this relation to examine the comparative results of how this policy of allowing or encouraging industry to revive itself has come out as regards the different classes of persons in this country. If one takes the figures of profit from the "Economist" report which, as hon. and right hon. Gentlemen know, are collected from 1,975 representative companies, one finds that there was an increase between 1934 and 1935 of 16.6 per cent. in the profits returned by those companies. The actual figures were, roughly, £144,000,000 in 1933, and £168,000,000 in 1934, and, taking the first quarter of 1935 and comparing it with the similar period in 1933, there is an increase of 28.9 per cent. in the profits returned to the persons fortunate enough to have investments in those companies.

That shows clearly what the effect of the Government has been as far as what I may call their friends are concerned. [Laughter.] Before hon. Members laugh too loudly let them consider the same question for a moment from the point of view of the money wages of the worker. The increase in money wages in 1933 and 1934, when this list of profits went up 16.6 per cent., was one-half of one per cent., and the increase so far in the first months of this year has been rather less than that amount. So that altogether taking the first quarter of 1935 and comparing it with the similar period in 1933, it would be fair to say that, while the profits of these respective companies have increased 28.9 per cent., the wages of the workers have gone up less than one per cent. One has to take side by side with this consideration of money wages the matter of the cost of living. Because that affects the profit-earner and the worker equally, we can leave it out in a comparison between the two, but what we have to consider is the increasing productivity per man and the increased strain of the faster work of mass production it has put upon a great many of these workers who are drawing the same, or very slightly higher wages, whereas, as far as I know, there is no increased strain on the profit-earner when he draws 28.9 per cent. more than he did the year before. The figures of increased production are too well known to recite to the House, but let me remind them of one or two, taken, of course, over a longer period. Between 1924 and 1933 in the building industry the productivity per man increased 29 per cent. On the railways the train miles run per employé rose 25 per cent. In the steel-smelting industry the output rose 40 per cent. Where has the result of that increased energy and productivity of the man gone? It has not gone into his wages, nor has it gone to his unemployed brothers and sisters, who have indeed during the last three years suffered the means test. The situation is well summed up in the "Business Barometer" issued by the Federation of British Industries: We are no longer living in an expanding but in a contracting world. The notion favoured by economic theorists of an economic community, capable of a more or less unlimited expansion in its standard of living, seems incapable of realisation in practice. … Were it possible to add up all the items which go to make up what the ordinary man regards as his standard of living, it may be doubted whether we should find that as a nation our standard of living is rising at all. That is on the average. If that be the true estimate of the average, then the profit figures which I have already given to the House make the implication as regards the workers' position a very obvious one. The attitude of mind which is shown in that article is the Government's outlook. They still live in an atmosphere of the necessity and scarcity of contraction. Although productivity has increased, they still adopt a policy which depends fundamentally for its success on the creation of a condition of scarcity. It can hardly be wondered that in these circumstances you cannot utilise the full productivity of your people. Instead of shortening the working life and the working week, they allow to be perpetuated long hours in industry on the one side and complete unemployment on the other. It is no answer to this complete failure to give the workers the benefits of the potential abundance to point to the swollen activities of the breweries and the aviation manufacturers, and say, "Look how prosperous we all are." Indeed, one of the most dangerous forms of all private booms is that caused by increased manufacture of armaments.

I was horrified to-day to hear the Prime Minister refer to the fact that increased employment was being given by the increased demands of the Royal Air Force of this country. There is the absorption of men in military forces and armaments manufacture in almost every country of the world. The building up of these great establishments in peace time, even from an economic point of view, is most unsatisfactory. Their continuance in times of economic difficulty is always liable to bring a great temptation to Governments to continue to seek the solution of their unemployment difficulties by increased manufacture of armaments. Such employment cannot be put to the credit side of any Government; it must be put to the debit side. The methods which the right hon. Gentleman suggested that the Government have attempted to apply are purely opportunist in their character.

If one can dignify what they have done by the name of a programme, I should say that it was a programme depending on the inspiration and suggestion of the moment. One of the most vicious and uneconomic methods of transferring wealth which they have introduced is wholesale use of the subsidy, to subsidise private enterprise; this means that they are transferring the wealth of the mass of the community into selected pockets. They get it without any test as to whether they need it or not. Apparently, a means test is not a dignified thing to apply to one's friends, but quite dignified to apply to the workers. How great this subsidy system has become will be realised by anybody who looks through some of these gifts and finds out what during the life of this Government has been handed out in doles in one form or another. In regard to de-rating, which has benefited industry and agriculture, there is a sum of well over £150,000,000 that is being held out in subsidy and relief by this Government.

It is not a policy which is justified by its results, or which can be followed as a permanent feature in the life of any country. If the profit fund in that industry is low, apparently, at the present moment they have only to make themselves sufficiently offensive to the Government to be paid something to call off that offensiveness. When it comes to the depressed areas, where it is not a particular group of shipowners or sugar-beet owners or some other kind of owners, the combined pressure of all the unemployed in the distressed areas cannot wring the heart of the Government to produce any scheme in order to alleviate their lot. We have the fantastic picture of the encouragement of great capital expenditure at a place like Corby where they are setting up a new town, which is going to draw away even more industry from the distressed areas, which is going to demand of a community the building up of a whole lot of social services, which is going to lead to the scrapping of social services elsewhere, just through the whim of financiers or private manufacturers who are allowed to go where they like over the countryside.

That is typical of the lack of planning by this Government. It is typical of their failure to take industry into the distressed areas. If this country believes that as a matter of policy, as the Prime Minister said, it is sound and right that these industries should go into the depressed areas, why cannot we order them into the depressed areas? [Laughter.] Hon. and right hon. Members laugh, but it is no laughing matter for the derelict workers in those areas. There is only one reason that hon. and right hon. Gentlemen have why they should not be ordered into the depressed areas, and it is not the interest of the country but the interest of the individual who wants to make a profit out of that industry. There is no other argument that can be put forward for this unplanned and chaotic system of dealing with the industries of this country.

Just as in the past in the depressed areas industries have gone and sucked them dry by exploitation and then decamped and left the ambulance work for the community to do, so the new industries in their turn, in a few years, will do exactly the same thing. You have a system by which you are going to allow private individuals to create difficulties for the community, as they have done by developing industries in Durham, Lancashire and other places for their profit, and then turn round to the community and say: "We have got all the profit we can out of this place, and now it is your job to look after what we have left." That is the method which to-day is being followed and approved by His Majesty's Government, and that is why in our Resolution we say that we regret the failure of His Majesty's Government to produce a considered plan to cope with unemployment. This hand-to-mouth policy, this policy which is the result of the pressure of one or other private groups in the country, is not good enough for the workers of this country in the organisation of their lives. The record of this Government shows nothing except that it has attempted to bolster up the chaotic and anarchic system which is responsible for all our evils to-day. Hon. and right hon. Members may say what they like, but we have had a capitalistic system in this country for a hundred years and whatever we are suffering from to-day is the result of the inability of that system to adjust itself to changed circumstances, and, unless the Government are prepared to do something more than merely play with this problem, then I believe the workers of this country will take the only sensible step that they can take, and get another Government.

10.19 p.m.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon)

The Prime Minister, earlier in the Debate, referred to the many-sidedness of truth. If there has been any impartial visitor who has been following our disscusion to-day and he listened to the speech which has been made by the hon. and learned Member for East Bristol (Sir S. Cripps), I feel that he must be more puzzled than ever to know how on earth a Government destitute of every possible principle of morality or common sense can possibly enjoy the support of the great majority which this Government has. It would be quite impossible to correct every misstatement of the hon. and learned Member, but let me take one. In his catalogue of Government crimes he ultimately came to the new community at Corby in Northamptonshire. He made it one of the heads of his indictment; we are all responsible for this piece of folly. The reason why the new community is established at Corby is because the ore is there. No doubt in a future Socialist Government it will not be the men but the materials which will be moved. [Interruption.]

HON. MEMBERS

Why not?

Mr. SPEAKER

We cannot carry on the Debate with constant interruptions.

Sir J. SIMON

In point of fact there are some 3,000 men who are now being employed there in connection with ore which was formerly imported from the north of Spain, and the whole matter has nothing in the world to do with Dowlais.

Let me pass to deal briefly with three points which were made by the right hon. Gentleman who opened the Debate. He started by lecturing us about half-truths. I am certain that there are one or two matters upon which he would like to be corrected. He gave the House figures on the subject of industrial production, and made a great point that between certain dates, which he chose, 1932 and the present day, the increase in industrial production in this country was 25 per cent., whereas in the case of some other countries the increase was more. That is quite true, but I should be doing the right hon. Gentleman more than justice if I were to say that it was as much as half of the truth. The increase in percentage differs in different countries because of the depths to which some countries had sunk in their industrial production. I have here the figures of the years 1929 and 1934, and as far as this country is concerned our manufacturing production is up to the level of 1929. If you take the whole of our industrial production we are within 1 per cent. of the level of 1929. In the case of France there is a 29 per cent. decrease, in the case of Germany a 15 per cent. decrease, and in the case of the United States a 34 per cent. decrease. In these circumstances, what is the sense of pretending that there has not been in fact in this country a restoration to a level which has not been attained elsewhere?

My second illustration is an observation which the right hon. Gentleman made not for the first time, which has no foundation at all, on the subject of the Housing Act of the late Government. He suggested that the policy of the present Government had destroyed the prospect of the 40,000 houses contemplated under the Housing Act of 1931. He has alleged before to-day that this was stopped by the National Government. He has been publicly corrected in this House, and I regret that he has repeated it to-day. I recollect that at the conclusion of his speech he quoted some verse which said that a mis-statement "can never be young but once." That is quite true. The fact of the matter is that that Act which placed the sum of £2,000,000 at the disposal of the Ministry of Health provided that any applications were to be received within four months from the passage of the Bill. It will be remembered that the late Sir Tudor Walters was very closely associated with the matter. They all had to be received by November, 1931, and only 4,000 applications were received.

Mr. GREENWOOD

Why?

Sir J. SIMON

As a matter of fact, the crisis was already upon the country and when the Committee which had been appointed to examine the applications did so it was found that not one penny of the extra money over and above the Wheatley subsidy for rural areas was needed, and there is every reason to believe that these 40,000 houses have been built in the intervening years, and there is not the slightest foundation for saying that the National Government put any obstacle in the way at all.

I take the third of these unfortunate misapprehensions. Not for the first time the right hon. Gentleman has been telling the House to-day that the fact that there are additional numbers of persons receiving assistance through public relief proves that the reduction in the unemployment figures is a sham.

Mr. GREENWOOD

I never said that.

Sir J. SIMON

Perhaps then the right hon. Gentleman will agree with me on this, that the fall in the figures of unemployment is a real fall and is not accounted for by transferences to the Poor Law.

I am going to the best of my ability to join battle with the hon. and learned Gentleman the Member for East Bristol, but before I do so I would like to say a few words on a matter which is not controversial, about the attitude and approach which I am sure we all share to this fearful problem of unemployment. I think it is very much to the credit of the House of Commons that no time has been occupied in merely dwelling upon the tragedy of human suffering which we all appreciate and feel, and, while I am going to deal with a few figures, I would like to say this. We all realise that statistics of reduced totals of unemployment and improved figures of trade give no comfort to the individual who is out of work. Increased exports are a very good thing, over which we are all willing to rejoice, and so are particulars of new enterprises in certain parts of the country, but they do not give new courage and hope to areas that are specially affected by long unemployment. It would be a great pity if the House of Commons in a controversial Debate did not spend a few minutes in registering their common agreement about these simple facts.

It is perhaps unfortunate that this Debate should take place before the Commissioners' reports, with their observations and suggestions, are available. I cannot anticipate them, and I am sure the House would not wish me to do so, but they are going to be published. May I be allowed to say, however, that the Government who have pursued a policy which is laying the foundations for recovery are not accepting the present situation as one in which there is no more to do. There need be no doubt at all in any quarter As to the Government's resolve to tackle every aspect of the case by every means which will not undermine the very foundations which we have laid. But we have our responsibilities not only to the unemployed but to those who have got employment. Our responsibility to those who are in work is one which makes it necessary that no policy should be pursued which would jeopardise their work.

Having made that general observation, I want to say a few words about the attitude taken by the Opposition in this matter. This is a Vote of Censure by the official Opposition, and while, of course, we ought to welcome informed and responsible criticism from those who are qualified to give it, I think that, at the end of this Debate, we are entitled to ask ourselves who the critics are who propose this Motion of Censure, and what there is in their past record or in their present policy which would lend special authority to a Motion of Censure on this subject at their hands. I pause to observe, as another illustration of the many-sidedness of truth, the peculiar view taken by the hon. Gentlemen below the Gangway on the opposite side. I recall a Debate on a Motion of Censure in this House on the question of unemployment, moved against the late Labour Government, in April, 1931, at a time when it was unfortunately the fact that the figures of unemployment had gone up since they came into office by a million and a half. The hon. Gentlemen below the Gangway opposite felt it their duty to support the Labour Government and to resist the Vote of Censure. Now we have a Government who at least have this fact in their history, that there has been a reduction in their lifetime of nearly a million in the figures of unemployment, and that a larger number of people are now employed in this country than ever before. So remarkable is the many-sided character of truth, that hon. Members below the Gangway opposite say that this time they must vote for the Vote of Censure.

Now I return to the official Opposition. Alter all, we are entitled, I think, to remind ourselves of this fact, that among the leaders of the official Opposition sitting there are those who refused to be responsible for the drastic and disagreeable action which was necessary to deliver this country from the crisis in 1931. If I am not mistaken, there are some among the rank and file at any rate who are rather disposed to deny that there ever was a crisis at all. Well, we have had a speech to-day, a maiden speech, from an hon. Gentleman who represents the City of London (Sir A. Anderson), who pointed out to us, from his own special knowledge, how near we were to the brink, and over the brink, and I am bound to say that I think the country as a whole will prefer the views of a gentleman with that experience to the views of those who deny that there ever was any crisis in 1931.

Is it denied that we were in a situation in which the Budget for successive years would not balance? Is that denied? Is it denied that our exports had dropped in two years by nearly half? Is it denied that our balance of trade was on the wrong side by about £100,000,000 and that unemployment had increased by 1,500,000 in a couple of years? Is it denied that authorised borrowings for the Unemployment Insurance Fund had reached the stupendous figure of £115,000,000? Is it disputed that the situation was such that one of the most important officials of the Treasury reported that continued State borrowing on the present vast scale without adequate provision for repayment by the Unemployment Insurance Fund would quickly call in question the stability of the British financial system? Is it denied that the Chancellor of the Exchequer of the Labour Government published that statement as a White Paper in order to inform the country? I am very willing to agree at once that the situation of 1931 is not to be laid wholly at the door of the party opposite. It was very largely due to world causes which neither they nor anyone else could control. The question, after all, is not who was to blame for it, but whether it was a fact, and whether, being a fact, it is not the drastic measures which the National Government have taken which has delivered us from that crisis by degrees, and from a situation which hon. Gentlemen opposite were not prepared to tackle.

I come to another observation of the right hon. Gentleman who opened the Debate. He said, I think without any warrant, that the last General Election was won by the National Government by raising tremendous hopes. As a matter of fact, I should have thought there had seldom been an election fought in this country in which the successful Government had held before the people of this country less prospects of an easy restoration. What the Government said was that by a united effort we ought to be able to get ourselves out of the mess. They said that the method which they might have to pursue would be drastic and could not be precisely decided. They asked for a doctor's mandate. If at the last General Election the Government had then held before the country the prospect of what has happened since, if they had said, "Vote for us, and you shall see that this terrible drop in exports shall be stopped and exports will begin to rise; you shall see wages rise in a few years to a point above what they had been ever since 1927; you shall see the credit of this country restored until it is the admiration of the world" —if they had said half of that, hon. Gentlemen opposite would have told us that [...]e were bribing the electors. In fact, [...]e did nothing of the kind. We seized a situation which had to be tackled with firmness, with the result that we can now see. Those are the critics.

I am going to follow the course of inquiring what is the remedy which they seek to apply. I hope that they will not try to prevent me from stating that remedy, for the more it is known to the country the better they will like it. Let us see what the remedy is. The recovery of the country is due, first and foremost, to the restoration of confidence, and the restoration of confidence has been due to our financial policy. That is due to the first Budget for which Lord Snowden was responsible and to the steady pursuit of a sound financial policy ever since under the guidance of my right hon. Friend the Chancellor of the Exchequer. That is the foundation upon which recovery is being built. Destroy that foundation and it is no good talking about a superstructure; you will make a superstructure impossible. The Motion of Censure talks about a considered plan, and the Prime Minister has made an observation about this use of the word "plan." It is a very convenient word. It sounds like something you can frame a questionnaire about, something you can treat as a test of orthodoxy, whether the man who answers the question has read it or not. You can even treat it, if you like, as the test of genuine devotion to a cause which all of us are doing our best to serve.

But, after all, what is the view of the Movers of this Motion of Censure about a plan, a considered plan? In place of confidence we have the assurance of the hon. and learned Gentleman, which all his companions on that side are delighted to hear repeated as often as possible, that if he and his friends get the opportunity they promise us a first-rate financial crisis. [interruption.] I quite understand the feeling of nausea of some hon. Gentlemen opposite, but I would point out that what really matters about this is not that it is so annoying to have it repeated but that it is quite true. It is not right that the hon. and learned Gentleman should have all the limelight in this matter. It is not fair. Let me take the right hon. Gentleman the Member for Limehouse (Mr. Attlee), whom I do not see at the moment. He contributed to a book called "Problems of a Socialist Government." I am glad to know that even they will have their problems. In his contribution he wrote: I am envisaging the period of the first Socialist Government in power as one of crisis. A very large number of people in this country are under the impression that there was a crisis in 1931. A very large number of people are under the impression that they were delivered from that crisis by their own courage and by the National Government. Now they are told quite plainly, "If you like to have another crisis we can give it you." Mark you, Mr. Speaker, it is under those favourable conditions thus envisaged by hon. Gentlemen opposite that they are going to cure the problem of unemployment. They too have their plan of action. I hold in my hand a recent publication of the Labour party. I do not call it a yellow book but it is a yellow pamphlet. It is called "Programme of action." Whether my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) or Transport House is going to bring an action for copyright against the author I do not know. At any rate, here it is, and it is directly concerned with the notion of hon. Members opposite of how to cure unemployment: What is necessary is this, and it must be done at once. There must be a policy of full and rapid Socialist planning. The public ownership and control of the primary industries and services is an essential foundation step. Now, our view is that the foundation for better trade and more employment is confidence, and good financial administration.

But there is another view as to the foundation. It is the public ownership and control of the primary industries and services. In order that nobody should be left in doubt as to what this means—remember that it is hon. Members' preliminary action in the cure of unemployment—they are good enough to give us the list: Banking and credit, transport, water, coal, electricity, gas, agriculture, iron and steel shipping, shipbuilding, engineering, textiles, chemicals and insurance. In all those the time has come for drastic reorganisation and for the most part nothing short of immediate public ownership and control will be effective. What a formidable step towards curing the evil of unemployment. It is only fair to say that the authors of this document go on to say the public acquisition of industries and services will involve the payment of fair compensation to existing owners. Therefore, it is not altogether unnatural that they should go on thus: much will depend upon the actual economic situation. That is not the whole of it. It is essential that I should give these quotations because, inasmuch as it is suggested by hon. Gentlemen opposite that there ought to be a considered plan, I am examining their considered plan, and this is it. It consists of more of the same matter. It is most comforting to know that they intend that there should be fair compensation to existing owners, but Mr. Morrison explained recently what that really meant. The explanation is in a passage full of value, which, I hope, the House will allow me to read it. Mr. Morrison, at the Labour Party conference at Southport in October of last year, said that they had to ask themselves, if they went to the country at the next general election with a policy of confiscation, modified to meet absolute hardship, whether the country would give them a majority to do it. —not to ask whether it was fair or unfair. Can we be sure that the country will give us a majority if we said, to start with, that we were for confiscation? Mr. Morrison went on: If they were almost certain that the country would reject such a policy, they had to ask themselves whether they could cut themselves off from political power and prevent themselves from being politically competent to put their policy into force. Then he would sooner get on with the job of Socialism by paying fair and reasonable compensation, but not a penny snore than was necessary. He would sooner the State got into its control key industry after key industry, until, within a reasonable time, they were substantially masters of the economic fabric of the community, and of the means of production and distribution. Then would be the time to take the big decision which he could assure them he would not be afraid to take when the time came and say that the burden of capitalised industry must stop and a settlement of accounts begin. Then they could make a fair, clean, and equitable sweep. I think I have said enough to show that the authors of this Motion of Censure, who clamour for a considered plan, have got a plan which it would be very well for the country as a whole to consider. I am sure that they would be very grateful, if having put down this Motion, there is the opportunity of considering what it is they want to propose.

The real truth about the matter is that difficult and intractable as this subject is, hon. Gentlemen opposite are the very last to have the right to come down here to the House and lecture us or anybody else about the handling of unemployment. The special areas, whose fate is so tragic and which we are all doing our best to help, are not a new problem. The right hon. Member for Wakefield (Mr. Greenwood), in an earlier speech, said quite frankly and fairly that the special areas problem had been known to him for 12 years, and that he had been in two Governments during that time. That is the measure of the difficulty of that problem. For the rest, I believe that the whole country is at one with the Government in rejoicing in the substantial improvement which has taken place during the Government's years of office. We do not claim that every item in that improvement is due to Government action any more than we accept censure for every evil that remains to be removed. Not merely we, but, I think, the whole country take sober satisfaction in noting how vast the change is for the better since the adoption and pursuit of the policy for which we are responsible. And while we deplore with the rest of our fellow-countrymen—and I know how sincerely hon. Gentlemen opposite deplore it—that the figure of registered unemployed should still be above the 2,000,000 mark, we rejoice, and I think others should rejoice, that it is the smallest figure recorded in any month for the last five years.

I notice that this yellow pamphlet lays stress on the fact that the figure is still above 2,000,000. Perhaps there will be a new edition wanted very shortly. We shall adopt every course that intelligence can suggest to bring that figure down, and especially in the areas which are still

suffering severely. But I do not make these claims for any body of Ministers or for the Government; I make them for the British people—whose spirit was roused when leadership was given them and who themselves are responsible for their own recovery. It is the British people to whose spirit of courage and resolve the recovery is very largely due; and I cannot believe that the British people are likely to jeopardise what has now been gained by returning to the very course which helped to bring upon us our misfortunes. The collapse of 1931 was due to lack of confidence in Britain's position and in Britain's future. This lack of confidence at the time was not limited to foreign countries, but extended to some people inside this island. Everything that has since taken place is due to the restoration of confidence as the result of the sensible policy of sound finance under the guidance of the Chancellor of the Exchequer. The Motion speaks of "admitted failure." It seeks to exploit an observation made with his characteristic straightforwardness and courage by the Prime Minister. Is it not better to admit that over a portion of the field success has not yet been attained? Is it not better to call upon the British people for their support for a further effort rather than to pretend that there was no crisis in 1931, or to produce nonsensical explanations like "the bankers' ramp," or "the Buckingham Palace intrigue." Censure from such a quarter as that is not very impressive, and it is not very difficult to meet. We appeal to the steadiness of the British people, which, by rejecting wild experiment and encouraging every well conceived effort for further improvement, is bringing this country step by step through most difficult times, and has made its progress towards recovery the envy and the admiration of the world.

Question put, "That this House regrets the failure of His Majesty's Government to produce a considered plan to cope with unemployment and, in particular, their admitted failure to deal effectively with the problem of the distressed areas."

The House divided: Ayes, 76; Noes, 450.

Division No. 266.]	AYES.	[10.58 p.m.
Adams, D. M. (Poplar, South)	Banfield, John William	Brown, C. W. E. (Notts., Mansfield)
Addison, Rt. Hon. Dr. Christopher	Batey, Joseph	Buchanan, George
Attlee, Rt. Hon. Clement R.	Bevan, Aneurin (Ebbw Vale)	Cape, Thomas
Cleary, J. J.	Grundy, Thomas W.	Nathan, Major H. L.
Cocks, Frederick Seymour	Hall, George H. (Merthyr Tydvil)	Owen, Major Goronwy
Cove, William G.	Hamilton, Sir R. W. (Orkney & Zetl'nd)	Parkinson, John Allen
Cripps, Sir Stafford	Harris, Sir Percy	Rea, Sir Walter
Curry, A. C.	Hicks, Ernest George	Rothschild, James A. de
Daggar, George	Jenkins, Sir William	Salter, Dr. Alfred
Davies, David L. (Pontypridd)	Johnstone, Harcourt (S. Shields)	Samuel, Rt. Hon. Sir H. (Darwen)
Davies, Rhys John (Westhoughton)	Jones, Henry Haydn (Merioneth)	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Dobbie, William	Jones, J. J. (West Ham, Silvertown)	Smith, Tom (Normanton)
Edwards, Sir Charles	Jones, Morgan (Caerphilly)	Strauss, G. R. (Lambeth, North)
Evans, Capt. Ernest (Weish Univ.)	Kirkwood, David	Thorne, William James
Foot, Dingle (Dundee)	Lansbury, Rt. Hon. George	Tinker, John Joseph
Foot, Isaac (Cornwall, Bodmin)	Lawson, John James	West, F. R.
Gardner, Benjamin Walter	Leonard, William	White, Henry Graham
George, Rt. Hon. D. Lloyd (Carn'v'n)	Logan, David Gilbert	Williams, David (Swansea, East)
George, Major G. Lloyd (Pembroke)	Lunn, William	Williams, Edward John (Ogmore)
George, Megan A. Lloyd (Anglesea)	Macdonald, Gordon (Ince)	Williams, Dr. John H. (Llanelly)
Greenwood, Rt. Hon. Arthur	McEntee, Valentine L.	Williams, Thomas (York, Don Valley)
Grenfell, David Rees (Glamorgan)	McGovern, John	Wilmot, John
Griffith, F. Kingsley (Middlesbro', W.)	Maclean, Neil (Glasgow, Govan)	Wood, Sir Murdoch McKenzie (Banff)
Griffiths, George A. (Yorks, W. Riding)	Mainwaring, William Henry	Young, Ernest J. (Middlesbrough, E.)
Griffiths, T. (Monmouth, Pontypool)	Mason, David M. (Edinburgh, E.)
Groves, Thomas E.	Milner, Major James	TELLERS FOR THE AYES.—
		Mr. Paling and Mr. D. Graham.
NOES.
Acland-Troyte, Lieut.-Colonel	Burnett, John George	Davison, Sir William Henry
Adams, Samuel Vyvyan T. (Leeds, W.)	Burton, Colonel Henry Walter	Dawson, Sir Philip
Agnew, Lieut.-Com. P. G.	Butler, Richard Austen	Denman, Hon. R. D.
Ainsworth, Lieut.-Colonel Charles	Butt, Sir Alfred	Denville, Alfred
Albery, Irving James	Cadogan, Hon. Edward	Despencer-Robertson, Major J. A. F.
Alexander, Sir William	Caine, G. R. Hall-	Dickie, John P.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd)	Campbell, Sir Edward Taswell (Brmly)	Doran, Edward
Allen, William (Stoke-on-Trent)	Campbell, Vice-Admiral G. (Burnley)	Dower, Captain A. V. G.
Allen, Lt.-Col. Sir William (Armagh)	Campbell-Johnston, Malcolm	Drewe, Cedric
Amery, Rt. Hon. Leopold C. M. S.	Caporn, Arthur Cecil	Duckworth, George A. V.
Anderson, Sir Alan Garrett	Carver, Major William H.	Dugdale, Captain Thomas Lionel
Anstruther-Gray, W. J.	Cassels, James Dale	Duggan, Hubert John
Apsley, Lord	Castlereagh, Viscount	Duncan, James A. L. (Kensington, N.)
Assheton, Ralph	Cautley, Sir Henry S.	Dunglass, Lord
Astbury, Lieut.-Com. Frederick Wolfe	Cayzer, Sir Charles (Chester, City)	Eady, George H.
Astor, Maj. Hn. John J. (Kent, Dover)	Cayzer, Maj. Sir H. R. (Prtsmth., S.)	Eales, John Frederick
Astor, Viscountess (Plymouth, Sutton)	Cazalet, Thelma (Islington, E.)	Eastwood, John Francis
Atholl, Duchess of	Cazalet, Capt. V. A. (Chippenham)	Eden, Rt. Hon. Anthony
Bailey, Eric Alfred George	Cecil, Rt. Hon. Lord Hugh	Edge, Sir William
Baldwin, Rt. Hon. Stanley	Chamberlain, Rt. Hon. Sir J. A. (Birm., W.)	Edmondson, Major Sir James
Baldwin-Webb, Colonel J.	Chamberlain, Rt. Hon. N. (Edgbaston)	Elliot, Rt. Hon. Walter
Balfour, Capt. Harold (I. of Thanet)	Chapman, Col. R. (Houghton-le-Spring)	Ellis, Sir R. Geoffrey
Balniel, Lord	Chapman, Sir Samuel (Edinburgh, S.)	Elliston, Captain George Sampson
Barclay-Harvey, C. M.	Chorlton, Alan Ernest Leofric	Elmley, Viscount
Barrie, Sir Charles Coupar	Christie, James Archibald	Emrys-Evans, P. V.
Barton, Capt. Basil Kelsey	Churchill, Rt. Hon. Winston Spencer	Entwistle, Cyril Fullard
Bateman, A. L.	Clarke, Frank	Erskine-Bolst, capt. C. C. (Blackpool)
Beauchamp, Sir Brograve Campbell	Clarry, Reginald George	Essenhigh, Reginald Clare
Beaumont, M. W. (Bucks., Aylesbury)	Clayton, Sir Christopher	Evans, Capt. Arthur (Cardiff, S.)
Beaumont, Hon. R. E. B. (Portsm'th, C.)	Clydesdale, Marquess of	Everard, W. Lindsay
Beit, Sir Alfred L.	Cobb, Sir Cyril	Fermoy, Lord
Benn, Sir Arthur Shirley	Cochrane, Commander Hon. A. D.	Fielden, Edward Brocklehurst
Bennett, Capt. Sir Ernest Nathaniel	Collins, Rt. Hon. Sir Godfrey	Fleming, Edward Lascelles
Bernays, Robert	Colman, N. C. D.	Ford, Sir Patrick J.
Bevan, Stuart James (Holborn)	Colville, Lieut.-Colonel J.	Fox, Sir Gifford
Birchall, Major Sir John Dearman	Conant, R. J. E.	Fraser, Captain Sir Ian
Bird, Sir Robert B. (Wolverh'pton W.)	Cook, Thomas A.	Fremantle, Sir Francis
Blaker, Sir Reginald	Cooke, Douglas	Fuller, Captain A. G.
Boothby, Robert John Graham	Cooper, A. Duff	Fyfe, D. P. M.
Bossom, A. C.	Cooper, T. M. (Edinburgh, W.)	Galbraith, James Francis Wallace
Boulton, W. W.	Copeland, Ida	Ganzoni, Sir John
Bowater, Col. Sir T. Vansittart	Courtauld, Major John Sewell	Gault, Lieut.-Col. A. Hamilton
Bower, Commander Robert Tatton	Courthope, Colonel Sir George L.	Gibson, Charles Granville
Bowyer, Capt. Sir George E. W.	Craddock, Sir Reginald Henry	Gilmour, Lt.-Col. Rt. Hon. Sir John
Boyce, H. Leslie	Cranborne, Viscount	Gledhill, Gilbert
Bracken, Brendan	Craven-Ellis, William	Gluckstein, Louis Halle
Braithwaite, Maj. A. N. (Yorks, E. R.)	Critchley, Brig.-General A. C.	Glyn, Major Sir Ralph G. C.
Braithwaite, J. G. (Hillsborough)	Croft, Brigadier-General Sir H.	Goldie, Noel B.
Brass, Captain Sir William	Crooke, J. Smedley	Goodman, Colonel Albert W.
Briscoe, Capt. Richard George	Crookshank, Capt. H. C. (Gainsb'ro)	Gower, Sir Robert
Broadbent, Colonel John	Croom-Johnson, R. P.	Graham, Sir F. Fergus (C'mb'rl'd, N.)
Brocklebank, C. E. R.	Cross, R. H.	Granvlile, Edgar
Brown, Col. D. C. (N'th'ld., Hexham)	Crossley, A. C.	Grattan-Doyle, Sir Nicholas
Brown, Rt. Hon. Ernest (Leith)	Cruddas, Lieut.-Colonel Bernard	Graves, Marlorle
Brown, Brig.-Gen. H. C. (Berks., Newb'y)	Cuiverwell, Cyril Tom	Greene, William P. C.
Browne, Captain A. C.	Dalkeith, Earl of	Gretton, Colonel Rt. Hon. John
Buchan-Hepburn, P. G. T.	Davidson, Rt. Hon. Sir John	Grigg, Sir Edward
Burghley, Lord	Davies, Edward C. (Montgomery)	Grimston, R. V.
Burgin, Dr. Edward Leslie	Davies, Maj. Geo. F. (Somerset, Yeovil)	Guest, Capt. Rt. Hon. F. E.

Guinness, Thomas L. E. B.	MacAndrew, Lieut.-Col. Sir Charles	Roberts, Sir Samuel (Ecclesall)
Gunston, Captain D. W.	MacAndrew, Major J. O. (Ayr)	Robinson, John Roland
Guy, J. C. Morrison	McCorquodale, M. S.	Ropner, Colonel L.
Hacking, Rt. Hon. Douglas H.	MacDonald, Rt. Hon. J. R. (Seaham)	Rosbotham, Sir Thomas
Hales, Harold K.	MacDonald, Rt. Hon. M. (Bassetlaw)	Ross, Ronald D.
Hamilton, Sir George (Ilford)	Macdonald, Sir Murdoch (Inverness)	Ross Taylor, Walter (Woodbridge)
Hammersley, Samuel S.	Macdonald, Capt. P. D. (I. of W.)	Ruggles-Brise, Colonel Sir Edward
Hanbury, Sir Cecil	McEwen, Captain J. H. F.	Runciman, Rt. Hon. Walter
Hannon, Patrick Joseph Henry	McKie, John Hamilton	Runge, Norah Cecil
Harbord, Arthur	Maclay, Hon. Joseph Paton	Russell, Albert (Kirkcaldy)
Hartington, Marquess of	McLean, Major Sir Alan	Russell, Alexander West (Tynemouth)
Hartland, George A.	McLean, Dr. W. H. (Tradeston)	Russell, Hamer Field (Shef'ld, B'tside)
Harvey, George (Lambeth, Kenningt'n)	Macquisten, Frederick Alexander	Russell, R. J. (Eddisbury)
Harvey, Major Sir Samuel (Totnes)	Maltland, Adam	Rutherford, John (Edmonton)
Haslam, Henry (Horncastle)	Makins, Brigadler-General Ernest	Rutherford, Sir John Hugo (Liverp'l)
Haslam, Sir John (Bolton)	Manningham-Buller, Lt.-Col. Sir M.	Salmon, Sir Isidore
Headlam, Lieut.-Col. Sir Cuthbert	Marsden, Commander Arthur	Salt, Edward W.
Heilgers, Captain F. F. A.	Martin, Thomas B.	Samuel, Sir Arthur Michael (F'nham)
Henderson, Sir Vivlan L. (Chelmsf'd)	Mason, Col. Glyn K. (Croydon, N.)	Samuel, M. R. A. (W'ds'wth, Putney).
Heneage, Lieut.-Colonel Arthur P.	Mayhew, Lieut.-Colonel John	Sandeman, Sir A. N. Stewart
Herbert, Major J. A. (Monmouth)	Meller, Sir Richard James (Mitcham)	Sanderson, Sir Frank Barnard
Herbert, Capt. S. (Abbey Division)	Mellor, Sir J. S. P.	Sandys, Duncan
Hills, Major Rt. Hon. John Waller	Mills, Sir Frederick (Leyton, E.)	Sassoon, Rt. Hon. Sir Philip A. G. D.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Milne, Charles	Savery, Servington
Hope, Capt. Hon. A. O. J. (Aston)	Mitchell, Sir W. Lane (Streatham)	Selley, Harry R.
Hore-Belisha, Rt. Hon. Leslie	Mitcheson, G. G.	Shakespeare, Geoffrey H.
Hornby, Frank	Molson, A. Hugh Elsdale	Shaw, Helen B. (Lanark, Bothwell)
Horne, Rt. Hon. Sir Robert S.	Monsell, Rt. Hon. Sir B. Eyres	Shaw, Captain William T. (Forfar)
Horobin, Ian M.	Moore, Lt.-Col. Thomas C. R. (Ayr)	Shepperson, Sir Ernest W.
Horsbrugh, Florence	Moore-Brabazon, Lieut.-Col. J. T. C.	Shute, Colonel Sir John
Howard, Tom Forrest	Moreing, Adrian C.	Simmonds, Oliver Edwin
Howitt, Dr. Alfred B.	Morgan, Robert H.	Simon, Rt. Hon. Sir John
Hudson, Capt. A. U. M. (Hackney, N.)	Morris, John Patrick (Salford, N.)	Smiles, Lieut.-Col. Sir Walter D.
Hudson, Robert Spear (Southport)	Morris-Jones, Dr. J. H. (Denbigh)	Smith, Bracewell (Dulwich)
Hume, Sir George Hopwood	Morrison, G. A. (Scottish Univer'ties)	Smith, Louis W. (Sheffield, Hallam)
Hunter, Dr. Joseph (Dumfries)	Morrison, William Shephard	Smith, Sir Robert (Ab'd'n & K'dlne, C.)
Hunter, Capt. M. J. (Brigg)	Moss, Captain H. J.	Smithers, Sir Waldron
Hunter-Weston, Lt.-Gen. Sir Aylmer	Muirhead, Lieut.-Colonel A. J.	Somerset, Thomas
Hurd, Sir Percy	Munro, Patrick	Somervell, Sir Donald
Hurst, Sir Gerald B.	Nation, Brigadier-General J. J. H.	Somerville, Annesley A. (Windsor)
Hutchison, W. D. (Essex, Romf'd)	Nicholson, Godfrey (Morpeth)	Somerville, D. G. (Willesden, East)
Inskip, Rt. Hon. Sir Thomas W. H.	Nicholson, Rt. Hn. W. G. (Petersf'ld)	Sotheron-Estcourt, Captain T. E.
Iveagh, Countess of	Norle-Miller, Francis	Southby, Commander Archibald R. J.
Jackson, Sir Henry (Wandsworth, C.)	North, Edward T.	Spears, Brigadier-General Edward L.
Jackson, J. C. (Heywood & Radcliffe)	Nunn, William	Spencer, Captain Richard A.
James, Wing-Com. A. W. H.	O'Connor, Terence James	Spender-Clay, Rt. Hon. Herbert H.
Jamieson, Rt. Hon. Douglas	O'Donovan, Dr. William James	Spens, William Patrick
Jesson, Major Thomas E.	Oman, Sir Charles William C.	Stanley, Rt. Hon. Lord (Fylde)
Joel, Dudley J. Barnate	Ormiston, Thomas	Stanley, Rt. Hon. Oliver (W'morland)
Johnston, J. W. (Clackmannan)	Ormsby-Gore, Rt. Hon. William G. A.	Stewart, J. Henderson (Fife, E.)
Jones, Sir G. W. H. (Stoke New'gton)	Orr Ewing, I. L.	Stewart, William J. (Belfast, S.)
Jones, Lewis (Swansea, West)	Palmer, Francis Noel	Stones, James
Kerr, Lieut.-Col. Charles (Montrose)	Patrick, Colin M.	Storey, Samuel
Kerr, Hamilton W.	Peake, Osbert	Stourton, Hon. John J.
Kerr, J. Graham (Scottish Univ.)	Pearson, William G.	Strauss, Edward A.
Keyes, Admiral Sir Roger	Peat, Charles U.	Strickland, Captain W. F.
Kimball, Lawrence	Penny, Sir George	Stuart, Hon. J. (Moray and Nairn)
Kirkpatrick, William M.	Percy, Lord Eustace	Stuart, Lord C. Crichton-
Knox, Sir Alfred	Perkins, Walter R. D.	Sueter, Rear-Admiral Sir Murray F.
Lamb, Sir Joseph Quinton	Peters, Dr. Sidney John	Sugden, Sir Wilfrid Hart
Latham, Sir Herbert Paul	Peto, Geoffrey K. (W'verh'pt'n, Bilston)	Summersby, Charles H.
Law, Sir Alfred	Pickthorn, K. W. M.	Sutcliffe, Harold
Law, Richard K. (Hull, S. W.)	Potter, John	Tate, Mavis Constance
Leckie, J. A.	Powell, Lieut.-Col. Evelyn G. H.	Taylor, C. S. (Eastbourne)
Leech, Dr. J. W.	Power, Sir John Cecil	Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)
Lees-Jones, John	Pownall, Sir Assheton	Templeton, William P.
Leighton, Major B. E. P.	Procter, Major Henry Adam	Thomas, Rt. Hon. J. H. (Derby)
Lennox-Boyd, A. T.	Pybus, Sir John	Thomas, James P. L. (Hereford)
Levy, Thomas	Radford, E. A.	Thomas, Major L. B. (King's Norton)
Lewis, Oswald	Ralkes, Henry V. A. M.	Thompson, Sir Luke
Liddall, Walter S.	Ramsay, Alexander (W. Bromwich)	Thomson, Sir James D. W.
Lindsay, Noel Ker	Ramsay, Capt. A. H. M. (Midlothian)	Thorp, Linton Theodore
Lister, Rt. Hon. Sir Philip Cunliffe-	Ramsay, T. B. W. (Western Isles)	Titchfield, Major the Marquess of
Little, Graham-, Sir Ernest	Ramsbotham, Herwald	Todd, A. L. S. (Kingswinford)
Llewellin, Major John J.	Rankin, Robert	Train, John
Lloyd, Geoffrey	Ratcliffe, Arthur	Tree, Ronald
Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)	Rawson, Sir Cooper	Tryon, Rt. Hon. George Clement
Locker-Lampson, Com. O. (H'ndsw'th)	Reed, Arthur C. (Exeter)	Tufnell, Lieut.-Commander R. L.
Lockwood, John C. (Hackney, C.)	Reid, Capt. A. Cunningham-	Turton, Robert Hugh
Lockwood, Capt. J. H. (Shipley)	Reid, James S. C. (Stirling)	Wallace, Captain D. E. (Hornsey)
Loder, Captain J. de Vere	Reid, William Allan (Derby)	Wallace, Sir John (Dunfermline)
Loftus, Pierce C.	Remer, John R.	Ward, Lt.-Col. Sir A. L. (Hull)
Lumley, Captain Lawrence R.	Renwick, Major Gustav A.	Ward, Irene Mary Bewick (Wallsend)
Lyons, Abraham Montagu	Rhys, Hon. Charles Arthur U.	Ward, Sarah Adelside (Cannock)
Mabane, William	Rickards, George William	Wardlaw-Milne, Sir John S.

Warrender, Sir Victor A. G.	Williams, Herbert G. (Croydon, S.)	Womersley, Sir Walter
Waterhouse, Captain Charles	Willoughby de Eresby, Lord	Wood, Rt. Hon. Sir H. Kingsley
Watt, Major George Steven H.	Wilis, Wilfrid D.	Worthington, Sir John
Wayland, Sir William A.	Wilson, Lt.-Col. Sir Arnold (Hertf'd)	Wragg, Herbert
Wedderburn, Henry James Scrymgeour	Winterton, Rt. Hon. Earl
Wells, Sydney Richard	Wise, Alfred R.	TELLERS FOR THE NOES.—
Williams, Charles (Devon, Torquay)	Wolmer, Rt. Hon. Viscount	Captain Margesson and Mr. Blindell.

Resolution agreed to.