CAPITALISM AND SOCIALISM.

HL Deb 20 March 1935 vol 96 cc177-260

LORD SANDERSON rose to move to resolve, That in view of the failure of the capitalist system adequately to utilise and organise natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, and believing that the cause of this failure lies in the private ownership and control of the means of production and distribution, this House declares that legislative effort should be directed to the gradual supersession of the capitalist system by an industrial and social order based on the public ownership and democratic control of the instruments of production and distribution.

The noble Lord said: My Lords, as far as I know there has never been a dis- cussion on Socialism pure and simple in your Lordships' House. On one occasion, on June 13, 1923, the late Lord Birkenhead did move a Motion on Socialism, but it was combined with another subject—namely, the question of the trade union political levy, and a great deal of the debate was on that second subject. I and my noble friends behind me thought that a discussion on Socialism would be useful both in your Lordships' House and in the country, because we think that our views are often very much misrepresented and often very much misunderstood. So we propose this afternoon to set before you as frankly and as clearly as we can the reasons why we object to the economic system under which we now live, and to put forward some of the steps we propose to take towards building up a new economic system and a new and better social order.

Twelve years ago to-day Viscount Snowden, who was then Mr. Philip Snowden, moved a Motion in another place on Socialism, and the Motion I have put down to-day is exactly the same Motion as that which Mr. Snowden moved minus a split infinitive. We consider that the Motion and the date, this being the twelfth anniversary, are both appropriate. The late Lord Melchett, then Sir Alfred Mond, in 1923 put down an Amendment to Mr. Snowden's Motion, and he argued very vigorously and very ably against Socialism; but he recognised that the present system was not perfect. In his Amendment he talked about the evil arising from waste and monopoly and talked of the necessity for social redress; I think these were the words that came into the Amendment. He thought the capitalist system could be improved and patched up. We believe that the capitalist system cannot be patched up, that it has broken down really beyond repair.

The noble Lord, Lord Mount Temple, has put down to my Motion a more optimistic Amendment than that proposed by Sir Alfred Mond. The noble Lord apparently thinks that the capitalist system has done very well in the past, and he thinks that it will serve us well in the future. We admit that during the 150 years since what is known as the industrial revolution or the age of machinery began, great advances have been made in human welfare, but that does not persuade us that the system is a good system. We think that people might have been much happier and greater advances might have been made under a different system. We do not think there is any future for Capitalism. We believe there is no hope of further advance under that system. Let us for a moment consider the twelve years that have passed since Mr. Snowdon moved his Motion. I do not think these twelve years are very hopeful with regard to the future of Capitalism. Unemployment has increased fifty per cent, since then. Our principal industries—mining, cotton, engineering, iron and steel—are all in a much worse condition than they were in 1923. Our foreign trade has fallen off enormously; and in that debate in another place in 1923 speaker after speaker maintained that the present system was essential for the maintenance of our foreign trade. There has been no improvement in our education, practically no improvement in the health services, the housing problem remains very far from solution, and the world under this system has gone through one of the worst slumps ever known. I may remind your Lordships that the supporters of the capitalist system have been in power most of the twelve years, so we do not think that the last twelve years hold out much promise for the future of the world under Capitalism.

Our first objection to the present system of Capitalism is that it brings about a very unequal distribution of wealth. All the means of production—the land, the raw material, and machinery—are owned by a small section of the population of the world, while the great mass of the people all over the world are poor people. The good things of life are preserved for the few and denied to the many. Take our own country. It is well known that the national income and the national wealth are very unequally distributed. A large part of it is in the hands of a very few people and the large majority of the working people have only a comparatively small amount. Very few members of the working class die leaving anything at all behind them. Some 75 to 80 per cent, of the population are weekly wage-earners. If a man can manage to earn £3 a week regularly all his life, working eight hours a day for it, with very few holidays and with an old age pension to look forward to when he is sixty-five or seventy, he is a very fortunate man among the working classes to-day. The great majority of that 75 per cent. are very much worse off than that. A few are no doubt better off, but they are very few. Why is it that these people have to live in that way? We believe that it is because they cannot get access to the means of production. They cannot get access to the land and capital, which is all owned and held by a comparatively few people. If the land and industrial capital were owned and controlled by the community it would be possible for the people to get access to them, and we could then solve the unemployment problem. The unemployment problem will never be solved under this system. The noble Earl, Lord Peel, has put down an Amendment in which he says that, even if our doctrines were partially adopted, unemployment would be greatly increased. I do not believe that. I believe it is only under Socialism that you can solve the unemployment problem.

Our second objection to the capitalist system is that we object to the motive under which industry is carried on—the motive of profit or profit-seeking. I do not say that profit-seeking is the only motive of industry, because I realise that unless you produce things the people will buy there would be no profits and no industry. But profit is the main motive of industry. Industry is carried on not to produce the services and goods which the people most need, but in order to produce the largest amount of profit. The object of industry is dividends rather than the goods and services which the community most need. Profit-seeking, first of all, does not give us many of the things we most need. If an industry is found unprofitable it is abandoned, no matter how much its products are needed. If a new industry is unlikely to be profitable it will not be started, no matter how much its products may be needed by the community. Profits do not give us the houses we want. It is not profitable to build houses, and the National Government are now engaged in subsidising industry after industry because the industries subsidised are not profitable enough to carry on without help. Again, the search for profit gives us a lot of things that we do not need, and would be much better without. It gives us bad whisky, and it gives us shoddy of all kinds. It gives us all sorts of things we could do quite well without, things I might describe as futilities or superfluities which we ought not to have as long as there are people in need of the necessaries of life.

Moreover, profit is dependent on scarcity. Abundance means less profit; so you must have scarcity. You have wheat being left to rot, rubber and cotton and coffee crops destroyed and fish thrown back into the sea or left to rot on the shore, simply because there is not enough profit from their sale, quite regardless of the fact that millions of people all over the world would be glad to have those things. Lastly, we object to profit because it creates a class of people who take a great deal more out of industry than they have ever put in—shareholders. I am not blaming any-body; I am one of them myself. We cannot help it, we are all caught up in the machine, but the machine has got to be scrapped all the same. These people take far more out of the common pot than they have ever put in, and the services they render are not anything like the equivalent of the reward they obtain. I shall be told that shareholders render important service to industry by lending their capital to industry without which it could not be carried on. That, of course, is perfectly true. But we claim that the reward they obtain is altogether out of proportion to the services they render, and altogether out of proportion to the services rendered by labour and the reward obtained by labour. A man may invest £1,000 in a mine and get£100 a year. All he has to do is to decide whether he shall spend his £1,000 or invest it—not a very great sacrifice. A miner may get £100 a year, but he has to hew coal eight hours a day to get his £100 a year, and there is no comparison between the two sacrifices.

I have stated as shortly as I can our principal objections to the present system. We object to the unequal distribution that it brings about. We object to the motive of profit, because it does not give us the things we need. It gives us the things we do not require, it is dependent on scarcity, and it creates a class whose rewards from industry far outweigh the value of their services. I have tried to put our objections to Capitalism very shortly, and I think your Lordships must agree that it is far from being a perfect system. There are at any rate imperfections in the system.

Now I am going to say something about the steps we wish to take towards building up a better system, but I want first to refer to the Amendment put down by the noble Lord, Lord Allen of Hurtwood. The noble Lord, I think, agrees with our criticism of Capitalism and he seems to agree with our suggested remedy. But lie wants no appeal to class hatred, he wants no threat of a financial and constitutional crisis. He does want an appeal to good will and intelligence. Well, I think I can reassure him on all those points. We make no appeal whatever to class hatred. We want no financial or constitutional crisis. If there is a financial and constitutional crisis it will not be of our making. It will not be the Labour Party which will bring about a financial and constitutional crisis. Of course, we appeal to men of good will and intelligence all the time, although I am never quite clear myself as to what is meant by a man of good will. I sometimes think when people talk about a man of good will that very often they mean a man who agrees with them. I am not suggesting that that is the noble Lord's interpretation of the phrase, but it is the interpretation of many people.

Next I come to the steps that we want to take. As income is so unequally distributed we naturally want to have income more equally distributed, and in order that that may be done we must nationalise what are usually called the means of production and distribution—that is, we must nationalise the banks and the principal industries. We should gradually go on to nationalise all industrial capital. I say gradually, but I must remind your Lordships that the author of the phrase "the inevitability of gradualness" himself pointed out that "gradualness" does not necessarily mean "slowness." We should nationalise what I call industrial capital, but that does not mean that we propose to nationalise all private property.

There are two kinds of property. There is property which enables a man to obtain an income from the labour of other people, and there is property which helps him in his own labour. To the second kind of property we have no objection. There is no reason why a man should not own his house and his garden and the tools he requires, so long as he does not exploit other people. But we do object to the kind of capital which enables a man to sit down and smoke his pipe all day while he watches another man dig in order to support him. I do not say that all property owners sit and smoke their pipes all day. I know many of them do very good voluntary work, and very good paid work too. What we do say is that as property owners they are overpaid for that work.

Another thing that nationalisation does not mean is this. It does not mean that industry would all be run from Whitehall like the Post Office. Not at all. There are all sorts of different methods of administration which could be adopted, all sorts of methods of decentralisation, and in the case of each industry we should adopt the form of decentralisation best suited to that industry, which would be carried on largely by the people who understand it—probably by the people who work it now—and carried on by people who know the locality in which it is carried on now. Private enterprises at the present time are not all carried on by the same methods of administration, and there are some semi-public enterprises which are being carried on by different administrative methods, such as the London Passenger Transport Board, the Central Electricity Board, the British Broadcasting Corporation and so on.

Then, too, a large number of municipalities carry on a great many industries with no connection with Whitehall. I think the noble and learned Viscount on the Woolsack brought in a scheme—I do not know whether he actually produced it himself or whether he adopted one produced by Sir Arthur Duckham—for the nationalisation of the mines which had no connection with Whitehall at all. It was conceived on quite different lines from the administration of the Post Office. It is perfectly possible to carry on industries in all sorts of different ways. No one need be afraid of Socialism for fear that it would become a stereotyped bureaucracy. There is no real danger of that. But we must get rid of the motive of profit, and you cannot do that until industry is nationalised. When industry is nationalised, industry must be carried on as a profession by salaried people. We hear talk about the fear of officialdom, but after all industry in the main is carried on now by officials—by managers and other people who really are officials paid by their directors and shareholders. There is nothing new in that. We want industry carried on as a profession and the only difference would be that the people carrying it on would be paid by the State instead of by capitalists.

I have no doubt I shall be told—I am sure the noble Lord, Lord Mount Temple, is going to tell me, and I think from reading his Amendment that the noble Marquess, Lord Lothian, also is going to tell me—that if we make industry a profession and do away with the economic or profit motive, we shall destroy all initiative and enterprise in industry. On that point I would ask your Lordships to consider the amount of good work that is being done at the present time quite apart from the profit motive. Think of the magnificent work clone by our civil servants, by the teaching profession, by men of science, by the Army and Navy, by ministers of religion, by the great nursing profession. They are all doing excellent work where there are really no great financial rewards at all. Why cannot that principle be extended to other callings? We believe it can. I will ask you again, my Lords, to consider this point: Do the people who show the initiative in industry get the rewards? I doubt it. It is a matter of common knowledge that inventors, to whom we owe so much of our industrial progress and progress of all kinds, almost invariably die poor. Probably a great deal of enterprise is due to the managers of industry, but they get no great financial rewards for their enterprise. The rewards of enterprise go in the main to the shareholders, who show no enterprise whatever; they know nothing about industry and take no part in its administration.

I now come to the question of compensation. When we take over the industrial capital we shall compensate the owners, but we shall not give them—at least according to my own view I do not know whether my noble friends will all quite follow me here—large capital sums from which they can draw the capital value of their shares or large incomes in perpetuity, indefinitely or for some long period, and hand them on to their descendants. We shall give them -what will be a reasonable expectation of income for life in the form of life annuities. As we cannot transfer industry to the State all at once, it would be unfair to give a certain number of people life annuities while leaving other people to hand on their money to their sons. We should therefore accompany the change-over with a drastic reform of the law of inheritance. The right of bequest would have to be very strictly limited.

I come now to the question of the distribution of income. Of course, with industry in the hands of the State and carried on as a profession the State could distribute income pretty much as it liked. I know the view of the orthodox economists is that industry is carried on now in such a way that each person who takes part in it obtains roughly the value of his product in money. I do not believe that; I am quite sure that this view is wrong. It is quite impossible for people to get the value of their products in money or in anything else, because nobody knows what the value of their products is. Where you have so many factors engaged in industry, it is impossible to discover how much value is contributed to the product by any one factor. How can you decide how much value is contributed to a packet of cigarettes by a girl who works a machine which puts the labels on; how much by the machine; how much by the manager of the factory, and so on? You cannot do it; you cannot justly distribute income on that method. You may say you can distribute it according to merit, but who is to be the judge of merit? You might distribute according to ability, but in that case the stupid man might starve, and why should the stupid man need less than the clever man?

The only just and proper way of distributing income is according to needs. I have never been able to see why one family needs more of the necessaries of life—that is food, clothing, shelter and warmth—than another family, apart from the size of the family. I do not know why one set of people needs more luxuries than another. I am sure, then, that the only proper method is according to needs. Tinder Socialism we, should gradually work towards distribution according to needs. As people's needs for the necessaries of life and the ordinary luxuries of life are quite equal, and as I cannot see why one family should require more than another, distribution according to needs would therefore mean equal distribution of income. What does a main need more than sufficient to enable him to do his work well?—given the necessary leisure, of course. There you get the difference: people require different apparatus for their work, so you would have to give everyone the apparatus, the tools, the implements and the surroundings necessary to enable him to do his work well. The apparatus of a doctor would be different from that required by a miner or a railway porter. What we should have to do would therefore be to give every family its equal share of the national income, and every worker should in addition have the use or ownership of his apparatus of work.

Under Socialism we should, of course, aim at other forms of equality. There would be equal opportunities for education, equal rights to the use of the health services, and equal rights to the good things of life generally. It is only with equality of income that you would get rid of class distinctions, which are really a glaring blot on the social system and which exist mainly owing to inequality of income. I believe that under Socialism, with industry properly organised on a definite reasonable plan, we could produce all we want in a very short working day. There would be employment for everybody; there must be plenty of employment for people until everybody's demand for everything is satiated, which seems to be a very long way off. You would have a great deal more leisure amongst the people, which would be a very good thing. Perhaps we might at last learn that work is not the only thing worth living for, and become a nation which is able to play.

I have tried to give your Lordships just an outline of the kind of steps we want to take and the kind of society we want to see. It is a very meagre outline, I know; I have stated it very inadequately and left many gaps. Those gaps, however, my noble friends behind me will, I am sure, be able to fill in the course of the debate. When everybody is working for the common good, everybody is contributing his share, and everybody has a right to the good things of life, I believe we shall have a much happier community than we have now. The comfort able classes might not be quite so comfortable as they are now; I do not think that would very much matter, because, although they might not be quite so comfortable, they would be very much happier. I am sure your Lordships will agree with me that our pleasure in and our enjoyment of the comfortable lives we live now are often marred by the thought that those lives are only made possible by the hard toil of men and women very much poorer than ourselves—men and women who can never enjoy the good things that we have in such abundance. We want the change to come peacefully. The present system will not be tolerated much longer. The change is bound to come, but we want it to come peacefully, and we believe that with a little forethought, a little give and take, and common sense on all sides, it can come peacefully and be to the benefit of mankind. I beg to move the Motion standing in my name.

Moved to resolve, That in view of the failure of the capitalist system adequately to utilise and organise natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, and believing that the cause of this failure lies in the private ownership and control of the means of production and distribution, this House declares that legislative effort should be directed to the gradual supersession of the capitalist system by an industrial and social order based on the public ownership and democratic control of the instruments of production and distribution.—(Lord Sanderson.)

LORD MOUNT TEMPLE had given Notice of an Amendment to leave out all the words after "That," and insert "this House, believing that the abolition of private enterprise in the means of production and distribution would impoverish the people and aggravate existing evils, is unalterably opposed to any scheme of legislation which would deprive the State of the benefits of individual initiative; and being convinced that Capitalism, which has proved itself capable of being adapted to the needs of the people, has immeasurably raised the standard of living of all classes, reduced hours of labour, increased wages, added to the amenities of life, raised the standard of education, declines to substitute for this well-tried system one which is purely speculative and would be found impracticable and oppressive in operation."

The noble Lord said: My Lords, I am sure I shall be voicing the feelings of everybody present when I congratulate the noble Lord on the clear statement which he has just delivered, especially as, unfortunately, he has to address your Lordships' House without the use of any notes, and therefore we are all the more impressed with his arguments. The speech of Lord Sanderson shows the difficulty there is in dealing with the advocates of Socialism. He comes here and coos gently as a turtle-dove. He says, in effect: "You have got your house, your land and your garden, and under a milk-and-water Socialism we will nationalise your land, your shipping and other things." But does he ever go on to Tower Hill, or into Hyde Park, on Sunday or Monday mornings, and listen to the Socialist orators there? Their programme is very different from that which he has presented this afternoon, and I would rather take what they say as representing the Labour Socialist policy, than what he may say, or what his friends who sit on the Benches in this House may say after him. If you go into another place the Socialism which is expounded there is a very different thing to that which he has expounded to us, and therefore I ask your Lordships, in this debate, not to be led away by the plausible statement which the noble Lord has made, but to keep firmly fixed in your minds what are the principles of Socialism, and what are the proposals of the Socialist Party.

To my mind the Socialist Party have never strayed away from the thesis of Karl Marx, which is that "under Capitalism the poor would grow poorer and the rich grow richer." That is a cardinal article of faith with the Socialist Party, and anything more ridiculously untrue I cannot imagine, as I will show to your Lordships later on in my remarks. At any rate, actuated by that thesis, they have adopted times out of number the comprehensive and all-embracing formula that as soon as possible nationalisation must be applied to production, distribution and exchange. I am not misrepresenting the Party when I say that, because that has been inscribed on their banners for some considerable time, and they have taken the trouble to underline that proposal, which is the fundamental principle of Socialism, at the Labour Party Conference at Hastings in 1933, and the Southport Conference in 1934. Therefore it is no good coming here and giving this milk-and-water exposition of Socialism. We have it that as soon as possible, without delay, you have to nationalise the means of production, distribution and exchange.

Lord Marley and others applaud those sentiments, and therefore that noble Lord does not agree with the noble Lord who moved this Motion. Tot homines, quot sententive. They have as many voices as there are members in their Party, and we must come to bed-rock facts, and not be led away by the speech of the mover of the Resolution.

LORD MARLEY

You will see that the words "means of production and distribution" are in the Motion.

LORD MOUNT TEMPLE

That means that as soon as possible, if you have a Labour majority in another place, you will nationalise the land, the mines, transport, the banks, shipping and railways.

LORD MARLEY

Hear, hear.

LORD MOUNT TEMPLE

I am not sure about the railways. The Labour Party were very hot about the nationalisation of the railways a short time ago, when the railways were prosperous, but as soon as the railways ceased to pay I noticed that they were not so anxious to push it, and it was put into the background. No doubt when the railways become more prosperous they will move it further forward in their programme. That means that all the great industries of this country, and the minor ones too, in time, will be taken from the people who own them and who work them, and will be handed over to the State to work, and of course own, too. And it must be by a Government Department and nobody else. I disagree with the mover of the Motion that you can work all the great industries by a board such as the London Transport Board, for instance; because where does their democratic control come in, which we hear so much about from the Labour Party? If you are going to hand over these great industries to some board or other, more or less independent, where is your democratic control? You have got to hand them over to a Government Department created specially for the purpose.

The next point which I would put to your Lordships is this: Is our property going to be stolen, or are we going to have full compensation paid to us, or partial compensation? Lord Sanderson comes down on partial compensation. Personally, I would much rather, if my property is going to be stolen, that it should be stolen out and out, than that I should be insulted by being offered 10 or 20 per cent. of the value of my property. If the State takes it over the State must pay full compensation, or if it is thought that we are robbers, or enjoy something which we or our ancestors have stolen, then, to be logical, the State should take it away, and pay us a dole, if any dole exists in those days. If you are going to take away without compensation, that is stealing. It is calculated that if all private property were taken over by the State a family of four, after the transfer was made, would have a net addition of 5s. a week to their income. That is a calculation which, of course, may be questioned, but several independent investigators have arrived at that conclusion. Thus the net increase of income to each individual in that family of four would be is. ad. a week. Is it worth while to break the Eighth Commandment for is. 3d. a week? If on the other hand you give full compensation, as many of the more enlightened members of the Socialist Party suggest, then where are you? You have not got a Socialist State. The money given to the people dispossessed of their land or mines, or whatever it is, would be there, and they would have to invest it in some enterprise or other. If it is lent to the State you have a new rentier class, and you are just where you were before. In short, you either have to have a rentier class or you simply have to steal.

The best example of Socialism in practice is, of course, Russia. I do not wish to turn this into a Russian debate, of which your Lordships no doubt have had enough for the time being, hut at any rate there you have the pure milk of Socialism being imbibed, willingly or unwillingly, by all classes. You have want and misery, and you have State bankruptcy existing in the only completely Socialist country in the world. And if noble Lords opposite think that Socialism there is such a success I suggest that they should cease attending this House, lay their titles aside, and go and live in Moscow or Leningrad. They would then see how they like Socialism in full practice. What better proof can there be of the failure of Socialism than Russia?—Russia with its enormous mineral and other resources, which spends its time now coming to this effete old country, this country ruled by individualism, and imploring us to grant it a loan. If Socialism is such a success there, why do they come here and offer to pay 7½ per cent. for loans?—although they might just as well say 10 per cent. or 20 per cent., because we know that they would not carry out their promise to pay 7½ per cent., as we know very well from our experience of the debts already owed?

The noble Lord, Lord Sanderson, mentioned the Post Office, and said we must not imagine that Socialism would mean having a large number of industries managed as the Post Office is managed. I disagree. It seems to me that you must have State Departments to run these things in order to secure democratic control by Parliament in the interests of the electors. Many people would say: "Well, I do not mind so much; the Post Office is not badly run." It depends, of course, upon the angle from which you approach the question. If you approach it from the departmental point of view I admit that the Post Office, especially as regards the sending of letters, carries on its work fairly efficiently. But can you look at this matter only from the departmental point of view? The person who is really concerned is the consumer, and from the consumer's point of view our Post Office is not at all a success. We all know that the consumer pays three halfpence to send a letter, whereas the cost to the Post Office is less than one penny. But what I object to in the Post Office—and this would be characteristic of these Government Departments—is the autocratic way in which the public is treated. If any noble Lord queries his telephone bill, what happens? You are told: "There is the bill, there are the items: you have got to pay up." They will not allow any question as to the accuracy or inaccuracy of the number of calls set down. "And what is more, if you do not pay up," they say, "we will cut you off and deny you any further service." There is a small foretaste of what Socialism would be. And, mind you, when people say that the Post Office pays, I would undertake to run any Government trading department at a profit if two conditions were present—namely, that one had a monopoly, as the Post Office has, and that it dealt in a necessity of life, as the Post Office does. If you have a monopoly of a necessity of life, obviously you can make it a success—but at the expense of the consumer.

May I put this to your Lordships, and I do not think I am overdrawing the picture: under Socialism we shall be compelled to eat, to drink, to read and to wear only what is supplied to us by the State. There would be no competition—the essence of Socialism is not to allow any private competition—and no attempt to meet individual tastes. Come down to realities and take the Post Office as an example of what Socialism would be if applied to all industries. Take a town of 6,000 or 7,000 inhabitants. At present such a town has one post office. Naturally, the Post Office is not going to have more than the absolute minimum necessary to carry on the business, so they would not have three or four post offices in the town. But if you were dealing with the boot trade, would you have under Socialism three or four boot shops in the town as there are at the present time, where people can go and have a choice of footgear, and, if they do not like the price, go from one shop to another? The Boot Department of the Socialist Government would have one shop in that town, as we have one post office now, and people would have to walk a mile or two miles to that shop, and they would not be able to choose exactly what they like. They would not be able to order the boots they wanted, they would have to take the boots supplied by the Government and at the price settled by the Government.

Take another point of view—and I would like noble Lords opposite (say the noble Lord, Lord Marley) to deal with it. What about the working man, what about the man employed by the Post Office? At present if an employee of the Post Office, for a good or bad reason, loses his job, he cannot go anywhere else in this country and get employment in the Post Office. His name is on the black list, and he has to go and seek employment from some private firm. Well, what would happen when you have nationalised all the industries? Suppose this wretched man, from no fault whatever of his own, got dismissed from the Government service, where could he go? There is no private service, because it is not allowed. Everything is the monopoly of the Government. He would not be taken on again by the Government in another branch because be proved himself, in their opinion, unfit to have a position of trust in the country. What are you going to do with him? Are you going to give him an old age pension or the "dole," as you give the unfortunate men who cannot find work? Surely you cannot do that for him. You have got to treat him worse. Are you going to send him to some concentration camp, to be employed on forced labour? He could not be allowed to starve. I would ask noble Lords to deal specifically with that point when they come to speak. What is going to happen under Socialism to a State employee who loses his job? I think that is a very important point.

Now, my Lords, if you will allow me, I would like to deal for a few minutes with another form of State Socialism. This form is not nearly so complete as the one outlined by the noble Lord who moved the Motion, but still it is of great importance as a finger-post to point to what would be the result of full Socialism in this country. I refer, of course, to the semi-Socialism which has spread all over the world, where a State Department is set up, with taxes and the Exchequer behind it, in order to compete with private enterprise. The great outstanding examples of this are the railways and shipping. Let me deal with shipping. After the War, when the States had done very good business with their State shipping, they continued it in peace time and under peace conditions; and France, Australia, Canada, and the United States of America set up State fleets to compete with private enterprise. Where are they all now? So far as know, they are practically all gone, and they have cost hundreds of millions to the taxpayers in the stupid countries where shipping was a State trade.

Let me deal with the railways. Canada, Australia, New Zealand, South Africa, France, and. many other countries have operated State railways. Many State railways still exist, but very few of them have ever shown a profit to the State. They have nearly always been run at a loss. When you see what happened to the shipping and to the railways, when you see what happened in Queensland, where banking, mines, hotels and refreshment rooms were run by the State in opposition to private enterprise, when you see the bankruptcy that came to Queensland because of these vagaries, surely noble Lords opposite ought to hesitate a thousand times before they suggest that we should change our well-tried system for these will-o'-the-wisps which only bring losses to the taxpayers of the respective countries.

Now it may be said: "Well, that may be so, but why should State enterprise, in your opinion, be unsuccessful in this country and in other countries?" State enterprise would mean that the various industries would be run by the British Civil Service. I have had a little experience, although not as much as many of your Lordships, of the British Civil Service, and I say unhesitatingly that, go the world over, in private enterprise or in public enterprise, you will not find a. higher level of intelligence and devotion to duty than you find in the British Civil Service. In anything I may say I do hope that any members of the Civil Service who are friends of mine will not think I am saying anything personal to them or running down their abilities. It is the system under which they work that makes it impossible for them to compete with private enterprise, where there is more responsibility assumed by heads of departments and even by low officials than is possible in a Government Department.

I will tell you why I think that the Civil Service could not compete successfully with private enterprise if it were put on equal terms. I say unhesitatingly that it is because nationalisation is unprogressive, and must be unprogressive. It is unenterprising and uninventive. It tends to level down and not to level up. I think that is absolutely true. You will find in a State Department that the pace of the slowest and the most stupid tends to become the pace of the quickest and the most able. Nationalisation deprives the individual of the hope of reward, and when individual profits are eliminated you can put up the shutter on efficiency. It induces a spirit of routine and red tape. It is slow—and this is very true—to introduce improved methods. A Government Department does not like to run any risks or to take any chances; it likes to go on the broad, straight, uninteresting and thirty-mile-limit path which is safest for the reputation of those who have to run the enterprise. There is no personal incentive to check waste and extravagance—an important point, my Lords. A Government Department is exposed to political influence, and under the noble Lord's suggestion of democratic control it would be very much exposed to political interference. A Government Department takes months to come to decisions which a private firm or individual would take in a few days. In private enterprise the test of the profit and loss account is always conclusive, whereas in a State enterprise the prevailing influences conspire to obscure it.

Those are some of the disadvantages of Socialism. Now, who are the people who advocate Socialism? It is largely advocated by people who are frankly jealous of those who are better off, by those who are jealous of the success of the captains of industry and jealous of the position of a man who has done good county work. It is also advocated by people who have never run, and will never be able to run, a business themselves. As a Party, it is advocated by noble Lords opposite. As a Party they have shown themselves pathetically incompetent to run the Government. When they were in office from 1929 to 1931 they squandered £192,000,000 of public money in wasteful public works. What was the result? Was employment increased or unemployment decreased? Not at all. While they were in office the number of unemployed rose, in two and a half years, from 1,100,000 to 2,700,000; that is to say, it more than doubled. When the noble Lords opposite came into office there were two unemployed, as compared with five unemployed when they ran away from office in the summer of 1931. On the other hand, the present Government, who adhere to worn-out decrepit political theories, who, according to noble Lords opposite, are troglodites who cannot see further than the end of their noses, have during their term of office reduced unemployment by 600,000. If the two are compared, can you wonder that many people are very loth to accept the panacea offered by the noble Lord? No, my Lords, I refuse to see any virtue in a State system which would deprive us of liberty and would convert us into a number of dull, mechanical units performing our allotted task without ambition or hope.

I will not keep your Lordships very much longer, but I should like now to leave the fallacies of Karl Marx and his disciples and put before your Lordships a picture of what Individualism and Capitalism—I am not afraid of the word "Capitalism" but am proud of it for the great things Capitalism has done—have done not only for the worker and the rich man, but for the country as a whole during the last 100 years. Our present economic system is of course not perfect. Nothing that is human is perfect. As soon as we get up to one rise, and do away with one injustice, another appears in the hills in front of us and we must always go on trying to improve within the ambit of the present economic system. But what has happened during the last 100 years under Capitalism? I should like some noble Lord to deal with these figures, because they are very remarkable, very stupendous, almost un-believable. In the last 100 years under Capitalism wages have trebled, working hours per week have fallen from sixty to forty-six; the expenditure on Poor Law relief has doubled; expenditure on education has risen from a few hundred pounds in 1835 to over £100 millions in 1935. The population has increased from 16,000,000 to 45,000,000; the death-rate has been halved.

The small investor, a class non-existent a hundred years ago, has now in the Post Office Savings Bank, in insurance societies, in trustees savings banks, in savings certificates and in other thrift agencies £3,000,000,000 sterling—enough money to carry on the government of this country for three years if it were necessary to turn to that source of income. What is the position of the wage-earner? He is now insured against ill-health and loss of work; in his old age he receives a pension; millions own their houses. There has been a great improvement in health, housing, education, food, clothing, and amusements. Under Capitalism the motor car, the wireless, the popular Press—if that is really a blessing, I do not know—the cinema, the gramophone, unknown a hundred years ago, are at the service of the people; and the crowning achievement of Capitalism, which has made us one of the richest nations on earth, is that Capitalism has made us the financial centre of the world.

To sum up. The real issue in my opinion between Capitalism and Socialism—and I give it with great deference for your consideration—is this: which system will work for the greatest good of the greatest number? In view of the facts I have given about Capitalism, can there possibly be any doubt? I have endeavoured to show that wherever Socialism or State trading enterprise has been tried it has been a complete and utter failure, as in Russia, Australia, and other countries, to which of course may be added, though it is some time ago, France after the great Revolution of 1792. Wherever these experiments have been tried they have done varying degrees of harm, but here the results would be too fearful to contemplate, with our world-wide financial commitments, our dependence on export trade, our huge urban population, and, above all, our dependence on imports from overseas for our food supplies. We are going to have a. General Election next year. It is up to every man who wishes for the prosperity of this old country of ours to work between now and then as hard as he can. It is often said that this or that Election is the most important in the history of the old country. I say unhesitatingly that the next Election will be far the roost important Election we have ever had in this country, because these two great ideals of Individualism and Socialism must clash, and in my opinion, if they clash to the detriment of Individualism, God help the country. I beg to move.

Amendment moved— Leave out all the words after ("That"), and insert ("this House believing that the abolition of private enterprise in the means of production and distribution would impoverish the people and aggravate existing evils, is unalterably opposed to any scheme of legislation which would deprive the State of the benefits of individual initiative; and being convinced that Capitalism, which has proved itself capable of being adapted to the needs of the people, has immeasurably raised the standard of living of all classes, reduced hours of labour, increased wages, added to the amenities of lice, raised the standard of education, declines to substitute for this well-tried system one which is purely speculative and would be found impracticable and oppressive in operation.")—(Lord Mount Temple.)

LORD TEMPLEMORE

My Lords, the noble Lord who introduced this Motion spoke with great force and, as one would expect, with great knowledge of his subject. He rightly pointed out to your Lordships that this Motion is in exactly the same terms, with the exception of the split infinitive on which I congratulate him and the Party opposite, as the Motion which was moved exactly twelve years ago to-day by the noble Viscount who usually sits on the Cross Benches when he attends this House. Referring to the noble Viscount, Lord Snowden, I must say that I observe with great disappointment that he is not in his place to-day. I should very much have liked to have seen him here, agreeing or otherwise with his former colleagues.

At the outset of my speech, I should like to say that this, of course, is an academic Motion. It is not at the moment practical politics, and there may be, and no doubt are, differences of opinion in the ranks of a Government formed like this one, a National Government; but speaking as I do to-day on my own behalf, I desire to give an unhesitating negative to the Resolution which has been proposed by the noble Lord, Lord Sanderson. I do not stand here in any way in a white sheet bewailing the failure of Capitalism. I believe in Capitalism. I believe it has done wonderful things for this country and, properly controlled and brought up to modern standards, it will do still more. I think it would be the height of folly for us to depart into the nebulous realms of Socialism, which has always been, as I propose to show, a failure wherever it has been tried, and whose adoption in this country would leave the state of this country, and indeed of the world, a great deal worse than it is at the present moment.

I must join issue, to start with, with two remarks which the noble Lord, Lord Sanderson, made. He said he did not like shareholders; the Party opposite did not like shareholders because they did not give value for services rendered in the particular businesses in which they held shares. Of course they do not. What are shareholders? They are not only people of what is called the rentier class who sit down with pensions and do not do very much else except draw their dividends. Shareholders are, in addition, professional men, soldiers and sailors, doctors, lawyers, and members of your Lordships' House, and I do not think anyone could accuse members of your Lordships' House of being idle men. Of course shareholders do not work in the businesses in which they hold their shares, but their capital goes to support those industries, and I really cannot see much objection in that. Then the noble Lord said that he thought owners of property were overpaid. A good many of your Lordships are landowners—I am one myself in a small way—but I never really heard it laid down even by Socialists that the landowner was overpaid.

The noble Lord mentioned a great many evils from which he said the people suffered owing to our social system, but he omitted to state the very large benefits which have accrued to the working classes during the period, say, of the last ten years. I have obtained a few figures with which I shall keep your Lordships for a few moments, though I do not propose to put before you many figures. Let us take the cost of living. It stood in 1924 at the index figure of 175; in 1934 it had fallen to 141. The number of insured workers in employment in Great Britain in 1924 was 9.53 millions and in 1934 10.14 millions. The average daily amount of postal receipts—a pretty good gauge of the country's prosperity—was in 1924 £114,618 and in 1934 it had risen to £137,582. Again, take the amount received from depositors in the Post Office Savings Bank. In 1924 the amount of deposits received was £81,056,000, and in 1934 it was £94,758,000.

The noble Lord, I think, said that there had been no improvement in the health services. I think he used those words, or words very like them. I can only say that in a statement made on the 20th of June last year, during the debate on the Vote for the Ministry of Health in the House of Commons, the Minister of Health stated that during the last ten years, owing to the improvement in the infant death-rate, we have saved 40,000 more infants under one every year than we were saving at the beginning of the century and the figures for the ten years at the beginning of the century were a great improvement on those of any preceding such period. He also stated that in the last fifteen years we have cut down the death-rate of children under five years of age from the three diseases most fatal to children —namely, bronchitis, diarrhœa and measles—by more than half, and also that where one person died of whooping-cough in 1932, nearly four died at the beginning of the century; where four died of diphtheria at the beginning of the century only one died in 1932; while of scarlet fever where one died in 1932 over seven were dying at the beginning of the century. The most remarkable scientific result of all was shown by the fact that where twenty-two people died of typhoid fever at the beginning of the century only one died in 1932. I think those figures are a very good example of the improvement which has been made in the health services of this country under the despised capitalist system.

My noble friend Lord Mount Temple, whom I should like, if he will allow me, to congratulate on his very excellent speech, went into a few figures regarding certain Socialist enterprises which had been started in different countries, and, with your Lordships' permission, I propose to go into them in a little more detail. Shipping appears for some reason or other to have been a very favourite subject on which to try the tenets of Socialism. State shipping has been tried by the United States, by France, by Canada and by Australia. The United States started State shipping in 1916. and from 1916 to 1930 the taxpayer of the United States is reckoned to have lost no less than £670,000,000 in State-controlled shipping. Take France, which in 1919 formed a merchant fleet called the French State Merchant Fleet. I see that from 1919 to 1924, when this unfortunate fleet was given up, the French taxpayer lost no less than £43,000,000 in capital losses over and above annual losses on the fleet. Australia affords a very striking, example as regards national shipping. From 1916 to 1928, when the vessels were sold, the losses to the Australian taxpayers amounted to £14,500,000.

Let us take railways. It is well known that the main reason why the Australian States cannot balance their Budgets is to be found in the heavy losses on the railways. The total loss from 1915 to 1932 on the Australian State Railways is reckoned to have been £81,000,000. The loss on the French State Railways which have now been under Government control for twenty-one years amounted up to two years ago, which is the latest date at which figures are available, to £32,000,000, and the loss was supposed to be increasing by £80,000 per day. I think a good many of your Lordships will have travelled in France on the well-known Western Railway, which was always under State control, and I think you will agree that it is the very worst managed concern you could possibly imagine. So much for the railways. Then take State trading. Outside Russia, no country has experimented more, for some reason or other, in schemes of nationalisation and State trading than Australia, and such experiments have been tried as the public ownership of mines, cattle stations, timber yards, electricity, banking, hotels and other enterprises, and in the majority of cases the result has been a hopeless loss to the taxpayers. In very nearly every case these concerns, when they are "broke,'' are handed back to private enterprise.

I cannot believe that you can graft a system of State Socialism such as is proposed on to a nation when it is entirely at variance with its nature and customs. This country is a very individualist country. We dislike instinctively—I am afraid we have to put up with it a good deal more than we did—having our lives ordered for us by officials. I am glad to have the concurrence of the noble Lord, Lord Strabolgi, on that. That would have to be the case in a very much larger degree under any system of Socialism. Who are the really rich men in this country to-day? If you look round you will see that very nearly all of them are men who started in the world with very little and who, by their hard work, by their immense energy and by their foresight, have created the big businesses that you see in the country to-day. As an example of such a business as I have in mind I would quote the great concern which is now presided over by the noble Marquess who leads the Liberal Party (the Marquess of Reading). It was started sixty years ago by Mr. Brunner and the grandfather of my noble friend Lord Melchett, who I regret not to see in his place. That would not have been possible under a Socialistic State, because you could not have got anybody to take the risks that these young men took in those days, or, if the State took the risk and the concern failed, the loss would fall on the nation—that is, on the taxpayer. It is quite a fallacy, I think, to say, as Socialists do say, that men would work better for the State than they do for private individuals. The advantage of the capitalist system, as I see it, is that if a concern fails it goes to the wall, it goes into bankruptcy, and, therefore, you root out automatically inefficiency from your trade system. It may be a harsh system, but it is a system that has served this country very well for very many hundreds of years, and I think it would be a great pity to change it.

Then take the matter from the political point of view. Under the capitalist system, people sometimes say that unless you start with advantages of family connections or immense wealth or something of that kind you cannot get on in politics. Whenever they say that to me, I point to the Labour Governments who held office in 1924 and in 1929–31. Most of them were men who started with no natural advantages at all, and rose to the highest positions in the State. I have a particular example in my mind, the noble Lord, Lord Snell, who has left his place for a moment. The noble Lord, Lord Snell, started with no advantages whatever. He has been a member of Parliament, he is now a respected member of your Lordships' House, he has been an Under-Secretary of State in one of the principal Departments of Government, and he is now Chairman of the London County Council, the greatest municipality in the world.

I would ask noble Lords opposite a question, and I hope we shall get an answer to it, for I believe a certain number of them are going to speak in the debate. The noble Lord, Lord Sanderson, said in his opening remarks that they were going to take over various industries. The question to which I should like an answer is: how are they going to do it? I see that the Motion refers to "gradual supersession." As I understand the word "gradual"—though as my noble friend below the gangway said Socialist orators are not always agreed about this—it means that you are going to start with certain industries, say banks and coal mines, to take two at a venture. You are going to take them over and put in Socialist officials to run them. Of course it is going to take a. little time to do that. Meanwhile the other industries of this country are apparently to carry on working for profit under the capitalist system. This House, if it proves at all obstructive, is to be abolished, and I understand from Sir Stafford Cripps and some of the more extreme members of the Party opposite, that even the House of Commons is not going to be allowed to function too much, because I gather that it is only going to be allowed to meet in order to register the decrees of the Government, and the country is going to be run by Orders-in Council.

I should very much like to know from noble Lords opposite what they think would be the state of those various other industries, which would be very much like ducks running about the farmyard waiting for the farmer's wife to wring their necks. I venture to think that the state of those industries would not be very enviable, either for the shareholders or for the taxpayers of the country. About two or three weeks ago we had a sort of semi-crisis, semi-panic in the City of London. We are used to these things in these days. A few years ago—certainly before the War—it would have been a very much worse crisis. But we are used to these things now, and Consols merely dropped 1½ to 2 points, which is considered nothing in these times. What was the reason for that panic? People talked about pepper and there were rumours about a new Stavisky scandal. There was an unfortunate by-election at Wavertree, and people said that was the reason. I do not believe it for a moment. What I think was the real reason was that certain newspapers who are not over-friendly to this Government spread a rumour on a Sunday that there was a crisis and disagreement in the Cabinet and that a General Election might be imminent.

The mere suggestion that this might be so and that the Party represented by noble Lords opposite might come into power was sufficient to cause this small crisis. That was not caused by the wicked Tory Party. It was caused by small investors and foreigners who took their money away. If the Party represented by noble Lords opposite came into office with their policy of spoliation—for it is nothing else—I venture to suggest that the consequences to this country might be very serious indeed. I have purposely not mentioned Russia in my speech because we are all rather inclined perhaps to get heated when we talk about Russia, and I did not wish my remarks to be acrimonious.

LORD STRABOLGI

Your colleague is on the way there.

LORD TEMPLEMORE

I would only say about Russia that the new system which the rulers of Russia are imposing on the country, the effects of which we have yet to see, is designed—to put it very mildly—to cause an immense amount of inconvenience and suffering to the people of Russia. I warn noble Lords opposite that if they and their Party imposed even one-hundredth of these inconveniences and ills upon the people of this country they would be driven from office in a very short time by an infuriated people. To borrow language from across the Atlantic, they would be told that that was where they would get off. I must not detain your Lordships much longer. I have done my best to show that in my opinion Socialism where it has been tried has been a complete failure, and I have done my best to show that in my opinion Capitalism, brought up to date and controlled in accordance with modern ideas, is still, and will continue to be, the best policy for this country.

Many hard things have been said about this House and about your Lordships. You have been called obstructionists, defenders of privilege, thwarters of the people's will, and described by other epithets which go down so well on Socialist platforms. My Lords, you need not mind that. This House has many enemies, but it has a great many friends—many more, I think, than some of us occasionally realise. People expect this House on occasions like this to speak its mind and give its vote in no uncertain terms. What I think has never been denied is that beneath the various qualities which your Lordships individually may possess, there lies a very sound substratum of strong common sense. That common sense will, I hope, be shown in full measure to-morrow when your Lordships go into the Lobby to defeat by a large majority this specious and most dangerous Resolution.

LORD ALLEN OF HURTWOOD had placed on the Paper an Amendment to leave out all the words after "That" and insert "in view of the failure of society adequately to utilise and organize natural resources and productive power, or to provide the necessary standard of life for vast numbers of the population, this House declares that legislative effect should be urgently directed to transforming the present industrial and social order by a rapid extension of the policy of collective organisation which has been increasingly adopted by every Government in modern times, and which now needs to be expressed in many varieties of public ownership and democratic control rather than in any one rigid formula, and which should be submitted to the attention of the nation by a constructive appeal to good will and intelligence and not as an appeal to class-hatred or as seeming to involve a financial or constitutional crisis."

The noble Lord said: My Lords, I should like to begin my speech by a word of gratitude to the noble Lord who has just sat down for making it so clear to the House that the speech which he has delivered was not on behalf of His Majesty's Government. That explanation has made my task as a supporter of the Government a great deal easier, and I am grateful to him for that opening statement. I am sure that the noble Lord fully realises that, however fantastic it may be to him, there are amongst the supporters of this Government those who rank themselves as sincere and lifelong Socialists and who intend to remain so notwithstanding their support of this Government. But when the noble Lord goes on to say that this Motion is an academic Motion, I am bound to disagree. While I listened to the noble Lord, Lord Sanderson, I could not help but feel that the speech which he delivered was a very different kind of speech from many of the speeches which are delivered on behalf of the Labour Party, both officially and unofficially. I am going to take my life in my hands and deal with this question of Socialism in no academic sense at all, but in terms of the situation which will confront this nation probably within a year from now.

The noble Lord, Lord Sanderson, has interested us by telling us how, in some remote future, industry may be organised under the Socialist State. What I am concerned with in my speech is whether Socialists are going to have a chance of using their programme, and whether a Socialist Party is ever going to become the Government of this country in order to apply its programme at all. At the next General Election we are going to. be called to battle on the issue of Socialism both by His Majesty's Opposition and by His Majesty's Government. Whether that is a wise thing for the political democracy of this land I shall proceed to argue, but in order to prove my point I ask permission to read a quotation from the Leader of the Conservative Party, the Lord President of the Council, Mr. Stanley Baldwin. In a New Year message which Mr. Baldwin sent to the Primrose League, he used these words: Whether the General Election conies this year or a little later, 1935 is going to be politically a very important and critical year. I therefore urge all members of the League to let no opportunity pass of exposing the dangerous policy of Socialism. It is more necessary than ever to bring home to the electors the fact that the principles on which the League is based are a real bulwark against the devastating creed of Socialism.

Now, My Lords, I am sure I shall have the sympathy at least of some noble Lords on this side of the House when I say that this reference to the "devastating creed of Socialism" as the issue upon which the next Election is to be fought came a little hardly to certain supporters of the Government from the Leader of the Conservative Party. I very much hope that when we are called to battle we shall have less of those remarks from the Deputy Prime Minister of the National Government. It is, however, clear that at the next Election we are going to be called upon, apparently from both sides of the House, to deal with this question of Socialism as though it were either a menace from the Government point of view, or going to be made into a menace by the Labour Opposition. I cannot think of anything more disastrous to the future of political democracy in this country, anything more likely to impede the rapid social development that is now available, anything more likely to prevent the alleviation of the sufferings of the working class, than that we should be called to battle in the year 1933 on an unreal issue in which we are to fight either Capitalism on the one hand or Socialism on the other.

May I examine the actual wording of the Motion which has been tabled by the noble Lord, Lord Sanderson? I should like to make it perfectly clear that if the procedure of this House requires me, when a Division is to be taken, to choose between the Motion which the noble Lord has put down and the Amendment which my noble friend Lord Mount Temple has put down—even though I desire to improve, as I think, on the wording of the noble Lord's Motion—I intend to vote for the Motion which has been tabled by the noble Lord, Lord Sanderson. I think, however, that that Motion is out of date. I fully remember the circumstances in which it was tabled, for I happened to be Chairman of the Independent Labour Party at the time when Mr. Philip Snowden put that Motion down in the House of Commons; I was therefore present at its birth. But, my Lords, twelve years have passed since then, and surely, though it may be strategically amusing to put down, in order to tease the noble Viscount, Lord Snowden, a Motion which was moved by him twelve years ago, it is not helpful to the cause of Socialism to submit here today a Motion the terms of which are not in accord with the times in which we live.

I submit to the noble Lords that, if they want to assist the cause of Socialism, they ought to present here a form of wording which does not suggest that we are going to change our social system by any one rigid formula or which points to any one particular cause as that which creates our present discontent. I am bound to point oat to the noble Lord, Lord Sanderson, that, despite all the gentleness of the manner in which he has approached his subject, unhappily one of the things which has happened during the last twelve years is that the manner in which Socialists are presenting their case to the public has been obscured by anger, by envy and by the stirring up of misapprehension which is creating a barrier between their creed and the public. It is for that reason that I have had the hardihood to attempt to re-word the noble Lord's Motion, not because I seek to defeat Socialism but because I want to commend it to the minds, the intelligence and the good will of the people of this country.

In that Motion the noble Lord, Lord Sanderson, refers to what he calls the failure of the capitalist system. The noble Lord, Lord Mount Temple, refers to that same system as being a well-tried system. The noble Earl, Lord Peel, does not want even partially to alter that system, and the noble Lord, Lord Templemore, who spoke from the Front Bench, says that it is impossible to graft on to the system of this country, with its individualistic outlook, any kind of Socialist system. The noble Lords seem to have been living in an Alice-in-Wonderland world during the last fifty years. There is no such thing as a capitalist system at the present moment, any more than there is a Socialist system. We are living in a period of transition which is neither capitalist nor Socialist, and if I may claim your Lordships' patience for a sufficient time I propose to bring forward a series of illustrations to prove how we have long since passed out of any organisation of society which can be described by the word "system" in any shape or form.

Every Government in succession during the last fifty years, right up to the time of the present Government, has been steadily engaged in increasing the area of collective organisation in this country: bringing under the State, under municipalities or under public utility corporations first this function and then that. We have the extraordinarily good fortune in this country, as compared with the situation which we see in countries abroad, to be living in a nation which seems to have the capacity for doing that very grafting which Lord Templemore said we could not do. That is exactly the quality which we possess. Whereas other countries pass through the storms of revolutions and catastrophes, we are able stage by stage to adapt ourselves to new circumstances and to graft new methods of organisation on to an old system. What is the result? To-day we are the least unfortunate country in a most unfortunate world. If we can avoid this unreal struggle taking place at the next Election, I believe that during the next two or three years we can advance rapidly towards that state of society for which the noble Lord, Lord Sanderson, has pleaded in this House.

The tragedy of the present position, if I may speak for one moment on the electoral prospects of the country, is that the vast bulk of the people—probably something between 50 and 60 per cent. of the electors—are altogether out of touch with the various political machines which seek their suffrage. If you happen to be a Socialist, as I am, and if you therefore wish to cast your vote for Socialism, you find the Socialist Party building this foolish barrier between its programme and its public. If you happen to be, as I am, a supporter of the idea of a National Government, you see this Government becoming less and less national in actuality, whatever it may be in name. I only wish that the noble Lord, Lord Stonehaven, were here in order that I might, remind him of some of the difficulties he is finding in the constituencies to-day of getting local Conservative organisations even to re-adopt their National Labour candidates who have served them in Parliament in support of the Government. Therefore, from the point of view of the country as a whole, what do you see if you watch the electoral graph at by-elections? We are faced with a position in which the country is out of tune with the political organisations which are appealing for its support.

What does the Leader of the Conservative Party say? He says we are to gird up our loins to fight Socialism. May I be permitted for a few moments to try to describe what I think Socialism is? First, it is a great social ideal which seeks to cultivate amongst citizens of a nation a spirit of service to each other, to bring nearer an. equality which gives them a greater opportunity of serving both their nation and themselves. Secondly, Socialism is a device by which the State collectively, year by year, seeks to redistribute the national wealth, and I would ask permission to give just a few figures as to what has already taken place in that respect. If you take the Inland Revenue report which has recently been put into your Lordships' hands you will find that the total number of large incomes has been substantially reduced during the last seven or eight years, and not because of the general increase of poverty which the world is experiencing. If you take the condition of the wage earners since 1914, the real wages, not money wages, have increased by nearly 20 per cent. If you take the survey of poverty in London which was organised by Charles Booth in 1880, you find that 30 per cent. of the population of London were below the poverty level. In 1928, when a similar survey was taken in comparable circumstances, those below the poverty level were only 8.7 per cent. That is the first result of Socialism, in so jar as its seeks to redistribute the national wealth between the different classes.

Then, thirdly, Socialism is an attempt by which the nation carries the burdens of the less fortunate members of society. Those burdens were previously carried, in so far as they were not borne by the persons themselves, through private initiative on the part of charitable organisations, but since the turn of the century the State and municipalities have intervened, and so to-day you have built up in this country a great body of social services, whether concerned with health, housing or other purposes—a body of social activity which makes this country the envy of the whole world, so far as social services are concerned. In 1910 £63,000,000 were spent for the purpose of social services. In 1931 that sum had increased to £490,000,000, and that shows that even if you allow for the changing value of money the nation to-day is spending for the purpose of social services three times per head the amount which it was spending twenty-one years ago. The survey of the League of Nations of the world on its economic side, contains this definite statement: The general drift of the public utility and social services is almost inevitably in the direction of re-distributing income in favour of the poorer classes. When the indirect provision of real income noted above is considered, it becomes clear that the standard of living has risen substantially. That is the third aspect of Socialism, which has been grafted on to our social system.

Fourthly, Socialism is an attempt to bring a sense of design into an economic system always disorganised. It seeks to use the functions of the State in order that industry may perform its duties more efficiently with less waste of capital and less suffering to those engaged therein. It used to be said in the old days that Socialism was production for use rather than profit. I think it should now be said that Socialism is production for public profit rather than private profit. That should be the new definition which we should give it. I wonder if I may hold your Lordships' attention for a moment just to mention the enormous variety of the interventions by the State in the world of industrial organisation. You begin with the nationalised Post Office and when there was an inquiry only about two or three years ago the report was unanimous after all this experience in favour of continuing the Post Office as it was. Then you have your public utility corporations, and many varieties of State intervention to assist and co-ordinate industrial functions. Under the present Government you have had a rapid extension of Socialism grafted on to our individualistic society. You have had many kinds of marketing schemes which seek to regularise production and to meet the needs of the consumer through supplying commodities to your social services as now organised. You have, for instance, the milk scheme—

LORD MOUNT TEMPLE

Surely the fallacy in the noble Lord's latter argument in claiming these new ideas as Socialism is the fact that the State does not produce. In the electric schemes, for instance, the production is continuous by the private man or private corporation and not by the State.

LORD ALLEN OF HURTWOOD

The noble Lord appears to have read his modern Socialist books just as badly as he read Karl Marx. He gave us some description of what he believed to be the views of Karl Marx which I think there would be the utmost difficulty in recognising as Karl Marx's sentiment. Now he is seeking—

LORD MOUNT TEMPLE

I am sorry, but I must interrupt my noble friend. Does he deny that in the cases he has mentioned the private individual, the private company continues to produce, and that it is not done by the State?

LORD ALLEN OF HURTWOOD

I most certainly do. In the case of public utility corporations such as in the matter of broadcasting, exactly the opposite is true. There is here no case at all of any private shareholder having any share in the profits or control. What we have discovered by process of time is that there are various methods by which you can introduce the principles of Socialism whereby the interest of the State and the interest of the body politic shall be put above the interest of any of the private individuals who compose that body. Through a public utility corporation you can get all the advantage of collective organisation and promote efficiency without the disadvantage which conies from political manipulation which may easily arise if you proceed to nationalise all industries and run them from Whitehall. The noble Lord has held me up in the development of my argument. I want now to go further. Not only have we developed all this new social activity but we have even in this House Lord Melchett coming forward with his scheme of an enabling Bill under which staple industries could put their houses in order so that they may become more efficient and better organised for the delivery of their goods and services. So far as the future of Socialism is concerned, I earnestly beg my noble friends opposite to realise that this is not patching the capitalist system at all, it is preparing a more orderly form of economic organisation, which they will be able to take over more effectively if at some future date they should consider it to be desirable.

What is the result of this development on the economic side? It is this. It was calculated a few years ago that practically two-thirds of the large-scale economic organisation of this country had already passed out of the sphere of unregulated private profit-making control. Then we are told that we cannot graft a new system on to an old one. I have ventured to put this argument forward because I think it would be such a tragedy that the history of that kind of development—and with that history being maintained by this Government, which has placed more Socialism on the Statute Book than was ever placed there by noble Lords opposite between 1929 and 1931—should be interrupted at the next Election. May I just say to my noble friends opposite that the public wants these methods, and the needs of the time require this system of organisation.

The noble Lord, Lord Sanderson, in his opening speech said that they did not preach class war. Let me read, if I may, a quotation, not from one of their unofficial speakers, but from one of their own official publications, and dealing with education of all subjects in the world. This is what their official publication says: The truth is that powerful sections of opinion hate the improvement of public education Tartly because it involves in creased expenditure.…But they hate it still more for another reason. Every measure which decreases, even to a small extent, educational inequalities seems to them a menace to social privilege, and arouses, therefore, their bitter opposition. English educational policy has been drawn on lines of social class. They desire to preserve those lines, and, if possible, to deepen them. That is a tragic way of presenting Socialism on a subject like education, and if it is not class war I do not know the significance of that phrase.

But to go further. Let me draw your Lordships' attention to a book that has been publicly blessed by the Leader of the Labour Party and other members of the late Cabinet. I have here the wrapper which appears round this book—"A book that tells Socialists precisely what to vote for and anti-Socialists precisely what to fear." Fancy presenting the Socialist case to unconverted people in terms of what is written here. It seems to me a tragic way of presenting the Socialist case. And you go further and you stir up the idea that, even if you receive a democratic mandate, your return to office will only have the effect of producing something in the nature of a crisis. I am studiously avoiding in this case any quotation from any unofficial speakers. I quote from the Deputy Leader of the Labour Party in the House of Commons. This is what he said: I am envisaging the period of the first Socialist Government in power "— that is, after a democratic mandate has been given— as one of crisis. The atmosphere will be comparable to that existing in this country at the beginning of the Great War. The important thing is not to do things with the most scrupulous regard to the theories of democracy or exact constitutional propriety, but to get on with the job. There is a declaration, not made in a speech which may have been misreported in the Press, but made in a calculated way in a book which tells the country that if they listen to the writer they will find themselves involved in a crisis, and that they must not have regard to the theories of democracy or exact constitutional propriety.

You are inviting other people to play with democracy who may not have that social concern for it that you claim for yourself. I cannot but feel that with all this stirring up in the nation of a belief that if His Majesty's Opposition should ever have the chance of becoming His Majesty's Government there would be this constitutional and financial crisis, you are doing what you know you have denounced in the case of the militarists, who say: "If you want peace, prepare for war." In your own domestic policy you yourselves are repeating the fallacy which you expose in the case of the militarists. In these circumstances, in whichever direction one looks, one feels that this immense chance which our nation has of continuing to develop without upheaval by the process of constitutional building and economic readjustment may easily he destroyed at the next Election if this is to be the mood which is applied to it by the Opposition. And therefore I urge that what we must do is to use politics to keep this process of democracy alive in Great Britain.

It was this issue that was at stake in 1931. It was this that caused many of us to support the Government. It will be infinitely more at stake at the next Election. It is the function of politics to keep open the door of progress so that all the new forces that are gathering way through science and education and in other directions may combine to create a new society. If once we allow that door to be slammed in our faces through a bitter class struggle over out-of-date doctrines, we may repeat in this country some of the disasters that have been seen abroad. That is the reason why I put down the Amendment that stands in my name on the Paper.

THE MARQUESS OF CREWE

My Lords, this debate exhibits one of the advantages which your Lordships' House possesses over another place. The noble Lord to whose speech we have just listened used the word "academic" in relation to this debate. The noble Lords representing the Opposition would not, I suppose, admit that this discussion is in any sense academic. They would say that they are looking forward at no very distant date to being able to fulfil the hopes explained in Lord Sanderson's Resolution, and therefore that they are doing a service to your Lordships in stating exactly what is going to occur when they come into office. However that may be, I must begin by echoing the protest that has already been made against the suggestion that the existing system, known as the capitalistic system, can be regarded as a failure or as having broken down. Of course, as we know, the world is in a disturbed state and there is a great deal we should like to see changed; but it is not fair or reasonable to relate that state of things to the existence of the particular economic conditions under which we live. It would be almost as reasonable to say that Christianity has broken down, that being the religious system under which a great part of the world lives. Or if you like, you may say, as some people do, that the whole system of representative government has broken down. But I repeat, it is unreasonable to relate the various misfortunes under which the world labours to our present system.

After all, there is nothing novel in the suggestions which are contained in the original Resolution. If those arguments are good, then they have been good for two hundred years or more, and there is no reason to suppose that they are better now than they have been at any other time. We know the kind of arguments that have always been used. There is a story of the French Revolution of 1848, that when one of the principal leaders came out from an enthusistic meeting and was about to get into his carriage, he perceived perhaps that there was some discrepancy between his position and that of his supporters. He looked round and said: "We are hoping for the time when everybody will have a carriage." One of the bystanders, with the logic of his nation, said "In that case who will drive me in mine?" That was a very crude appeal to the simple desire of a man to have something which he had not got. At other times there has been the appeal to the even less worthy sentiment, not that everybody should have a carriage, but that nobody should have one.

I am quite prepared, however, to admit for my part that the communistic ideal has an attraction and fascination of its own. The efforts of Robert Owen and of those unsophisticated people who attempted to start communistic colonies, especially in America, evoke a certain degree of sympathy. The ideal of a community where everybody has the necessaries of life and nobody has any need of luxuries, because they do not exist, and where there is no need for money because there is nothing to buy—all that may be regarded as an attractive ideal. If one may compare smaller things with greater, it is not altogether different from the ideal of a future state in heaven which used to be held out to children in school-rooms some generations ago. I think the children all admitted that the prospect was most peaceful and beautiful, but the sharper ones among them could not help reflecting that, as a method of passing eternity, it would be rather wanting in variety and incident.

I think we all agree—and it has been brought out in the most interesting speech made by the noble Lord who has just sat down—that there has been a very marked advance, not merely of late years but for many years past, in the public ownership and control of many departments. As we all know, in the Middle Ages there were a number of small private armies some of which were from time to time used for national purposes. In later days, we all enjoyed in our boyhood stories of privateers, that is to say, ships which fought in the national wars under what would now be called a licence. The noble Lord, Lord Mount Temple, spoke of the Post Office, perhaps with a certain note of disparagement. I have no doubt that some of your Lordships know that for more than four hundred years the whole postal service of Central Europe was in the hands of a great Bavarian family, and it is only within living memory that a very large sum was paid to that family as final compensation for the postal service in the different countries concerned becoming a public business. I am quite sure that, whatever may be said of the Post Office, we would all rather see it conducted by Sir Kingsley Wood, to whom the noble Lord, Lord Strabolgi, paid a most handsome compliment yesterday, than by one of my noble friends on the Front Bench opposite as a private enterprise.

As Lord Allen has pointed out, there are many instances in which the public control has increased. Where I think a definite black line must be drawn between the two sets of opinions, where there is a great gulf fixed, is that, while among noble Lords generally there may be a great diversity of opinion as to the extent to which public control and ownership should be exercised—there being some who would like to see it reduced as far as possible and others who would like to see it considerably enlarged—everybody, judging by the terms of this Motion, who feels entitled to call himself a Socialist pure and simple, looks forward to applying it to everything. That, I take it, is a natural line of demarcation which has to be drawn and it is one which would make it impossible for anybody who does not desire to be ticketed as a Socialist pure and simple to vote for the Motion of the noble Lord, Lard Sanderson.

Now I think it is relevant, rather pursuing the line taken by the noble Lord, Lord Templemore, to ask what would actually happen in the event of noble Lords on these Benches being able to carry out their desires. I pass by very briefly the question of the extinction of small traders of all kinds—the little shopkeeper in the by-streets of towns, the village blacksmith, and the village wheelwright—because, I am sorry to say, there i3 a tendency, whether we are Socialists or not, towards the extinction of these people. I sometimes wonder whether the great brewery firms who are now extinguishing small licence holders, and the promoters of multiple shops and chain stores, always realise how much they are accustoming the public mind to a sort of ownership which is not in essence very different from the kind of ownership advocated by noble Lords on the Opposition Benches. There is not much difference whether you use the letter "N" or the letter "R," whether you talk of nationalising or rationalising. There may not be in all cases much difference—I wish there were more difference—between the two.

When one comes to some of the larger enterprises now conducted privately and which might be conducted publicly, I take in the first instance one of the textile industries, cotton, on which I speak with all the more confidence because I do not pretend to know much about it. But what one does realise is that it has been through a very bad time and that the present system may, without great exaggeration, be said to have broken down to a considerable degree, and therefore it would seem to offer a favourable playground for noble Lords on the Opposition Benches. We all know that the cotton industry is very complicated. All the raw material has to come from other countries and will continue to do so, because one feels that even noble Lords who are fascinated by the creation of an artificial sugar growing system in this country would scarcely propose to start an industry for growing cotton under glass, although it might give a great deal of employment. We all know that the whole business of importing is decidedly complicated and also that it offers, as it would still offer under public management, a great field for speculation, for gambling in futures, next year's crop, and double futures, the crop of the year after next; but in addition to that there is the immense complication of the spinning industry, weaving, and dyeing and finishing. Assuming that all the mill hands became, as they would become, Government servants, and that all those who now hope to make a little profit out of buying and selling would be working on a fixed salary, what conceivable reason is there for supposing that that immensely complicated export trade would be any better worked under public management than it is at present?

The noble Lord, Lord Sanderson, indicated—I am afraid it was rather a shock to some of your Lordships—the manner in which industries would be bought up. They would be bought up, apparently, not at what would be called market value, but by giving something of the nature of a life annuity to those interested in them. That is a form of expropriation, and I think we are also bound to use the word confiscation, of private property which in ordinary circumstances would be compensated for at what is known as market rate; and I take it that that system is to apply not merely to cotton mills and things which now could be bought cheaply, but to other property of all kinds which even now has considerable market value. I pass rapidly over the coal trade; that has already been mentioned. Of course the buying out of mineral rights is a totally different question. That is not a Socialist proposition at all. It is simply a question of public convenience. Personally I do not think anything very much would happen if it were done. I do not think it would be found that the coal trade would benefit to any material extent by the purchase of mineral rights because one serious difficulty which formerly existed no longer exists—namely, the system by which a landowner in a particular line of advance of a coal enterprise could obstruct it unless he were paid something beyond a fair rent. Therefore I do not think it would make very much difference. What I have said about the complication, of the cotton trade applies certainly in an equal degree to the many ramifications of the coal trade, both domestic and export.

Then there is the question of the land. Nationalisation of the land again, so far as the actual taking over by the State of the surface, would not be in the main a matter of great complication. It is quite true that if expensive farm buildings were taken over at an all-round low valuation, which I understand is the proposition, for a few years it would be a decidedly paying thing for the State, whatever might be the moral propriety of the act, and I presume that the result would be that all tenant farmers would be sooner or later, sooner rather than later, turned into bailiffs working at a fixed wage. I suppose the smallholders, who I am glad to say have been placed in large numbers in the county about which I know most, would be told that they would not have to work their holdings on their own account but would have to work them at a fixed payment, and if they made a profit, it would go, I presume, to the county or possibly to the Exchequer. I doubt if propositions of that kind will please very greatly a large number of small people. It is by no means a question of expropriating members of your Lordships' House and others outside. There are hundreds of thousands of people of very moderate means who would find that their means of living and their prospect of leaving anything to their families were entirely destroyed. No noble Lord has so far mentioned the abolition of freedom of bequest. I take it that is one of the items, an important one, in the creed which is held by noble Lords on those Benches.

One point of discussion which arose between the noble Lord, Lord Allen, and a noble Lord on this Front Bench is the manner in which these changes are to be brought into operation. Nothing could have been more pleasant than the tone in which the noble Lord, Lord Sanderson, foretold the methods by which these vast changes, amounting undoubtedly to a complete social revolution, are to be brought about. The noble Lord opposite, Lord Allen, was not, I think, quite so confident that it could be done with so much rose water. Nor am I. I recall a long and friendly conversation which I held some years ago with a distinguished exponent of Bolshevist principles. After telling me a great deal of what Russians were doing, how much they were encouraging art, and how on the whole things were working well, he expressed the opinion that if their principles were to be imposed on Western Europe it would be altogether impossible that it should be done without going through what they had had in Russia—namely, a violent revolution accompanied by a great deal of bloodshed. I replied that I was very glad to hear that, because it was precisely the view which a great many of us entertained here. We believe that if what is practically the Communistic system is to be forced on this country it could only be done by a violent revolution. I know that is not the opinion of noble Lords on those Benches, but it is an opinion which, I think, a great many of us must be allowed to hold.

I think I can speak for my noble friends on these Benches when I say it is altogether impossible for us to support for a moment the ideas presented by the noble Lord, Lord Sanderson. Nor, I am afraid, am I altogether prepared to adopt the views stated by the noble Lord, Lord Allen, from a somewhat different point of view. I suppose that in this debate we are justified in mentioning even Amendments which have not yet been moved and, therefore, I would ask your Lordships to consider whether the Amendment which my noble friend Lord Lothian has on the Paper does not on the whole represent the central point of view more than any other of the Amendments on the Paper. It is quite true that he mentions the obstacles placed in the way of progress by the barriers to international trade, and though that is not the subject which is specifically before us, I should think that your Lordships would be glad to see those barriers reduced all over the world. Apart from that, I think that my noble friend's Motion puts the common sense of the whole question as well as it need be put. I merely come back to asking noble Lords to reflect: Cui bono? Who are the people who are really going to get advantage out of the line of action indicated in the Motion of the noble Lord, Lord Sanderson? I can only say for myself that I shall have the utmost pleasure in voting against it.

LORD SNELL

My Lords, I have always considered that your Lordships' House is seen at its best when a question of fundamental importance such as the one we are discussing is before it, and inasmuch as this is not a Party matter we can, without any question of Party loyalty, try to get very near to what each one of us believes. Not that non-Party opinions always mean calmness and gentleness. Not long ago I was talking to a distinguished and revered philosophical teacher, and he complained that we politicians always imputed personal motives into our discussions whereas philosophers were calm and deliberate. I said to him: "Is that really so? So far as I have observed you idealists are not even on speaking terms with the pragmatists." He said: "No, indeed; they are not worth speaking to." We are somewhat in that position this afternoon. Issues have been raised which compel us to examine exactly where we stand in relation to the great problem of the social organisation of the future. Let me say at once that the Amendments that have been put down to my noble friend's Motion stand up in a quite unusual and refreshing way to the problem that has to be discussed.

The noble Lord, Lord Mount Temple, has put down an Amendment which is a full-throated shout of praise of the capitalist system. He warned your Lordships against the gentle guile of my noble friend Lord Sanderson, and said: "If you really want to know what Socialists are and what Socialism means you must not listen to this debate, but you must go to Hyde Park." I should be very sorry to force your Lordships to take that journey, and happily there is no need because I can bring Hyde Park to you. So far as public speaking is concerned, Hyde Park was my University, and I do not know that there is any better place. You see in me Hyde Park at its worst. The noble Lord also told us that this Motion was Karl Marx. Really, my Lords, if there is anything characteristic about British Socialism it is that it is not Marxian. The noble Lord, Lord Allen, complained that the Motion of my noble friend was twelve years old. He was aware, of course, of the classical reason for repeating it, but there was another reason to be found in the speeches of the noble Lards, Lord Mount Temple and Lord Templemore. The tone and temper of their replies belonged to thirty years ago. What would have been their intellectual condition if we had produced for debate a Resolution that was right up to date? It was a matter of great kindness to them, at least, to allow a time lag of twelve years.

It seemed to me as I listened to the noble Lord, Lord Mount Temple, that no parent was ever so blind to the faults of his child, so certain about its perfection as he was in regard to the capitalist system. So long as we adhered to that it would heal all ills. The Amendment moved by my noble friend Lord Allen was a reasoned and constructive Amendment with which I have no sort of difference. He appealed to us to approach this discussion in a spirit of intelligence and good will. I hope that he meant that to apply to both sides, and that we are not to be compelled to use the honeyed words of peace whilst his present political associates are to tread the Primrose League path of dalliance with anti-Socialist invective. So far as I am concerned, let me say on the question of the class war to which he referred, that I have never, in a public life much longer than his, said a word in its favour and that I have made hundreds of speeches against it. It is not quite fair to the Socialist movement, to the Labour movement, to pick out some isolated phrase of a man who perhaps spoke out of the misery he felt rather than from his knowledge of the situation and to present that as being the temper of the Socialist movement.

LORD ALLEN OF HURTWOOD

If I may be allowed to interrupt for a moment, I would like to point out to the noble Lord that the quotation I made so far as the class war was concerned was from one of the official books of the Labour Party itself.

LORD SNELL

The noble Lord himself has written official books which have been subject to a very searching criticism and denunciation. Let him have the charity towards others that he expects for himself. Let me remind the noble Lord of this, when he appeals for charity and good will, that in spite of all its faults England has the most constitutional, the most orderly, the most co-operative Socialist and Labour Party in the world. Its men and women are of the fibre that would do credit to any nation. I have known them and worked with them, and I want to say that I have never known, and do not wish to know, better men. But I have never heard, and he has never heard, one generous, one really fair word about their work or about what they stand for. Moderation has been answered by slander and their ideals have been derided. If poisoned words could have killed the Socialist movement it would have been dead long ago. The Amendment put on the Order Paper by the noble Earl, Lord Peel, assumes an attitude of shocked belligerency. The capitalist system is sacrosanct, Socialism is wicked.

EARL PEEL

That is not in the Amendment, however true it may be.

LORD SNELL

Socialism aims to remedy maladjustments in society and to produce a wise economic and financial plan. It means to secure gradually and painlessly the transition of a state which is disorganised and full of disharmony into one that will have some relationship to the moral law. I really do not see what there is in that which should make the noble Earl, Lord Peel, fear to touch the evil thing. The case for Socialism this afternoon has been well put both by my noble friend behind me and by my noble friend Lord Allen, and I think I can best serve the House if I try to show in answer to the speeches that have been made just where I at least think the capitalist system has failed. As I listened to the speeches I was not quite sure that even its defenders knew what the capitalist system was. Let me try to describe it.

First of all, let me do so in the words of a very distinguished philosopher, Sir Henry Maine, in his book on popular government. He says: It is the beneficent private war which makes one man try to climb up on the shoulders of another and to remain there. In charity to the intellectually distressed I propose to say what I think Capitalism really stands for—I hope with fairness and clearness. Those who support the capitalist system believe that human welfare demands the minimum of interference by Government in economic and social affairs; that harmony can be established only through the free play of economic forces; or, if not harmony, then at least progress. In this free play of economic forces the weak and inefficient will suffer, but in the end the State, the whole community, will benefit. That, I take it, is a fair presentation of what Capitalism really stands for. From my standpoint I have never ceased to be amazed that generous minded and fine-grained men could support so hideous a doctrine. Our fathers believed that inequality and poverty were in accordance with the natural law, were inevitable, and they therefore put up with them. We know that slums are riot inevitable; we know that poverty is a social disease that can be cured. If it was a natural law, it was a bad law; the point is that it was not the moral law, and that is the really decisive thing. We do not deny the strength of the acquisitive impulse to get and to hold; we do not deny that it has done certain things for humanity; but while we may be compelled to bow before it we will never call it good, or praise it, or say that nothing can be better.

I detect a confusion in the minds of critics of Lord Sanderson's Motion as to what Socialism really means and what Capitalism does. They think Capitalism is the holding of private property, and that if Socialism came a man would lose his watch, and this, that and the other possession. That is the poorest mechanical view of a great principle. I am quoting now from Mr. and Mrs. Sidney Webb: It is not the sanction and security of personal possessions that forms the foundations of our capitalist system but the institution of private ownership of the means by which the community lives. That is really the capitalist system. Socialism is not that a person may not own things, but it is that he ought not to own the means by which the community has its life. Again, the criticism this afternoon has assumed that the capitalist system is perfect, that it is permanent, and that to question it is presumptuous. In reality it is a modern thing, and it will be a transient thing. Other systems before it made the same claims for permanency and said that they were based upon natural and even divine laws. So it was with serfdom; so it was with slavery in America. No one was surer than the owners of slaves in the Southern States that slavery was a divine law which they ought to defend even to the point of civil war, and they defended it until they were swept away by the sacred rage of a noble people. Capitalism is of that same breed, and in my judgment it will go the same way.

I do not know whether your Lordships would think it indelicate of me if I were to illustrate what I want to say by my own personal experience. It is not unrelated to this problem. I began to experience the dignity of labour early in life, and at ten years of age I worked for twelve hours every day for fourpence per day, and seventy-two hours per week for two shillings. And, you know, I was not grateful. I did not know that Capitalism was thoughtfully and generously adapting itself to my needs according to this Amendment, or I might have understood that it could have paid me one shilling instead of two. Then again, when I began to study economic theory Walker was put into my hands as being a classical economist, safe, and not likely to lead me astray. This is what I found: that so late as 1870— children were employed in the brickyards of England under strange taskmasters at three and a half years of age. Account is given of a boy weighing fifty-two pounds whose daily task covered fourteen miles, half of this with a load of clay weighing forty pounds upon his head. The same case, or perhaps another case, is dealt with in the same author's book The Wages Question: At the meeting of the Social Science Association in 1870, Mr. George Smith presented a lump of clay weighing forty-three pounds which, in a. wet state, he had taken a few days before off the head of a child nine years of age who had daily to walk twelve and a half miles in a brickyard, half the distance with such a burden. The clay,' said Mr. Smith, 'was taken from the child and the calculation made by me in the presence of both master and men.' In the words to be found in the New Testament: Whoso shall offend one of these little ones… it were better for him that a millstone were hanged about his neck, and that he were drowned in the depth of the sea. I should like to say something else. When I was a child, I saw old people whom I knew, neighbours of my parents, whose example and character are a part of my own spiritual heritage, worn out and sent by Capitalism heartbroken to the workhouse, which to them was but a prison with another name, with the same callousness with which it now sends old, used horses to the knackers' yards of France and Belgium. My Lords, do you not wonder that the sons of some of these men and women decided to do the best that in them lay to destroy a system which permitted that, and to try to build something better in its place? I am thankful to say that for more than fifty years there has not been a day on which I have not tried my best to supplant this beautiful capitalist order by a system based on ordered co-operation and intelligent planning. I do not wish to say that poverty is peculiar to Capitalism; it is not. Primitive communities, communities subjected to drought, and arid areas generally, have had poverty and will have it again. Capitalism, however, is condemned because it perpetuates poverty in the midst of plenty. That is the real point.

England, at the time of which I was speaking, was rich beyond record; her commercial prosperity had no parallel in the history of the world. The people shouted with joy about it. The Spectator in 1882 said: Britain as a whole was never more tranquil and happy. No class is at war with society or the Government; there is no dissatisfaction anywhere. The Treasury is fairly full, the capital accumulations are vast. How did Capitalism, before the Labour Party came into being to disturb the situation and produce these terrors, use that wealth? The people were docile, there was "no disaffection anywhere," Professor Rowley tells us that 320,000 adult males in regular employment were earning less than 15s. per week; that 640,000 were earning between 15s. and 20s. a week, and 1,600,000 between 20s. and 25s. and so on. Thus you have, on this authority, this responsible calculation, that 2,500,000 adult males in regular employment were receiving less than 25s. a week, and 4,240,000 were receiving less than 30s. a week.

The noble Lord spoke about Capitalism increasing wages. There was a period in the middle of the nineteenth century when, as a result of the industrial revolution and the application of science to industry, things were considerably better, but if the noble Lord means that Capitalism ever voluntarily increased wages he is presuming upon the ignorance of your Lordships of commercial processes. There never has been a demand on the part of the workers for better conditions that has not been resisted. There never was a strike of workmen to get better wages when Capitalism did not fight the hunger of the men's wives and children with bank balances drawn out of the profits of labour. It seems to me that Capitalism is at best a dying creed.

A NOBLE LORD: Then why worry?

LORD SNELL

I saw it in America on March 4, 1933. All the banks were closed (there was no Labour Party in America) and the capitalist hosanna suddenly changed into a squeal of terror, and nobody was so anxious to get off the shoulders of his neighbours and to take refuge under the sheltering wing of the State as the capitalists at that time. Things have altered since then in America. The Times, on the 5th of this month, said: Great improvements have been effected since the President took control. Production figures are now not far short of normal. Trade has improved in all directions. Agricultural prices have been raised.… and that has been done, not through unrestricted private initiative, but through control and planning, which with all its faults has helped to restore America to something like happiness. Capitalism is now engaged in adapting itself to Socialism, and everywhere—Mr. Bennett in Canada, and again in Italy, Germany and elsewhere—the private war is giving way to public control.

My Lords, my general criticism of the capitalist system is this, that it makes no effort to direct to social ends the economic and financial changes which occur. We spend our time patching up rents in the social fabric, and spend no time at all in trying to weave a new one. Capitalism ignores every problem until it has become inconvenient. It accepts with fatalistic lethargy the drift of population from north to south. It sees industries in the north decline, although the towns in which they were are admirably equipped for new industries which could be sent there. And, finally, Capitalism, if left alone without this dreadful State or communal control, would destroy the loveliest village and the inherited beauty of a thousand years. The one thing that arrests the internecine capitalist warfare is not individual private initiative but the fear that changes may come.

Before I close I want to say a word or two about my own conception of the Socialist advance. We are asking that the capitalist system should be gradually superseded, based on public ownership, if you will, or democratic control; that is to say, that all future legislation should be of a Socialistic tendency. We cannot say what it is wise to do. Noble Lords may detail the difficulties, such as was done by the noble Marquess on my right and other speakers, but the thing which will really determine the change will be the question of utility and expediency; changes will come so that we shall not know that changes are taking place, and they will be no quicker than we are fitted to ensue them and live under the changes made.

As far as I analyse the present society it is this, that present tendencies show a distinct quality, and that quality is a larger and larger aggregation of capital. Combinations and undertakings lead to the supersession of small ones. Will it be a comfort to the poor private person if he is superseded by a joint stock company rather than by a community? because by one or the other he is bound to be superseded. We do not claim any divine sanction or any sort of perfection for the views that we hold. We believe that they are ethically justifiable, and that a way to achieve them will be discovered. We do not claim that our views are always right or our methods—our ideals are always better than our choice of methods to realise them—but I believe for what it is worth that Socialism, as we know it, is even at its worst better than Capitalism at its best. I apologise if I have appeared vehement and even impolite. These things touch our feelings, and one's emotions cannot be put in a refrigerator. I have confessed my faith, and having done so I do not much mind if I do not speak in your Lordships' House again.

But in conclusion I would like to say that in my judgment Socialism is the hope of millions throughout the world, and I am not one of those who believe that a thing so evil as has been stated can appeal so wonderfully to the men and women I have had the privilege of knowing and working with. I doubt whether any movement since the Reformation has called to itself the devotion and the service and the social idealism that this movement has, and although it may be defamed, and its advocates libelled, and its ideals derided, Socialism will stay and Capitalism will go. So far as I know my friends on this side, they have responded to an urge which makes men strive to reach that which is just beyond their grasp, and that gives to them the kind of reward that Capitalism can neither give nor take away. I believe myself that in some way, perhaps in a way that none of us can conceive, an ordered, equitable, co-operative society will emerge from the present capitalist system, and my faith in that is as keen as it was fifty years ago when I began my work. Capitalists may hinder it, but they cannot prevent it, and I believe that if we apply our minds to the great purpose before us we shall find the way to go from a capitalist society which leaves men, within the shadow of this building, With their families six in a bed, to a society based upon order and upon human sympathy.

EARL PEEL

My Lords, I put down on the Order Paper an Amendment to this effect: Since the country is slowly but surely recovering from the financial and economic crisis, this House considers it inexpedient to give any countenance to doctrines which even if partially carried into effect must destroy confidence and increase unemployment. The noble Lord who has just sat down has criticised my Amendment rather severely. He denounced it as belligerent in style. Well, I can only tell him that if he thinks this is an example of my belligerent style he a good deal underestimates my capacity in that direction, I thought it was the mildest language I could use to express my meaning. I certainly do not think that the noble Lord need apologise to your Lordships' House for vigorous and forcible expression. I for one always like to hear people speaking forcibly, especially of their early life and when it has coloured their subsequent opinions. But if the noble Lord will allow me to say so, I think early experiences do sometimes colour our opinions, and perhaps for that reason the deductions which we draw from them are not quite so world-wide as we sometimes think them to be.

I will refer briefly to what he said about the evils of the capitalist system. He certainly denounced it in good round terms, and I must say that after reading the history of the past it is extremely difficult to imagine, not that capitalists, but that anybody could have tolerated the conditions affecting child labour in 1800 and 1810 and thereabouts. I am glad to say that my family record is rather a good one, because my great-grandfather was the first man who introduced into the House of Commons a Factory Bill. I am told it was a very bad Bill and was not properly carried out, and perhaps I shall have the opportunity of introducing a better one at a later stage. But I do not want to go into the details of the past, I would rather deal with the present.

In spite of the evils that the noble Lord attributes to Capitalism—and apparently according to him there is nothing to redeem it, nothing to be said in its favour, and it must be destroyed—it must be rather puzzling for him and for others, when they study the social history of this country for the last eighty years, to see the enormous improvements that have progressively taken place in all directions in the life of the working classes during that time. If, instead of relieving their feelings by denouncing Capitalism, they ever feel in the mind to study truthfully and honestly what has taken place I do not think they will talk so whole-heartedly about the evils of Capitalism, but will perhaps do justice to innumerable people who have worked for the assistance and improvement of the working classes during that period.

I should like to say a word about the Motion of the noble Lord, Lord Sanderson, because until I heard the speech of the noble Lord, Lord Snell, we were jogging along very comfortably in a sort of Utopian academic discussion. I think it was Lord Snell who took noble Lords very much to task for suggesting that the Socialists had derived their Socialist views from Karl Marx. Well, having very carefully studied all these economists, I am bound to say I see a very considerable connection between them, although no doubt the idiosyncrasies and character of Britons have to seine extent modified their views. But in the case of Lord Sanderson I was very much struck by the fact that he laid down definitely and straightforwardly those old propositions about Socialism with which I have been familiar for a good many years. If you are considering Socialism as a means of raising the position of the masses of the people, and if those words about ideals mean anything, as I am sure they do in the minds of noble Lords opposite, I really think they must consider a little more carefully whether their particular methods are going to introduce the great improvements of which they talk so much, because there is, to my mind, an amazing lack of logic in their statements.

It is very nice to attack Capitalism—and attacking anything, I am sorry to say, in this unregenerate world is rather pleasant. Sometimes even attacking the Government affords sport to certain minds. It is quite a different thing to say that all these evils are going to be swept away by a system which has got to defend itself and to answer a good many pertinent questions as to how it is going to work in practice. The propositions laid down by the noble Lord, Lord Sanderson, cut across some of the most deeply rooted instincts in the British character. I was very interested in the noble Lord's description of distribution. Like most Socialists, he said very little about production, a good deal about distribution, and not a word, so far as I heard him, about exchange. With regard to distribution, however, I found a difficulty in grasping exactly what he meant, because he referred to distribution or payment of reward by merit, and he said "Who can judge merit?" And poor merit got kicked and dismissed from the scene as a method of distributing goods. Then by work done—is that test to be taken? That was equally swept away by the noble Lord; and he said that distribution was to go by need.

That left me in rather a puzzled state of mind. I do not know whose need he meant. Was it the need of the individual, or the need of the family, or somebody else's need? How, indeed, is the noble Lord, who is so contemptuous of merit as a test, going to apply need as the measure by which reward is to be given? But then, after having given us these delicate tests, he says he thinks equal distribution will be the simplest method. Does he really? I mean we are talking of human beings and not of idealists who speak in Hyde Park.

LORD SNELL

Are they not human?

EARL PEEL

I do not know whether to include the noble Lord in that gallant band or not. I have had my experience there as well. I doubt whether my speeches gave such pleasure to those who listened as his did; but, after all, we are speaking in a practical world. Is there anybody who supposes that, shall I say the mass of the people in this country, are going to be content to get a perfectly equal distribution, whatever their contribution?—for that is his proposition. Whatever their contribution in work, ingenuity, invention or new patents, they are going to get exactly the same distribution. It certainly does argue a very high state of intelligence, culture and morals to suppose that the same efforts will be put forward by everybody, although they get exactly the same reward. I heard the noble Lord pay a magnificent tribute to the Socialists with whom he was associated. He said that they were a very fine body of people. I dare say they are, but I rather suspect that even they, if put to the test, would shrink a little from this method of assessing their merits and contributions.

The other point to which I should like to refer is the question of competition. That, of course, was denounced by the noble Lord as being the case of one man trying to get on the shoulders of another man. I have heard kindlier definitions of competition. Considering that competition cuts so deep into the national character that nine men out of ten are much more interested in competitions than in anything else, it seems to me incredible that you are going, with one swoop, to cut away all that principle of competition and to come down to formal co-operation without any rivalry or any attempt to beat the other fellow. I find it rather a strain on my knowledge of human nature to suppose that that is going to take place. One noble Lord—I am not quite sure which—was speaking of the entire change that has come over industry. He said that competition had gone out of industry. I do not think he could have been very deeply concerned in industry to give vent to such a proposition. It is quite true that competition in industry has very much altered from what it was forty or fifty years ago, but competition in industry is to-day of the sharpest and severest kind, for now it is generally exercised by great organised bodies which are fighting each other with a tenacity, vigour and resource which could not have been shown forty or fifty years ago. Indeed, that competition is not merely with other bodies and other countries, for the movement of science, advance, suggestions and patents are constantly altering businesses and making them fight, if not with competitors, at least with science and with time.

The other point the noble Lord dealt with was that profit-seeking is obnoxious. That proposition I entirely deny. It may be that in certain cases too much greed for profit is an unfortunate thing, but the advantage of profit in any business is that it is a test that the needs of the public are really being met. It is a test that a business as a whole is managed with efficiency, and it is probably one of the only tests. If you do away with the incentive of profit, I think you will have a very great loss of efficiency in your businesses. Like the noble Marquess opposite, I simply am unable to understand—and I have some knowledge both of Public Departments and of business—how the infinitely difficult and intricate matter of foreign exchange can be carried on by the sort of Socialist State which is suggested by the noble Lord opposite. Indeed, I think the Departments already have plenty to do in trying to assist our trade to get into foreign markets, and if they were to devote themselves wholeheartedly to that, they would render a great service to our trade. They should do this rather than speculate on what is to be done under a Socialist system, when a quarrel about a contract or the price of goods would at once become a diplomatic incident, and our knowledge of diplomatic incidents and methods does not lead us to suppose that they are quite as swift as is necessary in the commercial world.

I should like, if I may, to put one or two questions to which the noble Lord opposite, Lord Strabolgi, will reply perhaps when he follows me. They concern the working of this system. Everybody knows, of course, that in order to maintain and develop business you constantly have requirements for fresh capital, which comes from savings and from profits. I find it difficult to visualise exactly what will happen when the Sate is the only owner of capital. States and Governments do not usually shine by their economies. Generally they are futile, irresolute and easily drawn; but at the present moment there is some incentive on account of the fact that the people in the country itself, who are engaged in saving, know the virtues of thrift. If there is no incentive to save, if all capital is taken from the possession of individuals, where is the incentive left, and where is the support of those virtues of frugality and thrift on which the State must save? Indeed, I am afraid there will be very little saving on the part of the State, and that if this Whole monopoly is maintained by the State, there will be a falling in the industrial efficiency of the country, for the reason that the State will not have the energy to save, but will rather tend to distribute in immediate wages or salaries any profits that it might possibly obtain.

The other difficulty, which has not been emphasised to-night, is the extraordinary difficulty, as a practical matter, of introducing your solution—that is to say, the abolition of private capital. Let noble Lords consider the enormous increase in numbers during the last forty or fifty years of the small capitalist. If you examine the lists of large companies or banks and so on, you will be amazed, if you have not already realised it, at the vast number of small holders in these great concerns. It is, of course, the invention of the limited company and its connection with the banks, that has enabled the smallest people who can save to have some share in, and some feeling that they control, some of these gigantic concerns. Their influence possibly may not be very great, but it is far greater than it would be if they were simply shareholders in the great general concern of the State. Now that system, combined with the banks, has really set up one of the most wonderful machines that the world has ever seen for gathering capital from all sources, however small they may be, uniting that capital in great companies, bringing it back to the banks, and then, through the action of the banks, distributing it in the best manner for the purpose of assisting industry.

I was going to raise the question of compensation, but as it has already been dealt with, I need not do so. I am, however, a little puzzled to know what happens to those who have got to invest capital in a Socialist State, if they are paid off by the Socialists, and if the few last remaining businesses are paid off. What are people going to invest in? Are they going to invest in State stock, or are they going to be allowed to invest money in foreign securities? All these are detailed questions, but they are of intense importance to individuals and owners. I never hear any sort of attempt on the part of the Socialists to deal with these matters when they give one the general statement that everything will be well under a Socialist system. Indeed I should have liked to have asked them what they are going to do about the banks. We have heard a good deal about the banks lately. There has been rather a significant silence about the nationalisation of the banks to-day. Has that great principle of policy, so strongly advocated in another place, been diminished or thrown over? Take one bank alone, Barclays Bank. The chairman in his speech the other day stated there were no fewer than 60,000 shareholders in that bank, not just the few, limited number of "Money Barons" who are sometimes spoken of in speeches outside.

What is to be done if these banks are nationalised? I hardly conceive that you will dismiss the present organisation; you could not replace them by people who know nothing of the theory or practice of banking. But you will exercise a general control. How is that general control to be exercised and to what end? Are you going, as the banks do now, to make loans to the credit-worthy industries and so on, or are you going to favour certain industries, or what is your policy going to be as a practical banker? We get no answer on that point at all. We have never heard a syllable to show how this control of banking is going to benefit industries or in what way it is going to be exercised for the benefit of the public.

I see an enormous disadvantage to the Government, to any Government, under a complete system of Socialism. At present the Government is a large employer of labour but it still is able in many cases to exercise a mediating and modifying influence in labour disputes; but once you have the whole business of the country concentrated in the hands of the State, with the Government as the only employer, you will have the Government set against the great mass of employed, and you are likely to have un due pressure or perhaps unfairness when the Government has to deal with the enormous amount of labour that it has got to distribute somehow or other, either by persuasion or force in all the different industries in the country.

I am, I am bound to say, very sceptical as to this alleged decay or complete failure of the capitalist system. It is due to the capitalist system that, pushed into a War that we never desired and wished to escape, we were able to finance that War by raising almost incredible sums on our credit which Capitalism had built up in this country and to raise money to an extent that outranged the dreams even of the greatest financiers in this country. Is it nothing that the expenditure of this country has risen from £100,000,000 at the beginning of this century to £700,000,000 or £800,000,000 now, and that this much despised capitalist system has borne that weight? Is it nothing that we are spending £500,000,000 a year on social services, on pensions, grants to health and to education? We do not hear one word about the services rendered by this despised and attacked capitalist system in that direction. I never heard one word from the noble Lord, Lord Snell, as to whether he thinks this was a benefit or was not. One point I should like to put to him is this: Before the noble Lord transfers this tremendous burden to a new Socialist State is he quite certain that it will bear that burden, and is he quite certain that he will be able to get by his system of "business-without-profit" all that wonderful financial power which has enabled all these things to be done and which have been admitted to have been in so many cases of great value to the masses of the people of this country?

I do not want to detain your Lordships longer, but I think I could have put forward a very much stronger case for this system so much condemned by the noble Lord than he has imagined or conceived; but to-night I am rather on the more humble and pedestrian subject of my so-called belligerent Amendment. We all know that for causes which are too complicated to deal with here we have been suffering from this great financial and economic depression. Tremendous have been the efforts to bring us out of it, and slowly but not, I am sorry to say, in a continuous line—sometimes going back, sometimes advancing, but still, I believe, moving upward—we are pulling this country out of the financial difficulties and economic morass into which it has fallen. But all this depends on confidence, on the feeling of the business men of this country and those who are co-operating with them that they will have a few years at least in which to build up their fortunes and their businesses again.

I am perfectly certain that if there were the slightest fear in this country that this Socialist system was to be introduced in one, two, or three years from now it would be the gravest blow that could be struck at the rising industries of this country. These shocks to public confidence are sometimes spoken of with levity by leading members of the Socialist Party, but not, I am glad to say, in this House, for I am quite sure they have a patriotic desire to see their country happier and more prosperous. The best thing they could do would be to take a self-denying ordinance saying that "For the next five years we shall not preach Socialism, we shall let the business of this country improve, strengthen and stabilise." After all, it would be good policy to do that because when that time had passed, and if the Socialists came into power, they would meet with more prosperous industries, better to take over, better to work, and industries which would not, from shocks to confidence, suffer so severely as they would to-day if, when they are slowly rising and recovering, they had hurled upon them this new, ill-considered, unconstructive, and destroying doctrine.

LORD STRABOLGI

My Lords, apart from the pleasure your Lordships must have had in listening to the preceding speakers I think this debate was worth while, if I may say so, because it has drawn from the noble Earl the speech to which we have just listened. I seriously say that the noble Earl's final sentences were most valuable. He suggested a five years' respite to private industries to allow them to be built up so that they will be more valuable assets when they are taken over. We make no concealment of the fact, in arguing our case, that you cannot do these things in a hurry. I think that if a Labour Government comes in with a good majority in the other place and we have the noble Marquess, Lord Londonderry, leading the Conservative majority in this House, and seeing half eye-to-eye with us, as I believe will be exposed when he comes to reply to this debate, we shall be very fortunate in the first five years if we can take over the industries that are not only ripe, but rotten-ripe, for public control at the present time, and the prospering industries of which the noble Earl spoke will certainly have to wait.

I suppose he means chemicals among others. That industry has been mentioned by two or three speakers in this debate. This is a matter for very careful consideration, and I am going to approach it, if I may, in a very calm way. I am going to begin by asking the noble Earl who has just spoken if he will be good enough to allow me to send him a little pamphlet that I hold in my hand called For Socialism and Peace; the Labour Party's Programme of Action. It is rather startling on the outside, with a yellow, red and black cover, but it is one of the most concise and clear pieces of writing that I am aware of on this subject. I did not write it myself; I had no part in the style. But it is really a most excellent piece of writing, and it condenses into the smallest space a tremendous amount of matter. It answers every one of the questions the noble Earl has put to my noble friends on this side of the House, but I will, if only out of courtesy and in gratitude for the pleasure he gave me by his speech, send a copy to him. I will in the meantime answer one or two of his salient questions.

VISCOUNT ELIBANK

What is the date of it?

LORD STRABOLGI

October, 1934, and reprinted December, 1934. It has gone into several editions, the last being published in February, 1935. It cannot be more recent because it is based on our last annual conference at Southport to which the noble Lord, Lord Mount Temple, referred in his speech. We are having another conference this year. We are a very democratic Party. We cannot alter this programme in the meantime, and I do assure the noble Viscount who has just asked me a question, that everything is here in this pamphlet. I will be very glad to send him a copy also. The price is two pence, and there is a reduction for a quantity; in fact I think my noble friends on this side of the House might club together with me and send all noble Lords who have spoken in this debate or are about to speak in it a copy. I am sorry the noble Lord, Lord Mount Temple, is not in his place because it answers the two main questions he asked. I will quote a very few words from this pamphlet. I hope the noble Marquess, the Secretary of State for Air (the Marquess of Londonderry) has read it, or, if he has not, I hope he will do so before he winds up this debate for the Government. I am quite certain of this, that the noble Lord, Lord Templemore, had not read it, and I think it is very unfair for him to have taken the line he did, because this is the programme on which we propose to fight the vitally important coming Election in this country. This is one of our official documents.

LORD RHAYADER

There may be a new edition.

LORD STRABOLGI

It depends on the date of the Election. Our next conference will be at Brighton, and I am sure the noble Lord, Lord Rhayader, will be very welcome to attend it if he cares to come and take a seat in the distinguished strangers' gallery. If we want to alter the official programme at the Brighton conference in the light of experience we will do so. We are always doing that. If there is to be any alteration it will be made as a result of the next conference at Brighton. We are having the conference earlier than usual as there is a prospect of an Election this year.

The noble Earl, Lord Peel, asked me two questions which I will endeavour to answer. The first question had relation to competition in a Socialist State. The noble Earl was a soldier and I was a sailor. I will tell him what we did in that highly socialistic service, the Royal Navy. We did not know we were Socialists, but we were very good Socialists all the same. One of our most disagreeable duties was coaling ship, a horrible business in the large cruisers. After a long voyage it sometimes took us two or three days to do it, and we got the men to work hard at coaling ship by introducing competition between ships in a squadron. All the colliers used to come alongside the ships of the fleet at the same time. We started at seven or eight o'clock in the morning to get our coal in and the men threw the same enthusiasm into it as they did into their football matches. We got the coal in in very quick time. As a young officer I used to enjoy coaling ship because we had not only competition between ship and ship but between hold and hold. I was the divisional officer of the fo'castle men and we used to sweat blood literally in order to beat the quarter-deck men. That was the way we organised our competition, and there is much more competition in that sort of thing than there is in the chemical industry to-day.

The noble Lord, Lord Templemore, referred to the great Imperial Chemical Industry over which the noble Marquess who leads the Liberal Party presides. There is very little competition left in industrial chemicals now. In my own business I have had to buy chemicals. The monopoly is not quite complete in industrial chemicals, but it is nearly complete in this country, and in certain chemical products required by private manufacturing industries there is a complete monopoly. I only have to mention in order to prove that there is a monopoly, the territorial and geographical arrangements between the I.C.I. here, over which the noble Marquess who leads the Liberal Party presides—I am not saying they should not do this; it is quite legal and business is business—and the I.G., the great German chemical firm. As a result of these arrangements, they sell their products by agreement in certain parts of the world. The I.G. sells the same products in parts of the world in which they are not sold by the I.C.I., and vice versa. Try how you will, you cannot for love or money get any products in certain territories from the I.C.I. if, as a consequence of the arrangements I have referred to, those territories have been reserved for the I.G. These two great concerns have crushed out all competitors in certain lines. Where is your competition there?

I discussed this matter with the managing director of the I.C.I., a very able business man, and I complained as a buyer of industrial chemicals in one of my own businesses. The noble Marquess opposite knows this, too, because he has to buy chemicals in his business, or his agents do it for him. I discussed this particular matter with the managing director of I.C.I. and he said: "As a matter of fact we look upon ourselves as a great public service here; we do not charge the price we might as monopolists; we have got a monopoly but we want to do good service, to sell quality goods at a cheap price." That was his defence. There was no pretence at competition. All this talk about unrestricted private enterprise may have been perfectly right fifty or sixty years ago, but it simply does not exist over a great range of industry to-day, and every business man knows it, and everyone of your Lordships knows it. That is the kind of argument we have heard this afternoon. Very interesting and amusing the arguments have been, and perhaps quite suitable for remote country villages, but I should not advise noble Lords to put them forward in the North of England, in the County of Yorkshire, for instance, where I come from, on public platforms, because the people are quite aware of the fallacies underlying these arguments.

The noble Earl asked where was capital to come from if the State had a monopoly? After all, what is capital? Capital is goods, machinery, usable things. If you want more machines you make them, you manufacture them. You do not need the private capitalist in this matter at all. That is the answer to the noble Earl. I thought it only courteous to him to give those answers. We have heard from the noble Lord who spoke for the Government and from the noble Lord, Lord Mount Temple, and others, a lot about Karl Marx.

LORD TEMPLEMORE

May I interrupt the noble Lord? He said "the noble Lord who spoke for the Government." As a matter of fact I did not speak for the Government, and I certainly did not mention anything about Karl Marx.

LORD STRABOLGI

I apologise to the noble Lord. His speech was so interesting I might have known he was speaking for himself and not for the Government, and I presume the noble Marquess who will wind up the debate will also not be speaking for the, Government but will be speaking in his private capacity. I accept that. But Karl Marx has been mentioned, and quite rightly, in this debate. I would point out that he produced his ponderous and remarkable works in the early seventies of last century, and it is wonderful how many of his prophecies have come true, but the conditions in which Karl Marx studied and wrote were entirely different in certain respects from those with which we are faced today. Karl Marx studied a world in which there was a constant fear of famine and scarcity, and my noble friend Lord Sanderson and my noble friend Lord Snell have pointed out that the trouble to-day with the capitalist system is that it is glutted with the success of its own production, and that it cannot dispose of its surpluses.

The efforts of the present Government, the semi-Socialism of Mr. Elliot and of the noble Earl, Lord De La Warr, the bastard Socialism which they are forcing on the country, is bringing about an artificial scarcity by restricting production. Karl Marx never dreamed of that. He saw a world in which there was bound to be poverty and need for great economy and therefore there must be a sharing-out of what goods there were. He did not foresee the present situation in which the efforts of mine owners and the owners of oil wells are directed towards restricting production. In America, which was referred to by my noble friend Lord Snell, the Government are forcing farmers to restrict the production of cotton, wheat, hogs, fruit and other commodities. Karl Marx never foresaw that, but we have to face that situation and so our problem is much easier than that of Karl Marx, very much easier. But there is another thing which Karl Marx did not foresee which makes the situation more difficult for us. There are always compensations in this world. He did not foresee the distribution of property amongst small owners which we admit exists and which has had many advantages. There is to-day in every industrial country an immense class of small owners above the working classes. They are of course for us a very real difficulty. Fortunately the middle class is being converted to Socialism without its own knowledge, which makes it a little more easy.

The noble Marquess, Lord Crewe, I am sorry to hear, is not going to vote for us. I had hoped after hearing his speech that he would do so. I was brought up a Liberal, just as were my noble friends Lord Snell, Lord Ponsonby, Mr. Lansbury, Mr. Henderson and many others. Many of the older generation of the Labour Party were brought up as Liberals because in the days of their youth there was no Labour Party. I always maintain that the Liberal Party in the past did great service for humanity in fighting for religious and political freedom and for equal rights for man. But when the great fight for economic freedom came, the fight in which we are now engaged, the Liberal Party did not march forward. That is why we are Socialists, because we think that the next step must be economic liberty, which is only another phrase for Socialism.

If I may return for a moment to the speech of the noble Lord, Lord Temple-more, he spoke of landowners and said that landowners were not overpaid. I entirely agree with him. I think the lot of the old landed gentry in this country is very pitiable. Under Capitalism they have been ruined. They have been wiped out by one of those silent revolutions at which we English excel. The landed aristocracy, except those who have outside means, who have businesses, or who have married American heiresses, or are in some other fortunate circumstances, cannot afford to live on their estates to-day. That is a rather unfortunate result because their younger sons used to provide the officer class for the Army and the Navy; they went into the diplomatic service; they manned the county benches of magistrates, and they did a great deal of unpaid work. Really I am surprised that in your Lordships' House there are not more opponents of modern Capitalism, which has not been kind to the idea of a landed aristocracy.

That brings me to the question of compensation, which has been referred to by several noble Lords. If the Labour Party's programme be referred to, the matter will be found set out perfectly clearly on page 15 in two sentences. I should like to read those two sentences because they describe the whole of our policy. The programme says: The public acquisition of industry and services will involve the payment of fair compensation to existing owners. Then it goes on to describe what is fair compensation, and it says: The suggested basis of compensation, broadly, is the net reasonable maintainable revenue of the industry concerned. I do not think anything could be much clearer than that.

THE MARQUESS OF LOTHIAN

May I ask the noble Lord what "reasonable maintainable revenue" means?

LORD STRABOLGI

It means the income that the industry will continue to earn, the visible profits from it that can be maintained.

THE MARQUESS OF LOTHIAN

Would you tell us how that is to be ascertained, on what basis? That is the vital question.

LORD STRABOLGI

If I were doing it myself I think I should take the basis adopted in the case of the Irish Land Act—so many years' purchase. What we want to avoid is the creation of a new rentier class which would become hereditary; but, also, we do not want to do manifest injustice.

This matter which we are discussing this evening I suggest to your Lordships is really chose jugée. In every capitalist country in the world the Government is bringing in various forms of planning and in some cases really Socialistic measures. The one exception is Palestine. There you have a great influx of refugees, a very energetic type of people too, refugee Jews with capital, and also immigrants who have gone as idealists to build up the country as a new national home. They have no unemployment problem and many small industries are growing up. In every other country including our own, America, Germany, Italy, the Governments have had to step in with all kinds of restrictions, with forced planning or with Socialistic measures.

We are no longer living in a world where the free play of economic forces can have its effect. The greatest Socialistic measure in this country was not brought in by a Labour Government—I am almost ashamed to say this—but by a purely Conservative Government. It was the last Conservative Government under Mr. Baldwin that brought in the great scheme of electricity supply in this country. I have heard the noble Viscount, Lord Elibank, abuse this measure as Socialistic. The noble Viscount is perfectly right. But the trouble is, as with so many Socialistic measures brought in by this Government and by the last Conservative Government, that they have allowed many people to remain entrenched in industry drawing profits and preventing the full advantage of large-scale planning from accruing to the public. In the case of electricity the generation and transmission of electricity were brought under national control, but the retailing of electricity, its sale to con consumers whether private or industrial, the real source of profit, was left in private hands. That is the trouble to-day.

The noble Lord, Lord Allen, in the part of his speech which I heard, said the preset it Government had brought in Socialistic measures. Yes, but the benefits from the planning and from the semi-Socialistic measures brought in do not go to the public in all cases. A great part of them is intercepted by entrepreneurs as in the case of electricity. Now, I have heard technicians of the highest standing, without knowing it, talk pure Socialism about this matter. I have heard electrical engineers of the highest standing say that the time will soon arrive when the whole of the electrical industry will have to be brought under Government control. Not only that, but the same applies to the gas industry; and, through the generation of gas, the coal industry, including the bye-products of coal, must also for the same reason be brought under Government control. That programme would be supported by the majority of the most skilled technicians of this country, the most successful electrical and gas engineers, and technicians of the coal-mining industry. If a secret ballot could be taken of them, they would support it by a large majority.

VISCOUNT ELIBANK

I do not know what justification the noble Lord has for making such a statement, but I may say, on thin side, that I do not believe that what he says is accurate. I have considerable knowledge of the electrical industry and personal acquaintance with a great many of its heads, and I have never heard one of them express that view.

LORD STRABOLGI

I have heard them say exactly what I said, and they did not say it before their boards of directors: they said it in their professional organisations and at their professional meetings. They were probably careful not to say it before their boards of directors.

VISCOUNT ELIBANK

Is the noble Lord speaking about the wholesale or the retail distribution of electricity?

LORD STRABOLGI

About both.

VISCOUNT ELIBANK

That makes it all the worse.

LORD STRABOLGI

I particularly mention this, because I know that the noble Viscount is greatly interested in electrical companies and is a great ornament of the electrical industry. We are coming to a point—and this is the considered view of the majority of technicians in the industry—when the whole of it will have to be controlled if we are to get the benefits of the present grid system. That is a part of our programme, and has been for the past fifteen years. The Conservative Government under Mr. Baldwin "lifted" a part of it and brought it into a great Act of Parliament, but they left the most vital part of all, the distribution of electricity to the consumer, in private hands, so that the nation does not get the full benefit. That is what is happening to-day, and that is what will continue to happen if this present Government is, unfortunately, successful at the polls at the General Election.

I said at the beginning of my few remarks that I was very glad to hear the speech of the noble Earl, Lord Peel. He spoke of the crisis which would occur if the Labour Government were formed. I wonder if I may address myself to the noble Marquess, Lord Londonderry, and ask him, in my turn, if he will be so good as to enlighten us, when he comes to wind up the debate to-morrow, and also to tell the country—for I am sure that this is a debate which will be watched with great attention outside—something about this crisis. This is a very suitable atmosphere and occasion on which to debate this matter. We are being continually told that if we attempt to put our programme into force, particularly in regard to the banks, there will be a financial crisis. Now, it is obvious that a Labour Government with a majority behind it will wish to act constitutionally. That is the whole basis of our programme. The noble Lord, Lord Rhayader, I see has the latest edition of our programme, and it is laid down there that we wish to act through Parliament in an orderly and constitutional manner. Our programme will have been before the public, and have obtained a majority of the electors in support. Who is going to create the crisis, and how?

This crisis is not talked about by irresponsible people. Mr. Runciman, the President of the Board of Trade, has said that he himself will lead a run on the banks; that he is going to take all his money out of the bank as soon as he hears the result of the last constituencies and knows that there is a Labour majority. I do not know what he is going to do with it when he takes it out, but that is another matter. Now, if what is meant by a crisis is a run on the banks, that is no new thing, and it can be dealt with. There would have been a run on the banks at the beginning of the Great War, and there might have been a run on the banks at other times. That, however, can be dealt with under existing powers of the Executive. But I think something else is meant. Mr. Baldwin, the Lord President, speaking in his not quite so exalted office as Grand Master of the Primrose League, in his New Year Message to that great body, said this: Labour's legislative proposals will produce not only a first-class financial crisis, but a very grave constitutional and Imperial crisis also. Who is going to create the constitutional crisis, and how? I am certain not Mr. Baldwin himself; he is a Privy Councillor, and has taken an oath. Who is going to do it? Perhaps some other speaker, if the noble Marquess is not informed, could tell us in between, but I think we are entitled to some answer.

THE SECRETARY OF STATE FOR AIR (THE MARQUESS OF LONDONDERRY)

There are no rules of order in this House, but I suggest that the noble Lord confine himself to the two Amendments which are being moved. This appears to have nothing to do with them.

LORD STRABOLGI

Only one Amendment has been moved, with great respect to the noble Marquess, and he intends, I hope, to speak to-morrow. Questions were put to us, but I am putting the question to the noble Marquess, and I put it to your Lordships, if the noble Marquess does not like the question addressed to him. This is a matter of great importance to the public. We are putting a programme to the public in a constitutional way; we are trying to get a majority as a constitutional Party, and we are trying to put that programme, which has been before the public, into operation by Parliamentary machinery. We are told that that will precipitate financial, constitutional and Imperial crises. I think we are entitled to know who will do that, and how. That is the whole basis of this talk of crisis. It has not been from Sir Stafford Cripps or from anyone else in our Party that the talk of crisis has come, but entirely from our political opponents. All that Sir Stafford Cripps has said—and I think that your Lordships' House will support him—is that whatever the Party, if unconstitutional action is taken against the King's Government, those responsible for that Government will keep order.

I have another reason why my noble friend should be supported in his Motion and why the Amendment should be rejected. I believe very profoundly that political democracy cannot continue to survive side by side with an economic and financial autocracy. You see the truth of that in the growth in certain countries of Fascism and Nazism. We believe that economic and financial autocracy, which is another word for the capitalist system, is in decay. I admit that the capitalist system has solved the problem of production and raised the general standard of living in industrial countries, but it is now in decay and has to be replaced by something else. We believe that it will have to be replaced by economic and financial democracy—in other words by Socialism.

Now there are certain people who believe, or pretend to believe, that this cannot be done except after a period of Communist dictatorship. That we deny. We believe it can be done through political democracy, and we intend to try. We may be wrong, but something has got to be put in the place of the present system. That is undoubted, and the truth of it is that the present Government are trying, in a very inefficient and indeed in many respects a very unjust manner, to put something in its place. The very fact that they are so trying shows the real necessity for it. That, my Lords, is our case, and our case against the Amendment. I hope that those who support us in the Lobby will be not only those who usually act with my noble friends on this side of the House.

LORD RHAYADER

My Lords, we have had a very long debate, and I hesitate to inflict another speech upon your Lordships, but the subject-matter of the debate touches so nearly the Liberal faith in which I was reared, and which, unlike my noble friends on my left, I still hold, that I cannot refrain wholly from speech. I will detain your Lordships as short a time as I can. Let me first pay a sincere tribute to the sincerity, earnestness and conviction with which the Socialist Party has worked in this country since its inception. I knew it from the beginning, under Mr. Keir Hardie, whom I knew well. I have worked with the Leaders of the Socialist Party, like Mr. Snowden and Mr. MacDonald, and its later recruits were in my own Party. I recognise fully not only their earnestness and sincerity but their belief that in what they are advocating they are pursuing a course to the best advantage of the poor people of this country, and of the whole nation. Unfortunately their faith is no guarantee that the doctrines they hold are true. History is full of examples of whole peoples and sections of people who have held mistaken beliefs, which they afterwards had to abandon, and therefore the zeal and conviction of the Socialist Party are no evidence at all that there is truth behind their doctrines.

It is rather remarkable that Lord Sanderson, in a speech very moderately phrased, gave us no definition of Capitalism. I suspect that as generally used the capitalist system means the age-long system by which individuals have been able to hold property, to buy and sell or save or invest. That is really the basis of the capitalist system, and although the methods in which it expresses itself have changed with the growth of machinery, they are essentially the same as they were thousands of years ago, and Capitalism in that sense is the system on which the world has worked down to the present time, almost universally. Lord Snell, who is of course the mildest mannered of pirates, defined the system as one in which individuals controlled the means by which the community lives. What are the means by which the community lives. The community lives by air, and nobody owns that. The community lives by water. There is some control of water, and it is owned in certain circumstances. The community lives by bread, but man cannot live by bread alone. The community lives by all sorts of things, and therefore you have given us no definition at all. All that we have been told is that the Socialist system is going to control the means by which the community lives.

The Socialists fix their eyes solely upon the failures of this Capitalism, but nothing has been said in this debate, or very little, of the successes of the capitalist, or the triumphs of Capitalism, and I must take two minutes in describing some of the real triumphs which Capitalism has achieved. The civilisation of this country is not a thing to be dismissed in a contemptuous phrase. Such as it is, it is a triumph for Capitalism. The Budget of this year is £800,000,000, raised from the people of this country out of the earnings of the people of this country—some of them nefarious earnings, according to the Socialists, but still the earnings of the people of this country. Is it not a wonderful thing that we are able to raise so large a sum for national needs? I think it is not all well spent, but it certainly is a triumph for Capitalism that so large a sum should be raised, with such comparatively little trouble to the Government of the country. Take our trade the world over, is not that a miraculous triumph for Capitalism? Do the Socialist members of this House ever think of the British ships in all parts of the world, collecting the produce of the world and bringing it over for consumption by the people of this country? You may say I am describing what happened before the War. Perhaps I am, for statesmen have not been always wise, but surely British trade the world over was one of the most marvellous triumphs that any system could show in any part of the world's history.

Let us say a word about our despised retail trade. Do you not think it is a wondrous thing that in London you can go into a shop and buy almost anything you want to buy, if you have the money to pay for it; that that wondrous organisation has arisen by which almost everything can be obtained by going into a shop and asking for it? I think that when noble Lords are denouncing the evils of the capitalist system they should not forget what the capitalist system has achieved. Let me also say this, that the faults they find with it are not necessarily the faults of Capitalism at all, but the faults of our society. I notice that Lord Allen of Hurtwood wisely modified the Motion of Lord Sanderson, because he substituted the words "in view of the failure of society" for "in view of the failure of the capitalist system." I agree with him. I think it is society that is to blame for the evils against which the Socialists and Liberals have been fighting throughout their political lives. We have been fighting together against the evils that exist in our civilisation, evils not necessarily due to Capitalism but rather to the failure of our social system and some of that at least is due to the people.

It is a significant thing that no one in this debate has touched upon the fact that there is in this country much suffering due to the failings of individuals and not to the failure of any system. Are there no evils caused by drinking and gambling? Are there no unfortunate people who have inherited disease for which there is no responsibility in the capitalist system? There has been no careful examination of these evils, one by one, to see where they come from, but a general condemnation of a system, and therefore Lord Sanderson says it is not enough to stop these evils one by one and deal with them as they arise. He says you must make an end of them at once—the machine is not to be regulated but smashed. The noble Lord, I think, used the words "the machine must go." "The machine has got to be scrapped"—those are the exact words. Private capital is to be extinguished and private enterprise abolished. But no evidence has been offered to us to-day that Socialism will do any better than Capitalism.

It is a very odd thing that throughout this debate there has been no word from the Benches which are defending the Motion of the Socialistic experiments that have been tried in the world in the past, and there have been very many. There have been experiments by individuals like Robert Owen, there was a reference, I think by my noble friend Lord Crewe to the Socialistic experiments in America, limited in extent, carried on by people who perhaps had not the necessary ability to sustain the burden, but still they failed. No reference has been made to the experiments which Australia has made in Socialism—not much to encourage those who think that a remedy is there to be found for the weaknesses of the capitalist system. Strangely enough also, very little reference has been made to Russia, where the Socialistic experiment is to-day being worked out to its logical conclusion. I have read Russia's Iron Age by Mr. Chamberlin—a very remarkable book which has just been published by an American journalist who has lived the last twelve or fourteen years in Russia. It is a terrible record of the sufferings of the people by which this logical system of Communism has been imposed upon Russia. The sufferings of individuals are indescribable, and the theory that is put forward in defence of them by the Communists of Russia, who are convinced believers in the truth of their doctrines, is that the end justifies the means, and that no amount of suffering on the part of individuals is any justification for resisting the dictates of the State.

No reference was made to this, and yet some justification should be put up. The noble Lords, Lord Sanderson, Lord Snell and Lord Strabolgi, say that it is going to be done gradually. Does that matter? Must we not look to the end? Where do you wish to get to? Is not the logical outcome of these doctrines the disappearance of individual enterprise and individual capital? The end is to substitute State workers for free men. The workers of this country are to become parts of the Government machine—"bricks in a wall" as a leading Socialist once said to me when describing the position which I and others would in future occupy in a Socialist State. What is this State in which the Socialists believe so profoundly? I believe that the State exists for the individuals, not individuals for the State. It is individuality that matters in every man.

It is a curious paradox of our life that from the time we are born into the world there is a kind of conspiracy on the part of society to force us to become all the same. The little children are dressed alike. Do not schoolboys resent more than anything else not being allowed to dress exactly like their fellows? All society endeavours to make men conform exactly to the same mode in daily life—in everything. And yet the one thing that matters to society is those points in which you are not constrained to be as other people are. Where you are the same as everybody else, what good are you? But where you have some originality which resists the pressure, there you make some contribution to society. It is only individuals who feel responsibility. It is only individuals who can think and add value to society. And let me add, the English are the last people in the world to whom such a system should be applied, and the last people who would submit to it

Our people have been, and are, an adventurous people. They have liked to go forth into the world civilising the world, spreading their ideas through the world. What has made the British Empire? How have Canada, India, Australia come to be part of the heritage of our people? It was not done by a Socialist system; it was done by individuals going throughout the world and impressing their personalities upon the world: We must be free or die who speak the tongue Which Shakespeare spake: the faith and morals hold Which Milton held. I will venture to read to the House one sentence from Milton addressing the Lords and Commons of England. These are his words: Lords and Commons of England, consider what nation it is whereof ye are, and whereof ye are the governors, a nation not slow or dull, but of a quick, ingenious, and piercing spirit, acute to invent, subtle and sinewy to discourse, not beneath the reach of any point the highest that human capacity can soar to. It is because the Socialists in their desire to cure the social disorders of the time care little or nothing for individual liberty that their doctrines must always fail to commend themselves to the common sense of a nation whose history is a glorification of freedom and who still believe themselves to be free.

LORD NOEL-BUXTON

My Lords, before the House adjourns, I feel that some reply should be offered to a charge which has been made from the opposite side that the claim of Labour policy to improve production has not been made good. We have heard a great deal of the dangers of Labour policy, but not very much answer to the claim from this side that national resources are inadequately utilised. That is a matter of fact to which I wish to address myself, and I do not feel that we have had much answer to my noble friends' claim that common justice demands that we should seek drastic remedies for the intolerable inequalities of comfort with which we are faced in this country. Are we not compelled to propose remedies which set the pace much faster than the remedies alluded to as something to boast of by my noble friend who has just spoken? I cannot see how anyone basing his views on Christian ethics can be satisfied with the rate of improvement—and we freely grant there has been improvement—that we see to be probable unless an attempt is made to make great and rapid changes.

I want to support my noble friend in one particular part of his argument, that we are not using adequately our resources in regard to land. The noble Lord, Lord Mount Temple, adduced the arguments that he hears in Hyde Park. I am not concerned to answer speeches of wild Communists, but to base myself on the programme of the Labour Party. The effective utilisation of land is one of the troubles with which the Government itself is faced to-day. It will have great difficulty in passing an Act to deal with ribbon-building. Here we have the most beautiful agricultural country in the world rapidly being ruined—daily being ruined—by ribbon-building; but regional planning is extraordinarily difficult so long as you have a number of adjacent properties. You have the scandal of the by-passes which were built at such enormous cost and which are now being rapidly built up, reproducing dangers and squandering national resources on the owners of adjacent properties who are seizing building values. Is there anything more insane in political history than the presentation of these millions of value to landowners who have sat still while by-passes were being built? Yet we shrink from the obvious remedy of greater powers for public acquisition of land because of Conservative prejudice.

In housing, again, the Government is hampered, and the housing progress of the last thirty years has been hampered, by questions of compensation, as to what are good grounds for compensation. You may say that even with State land there would be building leases which would involve difficulties of compensation, but they would be nothing in comparison with the difficulties which there are to-day because the question of freehold is involved. Opposition to public ownership of urban land is, I suppose, an instinct of ordinary conservatism, but when you come to the question of agricultural land, you also have opposition arising from sentiment. The association of land with families has a very strong appeal; in some cases it is very historic and has a great deal of romance attaching to it; and it gives to land acquisition the air of something revolutionary. But reform from the point of view of production alone is so urgent, as I hope to show in a moment, that we ought to decide how the sentimental question could be dealt with and put aside, in order that we might be able to keep an open mind on the question of public interest in regard to agricultural land.

I would like to remind noble Lords that the Labour policy provides for those very natural sentimental considerations by giving a statutory right to the retention of a certain amount of land with a house. It provides compensation on a scale which seems to me extremely fair, and this scale is set out in the documents of the Party. I do hope that noble Lords will keep an open mind in regard to the purely economic question of the handicap to the utilisation of agricultural land which, I maintain, is the result of divided ownerships. Perhaps the noble Lord, Lord Mount Temple, would attack us for advocating State farming because of our general expressions about the national conduct of industry. The Labour Party's policy does not advocate State farming. It advocates the owning of the greater part of agricultural land, but it does not advocate State farming. It advocates the control of the disposal of farms. May we therefore consider with an open mind the question whether our land is being adequately utilised to-day?

I submit that it is notorious that our land is suffering from inadequate equipment. The process has been hastened by the breaking up of large properties. Some very big estates of the past were models of management. As a rule they did justice to the buildings and the drainage and exercised the right degree of guidance and pressure upon the tenants. Since the War, as we all know, there has been a revolution, and between 1919 and five years later, for instance, the number of occupying owners increased from 48,000 to 94,000 and the acreage from 3,000,000 acres to well over 6,000,000. Formerly big estates were a model of production. English farming was a model of production a hundred years ago, but we have lost the lead and have fallen far behind in comparison with other countries. The evil of under-production of agricultural land has been obscured by the greater defect in regard to marketing, which has been the preoccupation of every Minister for the last twelve years. Since 1923, the time of the Linlithgow Report, marketing has filled the stage and the present Minister has made a great advance mainly with the aid of the Labour Government's Marketing Act. I am only afraid that he will endanger the stability of his policy by tying it up with Protection to such a degree that there must come a public revolt against it. For the moment, however, the stage is occupied by marketing.

We ought not to forget that production is vital and it is there that land ownership comes in. I suppose the handicap in regard to capital is not denied, but I would like to quote an authority we shall all recognise. Mr. Edward Wood, now Lord Halifax, when he was Minister in 1924, used words which have been widely quoted and which are really of great value. "We are," he said, "unless I mistake, witnessing in England the gradual disappearance of the old landowning class." He then referred to the problem of finding the maintenance capital of the land, as distinct from the current working capital, and he described how one sees a deterioration in the capital equipment of the land and the soil, whether in building or in drainage. He showed how the old landowner supplied the essential capital equipment of the land at a cheap rate of interest and asked what is going to happen if that class of owner is gradually disappearing. He then alluded to the new occupying-owners, who have left themselves inadequate capital with which to run their businesses, and said: That means either that the soil is going to be starved or the nation is going to say, 'We cannot watch this process going on,' and the State will come in to fill the function of the old landlord by lending capital. When it does that, you may depend upon it that it will claim some measure of control, and so you may find yourselves in the course of the next thirty or forty years within measurable distance of something like nationalisation by a side wind. Ought we not to draw another conclusion—that action in regard to the starving of the soil is an urgent thing, and must not wait for thirty or forty years? It is undeniable that large areas of land are being starved, as Lord Halifax described, but action has not been taken. Lord Halifax alluded to the effect on occupying-owners, but want of capital affects not only occupying-owners. We all know how extraordinarily difficult it is to maintain buildings out of revenue on farms which are part of a property and which are let. I submit that on this ground alone—on inadequate equipment of farms—we are suffering a grave loss of production owing to the present system which inadequately utilises our resources in land.

There are other causes of loss connected with the same cause. For instance, there is the handicap in regard to agency. Most properties are too small to afford really efficient agents, and others are too scattered to be economically managed. There is a great deal of unnecessary expense in supervising estate workmen on scattered properties, and there could be an immense economy if the land could be organised in convenient areas and placed, as some of the Crown land has been placed, under agents in very large sections. To my mind our experience of the Crown land and of the enormous area in the hands of colleges is an example of the great economy that could be made if State land were on a large scale. There are many other unnecessary expenses arising from the present ownership. There are needless complications in connection with conveyancing, with the collection of Income Tax under Schedule A, and with the assessment of Land Tax, and there are the complications of copyhold and tithe. They all mean a great handicap to the best utilisation of our resources.

When you come to farming itself, the Act of four years ago attempted to deal with negligent farming, but it is still very prevalent. Your Lordships know how difficult it is to get a county committee to give an order with regard to weeds, and largely owing to differences of ownership we have one farm injuring a neighbouring farm through the seeds of weeds being blown on to it, by ditches which are not clean and which cause land to be waterlogged lower down. And even when you come to the question of State grants for drainage the Ministry is constantly held up by the complications of ownership. Boundaries of farms, we all know, ought to be adjusted. Water supply is more difficult because of differences of property boundaries.

Afforestation is hampered. Estates cannot afford skilled foresters. The Forestry Commission itself is no answer to that because it is considerably hampered in choosing just the land on which, in its opinion, planting would be most profitable. Under the present system when you get a break-up of property, you get the ruin of the woods. They are not bought with the farms. They are not bought by the farmer but by timber merchants, and cut down and not replanted. I might support myself by quoting authorities whom everyone will recognise—Sir Daniel Hall, and Mr. Orwin, who wrote Tenure of Agricultural Land, and who is not a doctrinaire but a man who has been an agent of a number of properties. I do not think the point need be laboured because, if you are really looking with an open mind at the utilisation of land, the authorities are all in favour of such a system as we have with regard to Crown land already.

There is one final proof of the waste we are still guilty of and that is the action which was taken by a Conservative Minister as a result of the experience of the War. Lord Lee, in 1920, might have been expected to revert under Conservative land-owning influence to pre-War conditions, but such was the advantage shown by War-time control that he saw the need to perpetuate the enforcement of a standard, and he passed the Agriculture Act which gave powers in regard to negligent farming, maintenance, mismanagement, and the removal of tenants, and which gave county committees power to serve notices in regard even to such details as sale of straw, neglected ditches, and neglect to roll grass. Every imaginable power was given as the result of experience, and it was a disaster when that Agriculture Act was repealed—repealed as a sop to balance the loss of subsidies which was the hard lot of the farmers in 1921. The fact that a Conservative Minister passed that Act was an invincible proof that the land system stood condemned by Conservative and land-owning opinion. It seems to me unanswerable that, whether we look at the question of national income or at the numbers of those employed on the land, any view that we take of national welfare must include the better utilisation of the land.

LORD RHAYADER

My Lords, on behalf of the noble Marquess, Lord Lothian, I beg to move the adjournment of the debate.

Moved, That the debate be now adjourned.—(Lord Rhayader.)

On Question, Motion agreed to, and debate adjourned accordingly till to-morrow.

House adjourned at a quarter before eight o'clock.