§ THE EARL OF MIDLETON rose to call attention to the present conditions of Trade and Unemployment; and to move to resolve. That His Majesty's Government should forthwith direct an inquiry into the burdens and charges affecting the trade of Great Britain as compared with other leading nations; and that in order to enable British produce to compete in foreign markets further economies are essential in national services.
§ The noble Earl said: My Lords, in bringing this Motion before your Lordships I do not propose to trouble you with any observations on the great subject of controversy on which the last General Election turned. I desire to present certain figures which have been given me in support of the Motion and upon which I hope reliance may be placed, and I am convinced that 218 when you have heard them you will feel that to continue as we are at present, without a definite policy, going from one step to another hoping vainly that trade will re-establish itself and unemployment diminish, is a course which car only lead to certain disaster. There seems to be a great deal of loose thinking and false reasoning on this subject. The facts themselves are sufficiently serious. The foreign trade of this country was estimated in 1913 to be of the value of £411,000,000. Taking the trade in 1921 on the same ratio of values it was £297,000,000. In 1922 it was £293,000,000, and last year it was £362,000,000. That shows a slight recovery. The present year is about on a par with last year, but we have not yet got up to the position of 1913 and the salient point is that we have now a population larger than it was then by 1,250,000.
§ Apart from that, those who will speak to you with more authority than I possess will tell your Lordships that a great deal of our foreign trade which is now being carried on is being done at a loss. I know there are favourable signs. For instance, the wool trade is improving. I say nothing as to agriculture, which does not come exactly within the purview of this investigation, but at all events the outlook is anything but hopeful. When you come to some of the larger trades, however, such as cotton, on which Lord Emmott will probably speak, or iron and steel, I am within the mark when I say that at this moment there is not a ton of steel rails being made in this country except at a loss of from £l to £2 per ton and that there is not a ton of pig iron of our vast output which is not being made or sold except at a loss of from 15s. to £1 per ton. That state of affaire cannot possibly go on. Unemployment keeps company with this disastrous outlook.
§ It is very difficult to know the exact position of unemployment from month to month, but I think the soundest thing to do is to take the figures given by the Minister, when moving in the House of Commons for increased grants for unemployment, The numbers of unemployed at the present, he said, were 1,100,000, but he hoped that by 1926 they would diminish to 800,000. Germany reached the high water mark of unemployment in December last, when, out of 8,000,000 workers, she had 1,300,000 219 wholly unemployed and 1,700,000 partially unemployed. That figure of 1,300,000 unemployed in December last, or at the beginning of January, had gone down to 475,000 in the month of May. In other words, Germany has removed two-thirds of her unemployment in four months, while the British Minister of Labour hopes that our unemployment may diminish by one-quarter in three years. These comparisons are in themselves sufficiently startling and sufficiently indicative of the fact that the panacea for unemployment of which we heard something at the last General Election has been dissolved in rhetorical myths.
I said something about loose thinking and false reasoning, and perhaps the noble and learned Lord who is going to reply to me will not think I am wanting in respect if I ask him to decide whether some of the remarks he made in your Lordships' House the other day, when dealing with the question of our trade with Russia, come more naturally under the definition of false reasoning or loose thinking. I shall be quite prepared to leave it to his verdict. These were the words that the noble Lord used—
… everyone in this country, of whatever Party, who desires to get rid of the evil of unemployment, must recognise that if these negotiations [with Russia] could succeed the largest step would be made in that direction which could be made by any Government, whatever their opportunity might be.
§ Even if the premises were correct—and I challenge them—I think that the noble Lord will admit that this is the language of exaggeration. I go further and remind your Lordships that, at the time, I interpolated that our trade with Russia before the war was not equal to our trade with one, and that not the largest, of our Oversea Dominions, and I do not think that the Government will say that they have shown an exaggerated desire to forward Preferential arrangements with our Dominions.
§ But leaving that on one side, the discovery of fresh markets is, no doubt, imperative, but it is equally imperative—indeed, I think it is more imperative—that we should put ourselves in a position to compete with foreign nations in those markets, and I hope to show your Lordships before I sit down that this is at present impossible, that the charges and burdens on our trade have grievously increased and at a lightning speed 220 within the last few months, that we have at present a population desiring, and properly desiring, a higher style of living, and that the working output of production in this country is shown, statistically, to be sixteen per cent. less than it was in 1913, when we had 1,250,000 fewer people to maintain. We are going back instead of forward. At the same time, I should like to point out that our haphazard treatment of industrial matters tends, and has tended within the last few months, to industrial unrest, and that the charges which have been put upon our trade have been, as I think, so inequitable and so insupportable that we have no reasonable hope even with the anticipations of the Labour Minister of a reduction of unemployment to 800,000 taking effect.
§ I desire to treat these burdens under five heads: taxation, rating, industrial charges, sheltered trades and the administration of the "dole." Take taxation first. The taxation per head in Great Britain in 1914 was £3 11s.; in France, £3 7s.; and in Germany, £1 10s.; irrespective of the State taxation. In 1923 the corresponding figures were: Great Britain, £15 18s.; France, £6 18s.; and Germany. £4 1s., irrespective of the State taxation. Of these sums, the direct taxation which chiefly acts upon trade is, in Great Britain, sixty-two per cent.; in France, fifty-one per cent.; and in Germany, forty-four per cent. These figures establish a considerable difference.
§ What hopes have we of a reduction of taxation? I hold in my hand—the figures may be challenged—particulars of the commitments for which the Government, in the course of the last five months, have already, so far as I can gather, absolutely bound themselves and. so far as they can, the House of Commons. Housing is to account for £72,000,000. I believe the moderation of that figure is so great that I shall be rebuked on all hands to-morrow for not having stated it with an additional nought but the £72,000,000 is immediately in view as a charge. Old Age Pensions are to account for £2,000,000, unemployment insurance for £4,500,000; workmen's compensation for £2,000,000; extensions of education for £10,000,000; the abolition of the Entertainments Tax for £9,500,000; reduction of Tea and Sugar Duties for £10,000,000; further provision for widows, whenever 221 funds permit, for £20,000,000. These figures give a total of £130,000,000, and, deducting the Budget surplus of £40,000,000, there remain £90,000,000 to be found. What reasonable expectation is there that trade will be relieved by any reduction of taxation if these commitments are piled upon one another. I am giving your Lordships only that which has been promised in the few weeks since this Government came into office, but I say that it is useless to look for reductions in taxation unless we can be informed of economies on the other side.
§ Then take rating. I think it would be most convenient if I put this point to your Lordships in relation to a particular trade. I have been furnished with the data of rating as it affects the production per ton of steel in Sheffield in the case of three of the leading firms. Of course, the figures are very divergent, the reason being that the amount produced has, unfortunately, been considerable lessened in the course of the last few years. These are the figures per ton of steel: First firm—in 1914, 3s. 1½d.: in 1922, £1: second firm—in 1914, 3s. 7d.: in 1922, 11s. 3d: third firm—in 1914, 1s. 8d.; in 1922, 17s. 6d. The general rating has increased 120 per cent. during that period. In the urban districts, in which our factories are situated, the increase has been 295 per cent. I think that this is something like the figure that must be applied to these products, and, what is more discouraging than anything, the importation of steel in various forms has increased during that period from 186,000 tons per month to 199,000 tons per month.
§ Now I come to the third item—namely, industrial charges. They may be all very good, they may be of great advantage, but you have to look at their incidence. The workmen, the employers and the State were paying, in 1914, £2,500,000 for that for which they are now charged £46,000,000. If you take together all the charges of this description—workmen's compensation, old age pensions, health. Poor Law and unemployment, the figure before the war was £55,000.000, and it is to-day £165,000,000. Put all these figures together—I know there is overlapping, and I know I may be told that it is possible to put a different face on some of them—and the fact remains that on every product which leaves this kingdom you are paying 400 per cent. in taxation as compared with 1913, 300 per cent. in 222 rating, and 300 per cent. in charges for industrial insurance, and the like.
§ My contention—and I believe there is not a business man in this House who will rise and say the contrary—is that the only means by which you can meet so prodigious an increase of the on-cost charges is by increased productivity. What chance is there of increased productivity in this country? There is a great demand to reduce the hours of labour from fifty-three to forty-seven. Those six hours of reduction would mean the elimination of 1,250,000 workmen from employment. In other words, we shall be making the same as if we had that number of workmen less, or, put in another way, the increased cost of production is estimated by statisticians at £200,000,000—very nearly the value of the food that we have to buy from abroad every year. There can only be one means of avoiding that, and it is by more intensive action, or by the employment of a larger number of people at cheaper wages.
§ Look at Germany again. Germany has a working week of forty-eight hours, but the workmen have to work from forty-eight to fifty-four hours without an increase of pay. In fact, they are paid on the basis of forty-eight hours, if that proves to be sufficient. There is also a condition in Germany which I believe applies elsewhere, that where men are out of employment and receive a "dole" they shall be liable to be called upon for public service to a reasonable extent without payment, and therefore the productivity of the country continues. How do our wages compare with those of France and Belgium? Do not let it be supposed that I am declaring that wages in this country are too high. On the contrary. I will show in a moment that one of the most fertile causes of unrest is the fearful anomaly of the difference between sheltered trades and unsheltered trades. In engineering in Great Britain, the skilled man averages 14¾d. per hour and the unskilled man 10¼d. In France, the skilled man averages 12½d. and the unskilled 8½d. In Belgium, the skilled man averages 11½d. and the unskilled 7¼d. Those statistics show that with your competitors working longer hours for less wages, it is absolutely necessary you should increase your productivity.
§ And that is not the whole story. We come to the difficulty between the 223 sheltered and the unsheltered trades, and I believe we shall never get rid of the present state of industrial uncertainty unless we tackle the whole question and look at the subject as a whole. Your Lordships probably know the figures, but I will give them again. The shipbuilders have increased by only 20 per cent. since 1914, engineers, 43 per cent., bakers—you cannot provide your bread from abroad—111 per cent., railway men, 120 per cent., dockers, 85 per cent., and builders, 90 to 114 per cent. Yet, as I address your Lordships, the builders are out for a further increase, the whole of which must be at the expense of those trades which are not equally fortunate. At this moment the railway men are by no means satisfied, if we are to judge by speeches in the House of Commons. Surely you cannot have a greater anomaly. Many fitters in the railway engine shops are getting 16s. per week more than the same fitters doing the same work in shops which work for export. In a speech on June 26 a Labour Member of Parliament spoke of co-ordination of the wages of these very men, and said that if they did not get a fair deal they would be compelled to stop the whole of the railways of the country again.
§ I can only say that I cannot wonder that coal miners are dissatisfied. I am not going into the question whether they deserve all they have asked for—the Bill which was rejected in another place on May 16 contained a number of extravagant proposals—but if I were a coal miner, and I saw the wages that I had agreed to being reduced owing to a reduction in the cost of living, and if I saw railway men, tramway men and dockers, all sheltered and not in competition, coming forward one after another and demanding, with the threat of complete stoppage, an increase of wages which are already in excess of those paid in unsheltered trades, I confess I should feel that I had a great grievance. I do not think you will ever get a solution by these partial Inquiries, called in a hurry to meet individual cases. I do not think you will ever get any satisfaction until you regard the question as a whole and deal with it as such.
§ I will say only one word on dock charges. I have been supplied with the actual facts in regard to a number of French ships, and the object of supplying them was that not long ago one of the 224 largest firms in this country had practically come to an agreement for a contract with France. At the very last moment it went off, owing to the immensely different dock charges in this country from those charged in France or at Rotterdam. I have here particulars of a number of ships. The average time that they took to unload at Rotterdam was from twenty-four to twenty-nine hours, and in three British ports that serve great industrial communities, upon which industries depend, those ships were detained by trade union rules and difficulties as regards dockers for from sixteen to twenty-one days. Those are the facts, and everybody can see that if transport charges are to be developed in this way they become a very fair competitor with rating and taxation in their burden.
§ I do not wish to make any comments with regard to the action of the Government in recent strikes, but I will only say this: that nothing is easier than to call upon the sheltered trades to act generously An unsheltered trader has the greatest difficulty. If he gives way to a strike everybody applauds him, but contracts fail and unemployment is increased, but the sheltered trader—the railway, the dock, or the tram undertaking—passes the cost on to the consumer and it becomes at once a charge on the trade of the country. That is the case as far as those trades are concerned.
I will now say a word or two as to the administration of the "dole." Everybody agrees that, however generous we wish to be with regard to the payment, of those who cannot find employment, we cannot be too stringent in endeavouring to bring back into the ranks of the employed those who are at present kicking their heels and doing nothing. I must say that the language used by the Minister of Labour was unwise On March 10—I am putting three quotations together here—he said:
There seems to be an assumption in the arguments that one sees that the State is giving this money. On the contrary, the State is escaping a very large portion of the liability that the State ought to bear, for if employment be, as we say it is, and as we hold it is, a national responsibility, the burden ought to be on the nation, and not on the individual. … We will have neither part nor lot with the theory that is apparently held, that in the payment of these benefits you must treat every man who draws them as a potential fraud, and that whoever is not surrounded by safeguards will rob the nation. … The
Government is going to take the line that the ordinary unemployed man and woman it. a perfectly honest person, an honourable person, to be treated properly, as a right, and not as a charity.
§ I do not challenge the general character of the British working man. We lost some hundreds of thousands of our very best in the war. They are being replaced by hundreds of thousands who have never learned a trade, as those men had.
§ Since I gave notice, of this Question I have received scores. I could say hundreds—of cases of the grossest imposture. I will give three instances only, from different towns. I can vouch for them. The first is from a northern town. There is a quarry standing idle, owing to the present state of the iron and steel trade. The quarrymen had been in the habit of breaking the limestone to an 8-inch ring, and they got 1s. 11d. a ton for it. A municipality came forward and asked for 13,000 tons broken to a 5-inch ring. The company wished to employ the men. They therefore agreed with the price mentioned by the municipality, though it meant working for nothing whatever, and they offered to the men the highest [...]ate they could—2s. 6d. instead of 1s. 11d. a ton. They did so on the basis that every man would be able to make 60s. a week. The men, eighty in number, who had gone on the "dole," declined to take the employment. They went back for the "dole." The local referee, at the instance of the company, referred the matter to the Minister in London. The Minister said they were quite entitled to refuse the 60s. and to take the "dole," and they are on the "dole" at this moment. The future of the trade of this country is impossible if such instances are sanctioned by the Government.
§ In the second case a man from a Midland county moved into Sussex. He was a labourer, with a wife and three children. In the Midland county, without the slightest effort to get work, he had drawn the "dole" and Poor Law relief, amounting together to 35s. a week, for two and a half years. He came before the guardians, and said: "I have a right to Poor Law relief as well as the 'dole.'" These Sussex guardians said: "The wages here are only 30s. a week, how can we give you 35s. for doing nothing?" and they sent him, away. That man was an honourable man, to be regarded, according to the Minister of Labour, as having 226 a right to the "dole." A lady told me of a case the other day of a young woman of seventeen or eighteen who come into her house as her first place. She was very well-treated, but she could not settle down in the house. She asked to go back to her mother. At last, at her urgent request, having done no work whatever, she was sent back to her mother, her fare being paid. Within forty-eight hours the lady of the house received a demand from the mother on account of unemployed insurance. The girl could find no employment. The "dole," as it is administered at present, is bidding fair to run a very good race with taxation and rating to be first in the scramble for putting undue burdens on the commercial development of the country.
§ I hope I have said enough to substantiate the request I make to the Government that they will appoint some body to make an inquiry which will establish what the effect of these charges is on every pound of product which we send out of the country. I do not ask them to devise the remedy. I believe that if we once set a Commission to work to devise the remedy it will sit for two or three years, and it will be submerged by the great number of controversial questions in which it will find itself. What I would ask—and I care very little what the tribunal is, provided that it is competent, impartial and speedy—is to decide to what extent each of these different things is an influence in the price at which we have to sell products, which it is absolutely necessary for us to sell if we are to pay for the food brought into this country. If it be urged that the mere fact of knowledge will have no effect I would only urge, on the other hand, that, unless you have the stimulus of fact to guide you, you cannot expect, in the present condition of the public mind, that we shall advance at all. I believe I am absolutely within the line when I say that the Treasury—not only under this Government—no longer feels that it can rely on the Chancellor of the Exchequer, that the Chancellor of the Exchequer finds constantly that he cannot rely on the Cabinet for what he has determined to do, and that the Cabinet find that economies which they have done their very best to obtain are not supported by the House of Commons. The House of 227 Commons is rotten on the whole subject, because it believes that the country will not face it.
§ I will only say that in asking for economy in the public Departments I believe there never was a time when we were so far from it as we are now. I ask also for the positive co-ordination of great services, so that when you come forward with a housing scheme, which could only have the result of putting up wages, as it is doing now, and putting up the price of material, as it has done already, you will consider questions that practical men bring forward—that your immediate need shall be supplied by temporary dwellings which will not divert a single man from general trade. Again, we have no real scheme of emigration at the present time as an outlet for the population which we cannot house, and do not see our way to employ. I sat on a Committee eight years ago, of which the Chancellor of the Exchequer of the day was Chairman. We were warned off some of the most important subjects. Since then you have had the Geddes Committee, and I am sure the noble Lord who represents the Government will not tell me that the Geddes Committee's recommendations have all been carried out in the letter, or, indeed, even in the spirit in certain offices.
§ I do not want to go into individual offices, but does anybody believe that to have raised the cost of the Ministry of Agriculture from £300,000 to £2,000,000 has done anything appreciable for agriculture in this country?—appreciable, that is, as compared with the amount. Does anybody think that a salary list of £2,000,000 for the Ministry of Health is necessary or a salary list of £500,000 for the Labour Ministry? Even on the Stationery Office, which before the war cost us £300,000, you are now squandering £1,500,000 a year. I will undertake to say that any three experienced members of this House could knock off one-third of the work of the Stationery Office and that nobody would be in the slightest degree the worse. These things are going on at a time when the life of the people and the future of the nation depend on economy.
§ There is one other matter that I should like to mention. I do not suppose that noble Lords opposite know, and I never knew until to-day, how many authorities deal with the great question of social 228 reform. I will read a list of them to your Lordships. Of the various bodies concerned with public assistance there are the guardians, the county council, the local pensions committee, the labour exchange, the insurance committee, the distress committee, the local health authority and the local war pensions committee. Does anybody suppose that there is no overlapping amongst all those authorities with their numerous clerks and offices? From that one example alone it would seem that money is no object. I submit that we have reached a point at which, by the conjunction of sentiment and bureaucracy, we are really sapping the independence of the people and throttling trade. I ask that we should not continue this ruinous expenditure, as we did after the last great war, and that with a falling trade we should see whether we cannot face the facts and devise something which will give a stimulus to the real characteristics of the British people, to that self-help, self-reliance and self-sacrifice without which we cannot regain our old position. I beg to move.
§ Moved to resolve, That His Majesty's Government should forthwith direct an inquiry into the burdens and charges affecting the trade of Great Britain as compared with other leading nations; and that in order to enable British produce to compete in foreign markets further economies are essential in national services.—(The Earl of Midleton.)
§ LORD HUNSDON
My Lords, as this is the first time that I have had the honour of addressing your Lordships' House I ask for your indulgence. It will be necessary, as you will realise when you hear my halting remarks. When the noble Earl who has just addressed the House asked me this morning to second his Resolution I was in some doubt as to what it meant, but I learned from him that it is not desired that the. Government should supply a mere list of figures of taxation in other countries. What he desires and I very much desire, is that we should have an authoritative statement from our consuls and others of the effect of the various systems of taxation on the countries concerned. Such an inquiry would be most interesting and profitable to this country.
If your Lordships will permit me, I will give two examples which will enable the 229 House to judge whether my view is correct. I take the first example from the United States of America. For sortie years there has been great dissatisfaction in the United States at the high rate of what they call the Sur-tax. That dissatisfaction has been caused by the effect of the Sur-tax on trade. In 1921 a Conference was held in reference to the Revenue Act of that year which imposed very high "Sur-taxes, and in the presentation of the Report the following statement was made to the Senate:—It is a temporary measure, but nothing better than a temporary makeshift will be possible until the people of this country give to the question of Federal taxation an amount and kind of study which it has not yet received; until, in particular, the people become convinced of the sincerity and truth of the contention that the proposal to reduce excessive tax rates is not designed to relieve the rich and profiteer, but to avert a breakdown of the Income Tax, and to unshackle business.In support of these views, Mr. Henry Ford, the great motor manufacturer, wrote to say that he lived on one per cent. of his income and as, to use his expression, he had got ahead of the Sur-tax in point of time, he was able to develop what is, I suppose, the greatest individual industry that has ever been seen, which is of enormous profit and advantage to the people of his country.
Messrs. Guggenheim, the great mining and metal firm of the United States, also wrote in the same sense to the Secretary of the Treasury. They said they had been accustomed for many years to set aside a largo sum of money—I cannot recollect the amount, but I think it was 400,000 dollars a year—for examining properties and making experimente generally, but as the Government took nearly the whole of their profits if they were successful, and left them the loss, they were not going to continue that any longer. Then Mr. Mellon, the Financial Secretary of the United States Treasury, proposed to Congress that the Sur-tax should be reduced to 25 per cent. Congress did not agree to such a great reduction as that, but they reduced the tax to 40 per cent. and only levied that 40 per cent. on the excess over incomes of the almost fabulous amount of 500,000 dollars a year. That was in addition to the 6 per cent. normal tax, which is the equivalent of our Income Tax.
230 When the President signed the Act of 1924 last month, he made this remark—The Bill does not represent a sound, permanent tax policy.Still, in spite of its obvious defects, he agreed to sign it, and he added—A correction of its defects may be left to the next Session of the Congress. I trust a Bill less political and more truly economic may be passed at that time.That will show you, I think, how interesting it would be, and how profitable to this country, to study the effect of taxation on other nations.
I will give your Lordships only one other example, and that from Italy. Last August the Government of Sign or Mussolini abolished all Death Duties within the family-that is to say, the descendants of the grandfather—and reduced the others considerably, in some cases as much as a half. I think it might interest your Lordships to hear what was expected of that reform. Signor de Stefani, in introducing the reform, made use of these words—The Government holds that this radical measure will have a wide repercussion, direct and indirect, on public economy and on the accumulation of capital and private savings. It is of the opinion that the immediate loss to the Treasury will be more than compensated, not only by the performance of an act of justice, but by a real general increase of prosperity.He then mentioned the respect of the Fascisti for family life and the Roman law of property, and added:For both these reason" it is anxious to avoid a financial system which leads the citizen to think only of his own individual life, to save only in his own interest, to prefer a life annuity to an insurance in favour of his descendants, and to squander rather than to save—all to the detriment of capital which is the productive energy of the nation.On the information of an Italian banker I am able to say that Signar de Stefani's forecast is proving correct, that already a certain amount of capital is coming into the country, and that there is "a real general increase of prosperity."
I think those instances which I have given support the Resolution moved by the noble Earl, and I very much hope that we may have real authoritative statements as to the effects produced on other nations by their systems of taxation. The noble Earl in, if I may say so, an extraordinarily complete and interesting speech, laid great stress on present unemployment. May I support this 231 Resolution from the point of view of the prospect of future unemployment which, to my mind, is infinitely more dangerous, and as certain under our present system as our unemployment is to-day?
The noble Earl has given your Lordships many figures, and I rather hesitate to weary you with more, but I have some figures which I can quote from the Board of Trade Journal ox what they call surplus available for overseas investment. I should prefer to call it revenue from external trade. I will give your Lordships the figures for 1913—the first whole year before the war—and for 1923. The way they arrive at these figures is this. They take the estimated revenue from overseas investments, they add to that the estimated revenue from shipping, and to that the estimated revenue from commissions and other services, and from the total they deduct a balance of imports and exports, and the remainder, they say, is the amount available for overseas investment. That amount, in 1913, was £181,000,000, and in 1923, made on the same calculation, it was £97,000,000, but those £97,000,000 were not composed of the pounds sterling of 1913, but of the pounds sterling of 1923, which is a very different thing. If you bring those pounds sterling of 1923 to an equality with the pounds sterling of 1913, the comparison is £181,000,000 surplus in 1913 and £55,000,000 in 1923. Those figures appal me. I do not say they are appalling because they have produced such extraordinarily little effect, but they are, I think, very bad indeed.
Let us consider now whom we have to support by this external trade, the revenue from which has fallen off so tremendously. By the last Census of 1921 the population of this Island was 43,000,000, and I suppose it is now at least 44,000,000. The noble Viscount, Lord Long of Wraxall, the other day told us that the production of wheat in this country was 36,000,000 cwt., and the consumption was 140,000,000 cwt. On that basis you would suppose that of the population in this Island we could not support much more than a quarter with the present standard of living. But let us suppose we can support half of the present population. The other half must be supported by external trade. That means that 22,000,000 in this country are dependent for their life on the will and 232 the power of others to take our goods. The effect of a decrease in that power is shown by the unemployment figures given to-day by the noble Earl. The will or rather the disinclination of others to take our goods is shown by the tariffs with which others surround themselves, and more still by the factories which they build in their own countries to supply themselves with the goods with which we used to supply them. That is a most precarious position for any nation to be in.
But the future is worse, because this population is continuously increasing, and every increase must depend on an increase in external trade. The increase of population before the war was 1 per cent., after deducting emigration figures, and the balance of emigrants over immigrants in those days was 300,000 people. As the figures of emigration have fallen off, if you assume, as I think we may, that the population of this country continues to increase at the rate of 1 per cent. per year, we shall have no fewer than 11,000,000 more mouths to feed at the end of twenty-five years. There is no one, I suppose, in your Lordships' House who does not desire to see the working classes of this country have more of the amenities of life, more leisure for self-development, and more and better houses if they can afford them, but what I desire that our rulers should give a little more consideration to is this: How are these people to be fed! You cannot feed them except by developing the markets you have, in the Empire and other places, or by opening up new markets; you cannot open up new markets without adventuring money, and the only money which can be justifiably adventured in risky business is superfluous or surplus income. It is precisely that surplus income which is being taken away at the present moment and diverted from its old channels which formerly led to opening up new markets and to the forming of a national reserve fund.
The reason for this is that it is just to place the burden on the shoulders of those best able to bear it. When we say that, however, we suppress the fact that no man can spend money without giving employment to others, and no man can save his money without rendering it available for future employment, and, very often, present employment as well.
233 Therefore, when we place the burden on those beat able to bear it we are also placing it in its entirety on present and future employment. That principle is well enough in times of prosperity and when taxes are low, but in the extremely hazardous position in which the country-is at present the only principle of taxation which should be adopted is that taxes should be levied in a way which would inflict the least injury on the trade of the country.
This superfluous income, which is now taken from those who hold it, is, of course, superfluous so far as the subsistence of the individual who owns it is concerned, but it is essential to the nation because it is only this superfluous income which is available for new enterprises. Let me take an example—not a concrete example, because I cannot mention names. Let it be assumed that there is a project for making a railway in some foreign country and that a certain amount of money is required for the survey and to obtain the concession. The promoter would probably go to some rich man in the City and ask him whether he was prepared to spend that money for the initial stages of the enterprise. The reply probably would be: "If I do, and if I make a profit, the Government will take 50 per cent. of the profit now, and 40 per cent. of the remainder when I die."He therefore turns the business down. If he had taken up the business, and had been able to form an English company in order to make this railway, there would have been orders for rolling; stock and rails in this country, orders in this country for the wants of the employees, the land through which the railway passed would have been developed and would have afforded a market for the goods, of this country, and we should have had in perpetuity a sort of "tied house" in the railway for all its renewals and extensions. Now we have none.
Whether it was true or not in Napoleon's time it is true to-day, that we are a nation of shopkeepers, and every unit of population that is born is another shopkeeper. If shopkeepers increase and customers either fall off or remain stationary there can only be one end. The whole employing class in this country, that is to say, those with incomes over £500 a year, is estimated at 2½ per cent. of the total and the employed class at 97½ per cent. I am convinced that unless 234 the 97½ per cent. who now rule this country are prepared to take their share of the sacrifices necessary to restore and maintain the position of this country, the outlook for them, or at least for their children, is of the blackest possible.
§ LORD EMMOTT
My Lords, the noble Earl has done a great service in bringing forward this Motion to-day and supporting it by a speech with great wealth of facts and great weight of arguments. He has been followed by Lord Hunsdon, to whose speech I am sure we have all listened with the greatest interest because it is the speech of a practical financier who has given us striking examples of the danger of our present position. Our present position in this country as to trade and unemployment is very difficult, and it may very quickly become dangerous. The causes are not very far to seek. We cannot help it, but we are the one great country in the world most dependent on export trade for our livelihood. We are only exporting £750,000,000 to £800,000,000 in value per annum. We ought to be exporting £1,000,000,000 to £1,100,000,000, if we were exporting the same volume as before the war. The bulk of our exports must be manufactures, and we have to sell them in competition with the whole world.
The poverty of a great part, of Europe is against us; the unsettled exchanges of Europe are a great obstruction to business; Russia is only exporting something like one-fifth, or one-sixth, of the amount she exported before the war and only importing about one-eighth. She is almost out of the market altogether. As to the rest of the world, relatively there is a break between the price of manufactures and the price of food and raw-materials; that is, between the prices of what they sell and the prices of what they buy. Take Nigeria as an instance. The chief exports of Nigeria are palm kernels and palm oil. Prices are very-little higher than before the war, but the price of cotton goods, which are her chief imports, has doubled, or rather more than doubled. She pays for her imports by the export of palm kernels and palm oil, and a ton of either can only buy half the quantity of cotton cloth it did before the war. The demand for our cotton goods has much decreased because of instances such as this. Tariffs are 235 being raised against us not only in foreign countries but in many of our own Possessions. Nigeria is a ease in point. She has not raised the tariff for protective purposes but because of the financial changes that have come with the war. But in some of our own Possessions, particularly India, tariffs are being raised against us for genuinely protective purposes.
Another point in regard to the question of unemployment is the restrictions on emigration compared with what they were before the war. In the last ten years, if we had been emigrating at the same rate as before the war, we should have sent out 2,000,000 people. Therefore, we have the volume of our exports lessened and the volume of our population increased; which makes the position difficult in both ways.
Last but by no means least, there is the question dealt with so forcibly by Lord Hunsdon—the question of savings. He stated on the basis of certain figures that we were, before the war, saving £181,000,000 per year, while now we are only saving £97,000,000. But his figures did not cover the whole case. He did not take into account the interest earned on loans abroad, which was then left abroad. I think the calculations of our statisticians show that we were investing at that time something like £.300,000,000 or £400,000,000 of new money every year, the bulk of that large sum coming from the Income Tax-paying people. Those who paid Income Tax were as a matter of fact, and it is rather surprising, apparently re-investing from one-third to one-half their total income, and that was what made employment in an increasing population possible. I think we were investing new money each year at the rate of £300,000,000 or £400,000,000 before the war. To-day it is not more than £100,000,000. We are not saving enough to employ our new surplus population, even if we could find markets for the things that they would produce. We are also the only one of the great countries that went into the war at the beginning that has met its Budget charges each year since the war ended. Consequently, while there has been a most unfortunate reduction in the volume of our exports, there has also been less saving, our population has increased and the whole position is certainly disquieting. It is, of course, made still 236 worse by the case of the sheltered trades with which Lord Midleton dealt so forcibly.
It may seem rash, and I admit that it does not carry us far, but I should like to express my honest opinion that I wonder that things are not worse than they are. We are still getting our share of international trade, quite as much as we had before the war, although statisticians tell us that we are producing only about three-quarters of what we produced before the war. Our unemployed numbered 2,000,000 only a comparatively short time ago, and they have decreased to 1,000,000. A gradual process of attrition is going on month by month, and that 1,000,000 represents the surplus population since the war. If I might put it in this way, the stoppage of emigration has kept 2,000,000 people in this country who would have emigrated; we lost unfortunately, in that great struggle, nearly 1,000,000 of our best; and the balance is 1,000,000, which represents the number of unemployed to-day. We have the same numbers employed to-day as we had before the war, the unemployed are receiving a maintenance more liberal, I think, than has ever been given to unemployed in any country previously, and trade and industry are bearing that burden—for it is a burden. May I quote one case of a cotton company in the north with which I am connected? I ought to say that the capitalisation is too low, and this must have a bearing on the figures, but the new insurance charges on the firm itself amount to 3 per cent. on the ordinary shares to-day, and, besides, the workpeople themselves pay another 2 per cent. or 2½per cent., making 5 per cent. or 5½ per cent. on the ordinary shares of the company.
It is said that history repeats itself. It never does, because the circumstances are never the same, but there are some interesting analogies to be found when one looks into history. I have not infrequently in these late years obtained some kind of reflected comfort by looking at the Annual Register of 100 years ago. I find amongst other things that the cotton spinner of that day was paid 16s. a week for a week of sixty-nine hours. The cotton spinners to-day are paid about four times that sum for a week of forty-eight hours, so things have improved in some ways. Looking at the Annual 237 Register for 1824, I find a Report of a Select Committee of the House of Commons on what was known as the Speenhamland system of Poor Law relief that was then in vogue, and it gives a number of details concerning wages. It states that the wages of labourers, whether agricultural or other, in some of the Northern counties amounted to something like 12s. a week or more, rising to 18s. in the case of one place—funnily enough, by old constituency of Oldham. But in the Eastern, Southern and South-western counties the wages of labourers were at that time anything from Ox. down actually to 3s. a week, the remainder being made up, of course, by Poor Law relief. Our unemployment scale to-day, at any rate the new scale, is 18s. for a man, 5s. for his wife and 2s. for each child, and that is very much better than a great many people in full work were getting at that time.
That was a year of rather good trade, or, at any rate, agriculture had very much improved. I think the Annual Register must have been edited by a Radical at that time, because I find this sentence dealing with the state of agriculture:—Even the country gentleman—the most querulous of all classes, the least accustomed to suffer, the most incapable of struggling with difficulties when difficulties present themselves—could no longer complain.As I have said, that was a year of improving trade. So I looked back to 1821, six years after Waterloo, as this year is six years after the Armistice, and I find the following sentences, which are not without interest to-day:—The agricultural distress was not inferior to that of 1820. … Numerous petitions for relief were presented to Parliament; but it was easier to demand than to discover a remedy.
§ LORD EMMOTT
The noble Lord opposite cheers that statement, and I am sure that His Majesty's Government and many previous Governments of His Majesty have felt the same thing. The Annual Register goes on to say:—Some wished the Government to alter the standard of the currency——there is a counterpart to that to-day—some suggested the propriety of expunging part of the National Debt—238 we have a Committee sitting on that question to-day, presided over by my noble friend Lord Colwyn—some placed their hopes in the removal of taxes—we all do that, if we can only have faith that that removal can be brought about—and some had a perfect faith in the omnipotence of high protecting duties.There are people also of that kind to-day—All called for inquiry;—that is what we are doing here to-day—and the Ministers thought that inquiry ought not to be refused to those who suffered.I hope that the noble Lord opposite, when he replies, w ill allow history to repeat itself in this case, and will grant the Inquiry for which we are asking. Unemployment is still terribly high, but I honestly believe that we shall pull through if we do not run after false gods and resort to remedies that will prove fallacious.
I want to say a word or two on behalf of the British workman. At his best he is the finest fellow in the world. He loves his country—after all, it was he who saw us through the war—and, if he thinks that the country is in danger, I believe that he is still perfectly sound. I am convinced that the bulk of the workers of this country are not demoralised. Let me mention very briefly three arguments in support of that statement. The first is founded on the recently issued Report of the Scottish Board of Health, in which it is shown that crime has decreased, the death-rate has decreased, and tuberculosis is, at any rate, no worse. It states positively that neither health nor morale has suffered in these last two years of unemployment, and trade distress.
When I knew that this debate was coming on to-day, I sent word to a concern with which I am connected, employing many thousands of people in the North of England, to ask whether they had evidence of an abuse of what is known as the unemployment "dole," although technically, I believe, that is an incorrect description. I am glad to say that they told me that they had no proof of any thing of the kind, and the manager of one of the great branches of those works, employing, I think, some 6,000 or 7,000 people, said that his house 239 was often besieged at night by people wanting work in order to get off the "dole."
Finally, let me quote the report of the ten thousand cases that were specially investigated by the Ministry of Labour. I will give only one set of figures in that connection. Of the ten thousand cases investigated, over 4,000 were of men in the "A" class, that is, of men normally fully employed. Of these men 1,060, at that moment out of employment, had gone into insurance in 1912–13. Of course, the insurance was upon a much narrower basis than it is to-day, but those 1,060 men had, on the average, paid 420 contributions each. That is to say, they had been fully employed for eight and a half years since 1912–13 and had received only 366 days' relief. That is not a bad showing. In the last 122 weeks of the whole of the employed 44 per cent. were employed for more than 60 weeks, while of the "A" class of men 50 per cent., or rather more than half, had been employed for more than half of the last 122 weeks. That is not very clearly put, but the general result of those figures is, I think comparatively satisfactory. Remember also that for every one of the men unemployed there are eleven men working. They are not covered in the unemployment returns at all.
On the other hand, there are some regrettable tendencies to-day. There is much danger in too great a rate of unemployment pay, undoubtedly, and there is great danger in some of the theories by which this high pay is supported. For instance, the claim that there is a right to an income based on wants, irrespective of the national income or the production of the people, is silly. There is no such right. I maintain that we cannot get out of our troubles unless there is more co-operation between employers and employed. That is the great thing which we need at the present time. The aim of trade unionism is, with increasing emphasis, to promote antagonism between employers and employed. The aim of trade unionists is Nationalisation. They oppose profit-sharing and co-partnership, our one great hope; they sneer at welfare work in many cases. Never were employers more anxious for the prosperity of their workpeople than to-day, and never was there less response to their efforts.
240 I am not going to deal with the nationalisation of trade, but allow me to say that the claim to nationalisation is against all experience. Nationalisation has been tried on a great scale in one country only, and that is Russia. It has been tried and it has met with the most tragic economic failure in all history, Nationalisation on a smaller scale has never been proved to be a success. Obviously, it is immensely more difficult to conduct a national industry than a sectional trade union, and it is an extraordinary claim on the part of trade unionists, in the face of the recent history of trade unionism, that the nationalisation of industry would result in its being better carried on than it is under the present régime of private enterprise. Anybody who has read Mr. Sydney Webb's works on the history of trade unionism must have seen how, all along, he shows that there have been internecine disputes between trade unions, and that there has been no central authority to settle those disputes. How can these people claim wider control where smooth working is essential, when they are unable to agree and so quarrel with other trade unionists?
Many of the most recent labour troubles have, I believe, been trade union quarrels, as, for instance, the last engine drivers' strike. I am afraid that this tendency is growing, and that there is also an increasing tendency towards a lack of discipline within the trade unions. I understand that the present building strike, and also the last tube strike, were cases of that kind. Whether it is due to war neurosis, or to the teaching of trade unionism acting upon the natural pugnacity of mankind, I do not know, but there is a state of internecine hostility among the trade unions. Luckily, it does not apply in all cases, and in the cotton trade, with which I am acquainted, I believe that the relations between employers and employed are extremely good and have been so for many years. If, however, the tendency of which I have spoken does grow, it certainly means disaster to the country.
There is another matter upon which I must say a word or two. Unrest is fanned by the Communist element. With the warning of Russia before them they are moving—I will not say Heaven and earth, but with your Lordships' permission, 241 earth and hell—to bolshevise this country. Russia may recover, and I believe she will, from Bolshevism, but we never could. Our Empire would vanish with a breath of it, our export trade would disappear, half of us would starve and perish, or have to emigrate. I do not suggest that it is an immediate danger, or that Ministers of the Crown are in favour of Bolshevism, but I find Zinoviev still makes speeches desiring that Mr. Ramsay MacDonald should be hanged with his own rope, and there is no doubt that if we had Bolshevism here there would be short shrift given to the moderate Ministers whom I see before me.
The mass of the workers are against extreme measures, but some are playing with fire, and I would call the attention of Lord Parmoor to an incident, recorded in the Pravda of June 4, about the Amsterdam International, which is affiliated with the Second international. I did not take much interest in the recent debate when Lord Charnwood and the Duke of Northumberland referred to the Prime Minister's association with that body. I agree with a noble friend who, when leaving this House, said: "We Englishmen are a generous people, and when a man has attained to a high position we like to give him a chance.' This report in the Pravda of June 4 states that at the Conference at Vienna a certain person who is called "Bromley" addressed the Conference with regard to the question of the negotiations with the Red Trade Union International. This person is said to hold the position of Secretary-General of the Trade Union Congress, and if so he must be Mr. Fred Bramley, who succeeded Mr Ramsay Mac-Donald. This Mr. Bromley, or Bramley, protested against a decision of the governing body of the Amsterdam International against having anything to do with the Soviet Trade Unions, and he proposed that fresh negotiations should be entered into with the All-Russian Central Soviet of Trade Unions, with the object of establishing mutual cooperation. The French and Belgian Delegates opposed, but Mr. Lozovsky, Secretary-General of the Red Trade Unions, welcomed the proposal, and said they were always ready to ally themselves with the revolutionary working class element anywhere.
242 Possibly the noble Lord could not answer me on this matter to-day, but in the Pravda of June 7, in the report of an interview with this same "Bromley," he is made to say that if our Government recognised the Soviet Government then the Amsterdam Second International ought to recognise the All-Russian Trade Union. Now the Third International rules the Soviet Government and the Soviet Government rules the All-Russian Soviet of Trade Unions. The Third International exists to promote revolution and is making efforts to promote revolution in this country. I should like to know whether this Mr. Bromley, who I believe is Mr. Bramley, is speaking the voice of Labour and of this Government in the views which he represented at Vienna. If the noble Lord cannot answer me to-day I will either communicate with him privately or put down a Question for a later day.
These are regrettable tendencies. There is a great deal of unrest to-day. People's nerves are on edge—whether it is duo to the war, or the boom after the war, I do not know. But I believe that most of our people are thoroughly sound at heart. The point is, how can we bring home to them the sense of the danger in which our trade is to-day. In all classes some people to-day are behaving as if there had been no war. Our trade is imperilled. I think the best way to bring it home to them is to get facts, as my noble friend asks in this Resolution—facts showing the burden that industry has to bear in this country as compared with those which are borne elsewhere. I earnestly hope that the Government will agree to this Resolution. The second part of it deals with economy. Here the example of a hundred years ago is a good guide. Rigorous economy was resorted to then. It has always been a marvel to me how the great Duke, the Duke of Wellington, was willing to cut down military expenditure and to assist in the campaign of economy. That campaign, as it happens, was carried out as an administrative matter by a Conservative Government. Peel and, later, one who became his pupil for a time, Gladstone, really come from that period, or from soon afterwards, and they have left on the Treasury their bias in favour of strict economy ever since.
243 We have now a Labour Government. I venture to say that on this matter of economy the present Chancellor of the Exchequer has done pretty well, or would have done pretty well if he could only have had his way, but there are other Ministers who are presenting to the country to-day reckless schemes which mean mortgaging the resources of the country in a way that is entirely unsafe and improper. We shall never pull through, or get out of our troubles, if we give way to the extravagance which is advocated. I heartily support the Resolution.
§ LORD PARMOOR
My Lords, three exceedingly interesting speeches have been made on a topic which is essentially difficult. I think in one respect all the speakers were in agreement. They realised that the difficulties arose from the after-war position, from two points of view—and they are very important points of view. First of all, they realised, I think, that the difficulty of markets, which necessarily is one of the most important matters that we have to consider, has been enhanced owing to the post-war conditions. I do not suppose that any one will deny that statement. Secondly, I think they realise, although they perhaps do not realise quite so directly, that the effect of the war has been, in itself, to throw an enormously enhanced charge upon our national resources. So that you have at the same time an increased difficulty in finding markets, and an increased difficulty in reducing your cost of production to the lowest practicable level.
The noble Lord, Lord Emmott, I think, did not present quite such a lurid outlook for the future as did the noble Earl and Lord Hunsdon. He did recognise that, having regard to the conditions in which we have been placed, the trade and finance of this country appear to have recovered in a wonderful manner. Of course, we should like to do better. Only yesterday I happened to be talking to a large number of commercial men from America. They said: "Nothing has created greater wonder in America, indeed, we may say in the commercial centres of the whole world, than the extraordinary way in which, under all its difficulties, England has met her financial liabilities, and has managed to so large an extent to maintain industrial supremacy." I believe that view is 244 common. Of course, it does not absolve us from the obligation, which the noble Earl has pointed out, to do all in our power to meet admitted difficulties. But I think it is a mistake, on the other hand, to exaggerate those difficulties, and not to give full weight to what Lord Emmott has referred to—namely, the wonderful power of all classes in this country to recuperate since the evil effects of the war have, I will not say come to an end, but been modified, compared with what they were at the worst time.
I think all the noble Lords who have spoken talked about the sheltered and the unsheltered trades. By that phrase, I imagine they mean trades open to foreign competition, and trades in respect to which foreign competition is not an important factor. An illustration from the shipbuilding trade was given by the noble Earl. The shipbuilding trade is, in its essence, a sheltered trade not subject to foreign competition. It is as much a sheltered trade as are the railways or the building trade, and yet we find in this sheltered trade probably worse conditions than in any other trade in the country. Why is that? It is because these unfortunate trade conditions are due to very large and wide considerations. Why is it that the shipbuilding trade is so depressed, and that wages in the shipbuilding trade are relatively extremely low? The noble Earl gave the figures—I think he said that wages had only increased 20 per cent., whereas in other engineering trades they had increased 70 or even 80 per cent. Why is that? Because, owing to the conditions which have followed the war, the amount of our carrying trade has very much decreased—decreased in volume and decreased in value. The result is pretty obvious. It is exactly what the noble Lords, Lord Emmott and Lord Hunsdon, would expect to follow—namely, that the shipbuilding trade, the trade which produces the carrying power for our oversea traffic, is in a depressed condition. As a consequence there is no trade in the country at the present time in which the conditions are worse, both as regards unemployment and the level of wages.
There is another point, to which, I think, both Lord Emmott and the noble Earl referred—emigration. Emigration has become in some ways not a very easy topic, but I am sure both the noble Lords 245 are aware of the Oversea Settlement Committee, which meets every week, and i believe that everything its done by the members of that Committer to promote, within reasonable and legitimate limits, in such ways as they can, emigration overseas. I do not know whether any one in this House will suggest that there is any impediment put in the way of emigration. On the contrary, every possible facility has been given to it, and, although I have not the figures before me, I believe the sum of expenditure in reference to which complaint was made was incurred in that connection. Emigration may not be so easy as it has been. I have heard, for instance, that in regard to Italy, the complaint is much worse than it is here. We have certain areas and districts which are, undoubtedly, open to us for the purpose of emigration; whereas Italy, which had an emigration of about one million a year before the war, finds great difficulty in dealing with its surplus population at the present time. It is a common difficulty. It is a difficulty which I believe we have met better than other people; still, it is a difficulty. It is one of the difficulties which are the heritage of war and which we are trying to meet in every possible way.
Two interesting factors were brought forward by the noble Lord, Lord Hunsdon. He gave an instance of a very fortunate person who could live on one per cent. of his income. I am afraid that does not apply to many people in this country. That enabled this person to use ninety-nine per cent. of his income for capital purposes; a very admirable thing, I dare say, but how can you apply a case of that kind to the conditions which exist at present in this country? Shortly afterwards the noble Lord told us what the facts are. I do not believe that people are unduly extravagant in this country at present. I believe that we are all feeling the pinch. I am sure that everyone who is cognisant of public life knows the extent to which conditions have altered. The noble Lord told us that whereas before the war there was a surplus for overseas exploitation of £181,000,000 (ho will correct me if the figure is wrong) if you allow for the difference in the pre-war and present value of gold the surplus available for overseas exploitation is the far smaller figure of about £55,000,000. That is a 246 fact which we can all appreciate and which we may all deplore; but it is a very different thing when you come to consider how you can meet a difficulty of that kind.
I should agree very much with what the noble Lord, Lord Emmott, said—that to get over these difficulties we want primarily a spirit of co-operation between all classes and all interests. I am one of those who have always expressed the belief—and I do believe—that if people, work together you get the right results and by antagonism you always get the wrong results. Therefore, I should agree with what the noble Lord said in that respect. Taking conditions as they are, taking them as stated by the noble Lord, Lord Hunsdon, it is obvious that a country with a surplus of £181,000,000 was in a much more prosperous condition for the employment of labour and all other purposes than a country with a surplus reduced to £55,000,000.
Two other points were mentioned, one of them by the noble Lord, Lord Emmott, and the other by the noble Lord, Lord Hunsdon, on which I do not propose to embark. I do not think the present is an occasion for doing so. Lord Hunsdon raised the question of the Heath Duties. This, surely, is not the time, and this House is not the place, to enter upon a topic of that kind, which has been discussed over and over again and on which I recognise that people hold different views. There is no question about that. In the same way Lord Emmott referred to certain quotations from the Pravda newspaper, which, as we know, is the Soviet newspaper. I know nothing of the conditions to which he called attention, and I think he recognised that; but I wish to inform the noble Lord that if he wants further information upon a point of that kind about which I have none at the moment, and he either addressee me personally or places a Question on the Paper, I will endeavour so far as I can to see, that the information is obtained. In a discussion of this kind it is clear that you may get too wide, and I might say perhaps that I should lose myself because all or most of the topics to which reference has been made are matters of controversy. I do not mean controversy in the sense of antagonism, but controversy in the sense of questions 247 on which economists are in some cases sharply divided.
I do not know that there is any other question I need refer to till I come to the speech of the noble Earl. The noble Earl, with great courtesy, wrote me a letter beforehand telling me what were the points to which he desired to direct the attention of the House in bringing his Resolution forward. I beg to thank him for that courtesy. When you have a series of statistics and a series of economic problems which depend on them, it is impossible to deal with them unless some intimation is given beforehand of the lines on which the demand for the desired information is intended to be founded.
The noble Earl's Resolution divides itself naturally into two parts. The first of them is—To move to resolve, That His Majesty's Government should forthwith direct an inquiry into the burdens and charges affecting the trade of Great Britain as compared with other leading nations.Now what Inquiries are either going on or promised at the present time? I hope they are sufficiently wide to cover what the noble Earl would desire. Let us at any rate consider their scope. If further inquiry is necessitated or suggested that can be considered.
First of all, in reference to the demand for an inquiry, an Inquiry into the burdens and charges affecting the trade of Great Britain is now going on. That Inquiry was constituted, I think, in February of this year. It was intended to be as exhaustive and impartial as it could be, and the Chairman, who is Lord Colwyn, ought to give confidence to every member of this House. I have not the names of the other members of that Committee with mo, but I believe it is universally recognised as an impartial and able Committee. It is important, of course, to consider the terms of reference to that Committee, and I will read them. They may not go quite so far as the noble Earl would desire, but at any rate the Inquiry is going on, and these are the terms of the reference to it—To consider and report on the National Debt and on the incidence of existing taxation with special reference to their effect on trade, industry, employment and national credit.When I recollect the speech which was made by the noble Lord, Lord Hunsdon, 248 it seems to me that an Inquiry on those terms would cover all the points he mentioned.
When the Prime Minister referred, in February last, to this Committee of Inquiry which had been appointed, he made use of the following words—We shall concentrate first of all not on the relief of unemployment but on the restoration of trade—So far as I have followed the speeches of noble Lords on the other side, that is what they would desire—We are not going to diminish industrial capital in order to provide relief. I think the best course is that a really representative Committee shall be appointed.It was after that statement that the Committee of which Lord Colwyn is Chairman was, in fact, appointed. It may be said that the terms of reference to that Committee do not cover all the matters to which reference has been made, and I think that is right. It was said to be an Inquiry "not too wide to be definite"—that is the expression used when the Committee was appointed—and I think that is a very wise precaution when you are dealing with these very complicated financial and economic problems.
Notice has been given that a further Committee is to be appointed, I believe in the course of the present week, by the President of the Board of Trade. When he was stating the other day the idea underlying the appointment of that Committee and what its duties would be, he used words which I shall quote to your Lordships. I do not say these words are final, because I know it is a matter which has been under consideration for some time, but I believe the Committee will be appointed during the current week. These are the words used by the President of the Board of Trade:As a matter of fact the Prime Minister has already announced an inquiry of a comprehensive nature, the most effective inquiry that can be made with particular reference to our export trade and several other things that he mentioned. I would remind the right hon. gentleman, however, that a mere compilation of statistics undertaken by officials is not all that we want. We want something more. We want an inquiry on a scale as great as can be managed, and so far as possible impartial. To start an inquiry of that kind takes time, and it is not possible to give the names at once. I may say, however, that the process is very nearly completed.249 Last Thursday, in answer to a question in the other House, Mr. Alexander, the Parliamentary Secretary of the Hoard of Trade, made this statement on behalf of the President, who was away:My right hon. friend hopes to be in a position to make a full announcement on this matter at an early date.I can tell your Lordships this, without disclosing any secret which I ought not to disclose, that there is very little doubt that both the constitution and the reference to this Committee will be announced in the course of this week, or it may be a day or two after this week. One cannot always be certain on matters of this kind, in which you have to approach a great number of people before you can constitute your Committee. I know that a large number of letters have already been written.
When that is done I believe that the whole position and prospects of the overseas trade, and the prospects of British participation in world markets, will be a matter which will come before that Committee. The desire of the Government—I am sure you will believe, the genuine desire—is that the Committee should be so constituted that it will be authoritative. That is to say, it should consist of people with a knowledge of trade, of people who are economists, and at the same time should be as impartial as possible. I hope that that is an answer to the first part of the noble Earl's Resolution, and that he will be satisfied that what he wants is going to be done. I am very pleased to be able to make that statement on behalf of the Government.
No one can have listened to the discussion to-night without coming to the conclusion that a matter of this kind could not be determined merely in debate as between the two sides; certainly not here, and I do not think in the other House either. What is wanted is an impartial and an authoritative outside Inquiry. I do not know how long such an Inquiry will take, but it is to be embarked upon as soon as possible, and it is intended to be pressed forward. I hope that those questions which have been asked of me will be answered in a much more authoritative and impartial way than that in which I could be expected to answer them on an occasion like this.
Having made that statement I should like to give a short summary from the 250 Government's point of view of what the present position is. I am not prepared to deny its serious character; on the other hand, I think it would be a great mistake to suppose that there were not features of hope, or to imagine that there were not other things to consider besides those which some noble Lords seemed to regard as a certain road to disaster. Our export trade in manufactured goods is, no doubt, in volume very much below the level of 1913. I speak of "volume" and not of "value," because "volume" is the essential thing. It is a very complicated matter to compare values, having regard to the varying conditions at different times. The total volume for the first quarter of 1924 is some 25 to 30 per cent. below the total for the first quarter of 1913.
That is a very serious thing in the case of a country of our industrial position which must depend on its industrial exports in the long run for the maintenance of its population. There has been no falling off in the world's needs. What is lacking is ability to purchase, and that, according to the views of the experts of the Board of Trade, is due to the terrible impoverishment of the world in consequence of the war. I do not think that impoverishment has been sufficiently understood economically even up to this time, and one of the, reasons why it has not perhaps been sufficiently understood in England is the wonderful way in which we have maintained our trade position and our financial stability. The disordered state of the exchanges, and the high prices of important raw materials, and particularly of the raw material of cotton to which my noble friend, Lord Emmott, called attention, are also delaying the resumption of active buying.
An important contributory cause of the prolonged depression is the unsettled state of Europe, and the political unrest in some of the great markets not only of Europe but outside Europe. Take China, for instance. China, I believe, is one of the most important markets for our cotton goods from Lancashire. The state of unrest in China at the present time has very seriously interfered with our market in that country. It is to the matters to which I have referred that, in the opinion of the experts of the Government—I am not, of course, in a position to speak as an expert on these topics— 251 most of the depression in British export trade is to be mainly ascribed.
Returning to the cotton industry, I would point out that our greatest markets are in the poor countries, such as India and China. Not only are the markets, particularly in China, unsatisfactory, but the price of raw cotton, owing to the shortage of recent American crops on which we are very largely dependent, is some three times what it was before the war. The buyers in these Eastern countries, where our best markets were, cannot afford to buy the goods at the high prices which this high cost of the raw materials renders inevitable. The goods cannot, therefore, be sold under such conditions at anything like the prewar rate. I should like to emphasise this, because it is a point upon which Lord Emmott very properly dwelt. There are not those troubles to which reference has been made between the operatives and the manufacturers in the cotton trade. There has never been serious trouble. But even when you have the best of conditions and the cooperative spirit between the two bodies you cannot help yourselves as regards these difficulties—namely, that, on the one hand, you have the raw material three times the price it was before the war, and that, on the other, you have your markets in poor countries which cannot afford to pay the enhanced prices. It is these conditions that have affected our overseas trade and have reacted so adversely on our shipbuilding industry. We cannot prevent them; no Government can. It is beyond the power of any Government to prevent the effect and operation of matters like that.
Now I come to the more cheerful side. There are slight signs of improvement in the cotton industry, and if the hopes cherished in some quarters of a much larger American crop this autumn, and a consequent fall in prices, are realised, there may be a substantial improvement. That is what is hoped for, but it is too early to be at all confident as to this. I was speaking to an American commercial man yesterday, and I asked him this particular question. He expressed the hope that the insect which has been playing such havoc with their cotton crops would not affect in the same way the new areas which have been planted and that we might hope for a much better crop 252 this autumn. In the woollen and worsted industries, in which hitherto trade has kept up surprisingly well, there are said to be some signs of reaction. There may be some difficulty in keeping up the present level of their trade. I do not think it is always realised that our production of iron and steel is on a considerably higher level than before the war—I am talking now of volume—but it is very much below our productive capacity, and the reason for that is, that our productive capacity was very much increased during war time, and to a great extent for war purposes, and we are not utilising our manufacturing power nearly up to its full capacity. At the same time the actual volume of output of steel at the present time is considerably higher than it was in prewar time.
Everyone allows that the remuneration of trade, if that is the proper expression to use, is very low at the present time. It is difficult to execute orders so as to obtain what I may call a normal rate of interest, and I agree that those matters operate in the direction which Lord Hunsdon has pointed out—namely, that you hardly have sufficient inducement to make the organisers of industry, as I may call them, really interested in spreading that industry as widely as possible. Let me give another illustration showing the difficulties on the one side and the advantages on the other. The general engineering trade remains very inactive, but there has been great activity in the manufacture of electrical plant and apparatus and textile machinery. That does not look as if all the conditions of this country were against trade progress. I think it shows that there are wider considerations, outside considerations—matters which, unfortunately, we are not able, whatever Government is in power, to control—that really have produced the two results to which the noble Earl called attention—(1), the troubles in our trade, and (2), the great inequality—and here I quite agree with him—in the conditions of the working men and wages as between different trades in this country.
Let me give a figure in order to carry still further what I have said. In May this year the value of imports was greater than has been recorded for any month since the end of 1920—the figure is £122,087,000. As prices have fallen since 253 1920 by something like one-half it is safe to say that in volume the imports in May, 1924, were in excess of those for any month in 1920. If value is taken it may fall below; but, I am taking the test not of value but of volume. It may be said that it is to exports we have to look rather than to imports, but let us realise the character of these imports. A very striking Feature of the May record is the large increase in imports of raw materials, particularly raw cotton and raw wool. Large increases are also recorded for oil stuffs, hides and skins. In other words, these imports, which in volume exceed the imports of any other month within the dates I have given, are imports of raw materials, raw cotton and raw wool, which point to a better trade in these industries in the future.
But it is not only in imports but also in exports that large increases are shown in the figures which I have before me. Since January, 1921, the only months for which a larger aggregate has been recorded than in May, 1924, were the months of May and October last year, and the May returns for this year are within two per cent. of those exceptional records. The actual figure, expressed in money not in volume, was £70,261,000, whereas the monthly average in January and April, 1924, was £64,045,000. I am not putting this forward as all that we want, but I do put I forward in order to say that there is no reason for these exaggerated alarms, and that it is an entire mistake to suppose that the social and trade conditions, the inter-operation of the influence of capital and labour on one another, are the factors which are causing the trouble. They are not the factors. I agree with Lord Emmott that the men are as sound at heart as they ever were. What is causing the trouble is the cost of the raw material and the interference with our market due to the conditions created by the war.
Now I come to the question of the "dole." That is a word which I do not adopt in any way as my own. I want to say this, and I believe it is the experience of everyone who knows the British working man, that in the vast majority of cases, at least "0 per cent. of the whole, the people want work:. That is what they seek; that is what they want to obtain. I recollect a short time ago that a working man on my farm came to me at the head of a deputation. 254 One is always afraid of a deputation; but they said: "Cannot you in London prevent these 'doles' being given. No one wants the ' dole'; we all want work. "Although one instance like that must not be carried too far, I believe the suggestion that the "dole" makes people idle, that they are contented to live on the "dole" rather than to work, is only true of exceptional cases. Every man, just like any member of your Lordships' House, wants to work and prefers to work.
Let mo say one word more regarding the statistics of unemployment. I have them in two forms, and I will give them to your Lordships in both forms. When the present Government took office the number of unemployed was 1,251,820. Today—probably these figures refer to last Saturday—the figure is 1,013,500, or a decrease of 238,320. When you consider the difficulty of absorbing this large number of working people in the conditions which I have described and under which our industry is being carried on at the present time, that is not unsatisfactory. It is, no doubt, unsatisfactory in one sense, because there is no greater misery for a working-class population than want of employment, and there is no greater duty upon everyone who cares for the prosperity of his country than to do all that can be done to provide employment.
It may be said that the end of June is a time when you have more employment than during the winter months, when the Government came into office, and therefore I asked for a comparison between June of this year and June of last year, in order that we might have a basis of similarity in order to make the figures a true guide. On June 9 of this year the number of unemployed was 1,027,000, which is very nearly the figure which I gave just now. At the corresponding date last year the number was 1,230,288, which gives a reduction in round figures of more than 200,000. Taking what is, I think, a fair comparison between these two dates, you find a considerable improvement. Again, I take the precaution of saying that this is not enough; we all want a great deal more. But it is an answer to the pessimist, to the person who says that we are going towards disaster. I say, on the contrary, that, great as our difficulties have been since the war, both as regards cost on the one side and 255 markets on the other, we have been making, and are still making, real progress. We are weathering the storm.
I could not help paying great attention to the remarks of the noble Lord, Lord Emmott, regarding the attitude of the Duke of Wellington after the great Napoleonic Wars. There is no man, I believe, to whom we are more indebted than to the Duke of Wellington for his constant theme that all the expenses and extravagancies of the Napoleonic Wars must be met by reducing expenditure in every direction, and for a great General such as he was—and he was one of the greatest Generals we have ever produced—to allow or sanction the reduction of expenses of our fighting Services to a figure which, I think, would startle many people at the present time is somewhat remarkable. He did it on the ground that it was necessary from a financial standpoint, and just as ho stood out for a general reduction of expenditure in a mariner which will always be to his credit, he did not allow even the interests of our fighting Services to overshadow the necessity for rigid economy as the only means by which we could recover our financial position.
There is one other point upon which I wish to give statistics before I come to one or two Treasury figures, and that is the question of rates, to which one noble Lord has called attention. This is, to me, a very serious matter, to which I have called your Lordships' attention more than once. But, here again, what are the facts? Do not let us be led away by mere general statements. I will take Sheffield, which I think was one of the places mentioned. The rates in Sheffield in 1921–22 were £1 1s. 2d. in the £. They are now only 18s. 8d.—a substantial reduction. I have another figure here, that of Cardiff. In 1921–22 the rates were 17s. 8d. in the £; they are now only 12s. 6d. in the £, and I have similar reductions, though not with exactly the same percentages, for Birmingham, Newcastle, Bristol and Nottingham. I asked that certain industrial places should be taken in order to test this matter, and in every case there has been a real and substantial reduction in rates. Considering all the difficulties which followed the war and all the difficulties which have surrounded questions of employment, industry and trade, it is surely not 256 unsatisfactory that the tide has turned, and that we are no longer subject to the heavy burden of rates that existed a few years ago.
Next I turn to the second part of the noble Earl's Motion, which runs:—that in order to enable British produce to compete in foreign market" further economies are essential in national services.I wish to put before your Lordships the economies which have, in fact, been achieved. I am not sure that we shall not come to the conclusion stated the other day by Mr. Neville Chamberlain, that the nearer you get to the bone the more difficult it is to have anything in the nature of further economy. I think it was Lord Emmott who referred to Sir Eric Geddes. There has been a. greater economy than was suggested by Sir Eric Geddes, and I will give figures which will, I think, show that this is so. I do not think I need repeat the figures quoted by the noble Earl who opened this debate. The figures before him are the same as those which I have, and ore those which were given to Mr. Lambert in reply to a Question in another place on February 25 of this year.
But I should like to make a comment on the figures which were quoted by the noble Earl. Figures of taxation per head are not of much value, unless related to the national wealth per head. A £1 tax per head is a very different burden upon a rich country from what it is on a poor country. Merely to show, for instance, that the taxation per head in England is heavier than the taxation per head in Italy proves very little indeed. Mere comparison of statistics does not in itself carry the matter very much further. Attempts to estimate what is called commensurate taxation, that is, the real burden of taxation upon industry in different countries, are attractive but in practice extremely difficult and uncertain. Reference was made to the Chancellor of the Exchequer. I naturally take a very high view of what he has done, but I think everyone will admit that he has great knowledge of these financial topics, and he has got all the Treasury advisers behind him. He stated, less than a week ago, all the reasons which induced him and the Treasury to know that it was extremely difficult to have any commensurate estimate of taxation in other countries which would give you an 257 accurate view of the burdens which they throw upon trade.
I can quote, and I am quite sure that the noble Lord will recognise the authority, from Sir Josiah Stamp, who sat on the Dawes Committee. This Committee pointed out that the comparison of statistics of taxation in various countries presents many technical difficulties, and is not, in itself, useful unless its result is related to per cap. wealth or income Differing financial systems, differing administrative units of expenditure, and even differences of classification as between direct and indirect taxation, complicate the difficulties arising from defective statistics, and the disturbance of national economies arising from currency depreciation. As he added, and as I think we shall all appreciate, all these difficulties are enhanced in the case of fluctuating currencies.
So far as taxation is concerned, it is easy to over-estimate the effect on industry, but much depends on how the product of taxation is used. For instance, in our case about £350,000,000 per annum goes in Debt payments, but nearly all to internal Debt payments, which, of course, is a very different matter. That has entirely different financial results, as regards trade, from new expenditure, particularly if you have new expenditure during war time on that which, in itself, is a wasteful object. Therefore you cannot, in estimating taxation per head, and companing it with that of other countries, put out of sight the fact that a large sum of that sort is really in the form of a distribution between taxpayer and capitalist, and is quite distinct from new expenditure or expenditure for wasteful products.
I will now give the figures to show what the reductions have been. I have here the expenditure in millions, excluding such matters as I have referred to—namely, repayment of Debt for war expenditure. In 1920–21 the expenditure was £802,000,000. That is on our Civil Services, and expenditure of that kind. In 1024–5 the amount was £405,000,000, or half that of 192021. Now I will show in a moment what is the real difference between that figure and the pre-war figure. Excluding what are called transitory war services the figures in 1920–21 was £585,000,000, and in 1924–25, £400,000,000. Surely that is a notable reduction. In the summer of 1921 the 258 Geddes Committee were asked to suggest reductions in the 1921–22 Estimates to the enormous total of £100,000,000, in addition to the £75,000,000 reduction shown in the preliminary Estimates for that year, and the reduction has gone beyond the figures which were suggested as the basis of reduction by Sir Eric Geddes' Committee. The bulk of the reductions recommended by his Committee were adopted, and, in addition, substantial economies were effected in directions other than those recommended by the Geddes Committee.
I am sorry that it has been necessary to trouble you with sc many statistics, but there is one more table which I must give, and I do so really in order to compare like with like as between pre-war Estimates and Estimates at the present time. Now the total of the net Estimates for the Civil Services in 1914–15 were £57,000,000, or excluding £6,300,000 for Irish services, a net total of £50,700,000. To this has to be added, for increased prices, eighty per cent., which brings the figure up to £91,300,000. Now, without going through all the figures, at the present time you have a total figure, excluding Irish services, transitory war services, and new services which the State has undertaken since 1914, of £118,000,000, or £27,000,000 more than in pre-war times, and of those £27,000,000, £10,400,000 1s for education and £11,900,000 for contributions to the unemployment insurance fund. I think I have given your Lordships, as frankly as I can, in answer to the noble Earl, all the statistics and information which have been supplied to me.
Really the position is that we are going through a crisis, but to a great extent we have weathered that crisis. There are signs, at any rate, that it is coming to an end. There are further hopes of recovery of our markets under peaceful conditions. The moral I draw is this. It is not a moral of pessimism, I will not say it is a moral of optimism, but it is a moral of hope and faith in the power of our people to recuperate, and I believe that when the present crisis passes by we shall have established a financial record without parallel in the history of the world by the way we have done our duty and met our obligations. On the other side, I hope that we shall have not only restored productivity, owing to cheaper raw material, but also the markets which are 259 necessary in order that there may be purchasers to buy our manufactured goods.
§ THE EARL OF BALFOUR
My Lords, the hour is late, and I shall certainly not think of detaining your Lordships with any elaborate survey of the debate which is just drawing to a close. The speeches have, I think, been extremely interesting. The speech of my noble friend who opened the debate, the speech of Lord Hunsdon, the speech of Lord Emmott and, I will add the speech which the noble Lord has just delivered on behalf of the Government, have all been of great interest, and, I think, will be regarded in the country as a not unworthy contribution to one of the most difficult problems which any country has had to face. I do not wish to take up a pessimistic attitude. If my own state of mind could be accurately described I think I should adopt the words of Lord Emmott. I am sanguine as to the power of this country to deal with the quite unparalleled difficulties with which we have been struggling since the Armistice. I have faith in that. But I admit that if I consider the terms of the problem in the cold light of analytic reason I do not see a very bright prospect spread out before us and before our children. The difficulties of this small Island, with its increasing population, with its diminishing markets, with all the problems set before us by my noble friend who initiated the debate, are such that I think every economist must admit that the prospect is not one to which we can look forward, with that serene confidence in an unlimited golden future which, perhaps, fifty years ago, was justifiably held by the statesmen of all Parties and all modes of thought.
However, I am not going into these wider prophetic issues. I prefer to deal with the more immediate problems before us. I observe that, while there are three great causes, as I think, of our present difficulties, each speaker has dwelt, according to the case which he wished to establish, upon one or other of them. For instance, my noble friend who initiated the debate dwelt very largely upon the question of taxation. How does the Government's case stand upon that? The noble Lord who spoke from the Government Bench seemed to think that he had given a sufficient answer to my noble friend when he said that it was extremely 260 difficult to compare the systems of taxation of different countries, with their different methods of local taxation, and very unprofitable to consider the amount of taxation per head. I do not deny the difficulties, and I do not deny that the amount per head, if taken by itself, and looked at in pure isolation, may be an unprofitable premise on which to build any interesting conclusion. But, after all, my noble friend who initiated the debate did not ask for the amount of taxation per head. He did not dwell upon that: I do not think he mentioned it.
§ THE EARL OF BALFOUR
He may have done so, but the real point is the burden of industry. Do the Government deny that the maker of steel, for example, has a burden, due to taxation, thrown upon him in this country which no rival producer of steel in other countries has to bear? That is the plain and simple question, and that surely it is within the power of a Commission to examine. They can tell us whether the burden of taxation falls more heavily upon a British producer of steel than, let us say, upon a French or a German producer of steel. They can say that, and, from the conclusions which they draw, we surely can base some guidance with regard to the management of our own financial affairs. My belief is that the burden on industry is one of the most serious things that we have to face.
My noble friend's argument was quite a simple one. If you cannot produce cheaply enough to induce or compel foreigners to buy your goods, whether they prefer to make them at home under protective duties or not, we must starve. That is the simple proposition. Surely, in producing those goods in a competitive market, the burden of taxation thrown upon our producers must be an important factor. The noble Earl supplemented that fundamental argument by pointing out that our population is increasing, and he said that if our population is increasing, so must the capital available for productive purposes increase. Does not taxation hamper, and seriously hamper, the accumulation of capital and the use of capital for industrial purposes to our advantage—capital perhaps 261 invested at home, perhaps invested abroad? Can it be denied by the Government themselves that the immense pressure of taxation does seriously hamper us in that competition? The noble Lord accepts the proposition, as I was sure he would when it is put in that simple fashion. But, then, is it not very desirable that the exact effect of this burden upon industry should be examined by a competent Commission, so that, even if we cannot relieve ourselves of these hampering conditions, we shall at least have a fair warning of the difficulties with which we have to contend?
The noble Lord who spoke last dwelt, and I think he dwelt with perfect propriety, upon the lack of markets, due to the poverty of the countries which have been, and which still ought to be, among our best customers. It is a perfectly fair argument, and the weight of that argument is not likely to be denied by anybody on this side of the House. Putt have we not all an uncomfortable feeling that it is not merely a question of the poverty of foreign countries, which the progress of time, and the improvement which we may hope to see in such countries as China and Russia and on the Continent of Europe may to a great extent remedy; have we not an uneasy feeling that there is something behind that, and more fundamental than that—that there are difficulties incident to our essential position which the mere restoration of reasonable Government in Russia, law and order in China, and all the rest of it, will largely mitigate, but cannot wholly remove? It is those other menaces which we cannot quite exclude from our minds and which cause us anxiety when we contemplate the economic future of this country.
When I was at Geneva on League of Nations' business three years ago I confess that a very eminent American financier startled me by saying that he thought the economic position of Poland was much better than the economic position of Great Britain The economic position of Poland at that time was one of apparently hopeless financial disorder. With a currency rapidly diminishing, with external trade rendered difficult, Poland was suffering indeed from all the inevitable signs of a country which had just been re-born and come into existence as a country under the terrible conditions 262 consequent upon the great war. I asked him what he meant and he was quite sincere. He said: "I think your position is most insecure," and for reasons only too familiar to your Lordships. He said: "You are not producing and you never can produce enough for the necessaries of your life, and, unlike other countries, unlike Poland, you are dependent upon importation not merely for your luxuries but for your very existence, your being; and to that condition Poland has not been and never can be reduced." I confess that I was not convinced that the future of this country was so black as he quite honestly painted it at that time, but I think that there is just that substance in his argument which lies uneasily at the back of your Lordships' minds when this great problem is brought up for your consideration.
May I say one other thing in connection with the burden of taxation? I almost gathered from something that fell from the noble Lord that he regarded the taxation of individuals as long as, the taxation was expended in this country by other individuals as no burden on the community.
§ THE EARL OF BALFOUR
It is not the same burden; but is the argument really of any very great value? I do not deny that if we are to pay the colossal sum of £350,000,000 every year it is far better that we should pay it to Englishmen than that we should pay it to foreigners. That is perfectly true. But the idea that the manufacturer is not impeded and hampered in his manufacture because he has to pay an immense Income Tax in order that the country may remain solvent and the interest on the National Debt be paid, the idea that that is no burden upon industry is, surely, a fallacy of the most serious kind. I do not know whether that is the justification, as yet unused, which the Government desire to bring forward for their financial policy in connection with housing and whether, because housing and the debt incurred on housing would be paid through other agencies by the Income Tax-payer, they think that would not be a burden on national industry; but I can assure them that is a profound fallacy if it is the governing consideration which makes 263 them look with serenity upon the huge interest which is already an unexampled burden.
There was one point upon which the noble Lord, Lord Emmott, and the noble Earl who initiated the debate dwelt. I am not going to say much about it, but it must be in all our minds. It is what is commonly called the labour unrest. I think there is only one side of it on which I should even desire to say a word at this hour of the evening. If anything like a spirit of common sense and reason prevailed. I do not believe that this friction between employers and employed, between so-called capital and so-called labour, need necessarily be a permanent element in our social system, or even an element which is going to last a very considerable time. Their interests are really identical. The quarrels between them can be settled by a little common sense and consideration on both sides. I do not for a moment say that either of the contending parties is without blame. I neither say so nor do I think so. But I believe that we may see, at any rate the younger of us may see, an immense improvement in that respect.
The truth is that there is another form of struggle or contention under which we are all suffering but of which nobody suggests a remedy and nobody, indeed, seems to be able exactly to weigh the evils. I mean not the contention between the capitalist members of a producing group and the employed members of a producing group; I mean the contention between producing groups. My noble friend, in a very able and interesting part of his speech, dwelt at considerable length on the contest between the sheltered and unsheltered trades. That is not a contest between labour and capital. It is a contest between one producing group and another. All international competition is of the same kind, and you cannot settle those things merely by improving the relations between employers and employed. Improving the relations between employers and employed is a vital social necessity, and I grant it. I think the present state of things is in many respects quite intolerable. But that can be cured, as I think, by good will and common sense.
I do not see how you are going to cure the other. It is far more difficult. I do 264 not think it is easy as between the producing groups within a State. It is perfectly true that if the railway men, for example, get an increase of wages and if the increase of wages requires the railway company to raise fares that is practically fining every other industry in the country. That is obvious and it is true. The railway men—I take them as an instance—may be able to exact terms which, if there was competition with other groups outside in other nations, they could not exact. The point was made perfectly clear by my noble friend and is familiar to your Lordships. But it is a most important point. How are you going to cure that? That really is the trouble with foreign competition. As foreign competition gets more acute, and as all the difficulties of our export trade are increased, you will undoubtedly have the position of some of our trades made much more difficult. The difficulty is very little understood by the general public. I do not believe, for example, that the agricultural labourer is the least conscious that he is being fined by a rise in the rate of railway labour. I do not say that if he was aware of it he could cure it, but you would get a public conscience which would at all events understand the situation. That is what you do not get now.
It is precisely the same thing with hours of labour. I am a great believer in the reduction of excessive hours of labour. I believe that it does not in itself diminish production, at any rate carried out to a reasonable extent, but what is absolutely fatal is the idea not only that you should work fewer hours of labour, but that you should work less vigorously, that you should throw less vigour and interest into your work. The notion that the condition of any body of men is to be improved by producing less is a fallacy of the most serious, far-reaching and fatal character. I think from what I hear that in America that fallacy has ceased to influence any form of trade union organisation, or any great body of men, and that is one of the great advantages which America has—she has many advantages—in the world competition of goods. All these considerations belong to so many branches of what I suppose I must call sociology, that, surely, it is very necessary they should be taken into 265 account by one body—by one body not too large—of really competent and impartial men, who should survey the great province of political and social thought which, even in the able speeches we have had to-night, have only just been touched upon, and of which I have but indicated the fringe. I take it from what the noble Lord has said that the Commission which the Government indicated their intention to appoint will have before them the very broad questions on which I have so imperfectly addressed your Lordships—
§ THE EARL OF BALFOUR
—and that they will look at the industry of the country, the economic position of the country, its relation to foreign markets, and all those other considerations, in a broad spirit, and not allow themselves to be too much immersed in endless details and interminable statistics, but will give the public of this country what it sorely needs—a grasp of the great difficulties with which we are faced—and will induce them to do what I am convinced they will do when they understand the necessity, and that is, to rise to the height, of the great effort which I am certain is called for both from us and from our children.
§ LORD PARMOOR
My Lords, I do not know if I might ask one question of the noble Earl who moved the Resolution. Having regard to what I have said about the Commission which will inquire, I think, into all those matters to which the noble Earl, Lord Balfour, referred, does ho propose to press his Resolution?
§ THE EARL OF MIDLETON
My Lords, in reply to the noble Lord I should be quite ready to accept his assurance, but there is one point that I should like to make quite clear. Our desire is that the investigation, as my noble friend Lord Balfour has just said, should be not merely into the incidences of the burdens on British trade, but into the corresponding incidences of the burdens on the trade of countries which we have to supply. The noble Lord did assent when Lord Balfour alluded to those burdens, but I hope he will be able to put the matter definitely, and state that there will be put before us not merely the percentage charges upon our own trade, but the 266 percentage charges on the trade of those nations with whom we do business.
§ LORD PARMOOR
My Lords, the noble Earl can hardly expect me now to give a definite answer on that point. My own view is that the reference will be wide enough, but all I can say at the present time is that I will certainly bring to the notice, of the Board of Trade and the members of the Cabinet who are considering this matter the suggestion of the noble Earl in order to be sure, as I understand he desires, that the Inquiry shall bring out the comparison between the trades here and the trades in other countries. I cannot go further than that, as the noble Earl will understand.
§ Motion, by leave, withdrawn.