Lords Sitting of 21 March 1923

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
CALEDONIAN INSURANCE COMPANY BILL. [H.L.]
Read 2a.
THOMAS CHESHIRE AND COMPANY. LIMITED (DELIVERY WARRANTS) BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.

THE EASTER RECESS.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, with your Lordships' permission, I desire to say one word in respect to an answer that I made to my noble friend Earl Beauchamp a few days ago, with regard to the Easter adjournment. I think your Lordships will remember that it was the intention of the Government to ask the House to sit until Thursday of next week, and then adjourn until April 10. Since that statement was made, however, we have been informed that there is no judicial business arranged for your Lordships' House before April 17, and it also appears from an inspection of the Order Papers that there is no other business for the preceding week, and the Government thought perhaps that in those circumstances it would not be considered in any way improper if we did not assemble until April 17. Therefore, with the permission of the House, that is the Motion for adjournment which will be submitted.
THE EARL OF BIRKENHEAD: A very welcome announcement, I think.
THE MARQUESS OF SALISBURY: I ought perhaps to say that between now and the adjournment some question of public business might arise which would necessitate our making a change, but the period of adjournment will probably be as I have stated it.

AIR STRENGTHS OF FRANCE AND GREAT BRITAIN.
THE EARL OF BIRKENHEAD THE EARL OF BIRKENHEAD rose to call attention to the relative air strengths of France and Great Britain; and to move for Papers. The noble Earl said: My Lords, the Notice which stands in my name on the Paper raises a subject of immense importance, but I am anxious that there should be no misunderstanding as to the motives that have decided me at this moment to raise it, or the tone that it is my desire to lend to it. Quite obviously the implications of the Motion are not directed against this Government, because they could be retorted very effectively against the late Government. Still less are they directed against the noble Duke (the Duke of Sutherland) who answers in this House for the Department and of whom I hear on all sides that he is devoting himself to his new duties with the most praiseworthy assiduity. The question is really one of the utmost public importance and one which has changed its aspects very largely in the last two years and not inconsiderably in the last few months. And it is upon the larger question of national and imperial policy, involving, as I hope to show it does, the ultimate question of Imperial and national security, that I invite the attention of the House to the figures which I anticipate will be disclosed by the reply which the noble Duke make on behalf of the Department.
I suggested a few moments ago that, if there has been neglect, if there has been lack of foresight, there was no question of placing that upon this Government or this Ministry, and it would be extremely unfortunate if the importance of the matter were in any way obscured by a tendency to recrimination for which, on the whole, I think the facts afford little support. We are well aware of the circumstances under which this war to end war concluded. We remember the dreams that were dreamed; we remember the hope that was entertained that with the support of the United States of America the League of Nations would address itself to the problems of preventing wars for the future with a zeal, an efficiency, enthusiasm and authority which, alas! can no longer he looked for and will never evidently be attained until there is a real adherence of all the nations of the world

471
to its counsels. It was in that mood that when the Armistice came this people and the Government which was responsible for the safety of these Islands addressed themselves to the task of deciding how and when, in what measure and with what degree of completeness should they extricate themselves from the gigantic financial, naval and military commitments in which war waged upon the scale of this war had involved them.
Whatever criticism upon other points may be directed against the people or the Government of this country, no one can say that they fell short of giving every conceivable pledge to civilisation and to the world as a whole of the genuineness of their desire that the victory which had been gained should coincide with a general and an immense diminution of military and naval charges throughout the world. It has always been the spirit of this people—a pacific and not a military people—that while it was prepared to make any effort and undergo any sacrifice while the struggle still continued, it was not prepared, it never has at any moment of its military history been prepared—and I do not argue here whether the quality is a defect or a strength—to continue upon a large scale military exertions when the immediate and evident necessity for those exertions had disappeared.
And so it came about that with the Armistice we were the first country in the world who gave that pledge of our conviction in the coming peace—the peace which we hoped had already come—by dissolving, almost as rapidly and almost as magically as we had created them, those great Armies which had played so great a part in conquering Germany, which, almost unassisted, had defeated the Turkish Empire, and at the same time had won unfading laurels in the campaigns which followed upon the occupation of Salonika. One clay this country was represented by mighty Armies, consisting of millions of troops, and then, almost in a month, they were disbanded, and from the military side we were left in the position for which the Government and the people in this country at that time had deliberately made themselves responsible.
The consequences to-day are well-known to your Lordships, and I make a passing observation upon the purely military
472
topic. At present the peace-time establishment which is contemplated as being permanent by the French nation is more than twice the peace-time establishment for the Army which, with our immense and far-flung responsibilities, all Parties in this country have consented to as reasonable. One must, of course, treat these topics—the Army, the Navy and the Air—as co-related topics, none of which can be examined or dismissed in detachment. Such was the policy which we adopted in relation to our Army. Let me make one observation on the subject of the Navy. Lord Balfour, the distinguished representative of this country at Washington, reached a settlement with the representatives of the United States which commended itself to the democracies of both these countries, and we have already, alone of the signatories of that Treaty, carried out the obligations to which we signed our names conditionally upon the other co-signatories equally discharging that which they had undertaken to do.
The First Lord of the Admiralty, in a speech which he made in the House of Commons a few days ago, spoke of this as a great act of faith, and did not dispute that it involves a serious risk, and perhaps, at the moment, a risk not completely measurable. I confess that I have less anxiety, though I have some anxiety, in relation to the contemplated reductions in the Navy; because, looking at the politics of the world, attempting to form an accurate picture of the political anxieties and risks of the world, I do not descry at the moment, or within a period which cannot be dealt with by later Estimates, the risks to which the existing strength of the British Navy are likely to prove inadequate. But considering, as I have already said, how vital it is that these topics should be considered together, your Lordships will not take it amiss if I remind you that we, who were the first to reduce the Army, who now have reduced the Army almost to pre-war establishment, in spite of all the dangers which menace Europe and ourselves to-day, have equally, in the words of the First Lord of the Admiralty, undertaken a grave risk and exhibited to the world a signal act of faith in relation to the Navy.
Now I come to the immediate subject of this Notice. If any noble Lord thinks it worth while to say to me that in the

473
four pitiful years after the Armistice in which we were responsible for the Government of this country we assented to a weaker Air Force than the safety of this Empire rendered prudent, I should feel less able to make a convincing reply than on most of the indictments to which the late Government was habitually subjected. I can at least say this: that I sat upon the Cabinet Sub-Committee which tempered and mitigated the edge of the Geddes axe in its application to the Navy, the Army and the Air Force, and, if I am not submitting myself heedlessly to the censures of those who criticise anyone who directly or indirectly affords an opportunity of anything which took place ever becoming known in any of these discussions, I will at least make bold to say that it will be none of my colleagues who sat with me upon that Committee and none of the representatives of the Air Force who will say that in those discussions I ever used an argument in the contrary sense or ever omitted an opportunity which might secure a little more from the assaults of that all-powerful axe.
I think we must all feel that any Government—the late Government or the present Government—would have been in this matter in a situation of extraordinary difficulty. The people of this country had made immense, sacrifices, financial sacrifices and others, in the course of the war. There was a reasonable and vehement desire that there should be great economies introduced into the public service, and Session after Session, almost month by month, as well in another place as here, eloquent denunciations were made of the extravagance of the Government. And we happened to find ourselves almost alone of all the belligerent nations concerned in the war, quite alone of all the European belligerent nations concerned in the war, in the position of a nation that was taxing itself upon an adequate basis in order to discharge the burdens of the war. We found ourselves equally alone in a still more singular respect among the nations of Europe inasmuch as we conceived that at some time or other we should probably have to pay the money which we had borrowed and we admitted that we owed. Realising those dual facts with co-related implications we imposed an adequate burden of taxation, and the
474
present Government have followed, if I may say so, our example in that respect and among the economies which have been involved has been the economy to which I am virtually directing attention in relation to the Air Service.
One other observation, I think, should be made at this stage, and it is this: that at any given moment whether you are dealing with military, naval, or air strength the case is to be largely determined by the diplomatic and political situation of the moment. When the Armistice came all of us were familiar with the position of Germany, with the burdens which the Peace Treaty imposed upon Germany, and with the restrictions upon her development of military and naval strength; so that on the side of our late enemies there was no anxiety. Vis à vis our late enemies the country and the Government could afford to take great risks and did take great risks. We had then to consider the case of our Allies. A man naturally does not, at the conclusion of a glorious victory, envisage closely his conceivably possible protective necessities in relation to those by whose side he has fought a great war and side by side with whom he has attained to a glorious victory. I will not say more than this upon a subject of obvious delicacy.
Four years have passed since the Armistice. We have not gained one yard that I can see in the direction of that European settlement, in the re-attainment of tranquillity upon the Continent of Europe, which was the dearest hope of all of us four years ago. What is the situation at this moment? I attribute in this connection no blame to anyone. I merely record facts nakedly and without heat. During those four years a series of the gravest international problems have presented themselves month by month for adjustment between those two great Allies who shared common counsels while the war lasted. The greatest of all those problems has dealt with the subject of Reparations.
It was thoughtlessly said by many who at that time were not so well aware as we were of the problems represented by the Reparations question, that the late Government was faulty in its conceptions, irresolute in the manner in which it attempted to translate those conceptions into action, and, above all, that it failed to give that constant support to

475
our Ally, France, which the history of their military association should have rendered easy. I will say no more upon that subject than that some months have elapsed since we discharged the burden of that responsibility, some months have elapsed since we were exposed to those censures and since those who replaced us, I think a little under-rating the difficulties of our task, put foremost among their political goals as we had really done during the whole of that time—put foremost among their political goals at the Elections—the maintenance of a friendly relationship with France.
The only observation I am bound to make further upon that subject is this. Nearly five months have elapsed since the present Government inherited our responsibilities. I do not think I exaggerate when I say that possibly and, as I think, almost certainly without any blame that is imputable to them, this at least is true, that our relations with France have not become better than they were a month before the late Government left office. I make it my business to follow very closely the French Press. I cannot remember a moment since the Boer war in which the tone of that Press was, unhappily, less friendly to this country than it is to-day. I make no attempt to decide where he the demerits or the merits of this quarrel. It is our duty to note and to analyse facts. It has, unhappily, proved to be the case that the French Government conceive that they have not received the support which they ought to have received from this Government in carrying out their policy in the Ruhr. It is, unhappily, the fact that they think that the failure to give that support has involved some kind of breach of the general assurances of friendship and good feeling in which this Government, like the last, has not been found wanting. In both cases I am persuaded that they corresponded with the genuine desires of the people of this country.
What is the existing situation? It is extremely relevant, as I will point out in a moment, to the subject of this question. The existing situation is that France—and I do not argue here whether she be right or wrong—has gone into the Ruhr alone, that a British Army finds itself at Cologne in a situation which it is extremely difficult to distinguish from the situation of blockade; that the
476
whole trade of British merchants with Germany is at this moment interrupted and subjected to every conceivable kind of harassment and annoyance. The relevance of these facts does not, of course, he in any desire upon my part to initiate at this stage a general discussion as to the relations between France and this country. There is no sensible Englishman—and I should hope there is no sensible Frenchman—who does not realise the immense and permanent disaster for the Continent of Europe if it be found impossible to restore the harmony which existed. But we have a duty to our own people. The Government and Parliament have an equal duty, and I have recorded this change in what I call the international European atmosphere because it is vitally important that everybody who is responsible in any degree, great or small, for the security of these Islands should consider that security, whether you are dealing with the Army or the Navy or the Air, in the terms of the new diplomacy and not in the terms of the old diplomacy.
What is the position? The noble Duke will tell your Lordships with more authority than I, of course, can claim what is the exact situation, but I have examined with all the care of which I am capable the statement made by the Secretary of State for Air in another place about the actual present strength in the air of Great Britain compared with the strength of France. The noble Duke will tell me if I am wrong in any particular in the extracts that I have taken from the statement made by the Secretary of State for Air. If I understand aright the information given by him in another place, it is to the effect that at the present moment Great Britain has 371 service machines, and France has 1,260 service machines. In 1925, if the present programmes are maintained and not modified, Great Britain will have 575 service machines, and France 2,180. The numbers of squadrons at the moment are: Great Britain 34, France (in the words of the Secretary of State for Air) about 84.
We are not, of course, in attempting to understand this question, concerned alone with numbers. We have to consider what is the necessary employment of those numbers having regard to the commitments of each of the two countries, over

477
what parts of the world the obligations of Great Britain extend, and over what parts of the world the obligations of France extend. Let us examine the question for a moment from that point of view. If you take the disposition of forces for home defence Great Britain has assigned five squadrons, of which four, I believe, are bombing squadrons, and only one a fighting squadron. I believe at this moment there is only one fighting squadron, but the noble Duke will check my statement on this point. There exist at present in France available for home defence, available for any sudden purpose, forty-four squadrons, of which thirty-two are fighting squadrons.
We have distributed elsewhere over the world twenty-nine squadrons (making up the aggregate number which I gave your Lordships) while the French have about twenty. Your Lordships may be interested to hear, by way of reminder, where our twenty-nine squadrons, which are distributed elsewhere, are placed. In Egypt and the Near East there are, I think, eighteen; in India there are six; four are allocated to the Navy and five to the Army. I will make an observation, if I may be allowed to do so, upon the most disquieting state of affairs which is disclosed in that comparison in a moment, but I will first complete the information as it is in my hand. In 1922 we built in this country 200 aeroplanes altogether for civil and military purposes. France built in 1922, 3,300, of which 3,000 were military and 300 civil.
I cannot conceive that any one of your Lordships will not think that those figures disclose a most alarming state of affairs. I do not think it is useful or helpful to enter into any question of responsibility in the past, though I would not shrink from any share of it which I, in common with others, ought to bear. But what all of us ought to do is to consider the situation in the present and examine our responsibilities for the future. I confess it never occurred to me that a nation which owed such immense sums of money would find it possible to construct these enormous armaments at a moment, as I understand, when there is not the slightest encouragement to suppose that one penny of that money can be paid either at present or in the near future, or will be paid either at present or in the near future. But
478
such apparently is the situation. The knowledge that we have payments to meet which we must meet, and which we are meeting, in the United States of America, perhaps deflected all of us too far into the paths of economy in dealing with the Air, but surely we must examine the consequences of the figures which I have disclosed from the point of view of what has always been the ultimate strategical conception of the British Empire.
Why is it that for centuries now this country has concentrated, and has successfully concentrated, against one great conqueror after another: Philip of Spain, Louis XIV, Napoleon, the Kaiser? The answer, of course, is known to every one—that it has been the view of the statesmen who have been responsible for the safety of maintaining these Islands, that wholly special obligations and risks were imposed upon us by our insular position, just as that insular position has afforded us the compensation of greater security. But what so many people are apt to forget is that this very vital function which was discharged for all those years in the past by the Navy must, so far as the greater ambit and range of it are concerned, be discharged in the future by the Air Force, and as we could not claim security for the people of this country in the past unless our Fleet was adequate, so to-day we are entirely lacking in our duty to the people of this country unless we are able to afford them the guarantee of an Air Force which can defend them from attack.
There is no case here for offence on the part of any other Power. No noble Lord takes offence because the French are building and have built this immense armament. No one took offence in the past. It was found possible in the past, without impairing diplomatic friendships, to discuss year after year the adequacy of our Navy to protect us, having regard to the strengths of existing Fleets, and year by year, without offence, Ministers in this House and on the Government Bench in the House of Commons compared capital ship with capital ship, destroyer with destroyer, and submarine with submarine. International life would be alike impossible and intolerable if it were not reasonable, without the slightest offence on one side and the other, for nations to discuss the terms of their fundamental national security. What is

479
the situation to-clay? The situation upon its graver side is that there are five squadrons, with one fighting squadron, available to-morrow for the defence of these Islands, as against the thirty-two fighting squadrons and thirty-two bombing squadrons of the French.
It is said by some, though I have the greatest doubt as to their accuracy, that there are great German Air preparations going on at this moment. I can only obtain information on these topics by private channels, but I have made it my business to use the best available sources of private information I have in the shape of officers who have recently had an intimate knowledge of Germany, and the reports made to me are that these statements arc most grossly exaggerated; that there is no German Air menace at all at the moment, and that industrial and other circumstances make it quite inconceivable that in the near and approximate future—and by "approximate" I mean a period of about two years—there can be any menace of any kind at all from Germany alone in the air or from Germany taken with Russia in the air. If the noble Duke thinks it right to make any observation on this point I should welcome it, as I have no doubt many of your Lordships would also.
If that is true, the situation becomes even more alarming, and I shall be asked, and rightly asked, as I have taken upon myself the responsibility of raising this subject, what it is that I recommend. However unofficial a critic may be, he is bound to form a view and to state that view. I do not for a moment suggest that it can be done this year. It is not for me to say what it will be possible for this Government to do in the next twelve months. That they ought to do something more, and something considerably more, than they are at present contemplating, I am quite satisfied, and I have little doubt that the growing volume and education of public opinion in this country, even if they are unwilling—and I have no reason to believe that they are unwilling—would drive them along the path of added security. But looking to the future, as anyone who claims to speak at all about strategy must do, what is the larger policy? I say plainly that this country can no more be content in the next three, or four or five years with a position of inferiority in the air than it could be content with
480
naval inferiority in the years which preceded the outbreak of war in 1914. Nothing else is safe, and it is in the terms of safety, and safety alone, that Governments and Empires exist.
Upon what possible basis can it be said that we are to be content with less than a one-Power standard? Is there any conceivable necessity for a neighbour of ours, so close to us and threatened by no one, to build up remorselessly and constantly a strength in the air in circumstances which can make it possible that that strength may be directed against us? Will any noble Lord say that he would take the risk at a moment when he was responsible, of letting the fortunes of this country depend upon an international relationship which has varied, as your Lordships know, over and over again during centuries and even in decades? I do not believe that the sane and sober opinion of France will refuse, when the long view is taken and the last decision is reached, to range itself side by side with all that is sober and moderate in English opinion in carrying out the view, which every one of your Lordships holds, that the continual co-operation and warm friendship of France and England are necessary for the civilisation of Europe and the restoration of the world. While I say that plainly, and while I would make any sacrifice to carry it out, I say equally plainly that, friendly or unfriendly, I do not believe it will be found possible for any Government in this country to accept any standard which is lower than the standard that this country in the air shall be at least equal to any foreign Power.
THE UNDER-SECRETARY OF STATE FOR AIR (THE DUKE OF SUTHERLAND): My Lords, I have purposely reduced the length of my statement in reply to the noble and learned Earl in certain details with which the Secretary of State dealt fully in the other House last week, but none the less the Air Ministry is very grateful to the noble and learned Earl for raising the subject to-day. Let me deal first with the numbers of machines he quoted as having been given by the Secretary of State in the other House as regards both ourselves and France. His figures for British machines were quite correct; that is to say, 34 squadrons and 395 machines; but the French figures he gave were not quite correct. According to our latest information the French

481
figures are 140 squadrons and 1,260 machines—I think the noble and learned Earl said they had 84 squadrons. One hundred and eleven of these French squadrons are at home and twenty-nine overseas. I think he said that the number of British squadrons at home now was only five, but the number is ten, and will, I think, be fourteen, because, although there are only five purely home defence squadrons, there are five other squadrons attached to the Army and Navy and working with them, which makes ten squadrons in all, together with four further squadrons which would be at home but for the fact that they are at the present moment at the Dardanelles. By 1925 the British machine figures will have been increased to 575 at the present rate of expansion, and the French machine figures to about 2,180 on the assumption that no alterations are made in the programme of expansion, which has still to pass the French Chamber and Senate.
As regards personnel, the British strength is at present approximately 29,000 in all ranks It is not possible to give the comparable French figure since a large number of the personnel employed on ground duties in connection with the French Naval and Military Air Services—for example, transport work, personnel for wireless, recruiting, provision of rations and clothes, medical services, etc.—are found from the French Navy and Army. This category of personnel is not budgeted for separately in France, or otherwise distinguished from Navy and Army personnel generally, so that it is impossible to assess their numbers with accuracy. Excluding this category, the combined strength of the French Naval, Military and Colonial Air Services is approximately 38,000, but it is not possible to give personnel figures for the strength of the French Air Services on completion of the programme of expansion.
The noble and learned Earl may remember that the Cabinet of the late Coalition Government, of which he was a member, laid down the general axiom, after considerable discussion and consideration, in 1919 soon after the war, to the effect that in view of the general condition of Europe, it was unlikely that there could be any major war for ten years, or before 1929. In 1922, however, they decided to increase our Air Forces by fifteen regular squadrons and five
482
auxiliary squadrons for home defence between 1922–25, at a rough estimate of £2,000,000 per annum. If the present Cabinet decide that in their view, since that opinion was expressed, that axiom regarding a major war no longer holds good, and if the Committee of Imperial Defence, which is now reviewing the whole question in every light, also hold the same view, and consider that present circumstances warrant a larger Air Force, it is quite possible that a larger force will be raised. If it is decided to adopt a one-Power standard in the air with France, on the naval analogy, it would mean an immediate increase over our gross Estimate for 1923–24 of about £5,000,000, but it would mean an eventual increase of £17,000,000 per annum, in order to keep pace with France, if she continues to expand as at present proposed.
I quote France only because she has the largest Air Force in the world at the present moment, and because the noble and learned Earl who framed the Notice especially quoted France therein. I do not quote comparison with her because I believe there is any remote possibility of any feeling of hostility arising between ourselves and our friendly Ally. In the event of this increased expenditure becoming necessary, which, on this basis, would amount to an additional £5,000,000 over the projected expenditure for next year, making a total of £23,000,000 per annum, in addition to a possible capital expenditure of £15,000,000, it will be necessary to see whether reduction can possibly be made in other Services to correspond to this increased cost.
Furthermore, it must be borne in mind that three-quarters of the total French Air Force is kept at home in France, while nearly two-thirds of our squadrons have at present to be permanently overseas, leaving only fourteen squadrons at home. This is chiefly due to the geographical position of the British Empire. It must be remembered that the Mediterranean, Egypt, Palestine, Iraq and India at which twenty squadrons of the Royal Air Force are normally stationed, he at a far greater distance from the British Isles than Algeria, Tunis, Morocco or Syria do from France, and the transport costs in respect of these twenty squadrons are in consequence much heavier, to say nothing of the large working margin of personnel,

483
1,500 in all, which has to be retained for reliefs for these distant theatres. Moreover, the fact that so large a proportion of the Royal Air Force is stationed overseas under active service conditions means that training cannot be carried out in squadrons, but separate flying training schools have to be maintained.
The noble Earl must also remember that the French have a great and permanent advantage over us in regard to the cost of their personnel, as under the system of conscription they are enabled to save a great deal on such items as pay, allowances, rations, clothing and works. This also makes it possible for them to draw on the pick of the young mechanics in civil engineering shops and factories, and consequently does away with the necessity under which we he for maintaining large instructional establishments for the purpose of training raw personnel from the beginning after recruitment. From the point of view of national security another important factor, to my mind, is the keeping alive and encouragement of the aircraft industry in this country, so that in the event of war an immediate expansion could be made in the number of machines required for military service.
This can be made possible only by encouraging civil aviation, by the standardisation of types of machines and by large orders for military machines in the immediate future. The encouragement of civil aviation will also help from a military point of view to the extent that the pilots who take part in this work will be asked to join the new reserve that is being formed for military pilots, and that their constant practice in flying will keep them to a certain extent in training, although some additional training would undoubtedly be required to make them competent military pilots. Opinions differ on the point of whether civil aviation machines could, in time of war, be adapted for bombing and other military purposes. This could undoubtedly be done to a limited extent.
To turn to the noble and learned Earl's remarks on the position of Germany. France no doubt feels that she is fully justified in having a large Air Force as being the first line of defence against an air attack upon both herself and Britain on the part of a Russo-German combination of the future.
484
While our policy is still to remain in Palestine, Iraq and the Middle East, it is undoubtedly cheaper to control those countries from the air than with the Army. It would not pay us, while our policy remains the same, to withdraw our Air Force from there to strengthen the home Air Forces, and to substitute Army control in those countries, as it would mean a greater added cost on the Army Vote, and we could not even then remove all our squadrons from that part of the world to this country, as a good number of them would have to remain in the vicinity of Egypt, the Mediterranean, and India. The foundations which we have laid at present, which are necessary for the building of our present modest Force, would, with comparatively slight additions, suffice to support a Force of two or three times its dimensions, and the more squadrons and machines we build up to the French numerical standard, the cost per squadron and machine would progressively diminish.
In conclusion, if we wish to raise the Royal Air Force to a one-Power standard, on the basis of the present French strength, we shall have to face immediately an expenditure of £23,000,000 per annum; whilst, if and when the full French programme of expansion is carried into effect, this figure will have to be increased to £35,000,000 per annum. I am very glad that the Committee of Imperial Defence is enquiring into the whole problem, so that we can be satisfied, before the expenditure is undertaken, that it is really necessary for the Empire at the present time when the need for the utmost economy is so imperative. I should like to assure the noble and learned Earl that we welcome this debate and the interesting speech from him, and I can assure noble Lords who may wish to speak that we shall take careful note of any helpful suggestion or criticism that they may have to offer.
THE EARL OF BIRKENHEAD: Will the noble Duke answer a question? He has not said whether the Air Ministry had any information that German building on a large scale was taking place. If he would rather not make a statement now, I will put down a Question later.
THE DUKE OF SUTHERLAND: Perhaps the noble Earl will put down a Question.
VISCOUNT HALDANE: My Lords, I have listened to the statement of the noble Duke with close attention. He has given us some materials, and in a form which is very useful, which we did not possess before, but on the main question I confess he has left me somewhat uneasy. The position which we are in is a position which seems to me to be inadequate, so far as home defence is concerned. I am talking of the Air Force just now, and in a few sentences I will tell your Lordships why I think so. I found myself, on some points, very much in agreement with the noble Earl who opened this discussion.
In the first place, you will never see far ahead with foreign relations. When I listened to the noble Duke referring to the General Staff proceeding on the footing that there will be no great war for ten years, I remembered that the last thing that the General Staff wishes to do is to meddle with political questions of that kind, and that what it means is: "If you tell us there is to be no war for ten years then we will prepare plans and Estimates accordingly." The General Staff, fortunately, has not, as part of its business, to deal with questions for which it is very ill-prepared. It is for the Government of the day to forecast these things, and the Government of the day cannot forecast them very much better.
Anybody who has followed, with any attention, the history of Europe for the last quarter of a century, and more, will see that the situation has varied from year to year. At times we have been on terms of great friendship with the Central Powers. At other times we have been on terms of great antagonism with them. We have gone from one side to the other, and we have done so because we could not help ourselves. Not we but the changing situation brought it about. Before the war it had ceased to be true that we had the advantages of splendid isolation. I had always thought that the real justification for the Entente was that British naval supremacy had ceased to be possible while we stood by ourselves. Continental Fleets were growing up, and a combination might very easily have come about, in which we would
486
have been outmatched. Therefore it was necessary that we should have sonic friends, who, at all events, would be neutral. It may be that that is one of the reasons for the adoption of the principle of the balance of power. I do not agree with the balance of power, but if other people set it up then a counter-balance of power proceeds to establish itself.
Fortunately, we are nearer a position of splendid isolation than we were before the war, but we have not reached it, nor has France reached it. It would be, I think, a very great misfortune if our relations with France became bad. France and ourselves depend on each other mutually for security. France needs our friendship for her security. We need the friendship of France if things are to remain peaceful. I am not sure that we do not need the friendship of France less than France needs our friendship, but on that question I am not speculating, nor attempting to measure the relative needs. I do say, however, that the situation is profoundly different from what it was before the war, and that it is the task of the Committee of Imperial Defence, if it does its duty, to estimate the real risk we have to face, and to deal with it.
My noble friend who opened the discussion very properly said that in considering this question you cannot take one arm in isolation from another. It is your grouping of arms, determined by your strategic necessities, which determines your strength. That is particularly true of some of the subjects which we have been discussing, and I think that this consideration has dropped a little too much out of sight. Supposing we were threatened by a Continental Power at this moment, what would be our weapon of defence? The first weapon is one which is never sufficient to prevent war, but which generally in the end decides it. I mean the economic question. It is very potent in the long run, but not at first.
The second weapon is the Navy. The great terror of the Navy to a Power which encounters a Power with a stronger Navy, is that that stronger Navy will not only destroy its trade and commerce but block the routes to its Colonial possessions, and make those possessions impossible to hold. There we are very strong, because, notwithstanding the reduction of the Fleet-which followed the Washington Agreement, the British Navy is still a very

487
powerful organisation, and it is permeated with a spirit of victory which is worth very many ships. Will that remain? I do not think it would be prudent, so far as I can judge, to reduce any further. I think we have got the Navy to a comparatively low point, but I agree that relatively to other Powers we still possess what is probably considerably the strongest Navy in the world.
I come to the Army. The Army is smaller than it was just before the war, but there is reason for that. Before the war it was necessary to have a small and highly organised Expeditionary Force, because of the need of defensive operations which you might have to undertake We could not defend the Northern ports of France unless we had that Expeditionary Force. But that is over now. Germany is no longer in the field, and the Expeditionary Force, although required for other parts of the world, is not required in the same way for a Continental war. Therefore I am not troubled by the Army reductions as I am by other things.
It is really when one comes to the Air Force itself that the doubt arises. I do not agree that the Air Force takes the place of the Navy; it is only to a very small extent that it can. To a considerable extent it takes the place that the cavalry used to hold with the troops. That has to be borne in mind in estimating what the real strength of our Air Force is compared with that of France. The noble Duke made a point which I thought was a good one, when he called our attention to the fact that a good deal of the French personnel was Army personnel which was employed for aircraft purposes. The French keep up a large standing Army, and that standing Army, according to modern requirements, necessitates the provision with it of an Air Force which will accompany it. That swallows up a good deal of the French personnel and the French matériel. Of course, that is so with us, too, but to a very much smaller extent; and therefore I suspect that if you investigated the figures you would find that a good deal of the difference is due to the difference in the size of the standing Armies of the two nations.
But that does not touch the other question of home defence, to which my noble friend alluded. With a large superiority in bombing squadrons a
488
foreign Power might come and work enormous destruction. For that, which is perhaps quite a small part of the general problem, a nation like this ought to be prepared. I do not say that I can form any opinion, or offer to submit any advice, as to what the Defence Force should be for that purpose, but at least the problem is a special one; and, as in itself it is not one which entails enormous cost, I think it is one of the points to which the Committee of Imperial Defence should give the closest attention: What chances have we of defending ourselves against a short-range expedition from the Continent, the purpose of which would be to attack, say, London? It is all very well to say that war is not likely. I do not think it is likely. I do not believe for a moment that France dreams of war with us; I do not think that the least probable. But at the same time I am also keenly aware that the whole course of history is a record of constant changes and sudden situations emerging, and that you cannot afford to leave out of account what the possibility of those situations may be. Therefore, just as we have always felt it necessary in times of perfect peace to keep up a strong Navy, so I think we require a Defence Force for that particular emergency which I have spoken of—a short-range attack of a destructive character on the shores of this country.
I have always noticed that there is a good deal of danger in making isolated reductions. I think armaments could be reduced very substantially on one condition, and that is that all the nations would agree; but if one country says: "We are going to reduce our armaments," and does so, such is human nature that it is not altogether a useful plan in its results. In international affairs the level of morality has always seemed to me to be below the level of the morality of individuals. There is not a very gentlemanlike spirit between the Chancelleries as a rule, and you cannot rely upon people not taking advantage of you, even when your intentions have been of the best and the purest. The result is that if you make sudden and rapid reductions, without seeing that your neighbours are prepared to make their reductions on the same footing and at the same time, you are not making for peace. It is a paradox that it should be so, but reduction of your necessary defences may be the way of leading to the greatest

489
extravagance, in bringing about situations where you have suddenly to recover yourself, and to resort to extravagant expenditure to do so.
I am not one of those who think that the problem is as difficult or as black a problem as has been suggested. We have emerged from a great war with an enormous number of very highly trained men. Before the war we had not anything like the number of highly trained men that we have now—and they are there. What we have to provide for them is the matériel and the plans for using that matériel. The rest probably could be organised in an emergency comparatively rapidly. That is true even as regards the Army. Although it has been reduced, everybody who knows about the Army is aware that there, is available—and their services could be got, as the National Reserve were got before the late war—an enormous number of people of the highest quality who are prepared to take their places in new formations, or to make up wastages in the old formations. Therefore I do not worry about the Army or the Navy; nor do I worry myself about those Air Forces which are required to go with the Army and with the Navy. But I do worry about the Defence Air Force, and that is why I am most anxious that in the coming inquiry concentration should take place on this subject.
Something has been said about Germany; questions have been asked about that country. I think we may put Germany out of our heads, and for a very broad reason. No country can raise a considerable Army, or a considerable Navy, or a considerable Air Force even, unless it has its Government, behind it. The German Government is not, in a position to raise any armaments, and the result is that no large amount of armaments can possibly be raised. I do not doubt that there is a minority of violent people in Germany who made profits during the war and objected to paying them over, and also a minority of violent people who still talk about war and the traditions of the past, and of restoring them. But what are they? A fraction; ten per cent.—not ten per cent. I speak after some inquiry and sonic investigations made on the spot.
Therefore you need not trouble about more than one Power. I think this is a
490
one-Power matter. With the United States it is inconceivable that we should have a serious war, if only because of the question of distance. Not only is there a diminishing risk, so far as one can estimate the tendency of the relations between two most friendly nations, but the distances are too great. But some Continental Power, if you did quarrel with it, would have the capacity to do you a great deal of damage in one respect, and one respect only—namely, that kind of sudden attack to which I referred, a bombing attack, it may be a mission of destruction undertaken with the design (I think a mistaken design, and one which would fail) of bringing terror to the people of this country. The people of this country are not easily terrified; they will endure. But we do not want them to have to endure, and we do not want to have a situation where we may, all of a sudden, have to create a Defence Air Force of this kind under circumstances which may look as if we thought war was actually on us.
It is far better to do two things; first of all, to work out your plans very diligently and very carefully, with the best military talent you can bring to bear on the problem; and then, in the second place, to go slowly to work in the way of building up reserves even more than in building up the actual machines and personnel. Before the war we were short of aircraft.. They had not been thought of so early as they were thought of in France and Germany. I was faced with the difficulty of providing them, and I remember well what happened. The manufacturers came crowding forward and said: "Let us build; it is only a question of money and we will produce plenty of aircraft." I saw admirable people, of great energy and great enterprise, the brothers Wright and others; but a little conversation with them satisfied me that, able as they were, they were mere empirics. And we found it better—it was done by the Government to which I belonged—to establish a branch of the National Physical Laboratory at Teddington, at which the late Lord Rayleigh presided over the best experts we could get in the country to work out the plans. We set up a construction factory at Farnborough close by, where these plans were translated into actual models to be issued

491
to the manufacturers for them to build from. The manufacturers did not like it, and there was great criticism of the Government for its apathy. But we were not apathetic at all, and we got the benefit of our arrangements afterwards.
I am sure this is the right plan, and that it is the plan to follow now. Do not rush into giving an enormous lot of orders for what you call standardised air machines. They are standardised to-day; to-morrow they are obsolete. There is no machine which changes more quickly than aircraft. If that is so, it is your study of these things and your determination of the plans that you really want that are vital to you for building up your reserve of strength. That reserve of strength will never be determined until you concentrate on that which is your real danger and the real point at which you are to avert danger, and, if I am right, that is the shortage in home defence. Therefore, my Lords, I conclude by saying what I said at the beginning, that it is on that one point, and almost only upon that point, that I feel the necessity of action, and that I think that we owe substantial thanks to the noble Earl who has introduced this subject, for having put it before us.
LORD CARSON: My Lords, considering the present situation of affairs it is rather extraordinary that there has been so little discussion in this House of our defensive forces and the great reductions that have taken place in them in recent times. And I do not know of a more profitable subject for debate at a time when men's minds are, for various reasons, most likely to be distracted from what is, after all, the very life of the country and of the Empire. Therefore I think the noble Earl is not only justified but has done a great service in raising this subject for discussion here to-day. When the noble Earl made, as he was entitled to make, a comparison with France, I am certain he had in his mind no feelings of hostility whatsoever towards that country. And I would preface my observations with the remark that there is nobody who has more sympathy with France in her present trials than I have, and I believe there is nothing that is of more importance in our international relations at the present moment than that we should be on the most cordial terms with our nearest
492
neighbour not only in our own interest and in theirs but in the interests of the general peace of the world.
I confess that I feel a great deal of disappointment at the statement of the representative of the Air Service in this House. He has not really challenged the case made by the noble Earl. He has explained that we have more squadrons abroad—in consequence of our responsibilities, about which I will say something in a moment—than was stated by the noble Earl. But when these figures which were given by the noble Earl are contrasted with the forces of France they must make us pause to consider whether the Government are really performing their duty towards the nation at present in relation to defence. The noble Earl was right in saying that you cannot consider this one Service by itself, and it is upon that point that I would like to ask a few questions and make a few observations.
During the war and at a very difficult period I had the responsibility of presiding over the Admiralty for some time. Nothing fills me with more alarm than the vast reductions which have been made and which are still being made in our naval programme. Two years ago, before I came to your Lordships' House, one of the last speeches that I made in another place was upon the Naval Estimates. At that time the Sea Lords, the advisers of the Government and of the Admiralty, warned the country that we had come down to the narrowest margin of security, and it was with great hesitation that they recommended the naval programme which was then put forward. What has been happening since? The naval programme has been going steadily down and down, and to-day I believe you have not even a margin of safety, or anything like it. I believe your margin of safety is a minus quantity as regards the Navy.
May I also urge this point, because it is very germane to the present subject. The great difficulty about the Navy and of cutting down the Navy is this. You cannot organise a fleet at a moment's notice. You cannot build ships in less than a very long time. You cannot even train a sailor in less than seven years. And there is something more than that. The moment you get rid of what I may call the expert organisation which has expanded our Navy during the whole history of this country, you get rid of

493
that impetus to research and towards progress in the building of warships which you can never revive, from the men in the shipyards to the naval architects and the personnel which was our greatest asset during the late war. If a war took place you would find yourselves utterly at a loss to know how, in any reasonable time that would be of use, to organise a Navy under those conditions.
I am not yet converted to the belief that there is at present any less necessity for a Navy, having regard to the nature of our Empire, than there was before the war. I am aware, of course, that the German Navy has disappeared. At the same time large Navies are in course of building elsewhere—you must not accuse one of hostility towards those countries because one mentions them—in America and Japan. It is all very well to say in the House of Commons that the scrapping of our ships is an act of faith. I have no more confidence in international politics than I have in home politics as to what may happen at any particular time. To rest the defence of this country on an act of faith is an error. If you have allowed your Navy to decline to a condition in which you have no margin of safety, arid in which it has not the power of policing even the seas of our own Colonial Empire, then it is obvious that you must, in some way or other, satisfy your conscience by setting up another arm of defence. Therefore we come back, as the only thing left, to the Air Service.
To my mind nothing could be more startling than the statement made by the noble and learned Earl (which has not been contradicted) showing the vast inferiority of our position compared with that of another country so short a distance from our shores as France. I pray heaven that France may always be our best friend, as we may always be hers, but that is not a thing, as the noble and learned Earl said, upon which you can always rely. While I am on the topic of the Navy and Air Service, there is one hint on which I should like some information. Before the war there was a separate Air Service for the Navy, and a separate one for the Army. There was a, friendly, patriotic rivalry between them which, in my opinion, was most healthy. Each struggled to become better than the other. I do not know in what position this country would have been if it had not been for the energies of the Admiralty
494
before the war in the organisation of its Naval Air Service. I remember sitting in the First Lord's room at the Admiralty and General Haig coming and discussing with me the question of what air forces could be lent without in any way injuring the Navy.
In the middle of the war the policy of having two separate Air Services was changed. I do not now say whether that was right or wrong, but in the middle of the war the Naval Air Service was put all end to That was done against the unanimous opinion of the naval experts who certainly convinced me that the change was a mistake. I hope the position in this respect as it existed before the war will be restored. The problems of strategy as between the air and the sea which were worked out when I was at the Admiralty were of the most vital importance, particularly in dealing with the submarine menace and with scouting, which is so important in coping with mines, submarines and dangers of that kind at sea. I think the problems of the seaplane and or the aeroplane are absolutely distinct, and require entirely separate research and experience. It is a grave error not to treat these two services as separate.
May I put forward an amateur's opinion upon a subject which I heard a great deal discussed when I occupied a particular post? It is in regard to the obtaining of personnel. Everyone knows that if a person becomes a member of the Air Service he cannot last longer than a certain time. What inducement are you going to hold out in order to secure a man who knows that after he has served a certain time he will be no longer required? What is to become of him? That is one of the problems which cannot be solved under existing conditions. If you had a separate Air Service for the Navy the same thing could be done as is done in the case of the submarine service. Officers go into the submarine service, and after serving a time they are, on becoming too old for that service, transferred to the larger battleships and so are able to maintain their position as officers. You will never be able to offer proper inducements unless you have a separate Air Service for the Navy.
I do not say that we have not in the Air Service to-day the finest and bravest men that could be got, but it is unfair to

495
them that after a certain time, having become obsolete just as ships become obsolete, there is no further prospect for them. I should like to have, if it be convenient to the Government, though of course it is not necessary to have it at this moment, a full statement from them of the relations betwen the Navy and the Air Service, and whether there are any proposals for the future in regard to the matters about which I have spoken. The more you reduce the Navy, the more necessary it is to substitute for what you have lost an enlarged Air Service as part of home defence.
I hope that we may have more discussions of this kind in your Lordships' House. I should not like it to be thought that I am not conscious of the financial condition of this country. It is very difficult for any man not to be aware from his own personal experience of the financial condition of this country. But if you are to give up your insurance and run the risk of your house being burned, you ought first to look at your commitments, and see whether you are justified in extending them, and whether you are right, instead of spending money on the defence of your own country, in wasting it in Mesopotamia and Palestine and other places where we have commitments which this country cannot afford. If we have to make a sacrifice, let us sacrifice our commitments in Mesopotamia and in Palestine, and abstain from entering into commitments elsewhere. Do not let us run the risk of imperilling what is our first consideration, the defence of our country, our Empire and our people.
VISCOUNT LONG OF WRAXALL: My Lords, I desire to support the views that have just fallen from my noble and learned friend. I do so especially for this reason, that coming to the Admiralty, as I did, at a later period than my noble and learned friend, it was my lot to go through the early days of the change, which had been entered upon before I went there, from maintaining our Naval Air Force under the Admiralty and having one under a separate Air Ministry.
As my noble and learned friend has said, the whole force of the noble Duke's reply is to be found in his concluding words, when he said that to make an Air Force comparable to that possessed by France it will be necessary to spend
496
£23,000,000. He made the bald statement, and left it at that. Nobody, either in this House or the other House, or in the street, can be unmindful of adding to the terrific financial burdens under which this country is suffering, and nobody will be in a hurry to press views on the Government when they know that the adoption of those views means increased expenditure. But I venture to ask whether all these questions have been examined by the Government in their close relationship one to the other. Have the financial position, the provision for defence and our foreign policy, been taken together as one question, which they really are, or are they discussed separately; and is that separate discussion one of the reasons for the situation in which we find ourselves to-day?
I do not suppose anybody in this House is less likely to advocate a policy of scuttle than my noble and learned friend and myself. After all, it is an old but salutary rule that you cut your coat according to your cloth, and if you cannot get more cloth you must alter the shape of your coat. Is the country doing this? Everybody talks about financial pressure; everybody knows that the burden of taxation is so tremendous that it is the one thing which is operating to keep trade back and to create unemployment and all those problems connected with labour which are so acute. Therefore nobody in his senses would advocate increased expenditure if it could be avoided, but I share the view expressed by my noble and learned friend that the House is deeply indebted, and the country will be indebted to-morrow, to the noble and learned Earl for raising this debate.
I consider that a mistake was made, a very great mistake, when it was determined to make the change referred to. Not only did you lose the advantages of healthy and desirable competition between the two great military services to provide a good and efficient service, hut you lost what is the most important thing of all. You were able in the Navy to offer to those young officers who were prepared to become airmen a complete career. When I was at the Admiralty this particular branch of the question was brought prominently to my notice. We held a series of meetings attended by the Sea Lords and representatives of the Air Ministry. The Air Ministry, naturally, said that they only wanted the young

497
men. As a matter of fact the actual age of a flying officer is between 19 and 30, or, probably, 25 and 26 years of age. It is not necessary to have had experience on board a man of war or at the Admiralty in order to realise that it is impossible for the Admiralty to lend men to the Air Service during the most important and receptive years of their lives when they should be learning the complicated art of the sea. It is even more impossible to-day, with your naval strength so greatly reduced, to let them go to the Air Force and acquire proficiency there and then return to the position in the Navy which they would have held if they had given those seven or eight years' service to the Navy. In addition you are committing a grave injustice to those officers who have remained on board ship and have acquired proficiency in the Navy. The position is so simple that it has only to be stated in order to show the difficulties of the case.
I believe I am right in saying—the noble Duke will correct me if I am wrong—that we are the only country in the world that has set up a separate Air Administration. When I was in Paris I discussed this question with the French Minister of Marine, who scouted the very idea. The United States have declined to do so, and I believe we are the only great naval and military country that has made this change. But what has happened? You set up a separate Air Force. We were urged by the Committee, who were responsible for the recommendation, to accept the view that the establishment of a separate Air Ministry would lead to economy. Whatever else it has done it has certainly not done that. The noble and learned Earl did not give the comparative figures of the cost of an airman in France and an airman in this country. I have not the figures, and I admit they are very difficult to arrive at because in France you have conscription as against voluntary service here, and the emoluments of the men doing the same work in the two countries must obviously be very different. Other conflicting facts make comparison between the two extremely difficult; but after making allowance for all this I think it wilt he found that France is getting her Air Force cheaper per man than we are getting ours. At all events they have a much larger force.
498
If we cannot find these extra millions it is no good talking about greater expenditure, still less is it right to advocate it if you are not prepared to foot the bill. I believe the financial condition of the country at the moment to be such that it would be impossible to impose extra burdens on the country. What is the remedy? Surely it is to review the whole situation. If my information is correct the Government have appointed a Committee—I am not quite sure whether it is a Committee of the Committee of Imperial Defence or whether it is a Cabinet Committee augmented by outside authorities—to consider what there is to be said for and against a proposal for a Ministry of Defence. Further inquiries, I understand, are going on relative to the powers to be possessed by the Admiralty mild War Office in regard to the forces.
I confess that I am a little dismayed at all these inquiries. You certainly want a more connected General Staff than you have had in he past, and we were bringing this together when I left the Admiralty—a naval staff that should represent not only the three Forces in this country but the Imperial Forces in all parts of the world, a strong naval staff to co-ordinate our military measures and to work out our plans of defence and offence for the future. That certainly is required, and the sooner it is formed in its fullness the better for the country. No doubt you want a Committee of Imperial Defence as a superintending body, but I venture to say that the Committee of Imperial Defence has lost some of its usefulness and power in recent years because it has been allowed to grow too big. It has become a sort of alternative Cabinet.
You have had at the Committee of Imperial Defence men who were, neither by the force of their official position nor by their training or knowledge, in the least specially fitted to give advice on these great questions of Imperial defence. What you do want is a small body composed of those who are the Ministers for Defence for the time being, the chiefs of the Navy, Army and the Air Force, if you have a separate organisation for it, fortified by two or three others, such as the Secretary of State for Foreign Affairs, the Chancellor of the Exchequer, and so on. You do not want a great body such

499
as you have now. I confess that, knowing, as I have the privilege of knowing, something of the Admiralty and of the Navy, I look forward with dismay to the time, if it ever comes, when you are to put over the First Lord of the Admiralty a Minister of Defence who is to be responsible for what is done in each Department.
The future may be productive of many men far greater than those who have lived in my generation. God grant that it will be. I suppose I have known most of the great men of my time and admired them. I believe there have been plenty of great men. But the future will have to produce far greater men than our generation has produced if you are going to find a man able in his own person to direct the work, energies and expenditure of our three great fighting Departments, the Admiralty, the War Office, and this new Department of the Air. I do not believe it could be done. I believe you want a Committee of Imperial Defence such as I have ventured to describe, small, powerful, well equipped for the work. I think you want to go back to the system under which the Navy and the Army controlled each its own Air Force.
I could keep your Lordships here for an unlimited time telling you the experiences that have reached me, and I have not heard them all nor one half of them. I could give your Lordships examples of the most deplorable character of the results of the divided control which at present exists as the result of having two Departments. I could tell your Lordships of the position of Commanders-in-Chief of foreign stations with wholly inadequate air forces under them, while the matter is entirely beyond their control and is left to the control of the Air Ministry. I am not going to trespass on your Lordships' patience with any such examples to-day, however. My object is only to say how cordially as one who was at the Admiralty later than he was, when these changes were going on, I agree with every word that fell from my noble and learned friend beside me. It is in no spirit of scuttle, of abandonment of our duties or surrender of our privileges in anything that we value, that I venture to urge that the situation must be reviewed in its entirety to-day, and that if we cannot do justice to our own people here at home we have no right to go on
500
wasting another penny in those parts of the world where we are spending so much, and spending with doubtful advantage to the people of those lands, and, so far as I can see, with no advantage at all to ourselves.
I share the view which has been expressed by other noble Lords to-day in hoping that no word will ever be said in these debates, however strongly we may feel, which would serve to give to France, our great neighbour and our splendid Ally in the recent struggle, the smallest idea that we are not determined at the cost of everything except honour to keep and maintain with her that friendship that has been sealed by the blood of those who fought on both sides in the recent conflict. That such a friendship should be broken I believe to be impossible, and I believe there are many people in this country to-day who would range themselves on the side of France and her recent operations in the Ruhr if they had an opportunity. But that is another matter. If we cannot pursue the policy that we are pursuing to-day and at the same time maintain for this country efficient forces for defence in the air, on sea and on land, because the money is not there, I beg the Government in a spirit of genuine friendship to review the situation as a whole and to take the country into their confidence at the earliest possible moment.
There is a feeling of anxiety abroad. There are many men in whose minds there exist doubts as to what the real facts of the situation are, and whether it is being really faced. That sort of feeling may well be kept alive in the country. It does not come from men and women who are hostile to His Majesty's Government: it does not come from men and women who are Little Englanders, or who believe in a policy of scuttle; it comes from men and women who are proud of their country's honour, and as determined to maintain it as any member of your Lordships' House. All they ask is that we shall realise that we do not possess the money, that we must not spend one penny in those parts of the world where duty does not call us to spend; and, above all, that we shall do everything, even if it involve serious changes in the system of administration, to take care that the forces we have are the best and

501
most efficient we can get, and are adequate for the protection of the liberty and lives of the people of these Islands.
VISCOUNT GREY OF FALLODON: My Lords, the Question on the Paper is to ask His Majesty's Government the relative strengths of the Air Forces of France and this country. I propose to keep strictly within the limits of the terms of that Motion, and I do not intend to make any observations on questions of naval or military strength, or, indeed, on matters of Imperial defence or of the defence of parts distant from this Island. It seems to me that the subject raised by the, noble and learned Earl this afternoon is that of the defence of this Island, particularly of the vital parts of this Island, and notably of London. It does not raise wide questions of Imperial defence, but it raises the very vital question of the defence of the heart of the Empire.
I am very glad that the noble and learned Lord opposite and the noble Viscount, who has just sat down took the opportunity of pointing out that, if a question is raised as to whether we, in this very place in which we are now, are not exposed to risks and dangers to which we have never been exposed in our history before, that is not a reason for not keeping within the smallest limits and reducing, as I think they ought to be very greatly reduced, our commitments abroad, other than those which are vital to the maintenance of the Empire. The speech of the noble Duke opposite, who spoke on behalf of the Government, really led straight to that point, because in giving the numbers of our Air Force he pointed out how very large a proportion of our exceedingly small Air Force had, at the present moment, to be kept in the Near East. A concrete illustration of that kind is worth a great deal. I am sure the country did not realise after the war—it was natural it should not realise, and it was natural perhaps that not even the Government should realise—than having won in the greatest issue of all history we were not stronger than we were before the war began. As a matter of fact we were left, after the war, with less strength for commitments abroad than before, and we have actually increased those commitments. I think facts such as these lead straight to the
502
point that, so long as we are in doubt, as we are to-day, about our safety at home, it becomes more and more imperative that we should reduce those commitments abroad, which can be reduced, within the narrowest possible limits.
I will not even fill the limits of the Notice on the Paper in the few observations that I shall make, because I do not propose to discuss our relations with France, which are undoubtedly raised by that Notice, and which are quite rightly giving cause for thought and anxiety. I hope your Lordships' House will have a debate on the Question. It cannot be until after Easter, I understand, partly owing to the condition of business and partly because the noble Marquess, the Secretary of State for Foreign Affairs, cannot be present in the House this week, owing to business, the importance of which we all recognise, in which he is engaged at the Foreign Office. I hope, however, that shortly after Easter there will be opportunity of debating in its largest and fullest aspect what is now going on in regard to the question of Reparations; and, of course, in debating that we shall debate it from the point of view of our relations with France, because what is proceeding now with regard to the Ruhr is a matter of anxiety to us, not only from the point, of view of the general effect which it may have upon the peace of Europe, but also by reason of the effect which it may have upon our relations with France.
I will only say with regard to France that I hope it is generally recognised in France that, whatever may be the case for the moment, in the long run French security depends upon friendship with Great Britain, and I wish it were more generally recognised than it is in this country that to-day, under modern conditions, our security depends upon friendship with France to a degree that it has never done before. That leads straight to a discussion of the Air Force. We were all brought up to believe that we were an island, and that being an island certain consequences followed, and that so long as the only weapons of offence were an Army and a Navy, the premise on which our defence was conducted was substantially true. That premise was roughly this: that as long as we maintained a Navy sufficient to keep the command of the sea

503
—by which we meant keeping the sea open for ourselves and making it impossible for our enemies—we might regard with comparative indifference the growth of land armies on the Continent. If Continental nations were building large armies, so long as we maintained our Navy in undoubtedly adequate strength we knew none of those armies could come here. Whatever else they might do, they could not land on our soil.
But a wholly new thing has been introduced by the development of aircraft. That premise of being an island does not apply to aircraft in the way it applied to armies. Air squadrons can come here. As a layman, I am not in a position of course to estimate the extent of the damage which can be done from the air, but I imagine that in the estimation of experts the amount of damage which can be done from the air is already very great, and is likely to increase. Aircraft are likely to become more and more powerful, and the damage they can do will be greater and greater as years go on. We have, therefore, to regard this question of aircraft as a new feature in the question of our home defence, raising a question with which we have never had to deal before, and which cannot be met by the old axiom of the supremacy of the Navy only.
Well, it really is, to state one aspect of the problem, but one which brings it home to people, a problem of the safety of London. An Air Force is something which, as I understand, can be put into operation immediately. It is there, and it does not require weeks of preparation. The action can be sudden, and I do not quite gather from the debate to-day what is the proportion of rapid expansion as between our present Force and a much larger Air Force? We know the actual figures at the moment, but if we are to consider the question of safety in the air we shall have to consider not merely the proportionate strength, at the moment, of existing Air Forces, but what it means with regard to expansion in both trained personnel and matériel.
It has been impossible for me to listen to the debate without a feeling of great uneasiness. The speech in which the noble and learned Earl opened the debate had some very grave statements in it, as regards our position at the moment, to which I do not see the answer. I do not
504
think it is possible to find any consolation in speculations as to when the next war may be probable. Things have gone on since the Armistice getting more and more uncertain, and I really think that we are on the brink, as regards Air Forces certainly, of a new competition in armaments, unless there can be produeed some sense of general security in Europe which will cause a general reduction in aircraft as well as in other armaments. I believe that that can only be done—or at least that is one way of doing it—by making the League of Nations more comprehensive, and more strong, thus giving through the League of Nations a more vital sense of general security than at present exists.
I am not going to labour that aspect to-day, because the only point I want to make, in conclusion, is this—unless you do get a sense of general security in Europe, you will undoubtedly have again competition in armaments. And this competition in armaments will not prevent war; it will lead to a future war. This is a very critical year. What is taking place on the Continent now, which is causing us so much anxiety, will show us, probably in a few months, whether we are travelling towards general security in Europe, or travelling away from it. I agree—I wish I did not agree—with what the noble and learned Earl who raised this question said, when he observed that since the Armistice we had travelled practically no distance towards the securing of general peace. I would not go so far as to say we have travelled no distance—
THE MARQUESS OF SALISBURY: Hear, hear!
VISCOUNT GREY OF FALLODON: But undoubtedly enough has been done to show how we may proceed in the right direction. What I rather feel is that, while we were travelling in the right direction, what is now taking place on the Continent has made us fear that all the progress which we have made since the Armistice may be jeopardised. If there is a successful issue from present complications I believe it can only be found in the strengthening of the general hopes of future peace and the sense of general security in Europe. I am not without hope that that will be so; I am not without hope that people on the

505
Continent will recognise, as I think people in this country do recognise, that, as things are going now, they are jeopardising the progress which has been made, and that this will lead in the long run to catastrophe, unless we work through on to the right path.
But I am sure that the time is getting short, and that, unless there does come about that greater sense of general security in Europe which tends to a more general reduction of armaments, including reduction of aircraft, it will be impossible for any Government in this country to hold its position, unless it can show that, as regards aircraft, we are able to secure the defence of the vital parts of this country against any possible attack. I do not see any escape from that proposition. I do not want to go into the question of standards and so forth; it is an entirely new thing, which cannot be answered in terms of Navy or Army. I trust the Government are really having the whole question investigated, and that they will be able in the course of time to show, on the best expert advice, what really is the position of this country with regard to defence, particularly of London, against any possible attack that may be made upon us from the air.
THE MARQUESS OF SALISBURY: My Lords, I confess that when I first saw the Notice of the noble and learned Earl on the Paper I was not quite sure whether in present circumstances a public advantage would be gained by the debate which would ensue from it; but I am quite converted, and I am satisfied that the debate, to which we have listened with such great interest and close attention, will do a very great deal of good. Let it be realised that, in dealing with this very difficult and important problem which is now before the Government, we shall have the support, I believe, of all Parties represented in your Lordships' House. I am sure that no one will suspect, for example, the noble and learned Viscount who spoke earlier in the debate, Lord Haldane, or the noble Viscount who has just sat down, of underrating the vital necessity of economy at the present moment in this country; and yet they have been urgent in representing to us that we must not allow questions of economy to interfere with any necessary provision which upon our responsibility we believe ought to be made in respect
506
of the Air Forces of this country. They represent very important bodies of opinion, and so does the noble and learned Earl who opened this discussion. My noble friends behind me, Lord Carson and Lord Long, have taken the same view. Therefore we shall feel encouraged to approach this problem almost, in respect of proposals, with a free hand. No doubt those proposals will be subject to keen public and Parliamentary criticism when they appear.
I do not criticise, therefore, the noble and learned Earl for having brought this Motion forward. I must not, of course, be held to endorse everything that he said. I think—and perhaps the noble Viscount who has just sat down also thought—that in some respects, in dealing with our relations with France, he exaggerated. He used language which I should almost deprecate. There is no question of a quarrel between us and France. There is a difference of opinion as to method—a difference of opinion which we all hope will be cleared up. But it would riot be accurate, I think—and I am sure the noble and learned Earl will agree with me on reflection—to describe our position at Cologne as being one of blockade. That is not so. No doubt there are certain difficulties which beset British trade in consequence of the troubles, but these, I hope, are in a fair way to be cleared up. So that I should rather deprecate, especially at this moment, any language which might be held to be exaggerated.
On the main issue which the noble and learned Earl has raised, however, there is very little difference between us. Of course, we hope that the nations of Europe will be induced to embark upon a policy which leads to disarmament. That is the ultimate goal at which all of us would aim. There was the great example of the Washington Agreement, which was a step in that direction. Reference has been made to it to-day. It was pointed out that we are the only Power which has fulfilled the conditions of that Agreement. That is so up to now. But we have every hope that the other Powers will ratify that Agreement, and that it will have its full fruit. I say this only because I should be very sorry if it were thought that the Government had abandoned the hope in any degree that that policy may be pursued to its reasonable and legitimate

507
conclusion. But, for the purposes of this debate, we must take facts as they are. We must not count upon disarmament. We must look at the situation as it is, and, as trustees for the country, we must, of course, make recommendations accordingly.
Noble Lords who have spoken in this debate have recognised what is the fundamental change in the situation which has called for this change in the provision of armament. It is, as was said, I think, by the noble Viscount who has just sat down, that we have ceased for many warlike purposes to be an island. That is the great new fact; that is what we must recognise; that is what I doubt whether the country, as a whole, has yet recognised. And one of the reasons why I welcome this debate, and what has been said in the course of it, is that it will tend to mature public opinion upon that very important fact. It must not be overstated, of course. It is not true that the Navy has altogether lost its importance, or anything like it. It is still of vital importance to this country; but undoubtedly it is not so important as it was. There is now this new factor which has diminished the relative value of the Navy as compared with what it used to be, and has brought us face to face with a new situation.
My noble and learned friend, Lord Carson, said that he was left uneasy by the speech, the very admirable speech, if I may say so, of my noble friend the Duke of Sutherland, because we did not challenge the facts and figures brought forward by the noble and learned Earl. Broadly speaking, that is true. It is not literally true, because my noble friend showed that in one or two particulars the noble and learned Earl had slightly overstated his case; but it was only in very small matters with reference to the number of aeroplanes available. Broadly speaking, I am not here to challenge the general position of the noble and learned Earl. It is true that the Air Force, relatively to the forces of the Power to which he compared it, is in a deplorably weak condition. That is true, and that is the fact with which we are presented. I do not want to take too gloomy a view, and I am very far from doing so.
There is nothing which we need consider in a tragic spirit. The whole question is open before us, and, if the Government
508
recommends it and the country wishes it, we are perfectly able to put all this right. And we have the special advantage, as I believe, of a population singularly adapted for the purpose of making and manning a great Air Force, if that should be decided upon. Just as we have been able to produce a great fleet and to man it with the best seamen in the world, so we could produce a great Air Force and man it with the best airmen in the world. That is my belief. Therefore I decline altogether to take an unduly gloomy view.
Now what ought to be done? What ought to be done, of course, is for us to realise, in its principles and in all its details, the exact situation. All that science can tell us, all that technical advisers can tell us, all that reflection, with the ability which there is in the Government, can tell us, should be put together in order to form the recommendation which we may make to the country. That is what has been done. The matter has been specially referred by the Prime Minister to the Committee of Imperial Defence. I suppose that all your Lordships are well aware of whom that Committee consists. I am very sorry, but my noble friend, Lord Long, criticised the personnel of that Committee.
VISCOUNT LONG OF WRAXALL: Hear, hear.
THE MARQUESS OF SALISBURY: He went on to describe what the Committee should be, and I was delighted to find that this is precisely what the Committee is. I have sat upon it now very many times, and, I think, in almost every particular it is just what my noble friend described as his ideal. So far so good. Having regard to the very great importance of this Inquiry, and to the necessity of bringing all the necessary advice to bear, the Prime Minister has thought it right to add to the Committee one or two outsiders who may lend it additional strength. I am glad to be able to inform your Lordships that the noble Earl, Lord Balfour, and Lord Weir have both consented to serve upon the Committee of Imperial Defence for this purpose. I need not tell your Lordships what additional strength that will give to the Committee. My noble friend Lord Balfour has made all these questions of Imperial Defence a

509
matter of special study for many years of his life, and Lord Weir too has been responsible, as your Lordships know, as Minister for Air, for this very Service, and brings not only that expert knowledge but great business capacity to hear in assisting us in this Inquiry. So that your Lordships may be assured that everything that consultation can do will be done.
We shall, of course, direct our consideration to all those points which have been mentioned by noble Lords in the course of this debate. I do not say this by way of criticism, but it is not merely because noble Lords have suggested it that we are going to take up all those subjects. The Committee has had two sittings and all these subjects have already formed part of what we have mentioned. The big subject—that is to say, the degree to which the Navy is not so all-important as it was and must be supplemented by the Air Service—forms, of course, an essential, perhaps the principal, part of what we have: to consider: and there is also the standard of the new Air Service. It is from that point of view that the noble and learned Earl addressed himself to this subject.
I am not going to say a word about France, certainly nothing derogatory to France, for I reckon myself and my colleagues as being the greatest friends of France. I would like to approach the matter from this point of view. In the altered circumstances of the day, what is the strength that a Continental Power can reasonably be expected to develop in the air? In order to determine that we naturally take the strongest Air Power of the Continent. It may be France, or it may be another. As a matter of fact, it is France, but that is only because that is the concrete instance which naturally presents itself. Looking at it as we ought to do in a purely passionless and scientific spirit, without any question of prejudice or hostility or, indeed, of friendship, we naturally take as our concrete example the strongest Air Power. There are other countries, and I think perhaps the noble and learned Earl somewhat underrated the air power that other nations may produce in the relatively near future. We have by no means reached the limit of the development of air power either as to numbers or the character of the machines. Their scope is getting wider
510
and wider every day. The distance over which they can travel, the time during which they can keep the air—all those subjects are in a very fluid condition and a state of rapid development. Therefore, I think it would be a mistake, to concentrate our attention upon any one Power: we ought to consider the subject as a whole.
Then it was said by several noble Lords that we ought to consider the Air Service specially from the point of view of defence. I should have said that was almost the whole point of view from which we ought to consider it, because as a nation we do not desire to follow any other policy but that of defence. I think it is overstating it to say that it is merely the defence of London. The obligations thrown upon the Air Service will be far wider than that, although, of course, the defence of London is of very great importance in itself. I say this only in order that your Lordships shall realise how deeply we have already gone into the question and that we realise how wide it is in its scope.
Another point was mentioned by several noble Lords—namely, as to whether there should be two Air Services or only one—my noble friends, Lord Long and Lord Carson, both mentioned that point—and as to the exact relations which ought to obtain as between the Air Service and the Navy. That subject also is already prominently before the Committee of Imperial Defence. We must ask your Lordships and the country in this respect to trust the Government. It is evidently impossible to give more than a limited amount of the information which is at our disposal. These subjects are very delicate, and we must ask for a full measure of the confidence of the House and of the country.
I hope that in what my noble friend the Duke of Sutherland and I myself have been able to say to-night we may have done something to assure the public that we feel deeply in regard to this and that they may be certain that nothing will be left undone which is necessary in order fully to inform the Government of the necessities of the case. We shall pursue this Inquiry without delay and without intermission. No time has been lost up to this moment. The Committee is in full session. The Government hope, within a relatively brief period, to

511
announce to Parliament and the country the result of their deliberations, and to obtain, as I am sure they will, the support of all sections of opinion in another place and in your Lordships' House.

PALESTINE LOAN.
LORD SYDENHAM: My Lords, I beg to ask the Secretary of State for the Colonies what sums have been advanced by the Crown Agents to the Government of Palestine on the security of a loan to be floated when the Mandate has been ratified; what is the amount of the proposed loan; and whether, as it must be secured upon taxation of the population of Palestine, the Government has ascertained if the assent of that population will be forthcoming.
THE SECRETARY OF STATE FOR THE COLONIES (THE DUKE OF DEVONSHIRE): My Lords, advances to the total amount of £1,365,000 have been made by the Crown Agents to the Palestine Government on the understanding that the money will be repaid from the Palestine loan when it is issued. The proposed amount of this loan is £2,500,000. I do not wish to enter into controversial matters not directly bearing on the present Question; but I must not be taken as assenting to the noble Lord's proposition that the Palestine Mandate has not yet been ratified or that the issue of the loan awaits such ratification. I do not suppose that the population of Palestine are any more fond of taxation than the rest of the world; but they doubtless realise that it is impossible to build roads and other public works, and in general to repair the ravages of time in a country which had been consistently neglected during hundreds of years without incurring a considerable amount of capital expenditure. I understand that most, if not all, of the works hitherto carried out were previously discussed with the Advisory Council and other responsible representatives of local opinion. In these circumstances I see no reason to anticipate the difficulty which the noble Lord apprehends.
LORD SYDENHAM: I beg to thank the noble Duke for his reply.

UNEMPLOYMENT INSURANCE BILL.
Order of the Day for the Second Reading read.
THE EARL OF SHAFTESBURY: My Lords, the subject matter of the Bill that I am asking your Lordships to read a second time this afternoon is of such a nature that the Bill will, I am sure, enlist ready sympathy from every part of your Lordships' House. Your Lordships, I know, will be the first to admit that there is no more pitiable object in this land of ours to-day than the man or woman who is anxious and willing to work but through no fault of their own cannot obtain suitable employment wherewith to earn a livelihood. If I may put it in that way, these poor unfortunate brothers and sisters of ours claim an attention and a sympathy peculiarly their own, and I know that your Lordships will be only too willing to accord it to them. It was the noble Viscount who leads noble Lords on the opposite side of the House (Viscount Grey of Fallodon) who said in his speech upon the Address, with all that eloquence that is so much at his command, that all that is possible must be done to palliate this crisis caused by unemployment. I am sure that whatever measures the Government put forward for that purpose will receive the most sympathetic consideration of Parliament.
This Bill seeks to continue, and I believe very greatly to improve, the measures that have been embodied in various Acts of Parliament. There have been four Acts, I think, passed in the last three years which were intended for the alleviation of that distress which is always inseparable from a state of unemployment. But unemployment insurance, by virtue of many Acts of Parliament which have been passed, embodying various changes in the law, has become of rather a complex and complicated nature, and in order that this Bill may become the more intelligible to your Lordships, and its provisions the better understood, I desire, with the indulgence of the House, to go back for a moment to the point at which an insurance scheme was first promoted.
I would like your Lordships to take a retrospect of the various stages that have led up to the necessity for another measure to deal with the situation as we find it to-day. At this late hour I will do that as cursorily as possible. As

513
far back as 1911 the necessity for some unemployment insurance scheme was realised, arid in Part II of the National Insurance Act of that year—an Act that put national health insurance and unemployment insurance together—a selection of certain trades, such as shipbuilding, engineering and building, was made, the provision being that those who were employed in those trades could insure against the day of enforced idleness. Subsequent legislation has separated national health from unemployment insurance, and each has been treated as a subject for distinct and separate treatment. The 1911 Act carried us on through the war with certain modifications. Then, after the Armistice, with the assistance of an out of work donation scheme, which was a scheme set up to deal with the emergency which arose when our men were being demobilised and with the civil workers who were forced to leave their employment as the result of the cessation of hostilities, we were carried on until 1990, and it was in 1920 that the Government of the day first initiated the policy of unemployment insurance upon its present and extended scale, and it has been the framework of all subsequent building.
But early in the year it became evident that the boom in which this country had been rejoicing, the boom in trade since the war, was very likely to expend itself, and that riot only was the boom going to expend itself but that a period of great depression in trade was about to set in; a period, probably, of marked contraction. The Government of the day, therefore, set to work to meet that contingency as it should arise, and it initiated a broad based scheme of unemployment insurance which was embodied in the Unemployment insurance Act of 1920, which has been referred to in all subsequent legislation as the principal Act. That Act came into force in the autumn of that year. It included practically all manual workers and a certain number of non-manual workers, with certain exceptions. Agricultural labourers were left out of the scheme, as were also domestic servants, and so far as non-manual workers were concerned exceptions were made in favour of permanent civil servants, pensionable school teachers, the permanent staffs of railway companies and also of local authorities. The effect of it was to add yet another 8,000,000 to
514
the 4,000,000 that were already insured under the Act of 1911, making a total of 12,000,000 insurable people in this country.
In order to have a full comprehension of the working of unemployed insurance it is necessary that what is meant by the terms "covenanted" and "uncvenanted" benefit should be rightly understood. Under the Act of 1920 only one well was provided in the oasis created in the desert of unemployment—the well of covenanted benefit; and it was necessary to provide another well in the shape of uncovenanted benefit. Let me take covenanted benefit first. Broadly speaking, the basis of covenanted benefit was that benefit was only payable in respect of contributions made by the applicant for benefit and under certain conditions. A man or woman could claim one week's benefit for six contributions. It is generally known as the "one-in-six rule," with a limited number of weeks' benefit to be granted in one particular year. But the vital condition really was that, no person could claim any benefit until twelve contributions had been paid. There was a further condition tinder Section 7 of the Act of 1920 which embodied what is called and known as the "waiting week," and that rule was that no benefit was payable for the first, six days of unemployment; a provision to which I shall have to revert for a moment when I am dealing with the continuity rule under Clause 5 of the Bill.
This provision of covenanted benefit was very soon to prove insufficient, and whilst it was obvious that in ordinary circumstances covenanted benefit was the only kind of benefit that could be provided under a contributory scheme, and that no contributory scheme could under normal conditions make any rule for discretionary grants, yet it became evident that, owing to the great cloud of trade depression which had settled down on the country and which has maintained the industrial world in its grip ever since, something more was needed to meet this abnormal situation. The position was as follows. None of these 8,000,000 new entrants into insurance could hope to obtain any benefit under the Act of 1920, which had just come into operation, for a very long time. They could not qualify for benefit until they had paid twelve contributions, and

515
thereafter they could only get one week's benefit for six weeks' contributions paid. The well of covenanted benefit had practically become inaccessible to them, and under these rules it was quite evident that these conditions would be a complete bar to the receipt of benefit. Something had to be done. Another well had to be sunk in the shape and form of uncovenanted benefit, and this was done under Section 3 of the Act of 1921.
Uncovenanted benefit is benefit in advance of contributions and in good faith of contributions to be paid in the future. I need not weary your Lordships by taking you into every detail which governs this uncovenanted benefit embodied in the various Acts of Parliament, but I can tell you roughly what were the methods employed for setting it up. Broadly speaking, the method adopted was to specify what is called a "special period"—from six to eight months—and give the Minister power at his discretion during that special period to grant, up to a specified maximum number of weeks, uncovenanted benefit during that time to those who, though not entitled to covenanted benefit, were at the same time normally employed in an insured trade and genuinely seeking whole time employment but unable to obtain it. The Act of last year set up the third and fourth of what we are accustomed to call "special periods."
I need not go into the third special period, because it is finished and done with, but I must for one moment enter into the question of the fourth period, because that is the period in which we now find ourselves. It began in the autumn of last year, and is dealt with in Clause 1. The fourth special period began on November 2 of last year, and terminates on July 1 of this year. During this period uncovenanted benefit may be drawn for a maximum of twenty-two weeks. Under Section 4 of the Act twelve weeks' benefit might be claimed without any contribution having been paid whatsoever, but further uncovenanted benefit beyond those twelve weeks was dependent upon whether contributions had been made or not, and in the case of contributions having been made it would be given in two separate periods of five weeks, making ten weeks in all.
The present position is that there are still more than 1,300,000 persons regis-
516
tered at the employment exchanges as unemployed. A number of these, whose desire to obtain employment is, of course, beyond question, have been in receipt of benefit since the fourth special period began in November last. Others have unfortunately exhausted the benefit payable to them under the existing Acts. Certain of these people, owing to their having paid no contributions, were not entitled to more than twelve weeks' benefit during the period which commenced last November, and consequently they exhausted their benefit so far back as January 24 last, and, as the Act stands at present, they could not receive any further benefit until next July in the absence of further legislation. The number of persons who exhausted their benefit as early as January 24 last was about. 11,500—only a small proportion, your Lordships will say, of the 1,300,000 persons registered as unemployed. But since that time the number has naturally increased, and on March 5 last it had reached the figure of over 53,000.
The maximum amount of benefit payable during the fourth special period, namely, twenty-two weeks, can be exhausted on April 4, and a considerable number of persons will exhaust their benefit on and shortly after that date. It is difficult to form a precise estimate of the numbers that will exhaust benefit in the future, but it, is anticipated from the information obtainable that the total number who will have reached the end of their benefit by the middle or the end of April will be at least 300,000 or 400,000 persons. In the face of these facts the Government came to the conclusion that some further provision was immediately necessary to meet the needs of these persons.
This brings me to the Bill which is now before your Lordships' House. It can be divided into five parts. The first part. deals with the extension of the fourth special period and a further grant of uncovenanted benefit. The second part makes provision for a benefit year, which I can explain further in detail when I come to Clauses 2 and 3. The third part makes permanent the grants to dependents, of which also I shall have something more to say. The fourth part is an amendment of the present continuity rule, which Clause 5 seeks to improve; and the fifth part raises the question of

517
relationships with local authorities with a view to carrying out the recommendations made by the Inquiry on Juvenile Employment over which Lord Chelmsford, whom I see in his place this afternoon, presided in 1921.
The Bill makes two main provisions for future benefit. It provides first of all, in Clause 1, that the fourth special period shall be extended from July until October 17 next, the period containing fifty weeks, during which forty-four weeks' uncovenanted benefit can be paid. I think your Lordships will agree that this is not an ungenerous measure of benefit. The other main proposal is that from the middle of October this year, when the fourth special period ends, the Government have made provision to look a little further ahead than has been customary in the last two Acts that have dealt with Unemployment Insurance, and I think your Lordships will agree that if that is a fault it is a fault on the right side. The Bill will make provision for a benefit year up till October 24, and even further than that if it, is found necessary.
Clause 1, therefore, deals with the maximum benefit of forty-four weeks during the calendar period of fifty weeks, and provides that when benefit amounting in the aggregate to twenty-two weeks has been drawn, there shall be a gap of two weeks before benefit is resumed. It is also provided that the maximum amount of covenanted benefit shall be for twenty-six weeks, and I may remind your Lordships that there is no change in this respect, for twenty-six weeks of covenanted benefit is all that can be drawn in the calendar year under the permanent provisions of the Act.
Clause 2 lays down that the maximum amount of benefit which may be drawn during the benefit year (which is definedin Clause 3) shall be twenty-six weeks either covenanted or uncovenanted benefit, and that when uncovenanted benefit has been drawn for twelve weeks during the first benefit year there shall he a gap of three weeks, instead of two, before the receipt of benefit can be resumed. If there are no contributions or only a very few contributions to a claimant's credit, from October, 1923, your Lordships will readily understand that the greater part of the benefit will be on the uncovenanted basis.
I pass on to Clause 3, which, as I have said, defines the first and the subsequent
518
benefit years. Hitherto there has been only one year of insurance, running from midsummer to the following midsummer, from July till July. That was the insurance year, and during this period the unemployment books to which contribution stamps are affixed remained current. It is not proposed to alter that insurance year for contribution purposes, but it is proposed that the year during which the maximum period of twenty-six weeks' benefit will run, which is now termed the benefit year, shall be in the future from October to October. There are two reasons for that. One is that from the administrative point of view it is a convenience to have an interval between the end of the insurance year, when the contribution books are collected, and the commencement of the benefit year, for which the maximum benefits are payable. But really the most important reason for the change is that unemployment naturally begins in the autumn of the year, and it has a tendency to reach its height in the winter, and to fall off during the spring and early summer. So much for Clause 3.
Clause 4 makes provision for the continuation of the grants of benefit in respect of dependent, wives and children. Your Lordships will remember that 158. per week is payable to a man and 12s, to a woman, and half rates to juveniles under eighteen. Under the Dependents Act of 1921, in addition to this 15s. and 12s. respectively, 5s. a week is payable to a, man whose wife is dependent upon him, or to a woman with a disabled husband, and, in addition, 1s. per week is payable for each child in the family. Normally, under present legislation, this dependents' benefit would cease at the end of the deficiency period, the deficiency period coming to an end when the fund once more becomes solvent. It was thought advisable, and in the interests of those insured, that this dependents benefit should be continued even after the end of the deficiency period, and so Clause 4 provides for that. Subsection (2) provides that the present. rates of contribution may continue in force after the end of the deficiency period until such date as the Minister may by Order prescribe, but not being a date later than the first day of the insurance year commencing next after the end of the deficiency period,

519
and then, after the deficiency period, that the rates payable by contribution from employed persons and their employers shall be at reduced rates to be prescribed by regulations, but not in any case exceeding the rates set out in the First Schedule to the Bill.
I think I may now pass on to Clause 5, which deals with the continuity rule. Your Lordships will remember that I said that one of the rules for the payment of benefit was that there should first of all be a waiting week in which no benefit was payable for the first six days of unemployment. In the ordinary meaning of this term that would convey that benefit was payable from the time when a person was out of work until he obtained further employment. This, however, would have had the effect of making unemployed persons chary of taking jobs of one day's or two days' duration. Instead of wearying your Lordships with the present rule of two days on and two days off, I think it will be sufficient if I inform your Lordships, with regard, to the present Bill, that the Clause proposes that, taking any period of six consecutive days, unemployment benefit will be payable if the worker is unemployed for fifty per cent. or more of his time—that is, three whole days or more. It is thought that this will meet the majority of cases in which the present law is found to operate unfairly. I am, of course, prepared to give more detailed explanation of the provisions if it is desired, but I trust that the explanation which I am giving will enable noble Lords to gather the substance and meaning of this particular provision.
Now I come to Clause 6. It lays down the terms upon which local education authorities may administer unemployment insurance in respect of persons under eighteen. The position briefly is as follows. Under the Labour Exchanges Act of 1909, juvenile employment was put into the hands of the labour exchanges, and they carried on the work through juvenile employment committees. In some places, and notably, I think, in London, some of these After-Care Committees were set up by the local education authorities. They were all voluntary bodies, and excellent bodies, composed of parents and head teachers, and anybody interested in the child, and they took on very largely the work of finding employment for the child after he or she
520
left school. This went on as voluntary work for some time, but it was legalised under Section 107 of the Education Act of 1921, I think, with the result that in a great many places the work was being carried on under a dual system. The local education authority was carrying on the work of finding juvenile employment, as were also the labour exchanges through their committees.
This worked very harmoniously in London. The Ministry of Education and the Ministry of Labour came to a very harmonious agreement on the, subject, but we do not find quite the same harmony when we come to consider how it worked in the provinces. At any rate, a situation arose in which the Government found it necessary to set up an Inquiry as to the working of this dual system. The Inquiry was conducted by Lord Chelmsford in 1921, and the noble Lord reported in that year, and made certain suggestions. The suggestions made in that Report were that the dual system should cease, and that the local education authority should be given the option of carrying on this work and taking it over from the labour exchanges under two conditions. Before I tell your Lordships what those conditions were, I ought to remind you that besides this employment work for juveniles there was added the question of unemployment insurance for children between the ages of sixteen and eighteen.
The suggestions laid down in the Report were (1) that the local education authority should take over the work and undertake to carry it on for a term of five years in order to save any chopping and changing about; and (2) that if they took over the question of finding employment they should also make themselves responsible for the insurance scheme and for unemployment insurance for these children. The Government embodied those suggestions in the present Bill. Clause 6 provides for the repayment to the authorities of every shilling of benefit which is paid to those juveniles, and also for the payment of the additional administrative expenses to which the authorities are put. The clause recognises also that it may be necessary to apply different scales to different classes of authorities, and this, it is hoped, will meet all the legitimate claims by the authorities concerned.

521
With regard to the remaining clauses of the Bill they are really only concerned with minor details. I would, however, draw your Lordships' attention to Clause 7, providing that the Act shall come into operation on April 12 of this year. A number of unemployed persons ran out of their benefit on January 24, others have exhausted their benefit between that. date and now, and larger numbers will exhaust their benefits on and after April 4. It is essential, therefore, that the Bill should be passed through all its stages before Parliament rises for the. Easter Recess. I therefore find it necessary to ask your Lordships to expedite this measure through all its stages. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Shaftesbury.)
EARL BUXTON: My Lords, I regret that this Bill has come on so late this evening, because I think 'a good many noble Lords would have been interested in it and have desired to take, part, in the discussion. I ask your Lordships' indulgence on the ground that I was the President of the Board of Trade who had the responsibility for drafting, introducing, and passing the original Insurance Act of 1911. That Act formed part of the insurance legislation of the then Government. Two quite distinct Acts were passed. The first Act, dealing with health insurance, was in the hands of my right. hon. friend the late Prime Minister, then Chancellor of the Exchequer, and the other one was in my hands. I think had a much easier task than he had there was much less limelight on unemployment insurance than upon health insurance, and I think I was able to get, it through without difficulty. The Board of Trade, which drew it up, and the Grand Committee which dealt with it, may, I think, take some pardonable pride in the fact that the principle and the details of that Act have lasted without any radical alteration ever since the measure was introduced first, and upon the fact that ii, was founded on such a sound financial basis in 1911 that when the slump came, with its difficulties of unemployment, there was at the Government's disposal a fund of no less than £22,000,000 in respect of contributions which had been received and had not been paid out. That would have been amply sufficient to carry over the particular industries
522
included in the Act during those bad times, hut the Government, quite rightly, absorbed that capital in order to apply it to other purposes under the extension of that Act, and to that extent the money has been applied in a different way from what was intended.
This Bill seems to me to have two great advantages over the five Unemployment Insurance Acts which have been passed since 1920. Those were very provisional Acts, only carrying the matter over comparatively few months, whereas this Bill will at all events cover a period of from eighteen months to two years, during which, as I understand, the responsible Department consider that the Unemployment Fund will be brought hack to a sound financial basis. They will then have a surplus and be able to return 1.o the old and proper system on which this legislation was founded. There are also one or two respects in which this Bill is a great improvement on the Acts passed since 1920. One of the best of them is that which modifies what is called continuous payment of benefit, and especially for the advantage of the casual labourer, and more particularly the docker, with whom we have all the greatest sympathy, because he is a man who has often been prevented from receiving unemployment benefit, through being employed irregularly by a great many employers, instead of regularly by one employer. Up till now it has been very difficult to help him when he has been unemployed. I do not think the Bill goes very far in that respect, but the step that is taken is an excellent one. I agree with the noble Earl also that the step taken in regard to children between the ages of fourteen and eighteen, on the recommendation of Lord Chelmsford, is of great value, because in future there will be no overlapping, and the body responsible for finding them suitable employment can new, if it chooses, become responsible for the payment of expenses. That, I think, will be greatly to the benefit of these children.
The Government now have a period of eighteen months or two years in which they will be able to consider various matters which are in question in regard to unemployment. They will have a sort of breathing time which hitherto, under the provisional Acts, they have not enjoyed. I think it would be a great

523
advantage if the noble Earl could assure the House that during that period the whole question of unemployment will be reconsidered. There is also the question of insurance by industries, in which a good deal of interest has been taken. It is a very difficult subject, and there is a good deal to be said on both sides, but that also is a matter which ought to be well considered. Further, there is the question of joint councils and the extent to which they should be able to contract out of the scheme, if better terms are given to those interested. Another question is that of dependents. At present that is in a rather vague position, and it is difficult to know what will be the position of dependents in the future.
There is also a very important point in connection with the old Acts. Under the original Act of 1911 and the subsequent Acts, in the event of a strike none of those directly concerned in the strike—and quite rightly—are to receive unemployed benefit; otherwise, of course, it would be a bounty in their favour against their employers. But there are cases, and they are becoming more and more frequent now that these trade unions are larger and more complicated, in which a number of men in a particular trade who have no liability whatever for the strike, but are employed in the same factory or workshop or have something to do with the work that is being done, are prevented by the fact of there being a strike in their works, although, as I say, they have nothing to do with that strike, from receiving unemployment benefit. It is a very difficult question, as I know very well from recollection and experience, to find words to cover such persons: but I believe that everybody, the employers included, would wish that these men should be included when they are not in any sense responsible for the strike and yet, under present conditions, are deprived of unemployment benefit.
I have already referred to the question of continuous payment, as to which I think something more might be done in the direction of assisting those in irregular employment to obtain unemployment benefit when they are bone fide doing their best to obtain work or have keen in work. I do not desire to detain your Lordships any longer in regard to this matter, but I would ask that the attention of the noble Earl and the Department he
524
represents might be given to these matters, so that during the time this Act is in force the whole thing, which has never yet been reconsidered properly since 1911, shall he carefully considered with the object of improving that which the noble Earl very properly regards as an enormous advantage to those out of work, which has done such a vast amount to reduce distress among these people, and which I believe during the very difficult years through which we have passed since the war has done a great deal towards preserving pew in the country, and enabling those difficult times to be got through with less distress and disturbance than would otherwise have been the case.
THE EARL OF SHAFTESBURY: My Lords, I can assure the noble Earl that every attention will be given to the points he has raised. It is very helpful for us to have the benefit of criticism from the noble Earl, who was so much interested in the early stages of this unemployment insurance and in these labour questions in earlier days. I can, however, assure him that this Bill cannot be taken to be in any sense an exhaustive measure. The matter will have to be continuously considered, and, as the noble Earl has pointed out, there will be plenty of time during the ensuing year while the new scheme is coming into operation, to consider all these various details. I can assure him that they will have very sympathetic consideration.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BUSINESS OF THE HOUSE.
THE MARQUESS OF SALISBURY: Your Lordships will, perhaps, allow me to suggest to the House that we should take the Committee stage of the Unemployment Insurance Bill on Monday, and I hope that will suit the convenience of the noble Earl opposite.
EARL BUXTON: Yes.
THE MARQUESS OF SALISBURY: I do not know whether the noble Earl can give me any indication as to whether he proposes to move Amendments on a large scale. It would help me very much in mapping out the business of the House if I knew that. But in any case we pro-

525
pose to take the Committee stage of the Bill on Monday. Perhaps your Lordships will permit me to say, as I am dealing with business, that we do not propose to take the next Order on the Paper, the Mines (Working Facilities and Support) Bill, to-night, but to put it down for Monday. That course appears to be convenient to noble Lords who are interested in the measure. The Mines Bill is an important one, and we are under an obligation, not to get it through both Houses of Parliament but to get it through the House of Lords, if we can, before the Easter Recess. We shall make an attempt to do that, if your Lordships will allow us. For that purpose we propose to put the Bill down as the first Order on Monday. It will require a slight Motion modifying Standing Orders to give it precedence, and we hope the House will allow us to do that. The business on Monday, then, will be the Mines Bill first, then the Orders as they stand on the Paper, and at the end of them the Committee stage of the Bill which we have just now been discussing.
EARL BUXTON: My Lords, as regards the Mines Bill, from what I know of my
526
noble friends who are interested in it, though I cannot pledge them, I think it would suit them very well if it were the first Order on Monday. With reference to the Unemployment Insurance Bill, I may say that I have not any extensive Amendments to put down. So far as I know at present, I have not any, for the reason which the noble Earl has stated, that this is merely a provisional Bill. If it was a big Bill dealing with the whole question of unemployment I should probably have many Amendments to propose. As it is, without pledging myself not to put anything down, my Amendments will be very few in number and probably not of very great importance.
THE MARQUESS OF SALISBURY: I am very much obliged to the noble Earl.

AGRICULTURAL HOLDINGS (SCOTLAND) BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
House adjourned at a quarter past seven o'clock.

HOUSE OF LORDS.
[From Minutes of March 21.
RUNCORN DISTRICT WATER BOARD BILL. [H.L.]
The King's consent signified, and Bill reported with Amendments.
GENERAL REVERSIONARY AND INVESTMENT COMPANY BILL. [H.L.]
Reported, with Amendments.
RIVER WEAR WATCH BILL. [H.L.]
  PETITION FOR ADDITIONAL PROVISION.
  Examiner's Certificate of non-compliance with the Standing Orders referred to the Standing Orders Committee on Tuesday next.

OLDHAM AND ROCHDALE CORPORATIONS' WATER BILL. [H.L.]
MORLEY CORPORATION BILL. [H.L.]
WAKEFIELD CORPORATION BILL. [H.L.]
Report from the Committee of Selection, That the following Lords be proposed to the House to form the Select Committee for the consideration of the said Bills; namely,

V. Falkland,

L. Balfour of Burleigh,

L. Fairfax,

L. Lawrence,

L. Newton (chairman);

agreed to; and the said Lords appointed accordingly: The Committee to meet on Wednesday, April 18 next, at eleven o'clock; and all Petitions referred to the Committee, with leave to the Petitioners praying to be heard by Counsel against the Bills to be heard as desired, as also Counsel for the Bills.

PORT OF LONDON (FINANCE) BILL.
Brought from the Commons; read 1a; and referred to the Examiners.
SOUTH STAFFORDSHIRE MINES DRAINAGE BILL.
Brought from the Commons; read 1a; and referred to the Examiners.