§ LORD BANBURY OF SOUTHAM
My Lords, I wish to ask His Majesty's Government if the refusal of the Unemployed Grants Committee to make the Middlesbrough Corporation the usual grant for road making except on the condition that they purchased English cement meets with their approval. I do not think there is any doubt about the facts, which are as follows. The Corporation of Middlesbrough desired to make a 1074 road, or roads, for the purpose of giving employment to the people in the neighbourhood, and, I presume, for other purposes. In order to do so it was necessary to obtain 400 tons of cement. They were able to obtain these 400 tons of cement at, I think, about 42s. a ton from Belgium, whereas the price asked for cement in England was somewhere about 53s. a ton. The Unemployed Grants Committee, on hearing of this, informed the Middlesbrough Corporation that unless they bought their cement from an English firm they would not receive the grant.
I have always understood—and I asked the noble Lord, the President of the Council, a question a few days ago in order that I might in no way misrepresent him—that the present Government stood for Free Trade, and not only that they stood for Free Trade but also that they stood against any trust or combine. My recollection was that the present Government at the last Election were nearly as strong in opposition to any trust or combine as they were to Protection. In the present instance they have broken the laws of Free Trade and they have supported a combine; because, as your Lordships will know, if any of you have had occasion to buy cement, one of the biggest trusts or combines in England is, so far as I am aware, the cement combine. The cement combine succeeded in raising the price of cement to a very high figure two or three years ago, and that price has been reduced by foreign competition.
I am a Protectionist, and always have been. I have always held the view that it is for the good of the people of this country that money made in this country should be spent in this country, but if the Government endorse the action of the Unemployed Grants Committee, and if the Government give as their reason that it was natural that the Unemployed Grants Committee should take this line, because the money was to be spent in the relief of unemployment, and it would be foolish to spend money in the relief of unemployment if the result of that expenditure was in some degree to benefit a foreign country or a foreign people—if that is the argument to be brought forward, I would ask them how it is that they were able during the last Election to say that Protection, the remedy of the Conservatives for unemployment, was no 1075 remedy. If Protection, which means spending money in this country and buying articles produced in this country, is no remedy for unemployment, then I say that if the argument is to be advanced that this was done in order to help unemployment, their argument at the General Election falls to the ground, and it is clear evidence that the Conservative remedy for unemployment was the right one.
Then there is another dilemma, and that is the assistance given to this particular combine. I have always held the view that it is legitimate for people to combine together for their own benefit, provided they do not in any way prevent other people from earning a livelihood That was not the view taken by the Socialist Party at the last Election with regard to combines on the part of manufacturers. They said that if they came into power they would do their best to put a stop to these combines, which they said were hampering trade. Yet here, in this particular instance, they are assisting one of the biggest combines that ever existed. If the noble Lord says, "This has nothing to do with us; it is the Unemployed Grants Committee," then I am glad to say that I see in the House the Chairman of the Unemployed Grants Committee. I have had the honour of Viscount St. Davids' acquaintance for a good many years. I have always understood that he was a very ardent Liberal and a very ardent Free Trader, and I will put the same questions to him which I have addressed to the Lord President of the Council. How does he justify the attitude which I am sure he took up at the last Election—namely, that Protection was not a remedy for unemployment? How-does he reconcile that with the action which his Committee have taken in this particular case? I have endeavoured to put my case as shortly as possible, and I shall be very much obliged to the Lord President of the Council if he will kindly reply to the two points I have raised.
§ VISCOUNT ST. DAVIDS
My Lords, before the Government answer the noble Lord's Question I think it would be well if I were to set out exactly what has been done, and exactly under what rules and under what guidance the Unemployed Grants Committee, of which I am Chairman, are working. I am glad to say a 1076 word upon this subject, because most of my friends think that we are a Committee which is giving out doles. We are a Committee which has been trying for four winters to find work for people, instead of leaving them to live on doles. We have been active in helping the building of big docks and canals, the making of roads, the developing of water supplies, the putting up of systems of gas and systems of sewage, works of electric supply, tramways and many other public works. We have had 12,260 schemes submitted to us. We have had to turn down some, but we have approved 8,352 schemes. The schemes which have come up to us have amounted to £86,100,000 up to the end of February last. The figure is a good deal bigger now. We have had, as I have said, to turn down some of them, but we have approved of schemes amounting to £61,600,000 up to the end of February last,
We have had this luck, that dealing with this vast sum of public money we have only had, over four winters, three or four questions asked in Parliament about our proceedings, and this is the first time there has been a debate upon them. As regards Middlesbrough, we have dealt with twenty schemes for Middlesbrough, and have found for that place nearly £500,000. They have been schemes for renovating the tramway tracks, extending gas and dock construction and sewer construction, and lastly, schemes for road improvement and sanitary work. It is in connection with this last that they have been using some cement, I hope your Lordships will allow me to say here that before the war I was myself connected with some big cement combines, but I think I need not tell your Lordships that I should not have touched the matter of cement unless I had been absolutely free to do so. I resigned all connection with any cement company ten years ago. and I have not the smallest connection with any now.
§ VISCOUNT ST. DAVIDS
No, but I wish to make that clear, because the suggestion has been made outside the House. I wish to show what is the nature of our work. Our work is to relieve unemployment. 1077 Schemes, come up to us, and we have to look at them under two heads:—(1), how much direct labour do they give; and (2), how much indirect labour? For instance, in the case of a scheme for levelling a public path, if you vote £5,000 probably the whole of it goes in direct labour. Another scheme comes up, say, to replace an engine in a waterworks. The cost may be £'5,000. In the actual putting up of the engine almost no labour is required—perhaps only ten or five per cent. of the cost is for direct labour. But then you have to look at something else. There is the making of the iron and steel, and indirectly there is an immense amount of labour employed in the building of that engine. We have to look at that. Is this House going to say that if we put £5,000 into the building of an engine, of which only £500 is in direct labour on the spot, that we are to allow £4,500 of it to be spent in some foreign country?
The noble Lord says this is not Free Trade. What has it got to do with Free Trade? This is money for the relief of unemployment as an alternative to a dole. Free Trade means that you may buy in the cheapest market. But there is no law that I know of that says you must buy in the cheapest market. It is open to anyone to buy what he likes, and where he likes. Roughly, I should say that of all plans for the relief of unemployment to which we devote money, about half of the labour that is used is in the place where the actual work is done. The other half of the labour employed is employed in a district, perhaps a very remote district, where the materials are got together. We on this Committee were appointed by a Coalition Government, we were asked to go on by Mr. Bonar Law, and again by Mr. Baldwin and by Mr. Ramsay MacDonald. We remained the same body. During the time of the Coalition Government, and under Mr. Bonar Law, we exercised our own discretion without any interference by anybody, and generally we compelled the use of British materials because we were a body to find work for the relief of the unemployed.
When the late Government came into office. I think in March of last year, for some reason or other we had to put up a case to them to get their opinion, and they laid it down that we were not to allow any materials except British 1078 materials. I have had the working of this for two years, and I represented to the Government in a personal letter that we might have to deal with rings and combines, we might have some fictitious high prices to deal with, and that I thought we ought still to be allowed a discretionary power. But no, the order went out to the country, in a Government circular, saying that local authorities were required to place within this country all contracts in relation to relief work assisted by Government grants. The difficulties of administration were very great, because, practically, you could not do it. You can say an engine must be made in England, but nobody can go behind that and say the metal of which this engine is made, iron or steel, was dug out in England, or in Spain, or America. You cannot go into the source of everything. We had to act as reasonable men and to have exceptions. The Government gave in to us again, and put us back into the position we were in before, allowing us to exercise our own discretion. And I may say that in making these grants, amounting to the vast sum of over £60,000,000, we have been dealing with practically every local authority throughout the country, and almost every local authority supports our attitude and sees the reasonableness of it
I want now to deal with the Middlesbrough case. In May last the Middlesbrough Town Council approached us and asked to be allowed to utilise foreign cement, on the ground of the difference in price between that and British. The difference then was a sum of 11s. 6d. a ton, the British cement being 58s. and the foreign 46s. 6d. The Committee first of all refused to accede to the request, because the case did not seem a very strong one, but we had a minute inquiry into it, and got reports from the Ministry of Transport as to the different qualities of cement, and so on. A deputation came from Middlesbrough, and it appeared that British manufacturers had first quoted a price of 71s. against 48s, and there were indications that homo prices were unfairly in excess of the foreign. We accordingly gave further consideration to the matter, and got another report from the Ministry of Transport. First, a certain specific standard for cement must be adhered to. The foreign cement does reach that standard, but British cement is a very much higher 1079 quality and is generally worth about 20 per cent. more. That is my information, which I have got very carefully from a number of sources. I think it is probable that before long, by agreement, the general cement standard in this country will be raised; if it is, the effect will be to shut out the foreign cement and admit the British cement, which habitually comes up to that standard.
As the result of our consideration the Committee agreed experimentally to allow Middlesbrough to purchase foreign cement for a month, providing that in future tenders were submitted to the Committee month by month. We took this trouble long before there was any suggestion of difficulty at Middlesbrough. The tenders were submitted month by month so that we could see month by month what the British and what the foreign prices were. For several months Middlesbrough came to us and for several months we renewed our experimental permission for purchases of foreign cement. But in February last we told them that they must accept British tenders, as the difference in price had been considerably reduced. I may mention that the British price had fallen slowly and the foreign price had risen, the two prices being in September last 54s. 6d. less 2½ percent. for British, and 46s. 9d. for foreign cement. Then foreign prices fell again, and for December and January we allowed foreign tenders. We have been varying this month by month. When the February tenders were received it was observed that the British price was still about the same level, 55s. less 2½ per cent. and the foreign price had dropped to 44s. 3d. But we were informed that a number of British firms were closed down owing to depression in the trade. The noble Lord talks of combines. It is untrue that the combine includes the whole trade.
§ VISCOUNT ST. DAVIDS
The noble Lord said the same thing—namely, that we forced these people to buy from the combines. We did not; they could buy from whom they liked. The combine, I believe, does not include, at the outside, more than one-half or two-thirds of the cement makers. All we said was that they were to buy British cement. We 1080 were told that at the present day in England 25 per cent. of the British cement plants are not working owing to scarcity of employment, and, taking all the firms which are working, the British cement industry is only paying an average dividend of about 5 per cent. Those are the circumstances under which we acted. Month by month we decided whether Middlesbrough was to buy English or foreign cement, according to the prices of the time, always allowing British cement some advantage.
The noble Lord said that that is Protection. What has it got to do with Protection? We are appointed to find work for British people. The money we vote is money that comes from the taxes, and I should say that it is very unfair indeed that the town of Middlesbrough should be the one to object. Middlesbrough produces iron and steel. All through our work we have had the greatest difficulty in insisting that such articles as tram lines should be bought by British municipalities from British makers and not from abroad. That has been our work. And I have shown that we have been acting under definite instructions from, at any rate, three Governments. It is, of course, for the Government of the day to say whether they, like the three preceding Governments, support our action. I noticed that the Minister of Health, if he was correctly reported, said very politely in another place, when questioned about this act, that he had no power to override it. That, I suppose, is technically true. We have nobody over our decisions to reverse them; but, naturally, we act as a Committee under the authority of the Government of the day, and if the authority under which we acted gave us different directions we should endeavour to carry them out as well as we could. That is the statement as far as the Committee is concerned, and I speak for the other members of the Committee as well as myself.
In regard to myself as a member of your Lordships' House answering the noble Lord who has spoken, I say that it has nothing to do with Free Trade. Free Trade, as I understand it, means that it is for the good of the country that every individual shall be allowed to buy what he likes, where he likes, and with the least hindrance possible. There is no law that forces us all to buy home goods if 1081 foreign goods are a shilling or two cheaper. This Committee carries out what, I believe, is the practice of every decent company director in the city of London. I speak for a vast number of men besides myself when I say that big companies in London, which own great industries in foreign countries, habitually give preference to British trade. We habitually give preference, and a big preference, bigger than the preference which has been given by the Unemployed Grants Committee. The noble Lord is chairman of a railway company. I was talking the other day to a great railway chairman, and I asked him "At what percentage of difference do you buy things made abroad instead of those made at home?" He said: "We never buy anything abroad. We buy everything made in Great Britain." And he told me—he may be wrong—that it was the practice of all great English railway companies. I say that it is the practice of a very great number of companies in the City of London. It has nothing to do with Free Trade. We have the right to buy abroad if we like, and we ought to have that right. But, having the right to buy abroad, if we decide to buy at home it is our own affair, and we have the option one way or the other.
What is the position with regard to the Unemployed Grants Committee? We are using public money, money taken from the taxpayer, to find work for unemployed people. That is what the money is for. Middlesbrough can buy any cement it likes abroad if it does so with its own money raised in the borough. If the money of the taxpayer which is raised to relieve unemployment is being used, it seems to me that money should be spent on British materials. I am in the hands of your Lordships' House and of the Government, but I have put alike the case of the Committee and my own view as to what I believe is the right and sensible course.
§ LORD PARMOOR
My Lords, the noble Viscount, the Chairman of the Unemployed Grants Committee, has dealt so very fully with this subject that I need only say a very few words. On behalf of the present Government, I should like to thank him for the work he has done on this difficult topic. In regard to his previous work he has shown, of course, that the Committee has expended no less than £60,000,000. It is impossible to 1082 regard a question of this kind as though it was a question of Free Trade or Protection. This money is provided as an unemployment grant to be used for unemployment purposes. If I might quote from this circular I am sure it will bring the matter back to the noble Lord's mind. On May 15, 1923—I forget for the moment whether it was in Mr. Bonar Law's time or Mr. Baldwin's
§ LORD PARMOOR
—the Ministry of Health acting on a Cabinet decision issued a circular in reference to these unemployment grants, in the following terms:The Government have decided that as regards all works in respect to which grants are given expressly because of unemployment by the Unemployed Grants Committee or by any Government Department, it shall be a condition of the grant that all contracts for or incidental to the works are to be placed in this country.This follows a similar condition with regard to schemes in respect to which guarantees are given under the Trade Facilities Act. The noble Viscount, the Chairman of the Unemployed Grants Committee, has explained to your Lordships that this note applies exactly to what was done in relation to the Middlesbrough contract. It was not a question of Free Trade. It does not even assist the noble Lord opposite in his love of Protection. It is neither the one nor the other. You have a special grant given for unemployment purposes, and the condition is that it shall deal to a maximum extent with the existing evils of unemployment by limiting the work done in relation to the unemployment grant to work done in this country
About the same date—I have no doubt the noble Lord is cognisant of it, though I do not think he actually quoted it—that is, May 15, 1923, a regulation was sent out to all local authorities in this country dealing with this Circular No. 400. I need only quote one passage from it. It is in these terms—I am directed by the Minister of Health to inform you that the Government have decided that as regards all works in respect to which grants are given expressly because of unemployment by the Unemployed Grants Committee or by any Government Department, it shall he a condition of the grant that all contracts for or incidental to the works are to be placed in this country.After that explanation, I think—
§ LORD BANBURY OF SOUTHAM
The noble and learned Lord has not answered my Question, which was: Does the noble Lord admit that the spending of money in this country does away with unemployment?
§ LORD PARMOOR
I do not know what the noble Lord means by the term "admit." I do not think I am making any admission. I am saying that where money is given as an unemployment grant in order to meet the special necessities of unemployment in this country, that money should be employed on works produced in this country. That is the only point involved in this Question. It was that point that the noble Viscount, Lord St. Davids, dealt with in his conclusive speech. I do not propose to go over the facts to which he has referred. I have here all the prices at various times in regard to the use of cement in Middlesbrough, and they are entirely in accordance with the statistics which he has already quoted.
§ LORD PENTLAND
My Lords, there is one question that I should like to ask. From the discussion which took place on this subject in another place, it appeared that it was the view of the Middlesbrough Corporation that the high price they were obliged to pay for cement directly curtailed the amount of employment which they could give. They were building something which required cement, and it was stated that the cement bought from the home producers was of such a high class that it actually restricted the number of payments they could make in wages and the number of people they could employ on this particular work. I do not know whether that is the fact or not, but that certainly was stated, and it did not appear to be controverted in the discussions in another place. But there is another side to this matter. It has been found that this restriction in regard to the purchase of raw material has directly reduced their capacity for employing the unemployed. If that is so, it is important that your Lordships should know whether the Government has taken that into consideration.
§ VISCOUNT ST. DAVIDS
My Lords, Middlesbrough may say that if they had not to pay so much for their cement they could have more road-making, but it is perfectly open to them to make as many 1084 roads as they like with their own money. When, however, they come to us for a grant we, as a Committee, I think rashly, have to say to ourselves: "How much of this is going direct in labour to be employed in Middlesbrough, and how much of it is going to labour employed elsewhere? "Suppose it is half and half, and Middlesbrough are going to pay a little more for their cement, then we have to consider where the labour is going to be employed. It may be that there are not quite so many people going to be employed in Midlesbrough, but more will be employed on the Manchester Ship Canal, or somewhere else, where the cement is made. In our discretion, we have to consider the question of unemployment generally and its alleviation. It is untrue to say that if Middlesbrough bought cement elsewhere, there would be more labour employed in Great Britain. I am quite sure it would not be so at all.