HC Deb 11 March 1947 vol 434 cc1147-79

Order read for resuming Adjourned Debate on Question [10th March], That this House welcomes the laying before Parliament of a survey of the nation's requirements and resources for the year 1947, is concerned at the seriousness of the situation disclosed, and will support the Government in all practical measures taken in co-operation with all sections of the people of the country to overcome the difficulties and to make secure the foundations of our industry so as to provide a high standard of living for our people."—[Sir Stafford Cripps.]

Question again proposed.

3.45 p.m.

The Minister of Labour (Mr. Isaacs)

Before I proceed to lay before the House the information regarding the manpower of the country, which I have been asked to give on behalf of the Government, there are two primary matters which I should like to mention. The first is my concern at the comments that have been made about the length of speeches and the obvious desire of many hon. Members to speak in this Debate. I have very full notes, and I promise that I will stick very closely to those notes and avoid any wandering from them so that I will finish my task as quickly as possible. However, I warn the House that I suffer from a very peculiar disability which is that I talk very, very fast, so fast sometimes that nobody can understand what I am talking about. Therefore, I will have to steer a middle course going slowly enough to let hon. Mmebers understand what I am talking about, and yet not taking up too much time, so as hot to disappoint others who wish to speak.

The other point I should like to mention is this. We listened at the end of the Debate last night to an excellent, well-balanced speech delivered in splendid tones, I want to say first of all that it is the kind of expression that this House expects from the Senior Member for the City of London (Sir A. Duncan). The right hon. Gentleman used a powerful argument about the extent to which it is proposed to allocate our resources for the purpose of capital re-equipment and maintenance, and referred to the vital importance of our credit-worthiness when the American and Canadian loans run out. I want to say to the right hon. Gentleman that this matter will be re-examined by His Majesty's Government, having in mind considerations of the kind advanced by him. I certainly am in agreement with him in one thing he said—that we must do away as soon as we can, with the frustrations which beset us today, and in order to surmount our present difficulties, we must do everything possible to increase productivity.

I want to deal mainly with what are, I think, accepted as the two most fundamental of our economic problems, namely, coal and exports. Before doing so, I desire to say a word about what has happened in the field of manpower since the end of the war. The President of the Board of Trade yesterday gave an indication of the remarkable change-over we have effected since the end of the war. He told us that 4½ million men and women have been released from the Forces; about 3½ million men and women have ceased making equipment and supplies for the Forces; and he also mentioned that the number engaged on exports had increased from 410,000 to 1,466,000, an increase of almost 50 per cent. over prewar. These last changes have been effected with very little industrial disturbanće, due mainly to our admirable system of industrial relationships in this country, which we claim as the best in the world and the envy of the world. Merely as an indication of the good relationships, may I mention that from VJ-Day to the end of February, 1947, a little less than 4½ million days were lost through trade disputes compared with 41½million in the corresponding period after the 1914–18 war. That is due entirely to the improved relationships between leaders of industry on both sides, which, the country is now happily enjoying.

While the change-over of manpower has, on the whole, been carried out with great success and much more rapidly than we expected would be practicable, it has not been possible to effect the distribution of manpower so that it fits exactly the requirements of industry. In consequence, we have a number of industries which are under-manned, of which coal is the most important to our economy. But it must not be thought that our only problem is one of distribution of manpower, nor must we exaggerate the extent of the maldistribution. Even if our manpower were distributed to the best advantage, we should still be faced with a very serious problem, namely, a general shortage of manpower. As a result of the fuel crisis of the last few weeks, the shortage of manpower has taken second place in people's minds after the shortage of coal. It is true that for the immediate future, coal, the shortage of which derives mainly from manpower difficulties in the mining industry, is our major problem, but it would be wrong on this account to ignore our continuing difficulties in the manpower field. Unless these are kept firmly in mind and satisfactory solutions found for the problem, the long-term economic consequences will be most serious. Indeed, our manpower problem will be made more difficult in some ways as a result of the fuel and power situation. As the House knows, one consequence of our shortage of generating plant is that a proportion of industry may not be able in the immediate future to work on the ordinary system of day work, but may have to turn over to double day shift working so that hours, and, consequently, electricity loads may be staggered. I am discussing with industry this whole problem of the staggering of working hours, and the extension of double day shift working.

May I interpolate here that the contacts already made with industry show the same readiness that they have displayed over past years, to do the best they can in the interests of the country in this matter. One consequence may be some reduction in working hours, and if that should happen, our economic situation will be seriously worsened unless output per man hour is increased to offset the reduction in hours. Both sides, I know, are fully aware of this and will, I am sure, do everything they can to avoid any unnecessary fall in output as a result of the rearrangement of hours which may prove necessary. The fundamental fact is this. We have not sufficient people to do all the things that need to be done, and to produce all the goods that require to be produced. The effect of a certain amount of maldistribution is to intensify the shortage of manpower in certain industries. We have, therefore, to increase our total manpower and to effect a certain measure of redistribution.

There are two ways in which we can increase the total manpower available for all the work that has to be done. The first is by remobilising our own work-people; the second is by the use of foreign labour. We are doing both those things. So far as British labour is concerned we are endeavouring to get back into industry many of the women who went out at the end of the war. We shall carry out a series of publicity campaigns in selected areas where industries are in urgent need of women workers. We are urging the undermanned industries to adjust their conditions of work to suit, so far as possible, the convenience of women with household responsibilities. A number of industries or industrial establishments which changed over to the five-day week, leaving the Saturday morning free, found that they had already created a very impressive inducement to women to go back into those trades and establishments. We are making efforts also to persuade those who can do so, to help the country in its present difficulties by staying on at their work for the time being instead of retiring. The Government themselves are encouraging older workers to remain in industry by providing in the National Insurance Acts, pension arrangements which offer special inducements to workers who have reached the retiring age to post pone their retirement. We are asking employers in industry who have schemes of a similar character, to consider following that example.

We are also taking special measures to ensure that, as far as possible, disabled persons are employed. The great majority are capable of employment under ordinary working conditions, and about 650,000 are today so employed. Every effort is made to submit suitable disabled persons for vacancies notified by employers, and in particular to suggest the engagement of disabled men for some forms of work ordinarily undertaken by women. A small number of disabled persons are so severely disabled as to need sheltered employment. The Disabled Persons Employment Corporation has an extensive programme of factories, designed to secure employment in sheltered conditions for those persons, and this is being pressed forward as energetically as possible.

With reference to foreign labour, one source available in this country comprises members of the Polish Forces who fought with us during the war. Some of these men and women were in this country at the end of the war; others had to be brought here after the end of the fighting in Europe. As the House knows, the Government decided that those Poles who wished to remain in this country, should be helped to resettle in civil life, but this is not a simple matter which can be left to solve itself haphazard. To facilitate their resettlement in civil life on an orderly basis, the Polish Resettlement Corps was formed in September of last year. There are now, approximately, 80,000 Poles enrolled in that Corps. There is a local office of the Ministry of Labour in liaison with each unit of the Corps, and after enrolment full particulars are taken of the experience of each individual and the type of work for which he or she appears to be suitable. Well over 60,000 Poles have been registered for employment, and there is no delay in this process after a man has enrolled in the Corps. As soon as a job is found for a member of the Corps he is relegated to the reserve and becomes to all intents and purposes a civilian.

There is, however, one overriding rule that a member of the Corps must not be submitted for any vacancy for which there is a suitable and willing British worker registered locally. In many industries it has been found necessary to hold joint discussions with the employers' and workers' representatives about the conditions upon which Poles would be accepted into the industries. In the great majority of industries where there is a serious shortage of labour these discussions have been successfully concluded, though in a comparatively few cases they are still in progress. In spite of the very serious difficulties caused by the recent severe weather and the fuel shortage, the number of Poles now placed in civilian work is approximately 3,900. But there are, in addition, 57,000 employed on Polish administration, camp maintenance, service tasks of one kind or another, or on loan for civil employment such as agriculture.

The prolonged bad weather and the fuel shortage are bound to set back our plans for placing Poles, but the machinery has been set up, and there is reasonable hope that there will be enough vacancies during the coming months to offer a job to all in the Corps. It is impossible, of course, to say for certain, because the effect of the weather and the fuel shortage on industry cannot be accurately predicted. Accommodation does, however, present a serious difficulty. The camps where the Poles are accommodated are, in general, a long way from the industrial areas. We are endeavouring to obtain camp accommodation close to the places where the work is available but this is not an easy matter and, in any case, it is only a temporary solution. The fact is that the Poles have to be absorbed into our population, and we must find billets and homes for them in our industrial areas. I would appeal to the people of this country to help the Government in this matter and to find homes for those who fought so gallantly in the Battle of Britain, at Tobruk, and in Italy. I should like now to say something to the House about displaced persons.

Mr. Henderson Stewart (Fife, East)

So far, the Minister has dealt only with Poles who are members of the Resettlement Corps. What about the great numbers who are not yet in that Corps?

Mr. Isaacs

We are waiting for them to come in. The Corps is there and we are dealing with those who are in it, at the same time doing the best we can to persuade others to come in. As regards displaced persons the House knows that we have been recruiting women in the displaced persons' camps. At the beginning, emphasis was placed on securing women for domestic work in institutions, but we think we can see the end of that phase and the scheme is now being extended to cover workers of both sexes both for industrial work and for domestic work in private houses. We are setting up a recruitment organisation which will cover the British zone in Austria as well as that in Germany.

At the headquarters of the Ministry, in London, we have established a special branch to deal with this matter. Our employment officers are now in Germany set ting up the machinery, and additional staff will shortly be despatched. As an immediate task, these officers will stimulate the recruitment of women for domestic work in hospitals and sanatoria, and for private households in the hardship category. We shall have to establish some sort of hardship category, giving preference, for example, to the farmer's wife, or others who badly need help in the home, which will mean some may have to wait a little longer. Urgent arrangements are being made for medical examination and classification, which are in the hands of the Control Commission. The Ministry of Labour are providing the necessary facilities here for the women when they land, and the Ministry of Transport are laying on the transport facilities. The Ministry of Works are arranging camps for their reception.

Vice-Admiral Taylor (Paddington, South)

Cannot the right hon. Gentleman speed up the people who are taking part in this work? My experience in the last six months is that it has been impossible to get anyone over. It is too long a time.

Mr. Isaacs

I am stating the plans we have in hand. I would point out that many of the women waiting to come here for domestic service, are not being held back on account of any lack of attention on the part of our own authorities. The difficulty is over their own papers and medical examinations. These people will go through a transit camp in London, where we hope to handle some 4,000 persons a week. They will be located there for the time being, and will then move on to holding camps where they will be kept until placed in employment. We are not just bringing them over for a job which has been found for them before they leave the zones, but bringing over all classes for whom we think we can find work, having them on the spot so that they can be sent immediately to work as soon as employers make application for them. This means a pretty large organisation. We have had to get the National Service Hostels Corporation, who have done such a fine job during the war, to extend their sphere of activity and take charge of this work for us. Obviously, it will be difficult to find British staff to come into these camps, as we cannot find them for our own institutions. We are hoping that we shall be able to make use of the wives and friends of the displaced persons themselves to undertake this side of the domestic work.

I am happy to inform the House that the Joint Consultative Committee composed of representatives of the British Employers Confederation and the Trades Union Congress, who have been informed of the proposal, have given us their blessing and support, while advising us that actual negotiations for industrial placements should be carried on with the industries concerned. In carrying on these negotiations, we are much helped by the fact that in so many industries there are joint industrial councils, which have proved their value during recent years, and it is through these organisations that we shall work. And so, any placings in industry will be made with the warm co-operation of both employers and workers, and people will not be pushed in regardless of anybody's feelings.

Mr. Sydney Silverman (Nelson and Colne)

Is the right hon. Gentleman yet in a position to give me an answer to the question I asked him a few days ago, in regard to the removal of the disability on prewar refugees in this country who are prevented by a Home Office condition from working? The right hon. Gentleman promised that he would look into this matter.

Mr. Isaacs

I did look into it. Knowing my hon. Friend, I anticipated his question. We are meeting the position. I do not want any person in this country who can work not to be put to work.

I now come to the question of redistribution of manpower. How are we handling this problem with a view to increasing the labour force in the under-manned industries? I use the term "under-manned" rather than "unattractive" industries. We are doing it by giving priority to vacancies in those industries, by bring those vacancies to the attention of persons seeking employment, by publicity drives, by improvements in the working conditions and attractiveness of these industries—that is the main way to overcome this difficulty—and by training in Government centres. I hope to illustrate later the extent to which each of these measures can be effective. The President of the Board of Trade said yesterday that the Government are concerned that the maximum economy in manpower should be exercised in the distributive trades, and he asked for the co-operation of these trades in securing this end. When we speak of the distributive trades, I hope Members will not cast their minds only to the persons behind the counter, because they cover a much wider field—anyone who has anything to do with distribution, such as the milkman, the coalman, and others, who bring their commodities to us.

I propose to discuss with the organisers of the football pools what might be done, by agreement and co-operation, to limit the amount of manpower employed by them, and to secure that they employ the type of labour which is least suitable for the manufacturing industries. I cannot forecast what the result will be. The football pool people believe in gambling, and perhaps they will gamble with us on this matter. We are endeavouring to secure, by agreement, that people in the Lancashire area suitable for employment in the textile industry shall not be employed on football pools. We have no legislative power to tackle this at the moment. We hope to proceed by some such arrangement, but should it be necessary, we shall have to take other steps. In one or two contacts made with the foot ball pool organisers on one or two other phases of industrial activity, we have not found them reluctant to meet the point of view put to them.

Mr. Nally (Bilston) rose

Mr. Isaacs

I cannot say any more about that. I am going to meet these people to talk over matters with them, and, if necessary, I will give a report to the House on the result of those negotiations.

I turn now to the question of coal. I thought that the speeches in yesterday's Debate were not only well-informed but were delivered in a helpful and not a carping spirit. It is obvious that everyone is aware of the importance of this question. It is clearly understood that full employment in industry depends on coal. As stated in Table A of the White Paper, the number of wage-earners on the colliery books was 735,000 in 1939. At the end of 1946, it was 692,000. During January, the number increased for the first time since the beginning of the war, and was 695,000 at the end of January.

That is very encouraging but it is not getting us where we want to get. The target set for the end of this year is 730,000. Taking into consideration the wastage that cannot be avoided, we estimate that we must find at least 100,000 additional persons to enter that industry this year, if we are to finish up with a figure of 730,000. This is a great task, and we shall not succeed unless the Government, the Coal Board, and the National Union of Mineworkers all pull together and bend their energies to it. I have every reason for saying that I am confident their co-operation in this matter is assured.

It is accepted, I think, that coalmining must be treated as an industry of fundamental importance, and that we must take exceptional measures to deal with it. I propose, therefore, to mention our long-term and short-term plans in this matter. So far as the long-term plans are concerned, improvement in the attractiveness of the industry is a fundamental thing. Much has already been done. During the last seven or eight years, especially since 1941, and with the Greene Award, the Porter Award and other awards, there has been improvement in their wage standards. We have reached the position where, at the moment, there is a minimum wage of £5 a week, while average earnings for the coal getters rise well above that. These figures may be compared with average weekly earnings during the year 1938 of less than £3. There is no doubt that the increased wage is proving one of the attractions. The next is that at the moment the normal working week consists of six 7½hour shifts, but in some areas there is a shorter shift of 6½ hours on Saturday. A five-day week has already been accepted in principle and is expected to be in operation in May. The right hon. Gentleman the senior Member for the City of London and the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) referred yesterday to the question of the five-day week and the question of production. Paragraph 86 of the White Paper states that the first thing the Government propose to do to obtain the necessary coal production is to increase the labour force in the mines. A satisfactory output of coal can only be obtained by an increase in manpower in the mines.

Some progress has been made, as is indicated by the improved figures I have just given, by making the mines attractive. Ex-miners are returning. The National Union of Mineworkers has issued an appeal to all ex-miners in the country to return to the mines, and they have had an encouraging result. Men who left the industry and went right out of the areas altogether, are now more ready to come back, because they say that with a five day week in prospect and a better wage, the industry is worth coming back to. But there are other factors as well as attractiveness. The physical strain of working a six day week is demonstrably too great for large numbers of our face workers, who are the real coal getters. Over the years it has been demonstrated that a regular six shifts on the coal face was an impossibility, and made demands upon the miners which were beyond their capacity. A full five day week is likely to be more profitable than a nominal six day week. Having regard to these important considerations, and to the improved relationships in the industry likely to result from the change, the Government announced last year that they accepted the principle of the five day week. The Minister of Fuel and Power said in this House on 26th June: I take this opportunity of announcing that the Government offer no objection in principle, provided that arrangements and conditions can be established with the full co-operation of the miners, to an organised five day week of a kind which will secure the output of coal which is necessary to meet the country's needs."—[OFFICIAL REPORT, 26th June, 1946, Vol. 424, c. 1322.] The Government do not depart from that today, since they are satisfied that the increased output which is so necessary if we are to produce the amount of coal required can only be achieved over the year if the present six-day week arrangements are modified, and a five-day week introduced. The arrangements and conditions to which the Minister of Fuel referred are the subject of negotiation between the National Coal Board and the National Union of Mineworkers. These organisations are fully seized of the vital necessity not only of reaching the target of 200 million tons of coal in 1947, but of improving man output per year and exceeding the target if possible.

Mr. Oliver Lyttelton (Aldershot)

I hesitate to interrupt the right hon. Gentleman, but will he see that a report is laid before the House which gives the estimate by the National Coal Board of what the increase in production will be as a result of the introduction of the five-day week?

Mr. Isaacs

In view of the fact that these delicate negotiations are proceeding with the National Union of Mineworkers and the Coal Board, and of all the differences of opinion which have been ex- pressed one way and another, I think it will be best for the moment, in order to get it adjusted satisfactorily to everybody concerned, if we leave them to work out their scheme, and then report to the House the result of the negotiations. Now I must hurry on, because so many others wish to speak. There are other facts the Government wish the House to be possessed of, so that they will have a thorough background in discussing the manpower situation, in relation to other phases which I know hon. Members wish to raise.

First, we are training new recruits. There is a preliminary training before they go into the mines. When they go into the mines, they have to be put under the supervision of an experienced workman for an initial period. Then welfare is being looked after. There are baths, welfare facilities, canteens and technical education of various kinds. Nationalisation has brought this industry under public ownership, and improvements in the working conditions have already begun. This will be a long term programme. It will include labour-saving machinery for cutting and loading coal, better underground lighting and more ventilation, better provision of health and safety, arrangements for conveying men to and from their work under ground, modern layout of pitheads, including the latest types of coal washing and screening plant, pithead baths, etc. Because in a specialist sphere, the use of machinery will call for a greater mechanical and electrical knowledge amongst the mineworkers, special arrangements have been provided, and a technical school is operating now in Sheffield for the training of the young men to be specialists of this kind in the coal mining industry. The policy of nationalisation is now being tested. We have yet to see what the full results will be, but I ask the House this question: Does anyone believe that output would have gone up as it has since the beginning of January if we had not taken over the mines?

We shall help to maintain manpower in the industry by not calling up the young men for service who are in that industry. No one at present employed in coalmining who is in the range for call-up will be called up as long as he stays underground —[Laughter.] I know there are other ways of going underground besides going into the coal mines, but the men who are not called up for military service, because they are underground in the coalmines, will have our compliments, which the men who go underground in the other sense of the word will not. We are also arranging that this does not prejudice the rights of ballotees and optants to be released from the mines in accordance with the undertaking which has been given. They will be released in accordance with that undertaking. We think that will help also to improve the service in the mines.

Now I will refer briefly to the short-term plan. What we are aiming at is to get 730,000 men in the pits by the end of the year. We are anxious to do that with as much British labour as possible. because of the difficulties of getting other labour rapidly efficient. But the industry has accepted the introduction of other nationals, if the need should arise. We want to emphasise that the production of 200 million tons of coal this year is an in dispensable minimum. We must produce at least 200 million tons this year, and we want the industry to understand that that is not the maximum; it is the minimum. By various means, by publicity, by the giving of housing—promising of housing—[Laughter.] I am quite aware that if it were under the right hon. Gentlemen opposite they would promise houses, but where the men could find the houses, and whether they would get them, I do not know. Houses which have been prefabricated, and scheduled for erection in some places, are to be diverted to the mining areas, so that the people on whom we rely for coal shall, at least, have a decent roof over their heads when they are not actually working. Then there is the question of special facilities for food. In conjunction with the National Union of Mineworkers, we are carrying out an intensive publicity campaign and we are confident of good results being obtained. The industry has agreed to Polish labour, and they have had under consideration acceptance of the same arrangements for other foreign labour should Polish labour not be sufficient to meet the requirements.

I will refer now to the export situation. We have been told that the target for 1949 is 75 per cent. above prewar. There are one or two important figures worth bearing in mind in this connection. In 1939 we had 990,000 engaged in manufacture for export, and 160,000 engaged on the production of coal for export. At the end of December, 1946, we had 1,466,000 on manufacture for export, and only 10,000 on coal for export. There is no immediate prospect of increasing coal exports. This means that our manufacturing industries, particularly engineering industries, will have to produce the exports required, because coal cannot do its share. That is why we have to build up the labour force in industries manufacturing goods for export to 1,700,000 by the end of this year. This labour force will have to be further increased in 1948–49, to about two million if we are to reach that 75 per cent. at the end of 1949. Here again the importance of coal is apparent. If we cannot return to the prewar position, when 160,000 miners were producing coal for export, it will be necessary to increase the number employed in the manufacturing industries for export much beyond 1,700,000, and that means an additional burden on the other industries.

Taking the labour force as a whole, the position in the manufacturing industries now is that there has been an increase on 1939 of 950,000 persons on export and home production. That is 17 per cent. over 1939. For export, the increase has been 48 per cent. and for home manufactures it has been 10 per cent. In manufactures for export in mid-1939, the figure was 990,000, and at the end of 1946 it was 1,466,000, an increase of 476,000, or 48 per cent. In manufactures for the home market, in mid-1939 the figure was 4,555,000, and at the end of 1946 it was 5,033,000, an increase of 478,000. The increase is almost equal to the increase in the other section, but the percentage is of course only 10 per cent. The totals of the two represented an increase of 17 per cent. But that does not disclose the full picture. In manufacture for export and the home market, metals and chemicals have in creased compared with 1939 by 70 per cent. while the other manufacturing industries are 13 per cent. short of the 1939 figure.

Two conclusions emerge from this. First, exports have been increased at the expense of the home civilian market. We are all aware of that. Secondly, metals and chemical industries have expanded at the expense of the other manufacturing industries. The home market cannot be further starved of the goods civilians so urgently require, and exports can only be substantially increased if the labour force in the textile and other manufacturing industries, apart from engineering and chemicals, is increased. The outstanding shortage of labour is in the textile industries and the chief bottleneck is in cotton spinning. This is affecting not only the textile trades, but also the clothing industry. I will give some details. The labour force of the cotton industry at present stands at 252,000 workers, and 88,000 more are needed to bring it to prewar strength. The immediate demand now waiting to be satisfied, is for 26,000 workers, mostly women and girls. As in the case of coalmining, I will mention the long-term proposals. First, the industry must face up to its needs—modern machinery and equipment which are being installed now, improved layout and spacing of machinery and lighting, exhaust ventilation and welfare improvements of canteens and so on. Last year the Cotton Board indicated that £5 million had been spent on improvements in the spinning, dubling and weaving sections of the industry over the last five years and a further expenditure of £2,750,000 was being planned. That alone ought to encourage those who left the industry to realise that improvements are coming along, and it might induce them to come back. Wage rates have also been increased substantially, and the average earnings of women workers in the industry compare very favourably with those of women in other industries. The industry has adopted a five-day working week. Many industrialists are finding that the best way of recruiting women is by having the five-day week.

In August, 1945, I appointed a Com mission under the chairmanship of Mr. Justice Evershed which examined the industry and made recommendations. Implementation of the recommendations is proceeding slowly, but progress has been made in applying them to draw frames, slubbers and mule room operatives, with the exception of mule spinners. On the short-term plan, we are carrying out a very useful campaign in co-operation with the industry and education authorities. The idea is to let children from the schools see exhibitions of what can be done, and the kind of work that is waiting for them in cotton, so that they leave school with an inclination towards the cotton industry, instead of a very strong inclination against it, as in the years gone by. The industry itself has become training conscious and is adopting training schemes. For example, many firms have set aside departments where they give systematic training in rooms away from the noise and distraction of the workrooms. Instead of the youngsters going into the noise of the machinery and picking up their skill in the factory they are taken to a quiet place and taught that skill.

Further, many firms are training new adult labour. A few weeks ago I saw a Ministry of Labour textile training centre at Oldham. I spoke there with some of the people who were going through that centre, with some of those who had passed through and with some of the employers. One great advantage. in training a man for this industry is that whereas, if one were training a bricklayer to build a brick wall, he has to knock it down again to build another section, in this class of work, it is possible, after the third or fourth week, in the 13 weeks training, for the product to be usable. This is a useful piece of work, and employers have told me there that many of the men who had been trained in that place, were, at the end of 13 weeks, able to hold their own with men in factories who had come through the process of ordinary haphazard instruction, in a go-as-you-please way. There is great advantage in the Government's service to this industry by this kind of training. To show that every effort has been made to help this industry, I would point out that between June, 1945, and December, 1946, the placings of the Ministry of Labour in this industry through the employment exchanges numbered 41,450.

Mr. Kenneth Lindsay (Combined English Universities)

Will the right hon. Gentleman say how many of these placings were juveniles and how many adults?

Mr. Isaacs

I cannot say that.

Mr. Lindsay

It is most important.

Mr. Isaacs

I appreciate that it is important, but I cannot answer the question without notice. I will gladly get the information for the hon. Member. Speaking from memory, I feel sure that the vast bulk would be adults, but I will get the information. I have not got the figures broken down. That is why I am not going into too much detail now.

Further, the Cotton Board have gone further afield in more senses than one, and have sent their own people over to the British zone of Austria and Vienna to find out what displaced labour is available to go into that industry here. In that connection, there is an opportunity of doing something else. We find that there are very few of what might be called unattached single women, unmarried women, and women without relatives, who can fulfil our requirements. If we are able to bring over a man with a family, we might be able to obtain the services of the family on the female side, as well as on the male side.

In the woollen and worsted industry the situation is similar, though the figures are not quite so bad. We estimate that 60,000 women and girls will be required in this industry during the next five years. This industry was heavily concentrated in the war, and those who left it and got other jobs are not anxious to return. We have our training schemes, a special college at Galashiels to give training, an interrupted apprenticeship scheme, and other steps are taken in co-operation with the employers in order to induce people to come back into this industry.

Before I conclude I would like to speak generally on this matter. One thing which emerged from the Debate yesterday was general agreement with the attitude of the Government in not imposing direction and compulsion upon labour. That makes the position much more easy to face, because we believe that if we had maintained those controls and directions for any great length of time after the war, they would have broken down, they would have been unenforceable, and it was as well to take them off. It is the Government's intention to see that the very few that remain are all taken off at the earliest practicable moment.

I have set out briefly, although in too long a space of time, the points regarding our manpower position. I finish with this observation. The situation is difficult. We have not enough men and women for all the jobs that are offered to them. There are plenty of jobs that people do not want to go to, and will not go to while there are better, more comfortable and cleaner jobs. We have to get people to see that every piece of work today, is not merely a matter of profit for the employer or wages for the employee, but that every ounce of work done is work for the nation. It is upon the in dustrial activity of management and operatives that our nation's welfare in the future depends. My daily contacts with employers' organisations and trade unionists through our National Joint Advisory Council and otherwise, and in making trips about the country, satisfy me that there is really a good spirit between the two sides, and an anxious desire to come to the help of the country—I will not be political and say, "come to the help of the Government." They want to come to the help of the country.

Most complicated negotiations are now proceeding about the staggering of hours —whether there should be night work, double day shifts, etc. I have today been reading the reports of the regional areas, and the ingenuity that some of our industrialists are displaying to find ways and means of staggering working time, with out imposing night work upon themselves or unpleasant early morning or late evening starts, is amazing. As soon as I am able to produce a summary of these efforts, I will take some steps to make them known. The spirit is there. The willingness of our people, industrialists and operatives, and the desire of all our people are there to help the country through this need. Someone said yesterday that when the time comes when the country needs help, the people will rally to its support. I ask this House to accept from me an assurance of their readiness, and the hope that whatever may be the result of tomorrow's vote, at any rate the spirit of the House in this Debate is to give its blessing to the industrialists, with the hope that they will carry through their job as quickly as they possibly can.

4.38 p.m.

Mr. Clement Davies (Montgomery)

This is one of the most critical moments this country has ever faced. The President of the Board of Trade called the outlook dark. The right hon. Member for Aldershot (Mr. Lyttelton) said that we are heading towards bankruptcy. I want to call attention to those words for two reasons. The first is that I wish the Government had been able to find more time, so that more Members of this House could have taken part in this Debate, because our critical economic position today is such that it affects every walk of life and every piece of legislation and everything we discuss. It is also the explanation of the length of the speeches to which the House has listened. The right hon. and learned Gentleman the President of the Board of Trade yesterday took two hours —quite rightly. If he had taken double that length of time I would still say it was absolutely justified, because the great Department over which he presides deals with all these matters and he had to bring them all under review. Secondly, this is an occasion even more than on any other when it is incumbent upon every one of us to express his own opinion freely and courageously. This is the moment when this House is not only entitled, but is under the duty, to exercise its functions of criticising the Executive of the day. So far as we can, we should be constructive in our criticism.

I want to pass to the opening speech yesterday by the President of the Board of Trade. It was a very full exposition of the White Paper. It was a restatement of the White Paper, but I listened, and I am sure everybody else listened, to hear whether there was anything further that the President of the Board of Trade could tell us in addition to what was contained in the White Paper. So far as I could hear, and so far as I could read this morning, there was not a single fresh thing in the right hon. and learned Gentleman's speech. In its ability and clarity it was perfect. but it left us precisely where we were when this White Paper was issued.

Mrs. Leah Manning (Epping)

The reference to the economic staff was quite new.

Mr. C. Davies

I want to be as short as I can. If the hon. Lady will wait, I will deal with that point later. The right hon. and learned Gentleman was at great pains yesterday to say that warnings had been given by him in particular, and by the Government, about what might happen as we went along. The very position which we have reached today should have been foreseen by all those holding the responsibility of government. Not a particular figure or fact, but the general situation, was undoubtedly coming unless we moved quickly and took the necessary steps to meet it. It is still more interesting because of that, to refer to a White Paper which was issued in May, 1944, when nearly all the right hon. Gentlemen now sitting on the Government Front Bench were Members of the Coalition Government. It is precisely the same as the White Paper issued in February, 1947. The only difference that I can see is that the document of 1944 is better worded. All the matters contained in the White Paper of 1947 are contained in that of 1944. Reference is made to the difficulties which would be confronting the people of this country, and indeed all other countries, when the war ended and we came to the period of transition from war to peace.

It contains one matter which is not referred to at all in the publication of February, 1947. I refer to the part which this country ought to be playing in regard to international trade, to assist itself not only directly but indirectly. The White Paper of 1944 deals with that subject much more fully than the later White Paper. There are references to all the matters—the need for production; the need for co-operation between employers and the employees; the assistance that should be given by the Government to all kinds of industries; the need for financial help; and the need for trying to divert labour to channels which would be more likely to be productive. All that is in it. There are also two much longer paragraphs than those contained in the White Paper of 1947, about restrictions upon industry either by employers and price rings, and things of that kind, or by ancient rules, which were very necessary in the days when this country was suffering most grievously from unemployment. Therefore, all these matters were present to our mind as long ago as 1943–44 One could see, more or less, to what things were tending unless adequate steps were taken in time, to prevent us from getting into the catastrophic position in which we are today.

What is my complaint against the Government? Whilst they have had in mind these facts and have said that planning was necessary—with that I, should think all of us would agree—where is the plan even today? Where is the overall plan? Where is the blueprint, or the test balance sheet, or the alternatives which they would bring into being as the situation changed from time to time? The only thing mentioned yesterday by the right hon. and learned Gentleman the President of the Board of Trade was that he was going to strengthen the economic staff. Does the House realise when the economic staff was first mentioned? It was brought into being originally as a staff to help the Minister of Production during the war, and it is one of the main features in this White Paper issued by the Coalition Government in 1944. Had the Government to wait until this blizzard came upon us, before they could see that the moment had arrived for strengthening this staff? Why has it been kept back until now, when this sort of creeping paralysis was coming upon us month after month? What is the real truth of the matter? What I have felt, all along, is that Members of the Government are so busy that there is no one who is really doing the overall thinking about what the policy should be.

In the period after a war, with its many problems, when the Government have to deal with a situation which appals us, when they have to bring millions back from the Forces and munition factories and reinstate them in peacetime work, there is the need, more than ever, for a small Cabinet with no executive tasks. Instead of that, however, they have this economic brains trust, supplying them with all the facts and figures. The Cabinet is still composed of 20 Ministers, at a time when we are pressing through a legislative programme the like of which this House has never had to face before. As I understand it, the first duty of a Government is not legislation but administration. Certainly, at a time like this, legislation should be strictly limited to eat amount which will make the administration more effective and easy. But what is happening with regard to the Members of the Government, and the permanent civil servants, their chief advisers? All their time is taken up with preparing for legislation. Only when it is prepared, are they then free to turn their attention to administration, but their work is done partly in this House and partly in Committees upstairs. What happens at present is that the Minister and the civil servant spend their morning in Committee, instead of in the office, and then they have to spend part of the afternoon upstairs or on the Floor of this House. Where is the time for administration?

In the meantime, our position today is due to the fact that we are living beyond our resources. We are trying to achieve more than our resources will permit and we are living in an inflationary period. I shall return to the subject of the Budget and the financial situation later. An inflationary period is a period when the money exceeds, and far exceeds, the amount of goods and the value of those goods which is purchasable by that money. That is our situation today, and the Government are trying to administer an economy of scarcity against a flowing tide of monetary inflation. The right description of that situation under such haphazard and unconnected measures as the Government have adopted in the way of rationing, price control, subsidies and things of that kind, is "suppressed inflation."

Before I deal with the home position, I should like to look at it from the point of view of the country as a whole, face to face with other countries. The position is very serious. We are continually running into debt. We ran into an enormous debt during the war, and that debt would have been far greater but for the assistance which America gave us, not only when she came into the war but before she came in, by devising that wonderful scheme of Lend-Lease. The war being over and Lend-Lease at an end, again she has come to our assistance. But what is happening? We are running further and further into debt. The amount of debt that we incurred last year was £328 million, and the amount of debt that we are to incur this year, is estimated by the President of the Board of Trade as another £350 million. We cannot continue along that road. That is the road to ruin and bankruptcy. While we have incurred that, what has happened with regard to our export position? I will come in a moment to the figures given in the White Paper and by the Minister of Labour.

We have roughly 500,000 more on export work than we had in 1938. The target we want to reach is 175 per cent. of our export volume in 1938. What have we succeeded in reaching? About 112 or 115 per cent., and that was in the last quarter of 1946—with 500,000 more men. It is always easier to get the first extra knot out of the speed of the ship than the last quarter of a knot. It has been difficult enough to beat this up to 112 per cent. How are we to beat it up to the target figure set by everybody of 175 per cent. when the figure given by the President of the Board of Trade is that, overall, during this year, we hope to reach 140 percent. —

The President of the Board of Trade (Sir Stafford Cripps)

Not overall. By the end of the year we hope to reach 140 per cent.

Mr. C. Davies

And that would mean that in order to reach that figure a far higher figure than 140 per cent.—if I remember rightly, the figure I have in mind is—

Sir S. Cripps

The right hon. and learned Gentleman must have mistaken what I said. I repeated it twice yesterday. We hope by the end of the year to reach a rate of 140 per cent.

Mr. Churchill (Woodford)

Measured over what period?

Sir S. Cripps

Over the last month of the year.

Mr. C. Davies

I would like to know whether that estimate was made before the present difficult situation arose. Was it made in December or in March?

Sir S. Cripps

It was made now.

Mr. Davies

So that we have nine months in which to try to catch up. All we have been able to do by beating up our exports is to import only 70 per cent. of what we imported in 1938—far less than we require either in food or in raw materials. One then asks how we are to get this extra production for export. Where are we to get our men? Very rightly the Minister of Labour said we are short in home production of between 660,000 and 750,000. We cannot draw on that. Where are we to draw them from? What is to happen? That is the main question of all. How are we to tackle it? It is all very well to set out these figures in the White Paper, but what the country wants to know is: how are we to set about tackling it? We know that this country will always respond if we tell them the full facts. They will always respond if we tell them what we want them to do. They will always be ready to help. What we want to know now is, not so much, perhaps, why we have got into this position, but, where do we go from now on? That is the position in this country face to face with abroad.

Let me now come to the position here. I have already referred to the fact that we are in an inflationary period. Originally, I was one of those—I believe I was the earliest one in this House—to refer to the fact that one should no longer look at the national Budget within the limit of 12 months but should take a much more extended view. That is an argument that one or two of us were putting forward before the war. By handling the financial situation fairly and properly in that way, one might give assistance to, instead of hampering, the industrialists, as Budgets have sometimes done. So we said that it was not necessary to balance the Budget every year but that one should take an overall view, over a larger and extended period, but always with this reservation, that if one was in a period of inflation, one should not only balance one's Budget but should if possible have a surplus so that one might then have something in hand when the period of deflation arrived. We are in a situation today when we have tremendous inflation, and it is more than ever necessary that the Chancellor should balance his Budget. How is that to be done?

One method always is to increase taxation. Perfectly obviously, we have pretty well reached the limit of taxation—so much so that I do not suppose anyone doubts now that in many ways it has acted as a deterrent to production. The second thing to be considered is that if one cannot raise taxation, one must cut down expenditure. The raising of taxation would take some considerable time; on the other hand, if one did not cut one's expenditure that would be a continuing burden on the people. One can cut one's expenditure quicker than one can raise one's taxation, with this difference: when one cuts down expenditure one is bound to hurt somebody, but that should not deter us from doing what we-think is right and proper for the nation, any more than a sensible man would deter the surgeon from carrying out an operation which is meant to save and extend life.

How can the Chancellor cut down? First and foremost there is the tremendous expenditure now being incurred on the Forces. In November, 1946, we had 1,510,000 in the Forces and 474,000 employed in equipping them, a total all told of 1,984,000—and at this time when we have come through six years of the most devastating world war that ever was, and at a time when we are all being asked to put our faith in the United Nations organisation.

The Government are expending this vast sum upon the forces abroad at the present time, in addition to the other expenses which they are incurring abroad. Last year we spent about £300 million net abroad. This year it is proposed that we spend £175 millions. We cannot afford £175 millions. I read in the White Paper the words "at the end of the year." At the end of which year? Is it the end of 1948? No, it is by March, 1948, and by that time we ar to have reduced the number in the Forces to 1,087,000. I ask the Government once more to go through their figures and review what commitments they should undertake. Let them remember that this country at the present moment has had to bear a bigger burden than any other country. The United States have been ruthless in their cutting of the Forces; so have the Dominions. Why should we still bear this burden? Why should we be the one and only nation to carry out the duty, which we have carried out so wonderfully for nearly 200 years, of policing the world? Is it not about time that some other nation helped to bear that burden? Have we no hope that the United Nations will undertake some of the duties that we have had to carry out until now? Even when we have got the figure down to 1,087,000, that will only be a reduction of 340,000, when we are already short for the export trade of 500,000 and short in the home trade of 750,000. [An HON. MEMBER: "Men?"] Yes, men. So there is a net shortage, even after allowing for that 340,000, of something in the nature of 900,000, in relation to the figure which the Government have said is necessary in order to maintain the standard of life of the people.

What can the Government do? There are two things they can do, now that they are face to face with this situation. The Minister of Labour stressed the need for men, yet the Government still adhere to their policy that it is necessary to introduce conscription in this country in time of peace. Conscription will mean calling up young men—all except the miners. I have heard Ministers at that Box talking of the advantages to young men of being conscripted. The miner is to be deprived of those advantages. He will have to go down into the mines, and if he decides to give up mining, he will have to go into the Army. Let the Government now form a manpower commission, to go into this question and to see what is the position and what can be done to help us out of it.

What is the other thing the Government can do? I and all my colleagues have, at all times, been keen upon increasing the education of the people of this country, not merely that of the children. I deeply regret that the provisions for raising the school age which were first put forward by Mr. Fisher in his famous Education Act, were not carried out at that time. One of the comments which I now have to make could not then have been made, because we should now have had the schools and the proper materials to carry out the proposals. What is happening now? At this very time the Government say that they are going to raise the school-leaving age. [HoN. MEMBERS: "Hear, hear."] Very well, but do those cheers merely mean that to the minds of hon. Gentlemen opposite compulsory attendance at school is the same thing as education? [HON. MEMBERS: "No."] Then what is to happen in regard to these children? Will they be able to get the proper teaching which they should get?

Mrs. Manning

Yes, in a good many schools.

Mr. Davies

In a good many schools, the hon. Lady says, but she knows that in a good many schools the classes are already too big and that they will be much bigger when the new conditions are introduced. In a good many schools, the teacher will have to divide his or her attention between those who are over 14 and those who are under 14, and both groups will suffer.

Mrs. Manning

Surely the right hon. and learned Gentleman is aware that children between 14 and 15 do individual work, and are not taught in masses in these days.

Mr. Davies

If they have the teachers, and the school buildings. As to the figures which have been published of the amount expended on education, let me tell the hon. Lady, who was not in the House during the last Parliament, that I was one of those who asked that the whole cost. of education should be put upon the national Exchequer so that all children throughout the country should have an equal opportunity. That proposal was all right at that time. The amount which the Government are now seeking to spend is £136 million—largely on what? The increase is necessary for buildings, and equipment to make way for the older children at the end of the year. I ask the Government that they should look into this matter again at this time. I say to them, "Do not proceed merely on theory, but see whether, in truth and in fact, the children will benefit."

I have dealt with the manpower situation. Now I will come for a few moments to the Chancellor of the Exchequer. I sympathised with the right hon. Gentleman yesterday in his position. He does not want, and very rightly, to anticipate his Budget. It would be wrong of him to do so, but nobody realises better than he does that financial control of the present situation vitally affects the whole economic position. I should have liked him to deal with matters in a broad way, and more fully than he did, with the position in which we haw an income of £7,000,000,000, while the value of the goods and services which are available for the people, amounts only to £6,000,000,000. That is the inflationary pressure, and as the right hon. Gentleman knows, some of his friends and colleagues have been very rude in regard to it. Sir Hubert Henderson quoted the words of the right hon. Gentleman's peroration at the end of his Budget statement about a song in his heart, and said that unless the Chancellor of the Exchequer dealt with this matter, he might find that the song in his heart would break the bowl of industry. Another old friend was even ruder, because he said that the song in the Chancellor's heart might turn out to be wind upon the national stomach. In spite of what the Chancellor said yesterday about levelling down the note issue, I wish he would make a definite statement that he has not increased the amount of borrowing more than at any period of the war. That means, if anything, the creation of new money. I hope the Chancellor of the Exchequer will tackle that matter, about which we certainly want to know more.

I turn now to the subject of coal. Everyone in this country now realises what we owe to the miners. I hope every body realises that what the country is suffering from is past neglect of the miners. But, surely, the Government realised the position when they were part of the Coalition Government. They knew the facts and figures when they took office. They knew how much was required on 1st December so that we could be quite sure of covering the winter until June. The stocks must be in by 1st December, at which time one begins to draw on stocks over and above the amount that is produced during the winter. When the hon. Member for Gower (Mr. Grenfell) became Secretary of Mines in 1940, on 1st December, he began the winter with a stock of 28 million tons; by 1st June the stocks had fallen to 14 million tons. At 1st December, 1941, he began with 31 million tons, and by 1st June the stock had dropped to 14 million tons. During that winter we took 17 million tons out of stocks. We have never taken less than 14 million tons. Therefore, what right had the Government to begin this winter with a stock of only 10.8 million tons? I remember the speech of the right hon. Gentleman the Minister of Fuel and Power last August, when he said we had just scraped through last winter, a mild winter. The Government had no right whatever to gamble on managing with 4 million or 5 million tons less this winter than we had ever had before.

What are we to do now that we are facing the present situation? The Government say they want to reach a target of 200 million tons. I am sure that is not enough to meet the needs of industry, to produce what we want for export, and to look after the health of the people of this country. In 1940 and 1941, the mines were producing 204 million tons with fewer men than today. Production per man was higher than it is today. We shall need probably 220 million tons, What are the figures with regard to the men? The present figure is 695,000. The Government propose to raise them to 730,000, an increase of 35,000. But that must be a net increase of 35,000. As the hon. Member for Aberdare (Mr. D. Thomas), in a wonderful maiden speech, and the hon. Member for Clay Cross (Mr. Neal) reminded the House, there is a tremendous wastage in the mines. The wastage last year was, I think, 70,000. Nobody will estimate it at less than from 35,000 to 45,000 in 1947. Let us take it as being 40,000. This means that, between now and the time when the target has to be achieved, 75,000 men will have to enter the mines.

From where will the Government get them? Bevin boys will not do. To my mind, there are the following courses. The first is to make the mines healthy. What does any miner ask first about a mine? He asks what is its reputation with regard to silicosis and the dread diseases like nystagmus, and so on. That is the first question that is put, and that is the guide to the young boy as to whether he follows his father into the mine or not. There is not a miner in a mining district who does not know which mine is healthy and which is unhealthy. Make the mines healthy, clean, and proper, and the miners will come back. The miner is most loyal, he has a most communal, a most social mind, and understands the needs of the people better than any other class of workers. The second thing is to give the miners their Charter. I think the Government are right in saying that the working week ought not to be reduced to five days in any industry unless the production can be, maintained or increased, but if there is any industry in which the working week ought to be reduced to five days, it is the mining industry. Therefore, let the Government see whether they cannot grant the miners their Charter. The third thing is pits. A great number of pits were closed down during the war and just before the war. It is a difficult task to reopen them, but it ought to be the first task of the Coal Board to do so. As all miners know, this is rather specialist work. I throw out the suggestion that there should be special groups of men in every area to tackle that work. The amount of coal produced will not depend on those on the surface or those around the pit shaft; it will depend on the number working at the face, and what they are able to get.

I want to say one word about manpower. There is going to be a greater burden upon the people of this country, and an increasing burden. First, the birth rate is declining, and there is a shortage of manpower today. Another thing is that with all our health measures the expectation of life is increasing, and the number of people over 65 in relation to the younger ones is rising. In 1900 they were only one in 17, today they are one in seven, soon they will be one in six, constituting a bigger burden on the producers than ever. What is to be done? We must render the position of the producers better and give them an incentive. I am not going to deal with what may happen in regard to taxation, but will content myself with saying that I accept the suggestion which was made to the right hon. Gentleman the Chancellor of the Exchequer yesterday by the hon. Member for East Aberdeen (Mr. Boothby). I think it is well worth looking into.

What we require at the present moment, and what we shall require throughout this time of trial, are full statements of the facts. Tell us your plans as soon as you can produce them, that we may know what they are. Tell the people what the facts are, and I have no fear whatsoever of the future. It will not even be necessary to ask for co-operation in this matter; where the safety of the country is at stake, every man and every woman will do their duty, as they always have, in order to save this country.

5.22 p.m.

Sir John Anderson (Scottish Universities)

Never, I think, in the nine years since I first entered this House have I found so much common ground with the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) as I have this afternoon. I should like first to join with him in paying my tribute to the right hon, and learned Gentleman the President of the Board of Trade for the masterly and lucid—one might almost say pellucid—exposition that he gave of the White Paper in opening this Debate. I think he was right to explain, even at unusual length, for in my view misunderstanding is at the root of much of the difficulty that confronts us in the economic field today. That is the first point that I want to stress. It is something that is hardly touched upon in the White Paper. We must seek to bring about a much clearer understanding of the basic facts and principles affecting our economic situation, and that is rendered the more necessary by reason of the many inconsistencies that appear to confront us in the policy and the declarations of His Majesty's Government.

I remember that the Prime Minister, in his pre-Election broadcast, expressed the view that the spirit which had got us safely through the war, would serve us equally well in peace. Indeed, he went further, and expressed the view that under a Socialist dispensation one might look for a more wholehearted effort than ever before, and incidentally he was much more optimistic in that speech than was the right hon. and learned Gentleman the President of the Board of Trade in the broadcast to which he referred yesterday. I followed the right hon. Gentleman two days later, and I ventured to express my sharp disagreement with that part of his speech, and the reason for my disagreement is a very simple one. People understood the war. They understood what it meant, they understood well what was required of them. They do not understand the economic conditions in which we live today; they do not understand the peace as they understood the war. They are just the same people, they are just as public-spirited, they are just as ready to make sacrifices, but they do not understand and, I venture to say, they get precious little guidance from the quarters from which they are entitled to expect it.

In this part of my speech I want to call the attention of the House to what I consider to be certain prevalent fallacies which ought to be swept away, which must be swept away if we are to get the co-operative effort that is required, and if people are to react to their circumstances as they must react, if a united effort, which alone will save us, is to be put forward. The first of these general fallacies to which I shall make reference is the idea that there is somewhere some fund which can be diverted to increase the workers' reward. It has become a commonplace that earnings must be justified by production, but you can go on saying that sort of thing again and again, and make no impression unless you first clear away the fallacy to which I have referred.

These are fallacies that keep cropping up, and not in one quarter only. After the publication of the White Paper, I think it was the morning after, I was horrified to find in a morning newspaper a short paragraph, headed "The White Paper," which placed in juxtaposition two statements drawn from the admirable statistical information in the White Paper. These statements were: £9 per week per head production required; £5-odd the average Wage. The natural inference from that is that there is a gap, that there is a large sum available from production, to supplement the wage of the workers, whereas, of course. out of it have to be met all the cost of maintaining capital, replacements, a large part of national taxation, all local taxation, rent and so forth. Voices are raised from time to time, and I was happy to notice the other day that the hon. Gentleman the Member for Stirling and Clackmannan, Eastern (Mr. Woodburn), who I think is Parliamentary Secretary to the Minister of Supply, speaking on this very subject, said this: It is a waste of time fighting about the division of these things "— He was talking about the division of profits— it is like two men fighting over a block of ice in the sun; it is fighting for something that is rapidly ceasing to exist. How very true, but that was one small voice; there is no apparent consistent determination on the part of the Government to deal with fallacies of that kind.

The next fallacy with which I wish to deal is the idea, still widely prevalent, that equality in the economic sphere is a good thing. If certain conditions are satisfied, equality is in fact economically a bad thing; it makes for stagnation. What becomes of the reward for special talent? How is the foreman or the manager to stand in relation to the ordinary worker? How is the skilled craftsman to be compared with the labourer? Is not the specialist to be rewarded at a higher level than the general practitioner? In Russia, where they can develop their theories, and put them into practice by the exercise of authority, the differences in the reward for different classes of the community are infinitely greater than any that are found here. That is a fallacy still widely prevalent, which ought to be swept away. May I quote a stanza from long ago—from Shakespeare: Take but degree away, untune that string, And, hark, what discord follows! each thing meets In mere oppugnancy: The bounded waters Should lift their bosoms higher than the shores, And make a sop of all this solid globe. The third point on which I want to touch—and this is a particular concern to the Chancellor of the Exchequer—is that capital must have its due reward. Unless that is realised, the Chancellor will be under constant pressure from those who see in the cheap money policy, to which I will refer later, only the development of a process designed to end in the elimination of the just reward of capital. The Chancellor knows very well that, unless he ensures that capital has its due reward, there will be a speedy end to the accumulation of savings. All his appeals to the people, to which they respond so very readily, will be in vain.

Finally, there is the supposed conflict between the national interest and the profit motive. I shall find it more convenient to deal with that at a later stage in my speech.

But, on all these points, there are les sons which have got to be rubbed in, in season and out of season, and hon. and right hon. Gentlemen of the Socialist Party are best qualified to undertake that task, because the fallacies to which I have been referring, and which are so prevalent, have come with the development of Socialist doctrine. What we have to do is to get certain basic principles and facts so clearly into men's minds that they react unconsciously in the right way. Unless that can be done successfully, I venture to say that Socialist democracy will either develop on totalitarian lines, or will give place to competitive individualism—and I do not know which of those alternatives would be the more distasteful to right hon. Gentlemen opposite. Therefore, I say that the first essential, to which no reference is made in the White Paper, and to which no reference was made by the right hon. and learned Gentleman in his speech yesterday, is, somehow or other, to get rid of fallacies of the kind to which I have called attention, and to get people to think soundly on those basic questions. If that can be done, nobody will benefit more from the process than the trade union leaders.

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