Lords Sitting of 1 December 1937

Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.

CONVEYANCING AMENDMENT (SCOTLAND) BILL. [H.L.]
THE UNDER-SECRETARY OF STATE FOR WAR (LORD STRATHCONA AND MOUNT ROYAL): My Lords, I beg leave to introduce a Bill to amend the law of conveyancing in Scotland, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Strathcona and Mount Royal.)
On Question, Bill read 1a, and to be printed.

DIVORCE AND NULLITY OF MARRIAGE (SCOTLAND) BILL. [H.L.]
LORD ALNESS: My Lords, I beg leave to introduce a Bill to amend the law of Scotland with regard to divorce and nullity and dissolution of marriage, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Alness.)
On Question, Bill read 1a, and to be printed.

CLYDEBANK BURGH ORDER CONFIRMATION BILL. [H.L.]
Considered on Report (according to Order).
HAMILTON BURGH ORDER CONFIRMATION BILL.
Considered on Report (according to Order).
RUTHERGLEN BURGH ORDER CONFIRMATION BILL.
Considered on Report (according to Order).

COST OF LIVING.
LORD FARINGDON LORD FARINGDON rose to move to resolve, That this House views with anxiety the failure of His Majesty's Government to take the necessary steps to counteract the continued increase in the cost of living, particularly in relation to its effects on certain sections of the community. The noble Lord said: My Lords, I think that first of all I should make your Lordships' House some form of apology for the very short notice I have given you in putting down this Motion. It was not my intention to put it down quite so soon, but I happen to be going abroad next week. I hope that your Lordships will therefore excuse me and that we may have an exceedingly interesting debate on this particularly burning subject. In point of fact I suspect that, had your Lordships been able to vacate your seats and to be represented by your Ladies, the House would at the moment be considerably fuller. It is a matter which, as your Lordships are probably aware, enters very closely into the home and touches some of us personally.
My reason for putting down this Motion I can most clearly state to your Lordships if I read you a short quotation from that very orthodox journal the Economist, which on November 27 this year wrote:
"During 1937 the cost of living has been rising faster than the average level of wage rates. While the Ministry of Labour wage index has been some 3 or 4 per cent. above last year's level for the greater part of the year, the cost of living index (on November 1st about 60 per cent. above the level of July, 1914, compared with 51 per cent. a year ago) has been running at about 6 per cent., and the cost of food alone at about 8 per cent., above last year's level. Earnings have risen more than wage rates, but the current trend is serious for the lower paid workers whose margin of subsistence is slender at the best of times—and for the unemployed who have been only slightly protected by the grant of additional 2s. or 3s. weekly 'winter allowances.' It is on the poor, and particularly on mothers and children, that the vicious effects of the milk scheme really fall."
I think that is a pretty clear and an orthodox and conventional expression of the very considerable anxiety and inquietude that exist all over the country to-day.
I know that it is the reply of the Government, or of Government speakers, when approached in this matter that in point of actual fact it is unfair to com-

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pare the present prices with prices, say, three, four or five years ago, and that they should be compared rather with the prices in what the Government call a normal year—say 1928 or 1929. It is perfectly true that wage levels are slightly higher than they were in 1929 and price levels are about the same. Nevertheless, I would point out to your Lordships that, even in comparison with 1929, bread, tea, milk and potatoes are considerably up. Of those four articles two are of primary importance in the diet of the poor and are, in fact, articles with which, if I may say so, I think a great many of your Lordships' House will undoubtedly agree with me that it ought to be the business of the State to see that its people have a sufficient supply at a reasonable price. When this matter was raised some little while ago—in point of fact in May of this year—the present Prime Minister replied:
"With increasing prosperity and improved employment there is a natural tendency for prices to rise somewhat above the very low level to which they fell during the slump, but there has been no abnormal development in this country and the cost of living is still decidedly lower than it was before the depression started in 1929 and 1930."
That is again the same thing.
That is not quite our attitude on this side of the House, because the Government do not, I suppose, wish it to be inferred from this statement of their Leader that they consider present wages too high, though it would seem to me that that is the conclusion which one is inclined to draw from this remark of the Prime Minister. If he feels no alarm at the rise in prices, and stresses the fact that wages are higher than in 1929, is one to conclude that he therefore thinks that real wages are in actual point of fact too high at the moment, and that the Government are prepared to see real wages fall, as they are falling at the present moment? There is no question that they are falling at the moment, and that in the last few years real wages have been steadily falling. It is perfectly true that unemployment has been falling too, but in that connection I would remind your Lordships that if you wish to go back to the normal year of 1929 unemployment is very considerably up in comparison with that year. Although, as a matter of fact, money wages are rising, some of them are anchored to the cost of living
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index figure, and in this connection it is worth mentioning that there are a great many people who are not entirely satisfied with that cost of living figure. In fact, the Government tacitly admitted that it is not everything it should be, inasmuch as they have set up an inquiry into the question.
There are, however, many workers whose wages have not increased. Miners have lately suffered a decrease of wages, and there are in addition vast numbers of what are called black-coated workers, many of whom, and I believe the vast majority of whom, have had no wage increase; and there are people who during the past years may well have been tempted by the higher value of their wages to undertake obligations such as matrimony, parenthood, and the purchase of a house, which obligations they are now finding extremely onerous. Whatever figures the Government may produce, however they may say that in point of fact the wage level in comparison with 1928–29 is higher and the cost of living is decidedly lower, still any of us who has been round the country must be aware that there is a great deal of discontent amongst practically all classes on account of this rise of prices. In this connection I would like to mention that since 1933 wages have risen by about 2½ per cent. while food prices have risen by 12½ per cent., and the comparison between those two figures is somewhat alarming.
But food is not all. There is, in addition, rent, and that is a matter about which we on this side of the House are at the moment extremely uneasy. There is talk of further decontrol of rents, and I hope that perhaps to-day the Government will give us some assurance that they do not at present contemplate any further decontrol of housing. It has been shown again and again that where decontrol occurs heavy rises in rent follow immediately. The housing problem for the vast majority of the people of this country is by no means solved. In addition to those who rent houses and flats, there is—and this, I think, perhaps is the class of rent which weighs most heavily on those who pay it—the class which pays rent for lodgings. Your Lordships are probably aware that it is by no means unusual here in London for a single man to pay anything between 15s. and 25s. a week for a room

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with bed, breakfast and sometimes supper. I am sure your Lordships will agree with me that out of the average single man's wage this is far too considerable an item. It would be very comforting, to us at any rate, to know that the Government had some scheme for meeting this undoubted need of a very large part of the population.
An expense which has been increasing in recent years is the cost of transport. Owing to the price of land the houses built under many of the new housing schemes have been erected far from the centres of work. At the moment I am not going to enter into the question of land values. We on this side of the House have views on that subject which would perhaps be considered at least unconventional by noble Lords opposite, but it is a matter which strikes very hard at people with low wages, who require houses or flats at low rents because, owing to the high price of land, either it has been necessary to build new housing estates far from the centres of work, or else it has been necessary to pay colossal prices for land nearer the centre. As a result of that reasonable rents for the people for whom those houses and flats are built cannot be charged by the authority which builds them. A very unhappy result of this rent question has been that it has been found in many cases that where families have been moved to these new housing estates mortality has actually risen, in spite of the apparent improvement in surroundings and circumstances. This unfortunate result, it seems to me, can only be due to the fact that people forced to pay higher rents and more for transport have had to economise on their food.
I have been dealing up to now entirely with those who are actually receiving wages and the ways in which those wages are spent. As indicated in my Motion, there are classes of the community on whom this burden weighs very much more heavily, and above all the unemployed. The Unemployment Assistance Board have certain liberty in hard cases, but since the rates were fixed the cost of living, as I have already shown, has risen enormously. Those rates were fixed so as to be well below the minimum wage which the employed could earn, and just sufficient to sustain life. Such, I believe, was the object of His Majesty's
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Government in fixing the unemployment assistance rates. We on this side of the House considered those rates mean when they were imposed; what must they be now when the British Medical Association have been forced by the rise in prices to raise their estimated minimum nutrition figure to nearly 7s.? When that is taken out of an unemployed man's benefit I think your Lordships will agree that he is left with too little to sustain life as it should be.
And let us remember that when the Government assure us that the unemployment figures are falling—and I beg to repeat that they have not fallen in comparison with what the Government call a normal year, but they have fallen since the bottom of the slump—they are not really being quite honest. I say so with apologies, but they are not, because the Government make no mention of the increased number of persons who are receiving relief under the Poor Law. In 1930 the country spent £17,000,000 on outdoor relief; last year that figure had risen to £30,000,000. I think I am speaking probably for all your Lordships when I say that what we have intended to do in giving unemployment benefit or old age pensions is to make life possible for those who, through no fault of their own, be it on account of economic circumstances or on account of age, are no longer able to earn their living; in short, to give them as a right the ability actually to live. Surely the allowance of 10s. a week given to old age pensioners can hardly be considered sufficient to support life.
In this connection I will read a couple of lines from a letter which I received this morning. I have, incidentally, in the few days since this question has been down on the Paper, received the most unexpected and surprising number of letters on this subject. Your Lordships will no doubt be gratified by the interest taken in the debates in your Lordships' House; but, in addition, it seems to me to be very indicative of the amount of interest that this question raises. I have chosen this particular letter from others, as it seems to me to put the matter in a very forcible and simple way. The writer, whose letter comes from Maidstone, says:
"The greatest sufferers in consequence of the present increased cost of living are the aged single persons, living alone in one room and forced, like myself, at 65 to exist on 7d.

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a day. To-day's dietary—bread 2d.; sardines 4½d."
A diet of bread and sardines! I do not know anything about this man, but he has probably worked for fifty years honestly and steadily, and his work has gone to support the rest of the community, and he is reduced in his old age to a diet costing 7d. a day. I think it is unworthy of a country like ours to put our old people on a starvation ration of that kind.
When replying in another place before the Recess the right honourable gentleman who spoke for the Government was particularly concerned to show that, though prices of foodstuffs had risen—and he admitted that it had been the policy of the Government to raise the prices—it was in point of fact desirable for the country as a whole, in order to benefit its agriculture, that these prices should rise. Probably the majority of members of your Lordships' House live in the country, and I dare say most of your Lordships are aware that the farmer is far from appreciative of this vast benefit which the Government claim to have done him. In point of fact, it is unfortunately true that very little of this benefit, for which the poor of the country have had to pay in the increased price of their food, has seeped down to the primary producer. There is the curious case of the cattle subsidy, which has cost the country about £10,000,000, but in spite of which the farmer is in fact getting less for his meat now than he did before. I suggest to the Government that it is infinitely desirable to trace where this £10,000,000 has gone. It would be illuminating to discover who has benefited by it.
The other, and possibly more urgent, matter is that of milk. I am sure your Lordships are aware that the value of milk in the people's diet cannot be overstressed. Its importance was emphasised by the League of Nations Commission on Malnutrition, but the fact remains that the consumption of milk in England is very far behind that of other countries. I regret that this is one of the figures I have not got with me at the moment, but I know it is about one-third of that of Finland and it is considerably less than that of the United States of America; while the price of milk in England is considerably higher than in any other country
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in Europe. In spite of this substantial price, which incidentally has just been raised, your Lordships will find that the dairy farmer is complaining that he cannot produce milk at a profit. It seems to me worth while considering where and how the difference in the distribution price of 2S. 4d. per gallon and the actual amount of money received by the farmer, which is about 10d. per gallon, is distributed. About 3½d. of it goes in subsidising the manufacturers of articles in which milk is used and in the expenses of the administration of the Board. The rest of it is apparently consumed in the expenses of distribution.
The co-operative societies have said that they can distribute milk for 6d. per gallon, but they are prevented from doing so. They are not allowed to sell milk below the Board's price, but it seems to me scandalous, and really a matter that should tell very strongly against His Majesty's Government in the country, that they are allowing, and have allowed, this very large margin between the price paid to the producer of milk and the price paid by the consumer. Instead of adding to the price of milk, as at present, if we took 6d. off that price and divided it between the producer and the consumer, I believe it would be possible to make dairy farming in this country pay, and at the same time to increase, as all medical authorities assure us is most desirable, the consumption of milk in the country. That brings us to what one cannot help feeling is the true villain of this piece—namely, the middleman, the distributor. Distribution of all agricultural products in this country seems to be grossly wasteful and extravagant. It prevents the consumer from being able to buy agricultural produce essential to a healthy diet at a price which he can afford, and it is at the same time making farming all over England unremunerative. In another place the word "review" was used in this connection. When members of our Party in another place raised this matter I believe they were assured that the Government had it constantly under review. We on this side of the House would be very pleased if we could hear that a slightly stronger measure than "review" was being taken to control this matter.
I do not wish to detain your Lordships too long, but might I ask the Government to give us, if at all possible, reassurance on six points? We are told that there

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is at the moment a very handsome surplus in the Insurance Fund. Would it not be possible, by distributing that, to relieve this appalling burden which is being put on the unemployed? We have been told that this surplus is being kept against an emergency. Let me warn the Government that that makes a very unfortunate impression. It gives one the idea that far worse is still to come Perhaps we could have some encouragement also as to housing. As the Government will obviously do nothing in this matter of land values, perhaps they will be prepared to subsidise houses so as to enable them to be let by municipal authorities at more reasonable rent, at rents which can be paid by the lower-and lowest-paid workers?
Would it be possible for a more humane view to prevail in this matter of pensions? I know that the Government have said that to raise old age pensions to what, for example, the Miners' Federation suggested, would be prohibitively expensive; but could they not make at least some increase to meet the absolutely undoubted hardship on persons of this class? And in making that increase let it be remembered that they would at least economise on the outdoor relief which is being given to those pensioners who are unable to live on their pensions. In this House on various occasions I have urged upon the Government, and they have been urged from their own side of the House by their own supporters, in order to assist the distressed areas, to control the location of industry. We have urged this in the past on account of the distressed areas. Let me urge its desirability now on the Government on another ground, on the ground of accessibility of work preventing the further excessive growth of London. Let me implore the Government to look into this matter, not only for the sake of the distressed areas, but also with a view to allowing the construction of dwelling-houses within close reach of work and built upon land sold at a price which would make smaller rents possible.
Finally, we would like some word of encouragement in the matter of rearmament. The Federation of British Industries have expressed themselves as alarmed at the prospect of what will happen when rearmament is complete. I do not know. Perhaps the Government never expect to complete rearmament,
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perhaps they expect to pile up armaments indefinitely, but, if they do not, then the day must come when it is no longer possible to continue to spend the vast sums we are now spending on armaments. It is generally recognised, and is recognised by the Federation of British Industries, amongst whom I suspect we on these Benches have no supporters, that the present conditions, in so far as that they are good, are almost entirely due to the Government's rearmament programme. It would be for the comfort of the whole country if His Majesty's Government could give us some assurance that they have a plan to keep industry at work when their rearmament programme is completed.
Moved to resolve, That this House views with anxiety the failure of His Majesty's Government to take the necessary steps to counteract the continued increase in the cost of living, particularly in relation to its effects on certain sections of the community.—(Lord Faringdon.)
VISCOUNT HORNE OF SLAMANNAN: My Lords, I am sure your Lordships, like myself, would be anxious to congratulate the noble Lord who has just sat down upon the moderation and ability with which he has put his case on the Motion that he has set down on the Paper. Personally, I had great satisfaction and gratification in listening to the grandson of a very old friend of mine. The topic which he has raised was, in my mind, somewhat suspect when I saw it on the Paper, because I have observed that it has been agitated to a considerable extent upon Socialist platforms in recent times. The "slump which is about to come" and the "high cost of living which has already overtaken us" are the twin sisters which, I observe, are being paraded on all the platforms in the country at the present time. But I do not charge the noble Lord with having any arrière pensée of that kind in his mind. I prefer, indeed, to believe that he is reverting to the traditional interest of his family in finance and that he has raised this question as a response to the call of the blood.
I was rather inclined to think that he divagated at some points from the trail in his pursuit of this topic. For example, in the latter part of his speech, he showed that he was anxious to subsidise increased pensions, to subsidise rents, and to subsidise

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the purchasers of all forms of food. Well, he does not seem to have paid any attention to the effect that such subsidies would have upon the Budget. Happily we have lived long enough to know the effect which an unbalanced Budget produced in this country in the year 1931. We had a Government then anxious to subsidise everything. It had magnificent schemes for making everybody happy, but the only result that it achieved was to make everybody in this country miserable. Its Budget was going to be of such a character that there would have been a deficit of an immense amount. This destroyed the confidence of every country in the world in our financial position and brought us to the edge of catastrophe. I forgive the noble Lord on the ground of his youthful enthusiasm, but, having had a somewhat long and cynical experience of life, I am inclined to abjure the particular methods by which he would make this country prosperous.
There were other aspects of his speech that were interesting, of which I took note. He seemed to think that the control of prices was entirely in the hands of Governments. In this free country of ours I would take some exception to that proposition. Governments may, by alterations of currency and by alterations of tariff, influence prices, but if you are constantly altering them to suit the cost of production of the goods which you get from overseas then you create a condition of uncertainty in the country which makes business absolutely impossible. In normal times, I think your Lordships will take it that the Government can do very little directly to influence the retail prices of individual commodities without doing more harm than good. A Government with large purchases to make may affect a market at a particular time by coming in as a buyer and seeking to accumulate stocks. In that way it can raise prices. But Governments have nothing to sell, and, so far as I know, Governments can have very little legitimate influence in reducing retail prices. If you take, for example, the thing with which the noble Lord was most concerned, the cost of food and raiment, then you have only to consider the vast amount that we spend upon getting commodities from overseas to understand how very little the Government can control the prices of things which the people consume. They
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could only do it by themselves becoming the purchaser of all such commodities and being the sole selling agency. But I take it that the great majority of our people enjoying a sound view upon this matter are very averse from embarking upon any such disastrous experiment.
To one other aspect of the noble Lord's speech I would venture to advert for a moment. He rather seemed to think that you could have low prices with good employment and prosperity. I venture to take a different view from that. In romantic affairs somebody long ago said:
"Never the time and the place
and the loved one all together!"
Whether that be true or not I cannot tell, but in the sphere of economics this can be asseverated with confidence: Never low prices, the producer and prosperity all together. Low prices, indeed, are almost universally the symptom of depression. If you analyse the course of trade throughout modern history you will find very definite results created by variations in prices. Rising prices are a stimulus to industry. When you have rising prices you have a buyer ready to go into the market with the prospect of selling at a higher price than that at which he bought. Then there is the man who wants to start a business but has not got sufficient money and who borrows for the purposes of his enterprise. The borrower in a period of rising prices can easily meet the interest on his debt. Again, so far as taxation is concerned, if you have rising prices the Government can easily collect their taxes, because what may be high in Pounds is low in the amount of goods which the producer has to give in the shape of taxes. Rising prices again mean that people are embarking upon enterprises and that employment is better.
In the case of falling prices you have exactly the reverse process. Immediately prices begin to fall people come out of the market. They live upon their stocks; they do not buy. There are few orders put into the great factories, and the factories begin to work on short time. The person who has a mortgage upon his house or upon his farm finds it more difficult with low prices to meet his mortgage and the creditor finds it more difficult to collect his debts. Unemployment becomes greater. You can find what I have, somewhat foolishly perhaps, taken the trouble to say to your Lordships—because it is a

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work of supererogation—aptly illustrated during the period of the recent depression. At the time when the cost of living was lowest in this country, in the year 1933, we had a million more people unemployed than we have to-day. Now, when the cost of living is more than ten points higher than it was in 1933, we have a million and a quarter more people employed in this country than there were at that time. Rising prices are a stimulus to industry and an incentive to employment, and the very reverse is true with falling prices. By keeping prices down all that you achieve is a deterrent to enterprise and a slackening in employment.
I apologise for all this disquisition upon matters which are entirely familiar to your Lordships, but may I remind you that the Macmillan Committee—probably one of the most expert Committees that ever sat in this country upon a question of economics—dealt with this matter at great length? The cause to which they ascribed the appalling depression in the country was the lowness of prices. They said that the producer could no longer live. The primary producer was unable to meet his costs, and after all we have to remember that the primary producer is the market for the manufacturer. If the primary producer can no longer live, the manufacturer no longer has a sufficient market for his goods. It was because the prices of primary products had fallen to such a very low ebb—had fallen indeed to less than half what they were a very short time before—that the primary producer could no longer maintain existence and we had a depression that was almost unequalled—certainly unsurpassed in the experience of people alive to-day, and probably in the course of our economic history. So the Macmillan Committee advised us that we should do everything we could to get prices up to the level at which they stood in 1928 and to sustain them there. Another authority that would perhaps commend itself to some of the noble Lords opposite—that of Sir Arthur Salter—following upon the same lines, suggested a different year. Sir Arthur Salter suggested that the year 1929 might be a year to which we should try to conform in the matter of prices. Governments can do that by means of currency alteration. When we went off the gold standard we succeeded in starting a career of gradually increasing prosperity by
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which we have arrived at the stage at which we are to-day.
I have taken the trouble, because I thought it might be important, to get out the figures of comparison between the years 1928 and 1929 and the present time. I venture to say again that if you are going to follow a sound principle you must not attempt in this argument to compare the cost of living to-day with the cost of living in times of depression. You can easily get an enormous rise in the cost of living figures from the year 1933, but would anybody wish to return to the conditions of 1933? The figures which you must compare are those of a time of good employment and those of the present time. The reason why the Macmillan Committee and Sir Arthur Salter go back to that period is that we can regard the years 1928 and 1929 as a time in which few were suffering hardships, and everybody was more or less comfortable according to the ordinary standards of life then ruling. I am not saying in response to the noble Lord's enthusiastic picture of a better future that I am content with things as they are to-day. I am not saying that for one moment. We are hoping that we are always progressing, but you must always progress within your means and too quick a step in your progress may ruin the whole of your advance.
What the National Government did when they took office in 1931 was not to begin by attempting to raise prices here and prices there, but to balance the Budget, to create confidence, to afford facilities to enable business to prosper, people to get employment, and to live more comfortably. That is the sound method by which Governments must work. Taking the years 1928 and 1929 you will find, comparing commodity prices with those of to-day, that instead of those prices having been raised as the Macmillan Committee suggested to the previous figure of 1928, they have not yet reached that level. If you take the level of commodity prices in 1929 as 100, it was 102.8 in 1928 and to-day it is only 96.9. We have not got back to what the Macmillan Committee and Sir Arthur Salter thought was a necessary goal in order to reach a comfortable position. But I imagine that it would not be sufficient for me to conclude the argument there. I may be asked, what about the cost of living, what

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about the state of wages? I have those figures also. I find that taking the year 1929 as equalling 100 the cost of living in 1928 was 101.2 and in October of this year it was 96.4. That is to say, the cost of living is still 3.6 less than in 1929 and 4.8 less than in 1928. Therefore, up to now at least there can be little complaint with regard to the rise in cost of living, if you select those years, as these distinguished people did, as being rather better than normal.
Now, what about wages? Wages at a level of 100 in the year 1929 are expressed to-day by wages at a level of 102.8. You have therefore had up to now a position in which the cost of living has fallen as compared with those important years, while wages have risen. Some complaints may perhaps be justly made later when something very different has happened, but I do not think that any complaint can be made to-day with regard to our condition. A sufficient margin exists for alteration, and from what we have seen recently the cost of commodities, so far from rising in recent months, has fallen. I suppose some noble Lords might think that was a good thing. I think it is not. You can see what the results have been. What has been the cause of the recent malaise in America? Chiefly the drop in commodity prices. That is what started it. You have, of course, something like a tug-of-war between the political and industrial elements in America, but the thing that started this trouble in America was the fall in the price of commodities.
It affected the Stock Exchange in America. Some people say, "Well, what does the Stock Exchange matter?" In fact the Stock Exchange has a very violent reaction upon the condition of business and industry; and for this reason. A man looks at the value of his securities one day, and three months later he finds that they are only worth half what they were. What does he do? He begins to curtail his expenditure. You can see with your own eyes that this is what has happened in the United States during the course of the last few months. Whereas a tremendous trade was being done in motor cars and great orders were going from the motor establishments to the steel industries, people suddenly found themselves at the beginning of a depression, and orders to the motor car makers
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dropped off. They began to work four days a week instead of five. Orders to the steelmakers also dropped off, with the result—I think I am right in saying—that whereas about six months ago the steel works were working at about 90 per cent. capacity, to-day they are only working at about 40 per cent. That is what occurs when you get a situation in which there is a lack of confidence in the commodity markets. Prices fall and immediately orders cease automatically, as they must. One appreciates the psychology of that situation.
I beg your Lordships' pardon if I have been too long upon this subject, but that is the spectacle we have been witnessing. Curiously enough, the Macmillan Committee warned us about this in advance. I think they must have foreseen the noble Lord's speech! They first of all dealt with the possible inflationary results of prices becoming too high. Of course, nobody thinks that prices should be raised to any abnormal height, such as was the case in our own country a few months ago because there was too great a speculation in the price of some commodities. That is very unhealthy, and no honest producer wishes to see a situation of that kind. The Macmillan Committee first of all suggested that inflation might be caused by raising prices too high, and in the next paragraph they said:
"Nevertheless, we think it much more likely that attempts may be made to stop the revival prematurely than to allow it to proceed too far. We believe that this would be a great mistake. It is often argued, and it may well be true, that the power of the banking system to hold a business expansion in check is greater than its power to revive business when depression has set in. If, however, we are overprompt to check every expansion "—
and I suggest that is what is being proposed to-day—
"yet hesitant in the face of every depression, the net result will be a steady lowering of the price level with all the attendant evils of such a prospect."
That is the last thing that I venture to say upon this subject. I think that an attempt at the present time to check price levels would only bring, I will not say disaster, but great disadvantages in its train. For my part, looking at the various levels of prices, cost of living and wages to-day, I see no reason at all why we should feel any sort of apprehension.
LORD SNELL: My Lords, I have always felt that one of the most useful features of your Lordships' House was the facility with which it could examine really important questions such as the one we are discussing this afternoon. When my noble friend put this Motion upon the Paper, it seemed to me that he was asking your Lordships to consider a matter of urgent importance—or one which at least we on this side of the House regard as extremely important. We think that whatever may be the technical heights to which prices rise or fall, the interests of the consumer are of the very first importance. Granted that prices have risen, as we believe that they have, we feel that that fact should concern everybody in your Lordships' House. Our complaint is, believing that prices have risen and that wages have not risen in anything like the same proportion, that His Majesty's Government have, as this Motion states, taken no necessary steps to deal with an important situation. It was generally denied, as the noble Viscount has apparently denied this afternoon, that prices had risen. Then, when the fact became rather too obvious, the argument was that they had only risen slightly and that, if they had risen, there had been some compensating increase in wages to meet the rise. That is what we contest, and a denial of which is implied in this Motion.
I want for a minute or two to deal with the speech of the noble Viscount who has just sat down. He is at all times the prophet of success, and it was always a joy to me to hear him in another place, for his capacity for dealing with figures and financial difficulties was a quality of which I would really have robbed him if I could. I always thought I could see when the City was doing well and when it was not by the look upon the noble Viscount's face! Whatever may be his knowledge on one side or another, I want to point out that the human side of this problem, about which we are specially concerned, was not mentioned at all by the noble Viscount, Lord Horne. He did not appear even to have thought about it. But just consider this point. I understand that all the trouble that arose in 1930–31 was due to there being in office in this country a Government of a political complexion of which the noble Viscount did not approve, and therefore, he said, all these things went wrong. I would point out, however, that America, which
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had a slump deeper than our own, had not the advantage or disadvantage of having a Labour Government, and yet those things happened. They happened in other parts of the world, and nobody knows that better than the noble Viscount who has just spoken. And he attributed all that to a Labour Government sitting in London, as though some political demonology had got into his mind, from which he cannot escape.
I venture to say that the noble Viscount knows far better, as was proved a minute or two afterwards, when he said with approval, because he repeated it, that the Macmillan Committee had actually said it was not due to the Labour Government but to low prices. The noble Lord cannot have it both ways. I am willing to believe that low prices had something to do with it, but I am not going to admit, in order to get the applause of your Lordships, that the Labour Government were responsible for it. I wondered while the noble Viscount was speaking how far his approval of high prices would go, because if things improved so much because prices were higher, then if prices were pushed still higher things would be still better, and I feared he was going to rise into inflation, but he stopped himself just in time. I cannot understand how he can ask your Lordships to believe that Governments can have little effect upon price levels, and do little if anything to meet needs which occur. One notices that Governments do subsidise farmers and landlords and other people. They can interfere when interference will help one side of the social scale. I ought, perhaps, to cover myself by saying that nobody supposes that the sympathy of the noble Lord with the poor is less than my own. Nobody who knows him would think that. I would, however, like to draw his attention to the fact that if wages have risen since 1929—I do not know why that year is chosen; it ought to be the year when the National Government began their beneficent existence—if wages have increased since 1920 from 100 to 102, rent and transport have increased very considerably, which would more than neutralise what profit there may have been.
VISCOUNT HORNE OF SLAMANNAN: If the noble Lord will allow me to intervene just for one moment, I would point out that if I had taken the period during

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which the Labour Government were in office the level of wages would have been still lower.
LORD SNELL: As I have admitted, I cannot attempt to compete with the life training of the noble Viscount in the use of figures. If prices have increased, if the poor woman with her market basket has to pay more for the things she purchases, it is a very serious thing for her individually, but when these small sums are added together the total increase for the whole of the purchases of the country is something colossal, and I have seen it placed at the figure of £150,000,000. If prices fall on the Stock Exchange everybody knows about it. The Press is sure to remind the investor how much he has lost during the last few days, and it frightens him to death, but when prices increase and a woman has to pay more for everything she buys the Press never attempts to estimate what the total loss to the consumer has been.
LORD JESSEL: The Daily Herald does.
LORD SNELL: Unfortunately your Lordships do not read the Daily Herald. I commend you to improve your habits in that respect. My point shortly is this, that rent has increased by over 59 per cent. since 1914, that fuel has increased by about 80 per cent., and clothing by about 105 per cent. So far as milk is concerned the price is now 2s. 6d. per gallon, or 7½d. per quart, and as the poor tend to buy milk in half pints at 2d., they actually pay 8d. per quart. Bacon, butter and bread have all increased, and we believe that the standard of living is steadily falling. Our further contention is that it is an increase of price not due to scarcity. Sir Frederick Gowland Hopkins says:
"Science has enabled us to achieve again the miracle of the loaves and fishes, but the loaves and fishes are not being given to the multitude."
We feel that the Government policy is involved here. It was, as the noble Viscount has admitted, the purpose of the Government to push up prices. They have done that by limiting production and by the erection of all kinds of tariff barriers and quotas, and so on. If that is so then the Government must bear a certain portion of the blame. It is not always willing to take a share of any blame that exists. It always has
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a soft spot in its heart for itself, whatever it may lack for other people.
I will refrain from going into the prices of wheat and meat, because really our point is proved in the affirmation of our main principle, that the poor have to pay more, whatever the City may say, for what they buy than they have had to do hitherto, and I would like to point out that it is a question partly of distribution. My noble friend Lord Faringdon has mentioned the question of milk distribution, and the Food Council in their Report have stated that there is a "general feeling that milk distribution under present conditions is wasteful and unnecessarily costly." The co-operative societies have proved that. They have to pay the same price for their milk, they cannot sell it at a lower price, and yet they have proved that distribution can be made in such a way as to reduce the price.
I will not detain your Lordships any longer except to remind you that this increased difficulty of a woman to provide for her family has more than individual reactions; it has reactions upon the nation as a whole, and we find it expressed in all sorts of way. For instance, not very long ago there was this statement made by the chief recruiting officer of the Manchester district in the Manchester Evening News:
"In the last four days of September, 1936, at the recruiting office in Manchester, thirty-six men presented themselves as recruits for the Army. All had to be rejected as physically or medically unfit."
It seems to me useless, therefore, to sing these songs of praise about the glories of our present system, and to try to frighten people to death as to what would happen if a Labour Government came into office, whilst you have such an illustration of what the present system does—not for thirty-six people, but for many hundreds of thousands. All I desire to say in conclusion is that I wish to invite the Government to regard this question as urgent, and not to under-estimate the swelling tide of resentment which present conditions are arousing.
THE PAYMASTER-GENERAL (LORD HUTCHISON OF MONTROSE): My Lords, I would like to join the noble Viscount, Lord Home, in his congratulations to the noble Lord who moved this Motion on his moderation. I listened with great sympathy to what he had to say, and it is

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undoubtedly true, as it has almost always is a good thing. And if it is true, as I been, that the very poorest of our population do suffer from lack of good things in this world. I venture to say in reply to what was said by the noble Lord, Lord Snell, that this is a question of humanity, and we on the Government side, especially my colleagues who are considering the conditions of life in this country, have as fair a share of humanity as the members of other Parties on the other side of the House. It is largely a question of balance: the cost of living has to be very carefully balanced against unemployment if we are seeking to ascertain whether the common good of the population is being best promoted. When I listened to my old friend Lord Home I thought that, perhaps because we both come from the same country, our thoughts seemed to run in the same line and direction. I observe, as he has well pointed out, that the graph of prosperity, as indicated by the numbers of people employed, follows a rise in prices. But that is only sound because of the increased competition for the various articles that are for sale in this country. The converse was true during the period of slump. When we had such large numbers of unemployed and prices were naturally very low—indeed below the cost of production—the result was all the misery of that period.
The present cost of living has been compared by previous speakers with that of the year 1929. That year is taken, I think, because it is the last of the years of what I call normal prosperity, before we suffered from the slump. The curious thing is that the big change in our monetary system and in the introduction of tariffs and a Tariff Board, which took place at the end of the slump, had no very great effect in raising the cost of living. One would, have thought that those drastic measures which were taken at that time and which produced an extraordinary rise in the employment figures would have been followed by a very serious rise in the cost of living. Therefore I think the country is to be congratulated that we were able to carry out those changes without a corresponding big rise in the cost of living. It should be noticed that, along with the rise in prices over four years, there has been a very great increase in the purchasing power of the people. That in itself, of course, produces a demand for goods. It
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is a good thing. And if it is true, as I believe it is, that there has been a steady rise in prosperity—the restoration of the cuts made in the slump period, then a gradual rise in the wage level—then the question arises as to whether the cost of living is balanced by the rise in wages (and of course I mean real wages) and whether people are able to enjoy the result of their labours. To-day we have the enormous figure of 11,659,000 people at work, and I think it is reasonable to say that those people do not feel the rise in the cost of living. I am perfectly certain that if you asked those people if they would like to go back to the days of low prices in 1932 when only 9,200,000 people were at work, you would find that they preferred the conditions which exist to-day.
I have some figures here which are worked out in a slightly different way in dealing with the wage rates. They are based on a figure of no for the year 1924. In the third quarter of 1937 the figure which is given to me is 102½, as compared with 100 in 1924. In 1933 the figure is 94, and in 1929 it is 98½. So that, comparing 1929 with to-day, we have a rise from 98½ to 102½, which shows considerable improvement. I quite agree that to those people who are unemployed, especially those who have to rely upon public assistance, and the old people who have to live on the small pension of 10s. a week, the rise in the cost of living, if it comes, would be a very serious matter. His Majesty's Government are watching most carefully the index figures of the cost of living, and I conceive it would certainly be their duty to watch most carefully the effects on the lower range of our population. The noble Lord who introduced this Motion rather got off the rails when he began to say that the pension of 10s. to the older people was not enough. We all agree, but that is not what is on the Paper. This pension, I would remind your Lordships, was increased first from 5s. to 7s. 6d., as the ex-Chancellor of the Exchequer will remember, and then to 10s. At that time the figure for the cost of living was 125 above pre-War, whereas the figure to-day—that is on November r last—is only 60 above the pre-War figure. Therefore if a pension of 10s. was given for certain reasons at that time, no argument concerned with the cost of living can be advanced in favour of its being raised to-day.

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There is one aspect of this pension question on which I might touch, and that is the cost. Supposing you increased the pensions to-day to those over 65, including widows, according to the Treasury it would cost £35,500,000. If all pensions were increased, including those of widows of 65, it would cost £43,500,000. In the case of old age pensions—that is those over 70—the cost would be £45,300,000, and the estimate is that thirty years hence they would cost £64,000,000, and at the peak the cost would be probably £80,000,000. It is therefore a rising charge on the Exchequer. If we take into account the cost to the taxpayer of the rearmament programme and other things, an additional charge like that thrown on the Treasury would undoubtedly have its repercussions on trade, and that is one thing we want, if possible, to avoid.
I want now, very briefly, to deal with the question the noble Lord put to me about unemployed receiving public assistance. He claimed that the Government ought to do something for them, and he mentioned the surplus in the Unemployment Fund at which we are all looking anxiously. No doubt the Chancellor of the Exchequer is also looking with anxious eyes at that surplus of £65,000,000. I would point out that the unemployment benefit has got to be dealt with by the Statutory Committee, and by Act of Parliament they have annually to review the finance of the Fund. They are bound every year—more often if they think fit—to produce a Report for the Minister of Labour, which is generally issued in February. I understand they are now actively engaged in examining the finance of the Unemployment Fund. Their Report has got to be laid before Parliament, and if the Minister of Labour thinks fit to alter the recommendation because he can produce the same financial effect in another way, he has to explain the matter to Parliament. I feel sure that the Statutory Committee will take into consideration the rise in the cost of living and also the various rates they have been paying in dealing with any surplus that exists.
As regards the unemployed who are receiving assistance, the matter has, in the first instance, to be dealt with by the Public Assistance Board. That Board, under existing powers, is able to issue
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certain regulations, and in fact they do issue instructions. I know for a fact that instructions have been issued by the Board to meet special cases at this moment. In other words, the committees are to examine the individual cases that come to their notice in the various areas, and if necessary give additional assistance to meet any hardship that may be brought to their notice. The Government, therefore, so far as their duty is concerned, are doing what they can to see that that part of the population which might, and probably would, suffer most by a sharp rise in the cost of living is safeguarded as far as is humanly possible. A remark has been made in another place that the local authorities in some cases have taken powers to deal with this particular class of the population, and I believe six or seven local authorities have so acted, but now, under the instructions which have been sent out to the various public assistance committees, drawing their attention to their powers and the way in which they are able to help these unfortunate people, this situation will be generally met.
The noble Lord talked about housing. Although house rents are no doubt very pertinent to this matter, none the less that leads into another line of thought. On the whole, we have been very successful in keeping rents down. The noble Lord is anxious about decontrol being speeded up.
LORD FARINGDON: I am afraid it may be.
LORD HUTCHISON OF MONTROSE: The noble Lord is afraid of decontrol. All I can say is that I shall draw the attention of the Minister of Health to the noble Lord's remarks, so that his fears may reach the right quarter. I am not informed on the subject, and I do not know what the policy is. As regards the distribution of industry, that is also a very pertinent point. It is one that demands the closest scrutiny at a time when all these industries are springing up all round this enormous area of London. I think the Government have in view the attempt by inducement to persuade industries to go into other areas, particularly into the Special Areas, and to my own knowledge they have been successful in attracting businesses certainly into three areas. But it is true that a large area like London, where there

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is such a wonderful market, is a great magnet to new industries. I can assure the noble Lord that that particular aspect of this question is receiving the attention of His Majesty's Government. As to rearmament and what is to happen afterwards, I venture to say that no Government would be worthy of the name if they did not consider the situation that is likely to arise after the rearmament programme has been carried out, and I know that His Majesty's Government are examining with the greatest care the situation that will ensue with the "shading off" of armament production and the move into industrial production. It is a problem that requires very careful thought and long-sighted arrangement, and I can assure the noble Lord that it is receiving the Government's attention.
The noble Lord, Lord Snell, complained that we did not read the Daily Herald. I can assure him we all look to see what it says. It is a very good newspaper, and we are all anxious to hear what those people who do not agree with us on Party lines think of us. I can say that sometimes they think well of us, and even accept our policy as the right one. The noble Lord referred to certain men who came to the recruiting office at Manchester. It is. because of that kind of thing that the Government are pursuing their policy of physical fitness, by means of which we hope to create a better and a finer race in this country. Let me tell the noble Lord one thing that came under my own observation. It may also have come under the observation of other noble Lords. During the years 1919, 1920, 1921 and 1922 the population in Germany were starving. Meat was not to be got. They lived on vegetables and fruits as far as possible, but they were undoubtedly underfed. If anyone goes to Germany to-day and looks at the young people of about sixteen or seventeen or eighteen years of age, he will find the finest type of population that has ever been seen in Germany. It may well be that this question of fitness depends upon proper feeding and the right kind of nourishment. Sometimes the kind of food that has been used by the population has not been the right type of food. It may well be that the weaklings perished during that period, but the fact remains that the population which suffered in those years, when they were one, two, three or four years of age, undoubtedly has de-
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veloped into a very fine population to-day.
I would say to the noble Lord who moved this Motion that he has our sympathy. We are watching the situation with great care. It is a question of balance. In addition to the rise in price to the consumer, there is the question whether the producer is going to get some return for his work. That is the basis of the agricultural policy of the Government. In order to induce the producer to produce you have to give him some reward for his labour, perhaps at the expense to a small extent of a rise in price to the consumer. It is that balance in policy which any Government must consider. I think the noble Lord has rendered a valuable service in initiating this debate, and I only hope that I have been able to deal with some of the points he raised.
LORD FARINGDON: My Lords, I should like first of all to thank the noble Viscount, Lord Home, for his kindly personal remarks about myself and my family. I should also like to thank the noble Lord who replied on behalf of the Government for his sympathetic attitude towards many of the points which I raised and to which I requested answers. There is perhaps one point of view in regard to which I find myself out of agreement with the noble Lord, and which causes me a certain amount of anxiety, because, however much both the noble Lords who have spoken from the Benches opposite may say that they will stop the rise of prices at the given moment, it does seem to me from what they have said to be a little difficult to judge exactly when that moment is. After all, as my noble friend Lord Snell pointed out, if things must necessarily get better and better as prices get higher and higher, is there any reason why they should ever stop? In any case who is going to decide the exact moment at which they shall stop? That seems to me a matter for some anxiety, because, particularly at the present moment, real wages are undoubtedly declining. When I moved my Motion I expressly did not take the figures for 1934 and 1935, I took the figures for 1928 and 1929 as the basis of comparison. I said that we recognised that then the cost of living index did appear to be lower and wages somewhat higher, but there is no doubt whatever that there is a great deal of

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suffering amongst the special class for whom we have spoken. The fact that old age pensions were fixed at 10s. at a certain moment does not necessarily prove that at that moment 10s. was a sufficient living pension for old people. That was my point.
In reference to some remarks of the noble Viscount, Lord Home, I would like to read a short extract from something that appeared in the Financial News. That newspaper said:
"It is perhaps a little anomalous that at a time when commodity prices are falling and unemployment is threatening to rise, the increase in the cost of living should be a matter of major economic and political concern."
I will not inflict the whole of the cutting which I have on your Lordships, but what I have just quoted seems to me to be of some interest. I am not going to bandy figures with an authority of the noble Viscount's standing and experience, but I would suggest to the noble Lord who mentioned fitness that the real essential point in fitness, as has been stressed
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by committees on malnutrition, is food. That is the really essential point, and what I would like to suggest to the Government is that rather than pay subsidies which somehow do not seem to find their way into the farmers' pockets, it would be more desirable, and I think more profitable from the nation's point of view as a whole, if they could subsidise consumers; if they could see that the essential foods of which the noble Lord himself has spoken got to the people who need them. I think that perhaps the noble Lord was over impressed by what he saw in Germany, though no doubt he has a certain amount of excuse for that impression. As he himself has said, particular kinds of food are really the most important, and we believe that the Government could and should see that these foods reach the people. In doing so we believe that they could also help agriculture. I beg to withdraw my Motion.
Motion, by leave, withdrawn.
House adjourned at twenty minutes before six o'clock.