Lords Sitting of 30 September 1931

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
The Viscount Knutsford—Sat first in Parliament after the death of his brother.

BUSINESS OF THE HOUSE.
LORD PARMOOR: My Lords, I wish to ask the noble Marquess the Leader of the House whether he can give us any information as to when the sittings of this Session are likely to come to an end.
THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, so far as I am able to judge—a statement I think is to be made by the Prime Minister in another place—probably on Wednesday of next week, unless something unforeseen occurs.

PRIVATE BILLS.
THE CHAIRMAN of COMMITTEES (THE EARL OF ONSLOW): My Lords, I beg to move the Motion which stands in my name, relating to Private Bills. It is purely a formal Motion, put down in general terms, to enable Private Bills to be carried over to next Session. Of course, they are not affected in any way by an adjournment. It is a formal matter on these occasions. I beg to move.
Moved to resolve, That the promoters of every Private Bill which shall have been introduced into this House in the present Session of Parliament, and which shall have passed this House and been sent to the House of Commons, or which shall be pending in this House, shall have leave to introduce the same in the next Session of Parliament, provided that notice of their intention to do so be lodged in the Private Bill Office not later than noon on the last sitting day of the present Session; and provided that all fees due by them thereon, up to that period, be paid;
That an alphabetical list of all such Bills, with a statement of the stages at which they shall have arrived, shall be prepared in the Private Bill Office, and printed;
That every such Bill which has originated in this House shall be deposited in the Private Bill Office not later than three o'clock on or before the third day on which the House shall sit after the next meeting of Parliament for business other than judicial business, with a declaration annexed thereto, signed by the agent, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present Session, and where any sum of money has been deposited, as required by Standing Order No. 67, that such deposit has not been withdrawn, together with a certificate of that fact, from the proper officer of the court in which such money was deposited;
That in case any such Bill brought from the House of Commons in the present Session, upon which the proceedings shall have been suspended in this House, shall be brought from the House of Commons in the next Session of Parliament, the agent for such Bill shall deposit in the Private Bill Office after the Bill shall have passed the House of Commons and prior to the First Reading thereof in this House, a declaration stating that the Bill is the same, in every respect, as the Bill at the last stage of the proceedings thereon in this House in the present Session; and, where any sum of money has been deposited, that such deposit has not been withdrawn, together with a certificate of that fact from the proper officer;
That the proceedings on such Bills shall be pro formâ only in regard to every stage through which the same shall have passed in the present Session; and that no new fees be charged in regard to such stages;
That the Standing Orders by which the proceedings on Bills are regulated shall not apply to any Private Bill which shall have originated in this House or been brought up from the House of Commons in the present Session, in regard to any of the stages through which the same shall have passed;
That all Petitions presented in this Session relating to any Private Bill

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shall, if necessary, be referred to the Committee on the Bill in the next Session;
That no Petitioners shall be heard before the Committee on any Bill unless their petition shall have been presented within the time limited in the present Session, unless that time shall not have expired before it closes, in which case, in order to be heard, their petition shall be presented not later than the fourth day on which the House shall sit for business other than judicial business in the next Session.—(The Earl of Onslow.)
On Question, Motion agreed to, and ordered accordingly. A Message ordered to be sent to the Commons to acquaint them therewith.

BUSINESS OF THE HOUSE.
THE MARQUESS OF READING: My Lords, I beg to move, That Stanching Orders Nos. XXI and XXXIX be considered in order to their being dispensed with for the purpose of giving precedence to the National Economy Bill and the Public Works Loans Bill over the other Notices and Orders of the Day, and for the purpose of passing the National Economy Bill through all its stages. Your Lordships will be aware that the suspension of Standing Order No. XXI is for the purpose of giving precedence to Government business for the day, and that the suspension of No. XXXIX is for the purpose of enabling us to take all the stages of a Bill on the same day. It may be desirable that I should make a short statement with regard to this. Your Lordships are already aware of the reasons for dealing with the National Economy Bill to-day, and the necessity for bringing it to a conclusion. In those circumstances I would ask your Lordships to allow this Motion to pass in order that we may proceed with the business.
Moved, That Standing Orders Nos. XXI and XXXIX be considered in order to their being dispensed with for the purpose of giving precedence to the National Economy Bill and the Public Works Loans Bill over the other Notices and Orders of the Day, and for the purpose of passing the National Economy Bill through all its stages.—(The Marquess of Reading.)
On Question, Motion agreed to, and ordered accordingly.

PUBLIC WORKS LOANS BILL.
Read 3ª (according to Order), and passed.

NATIONAL ECONOMY BILL.
Order of the Day for the Second Reading read.
THE MARQUESS OF READING: My Lords, in moving the Second Reading of this Bill I would recall to your Lordships the incident at the meeting of Parliament recently, when your Lordships, having returned in answer to the summons of the Lord Chancellor, had the opportunity of discussing the situation which had arisen. You will remember that on that occasion I explained the position of affairs, and especially the necessity for balancing the Budget as quickly as possible. It was also explained that economies would be introduced, which would have the effect of reducing the Expenditure immediately and for the next year, that is, the year 1932–33, so that we might meet the deficit in the Budget, calculated at £70,000,000 for this year and £170,000,000 for next year. I propose to deal only with round figures, and not to trouble your Lordships with the exact amounts. Of course, they can be given if necessary.
The deficit for this year, I should have said, was estimated at £74,679,000, but, with the economies proposed and the new taxation, there should be an estimated surplus on the new basis of £1,521,000. That is for the year 1931–32. For the year 1932–33 the estimated deficit on the existing basis was £170,000,000. Then, with economies of £70,000,000, and a saving on Debt amortisation of £20,000,000, plus the new taxation for the next year—namely, Inland Revenue amounting to £57,500,000, Customs and Excise, amounting to £24,000,000—the net total would be £171,500,000, leaving an estimated surplus on the new basis of £1,500,000. I desire to call your Lordships' attention at the outset to some changes which have been made in the economy figures, to which your attention will be directed in a little detail when the actual economies are discussed.

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I am very conscious, in asking your Lordships to deal with this Bill, that it is one of an almost unprecedented character. It proposes to give power to snake Orders in Council which will have effect just like an Act of Parliament. It proposes to give power to the Government to make these Orders in Council in respect of certain services which are set forth in the Schedule, relating to education, national health insurance, police, unemployment insurance, and roads. Of course, some of the economies to which your Lordships' attention will be directed do not form part of those particular services, and the only reason why they are not mentioned in the Schedule is that it is not necessary to pass Orders in Council for them. They can be dealt with by administrative orders. As your Lordships will appreciate, the necessity for Orders in Council in this matter is exactly the same as the necessity for legislation; that is to say, certain changes could not be made unless you introduced legislation. To introduce legislation at this stage for the purpose of dealing with these very complicated and detailed matters would be an impossibility, more especially as it is essential that we should arrive at a balanced Budget as quickly as possible—to be specific, by the end of this month—so that from the 1st October what it is proposed to do should take effect.
Therefore, instead of proceeding in the usual way the Government determined, as I explained at an earlier stage, to proceed by Bill to give extraordinary powers, and I do not hesitate to say that, but for the emergency, the request which the Government makes to your Lordships to pass this Bill would be indefensible. It would be quite impossible to ask your Lordships to pass a Bill of this character, giving these extraordinary powers, if it were not that we were in the midst of a serious crisis, and that we had to deal with this emergency. That is the sole defence that I put forward for introducing the Bill in this form. It is the only reason which has induced the Government to present these proposals, and I would add that the means which we have adopted are the only means that could be devised for the purpose of dealing expeditiously with the various matters compressed into this Bill and the economies which have to be made.
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Your Lordships will bear in mind that, in making these proposals, the Government are not asking for what is commonly termed a blank cheque. That is to say, the Government have produced with the Bill a White Paper, which I have no doubt your Lordships have seen, giving all the particulars of what has happened, and setting out the proposed economies in detail. The Government, in introducing this Bill, pledged themselves, if Parliament entrusted them with these powers, not to go beyond the limits stated in the White Paper. The proposal now made to your Lordships, which, as I have already said, is an extraordinary one, is that your Lordships should give power to the Government to make these Orders in Council, and the Government pledge themselves definitely not to go beyond the limits stated in the. White Paper; so that your Lordships know the extent to which the Government intend to proceed in the direction of the Orders that will have to be wade. I do ask your Lordships' attention to the limitations which we have placed by this undertaking inasmuch as we quite recognise that we could not ask for the power to make Orders in Council without, indicating to Parliament the limitations, and pledging ourselves to Parliament as to the limitations within which we propose to use these Orders in Council.
May I say one word on the constitutional question which may be agitating the minds of some of your Lordships? I do not propose to go into any lengthy discussion of it and I am sure that is not desired. In moving the Second Reading of this Bill I am anxious not to take up too much time. I do not desire or intend to discuss any of the economies in detail, but I will deal with them broadly and point out to your Lordships the effect of the proposals, so that you may see what it is that is wished by the Government and what it is that your Lordships are asked to give us power to do. Then, having indicated them, I shall simply tell your Lordships what changes have been made since the original proposals were put forward, so that you may see how the matter stands at this moment. Before doing so I thought it might be desirable that I should inform your Lordships, as far as I am able, of the effect and the extent of the powers which are to

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be given. An Order in Council when made under this measure has effect, as it must have, by the authority of Parliament, if given, just as an Act of Parliament. Once it is made it cannot be changed except by Act of Parliament or, perhaps, by another Act of this kind if it were ever deemed necessary to repeat the process through which we are now going. Once the Order in Council is made it stands. There has been some suggestion that another Order in Council could vary it. That is not so. An Order in Council made under this Act would be an Order, once made, which stands until it is altered by Parliament. That is so, and it is necessary to proceed in this way for the reasons that I have given.
So far as I am aware we have had to pass emergency measures at many times during our history and many of us, all of us possibly, had experience of it during the War. The only observation I would make regarding this Bill is that it is limited in the direction I have indicated, which certainly was not the case and could not be the case during the War: that is, that the Government have pledged themselves as to the extent to which they intend to use the Orders in Council. So that, although strictly legally and constitutionally it would be true to say that these Orders in Council made under the Bill are unlimited, yet in practice and in effect they are limited by the pledge of the Government and the statements in the White Paper.
The next point to which I would draw your Lordships' attention is that the power which is asked is for Orders in Council to be made during the period of one month after the commencement of the Act; that is to say, assuming that this Act receives the Royal Assent and comes into force to-night, for one month from to-night it will be within the power of the Government to make the Orders in Council. When that one month has expired the Government will no longer be authorised to make the Orders in Council. That is in pursuance of the policy which we have already indicated of endeavouring to deal with the situation as it now presents itself. Of course, these various questions have been studied in the interval. The proposals are before
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your Lordships and certainly are all stated in the White Paper and I will refer to them in a moment or two. Once the Government have made use of them, as I hope I have made it clear, there is an end. They make their Orders in Council and those Orders in Council must stand until Parliament changes them again.
LORD GAINFORD: My Lords, might I interrupt the noble Marquess to ask one question? That is, whether it is possible by one Order in Council to repeal an Order in Council that has previously been made?
THE MARQUESS OF READING: If my noble friend means, is there power under this Bill, if passed, for an Order in Council made under this Bill to repeal an Order in Council which was not made under this Bill the answer is "Yes," but not otherwise. As I indicated just now, once you make your Order in Council under this Bill in respect of any particular service that Order in Council stands. It is just as if a Bill had been passed, just as if your Lordships had had a Bill before you; as if it had been discussed for weeks or months in another place and had then come up here and been passed. It is exactly in the same position. It is for that authority that we are asking. Of course it is open to Parliament at any time to change these Orders in Council by passing an Act of Parliament. No other method is available. The Government could not, even within the month to which I have referred, make an Order in Council changing another Order in Council already made under this Bill. That is, as I understand, the constitutional position.
The purpose of it is to enable the Government to effect certain economies, but there are just one or two matters to which I desire to draw your Lordships' attention before I refer in detail to the economies. One reason why it is necessary to have these Orders in Council in certain services and not in others is that in some there are contracts; certainly in a number of the economies which we are proposing to make there are contracts in existence which could not be changed except by an Act of Parliament or by an Order in Council under this Bill, which has the same effect as an Act of Parliament. Take, for example, the teachers, whose case has

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been the subject of much discussion. In order to make these economies effective from the 1st of October it, is essential that there should be an Order in Council to that effect, otherwise notices would have to be given, re-engagement contracts would have to be made, and considerable time would elapse before you could get an effective economy such as we are proposing in the measure now before you. That is one reason. Another is that some of the matters to. be dealt with under these Orders in Council are already the subjects of Acts of Parliament, and you can only change them by an Order in Council made under an Act of Parliament.
When dealing with the Defence Services this Bill would not be required. The Defence Services are not scheduled under this Bill, and Orders in Council would have to be issued with regard to them. All that can be done by administrative orders under the Department, and no question can arise upon the legality of that procedure. Therefore, the economies under the Defence Services strictly do not form part of the purview of this Bill. Nevertheless I will refer to them, because your Lordships naturally would wish to know what is the total effect of the measures which the Government are now taking both in regard to the six months before the expiration of the financial year and also for the next year, 1932–33. I do not propose to refer any further to the taxation proposals, though no doubt those will be considered when your Lordships have to deal with the Finance Bill, which it is expected will come before you on Friday next. But I did at an earlier date indicate what the proposals were, and I have referred your Lordships to-day to the financial position, which is perhaps all that would be interesting at this moment, in order that you may realise what the effect will be if this Bill is passed and the economies which the Government propose Dome into effect—both the economies made under Order in Council and under administrative orders and otherwise—and that the Budget will be balanced for its next half-year and for the succeeding year.
That is, after all, what we have in mind, and what I think your Lordships would fully have in mind. I remember well during the course of the discussion asking my noble and learned friend Lord
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Parmoor whether there was any question with regard to the balancing of the Budget, and he stated quite definitely, as did some of his colleagues, that they agreed that the Budget must be balanced. Consequently there is no question arising upon that, and I am not going to spend time over it to-day. I will only indicate to your Lordships what the position will be. When we were discussing economies and taxation at an earlier stage, and were describing the emergency, it was to keep the pound on the gold standard. There has been an undoubted change since then. It may be said that the emergency does not exist any longer inasmuch as we have had already to abandon the gold standard. Your Lordships passed a Bill quite recently, when we discussed the matter, and explanations were given, and consequently the situation is no longer the same. I do riot put it forward to your Lordships on exactly the same ground, nevertheless it is so similar as to amount, at least, to the same emergency. We are still engaged in trying to save the pound, the only difference being that whereas at an earlier stage we wished to save it and keep it on the gold standard, now what we have to do is all that is possible for the purpose of preventing undue depreciation of it, and taking all those steps which may become necessary, watching events from day to day, in order that we may prevent undue damage being caused in present conditions. Whatever the cause, whether the emergency be the one or the other, the fact must remain indisputable that the Budget must be balanced. That emergency remains just the same as it did before; consequently, I think I am justified in saying that the change which undoubtedly has taken place does not in the slightest degree affect the situation which we have now before us.
Having thus explained to your Lordships what the position is, I would now refer very briefly to the economies which it is proposed to make. As I deal with them it would perhaps save time if I told your Lordships what are the changes that have been made since the White Paper was published. As your Lordships are no doubt aware, the White Paper was published when the Financial Resolutions were first put before the House of Commons, and since then,

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in considering various classes of hardships that were brought before the Government in relation to the teachers, to the police, to the Defence Services—the Navy, the Army and the Air Force—it was found, as was to be expected and must naturally happen, that there were inequalities which ought to be redressed. It was found that a general Order might act with peculiar hardship upon a particular class of servant, and would involve him in a greater sacrifice than that of his neighbour who stood in a different class. Various questions of that kind were bound to arise. I do not propose to discuss them in any detail. I make this observation to your Lordships because it will enable me to tell you at once what the changes are, and you will then follow more clearly the alterations that have been made in the scheme of economies as originally put forward.
This matter came before the other House on September 21, and the Prime Minister then made this statement:
"The Government have, as announced by me on Wednesday last, been examining details of the proposed scheme of reductions."
That is in the remuneration of personnel.
"There are undoubtedly classes of persons who are unfairly affected, and the Government have, in view of all the circumstances, come to the conclusion that the simplest way of removing just grievances is to limit reduction as regards teachers, police, and the three Defence Services, to not more than 10 per cent. This decision will not apply to the higher ranks of commissioned officers in the Defence Services. The balance of the Budget will be maintained."
It is in respect of these reductions that changes have been made and your Lordships may find it convenient if I deal with them without giving exact figures because some of these inequalities are still under consideration and it is not quite clear what will be the effect of the reduction.
Instead of £70,320,000, which was the saving proposed to be made in the original White Paper, concessions have been made which will amount to somewhere between £3,500,000 up to within £100,000 or £200,000 of £4,000,000. Roughly I think I may say £3,600,000 or £3,700,000. I have explained why I do not want to be too precise, and your
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Lordships will scarcely expect it. I indicated that there would be a surplus which was estimated for this first half year of £1,521,000. That would be affected, of course, by these changes. The Government have not yet determined how that should be met, but of course it has to be done. The tables of the reductions and changes made are all that I will trouble you with. If there is any further information required during the course of the debate I have it available and I shall be glad to give it, but I am anxious not to overload you with details and especially with details of figures, because one could take weeks and months going through them as those who have had to deal with them outside the House very soon found.
The first reduction is in the emoluments of Ministers. It is proposed by the Government that as from October 1 all Ministerial salaries shall be reduced—by 20 per cent. in the case of salaries of £5,000 and over, by 15 per cent. in the case of salaries of £2,000 and over and in the case of salaries less than £2,000 by 10 per cent. That, of course, will apply also to the salaries of Members of Parliament, Judges, civil servants and members of the Defence Services in respect of salaries or remuneration coming within the figures to which I have referred. It is expected that the saving in 1932 will be £4,534,000. I am not sure whether in speaking of them just now I referred to them as savings for part of the year, but the savings I am giving you are for the whole financial year of 1932. That saving comes to £4,500,000. In the Defence Services we have, first of all, reduced pay and pensions in certain cases resulting in a saving of £3,600,000. In addition there is a reduction of £5,000,000 on the Estimates of the three Services. I will not go into detail, but your Lordships will see it is a very considerable figure. There has been a change made in regard to this in consequence of the statement made by the Prime Minister, and that will reduce the figure by some £845,000. Then I come to education. On education altogether—for Great Britain that is—the estimated economy at first was £10,300,000 but that was when it was proposed to make a 15 per cent. reduction. That has been changed now and a concession has been made by reducing the cut to 10 per cent.

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which involves a change of £2,600,000. Passing over minor matters, the net conclusion is that the economies for 1932 will be roughly £66,500,000. As I have it before me it is £66,397,000 but there are some small matters to be dealt with, so that may not be strictly accurate. That gives your Lordships a picture of the economies to be made. Many of them can be effected without these Orders in Council, but in order that we may give effect to the plan proposed these Orders in Council are absolutely essential. There is no other way in which it can be done.
I ought to call your Lordships' attention to one important subject, because I think it has on the whole formed the subject of most discussion—that is the 19 per cent. cut, as it has been termed, on unemployment and generally the changes made in regard to unemployment. That involves consideration of a number of figures which I do not propose to give at this moment. I will deal quite generally with the subject of unemployment and the changes that are to be made, and if any question arises or any amendment be proposed I will reply if it is deemed desirable. It is in respect of unemployment that our greatest difficulties occurred, as your Lordships are aware. I do not desire to indulge in repetition, but borrowings for the purposes of the Insurance Fund had assumed proportions which led to observations by the May Economy Committee, which again attracted attention abroad, caused considerable perturbation and undoubtedly led to withdrawals of short-term credits and some unfounded lack of confidence in the pound sterling; because it was thought we were proceeding on what may be called a rake's progress. As a result of what is now proposed all that will stop. There Wilt be a reduction of expenditure from the Unemployment Fund which will amount to £25,800,000. In addition there will be an increased income of £10,000,000 which represents the extra contributions which will be made under the present plan.
Your Lordships will remember that when we discussed this on an earlier occasion I pointed out amongst other things what had already been stated by the Prime Minister elsewhere—that the reduction which was being made of 10 per cent. brought the figure to that which had been fixed in 1929, since which
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time there had been a reduction in the index scale of living costs of 11½ per cent. Part of the argument—I am not going to do more than refer to it briefly so that it may not be thought that I have slurred over the subject; I dare say we shall hear a good deal of it later—was that we were justifying the cut in unemployment pay on the ground of this reduction in the cost of living, and undoubtedly we did. I did in this House lay great stress upon it and it was the main argument elsewhere because obviously it was so clear that it could not help striking everyone who knew what the reduced scale of living was. Now it is argued, and has been argued elsewhere, that you must expect increased prices, that the reduced cost of living will gradually disappear and, in consequence of the pound being off the gold standard, prices will rise, and therefore this reason no longer exists. Let me point out to your Lordships that no one can say that there has been any great rise of prices at present, or any remarkable change in the cost of living. That is the position at the moment, and that is all I am dealing with, or profess to be dealing with.
I would add one other observation. It must not be thought that, because we laid great stress (certainly I did) on the argument as to reducing the unemployment payment by 10 per cent. because the scale of living had been reduced by 11½ per cent., that that was the only ground that could be put forward. It happened to be at that time the best ground and I followed the course, which I hope will commend itself to your Lordships, that if there is one perfectly good argument it is not necessary to embarrass the position by the addition of a number of other arguments that may not be quite as obvious, and at any rate would not be equally convincing to everybody. The point is that we could not continue on the scale on which we were proceeding with regard to unemployment, not only without gravely embarrassing our finances—because that had already been done—but without bringing us to a point at which it would really have been almost impossible to continue for any number of years, even for this country, with all its resources and power of recuperation and with the great strength of its own people and their determination and courage in

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cases of crisis—it would be impossible, I say, to recover the position that we should have lost. Obviously it was essential that we should come to a conclusion and make up our minds that we must stop the expenditure that was then proceeding, and the borrowing, which had reached an extent which no man in his private life would ever attempt if he wished to keep out of the Courts and to remain solvent.
LORD OLIVIER: May I ask the noble and learned Marquess a financial question?
THE MARQUESS OF READING: Certainly.
LORD OLIVIER: What steps are contemplated for covering the accrued deficit of many millions on the Unemployment Fund? Is it provided for by these economies?
THE MARQUESS OF READING: No, I do not think it is—not the accrued debt. What is intended by this is to prevent the continuance of borrowing. I do not want to go into the details, but I would only say that the loans have increased very much during the last two or three years, obviously on account of the increase of unemployment, and what we are intending to do is to put matters right for the future. We must all agree that we have over-spent ourselves, and what we are doing now is to try to make a balance sheet in which we shall make Expenditure and Revenue balance. What we are seeking is to prevent any further borrowing and to put the charge on the Revenue—that is the Exchequer—and to meet it out of the revenue that comes into the Treasury during the course of the year.
LORD OLIVIER: Is it perfectly clear that this is not retrospective? We are not recouping the debt that has accrued on the insurance Fund out of these economies. We are just leaving over, either a floating debt, or one that is to be funded hereafter.
THE MARQUESS OF READING: I think that is the position, but, if my noble friend will forgive me, it hardly affects the question with which we are dealing. No doubt there is a sum of money that has been borrowed. It is not a very large sum at the present time, and if the borrowing comes to an end it can
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easily be recouped. Of course, this is taken into account in the expenditure that has to be incurred by the Treasury. I have been longer than I intended. I have had to deal with a great many subjects, and I have tried to deal with them briefly, so that your Lordships may understand the position. I do not intend to trouble you further at this moment. I think I have sufficiently explained the reasons for this Bill. The plan which we are now proposing must come into force by October 1, otherwise we should lose very considerably and the Budget would be unbalanced. I would like your Lordships, in those circumstances, to bear in mind our present position and to give the Government the credit, at least, that they have attempted to meet the difficulty, that they have grappled with the emergency, that they have proposed the economies and taxations that were thought to be right, that in what they have attempted they have not shirked imposing taxation for the purpose of balancing the Budget and that, though the economies may fall with some hardship—economies always do, and perhaps more on some than on others—nevertheless, our endeavour has been throughout to deal equitably, so that the area of the burden may be enlarged and that the distribution of it may not be said to be unfairly placed upon the shoulders of any one class at the expense of another. I hope that, whatever else happens, your Lordships will come to that conclusion.
I have not referred in any way to what happened before. I have purposely refrained from discussing anything that took place during the activities of the late Government or the circumstances that brought about the change of Government. I want to deal with the case on its merits and, if your Lordships will permit me, to have it discussed on its merits. I do not deal in any way with what happened before, except to make this one observation, and this alone—namely, that most of these matters, if not all—I think I should be justified in saying all—were the subject of considerable discussion in the late Cabinet. I may go further and say that many of the matters were even the subject of agreement between the members of the late Government as to the course to be pursued. The only reason that I refer to this is that I

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want to emphasise that, in dealing with this crisis, we are dealing with it in the national interest, as we conceive with a national mind, with a sole desire to benefit the nation and to do what we can to restore the position which, for a time, we have lost.
Moved, That the Bill be now read 2ª.—(The Marquess of Reading.)
LORD PARMOOR: My Lords, I noticed that the last remarks made by the noble and learned Marquess opened rather a wide vista in regard to the late Cabinet and to the question of national unity. However, I do not propose to discuss them in the first instance, but to deal with the former part of his speech. Or course I agree with him that the proposed form of legislation in this Bill is wholly unprecedented. I have looked through the Defence of the Realm Acts and all the Acts of that character and I cannot find that any of them have gone to the same length as this Bill. I say that for this reason. The Bill appears to me to under-cut one of the deepest principles of our constitutional practice, and that is of real importance in the criticism that I am going to offer to the present Bill under this head.
A fundamental principle of our Constitution is that taxes and charges shall not be imposed upon the subject without the consent of the House of Commons. That is the position of the Petition of Right. What is done here? First of all, under Orders in Council, we interfere with statutory rights and contractual rights under certain conditions. I think it is important to draw a distinction in regard to what is proposed to be done as regards those statutory contractual rights, and to realise that the same effect is proposed as would be proposed if we endeavoured boldly and openly to impose taxation without the authority of Parliament. That is the aspect of the Bill of Rights, and that aspect has been considered in one case in this House and in two cases in the Court of Appeal. In the Attorney-General versus Wiltshire United Dairies case Lord Buckmaster gave a decision in this House, but the leading decision was given by Lord Justice Scrutton. Another case was what was known as Brocklebank versus The King, where the leading decision was
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given by Lord Justice, now Lord Atkin, and no one can read the principle in those cases, or any of the principles laid down in the Practice and Theory of the Constitution, without saying that this is unprecedented in the sense that it is a proposal, without the consent of Parliament, to impose what is practically taxation upon the citizens of this country. Suppose you have a statutory contractual right—
THE MARQUESS OF READING: I do not quite see why the noble and learned Lord says that it is proposed by this Bill to impose taxation.
LORD PARMOOR: I thought I had made it clear, and I will endeavour to do so. Is there any difference really between taxing income at its source and depriving a man of the same amount by deduction from the income to which he has a statutory right? That is the exact point. I say that in substance there is no difference, and up to this time, so far as I know, the principle that I am pleading for at this moment has never been invaded. I thought that the noble Marquess himself admitted that it was unprecedented. What I want to say about that—and it arises also in the subsequent part of the speech which I wish to deliver—is this: admitting it is unprecedented, why is it unprecedented I It is unprecedented because, in my opinion, without at any rate any satisfactory reason, all the proposals for dealing with this matter of balancing the Budget have been rushed through as though there were panic and crisis far beyond what it can be suggested has in fact ever existed, and if they had been taken in their normal course neither of these unprecedented acts, or any other in this drama, would in any sense have been necessary.
I know that I shall in one sense have the sympathy of those in this House who do not always agree with me. How often have I heard members sitting on the Benches opposite denouncing legislation which superseded the action of Parliament either by Orders in Council or by Regulations! I would like to ask the noble Marquess this question: Has there been any case where regulations have been given the absolute authority which they are given here? There is no control by Parliament of any sort or kind, and so far as I know it is certainly true of the Orders in Council, and I believe

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also of the regulations, that not only is there no power of control but no power of variation or alteration.
That brings me, I think, to the next point to which the noble Marquess referred in his speech, and it is this. He referred us to the White Paper. Let me ask him, from the subject's point of view, what guarantee does the White Paper give of any sort or kind? While this particular Government is in power I will assume that the Orders do not go beyond what is contained in the White Paper, but with another Government, with a change of policy and a change of thought upon these questions, the White Paper, from the point of view of being a real protection to the subject, has no force whatever. If you had wanted any legislative authority to limit what you are doing by the terms in the White Paper nothing would have been more simple than the introduction of a clause saying that these limitations should have statutory effect. If you ask me, I say that the value of this White Paper as a guarantee is nothing. I doubt whether in a Court of Law a pledge given by the Government would be any protection against a statutory enactment.
THE MARQUESS OF READING: If the noble and learned Lord is asking me, I thought I had made it quite clear that I agreed that the legal effect was nothing, but I declined altogether to draw a distinction between the legal effect in a Court of Law and a pledge made by a British Government in the British Parliament.
LORD PARMOOR: But the Government may change and there are some who hope and think it may change very soon. That is another matter. So far as the subject is concerned, and so far as it is a matter between what the Legislature has enacted and the subject, a Government pledge is of no value whatever, except to this extent. I am quite willing to accept the pledge of any Government during its term of office, but beyond that it is worth nothing, and could not even be referred to in a Court of Law, whereas if this had been made a statutory limitation, although the whole frame of this Bill would still be found to a great extent unprecedented, it would be a protection to the subject in matters vitally affecting him. He would have all the remedies which in these cases the
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law gives to any citizen, however poor, in this country.
The next point to which the noble Marquess referred was the question of the economies effected. I want to say something more in detail about that, if I may, when I come to the terms of the Bill. But, as far as I understand at the present moment, whereas under statutory right there is no limitation whatever, any limitations in the direction to which the noble and learned Marquess has referred depend merely upon the pledge of a Government so long us it remains in power. I think we agree upon that. I think, however, that it is under-cutting the very foundations of the liberties of the people of this country, confirmed to them ever since the Bill of Rights three centuries ago. The noble and learned Marquess has justified the unemployment cuts on the ground that, being only 10 per cent., they did not reduce the unemployment benefit below the 1929 terms because there had been an advantage to the recipient owing to the fall in prices. Let me answer that. There is no guarantee that prices may not be raised, but, as far as I know, from what we have been told, an Order in Council, once having been made, cannot be changed. What will be the position, if, as I believe will be the case, now that the gold standard has been abolished, prices are raised? Because it appears to me that that is one of the most certain effects of the abolition of the gold standard. The effect of the noble and learned Marquess's argument is not only that the Government are entitled to lower unemployment payments on the basis of lowered prices, but, if prices rise again to their present level, or even to a higher level, the effect of this Bill is to prevent any increase of unemployment pay to meet those increased prices. That is an extremely serious matter. I should like to say one word more about unemployment insurance. Do these cuts apply to the assurees under the insurance scheme, or are they only applicable to transitional benefit?
THE MARQUESS OF READING: Oh, no.
LORD PARMOOR: Because I do not think that the word "dole" has ever been more unhappily or wrongly used than in relation to payments made under a scheme to which the contribution of the worker has been made obligatory by

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Statute. You oblige a man to contribute to the insurance scheme. If it turns out to his advantage are you entitled to deprive him of that advantage, whatever it may be? If, on the other hand, it turns out, us it well may, to his disadvantage, are you suggesting compensating him for the corresponding loss? I quite agree that this argument does not apply to the recipient of transitional benefit, but what argument can really be offered that a man who has paid compulsory contributions, perhaps for twenty years, when at last the time comes when he is entitled to the advantage of his contributions, should have it reduced? I do not believe that any precedent can be found for such an injustice as that.
Under that head the suggested saving in the May Report is in round figures £66,000,000. I have studied the May Report, and read it through a number of times, because I was asked to express my view upon it, and I expressed the view that it was crude and unjust. But what strikes me more than ever is that at the present moment the whole question of unemployment insurance is before a specially appointed Royal Commission. That Commission has taken, and is taking, an enormous amount of evidence from experts and officials of the highest knowledge and experience. Why was the May Report made when a Royal Commission was dealing with this very matter, and in a far more erudite and complete way? What was it that made the majority of the May Committee—for after all it was only a Majority Report—make a proposal for saving on unemployment insurance a sum of £66,000,000 at the very time when this question was before a Royal Commission, which has tot yet finally reported on the result of its investigations?
EARL BUXTON: The Royal Commission reported on this very point.
LORD PARMOOR: No, it has not reported. The Interim Report dealt with anomalies, but the Final Report has not been made.
EARL BUXTON: There was an Interim Report presented at the particular request of the Government. That dealt not only with anomalies, but proposed the reduction of benefit and the increase of contributions—the very points which have been dealt with by this Government.
LORD PARMOOR: No doubt there has been an Interim Report, but the Final Report has not been issued, and it was not for the May Committee to deal with matters which had been specially referred to another tribunal, specially constituted for this purpose. Figures such as those I have given are calculated to cause panic, to raise a feeling of crisis, and to bring about the state of things which has since occurred. I now want to make another remark, which I think is specially applicable to the members of this House. The so-called crisis or panic has been grossly exaggerated to the disadvantage of this country, promoting the lack of stability and confidence which above all things are desirable. I should like to show that, both by the course of what passed in this House, and by a short reference to what passed during the discussions in the Cabinet. Your Lordships will recollect that it fell to my lot, sitting in the place now occupied by the noble Marquess, to tell the House that the ordinary precautions should be taken for calling the House together if necessary. I specially stated, and I believed it to be perfectly true, that the information I had was that there was no suggestion that the power would be actually exercised and that it was taken merely as an ordinary precautionary measure. Studying, as one had to do, the figures then and studying them since, I am utterly unable to discover on what basis the so-called crisis and panic can be justified if you eliminate what is called the gold standard, which I will deal with in a moment.
THE MARQUESS OF READING: That was the crisis.
LORD PARMOOR: No; there I entirely differ. You say that the gold standard was the crisis—
THE MARQUESS OF READING: Certainly.
LORD PARMOOR: Then this Bill ought to be unnecessary, if that is so. As regards what happened when the matter came before the Cabinet, I will not go into details, nor ought I go into them; I entirely endorse what was said by Mr. Henderson, Mr. Graham and Mr. Clynes in another place; there can be no question of the accuracy of their statement. But I want to add that I took the view

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throughout, and I take it now, that the obligation as regards balancing this or any Budget rests upon the Cabinet and the Government in power.
THE MARQUESS OF READING: Hear, hear.
LORD PARMOOR: And there was no reason whatever why the late Cabinet and the late Government should not have brought forward proposals, on which I know they were agreed at one time, to the House of Commons, and it would have been for the House of Commons either to reject or adopt them.
VISCOUNT ELIBANK: Why did they not do so?
LORD PARMOOR: I am glad that question has been asked. It was for this very reason, that while we were considering the matter and at a time when I for one considered that the difficulties were overcome, the Cabinet was broken down—I must use that expression—and treated in a way in which I doubt whether any Cabinet has ever been treated in the history of this country.
SEVERAL NOBLE LORDS: Why?
LORD PARMOOR: Why? When you are having discussions, when you are hoping to come to a determination and when a very large majority of the Cabinet are agreed, why should you break the whole Cabinet up? Why should the attitude be taken which is taken here—namely, that the late Cabinet or the late Government were unable to fulfil the duties and responsibilities which undoubtedly were placed upon them? I join issue wholly with that statement and I know something of what passed at the time. I say that we had more knowledge of the responsibilities and we were able and desirous of dealing with the question of Budget balancing. I do not want to use recriminatory language towards anybody, but it was only because we were not allowed to come to a conclusion and, as I use the term, the Cabinet itself was broken down—which might happen to any Cabinet at any stage of its discussions on matters of this sort—that the end came and the so-called crisis was said to have arisen. This is an extremely important point—
THE MARQUESS OF READING: If so, will my noble and learned friend kindly
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tell me what he means when he says that the Cabinet was broken down?
SEVERAL NOBLE LORDS: Hear, hear.
THE MARQUESS OF READING: The Cabinet broke up; it was not broken down.
LORD PARMOOR: I think that "broken down" is a right expression in the circumstances. Whether it was broken up or broken down I do not mind. It is all very well for your Lordships to laugh, but I agree with the view expressed by Lord Balfour that the Cabinet is the central pivot of our Parliamentary procedure in this country.
THE MARQUESS OF READING: Hear, hear.
LORD PARMOOR: I agree too with what I think every constitutional writer has said. Now I come to this position—suppose there is a difference of opinion between the Prime Minister and a vast majority of the Cabinet, what is the right procedure I say that the right procedure is to give every and further opportunity for discussion and agreement—I thought that had already been brought about in this case—and if in such circumstances a Cabinet is broken up or broken down (I do not care which phrase I use) it is in its essence and truth inconsistent with one of the most important parts of our democratic Constitution in this country.
Passing from that to the point about the gold standard, I think the noble Marquess is quite accurate in his statement that what I call a panic—I do not know where it came from I am sure—was raised in connection with the gold standard. A statement was made that if gold slipped off the gold standard scores of millions of workers in this country would be impoverished and destitute. To begin with there are not scores of millions of workers in this country and, secondly, gold has slipped off the gold standard. I am one of those who are strongly in favour of devaluation. Already the advantage of that change has been felt. I do not want to go into details upon this point because a great authority on these topics is present in your Lordships' House, the noble Viscount, Lord D'Abernon, who has addressed us more than once upon it. It is enough for me to say that I have always agreed with

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him in his statement that if the industrial conditions of this country were to be really bettered it could only be done by devaluation of the gold standard. How it could be said that in any circumstances slipping off the gold standard was going to cause destitution and ruin of this character I am sure I do not know. I should like someone to be able to tell us—I will not say on what authority, one may guess what authority he would have, but on what real basis a statement of that kind was made.
There was another occasion when the representative of the Government, speaking in another place, referred to the conditions of inflation in Berlin and Austria and said that their stamps there were utterly valueless although marked, I think, eight million marks. That may be so; but is there anyone here who will say that devaluation in this country is likely to have any operation of that kind? Nay, further, I admit that if you have devaluation you ought to control it if necessary. Control and organisation are the very essence of the Labour Party principle, although, as I think, we have been often unduly and unfairly criticised regarding our policy in relation to these matters.
I should like to have referred to one or two other points, but I do not wish to detain your Lordships unduly. There is, however, one matter which is really important because of, I will not say the prejudice but the feeling that it arouses. It is said that the present Government is a Government of national unity working together for a common object. How can that be said? Is it a common object when some members of a Government think that tariffs are disastrous and other members think they are the only means of introducing a new level of prosperity in our industrial life? How is that possible? In the same way as regards gold devaluation and these other questions, there are numerous differences of opinion, so it appears to me quite absurd to suggest that we have a united National Government. What does it mean? A united National Government in matters of finance and economics means a Government composed of Ministers who have the same views and opinions on all great basic questions. Sometimes people have wondered why Coalition Governments are not popular in this country. They have all failed,
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six or seven of them, since Parliamentary government began. They have all failed, without exception, where there has been disunity and not unity of interest amongst the Ministers who composed the different Governments in question.
And why? Because England, from its characteristics, likes straightforward action in matters of this kind, and the people have learned to know, quite truly, that you cannot have straightforward progressive action where the various Ministers concerned have different views on basic questions. There is only one unified opinion on these matters in the present Government, and it is an opinion in opposition to the views which the Labour Government have held, and in opposition to the policy which the Labour Government followed. To show that this is not a view of my own merely, I will not go into historical examples of which I have illustrations here, but should like very shortly to refer to a letter lately published by a Peer who has great authority whenever he speaks in the debates in this House. This letter was from Lord Selborne. Lord Selborne, in reference to some correspondence in The Times, wrote this:
"If I understand the meaning of some of your correspondents aright, they propose that a Government should be formed by a combination of those who honestly believe that a tariff is the most powerful instrument to our hands for the rehabilitation of our national industries, and those who equally honestly believe that a tariff would be disastrous."
I ask your Lordships to note the phrase "equally honestly." He then says:
"Surely this idea is fantastic, and, if any attempt were made to carry it into effect, the result must be disastrous."
It is fantastic. I say it is nothing more than a fantastic farce to talk of a united National Government composed of elements absolutely opposed to one another upon the great basic economic questions now being discussed, and whose only point of association that I can understand is opposition to the old Labour Government.
THE PARLIAMENTARY AND FINANCIAL SECRETARY OF THE ADMIRALTY (EARL STANHOPE): Is the noble Lord referring to the last Cabinet or the present one?
LORD PARMOOR: I am talking of the last Cabinet for a moment. The present

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Cabinet is a, Cabinet which came into being, a united National Government. I am sorry the noble Earl did not follow my argument. I have been saying that the present Government, so far from being a united national body differs on every essential subject, and so far as I can understand is only agreed on one point—namely, to keep out Labour Cabinets and Labour Governments. I do hope that what I call the "fantastic farce" of the suggestion of a united National Government will soon be disposed of, not on questions of argument but on questions of fact. There are various other matters of importance upon which I should have liked to say a word or two, but I will not detain your Lordships longer. This Bill is unprecedented. It is unprecedented because of the conditions surrounding this panic crisis, because of the unprecedented rush of matters, if I may use that expression. There would have been no crisis if this matter had been dealt with and met in the ordinary course. There would have been no crisis had there, unfortunately, not been a difference of opinion between the Prime Minister and the majority of his Cabinet. The Prime Minister must have known after that difference of opinion that he had not the confidence of the Cabinet composed of his own Party.
VISCOUNT ELIBANK: Does the noble and learned Lord say that it was only the Prime Minister who had a difference of opinion with the Cabinet? Did not also the Chancellor of the Exchequer and others?
LORD PARMOOR: What I said was that the Prime Minister had a difference of opinion with the majority of his Cabinet. I did not say that he was the only one. I have some knowledge of the facts which have been advertised to the world. I say that he knew that he was in opposition upon these matters to the majority of his Cabinet. He never faced the Labour Party in the same way that the noble Marquess (the Marquess of Reading), Sir Herbert Samuel and Mr. Baldwin faced the Parties they represent. How can you say you o have a united National Cabinet when the largest Party at present in the State is opposed to the whole policy of that Cabinet, and opposed to it not on a matter of detail, not on
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a matter of figures, but opposed to it on the fundamental principle that it puts social services and social action before industrial profit and even industrial success? We shall have to divide against this Bill, however small, comparatively, our numbers in this House may be.
LORD BUCKMASTER: My Lords, we have just listened to a speech that I should like to describe as interesting, but the many points that it raised appeared to me so to confuse each one with the other that I find it extremely difficult to know what is the line of argument that should be pursued. It concluded with a violent diatribe against his late Prime Minister. Let the members of the Party settle their differences themselves.
LORD PARMOOR: I carefully abstained from doing that. If it is a violent diatribe to say that you differ from a policy we should always be guilty of making violent diatribes. I carefully abstained from anything of the kind. I have the greatest respect for the Prime Minister.
LORD BUCKMASTER: Then Heaven protect the Prime Minister if a diatribe does come! I gathered that the suggestion was that the Prime Minister had gone behind the backs of others, that he had not consulted them but had allowed them to be broken up by some external force and in the end that he had arrayed himself with the forces who were against the forces which are still represented by the noble Lord here in this House. If that is not a diatribe I do not know what is. I should have thought that a more malignant attack upon the Prime Minister had never been heard. But it does not matter to me; it is utterly unimportant to me how those noble Lords and their followers quarrel amongst themselves. The thing that does matter is this. Have we got at the present moment a Government united in the purpose of balancing the Budget and doing all that is within their power to redeem this country from what is unquestionably a great danger? I believe we have.
NOBLE LORDS: Hear, hear.
LORD BUCKMASTER: I believe we have, and everything that has happened appears to me to support that belief. The noble Lord does not believe it. I do not know why. But, as I understand

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it, he regards the Party in Opposition as the Party that really has got more nearly at heart the national interest than any other Party in the kingdom. They are going to show it to-night, as they have shown it before, by attempting to reject the only measure that you can bring forward that will enable us to balance our Budget before the world. It is a most astonishing position because, according to the noble and learned Lord's own statement, and certainly according to statements in another place, they were none the less agreed on nine-tenths or perhaps five-sixths of these proposals before the external influence broke them up. That is what has happened, and I should like to ask the noble and learned Lord if, when he was describing disruption, the thing he had in mind was not trade union pressure from outside. It was that that broke them up.
LORD PARMOOR: It was nothing of the kind.
LORD BUCKMASTER: Then perhaps you will enlighten us as to what it was that broke them up? I can think of nothing, except that these people recalled their representatives and told them they were not to go on with the scheme they had in hand which now finds expression in this Bill. The situation with which this Bill is designed to deal may have shocked many, but. I admit it has caused me no surprise. There may be members of your Lordships' House now sitting who will bear with me when I say that from 1919 onwards I did nothing but warn the Government against the course they were taking—the Govern-milt from time to time, not one but all of them—and pointed out that if they persisted in their policy of paying revenue expenses out of capital this disaster that we now have to face must inevitably arise. There was one noble Lord who agreed with me whole-heartedly—we have rare contacts, but they are very close—and that was Lord Banbury of Southam, because he realised more clearly than others what must be the inevitable consequence of the financial policy that was front time to time insisted on. The final thing that happened was that this Chancellor of the Exchequer, representing the united Labour Cabinet, told us in February that no more money was to be spent for
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social services, and then the Government of which these noble Lords were members sent forward to this House Bills that might have committed the country to anything up to £200,000,000. And when this House attempted to modify them they started a campaign in the country and said that the House of Lords ought to be abolished and that it was anti-social action. In fact, your Lordships' action was the only thing that stood between the country and more imminent disaster.
The proposal brought forward by this Bill is one which I agree is unprecedented, but it does not seem to me that that matters. If you have an unprecedented situation in which you have to act with decision and with haste, unprecedented measures must be adopted. You cannot use precedented measures for a thing that has no precedent. I should be glad if the noble and learned Lord would tell me when there was a time in the history of this country outside a war period when we have had to deal as swiftly as we have to-day with these things now presented to us. Therefore the unprecedented nature of the Bill causes me no alarm at all. The noble and learned Lord says it is unconstitutional because it is attempting to tax people without the consent of Parliament. A more amazing bewilderment of thought I have never experienced. Let me put this to him. First let me assume that the reduction of the salaries of civil servants causes a reduction of 2d. in the pound in the Income Tax and that the twopence is taken off. I want to know how that will impose taxation on the people against their will, because that is the proposition.
LORD PARMOOR: No, no.
LORD BUCKMASTER: But it is the proposition. You cannot escape from it. Surely the whole point of this reduction is to prevent further taxation when it becomes necessary to impose further taxation for the purpose of balancing the Budget. How it can possibly be said to be contrary to constitutional precedent I utterly fail to understand. Now I desire to say a word or two about the reductions proposed. In the first place it is obviously impossible to speak of equality of sacrifice, when you are going to call upon people to bear such a burden

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as this. It is perfectly plain that by no rateable system of taxation can you possibly make a man who is well-to-do suffer as the man must suffer who has only just got enough to live on and finds that little reduced. However little you reduce it, the hardship he is called upon to bear must be greater than that of people who have sufficient wealth, even after exhaustive demands are made upon them, to maintain themselves in comfort. This talk of equality of sacrifice is a misleading phrase. It is not that. It is that you have so to adjust the expenditure of the country, which is distributed over various classes, as to see where you best and most fairly can save. That is what this Bill proposes to do.
As to fairness, it is difficult to find that when you pursue it through all the different classes. Let me take, for instance, one in which I have no personal interest whatever but a very close professional and traditional interest, the salaries of the Judges. I really am amazed that it should have been thought wise to reduce these salaries. I would ask your Lordships to remember that these salaries were originally £7,000 a. year, they were reduced to £5,000, and when bonuses were granted to everybody else the Judges never asked for them nor were they given them. They held themselves entirely aloof from the whole of these disputes. Is it fair, I would say more, is it wise to reduce these salaries now? These men are men to whom you entrust the gravest of all duties. In their hands lie the life, the liberty, the property and reputation of everybody brought before them. If you reduce their salaries I do not for a moment think that any body has a right to suggest that you are going to get a lower standard of integrity—that will always be maintained—but you cannot get your best men to do this work if you are going to ask them to make the grave sacrifice they must make if you take them away from their practice at the Bar and put them on the Bench with salaries so reduced. I have always said that no man ought to be appointed to the Bench unless he makes a heavy sacrifice, because unless he does that you have not got the best man; but if you are going to ask too heavy a. sacrifice the men may hold back and you may not get your affairs administered by the finest legal brains.
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After all they are safe people to attack. You may be assured that there will not be a word said by the Judges on this matter. They will bear in silent dignity what I regard as an unmerited oppression.
Now I should like to ask the noble and learned Marquess one question. He has explained quite clearly that this Bill is intended to supplement administrative action, that it is only intended to operate where rates of remuneration exist by Statute and need the equivalent of Statute for alteration. I understood him to say so. If I am wrong I shall be glad if he will correct me. If that be so, I should be glad to know how it is proposed to interfere with the salaries of the Judges. They are all established by Statute. There is not a word about them in the Schedule to the Bill. In this Bill it is designed to deal by Orders in Council with rights established by Act of Parliament. Do you say that they come under education? Are they under national health insurance? Are they even police, or do they come under unemployment insurance or roads? They are not within any of them, and the consequence is, if the noble Marquess's explanation of this Bill be right, that in spite of their desire they have failed to effect their purpose by this measure.
There is one other class of people with whom I am very greatly concerned, and that is the teachers. I do not think we really appreciate all the work that is done by our elementary school teachers. No one can doubt the enormous improvement that there has been in the manners, the conduct and intelligence of the poorer people of this country during the last twenty years. That is evident to everyone. You have only to go out on a Bank Holiday to see for yourselves. That is due more largely to the efforts of the elementary school teachers than to any other agency. The work they do, in school and out of school, is beyond all praise. On them, in the end, will depend whether we are going to ride through our difficulties in the future. It will depend on the people whom they train. To have cut their salaries is, I think, a hard thing. There are, to my mind, four outstanding professions in human life. There are the ministrations of the Churches—of all the

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Churches; there is the administration of justice; there is the healing of the sick; and there is the teaching of the young. I say it is a lamentable thing that in this Bill you have found two or three out of those four as the objects upon which these reductions are to be enforced.
Let me say one word or two about unemployment insurance. It is a matter that has become roost unpopular, both by reason of the extravagant demands that have been made upon the public funds and also because, from time to time, you find that some man abuses his opportunity and cheats the Government. People think that this is some representation of the 2,800,000 people who are, in some way or another, dependent upon these gifts. It is a most unfair conclusion. It is no more right to think that all these people are engaged in cheating the authorities than it is right to think, because you get people who cheat the Income Tax authorities, because you get some fraudulent rogue occasionally sent to prison for having falsified his Income Tax returns, or because some women cheat the Customs with silk stockings, that all are the same. It is not right. The truth is that the infirmity which causes some people to attempt to get the better of the Government Departments and to get all they can out of them is universal. It is spread through every class, and it is no more prevalent among these people than it is elsewhere. I should have been glad, therefore, if it had been possible not to cut this payment. Indeed, I should like to know whether it need have been done if only some other abuses had been removed.
Take, for example, the provision for removing the condition precedent of a man proving that he was willing and eager to get work as a condition of his receiving benefit. That was abolished by the late Government and is no longer necessary. Why? Because they say that it is the duty of the State to provide for a man work or maintenance. That, as I understand from something that transpired yesterday, is the slogan of the Labour Party. I have never yet heard a slogan that had behind it a single grain of sense, and this appears to me to be exactly like the others. It is perfectly clear that, if a man has the right to call upon the State for work or maintenance, the State must have the
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corresponding right to control his family, so that it cannot be that two perfectly worthless people are at liberty to reproduce themselves to the utmost of their physical capacity and then say to the State "Find work or maintenance for all these perfectly unsatisfactory citizens with which we are doing our best to flood you." If such a right exists, then the State has a right to control the family that it is asked to keep up. But no such right exists. If it did exist how would it attach? At birth? Or to the place where the person happens from time to time to be? Is it here while you are here, and in France if you cross the Channel? Does it follow you all over the world? There is no such right. It is the duty of a man to try to find work for himself, to spend himself to the utmost limit of his energy in trying to obtain it and to executing his work when he has found it. That is the right, and there is no duty on the part of the State to provide work or maintenance at all.
The next question that I would ask is, why in the world have they continued these allowances to boys and girls of sixteen years of age? I can conceive of nothing more demoralising. Apparently, if a sixteen-year-old boy has paid 9s. of his insurance in the previous year, he can get this allowance every week for a period that, so far as I can see, is not fixed; and the same applies to girls. I cannot imagine anything more mischievous. You take a boy of sixteen and you expose him to the twin temptation of girls and cinema palaces, and you give him 6s. a week as pocket money. When I was that age I am not ashamed to confess that I had 6d. a week; and if I had had Gs. a week I should never had had the honour of addressing your Lordships to-night. Of that I am certain. You can demoralise people more easily by giving them money to spend on entertainment than by any other means. I want to know why they did not take that, instead of taking it off the men who really are responsible for the families that: they have to maintain? I suppose the reason is that the Government were responsible for this arrangement, and they did not like to take their share of doing away with it. But I would suggest, even now, that

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they should consider—for these things are not decided—whether this could not still be done.
The only other reference that I wish to make is to the question of Free Trade. It is not strictly relevant, but if your Lordships would permit me I should like to say a word or two about it. I am very glad indeed that the Government have not attempted, as part of their immediate plan, to suggest the introduction of tariffs, and for this reason. It is a matter that requires very careful and mature consideration, and it may very well be that, if they had done so, they would have caused the disunion which it must be the desire of everybody at present to avoid. I have been a little surprised at the rigid and inflexible attitude that Free Traders have taken up. When a man says, as a man did the other day: "I was born a Free Trader, I am a Free Trader, and I shall die a Free Trader," the argument does not convince me. After all, we were not endowed with superhuman intelligence at our birth and, if we go through life with the motives of the nursery, it does not necessarily mean that they are good. Further, it does not seem to me that the method of the argument is very sound. Suppose I said—it is merely converting a few words—that I was born with a squint, that I have a squint, and that I shall die with a squint. It may be true, but it does not mean that squinting is the best way of looking at an object. Therefore that kind of argument does not appeal to me.
There is another thing that has caused me greatly to reflect and, as I believe myself to be a Free Trader, and I trust an honest one, I wish other people would reflect upon it also. Appeals have been made to the people of this country to avoid buying goods imported here so as to preserve the balance of trade. That appeal has been made on the authority of the Government. I want to know whether it is right or wrong. If it is right, if it is really the duty of people to avoid adding to our bill for payment of imports of foreign goods by not buying them, I cannot see why it should be wrong to prevent people from being subject to the temptation of foreign goods by keeping some of them out. It seems to me it is exactly the same process. I think the two things want think-
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ing about, and that is why it is I am glad indeed that this matter has not been made the subject of an announcement at the present time. There may be long and difficult struggles upon that question but I have never thought that Free Trade was anything except an economic arrangement suited to the special conditions in which this country from time to time finds itself, and if those conditions alter I cannot be called a traitor merely because I say I want the circumstances examined to see if they still lead to the same conclusions. Let me say in conclusion that I hope your Lordships will not think that this Bill is the end of our difficulties. It stands upon the threshold. I think even greater difficulties lie before us, and even apart from our economics I think that in the not far distance there are greater issues still that will yet be pleaded; but if we can only get the confidence of the people, and guide them, then I am certain there will even yet be greater victories won.
LORD SANDERSON: My Lords, I think that if a visitor came to this country from Mars, and if he examined the National Economy Bill, he would come to the conclusion that this Bill was not an Economy Bill at all. I think he would come to the conclusion that the Bill was a Bill for the punishment of the poor. I think he would be wrong, because if he stayed with us he would learn that we are at bottom a kindly people, and he would see that no one in the country really desired to punish the poor. That is not the object of the Bill, but the effects of the Bill will certainly lie to penalise very severely some of the poorest people in the country. With regard to the so-called "dole" which, as my noble and learned friend Lord Parmoor has reminded your Lordships, is not a "dole" at all, because in the majority of cases it is still an insurance benefit—with regard to that "dole" the Prime Minister said in his broadcast speech, which he gave just after the formation of the present Government, that the "dole" is not and was never intended to be a subsistence wage. You cannot cut 10 per cent. off an income which is not a subsistence wage without inflicting real hardship upon numbers of men and women who, through no fault of their own, are condemned to live lives of idleness and of great anxiety.

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I may be told—I do not think I shall be told so in your Lordships' House, though I have been told, and have seen it stated, or hinted at in the Press—that the unemployed appear to do rather well on the "dole." You hear people say: "Look at the cinemas, crowded with people living on the 'dole,' night after night." As far as I know we have no statistics as to the numbers of the unemployed who fill the cheaper seats in the cinemas. If we had there is no reason to think that the unemployed in the cheaper seats form more than a very small proportion of the occupants of those scats. Again, because you may find unemployed people in those seats there is no reason to assume that those people go there night after night, which is generally assumed. Probably at the most they go once a week, and perhaps not as often as that.
Then it is said: "Look at the children. The children of the unemployed have any number of pennies for sweets." Why should not the children of the unemployed have sweets? Are we to deprive those children of all pleasure in life? Are we to punish them in that way because their parents are unemployed? But, there again, while no doubt some of the children have a penny for sweets sometimes, not all the children do have pennies for sweets all the time. Again, is it not much better for the young people, if they can do it at all, to be in the cinemas rather than on the streets? The older people, too, are very often much warmer and more comfortable in the cinemas than in their own ill-warmed homes. Of course there are abuses and there are anomalies, but as Lord Buckmaster has said these have been grossly exaggerated. They are the exception and not the rule, and. the late Government have already taken steps for dealing with them.
I am glad that the noble and learned. Lord, Lord Buckmaster, has exposed, if I may say so, the extraordinary ideas about equal sacrifice. The Government have talked a great deal about it but have not attempted to bring it about, and you cannot have equal sacrifice in taxation with people with such varying incomes as our people. The economists of some time ago used to say that equality of sacrifice was the first principle of taxation, and at one time they thought, oddly
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enough, that that could be secured by proportional taxation; for example, by an Income Tax of 1s. in the pound right through. Even then they found that they had to give a rebate to people with small incomes. It was recognised that large numbers of people could not afford, and could not be asked, to make such a sacrifice. Then again, we moved on to graduated taxation, and it was thought that they would very nearly approach equality of sacrifice in that way. It was recognised that the sacrifice of £10 to a man with £100 a year was an enormously greater thing than the sacrifice of £1,000 to a man with £10,000 a year. That, of course, was true, but then you cannot get equality of sacrifice quite like that, because, although you can say the sacrifice of the richer man is a much smaller thing than the sacrifice of the poorer man, you cannot say exactly how much greater the one is than the other. You can say that for a rich man to give up a trip to the Riviera is not such a great sacrifice as for a poor man to have to cut down his children's food; but you cannot quite say with mathematical accuracy how much greater the one sacrifice is than the other.
The principle generally laid down by economists at the present time is that you should aim at minimum aggregate sacrifice; that is to say you should aim at the minimum sacrifice over the whole body of taxpayers. In other words, you should raise your taxation with the mini room of pain and inconvenience spread over the whole of the community. To take an example, if you have to raise £1,000 and you have five people who have £5,000 apiece income, and another man with £100 a year you get the minimum aggregate sacrifice if you raise all the £1,000 from the five rich men and leave the poor man untaxed. So it is with regard to a nation. There are classes whom you cannot ask to make any sacrifice at all in this way, and the unemployed come into that category and also many of the working people, who, after all, do most of the hard work of the country and get the smallest reward. I may be told that the well-to-do people have already made very great sacrifices, and that is quite true, but if more sacrifices are to be made they are the people who can make more sacrifices, while the poorer people cannot without reducing

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their standard of life below a reasonable point.
Just a word about the teachers, though I do not pretend to be able to make such an eloquent appeal on their behalf as has just been made by the noble and learned Lord, Lord Buckmaster. But I think he probably would agree with me that what he said about the salaries of Judges applies with almost equal force to the position of teachers. If you cut down the pay of the teachers you will not get the right class of people coming forward to become teachers, you will not get people coming forward with the right enthusiasm for service in the teaching profession. These cuts on the teachers' salaries are going to be very severe. Many teachers have to pay back money given by their parents to cover their long and expensive education, or perhaps grants borrowed from other sources, and that very often hangs over the young teachers for many years of their teaching life. Of course, the 10 per cent. cut is better than a 15 per cent. cut, but even 10 per cent. will bear heavily upon numbers of teachers, especially as many of them will be brought within the Income Tax level, and also if there is in addition a rise in prices and the cuts are going to affect the superannuation benefits. Teachers are better paid, no doubt, now than many classes of working people, or rather I would say they are not so badly paid as many classes of working people. But before 1925, when the Burnham scheme came in, they were abominably paid, and just before the War even the Morning Post described the teaching profession as little better than a sweated industry. Since the Burnham scale these people have naturally adapted their standard of life to that scale and settled down to it, and are looking forward to certain superannuation allowances, and to readjust that position will inflict real hardship upon them.
There are one or two questions which I hope the noble and learned Marquess, if he replies at the end of this debate, will be so kind as to answer, and, if he can, answer them in the sense that I hope would give great satisfaction to some of the teachers. Are the cuts intended to be merely temporary cuts to meet an emergency, or are they to be permanent and, if temporary, for how long? Will the Government take steps to prevent the local authorities making
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further cuts? How far are the teachers' superannuation benefits going to be touched by the cuts? And will special individual cases of hardship receive consideration? If the noble and learned Marquess or whoever replies to the debate can give an answer to those questions I think it will be a great help to the teachers.
I should like to see this Bill withdrawn altogether, because I do not believe any of these cuts are necessary. I do not agree with the noble and learned Lord, Lord Buckmaster, that there is no other way of balancing the Budget. I think there are other ways of balancing the Budget. I need not enlarge upon those but I might point out that another 10 per cent. on the amount paid by Super-Tax payers would bring in £6,000,000, which would more than cover the teachers' cuts. If the whole of the Sinking Fund had been suspended, another £32,000,000, that would have more than covered the cuts in unemployment insurance benefit. There is no reason, I am sure, for making these attacks on the social services and on the poorer members of the population. The well-to-do people, I am sure, could and would he willing to bear a little more. But I am afraid it is too much to hope that the Bill will be withdrawn, and I am afraid we shall not persuade noble Lords opposite to oppose it. I am afraid the Bill may become law, whatever we can say, but, if it does, I really believe it will go down to history as one of the most disgraceful pieces of class legislation which has ever stained the records of Parliament.
THE LORD BISHOP OF SOUTHWARK: My Lords, under ordinary circumstances I think undoubtedly I should have found myself voting against a majority of the various economies and cuts which are proposed in this Bill. I dislike most of these economies, for I believe they will curtail social services, and that they will inflict a good deal of suffering on a large number of people. But these are not normal circumstances; and if I vote, as I shall vote, for the Second Reading of this Bill, I shall do so, not because I care for these economies, but because I believe that this Bill and the balancing of the Budget and other methods adopted by the National Government are the only policy

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which will prevent nothing less than a, disaster to all social progress—namely, the complete collapse of the pound. I am not a little anxious when I discover how many people there are who seem to be quite unaware that there is really a financial crisis. I was not quite certain from the speech of the noble and learned Lord who opposed the Second Heading how far he recognised that there really was a grave crisis.
LORD PARMOOR: Not grave.
THE LORD BISHOP OF SOUTH-WARK: If I am asked whether there is a grave crisis or not my answer is that there must have been a grave crisis for the Cabinet of the late Government to have agreed to economies amounting to over £50,000,000. There must have been a great crisis and a grave emergency before the late Government could have consented to four-fifths or five-sixths of these cuts, including the economies in connection with the teachers. I know there are some who say that the occasion for these economies has, passed away with the departure from the gold standard. The fact of the matter is that with the departure from the gold standard we have lost our first line of defence. The pound has depreciated, but it has not collapsed, and the National Government is taking every step to prevent a collapse of the pound. If the pound collapses it means that social progress in this country is brought to an end for generations, and the poorest of the country are those who will feel the effect of that most quickly and most seriously.
Therefore, much as I dislike these economies and cuts, I feel bound to vote for the Second Reading of this Bill. There are, however, points of detail on which I should like to say a word or two. I should have said something about the teachers had not Lord Buckmaster referred to the cuts in their case, but I think the teachers undoubtedly had a strong case in protesting against the 15 per cent, cut. It is a very serious matter for the nation if a large body of teachers fed, as most of them do, that they are about to suffer a real injustice. I hope very much therefore, that the noble Marquess in reply, may be able to hold out some hope that when this emergency is over the stipends of the teachers may be restored at some future date to their present standard. The standard before the
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War was deplorably low and these cuts will, undoubtedly, affect very seriously some of the more poorly-paid teachers.
With regard to the cut in the so-called "dole," we are asking from the unemployed a sacrifice which, I think, is different in kind rather than in degree from what we are asking from others, for this will affect the very necessities of life in many cases. I entirely agree with what the noble Lord, Lord Melchett, said the other day when he wished that this particular direct cut could have been avoided. I am perfectly certain that the Prime Minister, the Chancellor of the Exchequer and Mr. Thomas, who have been closely associated with the Labour Party all their lives, would never have consented to this unless they had been convinced that it was absolutely necessary. The case for the cut, as the noble Marquess has pointed out, has been changed in some ways by the fact that we have come off the gold standard and that there is, to put it mildly, some probability of an increase in the cost of living during the next few months. Already, I am told, grocers in the poorer parts are warning their customers that within a few weeks the price of living may be increased, and I want to make a very strong appeal to the Government. At present, I understand, the wholesale prices are rather below what they were before the War while retail prices are 25 per cent, above. If wholesale prices go up 10, 15 or 20 per cent, it does not necessarily follow that the retail prices also should go up, and I would like to ask the Government if they have sufficient power to deal with profiteering, and if they propose to use any powers they have promptly, drastically and rapidly. Nothing will cause greater bitterness than the suspicion of profiteering while people are without the ordinary necessities of life, and nothing is more likely to lead to rioting and disorder in our towns among those who are accepting their sufferings with remarkably good temper. I hope, therefore, that the Government—
THE MARQUESS OF READING: The right rev. Prelate will pardon the interruption, but I should like to answer that question now. I could not deal with it before. Although I knew that a statement was about to be made it had not yet been made by the Prime Minister

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when the question was asked me about farther business. The Prime Minister has now made a statement about the business of the Session before the adjournment and has said that provision will be made for emergency powers of that character.
THE LORD BISHOP OF SOUTH-WARK: I am very grateful to the noble Marquess for that reply. The other point I would like to make in connection with the cuts in unemployment insurance is this. A very large number of men, numbering several hundred thousands, will be off the so-called "dole" in the next few weeks and will have to turn to the public assistance authorities. Those public assistance authorities will have a great mass of responsible work thrown upon them. Some of those authorities may make their decisions mainly with economy in view. Others may make their decisions mainly thinking of the needs of those who apply to them, and we may very easily find throughout the country a number of totally different decisions. I am not appealing for a flat rate relief. I think that that was one of the defects in the Insurance Act. But I am asking that the Ministry of Health should send instructions and advice to the various public assistance authorities so that there might be some kind of unity of spirit, at any rate, in dealing with what will be a very difficult and pressing problem in the next few months.
I wish it had been possible to deal with this problem without actually reducing the amount now paid to the unemployed. Here I would differ from a suggestion which was made by the noble and learned Lord, Lord Buckmaster, when he suggested that it might be advisable to stop the payment of the 6s. to boys and girls of 16. In the majority of cases that payment is made straight into the family budget. The boy does not get the 6s. Most of these boys only have out of it 6d. for pocket money. I have made very careful inquiries about this, and though, of course, the inquiries I have made have been limited to a definite locality, yet I think it is the case that cutting off the 6s. would mean that the whole family would suffer more.
My last observation would be that balancing the Budget and this Economy Bill are only first steps. We shall never really solve our problem unless the bal-
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ance of trade is rectified and work is found for the unemployed. While the ranks of the unemployed go on steadily increasing what we are doing to-day will be of comparatively little use. Therefore, whatever new experiments may be made in meeting this problem, I hope that this Government or whatever Government may succeed it will take such steps as will restore the balance of trade and thus find work for vast numbers of those who at the present time are unemployed.
LORD OLIVIER: My Lords, this is, as has been admitted, a perfectly revolutionary Bill, but for other reasons than those which the noble and learned Lord, Lord Buckmaster, gave, I should not take objection to it on that account. It is, however, a rather serious order to put into the hands of the Cabinet the enormous powers which this Bill gives without apparently any possibility of legal redress. I should like the noble Marquess to take this legal point. Under ordinary circumstances we know that a civil servant has no legal redress except by permission of the Sovereign and under Petition of Right. But there are other persons under this Bill who are not at present civil servants, such as teachers. Will they have any legal remedy in the Courts against anything that they may consider oppressive? Enormous jurisdiction is given to Ministers under this Bill; it is practically unlimited; they may do anything they like with regard to contractual obligations. Incidentally, I may say that this Bill comes very near giving the power which the noble Marquess denied was being given, the power of imposing taxation. The Government may increase the contributions to be exacted from the employers and employees to the Unemployment Fund—that is to say, they are going to take out of their pockets something which at present they cannot legally take out, and that surely is something of the nature of imposing taxation. However, that is a small matter.
I was not in the late Cabinet and consequently am not in a position to pursue the intriguing account which the noble Lord, Lord Parmoor, gave us. What may have been the divisions in the Cabinet I do not know, but discussion of them has, I think, occupied rather too much time in another place. They have nothing whatever to do with the Bill

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now before your Lordships' House. We have to deal with the Bill on its merits, and its merits are only, to my mind, affected by one circumstance connected with the late transition from one Government to another, and that is this circumstance. I should have been prepared to give Mr. Mac Donald credit for having had no alternative to taking the course he did. When he announced to the country that whatever he did the Government he had formed was going to exact equality of sacrifice from all those persons whom the Economy Bill and the new Finance Bill affected, I withheld my judgment. I said: "If equality of sacrifice is exacted I will support the proposals of the Government." But I1 find that in the combination between this Bill and the Finance Bill equality of sacrifice is very grossly violated. It is perfectly true, as the noble and learned Lord, Lord Buckmaster, said, that it is not possible to get a nicely adjusted equality of sacrifice. I agree with him in that. I will follow my noble friend Lord Sanderson in his argument when principles of equality and justice which appeal to the great mass of our fellow-citizens, are violated and when they are really grossly violated, then I think we have a right to complain and to ask if it is not possible, as the noble Lord, Lord Buckmaster, and the most rev. Prelate asked, that some of these provisions might possibly be reconsidered and modified because they offend against one's sense of justice and decency.
I noticed a manifesto in this morning's papers stating that it was going to be the policy of the Labour Party to reverse every single action taken by the Government in this Economy Bill and in the Finance Bill. I could not, myself, oppose that Bill if I thought it would commit me to such a policy, but I would rather tell my colleagues what I think of that manifesto privately than publicly. I, unfortunately, have been in an administrative position so often when I have had to retrench that it does not seem to me at all an outrageous thing that when you have to retrench the State should say: "We cannot pay our servants quite so highly as we were paying them, and have to cut their salaries." I have had to do that, I do not say I have had to suffer it, but I have had to do it, and it does not seem to me an outrageous thing, provided there is equality, that
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the pay of civil servants or of policemen or of teachers or of any other classes who are paid out of public funds, should, in a case of such a pinch as this unquestionably is, be reduced.
I do not believe it would be possible at present to balance our Budget without some kind of retrenchment, and without some kind of cutting and reduction of public emoluments; consequently, although there are certain cases such as the case of the teachers which I might like to utter a protest against, I do not oppose this Bill on those grounds. I say that provided you have a reasonable assessment of the cuts, and provided you are not going to double the number of your pensioned Judges by cutting down salaries, the State sometimes has to reduce the pay of its servants. The same argument has been applied in the case of the unemployment grants as in the case of the reduction of civil servants' pay. The salaries of civil servants have already been cut down to follow the fall of prices.
I do not oppose the Bill on that ground. I oppose the Bill on the ground of the joint effect of the Finance Bill, which we expect to see, and this Bill particularly in so far as it relates to the unemployment fund and the unemployment benefits. The noble Marquess gave us a hint which I think he must have hoard in his chambers when he first began to read for the Bar. He said: "Use your best argument and do not use your worst arguments after that."
THE MARQUESS OF READING: I never said that.
LORD OLIVIER: I beg the noble Marquess's pardon; I thought he said "Put your strongest point first."
THE MARQUESS OF READING: No, I should be sorry to have that put upon me. What I said is that if you have one argument which is good and convincing, use it and do not bother about others, but if that argument fails it does not prevent you bringing forward other arguments which you did not use in the first place.
LORD OLIVIER: Quite so, but the noble Marquess did not bring in any of those arguments, and I apprehend he has not got them. I have not heard any other arguments except that one, and it

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was not in my opinion a good argument. The point of difference between those on these Benches and the noble Lord, Lord Buckmaster, and perhaps other members of this House which causes us to regard this question of the unemployment insurance in a different light from other members in this House, is simply this. The noble and learned Lord, Lord Buckmaster, said there exists no right of employment or maintenance from the State. No, there does not at present, but we have introduced in the course of my recollection a principle which amounts to that, and we have done it for this reason. We who have been members of the Labour Party all our lives have repeatedly demonstrated, by economic and other arguments, that an essential operation of the present system of production of the capitalist system, which your Lordships think is a useful system, is inevitably and necessarily to produce unemployment, and the unemployment insurance arrangements which have been adopted by all Parties in the State are based upon the recognition that we believe that the capitalist system does produce repeated crises of unemployment, and must necessarily go on producing them; and part of the price you have to pay for keeping that system is to guarantee maintenance to those persons who are, without any fault of their own, thrown out of work by the operation of that system.
We have superseded the Poor Law by the unemployment insurance arrangements, and unemployment insurance is now part of our political and industrial machinery. It is part of our State political economy. We recognise that modern conditions throw men out of work, and we recognise as a State a right of relief under the unemployment scheme. I entirely controvert the position of the noble and learned Lord, Lord Buckmaster, that there is no right to maintenance or work. There is a right, there is an actual civil right established by the Courts, and it is a right founded upon justice and reason, and we cannot ignore it. That being the case we have established a certain right of maintenance for the unemployed. Subject to what was said by the Prime Minister that the basis upon which that was adjusted has altered and is likely to alter back again, that right stands upon a different footing from the right, I would say, of a civil servant to
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his salary or the right of a policeman or a teacher to his salary. The rights of civil servants, teachers, policemen and other State employees depend upon what the State can afford for the maintenance of the public services. Unemployment relief depends upon a principle which all Parties have admitted, a principle of industrial and social policy. We say that it is part of our system, and that people have a right to it.
The Prime Minister said: "We are going to introduce a scheme which shall exact equal sacrifices from all classes." Anybody who is in contact with unemployed persons and also with persons who are still employed knows that this particular cut of 10 per cent, in the incomes of the unemployed strikes all persons in that class as an extreme injustice. I have living opposite to me a tenant of mine whose family has lived in the house for many years. He is a man who was in a good position in a large furnishing warehouse. It was Shoolbreds, in fact, which was wound up, and through no fault of his own he lost his employment and ever since has been unemployed. I live opposite him. I compare the cut that is going to be made in my income under the terms of the Finance Bill with the cut that is being made in the incomes of other people. I see that a man who gets £500 a year is to pay a much greater percentage of his remaining income in taxation. In my case it is only 3½ per cent, additional. Living opposite me is that man. I am taking his rent week by week and everybody in the village knows the circumstances, and then the Government makes these proposals. It does seem outrageous that that man and men like him with a minimum of subsistence should be mulcted of 10 per cent, and I only of 3½ per cent.
The noble and learned Lord, Lord Buckmaster, seemed to suggest that there was no other way of balancing the Budget. Of course there were other ways. There was the other way of a revenue tariff. There was the other way of increased taxation of higher incomes such as mine, in which it ought to have been done in my opinion. There were many other ways in which it was possible to balance the Budget other than by cutting unemployment allowances. What we are doing by this Bill is to save

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£24,000,000 a year upon the incomes of 2,500,000 men. You are going to take £10 a head from the men on the unemployment registers. Of course I know they are divided into classes—there are the anomalies, men you are going to push off and send to the public assistance committees—but still there is a residuum of properly unemployed men, and you are going to take £10 a head on the average from the unemployed men. Is not that an astonishing proposal? It entails a grossly unequal sacrifice upon that class of men compared with the sacrifice exacted from any oil ourselves or any of the more fortunate classes. It is grossly inequitable. If the noble and learned Marquess had been in his place I would have appealed to his sense of equity, which I well know. He has been Lord Chief Justice of England and he comes of a race which understands equity. I would have appealed to the noble Marquess, Lord Londonderry, a man deeply versed in industrial affairs, if he had been on the Bench opposite. I would plead with the men who feel the principles of equity and are conversant with industrial affairs whether it is not really a shameful thing that this pressure should be put on the very poorest and most despairing, despondent class of the community.
And why is it being done? I should like to have a definite answer to the question why it is being done. Is it being done for any other reason than the reason put forward that unless the Unemployment Insurance Fund was put on a different basis we should not be able to get financial accommodation from people in America or elsewhere whose money we wanted to borrow? If that is the reason, I say it is a disgraceful and discreditable reason. Any trustee, any solicitor may find himself in a position in which if he cannot obtain immediate accommodation some disaster may ensue to clients, but that does not justify him in doing a dishonest, a disreputable or a dishonourable action. I say that to allow our established institution of unemployment insurance, which is a part, and a deliberate part, of our industrial polity as a remedy for the evils of the capitalist system, to be tampered with and broken up by foreign capitalists is dishonourable to this country, and I am astonished that anyone having the honour of the country
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at heart should submit to it for a moment. We are paying as a mitigation of the excesses of the capitalist system this unemployment insurance, and as a concession to the further excesses which have taken place we are to be blackmailed into a cut in the cost of our social institutions. I ask whether it is in deference to opinion in America—ignorant opinion in America—that this cut was made, or whether there was any other reason for this cut. Was there really any other reason than the difficulty of getting financial accommodation from abroad from people who were in my opinion grossly ignorant of our internal affairs?
I was in America two years ago and I know that American opinion then was grossly ignorant with regard to our affairs. The most absurd and ridiculous theories were put forward by everybody one met as to what we were doing in England. The noble Lord, Lord Buck-master, and the right rev. Prelate the Bishop of Southwark referred to the idea that we had millions and millions of idle persons cadging on the "dole" and refusing work when they could get it. That was an insulting travesty of the state of things in this country, but it was the predominant opinion in America. I trust that the people of America do not now believe that anybody who is out of employment is a man who is out of employment because he is idle and could get employment if he wished. I trust that their experience of the more vehement operation of the capitalist system in America has educated American opinion on that. But when it was possible by other means to balance the Budget, whether by a revenue tariff or by putting higher taxation on people in higher positions in life, it ought to have been done. I say that it is a dishonourable thing for the Government of this country to ask a foreign country to give us financial assistance on that security, just because they misunderstand the position and because we did not like to take the chance of going off the gold standard.
The immediate result of our doing so have not been very serious. It is possible that the effect of not being able to get advances would have been still more serious, and I could believe that this was the case. Nevertheless we should have made a stand, and I want

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the noble Marquess and the Government very seriously to consider whether the hints that have been thrown out by the noble and learned Lord, Lord Buck-master, and by the right rev. Prelate, the Bishop of Southwark, could not be followed up, whether they cannot distinguish the cases of real substantial unemployment from the anomalies that exist, and abstain from putting their hands into the pockets of these men by this disgraceful and cowardly action, which no independent Government not under pressure from foreign finances would, I believe, have dared to propose to this country. It is on the grounds of the principle that is embodied in this Bill and the inequality of sacrifice demanded by it that I feel I cannot support the Bill, and must vote against it.
LORD SNELL: My Lords, I bad some doubt as to whether I should not better serve the purposes of the nation by remaining silent than by taking part in these debates, and had it not been for what I regarded as the deliberately provocative Party speeches that we have listened to in this House, not so much to-day as on two previous occasions, I confess that I should have let this occasion pass without comment. I rather expected that your Lordships' House would set a much-needed example in political restraint and not attempt to exploit what is an admittedly grave crisis for Party ends. I was therefore surprised, and deeply disappointed, to listen to bitter Party speeches from two noble Lords, both of whom have been in the position of leading the Tory Party in this House, and I concluded that, if it were right for noble Lords with that responsibility to make speeches of that kind, it might be permissible for the latest member of your Lordships' House to say a few words on this occasion.
The noble Marquess, Lord Salisbury, with the knowledge of the disastrous financial record of the Government with which he was associated, had the courage to tell your Lordships that the whole of this crisis was brought about because the Socialist Government had brought the country to the brink of the abyss; but that statement was a model of restraint in comparison with the statement of the noble and learned Viscount, Lord Hailsham, who had a perfectly simple explanation of the great trouble in which
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we, as a nation, find ourselves. Economists all over the world might be perplexed as to what was the cause of the world-wide depression, affecting all nations and all Governments, but in the noble and learned Viscount's opinion it had nothing to do with the gold standard, nothing to do with the German problem, nothing to do with the concentration of precious metal in France or in America; it was the "mad orgy of expenditure into which the Socialist Government has Hung the country." I quite understand that political fare of that kind is what every good Tory expects to be fed with, but considering the fact that they are using the Prime Minister and the Chancellor at the present day to secure things that they themselves desire, I confess that that sort of statement astonishes me. I have no sort of insight into Tory ethics, but from a Labour standpoint I should regard such an attitude as indelicate, and perhaps risky. The Times to-day, in its leading article, weeps like an hysterical and love-sick girl to the Prime Minister, and begs only that he will consent to lead. And yet this leader and the Chancellor of the Exchequer are the two people who, according to noble Lords, have plunged the nation into the abyss, or to the precipice above the abyss!
What are the actual facts? It was not the Labour Government who put the country on to the gold standard. It was not the Labour Government that put the country off it. It was not the Labour Government that made the profligate bargain with the United States of America and the even worse ones with France and Italy. It was not the Labour Government, indeed, that was responsible for the initiation and detail of the unemployment insurance scheme. Responsibility for all these things, and for the progressive financial degeneration of the nation, falls upon the amalgamated wisdom of the two older political Parties, both of whom would shrink with horror at the thought of being associated with the Socialist ideal of the brotherhood of man. Now that we are in this trouble, all that is being done by noble Lords is to put up their hands and say, like Macbeth, "Thou canst not say I did it,"
How did the crisis actually arise? It was not the pound that was in danger. It was confidence in the pound that was

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involved. And it was not Labour that doubted the pound. I have never heard that poor people are selling their savings certificates to smuggle them abroad. Not at all. What really happened was that it was foreign gamblers in currency that got alarmed, and that alarm was induced, first of all, by Tory journalists, by calamity howlers, who for political purposes were running down the prestige of our nation, preaching it down, when their duty was, if not to preach it up, at least to be neutral in regard to it. The editors helped in that process. In the second place, the financiers, people with financial authority, spread alarm by the articles which they wrote. There were other forms of getting to the people of this country to tell them that the danger existed. I was Chairman of my Party in the other House for two years, and I avow to your Lordships that, at the slightest desire, I guarantee I would have had a Party meeting for them, where they might have addressed 250 of the most intelligent men that they could wish to address. They could have addressed all the Parties. But they thought it right to earn a few discreditable guineas by writing in the Press and spreading false ideas abroad. That is what helped to produce the financial situation.
Take The Times of September 14, which said that:
"the direct cause of the crisis of the pound was that foreign observers, especially of the United States and France, had been driven "—
notice the words—
"to doubt Great Britain's financial solvency."
Of course they had been driven to it by the alarm which had been created because of hatred of a Labour Government. I do not want to go into the question of how far the bankers were responsible for this crisis, but I am not a person who regards the bankers as innocent and entirely guileless in these matters. We know that they can coerce Governments, because we know that they do. The Times of September 17 last said:
"The fact that pressure on President Hoover has been exercised by international bankers floes not help to commend it to certain minds."
So it is admitted that the bankers may coerce an American Government, but the
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very thought that they should express an opinion to our Government throws The Times into a state of uncontrollable hysteria.
It seems to me, however, that that is not the point. I have a more serious charge to make against the bankers, and it is this, that the nation has entrusted them with the conduct of the most delicate and vital of its services. They were appointed to be, as it were, the guardians of the Treasury, and it was to them that the nation had a right to look for guidance, and from my point of view they have betrayed their trust. The control of the nation's financial resources can no longer be left in their hands. Again, see what The Times said about it in relation to America. It quoted from the Saturday Evening Post:
"We are getting exactly what we deserve for bad banking and our inability or unwillingness to see a crisis coming which has been building up right before our eyes for months and years."
That, my Lords, is precisely what has been happening at home, through this mismanagement of our affairs. I need not tell your Lordships that I am no financier, and if I use words that are not technically accurate you must forgive me. I will not use the allegations that they have been borrowing short and lending long, because I may be told that that is an inaccurate description. The noble Marquess preferred to describe it as a policy of unwise over-trading or insecure lending. What right had the bankers to go in for a policy of insecure lending? They should leave that folly to good-natured persons like ourselves. That is not what the bankers were appointed to do. All this cannot have other than a very bad effect upon the thrifty habits of the poorer of our countrymen, who will henceforth, I think, be inclined to put their savings into their children's education or to bury them in their gardens, where they will know where to find them.
The present problems are, however, mostly in our minds. Lord Buckmaster, in a speech of great force and illumination, said that ever since 1919 he had warned successive Government against this orgy of over-spending. Surely the noble Lord must know that the Party with which I assume he is associated for over two or three years has

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been urging the Government to borrow more and spend more and more.
LORD BUCKMASTER: No Party with which I am associated has ever said anything of the kind.
LORD SNELL: The Liberal Party has said it.
LORD BUCKMASTER: Not the particular branch to which I belong.
LORD SNELL: I cannot be expected to bear in mind the particular branch to which the noble and learned Lord belongs, but it is within your Lordships' knowledge that Session after Session the late Government was pestered by these demands, on behalf of the Liberal Party, to spend more money. A greater example of political apostasy has not been witnessed in our time. Lord Buckmaster said that if he had had 6s. a week as a boy he would not have become a member of your Lordships' House. I have far greater faith in his character, and would have trusted him with even more than 6s.
The present position is one of great anxiety to us all and we must be careful not to misjudge it. We cannot afford to make mistakes this time. It seems that there is the financial Budget and then the commercial Budget to deal with. Both must be balanced, but behind those there is the German problem and the Reparation problem, and above all the problem of producing an organised industrial nation. Not one but all of these problems will have to be faced before our problem is settled. We object to this Bill because it appears to put into operation a series of mean economies. A 10 per cent, cut for a man with £40 a year, a 3 per cent, cut for a man with £40 a week, and a 5 per cent, cut for a man with £1,000 a week! The matter about which we feel most keen is the question of the reduction in unemployment insurance. I am not suggesting that this is a cut which any member of the Government delights to make.
VISCOUNT ELIBANK: How was it the noble Lord's colleagues in the late Government approved of these cuts in principle? How then can be object to them?
LORD SNELL: I can object because the answer is that they did not do it. I admit that £12,000,000 is a very great amount of money, but I do suggest that
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it could have been raised in other ways. Lord Melchett made a speech the other day which, if he will permit me to say so, was not unworthy of the prestige which surrounds his name, and in which for the first time within my hearing in this House, was there shown any kindly understanding and recognition of the real position of the poor in this matter. He said that the price of this £12,000,000 was a disunited nation, and it would have paid us over and over again to have searched round in order to find that money elsewhere, rather than take it away from the poorest in our land. We are not alone in our objection to that cut and what its effects will be. Mr. Winston Churchill, who for the first time in his life has lost the boat, the other day said it will largely increase unemployment, further depress trade, and hang like a millstone round the necks of those associated with it. Coming from that source your Lordships will not doubt its complete accuracy.
But there is another point to which I wish most earnestly to ask your Lordships' attention. It is that the orderly conduct of the working classes during these years has been an unexampled thing in the history of modern nations. That has been because they had faith that somehow justice would be done to them. At the present moment that faith has been shaken, if it has not been destroyed, and the Government should see to it that their sense of injustice is not goaded into disorder in the great trouble that is before us. I have been trying for forty years to avoid what is called the class war, and we are doing more with this Bill to produce it than anything of which I have heard. Before I close I only wish to say that even at this hour it might be worth considering whether you could not scrap your cuts. We know who these poor men are. Thousands of them fought in the great War, and, My Lords, you and I are in great part their heirs. It is through them that we have our liberty. You can ask any sacrifice from them in the name of England, but not in the name of the City. They will bear sacrifice bravely, but they will not endure injustice. It is not what they pay to the State that makes them poor; it is what they pay to the landlord and profiteer. I only desire to say in conclusion that you, of course,

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will get your Bill, you may even get your lunatic Election and a nominated and muzzled Parliament, but even that will not be the end. What the end will be no man can see, but it might be worth while to reflect upon the ancient warning: "Let him that standeth take heed lest he fall."
THE EARL OF KINNOULL: My Lords, in opposing the Second Heading of this Bill I think it is necessary to go back to the beginning of the trouble. At the time of the May Report the position, as then stated by the bankers and financial interests, was that unless we kept the pound on the gold standard dire calamities would ensue. The situation became so acute in August that a so-called National Government was formed to save the flight from the pound. This Government, again taking the advice of the bankers and City magnates, produced the Economy Bill which is now before your Lordships to save the pound and restore confidence abroad. We were told by the Government that this confidence would only be restored if we balanced the Budget and that this Bill was the way to do it. In spite of all this the pound has flown and this "dire calamity" was immediately heralded by every newspaper in the country as good news. The need for these cuts in the social services has obviously disappeared. As it was found necessary to cut the unemployment pay to balance the Budget and save the pound, now that the pound has fallen why not reconsider the whole position? Every newspaper is agreed as to the beneficial effect of the fall of the pound. According to some papers factories are already flourishing as a direct result and orders are pouring in. How true this may be I do not know, but even if it be true in the smallest measure, surely the need for these cuts has already disappeared.
Do any noble Lords realise what these cuts mean? Not only do you cut the social services, and increase Income Tax but now their food will cost them more. Thus you penalise them three times over. Some tinned foods have already gone up 16⅔ per cent. The pound has not been saved. Then where is the need to cut the teachers' salaries and the policemen's pay? A short while ago it was thought desirable to get a better class of men to join the Police Force and police wages for that reason were to be kept high so as to attract this class of man.
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Is it not definitely dishonest to offer this inducement and then proceed to cut their wages? And now the unkindest cut of all, the cuts in unemployment benefit which noble Lords opposite are inflexible in their determination not to reconsider. Does any noble Lord in this House know what it is to be without the necessities of life? Has any noble Lord in this House ever been in want of a meal, to know what it is to see food in abundance in the shops and not to have the wherewithal to buy it? Has any noble Lord ever had to make his clothes out of sugar bags, as some of our miners have? Surely your Lordships who have not suffered these hardships would not deprive the poor of the pittance they have got. Would you take from Lazarus even the crumbs that fall from the rich man's table? Are they to be treated worse than your own animals, who at least are fed regularly?
And all these cuts were proposed to restore confidence abroad and save the pound. But the pound has not been saved. The cry of the National Government was "At all costs save the pound; these cuts are necessary for that reason alone." Mr. MacDonald says that he is at the head of this Government for that reason. But, I repeat, the pound has not been saved. Therefore the need for all these cuts has disappeared. No longer must we save the pound. The value of the pound has dropped, and we are told there will be a boom in the industries of this country. The circumstances are now quite different, and do your Lordships really think that it is fair, that it is decent, doubly and trebly to penalise these poor people? You will say: "Look at the poor capitalist—he has to pay 6d. more Income Tax; he will have to reduce his staff; instead of four gardeners he now must have three, instead of two footmen he can only afford one. He is taxed out of existence." But does this mean that he will have to have one less meal per day? Does it mean that he must go without enough food? Does it even mean that he will have to go without his cigar? Your Lordships know perfectly well that it means nothing of the sort. It will not affect his standard of living one iota. Then why take from the poor man the little he has got? These cuts are iniquitous cuts. The Prime Minister appeals for national unity. Do your

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Lordships really think this is the road to unity? I can only earnestly urge your Lordships to drop these wicked impositions on an already overburdened population.
LORD PONSONBY OF SHULBREDE: My Lords, the debate that we have had this afternoon has shown, by the series of well reasoned speeches that have been delivered from this part of the House, the deep animosity which is felt by the Opposition against this measure. I am not going to make any Cabinet revelations, for the simple reason that I was not in the Cabinet. I was a minor Minister, and, as many of your Lordships know, a minor Minister has no responsibility and no information. In fact, he has less information than anybody else in either House of Parliament. So that I can fairly speak from the point of view of an ordinary member of the Labour Party. I do not think that we can really consider this measure without examining its origin, without saying something about the crisis, and how it arose. My noble friend Lord Olivier has asked the noble and learned Marquess who leads the House some questions about the banks of the United States. But it is common knowledge that the money for the loan bad to be raised in America, and that the Federal Reserve Bank of the United States, very properly from its own point of view, could declare what it would accept and what it would refuse. When there was in the proposals put forward by the Cabinet no item which referred to unemployment insurance the Federal Reserve Bank said that they could not raise the money on a proposition of that sort. When that item was tentatively put in they said that was more reasonable and they would consider it. There was no dictation from the bank.
THE MARQUESS OF READING: Would the noble Lord give the authority for those statements? I have seen them made on several occasions, but I really would like to know, as they are made on the responsibility of the noble Lord and they are very serious, whether he will tell us what is the authority?
LORD PONSONBY OF SHULBREDE: I certainly cannot quote chapter and verse. Perhaps I am quoting unfounded gossip, in which case if I get a denial of the
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accuracy of what I am saying from the noble Marquess, I shall certainly accept it. If the United States Federal Reserve Bank acted in that way they were not acting improperly. If money has to be raised in the United States, if a loan is projected there, surely they are perfectly justified in saying on what terms they require the assurance from this country that the Budget will be balanced and economies made.
But there was another factor. This unemployment insurance question was undoubtedly a very serious matter. The Interim Report and the May Report that had been issued seemed to impose upon the Government or any Government a very great responsibility. The Conservative Party knew that its stride or, let me say, its future would be very much handicapped if, when it came into power, it had the millstone of this grave question round its neck. Nobody wanted to deal with a grave question affecting millions of people. Any new scheme must involve losses, outcry, unpopularity and probably the fall of any Government. All Governments knew that. The Conservative Government certainly knew it. They thought that an Election would prove that they would be returned in a majority. They were anxious to put before the country their tariff scheme, and when they saw an opportunity to force a Labour Government to get this question out of the way they, also quite properly from a Party point of view, seeing the Government in a corner insisted time after time that this unemployment insurance cut should be part and parcel of the economies. They were perfectly justified in doing that.
When these proposals came out first of all, we heard about patriotism. I am always very suspicious when people begin talking about their patriotism. It is like a man boasting that he is fond of his mother. When I hear somebody boasting about his patriotism I become very suspicious. That is one phrase that was used. The other phrase was "Equality of sacrifice." The noble and learned Lord, Lord Buckmaster, has said that it was a misleading phrase; may I suggest to him that it was a deliberately misleading phrase, as if sacrifice can be measured in pounds, shillings and pence! The very people who uttered that phrase

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knew that it was not in accordance with any possible fact. So when we see these deliberate and very natural and, from a Party point of view, very proper manoeuvres being carried out, and when I hear them called by the name of patriotism and equality of sacrifice, it makes me feel inclined to shout for a basin.
We have before us to-day the consequences of these manoeuvres. My noble friend Lord Snell, in what I think was a most admirable and closely reasoned speech, was shocked at the speech of the noble Marquess, Lord Salisbury, which I heard, and the speech of the noble Viscount, Lord Hailsham, because they were partisan Party speeches. He was shocked and surprised. I do not agree with him. Nothing shocks or surprises me in politics. I welcome that tone. It is far more natural. I only wish we could get back to the clear-cut cries and arguments of Party divisions, and that noble Lords opposite and those who sit behind the present National Government in another place would make speeches on what they believe and not on compromises in which they do not believe. I hope when an Election does come that we shall get back into a healthy Party atmosphere as I would call it. If we are going to have another bogus National Government with elements in it that are not really mixing, not really in agreement, then I cannot conceive that the country will stand it for long. I think it is putting a very unfair strain on the statesmen in the Cabinet.
Can one imagine a man like Mr. Baldwin, who has never stooped in his life to any Party manoeuvre, having to go to the country and say that the object of the next Election is to keep the Socialists out, when, in order to do that he must denounce the late Government and the Prime Minister and Chancellor of the Exchequer, and then go back the next morning and sit by their side in a Cabinet meeting? The whole thing is perfectly unnatural. The whole thing is contrary to the spirit of this country. You do not want these emergencies. One of the hon. members of the House of Commons said that what is wanted is a crisis mind. That is precisely what you do not want. What you want in a crisis is a person with a level head, a person
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who can see forward, and a person who understands that the political principles he believes in are best for his country. The Opposition was formed not through lack of patriotism but because Mr. Henderson and those of us who follow him hold that the principles in which we believe and have firm convictions, are best for the country. It is because we believe that that we stand out against the bolstering up of a system in which we do not believe. We are already justified in finding that the crisis was not of the character that was stated in the opening phases of the last few weeks.
I feel that we are living in very serious times. This is only just a stage in what is going to be a long-drawn-out drama. We see in the world that Parliamentary government is on its trial and Parliamentary government is failing. I do not want to see Parliamentary government fail in this country. I believe in it for the British nation, but I do not want to see tricks played with it. I do not want to see the institution of what is called emergency methods, of superseding legislation and brushing aside the representative assembly in the House of Commons. The strength of Governments in this country depends, to a very large extent, on the strength of the Opposition. It is merciful and fortunate that with this so-called National Government in existence an Opposition has grown up to watch it, to expose it, to denounce it, and if need be to overthrow it. By that means, and by that means alone, by the conflict of different opinions, can Parliamentary government continue to exist in this country. Once you have a National Government with all Parties joined up and no Opposition, then I say Parliamentary Government is on the down grade, and may yet be doomed in this country. I am glad to have no doubt in my mind that the manoeuvres that were undertaken, and the false reports that were circulated, and the hysterical paragraphs that were published in the newspapers, never made me deviate from what I conceived to be my duty, to go out into Opposition and to fight the present Government in order that we may get back into the healthy Party lines upon which alone our Parliamentary system can flourish.
LORD MELCHETT: My Lords, I had not intended to intervene in this debate this evening, and should not have done so but for the sort of perpetual inquest that has been carried on from the other side of the House upon everything that has been done by this Government and the last Government and the Government before that. It seems to me that the situation with which we are faced is far too serious for us to be continually turning our minds back, and trying to see what the mistakes were that have been made by people many of whom no longer hold office. It is far more important to look forward and try to find some means of getting ourselves out of our present trouble, to examine this measure more from the point of view of the effect it is going to have upon our immediate future, than to consider it in the light of what somebody said some weeks ago.
There is one point in the speech of the noble Lord who has just sat down. Lord Ponsonby, to which I feel I must refer. He has really made an appeal for national disunity, and for the ancient type of Party politics which has gone on for a very long time in this country. I am rather surprised to hear an appeal of that kind from that side of the House. People who sit on those Benches have always held themselves out to be people who were modern, who wished to progress, who wished to move forward, and now we hear that their ideal is to have Party Government and Party strife and all the petty divisions that the noble Lord knows perfectly well are inherent in Party politics, to have all those difficulties which Party strife entails and which make any sort of unity for a nation in a time of crisis quite impossible. According to the noble Lord the union of able men of all Parties to try and help their country is nothing more than political jugglery which ought to be stamped on at all costs. I profoundly disagree with that point of view.
What I would like to say this evening at this late hour is this. I have been giving all the consideration within my power to another aspect altogether of this question—namely, as to how we could best extract ourselves from the difficulties in which we are now placed, and to what extent the Bill at present before the House is going to have that effect. I must say I have the very greatest misgivings of the effect of this
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Bill. I cannot see that it is going to achieve the objects for which it was originally introduced. However, responsible men have taken up the reins of Government with the best advice, and they come forward and put this Bill before your Lordships' House, and for my part I will support them, saying again as I have said before, that I am certain that the march of events will be such that they will have to reverse the actions of this Bill within a very short space of time. But that is only one part of our problem. There is a much graver, and, to my mind, a much more vital part of our problem upon which we should have some lead at this stage if we are to be asked to vote these economies.
The noble Lord, Lord Snell, referred to the balancing of our commercial Budget. I ask your Lordships to remember that on September 17 you passed a Resolution supporting the Government in their action in setting up a Committee to consider this vital question. Whatever that Committee report, whatever action the Government propose to take as a result of the work of that Committee, must have a direct and vital hearing upon the propositions in this Bill. I do think we are entitled to know what progress the Government are making, whether they propose to take any action, or whether they are going to leave their work unfinished at this point. It is a matter of great importance to know that, in allowing these economies to go forward and in making an appeal to the people of the country to make the sacrifices which these economies will entail. Since that Resolution was passed we have had the Gold Standard Bill, which has taken us off the gold standard and devalued the pound. The effect of that devaluation has been to give a great measure of restriction to imports into this country, and is in fact doing some of the work that the Cabinet Committee might have suggested. But that devaluation is a very uncertain thing. It fluctuates almost from hour to hour, certainly from day to day, and no one is going to imagine that stable industry can be built up in this country behind a fluctuating restriction barrier of that type. Something more permanent has to be imposed, and imposed very quickly.
I think we are all agreed that some form of restriction is essential. I think we can draw a lesson from the restriction that has already taken place in the

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remarkable recovery that has already occurred in our trade. I should like to lead to your Lordships one or two of the announcements that have appeared in the reliable newspapers during the course of the last few days as to the effect already of the restriction imposed by the devaluation of the pound. For instance:
"Barrow Steel Company announce that early next week operations will be resumed at their works, which have been idle for same months. Two furnaces will be brought into operation for smelting iron, and the following week the steel department, which has also been idle for some time, will be restarted. There is a better feeling now in the iron trade."
Another report shows what has happened in regard to the Lancashire Cotton Corporation. It states:
"Another indication of the brighter tone prevailing is the announcement that the Lancashire Cotton Corporation … is to reopen four additional mills. They are the Parkside Mill, Royton, containing 145,000 spindles, which has been closed down since August, 1929; Yates Mill, Castleton, near Rochdale, with 50,000 spindles, which has been idle for four years; the Tudor Mill, Ashton, with 80,000 spindles, which has been stopped for over twelve months; and the Forge Mill, Oldham, owning 40,000 spindles which has not run for four years."
These are all starting again.
With regard to the Northern Aluminium Company we read:
"The Northern Aluminium Company, who have just completed the erection of a large factory at Banbury to employ several hundred people, announced on Wednesday teat they would not open until the New Year. Yesterday, however, it was announced that, as business shows distinct signs of improvement, the directors have decided to commence work as soon as possible."
That is from the Birmingham Post of September 26. Then with regard to John Clegg, Ltd., I read:
"The Daily Dispatch was informed yesterday that work will be resumed on Monday at the Sandy Lane Mill, Shaw, of Messrs. John Clegg, Ltd. Work will be found for 140 operatives."
Then there is the English Steel Corporation. The Daily Mail said on September 28:
"The prospects of at least a proportion of our lost steel trade being recaptured by British steel-producing companies, owing to the fall in sterling, have become more hopeful by the news that the German Steel Trust is preparing to close down its Wissen Mills, which employ 1,000 men. An official of the English Steel Corporation, the Sheffield
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Company which in 1929 merged the steel and allied businesses of Vickers-Armstrong, Ltd., and Cammell Laird & Co., told me that the position was already improving from our point of view."
In reference to the wool textile trade The Times special correspondent wrote on September 29:
"There is a definite improvement in the outlook for the Yorkshire wool textile trade."
All over the country, whether you turn to cotton operatives or tin plate works, you find the Germans unable to send goods to this country and you see signs of that trade revival which people in this country have been longing for and a chance of our men getting back into work, of the unemployed with whom we have all been commiserating this afternoon becoming again employed on full wages. All that has come about because for the time being some form of variable and indefinite restriction has been placed upon imports into this country. I think we can really say that on all sides of the House and among all Parties in the State there is general agreement that there has got to be some restriction of imports. The only question that they seem to disagree about is what they are going to do. I would say that the form of restriction is really not so important. There are many ways of restricting imports and we are not tied to any particular one. But above all things it seems to me that the most useless act that we can perform at the present time is to divide this country from end to end by having a General Election in order to enquire from the voters exactly what form of restriction we shall adopt. I cannot conceive of anything that could be more useless. For that reason I have presented to your Lordships a short Bill entitled the Imports (Regulation) Bill which very briefly would give the Government power to make Orders in Council—
"to restrict or prohibit in such manner as may be consonant with any Treaty obligations the importation of goods and merchandise into the United Kingdom in such manner and to such extent as may appear advisable in order to restore the balance of the overseas trade of the United Kingdom."
LORD BANBURY OF SOUTHAM: My Lords, on a point of order. Are we discussing the noble Lord's Bill or are we discussing the Economy Bill? The noble

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Lord is taking advantage of the House in order to initiate a discussion on a Bill which is not before us.
SEVERAL NOBLE LORDS: Hear, hear.
LORD MELCHETT: If I have troubled the House which points upon a Bill which I hoped would meet the situation and bear directly upon the subject which we are discussing, I must apologise to the House, but I had hoped that as the hour had become late and it is not possible to take a Second Reading of the Bill this evening, it might be possible to get some expression of opinion as to whether the House would like to go further into this matter upon the adjournment.
SEVERAL NOBLE LORDS: NO, no.
LORD MELCHETT: Since your Lordships seem to feel quite clearly that there is no object in further discussing any constructive proposal at this moment to deal with this matter, I will confine myself to a few observations in closing. I must say that it seems to me a great pity that the Government should ask us at this stage to impose these cuts upon various public servants without telling us what their plans are which may effect the economies and the amount of the cuts to be imposed. Some time has passed since a Cabinet Committee was set up and we have heard nothing in this House or elsewhere as to the intentions of the Government. I think that before we go to a Division we ought to hear from the noble and learned Marquess the Leader of the House what are the proposals of the Government.
EARL DE LA WARR: My Lords, at this hour I will not venture to detain your Lordships for long; but before the noble and learned Marquess who is to reply for the Government makes that reply I should like to appeal to him to deal with one point. The noble and learned Lord, Lord Buckmaster, whilst strongly supporting the Government, drew attention to certain hardships that he felt were particularly serious. He mentioned particularly the Judges, the teachers, and the unemployed. The noble Lord, Lord Melchett, went even further. He told your Lordships that in his opinion the Government if it continues in existence would actually have to go back on many of the economies that it is now proposing, for the simple reason
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that, as we must all recognise, the situation in the last fortnight has changed very considerably and a 10 per cent. cut or 15 per cent. cut proposed a fortnight ago is likely in the near future to become very much heavier now that the pound is at variance and prices are likely to rise. We all know perfectly well that the Government have introduced this Bill with great determination and intend to pass it, and it would not be of the least value to ask them to make any alteration at the moment.
But there is one good thing about it and that is that the Government are not committed to any specific cut that is to be introduced, because the cuts that are proposed are in a White Paper and all they are committed to, I gather, is not to go further than the White Paper. Therefore, could not the noble and learned Marquess who leads the House give some undertaking that before these cuts are actually introduced by Orders in Council the Government will reconsider the position in relation to the rising cost of living? There is one other alteration that has taken place owing to our going off the gold standard and that is that in a sense the worst has happened. We were all of us—some of us more than others—impressed by the intense seriousness of the position of being driven off the gold standard at the time when this Bill was originally introduced. But now the worst has happened and we are off the gold standard and we have found that ruin has not followed. So far from ruin having followed we find those very newspapers that for a whole fortnight were telling us that the country would be finished if we went off the gold standard are now saying that it is the best thing that ever happened. What, therefore, is the position?
When this Bill was introduced we were very largely at the mercy of financiers from whom we had to obtain credit, and we considered that in order to remain on the gold standard we had to accept their terms. We are no longer in that position. We still want to balance the Budget for our own reasons, but we are no longer in the position of having to balance the Budget in the manner in which we are told by outsiders we must do it. We all know that the last Government were prepared to balance the Budget but split on one item, the 10 per cent. cut in unemployment pay, which they

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were told must be made in order to satisfy foreign opinion. We are no longer in that position and if we read the foreign Press we see that foreigners are rapidly realising that it is far more important to them to keep up the value of the pound than it is even to us, in this country, and therefore if we now like to turn round and say that, owing to the alteration in the situation, owing to the fact that we know that the cost of living is bound to rise as the result of devaluation, we have decided to make an alteration in the cuts, particularly in the 10 per cent. in unemployment benefit, we can do so. Surely the noble Marquess must recognise that we should be in a very different position if we said that than we were in a fortnight ago.
Noble Lords may say that there is no alternative. I think that in other speeches many alternatives have been put to you. I would only add that we all of us know perfectly well that, in both Houses of Parliament, the majority of those who have voted for this Bill, and are going to vote for it this evening in this House, are at the present moment moving heaven and earth to try and precipitate this country into an Election, in order to introduce a system of tariffs, and those very members in another place, and members of your Lordships' House who are supporting this Bill, are themselves, by the policy of trying to precipitate an Election, making an admission that there is an alternative, not necessarily an alternative that we should agree to on this side of the House, but still an admission has been made that there are alternatives. Accordingly I would appeal to the noble Marquess, in view of the change in the situation, to tell the House this evening that, while unable to make any definite announcement, the Government is prepared to consider the altered circumstances.
THE MARQUESS OF READING: My Lords, your Lordships will agree that this debate has travelled over very wide ground, and that we have discussed some subjects which do not appear to have a very direct relevance to the Bill. But, on the whole, I think your Lordships, certainly those who are interested in the passing of this Bill, will have no reason to be dissatisfied with the debate. I could not help observing in the speech of the noble Lord, Lord
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Ponsonby, that during the course of his observations, and especially in reference to Party matters and to the usual kind of political warfare, he seemed, so far as I could understand him, to look upon this Government as something that was really quite unworthy of respect—I do not mean the persons composing it, but the Government as a whole—and he used the expression "a bogus National Government." I wondered at the time what he meant.
What is there that is bogus about the Government? I have tried to analyse it fairly and to arrive at the state of mind which led the noble Lord to make that observation. Is it that when members of Parties who have hitherto not been able to coalesce, members of Parties who have hitherto been engaged in political controversy, find themselves faced with a grave crisis, they then forget their controversies and range themselves together in the defence of the country and in the interests of the country, determined that, whatever may happen, they will stand firm for the nation and forget Party in the interests of the nation? I propose to say nothing more on that subject. I do not envy the man who takes the view that a Government formed in those conditions and in those circumstances should be termed a bogus National Government.
I was struck by the observations made by the noble and learned Lord who leads the Opposition, Lord Parmoor. I have no reason to complain in the slightest degree, so far as I am concerned, of any observations that he made, or indeed of any of those that were made by the noble Lord, Lord Ponsonby, save the one to which I have just referred. The only thing that has struck me throughout was that it did seem most surprising that, when we hear this condemnation of this Bill, we should fail to remember that the greater part of it, certainly 80 per cent. of it, had received acceptance from a large part of the Cabinet of the late Government, if not the whole of the Cabinet, and that the crisis which everybody on the other side is now ridiculing was at any rate a crisis which led to what was called the breakdown of the Government, when men like the present Prime Minister, the Chancellor of the Exchequer and the Secretary of State for the Dominions, felt it necessary to

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leave those with whom they had been associated all their lives, because they failed to agree with them in what these Ministers thought was their duty in the interests of the country. There may be honest differences of opinion. Nobody would suggest otherwise, and certainly no word that I have said from beginning to end, would lead anybody to think that I am in any way impugning the motives of those who may differ, though I may criticise their action.
All I do venture to observe—I do not intend to go into minute criticism—is that you should remember that, when these economies were first discussed, with which we are now dealing in the shape of a Bill, the crisis was upon us, not upon this National Government but upon the late Government, that it was they who were in difficulties and who were faced with the situation. Heaven forbid that I should make recriminations at this moment! Heaven forfend that I should be tempted to ask what were the causes of bringing us to this controversy! Let me not fall into the temptation of enquiring why steps were not taken before matters went as far as they did, and the then Government was faced with the crisis! I refrain from that, because I think it serves no useful purpose at this moment. I will only remind those noble Lords opposite who were Ministers in the last Government that it would be well to reflect a little upon that, before they condemn us for the introduction of these economies and of the taxation proposals. We quite realise that this is only a first step. I remind your Lordship that this is a first step that we are taking, and that the late Government, which had begun it and nearly finished it, failed to agree in the end, and left the task to us, who took it up because it was necessary to carry on the King's Government and to save the nation's finances, if we possibly could.
I will refer to only one or two observations before I answer certain questions that were put to me. It is an extraordinary thing, when we are dealing with these economies, that noble Lords should forget—and I would remind my noble friend Lord Melchett in particular—that we are not suggesting, neither this Government nor any one, so far as I know, who has spoken in support of it has suggested, that this is the end, or that
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it is any more than a first step. I began by saying to your Lordships to-day, and I repeat, that the first step was to balance the Budget. As regards that, there is fortunately no dispute. It is the policy, not only of the Government, but also of the Opposition. There may be, and are, differences as to how it should be balanced, but it is for the purpose of balancing the Budget that we have introduced these economies and the taxation.
It is very easy—nothing easier—to say: "Why have any economies at all? Why not put the whole taxation upon the shoulders of the people?" It was only eighteen months ago that the present Chancellor of the Exchequer made changes in the direct taxation. Our memories are so short, and we forget so easily. When we talk of equality of sacrifice we have no recollection of what happened before. We do not seem to remember that only eighteen months ago the Chancellor of the Exchequer proposed and carried direct taxation upon those who already had a very heavy load of taxation to bear—taxation which was estimated when introduced to produce £43,000,000 per annum. I am not suggesting that there is altogether equality of sacrifice. I agree with those who say that you cannot have real equality of sacrifice, any more than you can have equality of brain or equality of heart or of honour. They are things which do not exist. You cannot have strict equality, but what you can have is a spreading of the burden, so that it may be felt not too much by those who must be included, and a fair proportion is put upon the shoulders of those who already in the same interest have borne very heavy burdens—burdens which have helped to create some of the unemployment which is now deprecated—burdens which gradually do away with accumulations of capital, leaving nothing available for enterprise and new employment.
I do not want to go further into that, but I do want to say one word only upon some observations which have been made during the course of the debate, to the effect that the crisis is past. "The pound is saved" is one expression. What an amazing observation! The pound is saved when it has fallen away from the gold standard and is being dealt with at a depreciated value!

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I struggled hard, with the members of the Government, by every means in our power, and would have struggled to the very last minute if it were possible to succeed in keeping on the gold standard. It is a very different thing to go off and on the gold standard at your own will from being forced off it by events. Once that has happened, however, we must not spend our time bewailing the fact that it has happened. We have done all we can to prepare the country to face the situation. We want to do the best we can for the country. There are all kinds of questions to be solved, and I am not going to be led into a discussion upon when you can stabilise.
I would wish, however, to make just one or two observations to my noble friend Lord Melchett. Of course, although the introduction of his reference to the Second Reading of his Bill was ingenious it was a little contrary to our rules and habits, but I am sure the House will be glad to forgave my noble friend, because of the speeches he has made and the contributions which he makes on commercial matters which come before us, by which he is following in the footsteps of one whose name is well honoured in this House. He must not imagine, because he has the great advantage of youth over us, that therefore we sit and do nothing. We are trying to the best of our ability to deal with subjects which are rot so easy to solve, and which to everybody with responsibility do not appear to be quite so simple. When you have to take into account all the circumstances, national and international, as you must when you are a member of the Government—as my noble friend will perhaps find in a time not far distant—the subject is not really quite so free from other matters, which have to be examined and investigated so as to enable you to give a decision. I sympathise with my noble friend in this, that he is anxious to redress the balance of trade. He told us that restriction had already been imposed upon imports by the devaluation of the pound. That is what we expected to happen, but what we do not know is what is the extent of the restriction to be so imposed upon imparts. Until you know it, and can form an opinion, obviously you cannot move in the matter. He may rely upon it that we are not losing sight of the matter, and that the Government are certainly paying
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all the attention that can be given to it, but there are other matters also engaging us at the moment.
May I refer to two or three of the larger questions which were asked me, and particularly to those who fell from Lord Sanderson, who asked questions relating to the teachers? May I in this matter—Lord Buckmaster had some eloquent observations to make about the teachers, and somehow or other did not quite seem to realise that the teachers had been especially well treated by the Government—remind Lord Sanderson and others who have spoken about the teachers, of what happened? The May Committee recommendation was a cut of 20 per cent. The Government came to the conclusion that that was too high, and notwithstanding that they wished to make every possible economy they reduced the cut to 15 per cent. Having done that they had a further examination. Representations were made by the teachers, and some on behalf of the police and the Defence Forces, and the Government reviewed the whole situation and carne to the conclusion that there ought to be no greater cut than 10 per cent. I have read the announcement of the Prime Minister. The consequence of that is that we have really dealt, as it seems, fairly with the teachers, and I doubt very much whether, if economies have to be made, there can be any complaint. The noble Lord asked me whether these economies, these reductions in their salaries acre for a permanency. The answer I would make is "No." All these matters will have to be reconsidered, and when this emergency is over more particularly. Then he asked whether it touched their superannuation fund. Again, the answer is "No." He also asked whether there was any particular way of dealing or intention of dealing with hardships. All I can say with regard to that is that all those matters have been considered and dealt with in the reply of the Prime Minister.
My noble friend the Bishop of Southwark was very anxious that something should be done with regard to checking the exploitation of the consumer, and especially of the poor consumer, by the undue raising of prices. I gave him an indication whilst he was speaking, but I would tell your Lordships that it is

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Proposed—and I have no doubt that your Lordships will have to deal with the matter before the Session is ended—that we should have a Bill which will enable us to deal with eases when they happen, and if they happen, so that the Government may be entrusted with sufficient power to prevent this undue and unfair exploitation and profiteering, as it is sometimes termed. Of course, that is a different thing from a rise in prices that you may not be able to help, particularly when stocks are becoming exhausted, and have to be replenished, and an extra amount has to be paid; because, of course, on imports now you pay the extra amount caused by the devaluation of the pound, and that possibly may lead to a rise in prices. But that is a totally different matter. What we are dealing with, and what I think the right rev. Prelate had in mind, was to stop unfair use being made of this opportunity, and I can assure him that powers are being taken to deal with that, and your Lordships will have the opportunity of considering them when the Bill comes here.
LORD SANDERSON: There was another question. I asked whether the Government would take steps to prevent further cuts by the local authorities. It is possible, I believe, that the local authorities, on their own initiative, may make further cuts by putting teachers into a lower grade on the Burnham scale. Do the Government take exception to that?
THE MARQUESS OF READING: I will not say anything about that at the moment. Of course, the Government have to deal with that part of the matter with which they are entrusted, but I think there will be a sufficient indication in what the Government have done already with regard to the teachers to help them where it becomes necessary. I was about to deal with some observations made by the noble Lord, Lord Olivier, and I confess that he did a little surprise me. I agree he is very unconventional, very interesting often, and in this particular case he did surprise me, because I thought it was a little startling that he should make the accusations that he did—accusations which were repeated at a subsequent moment, to some extent at any rate, by Lord Ponsonby, who said he would wait for any denial—in reference to the bankers and the American
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financiers. I confess I fail to understand what the grievance is here, except that somehow they are seeking to find somebody to blame for the failure of the Government to take the situation in hand when it was responsible, and for the consequent break-up or breakdown of the late Cabinet. I cannot understand tins constant reference to the American bankers. What was happening? What was this crime on the part of the bankers?
LORD OLIVIER: There was no crime. The crime was on the part of our Government and of the National Government.
THE MARQUESS OF READING: Really, the noble Lord must forgive me. May I suggest to him, before he interrupts an observation of that kind, that he should verify his facts? He says it was the National Government. Has he forgotten that £50,000,000 sterling had been borrowed, half of it from the United States and half of it from France, by the Labour Government? Has he forgotten that? That was the first of the loans—money borrowed, properly borrowed, for the purpose of saving the credit of this country and keeping it on the gold standard. That was not the National Government. What happened later was a different thing, following along the same lines. Difficulties arose, want of confidence in foreign countries for various reasons, and more withdrawals with the result then that more credit had to be obtained, because the credits that the Labour Government obtained did not last more than two or three weeks. And the result of it was that more had to be put into the Treasury, or rather exchange found, otherwise the pound was bound to be forced off the gold standard.
What happened? Arrangements were made with the banks. They asked various questions. Was it an improper question for a bank to ask: "We should like to know whether in the course that you have been following in your finance, you have departed from the orthodox system which characterised you for many years, and whether you are going to balance your Budget?" Was not that a legitimate question for the lender? And, of course, it was asked. I am glad to see the noble Lords opposite agree. What is the objection? Where I joined issue was when a noble Lord repeated

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what he had heard as current gossip, but he accepted the denial. All I can say, from what I know—and I think I do know, although I was not actually a member of the Cabinet when these matters were being discussed—is that, of course, the American and French bankers wanted to know what was going to happen and whether we were going to balance the Budget.
LORD OLIVIER: I asked a special question.
THE MARQUESS OF READING: Will the noble Lord allow me? The noble Lord asks a great many special questions, and, if he does not mind, I will answer those questions which merited a reply. I cannot take up time in dealing with all of them. What he did put forward was that it was suggested that the bankers had forced the unemployment cuts, had taken the stand that unemployment benefit must be reduced, and that it, was that which brought the Government down. If that is the statement, all I can say is that, as far as I am aware, it is quite untrue. There is no foundation for it.
LORD PONSONBY OF SHULBREDE: May I remind the noble and learned Marquess that the Prime Minister in the House of Commons cm Monday, September 21, said in answer to a Question:
"the handling of the unemployment cuts was necessitated"—
—necessitated—
"by special conditions of borrowing, and they must remain"?
THE MARQUESS OF READING: Well, is that very difficult? The noble Lord really forces me to say what I had not intended. I must just remind him that in order to find the money that was necessary to balance the Budget the question was between £56,000,000 and the £66,000,000 which are now to be saved. £56,000,000 was agreed to by the late Government. We have had it definitely stated in another place. I know some questions were raised as to whether the Cabinet were all agreed, but at any rate that was the view taken. I care very little whether they did or did not, because, quite properly, they were considering it, and, quite properly, they were saying, "Well this is one way we can do it." The only object of my referring to it is to show that there cannot be anything
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so very horrible in it when they were doing the very thing which we are doing at the present moment, save for one question which was, "Is the unemployment pay to be reduced or not." A certain section of the Government, as I understand, said "Yes it must." They took the view that this could not go on, and that we have raised the benefits again and again.
And I would just like to remind Lord Parmoor, who seemed to think that when a man had been paying his insurance for twenty years it was a monstrous thing to cut clown the benefit for which he had been paying his insurance premium, that he seemed entirely to forget that when a man paid his insurance premium for twenty years it was for a totally different and very much smaller benefit, that the amount of the benefit had been put up time after time, until it had arrived at the stage which, with other things, made it absolutely impossible to balance your Insurance Fund. That was the position, and, in dealing with it, part of the late Government took the view that you must make a cut in the unemployment benefit and there was a great discussion as to the amount. That, in the main, was what brought the Labour Government down. If I were asked I should say I have understood that it was not so much a question of making a reduction in the unemployment pay; it was the actual amount that was to come from it. But I will not pursue it save to say that that is what happened.
Then the Prime Minister, having done that, said that there would be so much needed in order to balance the Budget. I fail to see the faintest justification for talking about our having to borrow the money. They began to borrow this £80,000,000, not we. All the negotiations were going on for this £80,000,000 when the National Government came in. The National Government completed them. All that was necessary was to say that, of course, we should show a balanced Budget. I leave this subject with this one observation. I am very glad to hear from noble Lords opposite, and it is well to remember it hereafter and outside, that they have taken the line that Mr. Henderson took in another place and have not made themselves parties to that rather mean cry about a bankers' ramp. They have not sought to attribute to

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people, who, as is now said, were doing their business quite properly—
SEVERAL NOBLE LORDS: Hear, hear.
THE MARQUESS OF READING: —any evil machinations for the purpose either of hurting the Socialist Party or of bringing down the Labour Government. I pass from that. I would scarcely have spent a moment on it were it not that too much is made of it outside. I say most emphatically that I should have thought that nothing could have been less merited than to turn upon the American bankers who have helped us twice when we very much needed it, and accuse them of having taken part, or suggest, if it is not an accusation, that they have been taking part in some undue action in the way of interference with their own Government and Cabinet, and in bringing down the late Government of this country. I pass from that.
One matter that was mentioned by my noble and learned friend Lord Buckmaster I must not pass. That is in relation to the salaries of the Judges. My noble and learned friend is not in his place at the moment but he seemed to think that there was no power to deal with the Judges. If he was right the same observations would have applied to Ministers and a number of other servants. I would only remind him that, evidently, during the course of the discussions, he had failed to notice these words in the Bill—
"During the period of one mouth after the commencement of this Act His Majesty may, in respect of the services specified in the Schedule to this Act and in respect of the remuneration.… of persons in His Majesty's Service.…"
that is a Judge, that is a Minister, that is a servant in His Majesty's Service—
"make such Orders in Council as appear to him to be expedient.…"
That is the answer. Then there is a paragraph at the end of the subsection which gives power by Order in Council to modify or terminate statutory or contractual
rights. There is no doubt whatever that there is the power. It was evidently overlooked by my noble and learned friend.
Although I do not profess to have answered every question that has been asked, I think I have in general replied to them. The noble Earl, Lord De La Warr, asked me whether there could not be reconsideration. All I desire to say with regard to that is that we have pledged ourselves to balance the Budget for some time past. We have pledged ourselves to do it in a particular way. We have given effect to representations made by making concessions, which I have already shown your Lordships amount to something like £3,500,000, for the purpose of meeting hardships in the various services to which I have directed attention. Everything has been done. We must stand by the Bill.
We quite recognise that this Bill is only one of the first steps. There are most important measures which may have to be introduced and when the proper time comes the Government must explain its policy. For the moment this Bill is the first stage; the Finance Bill is the second. That Bill will, no doubt, come before your Lordships on Friday. With the assistance of those two Bills, if your Lordships are pleased to pass them and after the Royal Assent has been given, we shall be in the position of saying that at any rate we have done everything that we said we would do. We have balanced our Budget so far as we can, because, of course, it is based on estimates. We have carried out every promise that we made and the pledge that in fact we as a Government gave to the nation when, in consequence of the circumstances to which I have referred, we were called upon to take part in the National Government.
On Question, Whether the Bill shall be now read a second time?
Their Lordships divided:—Contents, 67; Not-Contents, 8.

CONTENTS.

Sankey, L. (L. Chancellor.)

Effingham, E.

Vane, E. (M. Londonderry.)

Eldon, E.

Reading, M.

Iveagh, E.

Allendale, V.

Salisbury, M.

Lucan, E. [Teller.]

Bridgeman, V.

Onslow, E.

Cowdray, V.

Beatty, E.

Peel, E.

D'Abernon, V.

Bradford, E.

Sandwich, E.

Elibank, V.

Buxton, E.

Stanhope, E.

Esher, V.

FitzAlan of Derwent, V.

Clanwilliam, L. (E. Clanwilliam.)

Lloyd, L.

Hailsham V.

Luke, L.

Hood, V.

Clwyd, L.

Marks, L.

Knutsford, V.

Darcy (de Knayth), L.

Melchett, L.

Scarsdale, V.

Darling, L.

Monkswell, L.

de Clifford, L.

Phillimore, L.

Southwark, L. Bp.

Denman, L.

Raglan, L.

Desart, L. (K. Desart.)

Roundway, L.

Aberdare, L.

Ellenborough, L.

St. Levan, L.

Alvingham, L.

Cage, L. (V. Gage.)

Somerleyton, L.

Amulree, L.

Hardinge of Penshurst, L.

Stanmore, L. [Teller.]

Ashton of Hyde, L.

Hothfield, L.

Swaythling, L.

Askwith, L.

Howard of Glossop, L.

Swinfen, L.

Banbury of Southam, L.

Howard of Penrith, L.

Trenchard, L.

Boston, L.

Ker, L. (M. Lothian.)

Wavertree, L.

Carnock, L.

Lamington, L.

Wemyss, L. (E. Wemyss.)

Wynford, L.

NOT-CONTENTS.

Arnold, L.

Marley, L. [Teller.]

Ponsonby of Shulbrede, L.

Hay, L. (E. Kinnoull.) [Teller.]

Olivier, L.

Sanderson, L.

Passfield, L.

Snell, L.

Moved accordingly, and on Question, Motion agreed to.

Resolved in the affirmative, and Bill read 2ª accordingly.
Then (Standing Order No. XXXIX having been dispensed with), Bill committed to a Committee of the Whole House forthwith: House in Committee accordingly: Bill reported without amendment, read 3ª, and passed.

MINISTRY OF HEALTH PROVIS IONAL ORDER (CHEPPING WYCOMBE) BILL.
Amendment reported (according to Order).

IMPORTS (REGULATION) BILL. [H.L.]
Order of the Day for the Second Reading read, and discharged.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The Royal Assent was given to the following Bills:—

National Economy,

Public Works Loans,

Brighton Corporation.

House adjourned during pleasure.
House resumed.

BUSINESS OF THE HOUSE.
THE EARL OF LUCAN: My Lords, I beg to move that this House do now adjourn till Friday at half-past three o'clock.
House adjourned at ten minutes before eight o'clock.