WAGES POLICY

HC Deb 21 October 1942 vol 383 cc1978-2068

Sir Herbert Williams (Croydon, South)

In view of the restricted time available to-day, and having regard to the fact that a very large number of Members wish to speak, I will endeayour to show an example of brevity. It has commonly been said that profit should not be made out of war. That receives wide endorsement, but, unfortunately, profit has been a little too narrowly interpreted. What should have been said is that undue financial advantage should not be made out of war. The restriction to profit has created a good deal of misunderstanding. It is obvious that, generally speaking, incomes cannot be increased proportionately to the increase in the cost of living. If they were, it would mean that nobody was paying for the war. The war can be paid for only through the fact that, in general, our net incomes are reduced. It is also true that if you take that class to which I have never had the privilege to belong, the pre-war rich, most, I suppose, of them have seen 80 per cent. or 90 per cent. of their net incomes taken away from them. That is a reasonably accurate statement, and it is certainly borne out by the document which the Chancellor of the Exchequer circulated on Budget Day. Having said that by way of preliminary, I think we ought to be careful not to exaggerate on the wages question. From time to time one hears mention of some relatively enormous figure as the wages of a young boy, or, occasionally, a group of men appear to be in receipt of wages which are enormous in relation to pre-war standards. But I beg hon. Members, particularly some on my side, not to overstate the case, because, by doing so, they produce resentment among large numbers of workers who are not in receipt of these abnormal rates.

If hon. Members go to the Library and examine the June number of the "Ministry of Labour Gazette," they will see there a very interesting set of tables showing the percentage increases in the remuneration of men, youths, boys, women and girls and also of all workers for a group of industries. Those tables are worth study. I shall not attempt to quote them all, but the general statement which they present shows that during the period between October, 1938 and January of this year—and I have not picked those dates; they are the selection of my right hon. Friend the Minister of Labour and National Service—in the industries concerned, which are the bulk of the industries, men's wages are up by 47.8 per cent.; youths' and boys' wages by 62.9 per cent.; women's wages by 46.2 per cent.; girls' wages by 45 per cent. while the general wages average shows an increase of 46 per cent. during the same period. [An HON. MEMBER: "Wages or earnings?"] I beg pardon, I should have said earnings. We are inclined to forget that we are dealing here with earnings, and these figures relate to the actual earnings.

Mr. George Griffith" (Hemsworth)

What were the increases of hours?

Sir H. Williams

I do not think the figures of increases of hours are furnished, but I am trying to make a fair statement of the case, and I was just about to add that those increased earnings to which I have referred are the result of two things, greater regularity and longer hours, and the longer hours, of course, lead to increases in earnings greater than the proportionate increase in the hours, because of overtime rates and the rest of it. Over the same period the cost-of-living index number has increased 29 per cent. The cost-of-living index number is still compiled on the old basis, and the report that was prepared, I think in 1938, by the Ministry of Labour shows that that old basis is substantially accurate to-day, and therefore it is not possible to criticise it. But we have to bear in mind that that increase of 29 per cent. is an increase involved in the maintenance of a certain standard which includes the general range of essentials but does not include customary necessities such as beer or tobacco, or anything by way of meeting the increased burden of taxation which falls upon a lot of these people. Generally speaking, it is perfectly clear that there has been a substantial advance in the monetary standard of a very large number, in fact of the general mass of manual workers in this country. I have no complaint in so far as that increase is the result of increased productivity. The source of an increase in the standard of living for all sections of the community, must be an increase in productivity, and it is to the extent that these payments, to which I have referred, go beyond the increase in productivity to-day that one section of the community is getting an advantage at the expense of another.

If we take the industries which have been particularly stimulated by the war—metal, engineering and shipbuilding—the figures are, for men, 58.9 per cent. increase; for youths and boys, 73.2, which of course is a very large increase indeed; for women, 60.8, and for girls, 55.6. But I imagine that the figures with regard to women probably do not afford a very satisfactory comparison, because in that case we are comparing the enormous number of women now in those industries with the much smaller number who were there before. Therefore the setup has changed, and I would not attach too much importance to the comparisons in respect of women or girls. As far as the men and youths are concerned, I imagine it is a fair statement. I think that for a period we were paying people about eight days' pay for about five days' output. It was not that the workpeople were exploiting the nation. It was thrust upon them by Government action. I was one of those who thought that we made a mistake when we cancelled the Whit Monday holiday. I said so at the time, and I remember it was said, "It will have a very bad effect on the French if we go on with our customary holiday." But customary holidays are for the purpose of getting more output by maintaining the general physical condition of the people and giving them adequate relaxation.

I have been persistently opposed to the cancellation of holidays and to abnormal hours of labour. They have not been productive. This was shown by the committee which investigated the question of industrial fatigue during the last war. But the very mistake that was made in the last war was repeated in this war, in spite of the efforts of those of us on the Select Committee who urged on several occasions that we did not get increased output by these abnormal hours of labour but that we did get into the minds of the people a wage-earning standard far in excess of what they had ever expected. The result of that has been that on the reversion to shorter hours of labour, there have been demands for increased rates of pay in order to compensate for the loss of double pay on Sunday and other things of that kind.

We have, I think, made another mistake. A great many new factories have been constructed to make articles that were not made in peace-time. To a large extent these articles are, rightly, being made on a piece-rate basis. Once you have fixed a piece-rate, it is vital that you should never cut it, unless there is a change in productive methods. That is one of the most important things in industrial relations. It is equally foolish to fix your piece-rates too high, and I am satisfied that, in respect of certain instruments of war and parts of instruments of war, we have fixed the piece-rates too high. The result is that you have, to-day, the resentment of the highly skilled workmen who, owing to the necessities of the case, are working by time and not on piece-rates, and the resentment of the men in the Services when they see abnormal increases in the remuneration of the unskilled. Mass production is shown in excelsis in war-time. War gives opportunities for mass production that peacetime cannot furnish. War-time is, without the slightest doubt, the paradise of the unskilled.

Mr. MacLaren (Burslem)

Hear, hear.

Sir H. Williams

My hon. Friend is possibly thinking of the unskilled on the Front Bench. They were not in my mind, though I thick it is a very apt description.

The Minister of Labour (Mr. Ernest Bevin)

We are not the result of mass production, anyhow.

Sir H. Williams

No, because the results of mass production would all be of the same shape. As I was saying, there is resentment on the part of the Service men, and on the part of the skilled men, and, of course, there is acute resentment on the part of that very large number who are, rightly, continuing in their normal civil occupations and whose prosperity has been gravely affected—adversely—by the war. So we have had a vast shift of income from one section of the community to another at all levels, or nearly all levels. As I say, it causes resentment, and I think it imposes upon us an undue cost as far as the war is concerned. The Chancellor of the Exchequer is indirectly the ultimate employer to-day of nearly everybody in the war industries. Sitting near him on the Front Bench is the right hon. Gentleman the Minister of Labour and National Service, who came to this House after a most distinguished career in the trade union movement. To him, collective bargaining, which is a good thing, is almost the whole gospel. He, I think, sometimes overlooks the fact that collective bargaining, in the ordinary sense, in peace-time, may work very well because both sides are concerned in maintaining a price at which their product can be sold, and all wage negotiations have to take into account whether any change in wage rates will represent an enhancement in the price of the product as a result of which trade will be adversely affected and unemployment will follow. That does not arise to-day. It is, from the point of view of immediate effect, a matter of complete indifference to the employers what wages they pay, because they do not pay them. The Chancellor of the Exchequer pays them, and as he has no collective money of his own, they are paid by the money of the general population.

Therefore, strongly as I believe in the doctrine of collective bargaining, there must be some restriction imposed in wartime if one section of the community is not to take undue advantage of another section. As the State is in effect the only effective consumer to-day, I think the State has an obligation in preventing both employers and workpeople from engaging in a racket at the expense of the taxpayer. I will give an example. The other day the production committee of a certain firm, going outside their terms of reference, submitted a proposal to the management that all rates of pay should be increased in accordance with a certain formula, subject to the condition that the increase must be enough to absorb the whole of the sum of the Excess Profits Tax which the firm was earning and would have paid to the Chancellor of the Exchequer. I have seen the correspondence. I am fully aware of the facts. It was a deliberate proposal that the firm should not pay Excess Profits Tax and that the whole of the sum should be paid out to enhance wages.

The Chancellor of the Exchequer (Sir Kingsley Wood)

What happened?

Sir H. Williams

I am glad to say that the management resisted.

Mr. Bevin

The management did care?

Sir H. Williams

They resisted the proposal, quite properly. I furnished particulars to the Joint Parliamentary Secretary to the Ministry of Labour.

The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Tomlinson)

I think the hon. Member ought to say that the Parliamentary Secretary replied to say it was no part of the production committee's business to deal with rates of remuneration.

Sir H. Williams

I was very grateful for that. As I said, the production committee were going outside their terms of reference. I am drawing attention to the curious attitude of mind—the demand that the whole of this sum, which necessarily should go to pay for the war, should be handed out in the form of an increased rate of pay.

Mr. Lipson (Cheltenham)

How does the hon. Member reconcile the attitude of the management in the case he has given with his statement that managements were not in the least interested in what happened?

Sir H. Williams

There may be cases where a general body of employers are indifferent, or largely indifferent, because of the fact that if there is an increase in a rate of wages, that is then passed on in the form of increased costs. This was a different issue. This was a proposal to wait until the end of the year came, and that when the Excess Profits Tax was ascertained there should be an increase of pay to absorb it all. [Interruption.] I do not know who thought it out, but they did not get away with it, I am glad to say. I give that to illustrate an attitude of mind which is growing up. In considering all these questions of the increased rates of pay, we must take into account that they no longer represent net incomes, because all these people are subject to Income Tax. Curiously enough, having regard to some Debates that have taken place in this House, there is no resistance to any material extent on the part of wage-earners to paying Income Tax. There has been a great deal of misrepresentation on that matter. The only criticism I have heard is about the case in which a man is already paying the full standard rate on part of his wage and his wife goes to work. After she has paid the necessary expenses which her going out to work entails and paid Income Tax at nearly 10s. in the pound, she is left with so little that she is working for a negligible net income. I think that is one direction in which there might be some consideration in respect of this matter.

Increased rates of pay are operating as a factor in absenteeism. There are curious people who do not want to earn more than a certain sum. As soon as they have earned enough for the rent, a certain amount of food, the pictures; a shilling or so on a horse and an occasional visit to what is called the "local," they are satisfied, and once they have earned that they do not seek to earn much more. At a time when there is so little else to buy they take time off when they have earned that. In some cases I believe that an abnormal increase in the rates of pay of certain classes of people is a factor in absenteeism. I have tried to speak temperately. Nothing would do more harm than if large numbers of wage-earners who are working hard—and the bulk are working hard, faithfully and well—thought that an attack was being made in the House of Commons on their standard of living. That is the last thing we want to do. It is equally true that the wage situation must be considered in connection with the incredible task which the Chancellor of the Exchequer has in paying for the war. I would beg and beseech all of us to consider it in that light.

Mr. Summers (Northampton)

Before coming to the topic that is before us to-day I hope the House will allow me to make one brief reference to a personal matter in connection with this Debate. I refer to the fact that there have appeared statements in the Press to the effect that I was to open this Debate. I would like to make it as clear as I am able that I was in no way associated with these references in the Press, and, moreover, I am quite unable to account for how they got there. It is not the first time this practice has been followed, and I have consistently deplored that practice. I would like only to add that I deplore it still more when my own name is associated with it. I would just add, finally, that if the Press would realise that by disregarding constitutional procedure and attempting to anticipate your wishes, Mr. Speaker, they do nothing but disservice to hon. Members and to the practice of this House.

I am very glad that on the Report stage of this Vote of Credit opportunity is being taken to review the Government's policy with regard to wages, for there are few subjects, it seems to me, of greater importance at the present time. It is sometimes said that the Government have no wages policy, but I suggest that a study of the speech of the Lord Chancellor in another place on a recent occasion would do away with any such idea. It is no part of my case to-day to challenge the wisdom of the original decision which the Government took to permit the continuance of collective bargaining in industry", strengthened by the prohibition of lockouts and strikes, and by the establishment of the National Arbitration Tribunal. There were, I think, good reasons for that decision. The change from the conditions prevailing in peace to those prevailing in war brought many complex problems in their train, and it is only those in close touch with the factories who can be expected to deal with such problems. Conditions between one trade and another vary greatly, as they do between one district and another and indeed between one works and another, and it is very necessary in settling all such questions that there should be ample flexibility.

The White Paper that was issued in July last year, entitled "Price Stabilisation and Industrial Policy," set out the means by which the Government intended to prevent the £500,000,000 of incomes in excess of goods available for purchase from driving up prices and leading to inflation. It was made plain in that White Paper that the success with which their efforts met would depend largely on the maintenance of the wage level prevailing at that time. It may be an interesting speculation whether the chicken came before the egg or the egg before the chicken; it is hardly less profitable to argue whether prices drive up wages or wages drive up prices: the fact remains that they are inseparably linked together. Everyone is familiar with prices, and not slow to complain when prices go up. People do not always realise that such increases in prices must necessarily follow, sooner or later, from increases in wages. I hope, therefore, that one effect of this Debate will be to create a better understanding of the factors inherent in the policy of stabilisation which the Government have undertaken to carry out. This policy which they have hitherto pursued must be described as very precarious, if only because it depends on the way those in industry discharge their responsibilities. It is made clear that a great responsibility is placed on the two sides in industry in that matter. A system so arranged will necessarily bring about great variations and grave anomalies. It is easy to pick out ridiculous earnings in a particular industry, and to give specific illustrations. While I regret that there are anomalies and believe that their effect for ill is very far-reaching, I suggest that it is desirable not to obscure the main factors in this situation of wages policy by dealing with details of that kind.

Mr. Bellenger (Bassetlaw)

Might I ask, in order that we can follow the trend of this Debate, whether we are to understand that wages include salaries?

Mr. Summers

Certainly; I speak for nobody but myself, but I draw no distinction between the two. How has this policy worked hitherto? The time lost in disputes in industry in this war compares very favourably with the time lost in that way in the last war. Comparison between the base rates in industry and the rise in the cost of living also shows up very favourably. But, as my hon. Friend the Member for South Croydon (Sir H. Williams) pointed out, when you come to earnings, as distinct from base rates, the comparison is very much less favourable. Earnings have gone up far more than the cost of living. But by and large the system has worked satisfactorily. But is it sufficient to judge the soundness of our policy by what has happened hitherto? When we discussed the amalgamation of police forces and saw the unusual spectacle of the hon. Member for Seaham (Mr. Shinwell) supporting the Government, I was interested in one of his arguments. He pointed out that the proposals then before us were designed to deal with conditions which could be foreseen. In this instance it is equally important to review our policy in the light of conditions which can be foreseen, and not merely to rest on satisfactory results hitherto.

What is the present position? On the one hand, we see the country flooded with posters advising people to save; we hear Ministers and Members of all parties telling the public that unless they save there is great danger of inflation and of deterioration in the real value of wages. At the same time, while that advice is being given, and when it is known that there is excessive purchasing power, we are faced with" demands from all quarters for wage increases. Hon. Members are familiar with the claims put forward in the engineering industry; and what happens in that industry is usually reflected in the shipbuilding industry. The railways have put forward demands. Although we had hoped in the steel industry that a substantial measure of stabilisation had been achieved, those hopes have not been fulfilled. Before the war, in the steel industry, there was a rough and ready method of seeing that the prosperity of the industry was to some degree reflected in the wages of those who took part in the industry, and for that purpose the percentage additions to base rates were related to the selling price of steel. After some experience of war, it was recognised that there would have to be a substantial increase in steel prices to cover the prime cost freight and insurance of supplies imported from abroad. It was recognised that that increase would not increase the prosperity of the manufacturer. It is to the credit of all concerned in that industry that they realised that the method of assessment of wages called for review in the light of these special circumstances. Fresh arrangements were made, by which the percentage addition to base rates was pegged at the rate then ruling, and any further additions to that scale were related to the cost of living. Although conditions in that industry have not materially changed since that arrangement was made, and although at the time it was generally expected to continue for the duration of the war, notices terminating that arrangement have been handed in—as the agreements provided might be done—and the whole position is in a state of flux. Hon. Members will recall the increase which has been given in agriculture, because, in relation to the general level, it was thought that the pay in that industry was inadequate. There have been changes in the coal trade, because, again, it was felt that comparison made some adjustment necessary and it is not long since we increased pay in the Services. I do not want to stress the comparison unduly between the pay in the Services and that prevailing in industry, but the gap between those two types of pay is already subject to criticism, and any widening of the gap by a major change in the munition industries must have far-reaching results.

Why do these wage demands come forward? I do not believe that they arise from a need to increase the purchasing power of the recipients to cover increases in the cost of living. Occasionally increases can be justified on that ground, but, broadly speaking, I do not think that plays a major part in these demands. To some degree, I believe, they are put forward as a result of pressure exerted by irresponsible elements, actuated by ulterior motives, who force the responsible trade unions to put forward extravagant demands or to make way for others who will. To some extent it may be a desire to offset the rates of Income Tax, but probably the most important reason is the comparison which individuals make with the remuneration of those in other industries, and they say, "If they have had an increase, why should not I." I believe that after the war it will be very necessary to find ways and means of ensuring that wages more comparable with one another are paid for comparable effort and skill, but surely a problem so difficult to deal with as that is very much better dealt with in the calmer days of peace than in the critical days of war. In the White Paper to which I have already made reference it is stated that increases in wages or other incomes would not make more goods available. Such increases would not raise the general standard of living. They would merely tend to send up prices and to denude the shops, making it difficult to secure a fair distribution of the limited supply of goods. I hope it is not necessary for me to dwell at any length upon and to emphasise the main message conveyed in those words that any major increase in the wage level must have a serious and damaging effect on the question of inflation.

It is no argument to say, as an hon. Member on one of the Front Benches opposite who is not here to-day said recently, that because goods are scarce and because so many of them are controlled in price there is therefore no harm in putting more money still into the pockets of the wage-earners. In the first place there are still many goods not controlled in price and hon. Members do not hesitate to quote them when they are pressing the right hon. Gentleman the Chancellor of the Exchequer for improved allowances and pensions. But in addition to that we must surely have regard not only to the position to-day, but to the position which will prevail after the war. It may not be that these restrictions and controls will come off immediately, but some day there must be a relaxation of control and then will be the time when the actions we take now will have effect. We must have regard therefore to that position. It is not that the demands we see before us to-day are merely the continuance of the trend which has been going on for the last six or 12 months, but the demands are coming in from all quarters. The flood gates have been opened and the very stability of the wage structure is in doubt. Does anyone imagine that if these changes in munition industries which are requested are met, or even partially met, we shall not have recurring demands from this industry to which I have referred and already dealt with? It is only natural when their position has been rectified that, if the comparison made at that time is altered by a further increase in the munition industries, this other will once again come forward and have a very plausible case with which we shall have to deal.

It is pointed out by some people how logical it is—how illogical perhaps I should say—for the Government to deal with prices and many other factors in the situation and not directly deal with wages. They say, "After all, are we not all in the front line? Then why should not the similar procedure adopted in the Services be applied also to industry." For my part I am fully conscious of the dangers and difficulties of attempting to deal with wages in industry directly by the Government and I think some of those who lightly advocate such a course would do well to study more carefully before advocating such extreme lengths. I should have thought the experience of the controversial discussions on wages in the coal industry with which this House is all too familiar would have been a salutary warning of the dangers of dragging wages discussions in detail into our political life. In Canada they had attempted to deal with this problem by fixing a ceiling upon the wage rates to be paid and they selected those prevailing on 15th November last year, but they found it necessary to establish machinery for dealing with special circumstances and hard cases, which did very much to undermine the rigidity of the ceiling which they were setting out to provide. We see in America that directions has been issued to the Wages Board there that no wages may be paid higher than the rates prevail- ing on 15th September of this year, except for particular reasons which are laid down. But the exceptions to justify special treatment just mean that the whole system is riddled with loopholes, and unless I am mistaken one of them is to the effect that further increases may be made if they are required "for the better prosecution of the war."

You cannot drill holes in the stopper of a bottle and expect the liquid inside to stay put, and yet one is very conscious of the fact too that the liquid in the bottle, particularly if it is intoxicating, may very well burst the bottle for lack of an adequate vent, and that, it seems to me, is the dilemma in which we are placed in dealing with this problem.

If we reject the extreme alternative sometimes advocated and are by no means happy with the system prevailing now, does this mean that there is nothing more that could be done? We pride ourselves in this country in relegating logic to a subservient position. Our political institutions have thrived and survived by a process of improvisation and adaptation, and I believe that there are still ways and means open to us so to adapt and strengthen the present method that we are applying as may lead us to have more confidence in its successful application. (An HON. MEMBER: "What about logic?") The part logic plays is always dangerous in my view. There are three sources from which we might look for help. The Government themselves, those who take part in wage negotiations, and thirdly, the working people, the public, themselves. I do not believe that the Government have as yet come out anything like strongly enough in bringing it home to the people of this country that the maintenance of the present wage-level is an indispensable part of the price policy of the Government. It is perfectly true that we are told in the White Paper that the Government regard it as— the duty of both sides in industry' to consider together all possible means of preventing a rise in the costs of production, but who in industry has read the White Paper? When have we heard from the right hon. Gentleman the Minister of Labour an emphatic and forthright statement telling the people that there is the gravest possible danger in their demands for wage increases coming forward so long as there are not additional goods to buy to balance those demands? Why should not he come out and tell the working people what it is wise and what it is not wise for them to do in those same forthright terms that he has not hesitated to use when he has considered that there are employers in need of correction? It is not dictatorship for which I ask, but leadership. We have learned that in the near future the Prime Minister is to address a meeting of representatives of the coal trade, and here I may say, in passing, how much some of us welcome this instance of the additional interest taken by him in the affairs of the home front. (An HON. MEMBER: "It is the first time "). We have already dealt with the situation in the coal trade, and I can hardly think that it can do other than harm to that industry for further changes to be made in other industries. So it would seem the proper occasion—and I hope that my right hon. Friend will take it—to strengthen the forces of stability and to bring home to all concerned in industry the magnitude of their responsibilities in this matter.

Now there is a more direct way in which the Government can strengthen the present position. The keystone of joint conciliation machinery is the arbitrator. As matters stand, he can hardly fail to have regard to the wages paid in other industries when considering cases which are brought before him. I believe it should be possible for the Government to ensure that in dealing with the cases brought to him the arbitrator does not overlook the national considerations and the interests of the taxpayer. Just as in the same way as a judge directs a jury as to the weight to be given to the considerations before them, so, I suggest, the Government can direct arbitrators as to the weight they should give to the considerations put before them in these industrial cases. It does not follow that by so doing you would necessarily tie the hands of the arbitrator.

Mr. Levy (Elland)

Do I gather from my hon. Friend that the arbitrator would cease to be impartial but would be prejudiced and guided by the instructions given him by the Government, which would do away entirely with his freedom of action?

Mr. Summers

I am not suggesting that there should be given to the arbitrators instructions such as would do away with their freedom of action, but I am suggesting that because so much of the wage increases falls upon the taxpayers in the last resort it is perfectly proper for the Government to take steps to see that these considerations are given full and proper weight by an arbitrator when dealing with these cases.

Mr. Willink (Croydon, North)

Is it not a fact that public policy is taken in account by all tribunals when they are considering matters between individual litigants?

Mr. Summers

I think it would be a mistake if we dwelt too long on this aspect, but lest anyone should think that I feel I am getting the worst of the bargain, I should be happy to continue it afterwards. Coming to those who take part in these wage negotiations, I believe that the responsible leaders of trade unions do realise their responsibilities in this matter. I am one of those who regard the wellbeing of the trade union movement as an indispensable part of peaceful and efficient industry, but their task is very difficult. They have to justify their existence.

Sir Joseph Lamb (Stone)

To gain his object, would my hon. Friend be willing that the Government should be represented before an arbitrator to state their case to the public?

Mr. Summers

My own personal view is that that, at this stage, is going too far.

Mr. W. A. Robinson (St. Helens)

The hon. Member has not made his mind up yet. Give him a chance.

Mr. Summers

It is not a question of making up one's mind. Just as we reject the extreme course now we may have to come nearer to it as time goes on if the matter gets out of hand. Trade unions not only have to justify their existence but they have to look two ways at once and I am afraid that some of the demands now being put forward are putting an unwarranted strain on mutual confidence. My hon. Friend the Member for South Croydon gave an instance in which employers resisted demands to exploit the E.P.T. situation. I believe that generally there is a perfectly proper desire on the part of employers to resist such demands and that the existence of E.P.T. is not tending to allow these increases to take place unduly.

Finally, there are the working people themselves. The Minister of Labour has told us in a number of speeches that the unprepared position in which we found ourselves at the beginning of the war was in varying degrees the responsibility of all of us and in this case also everyone has in varying degrees both responsibility and the possibility of improving the position. It is all very well for us to say we are fighting for freedom and democracy and to be proud of our popular institutions but we cannot expect others, while we are preaching that creed, to make good our own individual short-comings. We are reminded of the dangerous position in which we are placed. We pay tribute to the gallantry of our Russian Allies; we marvel at their sacrifices and lament their sufferings; we tell each other that we must not use the war to improve our own personal positions. But are the jostlings for position at home, which we see going on around us, in keeping with these considerations? Is it not time we recognised that a different set of values must be shared and accepted in this country? We are told of the iniquities of the profit motive and that in the brave new world which we shall see one day service alone will suffice. Those who are so confident that that kind of new world will come about would do well to apply themselves to the present situation so that by so doing we may avoid many disappointments and possibly bring about a greater sense of realism than is apparent just now.

In a book which has just been published by Lord Elton there is a reference which I think is pertinent to this situation. I am speaking of an extract from "St. George or the Dragon." He says there that long ago men believed that the supreme tasks demanded of those who undertook them, not only a certain quality of life in the past but a progressive effort of self-discipline in the present. It was not so much the crusader who made the crusade as the crusade that made the crusader. To win your victory, you have sooner or later to earn it. I suggest that such thoughts are equally applicable to-day. Public opinion can do much in this matter, and it is up to the Government and hon. Members to mobilise public opinion. When the welfare of this country has been at stake hitherto, the good sense of the people has always been forthcoming. I trust that in these circumstances it will not be found wanting.

Mr. Benson (Chesterfield)

I hope the hon. Member for South Croydon (Sir H. Williams) and the hon. Member for Northampton (Mr. Summers) will forgive me when I say that their speeches were tinged with a lack of realism.

Mr. G. Griffiths

They were attacks on wages all the time.

Mr. Benson

When the honourable and usually gallant Member for South Croydon sings in a minor key, it is obvious that he and those who think like him are rather afraid of the problems they are trying to tackle. The two speeches we have heard have been demands for the freezing of wages. If we are to discuss this problem with realism, I think we had better cut out all vagueness. I do not think the hon. Member for South Croydon and the hon. Member for Northampton will deny that this was the demand they made. All I ask is that they should state it clearly and realistically. I am fully aware of the danger of purchasing power running ahead of the goods that are available for purchase. No hon. Member has spoken more strongly on that than I have, and nobody has taken a stronger line on the subject of taxation. I am prepared to give the hon. Member for Northampton his case fully—that unregulated increases in wages may produce a very serious financial position. I think that Lord Keynes, in a broadcast, put the matter very clearly when he said, 12 months ago, that the money income of the country was £17,000,000 a day, and that the total available amount of goods and services was only £12,000,000. Obviously, there is no possibility of an increase in the quantity of goods and services available to civilians during the war. The hon. Member for South Croydon referred to wages increasing with production, but if that production is war production, it does not increase the total volume of goods available to civilians. I am prepared to grant the whole of the case concerning the danger of inflation arising from either regulated or unregulated increases in wages when there is no possibility of an increase in the quantity of goods available. But I do not want to deal with that point now. Hon. Members opposite can be trusted to rub it in.

I want to consider the matter from a rather different angle. The hon. Member for South Croydon said that sacrifices have been made by the rich and that Income Tax, Surtax and Excess Profits Tax have taken something like 90 per cent. of the larger incomes. That is quite possible, but we must not overlook the fact that, despite the undoubted shift in the quantity of purchasing power down towards the lower income scales and despite the very high taxation of the upper scales, there has so far been little or no change in the relative standard of comfort of the various classes of society. [HON. MEMBERS: "No."] Does any hon. Member challenge that? I think the hon. and gallant Member for Epsom (Sir A. Southby) challenges it.

Commander Sir Archibald Southby (Epsom)

Certainly, I do. It is absurd to say that there has been no diminution in the standard of living of those who before the war had large possessions. There has, very rightly, been a great diminution, and it is most unfair to suggest that there has not. Everybody is making a sacrifice in the war, and to say that people who had large incomes before the war and who still have great commitments are not making a sacrifice is not a statement of fact.

Mr. Benson

If the hon. and gallant Member had listened to me, he would realise that I did not make any such silly statement. It is no use challenging a statement which I did not make. I said there has been no great relative change—I did not say no absolute diminution—in the standard of comfort of various classes. The hon. and gallant Member, I believe—I may be doing him a wrong—is a wealthy man.

Sir A. Southby

Believe me, I am not. The hon. Member is doing me a grave injustice.

Mr. Benson

The hon. and gallant Member's standard of comfort, before the war and now, is a great deal higher than that of the average miner.

Mr. Wragg (Belper)

The average miner can afford to buy lots of things which a rich man cannot afford.

Mr. Benson

If we go through this Debate in an air of unreality, the Debate will do no good. It is useless to challenge the statement that those who were rich before the war still enjoy a standard far higher than the standard of the average working-class man, before the war or now, despite increases in wages.

Sir Alfred Beit (St. Pancras, South-East)

Surely, that is quite different from saying that the standard of the working classes has not risen at all?

Mr. Benson

Of course, it is, but I did not say that. I said quite the opposite. I agreed there has been an undoubted shift of purchasing power towards the lower end of the scale. I said there has been no relative change in the standard of comfort of the different classes. [Interruption.] Hon. Members can deny it if they like, but the vast majority of the people believe it.

Mr. Wragg

Yes, because the hon. Member and those associated with him tell them so.

Mr. Benson

Would the hon. Member for Belper (Mr. Wragg) be prepared to change his standard of living for that of a miner?

Mr. Wragg

My standard of living has changed very much, and I see miners around me getting twice as much as they did before the war.

Mr. Benson

I asked the hon. Member whether he would be prepared to change his standard of living for that of a miner. I am well aware that money wages have gone up and that net large incomes have gone down, but that does not alter the fact that people who were comfortable before the war are comfortable now, and that people who were poor before the war are relatively poor now. That is the opinion of the vast majority of the people of this country, and that is why there are wage demands; and until that opinion has been changed, there will continue to be wage demands. The hon. Member for Northampton demanded the freezing of wages.

Mr. Summers

No.

Mr. Benson

The hon. Member asked for that. He referred to America, and he spoke of stabilisation, which is not quite such a crude word as freezing.

Mr. Summers

The hon. Member takes exception to the advocacy of a policy of maintaining the wage level at approximately where it is now. Does he seek to challenge the whole of the White Paper in which that is shown to be dependent upon the success of the whole policy? Does he challenge that policy?

Mr. Benson

Why does the hon. Member say I take exception to it? I have never said that I did. This demand for freezing wages means interference with the old-established law of supply and demand. I do not know whether hon. Members opposite realize it, but that is an extremely revolutionary proposal, reversing the whole policy of the past. In the past the' incomes of individuals have depended on monopoly in one way or another. If it were a landlord, it is the fact that his land had a monopoly value. If it were a barrister making £10,000, £15,000, or £20,000 a year, it was the monopoly value of his particular kind of skill, [HON. MEMBER: God gives ability to all men.] God does not give the same kind of ability to all men. It is not the social value of the service rendered which has had any bearing whatever on remuneration in the past. It has been simply and solely a question of how much the individual could wring out of society for the land or the factory, or whatever he owned, or for his ability. The hon. Member is proposing that this old-established custom of remuneration according to the law of supply and demand should be put an end to. As far as I can remember, there have only been three periods in history when the law of supply and demand has worked to the advantage of the working classes. One is now, one was in the last war, and the previous time was 600 years ago, after the Black Death.

Mr. Summers

Does not the hon. Member agree that the whole of the law of supply and demand has already been completely vitiated by the restriction and control of our actions, and so already it is no longer operating?

Mr. Benson

The law of supply and demand is certainly not operating in its complete fullness and purity, but, where the law of supply and demand for only the third time in 600 years works out to the advantage of the working class, hon. Members opposite say "No, it must be stopped." The hon. Member for South Croydon put the thing excellently. "Restriction is necessary to prevent one section of this community taking advantage of another in war-time." Why only in war-time I am not quite clear. It seems to me very invidious that hon. Members opposite should say that, when for the third time in 600 years the law of supply and demand, which has worked enormously to their advantage during those six centuries, and probably before, operates in the interests of the working classes, it must be completely suspended for the duration of the war. I am quite prepared to give them the case as to inflation. I admit as definitely as anyone on the other side that, if we allow wage rates to get out of hand, it will produce immense financial difficulties. I am quite prepared to see that wages shall be dealt with and, if necessary, frozen, but I am not prepared to accept the idea that only during war-time, and when the advantage is on the side of the working class, should the law of supply and demand be suspended.

I am quite aware that there is a grave crisis. I am quite aware that the unregulated demand, owing to monopoly value, for labour may produce trouble. But what about after the war? What about the past? Has the functioning of the law of supply and demand in the past failed to produce evils? It has produced low wages, poverty and sweating. Hon. Members opposite never suggested that it should be suspended when, along with low wages and sweating, it produced enormous wealth for their section of the community. They cannot have it both ways. If they say this is a bad method of fixing remuneration and it must be stopped now and for always, well and good. They will find that we on this side will give them every help. But let them realize that they cannot come along once every two hundred years and say this law must not operate now, while in between it operated to their advantage and that of their forbears.

Sir J. Lamb

The hon. Member keeps on referring to "we" and "they." Is he aware that some of us have advocated higher wages as vehemently as he has? To give one instance only, higher agricultural wages were advocated by Members on this side but were opposed by Members on the other side because they were consumers.

Mr. Benson

I am pointing out that hon. Gentlemen opposite are still maintaining the right to go back to the law of supply and demand—[HON. MEMBERS: "No."] Are hon. Gentlemen opposite prepared to say that we should get completely rid of free competition? Are they prepared to say that in future, and not merely during war time, there should be an entirely different system of regulating incomes and that it shall depend entirely on service to the community and not upon monopoly values?

Sir J. Lamb

Earned income, yes.

Mr. Benson

What about unearned income?

Sir J. Lamb

We are discussing wages.

Mr. Benson

I am discussing all forms of income. The point is that if hon. Gentlemen opposite want us to agree to the regulation of wages in war time we, as a price for that, demand that there shall be an entirely new system of regulating all forms of income and that it shall not cease when war ceases. We protest against the idea that it is only when wages rise that something is wrong with the law of supply and demand. We protest against the idea that it is only in war time that there are crises and social evils arising from the unregulated demands and powers of monopoly interests.

Mr. Wragg

If there were no regulation, prices would rise. The hon. Gentleman is arguing about supply and demand from the point of view of wages, but he must argue it from the point of view of prices. If there were no regulation by the Government, supply and demand would operate and prices would rise considerably.

Mr. Benson

I admit that the law of supply and demand is not working completely freely, but I am pointing out that there is a very large element in the fixing of remuneration in between wars which depends on the law of supply and demand. When the law of supply and demand is working to the advantage of the working classes—at any rate, to their apparent advantage—hon. Gentlemen opposite demand that regulation should take its place. As a price for that, if hon. Gentlemen opposite want us to agree, they must accept our position that the crisis is not merely a war-time crisis, but a permanent crisis so long as poverty exists and capital values give one man an enormously increased standard of living over any other man. They cannot make fish of one and flesh of the other and say that in one period of crisis it is essential to deal with it by abolishing the law of supply and demand, but that when the crisis is over we shall go back to the old method of regulating remuneration. We challenge the right of hon. Gentlemen merely to pick and choose their time when remuneration shall be regulated. We demand that in future there shall be an entirely new system and that that system shall be based upon social utility and not upon monopoly values. What I have said may be entirely irrelevant to this Debate or at the moment impracticable, but if hon. Gentlemen are to pull the majority of this country with them on the question of the regulation of wages, the point I have tried to put will have to be met.

Commander Galbraith (Glasgow, Pollok)

On this the first occasion that I have had the privilege of addressing this House, I would ask for your indulgence, Sir, and for the indulgence of the House. Ever since the commencement of this war the Government have found it expedient in the national interest to impose an ever stricter measure of control on every one of the national activities and to institute a measure of control over the lives of individual citizens. The sole great exception to that policy is in the remuneration of the workers, whether they be professional, industrial, distributive, clerical or otherwise. There normal peace-time channels have still been allowed to operate without interference, and that though the Government must be very interested in the wage situation because of the effect it might have on inflation and also because more than 50 per cent. of the industrial capacity of this country is employed directly on Government account. It seems to many people somewhat extraordinary that the Government should continue to pursue that policy, for after the experience of the last war there was a general opinion that in the event of another war one of the things which the Government would be almost bound to control would be wages. It is the more remarkable that they have not done so because they have taken such right and proper steps to control very strictly the profits that have been earned in industry and otherwise.

Indeed, a belief prevailed after the last war that in the event of this country ever again finding itself fighting for its existence, when the life and liberty of everyone of us was equally at, stake, it would be probable that the Government would introduce universal conscription. As the event has turned out, they have introduced conscription only so far as the Armed Forces are concerned. I am one of those who hold very strongly that when the State assumes the responsibility of demanding from certain of its citizens as of right that they shall give life itself in defence of the country, and when the State actually chooses the people from whom it expects that supreme sacrifice, then it has no option, either morally or logically, but to conscript and use in any manner which the Government consider necessary every individual citizen, male or female, and everything that they possess whether it be property, investments, capital or income. I am very sorry that at the outbreak of this war the Government did not follow that extremely logical course. It would have resulted, in my opinion, in there being in this country to-day an even greater unity than exists, though that is undoubtedly very great. It would have removed once and for all any suspicion that one section of the community was benefiting by the sacrifices of others. It would have made us feel even more strongly than we do to-day that we are all part of one team playing for our side not for ourselves. It would have achieved also a much nearer approach to something which, although it can never be attained in full, is very desirable, and that is equality of sacrifice. Unless we can get a very close approach to that objective I do not think we can ever get the maximum effort from us all. It is unfortunate that to-day it is probably too late to remedy what I conceive to have been a great mistake, in consequence of which we are faced now with an illogical situation which is unfair and, in certain of its aspects, also unmoral.

May I ask the House to consider a matter which has been debated here at some length recently, the position in which men in the Fighting Services find themselves as the result of the Government's decision to leave wages to be fixed by the normal channels which existed before the war? Their remuneration, of course, is fixed by the Government, who, I under-quite adequate in the present economic quite adequate in the present economic circumstances. That is something which, I am sure, the House will judge for itself. I have been told by Members who sit on the Benches opposite that there is no feeling among men in the Services which is strongly against the present wages policy of the Government which allows the industrial worker to receive a considerably higher remuneration than that which is received by Service men themselves, and that men in the Services are glad to know that their friends and relatives are doing so well. I think there is probably a certain degree of truth in that statement in so far as the young unmarried men in the Services are concerned, but human nature being what it is I wonder if they will have the same feelings when they return home at the end of the war to find their friends and relatives fairly comfortably off and with considerable savings put aside while they have little or nothing to show for the dangers and hardships which they have undergone in their service overseas.

What I really wish to consider is the position of the married men, and I will take as an example an able seaman in the Navy, not one who has recently been raised to that rating but one who has a good conduct badge, and let me assume also that he has a wife and two children. If that man makes the largest possible allotment to his wife, which means that he will have only 4s. 7d. a week for himself, his wife will receive 67s. a week. Do hon. Members really believe that that man will feel any very great degree of contentment when he learns from his wife that her sisters, young and inexperienced women, after a few short weeks of training, are able to bring home at the end of the week a pay envelope with something in the region of £4; or perhaps that her sister-in-law is receiving something in excess of £6 a week from her husband who is employed on munitions? I do not think those are extravagant figures. Does the House not think that that woman will feel some resentment when she knows that these sums, so considerably in excess of what her husband can earn, are being received by her relatives while they live quietly and comfortably at home, and not in any sense in danger, while her husband is in danger every moment of the day and night and she has to do without his companionship for many months at a time? I suggest that these circumstances must result in that woman feeling a certain amount of bitterness, and that bitterness will be communi- cated to her husband, and he will feel that he is not being fairly treated by the State. If that feeling is multiplied I suggest that it will not be to the national interest.

In case the House considers that the example which I have given is an extreme one, I will quote another, that of the most highly skilled member of the seamen branch in the Royal Navy, a chief petty officer, gunner's mate, with three badges, and let me assume that he is married and has two children. If that man makes the maximum allotment to his wife he is left with 11s. 3d. a week in his pocket, while his wife gets £5 7s. In view of what could be earned in civil life by a man of equal skill and experience and, most of all, capable of bearing the same responsibility that that man takes, I do not think hon. Members would be surprised if that man felt that his services were not fully appreciated by his country. Of course, anyone replying to these cases would probably accuse me of having failed to give the full account. It would be said that the men in the Services are housed and fed. So far as housing is concerned, I do not think the point really applies, because the man has to keep a house for his family in any event; and in regard to food the value amounts merely to a few shillings a week, and when we consider that the industrial worker to-day gets very good food, just as good as in the Services, at the factory canteen, at equally low cost, I do not think the point about the food of the Service man is really relevant.

Again, it would be said that men in the Services have pensions. I wonder how many of the men serving in the Navy to-day will receive a pension; and even if they do, it is a matter of 12½ per cent., and working that out on the pay of the men it comes to very little indeed. Again, it may be said that they get a free issue of tobacco and that their other tobacco they receive duty free. If that were put to the lower deck to-day the men would probably say that they would far rather give up these small privileges than have the issue obscured by them, and would rather have their pay fixed somewhere more nearly in relation to that which is received by a man of equal skill and experience in industry. These examples could be multiplied throughout the Services time and time again. There are other examples, too. Will the House consider the case of the nurses in our great hospitals who, after many years of the most arduous training and further years of service, may rise to the responsible position of sister? In Scotland a hospital sister has just recently had her salary raised to £110 a year, and that at a time when, as I have already stated, young and inexperienced women can receive after a short training more than £4 a week from industry.

I do not want the House to imagine that I do not appreciate the great services that these women in industry are giving. I do, and everyone is grateful for their services, but what I wish to bring out are the inequalities that exist. The fact is that the Government's policy in regard to wages leads to a continuous struggle for higher wages, produces a multitude of anomalies particularly between skilled and unskilled labour and results in unfairness and also in injustice. Wage rates to-day all over the country, and including those in agriculture, are, I am credibly informed, up by 31 per cent. The cost of living is up by 30 per cent. These two figures, considered one with the other, appear to be most reasonable, but when we come to consider earnings it is rather a different picture, because earnings are up by 47 per cent., that is, are 17 per cent. higher than the increase in the cost of living, and that wide disparity is not quite so reasonable.

There is another side to the picture which has been alluded to already. No matter what system may be imposed, no matter what control there may be over industry in the future, it is very unlikely indeed that the present rates can be maintained when we have again to face world competition, and nothing is more certain when these rates have to be adjusted to meet that competition than that there will be dissatisfaction, unrest and, maybe, bitterness. If the present wages policy of the Government is to continue, we can only anticipate that rates of wages current to-day will rise even higher, and, if that be so, I suggest that the dissatisfaction later on will be proportionately greater. There is another thing which I feel about this wages policy. Is there not a feeling in certain quarters in this country that after all war is not a bad thing? Food, it is true, is rationed, and so are other things, but there is still enough to go round. Commodities are controlled, but luxuries are available to those who have the money to buy, and money to-day appears to be plentiful. In my opinion war-time is a time of sacrifice. It is a time of sacrifice for many of our people, and should be a time of sacrifice for all, and that applies to every strata of society. What is this wage policy doing for the young? I do not think signs are wanting that it is having a demoralising effect on some of our younger people, who have far more money in their pockets than is good for them at that age.

In that connection I am alluding to boys and girls who have recently left school and have not yet reached military age. It is also giving to those young people a disinclination to take up a trade. What the state of mind of those boys and girls will be after the war, when they find themselves unskilled and unable to command more than a proportion of the wages they are receiving to-day, I do not know, but it seems to me that this wages policy is allowing a good deal of talent to go to waste when it might be of the greatest value to us in future.

My plea to the Government is—if it is too late to conscript us, which is what I would like to see—that they should fix wage-rates on the present level and step up the pay of the Services till it bears a closer relationship to what is earned by people in industry. If that course were adopted it would result in not so much unrest later on and it would have a steadying effect throughout the entire country. It would remove any feeling of unfair treatment in the Services, and it would avoid the danger of inflation, which is very real, in view of the applications for further increases now in preparation. Nothing is more distracting than uncertainty. Nothing is more crippling to the national effort. No matter what a man's earnings may be, when he has the knowledge that an application has been made to give him more than he is getting it has an unsettling effect. If the application should fail, he inevitably feels a sense of grievance. It is the same with a man who is completely satisfied with what he is receiving till he hears of someone who is receiving more. Then he feels entitled to an increase as well. This process is causing much unrest.

I would say, with all due deference to the Government, that if they want to get the maximum effort from industry— nothing less than the maximum will suffice at this moment—and the greatest measure of contentment in the Services they should stabilise wage rates now and step up the pay of the Services where it is out of step. I am certain that in that way all uncertainty would be removed and, with it, discontent, waste of effort, and the danger of inflation which is involved in the present wages policy.

Captain Cunningham-Reid (St. Marylebone)

I am sure it will be the wish of the House that I should congratulate the hon. and gallant Member who has just spoken. His maiden speech was excellent. It was lucid and well balanced. Having been in this House off and on since 1922, I envied him his confidence—or his apparent confidence.

I regret that the hon. Member for Northampton (Mr. Summers) has just left his place, because I should have liked to make a comment on one or two of his remarks. I notice that he suggested that the Minister of Labour should make an appeal to the working classes to make certain sacrifices and that there should be impressed upon them the damage that their increasing demands would make upon the national security. I would ask the hon. Member whether he is prepared to ask the Minister of Labour at the same time to demand that the rentier classes should also make what sacrifices are possible. It is important to make it clear that in this war there are no class distinctions and that we expect sacrifices from all members of the community.

I have listened to the whole of the Debate. The trend of it has only confirmed the fact that what is gnawing at the very vitals of the nation is widespread, unfavourable comparisons. That has been more or less agreed upon by all speakers. Comparisons are made between what can be earned and saved in the Services and what can be earned and saved in Civvy Street. We are told that from Civvy Street £10,000,000 a week can be invested in War Loans, but in the Services we know that practically nothing can be invested because the people there have no savings. The miner compares his financial lot with that of the skilled worker in a war factory who sometimes collects £ a week. There cannot be a great number who receive such a wage as that, but the comparison still remains. The agricultural worker knows what the labourer is receiving in some nearby aerodrome construction work. The hon. Member for Hemsworth (Mr. G. Griffiths), who I regret is not in his place, compared only the other day his £600 a year with my spendable income. In passing, I would like to point out that there is not such a great difference between the two. Then the engineers see no reason why they should be left out of the inflationary picture, and they demand a rise which has been estimated, I understand, to amount to approximately £200,000,000 a year. So the ever-mounting spiral of comparison goes on. Men and women become more and more discontented and unsettled, and with good reason in the case of many who are in the Services. In some other spheres it is just the natural human urge to be equal with wage earners in other industries.

The Government admit frankly that this is an immense psychological problem. They point out that the only alternative is for the Government to fix the amount which each wage earner should receive. In reference to that, a Government spoke-man said, the week before last: Does, anybody really suppose that the Government could undertake to regulate the size of wages in this country without the question arising, 'What about salaries? What about Directors' fees? What about the returns on investments?' I agree with that profoundly. If there are to be sacrifices there must be all round equality of sacrifice. Just as there are some wage earners who get more than is necessary to support them in modest comfort, so the same applies to the rentier classes, though the majority of them have been hit hard by war taxation. I agree though that in both spheres, those who have too much, taking into account the present necessity for austerity, are decidedly in the minority. But this is the point: So long as that minority exists, comparisons and demands will be made, and something has got to be done about that. Yet the Government are not prepared, as has already been done in the United States, to grasp this nettle by stabilising wages. If somebody will come here and prove to me there is some third course which combines the advantages of both"— that is to say of the present system of bargaining or wage fixation— I am sure no one would be better pleased than my right hon. Friend the Minister of Labour. Those are not my words. The Lord Chan cellor said that a week or so ago. Those were his very words. With such exalted encouragement——

Mr. Marshall (Sheffield, Brightside)

Did not the Lord Chancellor in that speech pay a very fine tribute to the present way of fixing wages?

Captain Cunninigham-Reid

That may be, but I do not wish the hon. Gentleman to misunderstand me. I am not for one moment saying that under the present system there should not be increases of wages. With what the Lord Chancellor said on that question I am entirely in agreement.

Mr. Marshall

He was referring to the method, not to the increases.

Captain Cunningham-Reid

Exactly. I agree with that. As the Lord Chancellor has suggested that he desires, if possible, to find some third course, I think we might examine that for one moment. It is admitted that the present labour conditions are unsatisfactory, for they allow wage earners to be comparing their lot constantly and unfavourably with that of other wage earners, and this leads to discontent and ever-increasing demands. The alternative sometimes pressed on the Government is that they should stabilise wages at present rates, but what would be the good of stabilising wages where they are at present when, at the same time, that would automatically stabilise the discontent caused by the present comparisons?. Then again if a limit was placed on the amount that wage earners could earn—and I do not say one should place such a limit under the present system—why should there then not be a limit on what other sections of the community can earn? In this desperate fight for existence citizens should not try to get more out of the war than that which is necessary for their reasonable expenses, plus some financial reward for skill and responsibility.

That surely should be the principle underlying the third course canvassed by the Lord Chancellor, and it seems to me well worth trying. We should courageously embark on a revolutionary system of something approaching real equality. Some political leaders claim that there is already to-day equality of sacrifice. I am inclined to agree with some members of the Army who use that phrase "Equality of sacrifice" as a term of sarcasm. Here very briefly is an outline of a proposed new system for the duration of the war. People who are better qualified to judge these matters tell me that it is a scheme that could well be a basis for an advantageous alternative to the present unsatisfactory and dangerous state of affairs. In the first place, every adult should be conscripted to come under martial law so that, whether he or she is an industrial worker or a director of the Bank of England, he or she should be liable to be shot for the same reasons that soldiers can be shot. At the same time the income, which includes wages, of every individual in the country who comes within the ambit of Income Tax should also be conscripted. Under such conditions citizens would have sufficient income allowed them from what they receive to cover their reasonable expenses, plus a bonus according to skill and responsibility. It stands to reason that a skilled worker is deserving of more than an apprentice, or that a sergeant is deserving of more than a raw recruit. The necessary individual returns—and I am glad to see my right hon. Friend the Chancellor of the Exchequer there—would be no more complicated than the present individual taxation forms, all of which under the proposed system could be done away with, as could all other direct taxation on the individual.

In practice a large proportion of the population would find that they had the same amount to spend as now. The soldier and his dependants would be better off, and would no longer be at the present disadvantage to the industrial worker. The spendable income of the majority of the Members of Parliament in this House, especially Labour Members of Parliament, would be about the same; but other M.Ps., including myself and the Minister of Labour, who, I see, has just come in, would be somewhat worse off. Under this scheme, properly adjusted by the Inland Revenue experts, the State would benefit, possibly financially, but certainly from the point of view of national morale. No longer would there be the same opportunity for considerable sections of the community to be envious of others, for to a far greater extent everybody would be in the same boat.

I would merely say this in conclusion. Let this House give up petty nibbling at a huge problem which can only be solved by immense courage on the part of the Government. They have already got the power to do this. Let us face up to the fact that so long as we presumably run the nation on democratic lines we shall never get that whole-hearted war effort necessary until there is no longer any real cause for one section of the population to demand to be treated the same as some other section who are or appear to be better off, that is to say, until every individual in the country, especially the majority of the Services, feel that at last there is something approaching real equality of sacrifice. We shall be heading for disaster if we continue to treat the grievances of those in the Services as well as those in certain industries as separate problems, because they are all, as I have attempted to show, inter-dependent, for each forms part of one vast problem and as such should be approached in a far wider and more statesmanlike manner than is being done at present.

Mr. Marshall (Sheffield, Brightside)

I do not want to follow the hon. and gallant Member for St. Marylebone (Captain Cunningham-Reid) too closely. He based many of his statements on what I think is lack of knowledge about how wages are fixed to-day. He concluded with a fantastic scheme for regulating wages, which would just about lose us this war. He would abolish in one fell swoop the trade union movement and a system for negotiating wages which has taken a century to build up. The upshot of his proposals would be to break the morale of the country, and to bring discontent into every trade and into every individual home. He would place every body of workmen in a position where, instead of making application for the removal of any grievances to their immediate employers or to the industry in which they work, they would have to make direct application to the Government. I do not think that the hon. and gallant Member realised that he was proposing to bring the Government directly into wage negotiations in such a manner that the workmen would be placed in a position of having to strike against the Government if there was a dispute, instead of striking against their employers. I do not know whether the hon. and gallant Member appreciates what the Government would have to do in such circumstances, but I can tell him that the policy which he proposes would be the most disastrous that could ever be brought into our wage negotiation system.

Captain Cunningham-Reid

Is the hon. Member going to put forward his solution of our present problems?

Mr. Marshall

If the hon. and gallant Member will be patient, I will put forward what proposals and advice I can. He goes on to say that the present method of fixing wages is dangerous and unsatisfactory. Who says that it is dangerous? Who says that it is unsatisfactory? I have not heard any widespread complaint about it.

Captain Cunningham-Reid

I said nothing of the sort. I said the present unfavourable comparisons are dangerous and unsatisfactory.

Mr. Marshall

I wrote the hon. and gallant Member's words down, and I think that when he reads the OFFICIAL REPORT to-morrow he will see that they were as I have said. I have not heard any widespread complaint about the present method of fixing wages. It may be considered unsatisfactory, but if so that feeling is on the part of the workpeople, who do not think they are receiving enough. Applications for increases in wages are nearly always made as a result of increases in the cost of living. I suppose the hon. and gallant Member would say that no matter how high the cost of living goes, wages are to be stabilised at a fixed point. That would be a very perilous path for this House to follow. It would break the morale of this country. Are you going to tell the miners that they are taking too much out of the national purse? The Government themselves had to interfere a short time ago, and to say that the miners were not getting enough, and that they must have more. If the hon. and gallant Member says that previous to that the miners' wages were too high, it means that the Government were wrong to interfere. Not long ago, after a prolonged and painful agitation, this House was induced to grant a minimum wage of £3 a week to agricultural workers. Does the hon. and gallant Member say that those wages should be stabilised at £3 a week? Are those fellows, upon whose efforts the feeding of this country depends, to be told that £3 a week is too much for them? The engineers wage to-day is about £4 2s. 6d. [An HON. MEMBER: "£4 1s. 8d."] It is £4 1s. 8d. Think of the engineering operations done by these men, working to the finest point of engineering practice, building all these instruments of war and of peace, and pouring into their labour all their skill. Are their wages to be stabilised at £4 1s. 8d.; and are we to say that, even if the cost of living goes sky high, we are not going to allow them to make an application, even on the merits of the case, for an increase in wages?

Captain Cunningham-Reid

The hon. Member must not continue completely to misconstrue what I said. My suggestion was that everybody should have sufficient for his necessary commitments. That is my scheme.

Mr. Marshall

Then the hon. and gallant Member points out that every body of industrial workers makes an application for higher wages because somebody else has got an advance. A general statement like that is only half true. I have been in the trade union movement for the greater part of my life, and I am now chairman of a trade union with 750,000 members. I know as much about trade union organisation as almost any Member of this House—I except the Minister of Labour, of course. Men do not ask for an increase simply because somebody else in Timbuctoo has got an increase. That suggestion is eyewash. If the hon. and gallant Member had ever attended a meeting of the body which is responsible for regulating engineering wages, he would have known that that kind of thing does not obtain. At such a meeting he would see on one side the representatives of the employers, the cream of the engineering industry in this country, and on the other side the representatives of the men. Somebody gets up to open the case for the men. He does not neglect to go into the cost of living and inflation, and subjects of that kind. These men are as much concerned about inflation as any Member of this House, and they take a reasoned view. Then the employers' representative gets up to reply. We members of the rank and file do not at once butt in, but we leave it to these expert spokesmen to argue the matter. Then the meeting is adjourned, the case is considered by a committee, and ultimately the findings are promulgated. That is collective bargaining.

If we took any steps to sweep away this system, which has grown up in this country in the last 100 years, we should be sweeping away something which, especially in war-time, is one of our most priceless assets. We ought to leave well alone. These great organisations are dealing not only with wages, but with working conditions and the prevention of disputes; and no one can assess the effect of the trade union movement to-day upon industry, arid upon the national life generally. If you are going to sweep this system away, and to leave all these little irritating grievances to grow into causes for industrial disputes, and to leave it to the Government—however generous a Government there may be—to deal with the matter, that will have a bad effect upon the whole industrial outlook of the country.

I believe in trade union collective bargaining, and in men's work, and they will come through this war and discharge their duties as loyally and patriotically as any section of the country. We should let well alone. They do their job well and will come through all right. I remember in the last war that wages were to some extent regulated by the State. Did that prevent trade union applications? Instead of going to the engineering employers, the building trades' employers and all the other employers' associations of the country, we had to put our case before the Ministry of Production. It did not prevent applications and comparisons being made. I understand that the suggestion in this Debate is that we should not do that but must come straight to the Government and bring the Government into the negotiating field. That would be disastrous, and if I could offer any advice to his House, I would say, Let well alone.

Sir Alfred Beit (St. Pancras, South East)

The hon. Gentleman the Member for Brightside (Mr. Marshall) administered some corrections to the hon. and gallant Member for St. Marylebone (Captain Cunningham-Reid) at the beginning of his speech and very suitably exploded some of the proposals which we had heard from the hon. and gallant Member, but the hon. Member himself later on proceeded to announce certain propositions which I think were similarly born of confused thinking. He said that the rise in the cost of living was causing demands for increased wages and seemed to overlook the fact which had been explained to us at the beginning of the Debate, and which we all know, that in point of fact the rise in earning rates in the case of men, youths and boys respectively has been between 50 per cent. and 100 per cent. more than the rise in the cost of living, so that it could hardly be said that the rise in the cost of living can attract demands for increased wages. Similarly he said, If any stabilisation of wages as has been proposed in certain quarters were attempted at the present moment, what would happen to workers when the cost of living went galloping up? If anything so drastic as stabilisation were to take place the cost of living would not go galloping up. It rises because of the vicious circle established by these increases

I would also like to refer to a remark made by the hon. and gallant Member for Pollok (Commander Galbraith) in a maiden speech in which he said he was sorry that at the beginning of the war some more embracing legislation had not been introduced. I would refer to what happened in France at the beginning of the war, and indeed on the day before war was declared. It is the fashion nowadays to decry the French war effort in view of subsequent events but there was introduced a remarkable and far-seeing legislation concerning the general problem of labour, especially with regard to national defence. That legislation was, I regret to say, attacked by the right hon. Gentleman the Minister of Labour in this House when he spoke about a year ago and said it was one of the contributory causes of France's downfall, but the fact remains he and the Government between them at subsequent dates introduced identical orders or legislation with two very great differences. One is that what was done in France in one day has taken us two years to do, and the other is that, whereas the French legislation covered every aspect of the whole problem, including, most important of all, the control of wages and rents, nothing of that sort has been attempted here. That law to which I have referred, introduced on 31st August, 1939, prohibited workers in national defence industries from leaving their employment, abolished the 40-hour week, stabilised rates for overtime and controlled rents and wages and certain other things as well. It had been prepared a long time previously against such an emergency and it operated smoothly with the minimum amount of friction, with the result that there were no labour troubles in France during the nine months that she was our ally. The cost of living rose far less than was the case in this country and had not to be kept down by vast Government subsidies.

Mr. G. Griffiths

On what authority does the hon. Member say that there was no labour trouble in France during those nine months?

Sir A. Beit

On the authority of personal observation. I was there during the whole of the nine months in question, serving with the Forces, and I had opportunities of studying that legislation and of seeing how smoothly it worked. I should emphasise that though there is a great difference in the level of earnings between civilian and soldier in France no jealousies were created, as has been the case here. Whatever may have been the cause of the collapse in France, one thing is certain, and that is, that labour trouble was not one of them.

No democracy ever seems able or willing to learn a lesson from another. I see in the American magazine "Time" that industry is now suffering from the same trouble that we experienced here of workmen being enticed from one factory to another. We experienced these troubles for an all too long period before the Essential Work Orders were introduced. We had only to look across the Channel to France, and I hope that the United States will look across the Atlantic for their own sake. It is obvious that, while profits were uncontrolled, collective bargaining was the right policy, and as such it has become the traditional policy of the country. I am sorry to have to say it, but I cannot believe that a love of tradition is the reason why the Minister of Labour is so loath to give it up, and I have a positive feeling that he is more concerned in creating a strong and even unassailable position for labour after the war than fitting wages into the general framework of the national war economy, with the urgent need of restricting purchasing power and preventing inflation. These are strong expressions, and they are not intended in any way as a personal attack upon the right hon. Gentleman, whom I personally admire and whose career I also admire, but I feel justified in saying them since the needs of war have imposed severe restrictions upon the capitalist element which most of us accept entirely without complaint.

Whatever may be said, profits are controlled either directly or through Excess Profits Tax, and, fortunately for the nation, no money can be made out of war without breaking the law. Why, therefore, are not wages and also rents controlled? [HON. MEMBERS: "Rents are controlled."] Hon. Members say rents are controlled, but not to the extent that I should like them to be. The control of rents we now know is hardly more than' it was before the war. Anybody who travels in the country where accommodation is sought by members of the Services who may be fortunate enough to have their wives or families living with them know what the state of the furnished house market is.

We were entertained by the hon. Member for Chesterfield (Mr. Benson) with a characteristic and familiar speech, and I am sorry that he is not in his place at the moment. He repeated very largely what he said about a month ago in a Debate in this House on the last Vote of Credit for carrying on the war. He once again repeated that he could not support any proposals like these—although he started by appearing to agree with them to some extent—unless he was convinced that there was genuine equality of sacrifice, and he cross-examined some of my hon. Friends on' this side of the House as to whether we thought anything of that sort had been achieved. Well, the hon. Member cannot have been round the country very much recently or he would have had greater knowledge of the equality which is now in existence. I can assure him that before the war is over we shall all be pressed into a still more standardised mould. [An HON. MEMBER: "Why not?"] I am not opposing that, but the hon. Member for Chesterfield, who started his speech by conceding some of the most important points made on this side, proceeded to knock down the edifice he had created by going back to the argument he has so frequently repeated in this House, and with which I am well acquainted, as I have had the pleasure of listening to him for 10 years or more.

Further, another argument against collective bargaining, as we know it in peace time, as was emphasised by my hon. Friend the Member for South Croydon (Sir H. Williams), lies in the growth of new industries, especially those run by or for Government Departments, such as the Ministry of Supply. I cannot speak from practical experience, but I believe—and I take courage from the fact that what I am about to say was confirmed by my hon. Friend—that in fixing certain piece-rates the lack of any previous experience upon which to go caused these rates to be based on estimates doubtless connected with some similar industrial operation but which in practice have been found to yield incredibly high amounts which were subsequently not revised to bring them into line with the payments probably anticipated. Whether it was owing to the sacrosanct nature of collective bargaining or lack of interest on the part of the Department concerned I do not know.

I have had, in common with many other Members, almost as many surprises during the war as to the way Departments allow themselves to be imposed upon as examples of the treatment they have meted out to individuals, and I look forward to the day when it will be possible for their control to be relaxed. I wonder how long after the war that will be?

I have heard and read attacks on various firms who continue to advertise products which are no longer procurable, and I think they might limit their expenditure in this direction if they did not feel that the present policy towards them was aiming, by a process of industrial and financial exhaustion, at their ultimately being taken over by the State at the cheapest possible price. One of their few remaining defences, therefore, is to retain their goodwill.

Mr. Cluse (Islington, South)

Could the hon. Gentleman give any instance over a long period where the State has purchased any undertaking at the cheapest possible price?

Sir A. Beit

I cannot give an example, and I was not quoting from the past. I am merely voicing the opinion expressed by responsible persons who feel that that is the path which the future is likely to take.

Mr. Cluse

There are too many Government valuers about.

Sir A. Beit

My hon. Friend the Member for South Croydon quoted figures from the "Ministry of Labour Gazette" for June of this year showing the average increases in wages. I have not seen that document, but I have in my possession a copy of a document, which was sent to all Members in November last, giving the increases up to then, and it is interesting to see that the rise between November and June has been in the order of 5 per cent. In November the individual increases ranged from 9 per cent. in the case of men printers to 104 per cent. in the case of youths and boys employed in constructional engineering. The average at that time was 42 per cent., and it has now gone up to 46 per cent. Averages at all times are dangerous things, for they even out a multitude of discrepancies as in the case of the various trades, ages and sexes quoted in this document. Whereas such industries as agriculture and coalmining received increases which were long overdue, these are more than countered by the big rises in the purely war industries, a great number of which are new. The result is, as I said at the beginning of my speech, that the rise in earnings is 50 to 100 per cent. more than the rise in the cost of living, and I have no doubt that the latter would catch up with the former without any difficulty at all if it were not for the vast subsidies now being spent in keeping it down.

Mr. James Griffiths (Llanelly)

The hon. Gentleman says that the rise in wages is 50 to 100 per cent. over the cost of living. Where does he get those figures?

Sir A. Beit

The figure for the rise in cost of living is 30 per cent. at the present time, and the increase in the rate of earnings, according to the pamphlet quoted, is 46 per cent. all round and just under 60 per cent. for youths and boys. That represents 50 to 100 per cent. increase.

Mr. Griffiths

How does he arrive at that?

Sir A. Beit

Sixty per cent. is twice 30 per cent.

Captain Poole (Lichfield)

But the comparison is not as between 60 and 30. It is as between 160 and 130.

Sir A. Beit

I am sorry if my mathematics are not correct. But it is clear to anybody that wages have increased far more than the cost of living.

Mr. G. Griffiths

Why does not the hon. Member say something about the additional hours being worked for the earnings? We have men in the coal pits working 60 to 70 hours a week.

Sir A. Beit

It is impossible to give a general average for hours worked, and there is no reference to that in this pamphlet except to the fact that the earnings given are average earnings based on average hours now being worked. We do know that although long hours are being worked to-day, there has been a tendency since 1940 for them to be reduced from the very high level which they then reached. Is not this policy of spending vast subsidies to keep down the cost, of living—which can only thus be kept below the rise of earnings—a policy of robbing the Peter to pay Paul? Can the Chancellor of the Exchequer, who has avoided many pitfalls in the conduct of the nation's finances in this war, really approve a race of this nature? Is it not touch and go whether inflation is just round the corner? The "Economist," which is hardly a reactionary paper, continually says so, and I am interested to see in the current number that it has joined the battle for a wages policy. It says: It has not been possible to work out an agreed policy for the restraint of money wages, a shortcoming which may still redound seriously against the real interest of a large section of the wage earners themselves. I think that insufficient attention has been paid to this matter, and I hope that the workers and their representatives will reflect on its significance.

I have not previously intervened in a Debate of this nature because, as I am only too ready to admit, I have not sufficient industrial experience. In my constituency there are no heavy industries, if one excludes the railways, and even as far as they are concerned, in St. Pancras there are only the administrative and distributive sides. Furthermore, I may add that I am not an employer, and that I am employed. Therefore, my experience has been limited largely to the kind of work which is done on a weekly basis, and I am a stranger to the shift system.

There has been in recent Debates a good deal of talk about absenteeism, and I do not want to lift that subject out of its proper perspective, but I feel that high wages;, or at least wages which are very much in excess of those formerly associated with any particular industry, together with a curious fear of Income Tax, have contributed to it. The shift system is an advantage at the present time to the less conscientious worker, while in bad times it suits an employer to put his men on short time. Would it not be possible in present circumstances for every industry to work on a weekly rather than on a shift basis? Vast numbers of people in this country are accustomed to the five-and-a-half or six-day week, and it would not occur to them not to turn up for their work during the course of it, and their employers certainly would not tolerate their absence. Absenteeism of shift system workers, small though it may be, is no less intolerable from the national point of view. I have put forward this suggestion without knowing whether it would be practically feasible, but as representing, nevertheless, a national necessity.

In conclusion, I feel more convinced than ever that collective bargaining must bow to sterner measures. The Government have control over every aspect of our lives. They have not hesitated to make use of their powers for restricting profits, limiting our movements, moving workers from one place to another, and in many other ways. Let them take courage and pursue this task to its logical conclusion.

Mr. Norman Bower (Harrow)

I fully realise, and the speeches of certain hon. Members opposite have made it abundantly clear, that anybody who advocates the regulation of wages, particularly if he is on this side of the House, is treading on very dangerous ground and is bound to come up against certain difficulties, the chief of which is that he immediately falls under suspicion of wanting to keep wages down. I want, as far as I can, to divest myself of that particular suspicion. I have always been in favour of high wages. I believe that in normal times the higher real wages are, the better it is for everybody. I have at any rate the advantage of being able to speak from a completely independent standpoint. I am not an employer of labour, I am not a director of any company, I am not even, at the moment, a shareholder in any company. Therefore, I have no personal interest in wanting to keep wages down. I think it ought to be made clear that anything that is done now in the direction of stabilising or regulating wages is done entirely without prejudice to any policy that might be decided upon after the war, either by the Government of the day, or between the two sides in industry, or in the direction of a fairer distribution of the products of industry. The hon. Member for Chesterfield (Mr. Benson) said that if we are to interfere with the law of supply and demand now, we must also be prepared to interfere with it for good and to introduce a new method of fixing wages after the war. Personally, I would not have any objection to interfering with the law of supply and demand and establishing a new method of fixing remuneration in perpetuity, but it is the first time I have heard that point raised, and I wonder whether the trade unions would agree to having the power which they exercise through the medium of collective bargaining permanently interfered with after the war, I rather doubt it.

Mr. G. Griffiths

No.

Mr. Bower

The hon. Member agrees that they would not like it. I am bound to say I find the arguments that have been put forward by the Government against the regulation of wages somewhat inconclusive. It seems to me that the economic policy of the country at the present time is definitely lopsided and out of joint. After all, practically everything is regulated in some form or another. There is a 100 per cent. Excess Profits Tax, dividends are virtually limited to what they were before the war, the prices of many commodities are controlled, the rents of a good many types of dwellings are also controlled, and in so far as they are not, I think they ought to be. Wages are really the only element in the economic structure of the country which at the present time are not subject to any substantial measure of public control.

The Chancellor of the Exchequer has told us that we must rely on the good sense of the two parties in industry and rely upon their being actuated by a sense of the national interest rather than a desire to promote their own sectional advantages. I agree that if we were able to rely upon that, it would be excellent and very much to the advantage of the whole community, but I am afraid I cannot place quite as much faith as the Chancellor appears to do on our ability to rely upon that particular element. If one expected people when negotiating wage agreements at the present time to be actuated solely by a sense of the national interest, one would be expecting them to be rather more than human—[Interruption]—or rather less than human, whichever way one looks at it. I do not think it is necessary for the Government actually to fix all wages rates or to make themselves entirely responsible for the whole complicated wages structure of the country, but what they could do, and what I think they ought to do, is something similar to what President Roosevelt has done in America; they ought to clamp down a ceiling on wage increases as from a certain date, unless some good cause can be shown to some authority representing the Government. One hon. Member opposite asked whether we are to stabilise wages permanently regardless of the cost of living and regardless of all other factors. I do not advocate anything of that sort. I want particularly to emphasise that if some good cause—such as the fact that wages in any given industry had been sub-normal over a long period and that that section of workers had never succeeded previously in obtaining justice and fair treatment—could be shown to the authority concerned, that would constitute a reason for raising wages in these times just as much as in any other time, in that industry.

The hon. Member for Northampton (Mr. Summers) said that this ceiling which has been imposed in other countries is full of loop-holes. It may be, but it seems to me that in essence it is a fairer and more satisfactory principle than the system which we at present employ. I think this question of granting or disputing wage increases, as the case may be, should be taken entirely out of the hands of employers, because they are not concerned in the matter at all at the moment. It is the Government that is interested in it, either through losing Excess Profits Tax or having to pay higher contract prices. The fact that employers are not really interested in it any more may account for their comparative generosity in granting wage increases which we have witnessed since the War. You cannot expect em- ployers to risk unpopularity with their workpeople by shouldering a responsibility which is really that of the nation as a whole. The argument is sometimes put forward that they are really interested because they have to think of what the effect of those increases will be on their post-war prospects, but we do not want to encourage them to think about their post-war prospects. We have numerous complaints all the time that employers and industrialists are thinking more about the post-war prospects of their industries than about getting down to the job of winning the war now, and there is a great deal to be said for some of those complaints. If we are going to impose this responsibility on them of disputing wage increases simply because of the effect that it may have on their post-war prospects, we are giving them an extra excuse for thinking about those very things that they ought not to be thinking about.

It is said that the arbitration tribunals are sufficient and that they are functioning satisfactorily and well, but it seems to me that even if they take the widest possible view and consider only the highest national interests, they are, as I understand them, a piece of conciliation machinery which only functions if a wage increase is disputed, but in cases where an application is not disputed and an increase may be granted without any contest at all, the matter never comes before the arbitration tribunal, and consequently they are not called upon to function. We are also told by the Chancellor of the Exchequer that so far there has been no evidence of this policy leading to inflation. That is true, but the cost of living has been kept down because very large subsidies have been paid. I agree that we have to consider not only the present but also the prospects for the future, and there is in the minds of very many people to-day a grave fear of inflation in the future. That shows itself in numerous ways. Everyone is afraid to allow his money to lie idle. People are undoubtedly seeking an outlet for it in some form or other. That has shown itself in the rise of prices of goods which are not controlled, particularly precious stones and valuables, and also in the recent long and steady rise in Stock Exchange prices. That again is a symptom which shows that people are afraid to leave their money lying idle because its value may depreciate after the war. Those are all sym- toms which show the way the wind is blowing. They are the unhealthy sym-toms which usually precede inflation.

The hon. Member for Chesterfield said it was not fair in war-time to suspend the law of supply and demand. The law of supply and demand cannot apply to all the people. If we allow it to remain as it is in industry, at best it is only applying to a certain section. There is one very large section, those in the Armed Forces, to whom it does not and cannot apply, and it seems to me wrong and morally unjustifiable that one section of the people, those engaged in civilian occupations, should be able to better their position by bringing pressure to bear and using weapons of a kind which are absolutely denied to those in the Armed Forces.

Mr. Benson

I hope the hon. Member does not think that I was advocating the law of supply and demand as a desirable method of settling remuneration. All I did was to point out that hitherto it has been accepted without question by hon. Members opposite and that it is only during war-time, when it affects wages, that they suddenly throw it overboard. We do not want the law of supply and demand. We want it scotched not only now but during peace-time as well.

Mr. Bower

I agree that the law of supply and demand might not be the best way of settling remuneration in industry, and I should be quite prepared to see it abrogated, not only now but perpetually. Before members of the Armed Forces can get an increase in their pay we have to get up one after the other and advocate it, and even then very often they do not get it, and I think it would be better if increases should only be obtained by the civilian section of the population by those same methods. We hear a great deal about equality of sacrifice, and I think most people would admit that at present it does not exist, but it is thoroughly desirable, and it seems to me that the regulation of wages on some such lines as those which have been suggested' would be one of the best ways of obtaining it.

Mr. Clement Davies (Montgomery)

This has been an interesting Debate, and I have heard the major part of it, but there has not been a very clear exposition of the ideas which seem to be in the minds of hon. Members. The Debate opened with a very light, unrehearsed and obviously unprepared sort of prelude by the hon. Member for South Croydon (Sir H. Williams). The full orchestra came in with the hon. Member for Northampton (Mr. Summers). The only thing of interest in his speech was that the Government had a policy and that he approved of it, but he was incapable of saying what it was, and he referred us to the Lord High Chancellor, who had explained it. The complaint that has been made by many of us is that there has been no policy at any time by any occupant of that Bench.

What we have been asking for all along is that there should be a policy. If there had been it would have saved a great deal of time that has been spent in negotiations and in recriminations and a great deal of disgruntlement and dissatisfaction, so long, of course, as it had been accompanied, as we have been asking that it should be, by a crisis policy, a profit policy and a salary policy, in fact, a comprehensive policy for the whole country including, of course, a full rationing policy which I have asked for right from the start. I have heard it said to-day, with the approval of the Chancellor of the Exchequer, that one of the advantages we have had in continuing as before is that it has relieved the Chancellor of the Exchequer of many of his difficulties by giving him the help of savings. If we had had a definite rationing policy for everything from the outset, he would not have had to send out all the ballyhoo begging people for money to carry on the war in addition to the taxation which he inevitably collects.

What decides wages and has been deciding them throughout? The hon. Member for Chesterfield (Mr. Benson) was right in saying that in the past they were decided by the law of supply and demand. That is why we get the terrible fluctuations and differences that exist in labour to-day. That was why trade unionism had to come into existence. There was the strong employer on the one side, and the weakling worker on the other, whose need for food for his family was so great that he was willing to supply his labour for very little. Can anybody be satisfied with the fluctuations and differences that exist to-day? Will the Deputy Prime Minister consider publishing a White Paper setting out the wages paid to men, women and youths? It would make startling reading. Why should there be in time of war these distinctions between one and another? Our needs are the same.

Up to the time of the war the free working of economics, as far as it was possible, was allowed play, and the law of supply and demand decided these matters. My complaint all along has been that the Government have not realised even to this day, in the fourth year of the war, that on 3rd September, 1939, one period ended and another began. From that moment onwards the movement, even the mobility, of men and women was not the same as it was on 2nd September. In a very short time one could realise that the materials which they could buy were not the same. Nevertheless, we were allowed to continue as if that great change had not come about. The old laws were allowed to operate so far as they could. One danger that has been mentioned is that of inflation. There was inflation for a number of months, but there is not so much now because we have rationed the vast majority of consumption goods—food, clothing, boots and so on.

Mr. Evelyn Walkden (Doncaster)

But very few vegetables.

Mr. Davies

I agree that we have not rationed enough. Nor have we seen to proper distribution or to price, but a great number of other articles are rationed indirectly because there are not sufficient raw materials to manufacture them. Moreover, owing to concentration of industry a great number of workers have been taken away from industries. Therefore, the danger of inflation is not very great, and it would disappear if we had complete rationing.

What is the complaint made from the other side? It is that wages are going up. What does it matter? There has been an unequal distribution which was perfectly obvious up to now. Is it a matter of complaint that the distribution is a little more equal now? That is not a case that can be made out. A case can be made out for the danger which arises from these inequalities and from comparisons one with another. A man pays attention to what is in his wages packet, but he also pays a great deal of attention to what is in the wages packets of his neighbours on either side of him. He can make a comparison as to the work done by each one and the value of their contributions, and if he finds that one of his neighbours, suddenly, for no reason apparent to him brings back more in his wages packet than he has, he wants to know the reason why. That is bound to affect a man's attitude and mentality as he goes on with his work. What we ought to concentrate on is the war effort and what is wanted to ease the wheels of production instead of making them more difficult. We have allowed this play to go on with trade unions bargaining on one side and the employers on the other. Bargaining for what? To what is the bargaining related? We will find a trade union asking for a higher wage. Why? Is it related to the cost of living? Obviously not. Is it related to the value of the contribution of the man or the particular trade to the community? Obviously not. Why has the miner had to work in the way he has and only recently has had a bare increase? Suppose that man who is so essential to the country and to ultimate victory—a lesson which is now being brought home to the people of this country because they are shivering—used to-day the law of supply and demand and held up the community to ransom; what would be his wage? That is the wrong principle. To what is it related? Not to the value of his work. Look at the differences.

Take the case of railwaymen. Some of the highest skilled railwaymen, upon whose skill, ability and concentration upon their work the lives of others depend, are often paid less than the unskilled labourer. Not only are there differences between trade and trade but there are regional differences within trades. The engineers in London are paid more than the engineers outside London. What is the result upon the war effort? There is little or no shortage of electricians here in London, but there is a cry for them in the country. Is that to be wondered at? To what, then, are you relating yourself when you are bargaining on the other side of the table? The law of supply and demand has gone. You are not relating yourself to the value of the contribution. I feel honestly, much as I want to appreciate the attitude of mind of one hon. Member who spoke as the chairman of a trade union which, he said, represented 750,000 members, that his attitude of mind was this "We have done our work well in the past, we have acted on behalf of these people and we are acting on behalf of them to-day. Do not interefere with the way in which we are acting." But they are perfectly prepared to interfere with everything else. Is the only thing which is to be held sacrosanct the trade union machine and the trade union leader with, so far as I can see, no co-operation amongst the leaders of trade unions or between one separate trade or another? How do they regard these matters? For the benefit of the community as a whole? And where has been the leading trade unionist of the lot with regard to these matters? When he entered the War Cabinet he took with him the tremendous experience of the leading trade union. He had 33 years of life devoted to the leading of his fellow men, 33 years of work within the trade unions. Fighting for what? A separate interest against other separate interests. The moment he stepped into the War Cabinet he should have taken the bigger view and regarded himself as standing on behalf of the whole community and not for any single interest. Will he say now, at that Box, that it would not have been the right policy to have introduced immediately war broke out a wages contract and profit policy and made the arrangements that would have been necessary to raise the level of those wages which had been too low throughout the years? Would he say at that Box now that production would not have been better and easier, and the movement of peoples easier?

I should like to see a complete review of all wages, all profits, all salaries, so that there was a proper valuation, so that they should be adjusted to the effort that is made and the production that comes from that effort, to the value of the effort, if you like. If that were done, then these distinctions and discrepancies, the causes of disgruntlement, would go, and you would not have, as we have to-day, differences decided by the sex of the workers. Why is it that when equal work is done by women they are paid less than men? Why is it that we have men working on an aerodrome or at a camp who are in uniform and getting only their keep, their clothes and pocket money and working alongside them men employed by a contractor, getting perhaps six, seven, or eight times as much? The Government should tackle this. I do not know what length of time will be required to tackle it, but the troubles have increased week by week. They would have been simpler in the days when the Chancellor of the Exchequer occupied another position under another Government but they have been allowed to grow, though even now if tackled properly, tackled with courage and tackled on behalf of the community, the community as a whole would benefit.

Mr. J. Griffiths (Llanelly)

As my hon. and learned Friend the Member for Montgomery (Mr. C. Davies) has told us, this has been a very interesting Debate and I think it has been a very welcome Debate for two reasons. For some time past there have been Questions almost every day from the other side of the House about wages and wage increases and I think the hon. Members who asked those Questions, some of whom have spoken to-day, ought to be told that their Questions have created a very definite impression in trade union circles and amongst the workers which is very undesirable from the standpoint of the war effort, because it has been observed that all the Questions were about pay and that those Members put no Questions about dividends. I suppose hon. Members will not deny that dividends have increased and if they are concerned only with increases that may lead to inflation then they ought at least to show an equal interest in increases in dividends, which also become purchasing power. There have been no questions about dividends increasing and no questions about the increases in prices.

Mr. Molson (The High Peak)

I question the accuracy of the statement that dividends have increased.

Mr. Griffiths

I have been referring to hon. Members who have been putting those Questions, and if the hon. Member will look back over the OFFICIAL REPORT for the past few weeks, he will discover that what I have said is true. There has been created an impression that the object of these Questions has been to make an attack upon the wages of the workers. I hope it will not be forgotten, however, that Questions have been asked and this Debate is taking place at a time when applications for wage increases on behalf of certain sections of workpeople are coming along for hearing, first by negotiation in the industry and outside the industry eventually by arbitration. Therefore, there has been a definite impression, to be quite frank, that some of the things said in the Debate to-day have revealed the fact that that impression is quite correct, because there has been an attempt in this Debate to-day to influence the minds of arbitrators who will shortly be dealing with wages questions.

From time to time there have been suggestions in the House about the alleged high earnings of youths in industry, and I have no doubt that there are cases in which the wages of boys and girls when compared with pre-war earnings appear to be very high. With others in this House and outside I have recently been interested in one form of Government service connected with the youth of the country. Some time ago boys and girls between 16 and 18 were asked to register, and following registration there were many interviews, and I hope that one of these days we shall have from the Board of Education a White Paper giving a complete survey of the revelations that have come out about the lives of these boys and girls. A great deal has been said about the danger of the alleged high wages they are getting. Let me tell hon. Members what men and women who have been taking an active part in this matter are very much more afraid of than that, what is behind even those exceptional cases of high earnings.

Is it a fact that boys and girls in this country are working such hours of labour every day and every week that their health is sure to be undermined in the end? The Minister of Labour knows that I have the privilege of being chairman of the Advisory Committee on youth in Wales. We asked the Ministry of Labour's Officers to discuss with us the influence, not of wages of £4 or £5 per week upon boys and girls but the influence upon them now and in the future of the hours they are working. Let me give one or two examples revealed as a result of a survey in a Welsh industrial town. In the 17–18 year group of boys, 22 were working more than a 50-hour week, and four more than 60 hours a week. In the younger age group, 16–17 years, the position was worse; 90 were working more than 50 hours a week, 48 more than 60 hours a week and four boys between 16 and 17 were working more than 70 hours a week. In one factory in Carnarvonshire boys and girls aged 16 to 18 begin at 7.30 in the morning and work until 7.30 in the evening and they work one Sunday every month. These were ascertained at interviews with these boys and girls. When we hear all this talk and charges and allegations about high earnings of boys and girls, I would say to the Minister of Labour and to the Government that the sooner we put a definite maximum limit on the hours of work of these boys and girls, the better it will be for the future of this country. The kind of country we shall get at the end of the war depends on these boys and girls who are now being overworked.

This has been an interesting and welcome Debate. It would have been much more interesting if hon. Members had been much more frank than they have been. This Debate was asked for, I understand, not even through the usual channels but through unusual channels. It began with a contribution from the hon. Member for South Croydon (Sir H. Williams) who has told me he regrets he cannot be present at this stage as he has to attend an important meeting upstairs. His was a very "cooing dove" sort of speech. Apparently this Debate was asked for to examine and to review first the Government's wage policy and secondly the present method of settling wages in industry, and also, I understand, to present us with alternatives. I have listened to every speech in order to try to elucidate what was the proposed alternative. We did not get an alternative until the last speaker. The hon. and learned Member for Montgomery has an alternative policy, that the reward for service and for labour in this country shall be related to the effort people are making and the contribution they are making, and nothing else. What I would put to my hon. and learned Friend is this: Such a policy is only possible in a society in which all the wealth is under the control of society itself. It is therefore the clear alternative to the present system but that is not the issue to-day. The issue to-day is that of an alternative to the Government's policy.

As I understand it the Government policy is, first to rely upon the machinery for negotiations and settlement of disputes set up in industry. They have supplemented that by setting up instruments of arbitration which will be available if the ordinary machinery of negotiation fails. So far as a piece of machinery it has worked reasonably well in the circumstances. The trade unions in this three year period of war have not taken advantage of the economic position. I think I am entitled to say that because I would remind my hon. Friends that, as was stated by my hon. Friend the Member for Chesterfield (Mr. Benson), for the first time for many years there is a real, acute shortage of labour in this country. In normal times that would give trade unions an enormous bargaining power they have never had before. Look at my own industry. Before I came to this House I had the honour to be the President of the South Wales Miners Federation. I have negotiated round a table for 125,000 men, working in a coal field where ten years before there were 270,000. For every man on whose behalf I was accepting wage offers there were two poor devils unemployed. Did the employers at that time not take advantage of their position and drive our wages right down until real wages were lower than they had been since 1850? Here for the first time for more than a generation, the trade unions, the workers of this country, have the advantage. The miners could ask for £10 a week, and if they made up their minds, it would have to be given to them. But they are not asking for that. They are showing a bigger sense of responsibility than the employers in industry did, and I think we are entitled to say that.

I heard the hon. Member for South Croydon and one or two other Members speak about employers who, so it appears, did not bother whether they had wage increases or not. I would ask him to give me their addresses. I would like to see them. I would like to meet them. Is it the Mining Association? To the hon. Member for Northampton (Mr. Summers) I would say: Is it the owners of the steel industry? Several Members have said it does not matter to the employers whether they give wage increases or not. Will they cite a single instance of an employer anywhere who has said to the trade unions, "Come here chaps, I want to give you an increase of wages"?

Mr. Summers

I made no suggestion of that kind. If such a suggestion was made, it was made by other Members in my absence and not by me.

Mr. Griffiths

I am sorry, but if the hon. Member did not make that comparison other hon. Members did so. The hon. Member for South Croydon certainly made it. As a matter of fact, every wage increase secured has had to be fought for stage by stage and more has been got from arbitration courts than from employers. Before the Minister of Labour replies I want to ask hon. Members whether they want this arbitration machinery scrapped. If so, what do they propose to put in its place? The hon. Member for Harrow (Mr. Bower) used the frankest language. While other hon. Members skirted round the problem, apparently afraid to state what they wanted, the hon. Member urged the Government to clamp down on wages. I have his words.

Mr. N. Bower

I said they should clamp down a ceiling on wages.

Mr. Griffiths

The hon. Member thinks the Government ought to clamp down a ceiling. He did not say what the ceiling was to be. Obviously, the implication of his statement is that the State should be asked to regulate wages by fixing a ceiling for wages. Let me follow that suggestion by asking a question. Is it to be only a ceiling? Is there to be no bottom or no foundation? Is the State to say to industry: "You must not pay more than a certain amount"? Is the ceiling to be £5, £6 or £10? The State has no moral right to fix a ceiling unless it says to everybody in industry that no one shall be paid below a certain wage in this country.

Mr. Bower

A number of hon. Members here would agree that there should be not only a ceiling but, of course, a bottom. In present conditions, however, a bottom is unnecessary, having regard to the demand for labour.

Mr. Griffiths

The fact is that the hon. Member mentioned the ceiling but forgot all about the bottom and did not mention it. If the State is to enter this field and to scrap the present machinery, there must obviously be not only a ceiling but a bottom, a minimum wage below which no one should be employed. Tens of thousands of workers in this country are not getting enough week by week. We know this to be true. There are workers who cannot even buy their maximum rations. The other day a survey was made by an organisation and it was discovered that when the ration price of some essential foods was raised, the workers failed to buy the complete ration because their wages did not reach to it. We hear complaints about high wages, but actually the over-all increase in earnings in this country since the war began is 47 per cent. The increase in wages rates is only 7 per cent. above the pre-war level. It must be remembered that the wages ruling when the war began were fixed in the years of depression. Not only are the workers not taking advantage of the position in which we now are, but they have not used their power to any extent.

A suggestion came from the hon. Member for Northampton which I should like to give him an opportunity of explaining. In a very interesting and closely argued speech he tried to get the Government to do something. I do not know whether he intended to say it, but the impression he made upon me was that he was suggesting that the Government should bring to the attention of arbitrators the public policy aspect of this problem. Was the hon. Gentleman suggesting that the deciding of public policy in this country should be done, not by the Government but by arbitrators? Is it his suggestion that arbitrators should decide wages issues that come before them, not upon the relative merits of the cases presented by both sides, but upon some other consideration? If that is to be done, the trade unions will refuse to be parties to any arbitration where the dice would be loaded against them in that fashion.

Mr. Summers

The hon. Member has asked me a series of questions and has posed them as suggested alternatives. He wants to know whether an arbitrator, who now considers only the merits of the case before him, should cease to do so under my suggestion, and decide cases solely on public policy. I was not representing this as a complete change, in the sense that the hon. Gentleman has indicated. I say that I believe it will be necessary not only to take account of the individual merits of the case, but in addition, to give proper weight to public policy.

Mr. Griffiths

We had better look at the OFFICIAL REPORT to-morrow. I thought it was a very clear suggestion that the Government should influence arbitrators in some way. The fact will not be lost sight of that the suggestion comes at a time when wage applications from many hundreds of thousands of workers in this country are being considered. Public policy must be decided in this House and announced from that Box and not by outside arbitrators.

One last word. A good deal has been said about contrasts between rates of wages in one class of workers and another. Every speech has brought in a contrast between the men who are in the Services and those who are left in industry. Speaking for myself and for my hon. Friends, I say that we are as closely in touch with the men serving in the Forces as any Members in this House. If there is resentment, it is not, believe me, at the comparison between the wages of men in the Forces and the men who are working hard, but at the fact that there are still people in this country who do not work at all. Go to some of the resorts like Llandrindod Wells in Wales, or Harrogate in Yorkshire and there you will find people who render no service at all and who live on the fat of the land. The hon. Member for South-East St. Pancras (Sir A. Beit) accused the Minister of Labour of using his position to build up what he called an impregnable position at the end of the war. Does the hon. Member want labour to be in a weak position at the end of the war? Labour is entitled to ask the Government and the nation to note that it is not taking advantage of the war or pressing its claims unduly or exploiting its monopoly advantage, although employers did so in pre-war days. We are giving service to the nation and are quite entitled to a square deal. We are entitled to a guarantee that at the end of the war, the service we give to the nation shall be valued in proportion to the real work upon which the life of the nation depends.

The Minister of Labour (Mr. Ernest Bevin)

Like the hon. Member for Llanelly (Mr. J. Griffiths), I welcome this Debate, but I must confess that, as a representative of the Government, holding a vital office—on which I think the outcome of this war depends as much as on any other Department of State—I regret that the contributions made to-day to the solution of the problem have been so small. I would like, first, to deal with the constantly-reiterated contrast between the conditions of men in the Services and of those in industry. Let me say, I think, for all my colleagues in the Government, that we should have no resentment if the House thought it their duty to put forward a rearrangement of soldiers' pay, or to say, if they felt so, that the Services are not being treated right. But the method of trying to set Servicemen against their comrades in industry and vice versa is the lowest form of agitation that could be adopted in a war.

Mr. William Brown (Rugby)

It- is not speeches here, but Government action that does that.

Mr. Bevin

If my hon. Friend will be as good, a listener as he is a speaker, he will help me a lot.

Mr. Brown

I do not want to help the right hon. Gentleman. I think he is a national menace.

Mr. Bevin

So long as my hon. Friend thinks me a menace, I know that I am right. No one has done more than my hon. Friend in the way of hopping about like a bird who does not know where he is to go. I had the experience of dealing with the men who returned from the Forces at the end of the last war, and of re-settling them in industry. I would utter this warning. The main concern of the men in the Forces is, what are they coming home to? The men in the Forces, a large number of whom are members of trade unions, are looking to the unions to maintain their standards. To try to set one lot of men against another, in pursuance of a political aim, is not conducive to a solution of the problem. I can produce hundreds of cuttings showing that this sort of thing has been deliberately carried on as a political campaign, to try to put the trade unions in the dock, and to make it appesx that they are neglectful of their brothers, in the Forces. It is not true, and I repeat that with emphasis. The Government had to design a policy to deal with wages, and that policy has not been seriously challenged in any part of the House. As the hon. Member for Llanelly says, not one Member has submitted a real alternative that can be applied in practice.

I have never accepted the view that pre-war war and post-war are, of necessity, separate things. War may be an intensification in the development of our lives, but there is no definite break; everything you do before a war determines largely what will happen in the war, while everything you do in the war will largely determine what will happen after the war. We have to consider, in endeavouring to handle this difficult problem, whether we will tear up everything that has gone before and start afresh, in the middle of a crisis, or utilise the machine that has been established to assist in the prosecution of the war. Many experiments were tried in the last war, and many pitfalls had to be avoided. There was one great advantage at the outbreak of this war as compared with the beginning of the last war, or even with the end. There had grown up between the two wars collective bargaining machinery over a very wide area. A previous occupant of your Chair, Sir, was associated with a change in the negotiating machinery of this country, with which his name will ever be linked: I refer to Mr. Whitley, and the Whitley Council. That introduced into a field where there had been practically no industrial organisation joint machinery which, I think, has been, if I may say so, with great respect, superior to the older machinery in the older trades. I hope I will not be misunderstood by some of the older trades when I say that this machinery was not wedded to out-of-date wage structures which have been largely a handicap, rather than a help, between the two wars and during this war.

We had to decide whether to utilise this machinery, and the Government decided that they would. I claim that this Debate shows that we took the right course. We have promoted on both sides of industry a policy of self-government in industry. There has been a gradual change-over to what I think holds very great potentialities, namely, negotiations of a more representative character than the old method of bargaining prior to the last war. The change towards the Whitley procedure has had a very steadying, and a very good, effect. The trades boards, while there has been very little amendment in the structure itself, have gone far beyond the mere dealing with sweated wages and have been utilised to build up wage structures over a very wide area. That applies equally where the employer is the State. I do not use the term "employer" in this sense as meaning only the private employer, because the Whitley machinery and the collective bargaining machine extend over the whole Civil Service and productive enterprises, whether State-owned or privately-owned, and including local authorities and any other publicly-owned institution. I use the phrase "employer" in that sense. There is a moral force working which it is wise to harness and take account of. There was a terrible disaster at the end of the last war, due, first, to an orgy of speculation, and, secondly, to inflation that went with it, and then a sudden deflation. [Interruption.] It was before the return to the gold standard. I am dealing with the inflation of 1922. Perhaps hon. Members will be good enough to allow me to follow this through, because it has a very great bearing on the policy we are endeavouring to follow at the present moment. It is clear that that situation remains so vividly in the minds of both sides of industry that nobody wants to go through it again. No one wants the up and down fluctuations of currency and artificial rises, and then sudden reductions, dislocating the whole of our national life, and doing something worse—holding up the internal trades and allowing the export trades to drop down, thereby destroying the equilibrium throughout the nation and creating the very condition which caused the inequality of wages with which we have been trying to deal in this country. Therefore, with that in mind our aim has been to allow the collective bargaining machinery to act as a sort of trustee on behalf of the State in so far as it is capable of doing it.

It has been said that employers would give rises without question. Let me assure the House that that has not happened. There has been none of that, as far as I know, in this war. There was a lot of it in the last war, and everybody knows it, but everybody was bitten by it then, and no one wants to repeat it. Consequently the trade unions have been careful in their demands. But in the progress of a war lasting this period, do please remember that there are two things happening: not only the increased cost of living but the increased productivity per unit. It is said that piecework rates are fixed without regard to their results. That is not true. They are fixed at their inception with a definite yardstick with which to measure them, but there is an enormous amount of ingenuity in the heads of working men and working women, and if by their ingenuity they increase output, are you then going to put a ceiling on to stop them? Such a thing would be a terrible injustice and would cripple your production immediately you attempted it. It would have a worse effect than the old system that used to apply, namely, that when output was increased the rate was cut. That was a terrible system, and it held up efficient production for years. You want payment by results. If there is any hon. Member who will get up here and say, "Cut out payments by results," let him get up and. say so. If it was done I can assure him that war production would go down enormously. But if you are to have payment by results, you must have it honestly and——

Mr. Bernays (Bristol, North)

That is the answer to Socialism.

Mr. Bevin

Payment by results is not inconsistent with Socialism. It was in the days of Liberalism that the rate was cut immediately there was increased output. That was the product of the Manchester school.

Mr. Bernays

The basis of Socialism is opposition to the profit motive.

Mr. Bevin

That is not the profit motive; that is paying for production. Profit is taking money that you do not earn. Let me give the hon. Member the correct Marxian theory. I think he had better go back to the London School of Economics.

As regards the question of arbitration, I regret that it should have been introduced into this Debate. Arbitration, apart from the general increase in wages arising out of the war by voluntary arrangements through joint machinery, covers a very wide field, and I beg Members to place arbitration courts in industry as high as they place the Judiciary above the Executive in other matters. Unless you do that, you will weaken arbitration, and I advance this reason for it. At the end of the last war I happened to be in a minority with a few others—as I have so often been on other occasions—and we were anxious to carry on arbitration for a period following the cessation of hostilities. I think every member of my own movement will agree with me now that it was a mistake at that time to throw it over. If it had not been thrown over, we might have checked inflation and had it as a buffer against the terrible events of 1921 and 1922. If I do nothing else in this House, I hope I shall create such confidence in arbitration that, during the transitional period following this war, when our men will have to resettle, come back into industry and evolve their own policy—to which they are entitled after fighting—it will allow this resettlement to be carried out in an orderly and stable "manner.

There is another reason why I want to maintain arbitration and collective bargaining, and it is that the settlement of wages is such a comparatively small side of the business. No Government machine can be created to handle efficiently or effectively the thousand and one questions that are arising every day. Both sides employ technicians, from the shop stewards upwards, to adjust these questions. I know of heaps of men in the trade union movement who cannot make a speech on a platform, but give them a job to do and they will price it immediately, whether it is in mine, factory or ship. It is the same on the employers' side. This is a valuable asset which the Government cannot afford to lose, and we are not prepared to get rid of it. While there may be a strike now and again over these settlements, let it be remembered that in thousands of cases the settlements are based on two men's word, often without anything being put in writing. It is simply a matter of the foreman or the manager and the shop steward or the trade union official pricing a thing and agreeing to it. Sometimes the matter is even settled over the telephone, without a word in writing. Yet everybody accepts it as an honourable bargain. No other country in the world has yet been able to find a way of doing this with the same confidence. I am not prepared to be a party to getting rid of this system unless it can be shown that it has completely failed, and it has not failed yet.

Another point I want to deal with is whether it is desirable to bring wages into the political arena to be debated in the House. I wonder whether it is. Agriculture was debated here for a long time. The problem of agriculture was not solved, and the problem of the standard of living of the agricultural workers was not solved. At the outbreak of the war agriculture was one of the most sweated industries in this country, although it is one of the most highly skilled occupations. To those who have the conception that it is general labour, all I can say is that they should have a try at it. The men working in agriculture were comparatively unorganised, their union was very weak, and at one time, when they were right in the doldrums, they had practically no defence. Did not Parliament have a chance then to show how it would handle people in that condition? The House debated the industry, but left it, in most cases, worse than it was before, as far as wages were concerned. The wages of the miners have been discussed in the House from 1912. I venture to hope—and I say this with all sincerity—that the steps we have taken during the last six months to give the mining industry the machinery they want and minimum standards which they can understand will enable them to build a new piece-work system which is up to date on the new minimum instead of keeping on the basis of 1879—or whenever it was. I venture to urge that upon the industry. Instead of looking backward, they might look forward. I believe that, with the other conditions that have been given and with the National Wages Board, and with real self-government that must be made to work properly, the probability is that the mining industry, which has given so much difficulty, will do better under industrial self-government than it has done through the years from the Benches of this House

The hon. Member for South East St. Pancras (Sir A. Beit) said I was anxious to leave the Labour movement in an impregnable position. I have not noticed that the Conservatives want to come out any weaker than they are. Both sides seem to be anxious to stand at the next election as well prepared as possible. But' in shaping this policy, I have not given a moment's thought to any political considerations at all. If the hon. Baronet says I want to finish up with this job and go out of politics, as I hope to do when the job is over, leaving the people of the country better off to face the post-war world, I confess to that design, and I think it is a laudable one. Experience of the war is giving us some opportunities to do it. We have done it in agriculture and in mining. We must do it in textiles. We can never have an efficient textile industry on the basis of the present wage structure. An efficient wage structure is the best way to promote efficiency in any industry. If you have a poor wage basis and a poor wage structure, you are almost certain to have an inefficient industry. When this House carried the Trade Boards Acts the cry went up that businesses would be ruined. There is not a single industry that has ever come under the trade boards or under the joint industrial councils which was not more prosperous afterwards than it had ever been before. One industrialist said to me, "The more you fellows keep a steady pressure up from beneath, the more the man on top must use his head." I think there is good economic truth behind that.

Mr. C. Davies

Then the Chancellor taxes him for his industry.

Mr. Bevin

He is only socialising the profits of both.

The next point that I want to make is that wages can never remain absolutely stationary. Changes and opportunities for changes must continue to occur. The shipbuilding industry was mentioned. I must be careful to say nothing which will prejudice the present case, but the highly skilled men in that industry fell to about 50S. a week in the middle of the depression. Neither the Government nor the unions can be expected to take the view that the basis which was the result of the depression must of necessity be the right basis, merely adding the cost of living for the rest of the war. That would not be equitable. In the engineering industry, which fell so badly as the result of deflation and stagnation at the end of the last war, you had certain very poor conditions.

It is true that it has been made up in aircraft and some of the other sections of war production which give a higher average, but this must be considered—and I would emphasise it—that the best craftsmen must be on time-work. You cannot help that. Therefore you have to try and make adjustments accordingly. That involves changing wage practice. It has nothing to do with the increased cost of living at all. Unless we had some machinery of this kind to make the adjustments we would be landed into strikes and disaster.

I can assure the House that every alternative method has been studied. Also it must not be assumed that there has been no control at all. In the last war Parliament imposed arbitration, and it broke down. This time arbitration was carried by the consent of both parties; it is really a collective agreement endorsed by Parliament. There have been many other measures which have operated as a restriction on the workpeople. There has been the Restriction of Engagement Order, which took away altogether freedom of contract. There was the Essential Work Order, which was described when it was introduced as a slacker's charter. I do not think it has turned out to be that at all. It has proved to be a very steadying influence in the organisation of the war effort. The power to direct people from one occupation to another at the rate for the job, the conscription of women and Orders of that kind are all parts of our labour policy. Instead of dealing with wages and challenging the Government on a wage policy alone, hon. Members should realise that the only way they can get a real appreciation of the Government's policy is to take all the parts together. The Orders have been part and parcel of that policy, and each part dovetails into the other.

Lastly, there is the question of increased production. We have been told by the Minister of Production recently that the increased production per man-hour is up by over 44 per cent. If we had, in peacetime negotiations, been able to show an increased production of 44 per cent. per man hour, what kind of wages could the unions not have succeeded in getting as a result? They would have been colossal. We have pressed no claim at all—— [Laughter.] I slipped back into my old position in saying that, but it was not a bad slip, and I would never apologise for it. The unions or the employers have pressed no claim at all in respect of that. We hear a lot about American shipbuilding and their great output. We welcome it and we need it. But we have a limited capacity in this country, and I am saying nothing derogatory about America when I say that our shipbuilders on the Clyde and the Tyne are producing twice the output per man of the yards in the United States. That is a remarkable achievement. The shipbuilders have not claimed American wages. There has been nothing of that sort. The men do say, however, "'You have no right to base our wages on the circumstances of a horrible depression." Another great saving which no one has mentioned is that the average increase in earning of 47½ per cent. is for full-time work. Remember that a lot of time which now goes into full-time was part-time before the war and had to be paid for by the State out of State funds as unemployment insurance or unemployment assistance. That is all turned over to productive enterprise.

If I had the time to make a real financial analysis of the workers' contribution in this war covering the increases they have received to meet their cost of living, and setting off against them the taxation they have borne and what has been saved by the State in other directions, taking into account the increased production per man-hour, it would be seen that the workers of this country have nothing to be ashamed of in their contribution to the war effort. I hope that this thing will be looked at in a real way. If anyone can suggest a better and wiser policy, likely to lead to a quicker end to this war, the Government will not turn it down. But we know that any disturbance of this system may lead to disputes and trouble, may undermine the whole war effort and do more harm in industry than our Forces can do for victory in the field. I trust, therefore, that the matter will be viewed with a constructive outlook. I believe this policy will serve us in the war and will help us through the peace.

Mr. William Brown (Rugby)

I propose to detain the House only for two or three minutes. The Minister of Labour has taken to the credit of the Government the increased productivity of the workers and their willingness to make sacrifices during the war, but he has not said a word of defence about the absence of any constructive wages policy on the part of the Government. There are three elements in this picture. First, there is control of prices, which is at the root of this structure. In regard to that, this Government, and its predecessor, were found wholly wanting. They allowed prices to go as they would in the early days of the war, and when they began to apply control, applied it only to certain standard articles of consumption, leaving the rest to go where they liked. Only now are we beginning inadequately to get some sort of price-control policy. Point No. 2 is control of profits. You cannot get the workpeople of Britain to acquiesce in an ordered wages policy while there is anarchy in profits. There is anarchy in the matter of profits. You may say that there is the 100 per cent. Excess Profits Tax, which applies to profits made in excess of what was made in the standard years, but this, especially in the armaments industry, can be anything up to £2,000,000 per annum per firm. There has been no disposition on that side of the House to tackle the problem of profits.

The third element is that there has been no attempt to achieve an equation between three or four things that must be equated unless we are to run into serious trouble. One necessary equation is in the relation between one workman and another. That is going to pieces in this war. Any miner will say that his unskilled daughter can go into a munition factory and come back with two or three times as much wages as a skilled miner is getting. It is a travesty to talk about a wages policy when agriculture and mining remain two of the worst-paid industries in Britain, and at a time when they are the most essential industries. That is a complete evasion of a wages policy. The next thing you must equate is the treatment of the civilian population compared with that of the Army. I do not know whether the Government—if it can be called a Government and not the illegitimate offspring of an unholy alli-anee between Transport House and the Carlton Club—occasionally read a book. Among the books I recommend them to read is "The Memoirs of Ludendorff," written after the last war. It has one paragraph which I commend to Ministers on that bench, in which he states that in his view the greatest single cause of the breakdown of German morale at the end of the last war was the contrast between the treatment of the civilians and the military population of Germany during the war.

The Lord Privy Seal (Sir Stafford Cripps)

May I interrupt the hon. Member? I am sure that he appreciates the position in which the House is. He has had twice his three minutes. I am very anxious, because I know that Mr. Speaker is anxious to leave at once in order to make the necessary arrangements.

Mr. Brown

I understand that very well. May I make this point? I do not understand how it is that the real Opposition, which sits on these benches, can sit here all day waiting for the opportunity to get in a speech, while the men on the benches opposite to the Government, who claim all the advantages of being in the Coalition and all the advantages of being the Opposition, can get up and speak when they like. I will not trespass further upon the feelings of other people. I will conclude, not out of consideration for the Front Bench but out of consideration for Mr. Speaker and our distinguished visitor at the end of the corridor, by saying that this Debate illustrates as nothing could have done the deep, diseased fissure that marks the whole character of the social set-up in Britain. I warn hon. Members that unless they achieve a solution of that problem, which expresses itself in every field of our national life, we may squander by the civilian arm everything that the military arm may win for you. We must become integrated in this war, or perish, and as a condition of integration, the first thing that is required is to get rid of the corrupt bargain between the trade union movement of Britain and the employers' representatives on those benches, which overlays everything in every sphere of the war effort in Britain, and is the biggest single obstacle to victory in this war.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.