WAGES (TEMPORARY REGULATION) EXTENSION BILL. (Hansard, 15 May 1919)

§ VISCOUNT SANDHURST
My Lords, I ask your Lordships to give a Second Reading to this very short Bill, which is really to extend for a further period of six months the Act passed last November. The object of that Act was to stabilise wages in view of the arrangements being made between employers and workmen. I do not think I need repeat what I said on that former occasion; but I might say that the original Act has turned out to be an extremely valuable instrument, and many arrangements under it have been made. On the other hand, owing to demobilisation and other causes, there are still some trades which have not been able to settle matters for the future; and consequently at a meeting of the Provisional Committee of the National Industrial Council of representative employers and trade union officials—a body consisting of thirty from each side—a unanimous conclusion was arrived at to recommend that the original Act be extended for a further period of six months. No complaint has ever arisen out of the proceedings resulting from the Act; in fact, it has really been of great benefit indeed; therefore I ask your Lordships to be good enough to give this Bill a Second Reading.

§ VISCOUNT MIDLETON
My Lords, I do not rise to oppose the passage of the Bill, but I would like to point out that the proposal to extend the original Act for another six months is really a very dangerous 690 one. That measure was originally introduced as one of emergency due to the sudden stoppage of hostilities and to the consequent effect on the position of very large numbers of persons employed in special industries connected with the war. What I want to point out to the noble Viscount, and to hear from him some explanation about if possible, is this: A large number of industries have been under the control of the Government. That control has necessarily lapsed, with consequent effects on prices modified by the withdrawal of the subsidies which the Government had given.
Let me give to the House an instance. I will take the production of ore. The Government fixed a price which made the production of ore unremunerative, and then proceeded by subsidy to compensate the producer for the loss at which he would otherwise have been. But those subsidies have now very properly come to an end. Take again our steel and iron industries. The Government, having fixed a rate of wages which did not enable the manufacturer to produce at a price at which he could reasonably expect to sell, proceeded to compensate him by a subsidy in the same way. Now, my Lords, how is it possible to suppose that our industries for export, on which we depend for our resuscitation after the war, are to be prosperous if you continue to fix the rate of wages, and withdraw, as I am now glad to think you have withdrawn, subsidies which enable the manufacturers to produce or appear to produce more cheaply than they are able to do. Those are two points on which we require to be re-assured.
Another point is this, that the effect of this Bill, with the unemployment donation which has been saddled on the country without the authority of Parliament and by the mere ipse dixitof the Minister—the effect together has been to produce an amount of unemployment which is really at this moment a great danger to the country. If you fix so high a rate of wages—a rate of wages which is entirely fictitious, because it is inconsistent, unless the output is greatly increased, with the industry getting orders necessary to maintain it—and on top of it, and guided by it, you proceed to fix a rate of unemployment pay which prevents those receiving it from being willing to receive a rate of wage which employers can afford to offer, you have this extraordinary position, that 691 you may go into any industry you like, iron or steel, or agriculture, or domestic service, or the building trade, or any other department of trade, and you find a shortage of labour. Production is extraordinarily dear, and at the same time you have nearly a million of persons waiting about with unemployment pay, either unwilling to take employment or unwilling to take it at a price which those who wish to employ them can afford to pay.
What I would point out to your Lordships is that the longer you continue this provision under this Bill for regulating employment at so high a rate, and continue the unemployment dole, which I venture to say has been really a great snare to us since the cessation of hostilities, the larger will be the number of people who are unemployed, because those who are willing to employ them at a reasonable wage cannot afford the rates fixed by the Government. That is the conundrum which I think the noble Viscount has to meet, and I do assure hint that it will be really impossible, without most serious debate, to continue this measure for another six months. For the present hostilities are not yet absolutely passed by. The state of demobilisation is incomplete, and there is some case no doubt for a belief that circumstances are not sufficiently assured to enable us entirely to dispense with the shackles of Government control; but I should like to see this Bill for three months rather than for six, and I think if the Government would only approach the matter from this standpoint, and at the same time limit the really great evil of the unemployment dole, they would help to restore the country to normal conditions to a degree which under this Bill they will I am afraid find impossible.

§ VISCOUNT SANDHURST
I may, perhaps, say a word in reply. My noble friend the noble Viscount has traversed a considerable economic field, and I do not wish to be disrespectful to him in saying that it hardly seems to me that on my Bill the question of the subsidy comes in, or the unemployment question. I well remember his speech last year, when he advised that the Act should operate for three months instead of six, but at the great meeting when both sides of the question were represented the feeling was that six months was too short a period rather than too long. The object of the Act, as perhaps I may repeat, was to 692 reassure the workmen that their wages should not drop owing, we will say, to demobilisation or other causes—to give them confidence that wages would not drop while possibly the cost of living was not decreased. As I said in my very few remarks at the beginning, the success of the Act was so great that at that meeting it was unanimously desired by employers and employed to recommend that it should be extended for the period named in the Bill.