Sitting of 25 September 1931

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.
ORDERS OF THE DAY.

  NATIONAL ECONOMY BILL.
  [2ND ALLOTTED DAY.]
  Considered in Committee. [Progress, 24th September.]
  (Captain BOURNE in the Chair.)

  NATIONAL ECONOMY BILL.

    SCHEDULE.—(Services in respect of which Orders in Council may be made under this Act.)
    Mr. RHYS DAVIES: I beg to move, in page 3, to leave out line 5.
    This subject has not been very clearly explained, neither has it been handled very distinctly on this occasion. If, therefore, I can rescue the subject from oblivion, I shall be quite happy. What has happened is that the Minister of Health and his Department in the statement which appears in the White Paper would lead the nation and the House of Commons to believe that the panel doctors of this country have been gracious and generous enough to hand over to the Treasury £850,000 per annum of their own money. I want to disabuse the mind of the Committee because the ease is not exactly like that. All that has been said on the subject up to now consists of a few remarks made by the Minister of Health on the Second Reading of the Bill. In order to show the Committee how difficult it is to find out what all this means I will read one or two sentences from the speech of the Minister of Health. This is what the Minister said, and I would like to know how many hon. Members will be any wiser when I have read his words:—
    "The result is that the effect of the proposal to deduct a certain proportion of the remuneration of doctors and chemists, and to return that deduction to the Exchequer is that you give back to the Exchequer something which the Exchequer had already paid out for another purpose." £ [OFFICIAL REPORT, 18th September, 1931; col. 1169, Vol. 258.]
    That does not seem to be very clear. What happened, apparently, was that the Minister of Health went to the British Medical Association and said: "The pound sterling is languishing from nervous debility and our export trade is suffering from Bright's Disease," and the British Medical Association was asked to
    1974
    come to the rescue of the pound sterling, and this is how it was done. The panel doctors are paid a 9s. capitation grant in respect of each of the 15,000,000 insured persons in the country. With the exception of a very small contribution from the Exchequer the whole of that 9s. comes out of the funds of the approved societies. It may rightly be assumed, therefore, that if there is any reduction in the 9s. paid to the doctors, that reduction ought to accrue to the funds of the approved societies from whence it came. The Minister of Health went to the British Medical Association and made an agreement with them. After that he came to the representatives of the approved societies on the consultative council, so I understand, and informed them of what had transpired. In fact, the whole of the contract for this reduction was practically completed before the approved societies had a chance to say a word about it. It is reported, however, that the representatives of the approved societies agreed to what has been done. I think that is typical of the right hon. Gentleman. I think it is unfortunate that these funds are continually being raided by almost every successive Government. Hon. Members will recollect that the right hon. Gentleman the Member for Epping (Mr. Churchill) took away £2,250,000 per annum from these funds, and the present Minister of Health proposes to take about £1,000,000 per annum away on this occasion. The Minister of Health, in effect, says: "I am not going to take that from the funds of the approved societies. What I am doing is this. The doctors and the chemists are giving me about £1,000,000. That sum will go back to the funds of the scheme, but it will relieve the State contribution of exactly that amount." I have never beard before of such financial jugglery, and I shall be very pleased if the Minister of Health will explain what he actually means.
    The proposal we are considering makes a cut as I said of 1s. in the fees of panel doctors and that is expected to save £850,000 per annum. It is an astonishing fact that it is only in respect of national health insurance that the cuts which are proposed by the Government go very much beyond the demands contained in the May Economy Committee's recommendations. In the case of the teachers

    1975
    the May Committee recommended a reduction of 20 per cent. The Government suggested a reduction in their case of 15 per cent., and now they have agreed to 10 per cent. The same thing happened in the case of the police, but in regard to National Health Insurance the Government is, I repeat, going beyond what the May Committee recommended. [HON. MEMBERS: "No!"] If the Minister of Health will compare what the May Committee recommends and what he is proposing to put into this Bill he will find that the amount is more than the May Committee recommended.
    The MINISTER of HEALTH (Mr. Chamberlain): Will the hon. Member explain how he arrives at that conclusion?
    Mr. DAVIES: The May Committee suggested a saving on Health Insurance of only £1,000,000, but this Bill suggests the sum of £1,100,000. I would like to put an important question to the right hon. Gentleman. I would like to know whether we are going to get the same service from the doctors for 8s. that we are now getting for 9s.? Is the Minister of Health aware that since he has made this arrangement with the chemists, one of the largest chemist firms in this country have asked their staff to accept a reduction in wages as a consequence of the proposed reduction of the grant? Whilst it is claimed that the chemists will hand over £120,000 to the Treasury the staff of one firm of chemists alone will suffer a reduction of wages probably amounting to £120,000. The result will be that the firm in question may make a profit out of the transaction.
    There is another important question which I should like to put to the Minister of Health. I would like to know if the Government is going to relieve themselves of the responsibility for a grant to the central fund? I understand that the sum which usually came from the State is now to be taken from the contributory pensions fund. I remember when the figures were given relating to that pensions fund the actuary said that the contributory pensions fund was so delicately poised actuarially in respect of financial calculations that if there was even £1 difference or only a recurring decimal in the figures they would have to be most careful lest the whole thing be-
    1976
    came unbalanced and toppled over. The sum of £142,000 hitherto paid by the Exchequer is now to be taken from the Widows' Pension Fund and handed over to the Health Insurance Scheme in order to reduce the Exchequer grant by that sum.
    What is happening, of course, is that in the ultimate the Government are again raiding the funds of the approved societies, and, as I have said, I am a little astonished at what is being done. While I agree that this may not be termed barefaced robbery, I am sure it could easily fall into the category of receiving stolen property. The doctors and the Ministry of Health have arranged among themselves to hand over to the Treasury approximately £1,000,000 which does not belong to them at all, but belongs to the scheme as a whole. [Interruption.] The Exchequer grants to these funds have fallen from £10,250,000 in 1921 to £6,250,000 in 1930, in spite of the fact that the number of insured persons has increased almost every year. As regards unemployment insurance, the State grant has increased to a colossal sum, but in the case of this scheme the grant has gone down almost every year. If this process continues, the time will come, of course, when the State will wipe its hands clean of this scheme. I want to say another word about the panel doctors. Let me say right away, however, that I do not criticise the professional work of the doctors, but I am very much afraid that the doctors may, as a result, increase their charges to their non-panel patients. That is quite possible. In the end I doubt whether the doctors will suffer much, and, of course, the work of the doctors—
    Dr. MORRIS-JONES: Is the hon. Member aware that, whereas the panel doctors have suffered a cut of over 10 per cent., no reduction has been made in the amount given to the approved societies for administration?
    Mr. DAVIES: If this Government unfortunately lasts long enough, I suppose that that may come down also.
    Dr. MORRIS-JONES: It ought to come down now.
    Mr. DAVIES: Perhaps the administrators will do what the Navy did, and "larn them a lesson," as the saying goes. It is, however, an appropriate question

    1977
    to ask whether we shall get from the panel doctors in future the same service as we are getting now, and whether we shall get the same quality and standard of drugs from the chemists as we are getting now. There is, of course, a reduction proposed in the price of the prescriptions. I am astonished that the right hon. Gentleman, who has been searching every nook and corner, has left out the dentists and opticians, though he has caught the chemists. Of course, the dentists and opticians only come into the scheme in respect of additional benefits, about which I shall have a word to say later on.
    In 1913 there were 12,674 panel doctors, while there were 15,750 in 1930, and it is interesting to note that the average annual income of each panel doctor rose from £304 in 1913 to £463 in 1930—an increase of about 50 per cent. Let me say, incidentally, that I do not think that the medical profession is over-paid, though it ought to be remembered that the May Committee make a very scathing attack upon the capitation payment to panel doctors from insurance funds. They say that the local and municipal authorities find it very difficult to secure the services of professional medical men, because the fees under the National Health Insurance scheme are so much higher than they are prepared to pay. I do not say that; that is the Report of the May Committee. There has been an increase in the fees of the doctors from £3,750,000 in 1913 to £7,250,000 in 1930, and the Report of the May Committee points out very definitely that the 9s. is by far too much—those are not my words—because, under the old friendly society system, the figure was 2s. 6d. It will be remembered, of course, that the doctors almost declared a strike in 1911 on this question of fees. Somehow or other, a declaration of a strike always frightens all Governments.
    Those of us who have anything to do with the administration of these funds feel very sad about the present situation, because in the end this is what it means. As I have said, nearly every Government comes along and makes a raid on these funds, and the result will be that benefits must be reduced. Statutory benefits will not be reduced at the moment, but dental, optical, convalescent home, and distress grants will probably go by the
    1978
    board, in consequence of these several raids. I am not alone in thinking that that is so, because the May Committee, in their Report, state that the third valuation of approved societies—of which, by the way, all the figures are not yet available—indicate that some of the societies will be in the position of not being able to meet the statutory claims of their members. Consequently, we are very much alarmed indeed at what is transpiring. It is not commonly known that there are in this country 100,000 persons or thereabouts who have gone through their 26 weeks of full benefit under this scheme, and are now, in the language of the Unemployment Insurance scheme, in the transitional stage, and are receiving 10s. a week or less. I do not know how many of them are going to the public assistance committees, but in the end this deduction by the Treasury will make it certain that those poor people on permanent disablement benefit will receive, not 10s., or 9s. 6d., or 9s., but may all come down to 7s. 6d.
    Mr. CHAMBERLAIN: Would the hon. Member kindly say which is the particular act of the Treasury which he anticipates will produce that effect?
    Mr. DAVIES: Taking £1,000,000 out of the funds. I do not think that the right hon. Gentleman is seized of what I said.
    Mr. CHAMBERLAIN: What £1,000,000 out of the funds?
    Mr. DAVIES: The right hon. Gentleman himself, if I may say so without offence to him, has not understood exactly what this means. May I, as an administrator of a society put this to him? I may be mistaken, but I feel sure that it is he who is mistaken. He has told the doctors and the chemists to hand to the Treasury about £1,000,000 per annum, in round figures. That £1,000,000 comes from the funds of the societies. That is understood, I am sure. [Interruption.] Does the right hon. Gentleman disagree?
    Mr. CHAMBERLAIN: I completely disagree. I will tell the hon. Member why later on.
    Mr. DAVIES: With the exception of the Exchequer grant, which is about one-seventh of the total administration ex-

    1979
    penses, every penny of the £1,000,000 comes in the first place from the approved societies. If you reduce the doctors' fees by £1,000,000, and hand that sum over to the Treasury, surely that £1,000,000 comes from the funds of the scheme. [Interruption.] Let me put it the other way. Whenever there has been a reduction in the past in fees, that reduction has always accrued to the funds of the societies. I cannot put it more clearly than that. In any case, in the ultimate, the total funds of the societies will be decreased, and, accordingly, it does not matter how the right hon. Gentleman arrives at his figures.
    May I say one last word and that on the Central Fund? There has been a great deal of talk about this Central Fund. It has been said that the Government have been very generous in securing for it this £142,000, so that the societies which are not able to meet the statutory benefits will now be helped from the Central Fund. This is called the partial pooling of surpluses. I do not know how long the right hon. Gentleman is going to be in office. I hope he will not be there very long. But, while he is Minister of Health, I am sure he will find out that, once we begin to pool surpluses, in the end the obvious result will be there will be no surpluses to pool. I should like the right hon. Gentleman, however long he is in his post, to take note of that. As I have already stated, I am very much disturbed as to what is happening, because those of us who have dealt with these social services have been highly gratified to see the beneficial results on the health of the community consequent on what has been done by the National Health Insurance scheme. We have practically the lowest general mortality rate in the world. The infantile mortality rate has declined by a half in one decade, and in my view the excellent contribution of the panel doctors and the approved societies has helped considerably to achieve that desirable object. Anything that is done therefore by any Government to take away money that belongs to the insured population and this scheme is damaging, not the funds of these societies alone but the health of the community as a whole.
    Mr. CHAMBERLAIN: I must express my astonishment at the speech of the hon. Member, who really does know something about National Health Insurance. There is not a shadow of excuse for the attempt he has made to represent the action proposed to be taken as a raid upon the funds of the societies. In support of his observation, he said I had told the House that the societies had agreed to a proposal to take a shilling from the capitation fees of the doctors and hand it over to the Exchequer. He said they had not given any such agreement and that my statement was typical of all any speeches in the House. I do not know what he really meant to infer by that unless it was that I was in the habit of telling the House that which was not true, but the whole basis of his statement crumbles when I remind the Committee that I never made any such statement.
    Of course, this transaction is a perfectly simple one, and the Committee understands the situation better than the hon. Member affects to do. A sum of 15s. per head is allowed to be set aside for medical benefit under the Act and, out of that, 9s. is the remuneration that is given to the doctors. It is true that, in the ordinary course, any arrangement of that capitation fee which would have the effect of reducing it would be that the funds of the societies would benefit by any such reduction. But this was not the ordinary course of procedure. In this case, the question was never discussed upon merits, as I explained to the Committee on a previous occasion. The doctors were asked whether they would be prepared to agree to a reduction in their remuneration as a contribution to the national needs and not as a contribution to the societies' funds, and I say without hesitation that, if they had been asked to give up a simply for the sake of benefiting the funds of the societies, they would, of course, have refused and would have fought the case from one end to the other. They asked me whether I could give a definite assurance that anything that they gave up would go to the relief of the Exchequer and not to the relief of the societies, and it was only on that assurance that I asked them to accept the cut, and they agreed to it.
    The hon. Member has said that this is the only case where the Government are taking more than was recommended

    1981
    by the May Committee; there again he appears, I will not say deliberately—to have got confused as to what the May Committee recommended and what in fact, we are proposing to do. The May Committee recommended that the doctors' capitation fee should be reduced from 9s. to 8s., which is, of course, the proposal which we asked the doctors to accept, although once again I say there was no question of merits, I was not going into the arguments used by the May Committee and this was merely the allocation to them of what the Government thought a reasonable contribution for them to make. But, as a matter of fact, that contribution was the identical contribution which the May Committee had recommended. It is true that the May Committee estimated a saving from that in a full year of £750,000, and a closer estimate showed that it would be £850,000, but there is no difference in principle. It is true that the. May Committee did not recommend any reduction in the remuneration of the chemists. Is that what the hon. Member has founded his complaint upon, that we have asked the chemists to make a contribution as well?
    Mr. RHYS DAVIES: Surely my point holds good that the Government are going further than the recommendations of the May Committee in that respect. Is not that correct?
    Mr. CHAMBERLAIN: I thought that was what the hon. Member intended to convey. [An HON. MEMBER: "It is exactly what he said."] I think not. At any rate, I have taken the opportunity of making clear the difference between the Government's proposal and the May Committee's proposal. I do not know why the May Committee did not recommend it. It seems obvious—I hope the Committee will accept the view—that, if the doctors were asked to make a contribution, it was only reasonable and right that the chemists also should contribute, and the chemists at once accepted that. A further difference between the proposals of the Government and those of the May Committee is that the May Committee's proposals included £100,000 to be saved by the non-extension of the Act.
    I want to make this further statement. A slight alteration has been made in the proposals that are embodied in
    1982
    the White Paper. The Committee will recollect that an announcement was made by the Prime Minister that certain alterations were going to be made in the cuts originally proposed for the services, for the police, and for the teachers, and there was to be a maximum of 10 per cent. instead of the varying rates that had been previously proposed. The cut from 9s. to 8s. from the doctors, of course, represents a larger percentage—it represents 11 per cent. and it seems to me to be unfair to them and inconsistent with the general scheme of the Government that, when an alteration has been made, the doctors and chemists alone should be left out of the scope of it and, accordingly, I wrote to the Insurance Committee of the British Medical Association and also the Pharmacists Union, and said we proposed to substitute for the original proposals of reductions a simple 10 per cent. reduction in both cases. That brings it into line. It means that there will be a rather smaller sum available for saving, a sum of about £90,000 in a full year, but that, I hope, we shall be able to make good by savings in other directions.
    The hon. Member touched upon another proposal, namely, the withholding of the State grant of £142,000 from the Central Fund. Anyone would suppose, listening to him, that this again is an attempt to raid the funds of the approved societies. But he knows perfectly well—and no one better than he does—that the approved societies are very much relieved at the proposals which the Government are making in this connection, because they realise that owing to the enormous increase in the claims for sickness benefit the position of a number of the societies after the next valuation is going to be much less satisfactory than it was after the last. In fact, in some cases there may be societies who without outside help may not be able even to meet the statutory benefits.
    What is the resource available to approved societies if they find themselves unable to meet the statutory benefits? It is the Central Fund, and it is to the interest, therefore, of the whole system, and of the weaker approved societies in particular, that the Central Fund should be made as strong as possible. That is what we are proposing to do under our proposals. It is quite true that the

    1983
    £142,000 which would fall to be paid this year from the Exchequer is withdrawn and not to be paid, but, instead of that, the Central Fund is to get £300,000 a year which it had not before, and further, it is to get arrears of the £300,000 since 1928 which will amount to something like £1,000,000 to start off with. So that with the £1,000,000 and the £300,000 the Central Fund is to get, it will be in an unassailable position and will be able to guarantee the standard benefit all round. That is a source of very great satisfaction and, I would say, of relief to the approved societies, and, so far from looking a gift horse in the mouth, they are all delighted to think that their finances are being put upon a sound and satisfactory basis. I think I have shown conclusively that the hon. Member's allegations, or insinuations, have no foundation whatever in fact, that there is no raiding of the funds here, and that there is a question of contributions, indeed, not by the approved societies, but by the doctors and chemists to the national emergency. But, as far as approved societies are concerned, they will be made stronger and not weaker by what we are now proposing.
    Mr. THOMAS LEWIS: "A rose by any other name would smell as sweet" would be a very apt description of the right hon. Gentleman's statement this morning that the funds of the approved societies are not being raided in connection with the grants to the doctors. It is true that the doctors have accepted the proposed reduction, but it is also true that the moneys at the present time are the property of the approved societies. I have before me a list of the various sums paid to doctors. Formerly, the Government made a grant in respect of the payment of doctors. There was an Exchequer grant, but that grant was subsequently withdrawn and the societies were made to contribute, as the right hon. Member himself has said, 13s. to the medical fund, of which 9s. went in payment of the doctors. Some approved societies have felt for a long time past, having regard to all the circumstances, that the doctors were being overpaid in respect of the sum of 9s. per annum. Personally, I do not object at all strongly to the reduction, but I claim that, having regard to the fact that the moneys are
    1984
    provided by the approved societies, the approved societies should at least have been consulted prior to the proposed reduction being made.
    The right hon. Gentleman has not said definitely that the approved societies agreed. As hon. Members are aware, there is a consultative council in connection with National Health Insurance, and I believe that more or less they did agree. I happen to be a member of that council, but I did not agree. I am stating the facts. As is usual with consultative councils of that kind, everything is cut and dried. Whatever opinion is expressed by the consultative council, I have never known it make any difference. They are told what to do by the officials. In this case, the Minister was not present. He was, I expect, busy with more important affairs of State. It is true that with very few exceptions they accepted the statements made at that time. But they are not there in a representative capacity. I think that hon. Gentlemen will admit that. They are not elected persons. I venture to suggest that if you consulted the whole of the societies, and especially the membership of the approved societies, they would object very strongly to this—I must use the term—raiding process. It is a gross impertinence to handle other people's money in this fashion. It is very nice to give up your awn money out of goodness of heart if you want to make a sacrifice, but to make a sacrifice on somebody else's behalf savours of very gross impertinence indeed. I should not like to refer to the right hon. Gentleman in that light, and perhaps a slightly milder term would fit the case.
    I am concerned for the future of National Health Insurance. If there is to be a reduction in expenses whether in the fees of the medical profession or in any other way, National Health Insurance requires the funds. The right hon. Gentleman and his former assistant know perfectly well that National Health Insurance is in a precarious state to-day. It is in the state at which the right hon. Gentleman hinted. He knows the result of the third valuation with regard to small societies. A large number of the small societies to-day cannot pay the statutory benefit, let alone pay additional benefit. The right hon. Gentleman also knows that on the fourth valuation, it is expected that a very large number in

    1985
    addition to those will be unable to meet even the statutory benefit to which I have made reference. It discloses a very serious position indeed, and this £900,000 a year could well be placed, if we had the care of National Health Insurance at heart, to the credit of the approved societies. The right hon. Gentleman and his hon. Friends have made the position possible.
    My hon. Friend the Member for Westhoughton (Mr. R. Davies) hinted at the continual raiding and stated that the Exchequer grants are now £4,000,000 less per year than they were 10 years ago. Practically all the raids perpetrated upon approved societies have been by a Conservative Government. In 1921 the Exchequer grants amounted to £10,271,000 on a total expenditure of £28,368,000. To-day the Exchequer grants amount to£6,370,000, but the expenditure is no less than £36,400,000. Both the Minister and his former Parliamentary Secretary must know of the precarious state of these funds. Receipts and payments are just about balancing, and, having regard to the peculiar basis of National Health Insurance, it will require all the ingenuity of the officials at the Ministry of Health to keep National Health Insurance upon a sound basis. Therefore, I support the Amendment because I think the wrong thing has been done in taking away these funds from the approved societies. I will make no reference to the question of the central fund. It would require too much time to go into that matter.
    I should like to raise another question which may not come within the range of this particular Motion, but I feel very much concerned about it. I refer to maternity benefit. I am afraid, from the answer given by the right hon. Gentleman a few days ago, that the reform in regard to child birth, which is so imperative and by means of which we could prevent the unnecessary deaths of many mothers, is going to be delayed. The scheme had been brought to a head. It wast almost on the eve of completion. The consultative council have had it under consideration for many years. It had reached the final stage in regard to the allocation of the money—the halving of the £2 per head, so that half the amount could be used for building up the new service of maternity homes. Whatever may be the result of the present
    1986
    proposals, I hope that the Minister of Health will keep in mind the question of the new maternity service and not allow it to go by the board. We cannot afford to sacrifice the childhood and the motherhood of this country. If the right hon. Gentleman remains Minister of Health, I hope that he will push this matter forward for all it is worth.
    Dr. MORRIS-JONES: I feel sure that the medical profession will be pleased with, and I am sure that the House as a whole will gladly accept the offer that has been made by the Minister of Health. It is not a question of very great generosity. He has given the medical profession an additional one per cent. It would have been hardly right after the profession had accepted the cuts, not on their merits but simply as a gesture in this time of emergency, that they should be penalised for accepting quietly what a large number of other professions have not accepted. In the interests of the State it would have been a very bad precedent that those who accepted the cuts quietly should be treated much worse than those who complained very loudly.
    I was disappointed at the attitude adopted by the hon. Member for Westhoughton (Mr. R. Davis). I should have expected him to say that the medical profession in this instance had behaved extraordinarily well, and that be would have paid them a little compliment. It would have been a gracious act on his part as an administrator of the approved societies. Instead of that, he said, in effect: "If you make this cut on the doctors who have no right to make it unless you give the money to us." That is not the spirit in which I should have expected the hon. Member to greet a gesture of the kind that was made by the profession. While thanking the right hon. Gentleman for the one per cent. gesture which he has made, I would like to ask him if he will be in a position to tell the House, when sacrifices were called upon from the medical profession and from other sections of the community—which the right hon. Gentleman admits so far as the medical profession was concerned were not cuts on merit—on what principle of equity the 4s. 6d. per head allowed for administration expenses for the approved societies remained unaltered. There has been no

    1987
    cut there. On the whole, the financial situation of the societies is such that they could bear with perfect equanimity and without any serious disturbance a small reduction per head for administration expenses. I do not want to press that upon the right hon. Gentleman in any spirit of antagonism, jealousy, enmity or retaliation, but I do suggest that a very small cut per head in the administration ex-
    penses would have produced some small sum for the State and would have given the approved societies an opportunity of following the very patriotic example of the medical profession.
    Question put, "That the words 'National Health Insurance' stand part of the Schedule."
    The Committee divided: Ayes, 237; Noes, 153.

    Division No. 495.]

    AYES.

    [11.52 a.m.

    Acland-Troyte, Lieut-Colonel

    Denman, Hon. R. D.

    Lane Fox, Col. Rt. Hon. George R.

    Ainsworth, Lieut.-Col. Charles

    Despencer-Robertson, Major J. A. F.

    Leighton, Major B. E. P.

    Alexander, Rt. Hon. A. V. (Hlllsbro')

    Duckworth, G. A. V.

    Lewis, Oswald (Colchester)

    Alexander, Sir Wm. (Glasgow, Cent'I)

    Dudgeon, Major C. R.

    Llewellin, Major J. J.

    Amery, Rt. Hon. Leopold C. M. S.

    Dugdale, Capt. T. L.

    Locker-Lampson, Rt. Hon. Godfrey

    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

    Eden, Captain Anthony

    Locker-Lampson, Com. O.(Handsw'th)

    Astor, Maj. Hn. John J. (Kent, Dover)

    Edmondson, Major A. J.

    Long, Major Hon. Eric

    Atholl, Duchess of

    Elliot, Major Walter E.

    Lymington, Viscount

    Atkinson, C.

    Elmley, Viscount

    MacDonald, Malcolm (Bassetlaw)

    Baldwin, Rt. Hon, Stanley (Bewdley)

    Erskine, Lord (Somerset,Weston-s.-M.)

    Macdonald, Sir M. (Inverness)

    Balfour, Captain H. H. (I.of Thanet)

    Evans, Capt. Ernest (Welsh Univer.)

    Macdonald, Capt. P. D. (I. of W.)

    Balniel, Lord

    Everard, W. Lindsay

    Maclean, Sir Donald (Cornwall, N.)

    Beamish, Rear-Admiral T. P. H.

    Falle, Sir Bertram G.

    Macpherson, Rt. Hon. James I.

    Bellairs, Commander Carlyon

    Ferguson, Sir John

    Macquisten, F. A.

    Berry, Sir George

    Fielden, E. B.

    Makins, Brigadier-General E.

    Betterton, Sir Henry B.

    Foot, Isaac

    Mander, Geoffrey le M.

    Bevan, S. J. (Holborn)

    Ford, Sir P. J.

    Margesson, Captain H. D.

    Birchall, Major Sir John Dearman

    Forestier-Walker, Sir L.

    Marjoribanks, Edward

    Birkett, W. Norman

    Fremantle, Lieut.-Colonel Francis E.

    Mason, Colonel Glyn K.

    Blindell, James

    Galbraith, J. F. W.

    Merriman, Sir F. Boyd

    Boothby, R. J. G.

    Ganzoni, Sir John

    Milne, Wardlaw-, J. S.

    Bowater, Col. Sir T. Vansittart

    Gault, Lieut.-Col. A. Hamilton

    Mitchell, Sir W. Lane (Streatham)

    Bowyer, Captain Sir George E. W.

    George, Major G. Lloyd (Pembroke)

    Monsell, Eyres, Com. Rt. Hon. Sir B.

    Bracken, B.

    George, Megan Lloyd (Anglesea)

    Moore, Lieut.-Colonel T. C. R. (Ayr)

    Braithwaite, Major A. N.

    Gibson, C. G. (Pudsey & Otley)

    Morris-Jones, Dr. J. H. (Denbigh)

    Briscoe, Richard George

    Gillett, George M.

    Morrison, W. S. (Glos., Cirencester)

    Broadbent, Colonel J.

    Gilmour, Lt.-Col. Rt. Hon. Sir John

    Muirhead, A. J.

    Brown, Ernest (Leith)

    Glyn, Major R. G. C.

    Mail-Cain, A. R. N.

    Brown, Brig.-Gen.H.C.(Berks, Newb'y)

    Gower, Sir Robert

    Nathan, Major H. L.

    Buchan, John

    Graham, Fergus (Cumberland, N.)

    Newton, Sir D. G. C. (Cambridge)

    Buchan-Hepburn, P. G. T.

    Grattan-Doyle, Sir N.

    Nicholson, Col. Rt. Hn.W.G.(Ptrsf'ld)

    Bullock, Captain Malcolm

    Gray, Milner

    O'Connor, T. J.

    Burton, Colonel H. W.

    Greene, W. P. Crawford

    Oliver, P. M. (Man., Blackley)

    Butler, R. A.

    Gretton, Colonel Rt. Hon. John

    Oman, Sir Charles William C.

    Cadogan, Major Hon. Edward

    Griffith, F. Kingsley (Middlesbro' W.)

    Ormsby-Gore, Rt. Hon. William

    Calne, Hall-, Derwent

    Gunston, Captain D. W.

    Owen, Major G. (Carnarvon)

    Campbell, E. T.

    Hacking, Rt. Hon. Douglas H.

    Peake, Capt. Osbert

    Castle Stewart, Earl of

    Hamilton, Sir George (Ilford)

    Penny, Sir George

    Cayzer, Sir C. (Chester, City)

    Hamilton, Sir R. (Orkney & Zetland)

    Perkins, W. R. D.

    Cayzer, Maj.Sir Herbt. R. (Prtsmth,S.)

    Hanbury, C.

    Peters, Dr. Sidney John

    Cazalet, Captain Victor A.

    Harbord, A.

    Peto, Sir Basil E. (Devon, Barnstaple)

    Chadwick, Capt. Sir Robert Burton

    Hartington, Marquess of

    Power, Sir John Cecil

    Chamberlain, Rt.Hn.Sir J.A.(Blrm.,W.)

    Harvey, Major S. E. (Devon, Totnes)

    Pownall, Sir Assheton

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Haslam, Henry C.

    Purbrick, R.

    Chapman, Sir S.

    Heneage, Lieut.-Col Arthur P.

    Pybus, Percy John

    Christie, J. A.

    Hennessy, Major Sir G. R. J.

    Ramsay, T. B. Wilson

    Clydesdale, Marquess of

    Hills, Major Rt. Hon. John Waller

    Ramsbotham, H.

    Cobb, Sir Cyril

    Hope, Sir Harry (Forfar)

    Rawson, Sir Cooper

    Cohen, Major J. Brunel

    Hore-Belisha, Leslie

    Reid, David D. (County Down)

    Colman, N. C. D.

    Howard-Bury, Colonel C. K.

    Rentoul, Sir Gervals S.

    Colville, Major D. J.

    Hudson, Capt. A. U. M. (Hackney, N.)

    Reynolds, Col. Sir James

    Conway, Sir W. Martin

    Hurd, Percy A.

    Rhys, Hon. C. A. U.

    Cooper, A. Duff

    Hurst, Sir Gerald B.

    Richardson, Sir P. W. (Sur'y, Ch'ts'y)

    Cranborne, Viscount

    Hutchison, Maj.-Gen. Sir R.

    Roberts, Sir Samuel (Ecclesall)

    Crichton-Stuart, Lord C.

    Inskip, Sir Thomas

    Rodd, Rt. Hon. Sir James Rennell

    Croft, Brigadier-General Sir H.

    Iveagh, Countess of

    Rosbotham, D. S. T.

    Crookshank, Capt. H. C.

    Jones, Llewellyn-, F.

    Ross, Ronald D.

    Croom-Johnson, R. P.

    Jones, Sir G. W. H. (Stoke New'gton)

    Russell, Alexander West (Tynemouth)

    Culverwell, C. T. (Bristol, West)

    Jones, Rt. Hon. Leif (Camborne)

    Russell, Richard John (Eddlsbury)

    Cunliffe-Lister, Rt. Hon. Sir Philip

    Jowitt, Rt. Hon. Sir W. A. (Preston)

    Salmon, Major I.

    Dalkeith, Earl of

    Kedward, R. M. (Kent, Ashford)

    Samuel, A. M. (Surrey, Farnham)

    Dairymple-White, Lt.-Col. Sir Godfrey

    Kindersley, Major G. M.

    Samuel, Rt. Hon. Sir H. (Darwen)

    Davidson, Rt. Hon. J. (Hertford)

    Knight, Holford

    Sandeman, Sir N. Stewart

    Davies, Dr. Vernon

    Knox, Sir Alfred

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Davies, Maj. Geo- F. (Somerset, Yeovil)

    Lamb, Sir J. Q.

    Savery, S. S.

    Dawson, Sir Philip

    Lambert, Rt. Hon. George (S. Molton)

    Shakespeare, Geoffrey H.

    Shepperson, Sir Ernest Whittome

    Sueter, Rear-Admiral M. F.

    Warrender, Sir Victor

    Simms, Major-General J.

    Taylor, Vice-Admiral E. A.

    Waterhouse, Captain Charles

    Skelton, A. N.

    Thomas, Rt. Hon. J. H. (Derby)

    Wells, Sydney R.

    Smith, Louis W. (Sheffield, Ha am)

    Thomas, Major L. B. (King's Norton)

    Williams, Charles (Devon, Torquay)

    Smith-Carlington, Neville W.

    Thompson, Luke

    Wilson, G. H. A. (Cambridge U.)

    Smithers, Waldron

    Thomson, Sir F.

    Windsor-Clive, Lieut.-Colonel George

    Snowden, Rt. Hon. Philip

    Thomson, Mitchell-, Rt. Hon. Sir W

    Winterton, Rt. Hon. Earl

    Somerville, A. A. (Windsor)

    Train, J.

    Womersley, W. J.

    Southby, Commander A. R. J.

    Tryon, Rt. Hon. George Clement

    Wood, Rt. Hon. Sir Kingsley

    Spender-Clay, Colonel H.

    Turton, Robert Hugh

    Wood, Major McKenzie (Banff)

    Stanley, Lord (Fylde)

    Vaughan-Morgan, Sir Kenyon

    Young, Rt. Hon. Sir Hilton

    Stanley, Hon. O. (Westmorland)

    Wallace, Capt. D. E. (Hornsey)

    Stewart, W. J. (Belfast South)

    Walters, Rt. Hon. Sir J. Tudor

    TELLERS FOR THE AYES.—

    Stuart, Hon. J. (Moray and Nairn)

    Ward, Lieut.-Col. Sir A. Lambert

    Major the Marquess of Titchfield and Mr. Glassey.

    NOES.

    Adamson, W. M. (Staff., Cannock)

    Jones, Morgan (Caerphilly)

    Potts, John S.

    Alpass, J. H.

    Jowett, Rt. Hon. F. W.

    Price, M. P.

    Ammon, Charles George

    Kelly, W. T.

    Raynes, W. R.

    Attlee, Clement Richard

    Kennedy, Rt. Hon. Thomas

    Richards, R.

    Batey, Joseph

    Kenworthy, Lt.-Com. Hon. Joseph M.

    Richardson, R. (Houghton-le-Spring)

    Beckett, John (Camberwell, Peckham)

    Lansbury, Rt. Hon. George

    Riley, F. F. (Stockton-on-Tees)

    Bennett, William (Battersea, South)

    Law, Albert (Bolton)

    Ritson, J.

    Benson, G.

    Law, A. (Rossendale)

    Romer l, H. G.

    Brockway, A. Fenner

    Lawrence, Susan

    Rowson, Guy

    Bromfield, William

    Lawson, John James

    Samuel, H. Walter (Swansea, West)

    Brothers, M.

    Lawther, W. (Barnard Castle)

    Sanders, W. S.

    Buchanan, G.

    Leach, W.

    Sandham, E.

    Buxton, C. R. (Yorks, W. R. Elland)

    Lee, Frank (Derby, N.E.)

    Scrymgeour, E.

    Cape, Thomas

    Leonard, W.

    Sexton, Sir James

    Charleton, H. C.

    Lewis, T. (Southampton)

    Shepherd, Arthur Lewis

    Chater, Daniel

    Lloyd, C. Ellis

    Sherwood, G. H.

    Clynes, Rt. Hon. John R.

    Logan, David Gilbert

    Shield, George WiIliam

    Cocks, Frederick Seymour

    Longbottom, A. W.

    Shiels, Dr. Drummond

    Compton, Joseph

    Longden, F.

    Shillaker, J. P.

    Cove, William G.

    Lunn, William

    Shinwell, E.

    Daggar, George

    Macdonald, Gordon (Ince)

    Short, Alfred (Wednesbury)

    Dallas, George

    McElwee, A.

    Simmons, C. J.

    Davies, D. L. (Pontypridd)

    McEntee, V. L.

    Smith, Frank (Nuneaton)

    Davies, Rhys John (Westhoughton)

    McShane, John James

    Smith, Tom (Pontefract)

    Duncan, Charles

    Mansfield, W.

    Sorensen, R.

    Ede, James Chuter

    March, S.

    Stanford, Thomas W.

    Edmunds, J. E.

    Marley, J.

    Stephen, Campbell

    Edwards, C. (Monmouth, Bedwellty)

    Marshall, Fred

    Sutton, J. E.

    Edwards, E. (Morpeth)

    Mathers, George

    Taylor, R. A. (Lincoln)

    Gardner, B. W. (West Ham, Upton)

    Maxton, James

    Taylor, W. B. (Norfolk, S.W.)

    Gibbins, Joseph

    Messer, Fred

    Thorne, W. (West Ham. Plai taw)

    Gibson, H. M. (Lanes, Mossley)

    Mills, J. E.

    Thurtle, Ernest

    Gossling, A. G.

    Milner, Major J.

    Tillett, Ben

    Gould, F.

    Montague, Frederick

    Tinker, John Joseph

    Graham, Rt. Hon. Wm. (Edln., Cent.)

    Morley, Ralph

    Tout, W. J.

    Grenfell, D. R. (Glamorgan)

    Morrison, Rt. Hon. H. (Hackney, S.)

    Vaughan, David

    Grundy, Thomas W.

    Morrison, Robert C. (Tottenham, N.)

    Viant, S. P.

    Hall, F. (York, W.R., Normanton)

    Muff, G.

    Wallace, H. W.

    Hall, G. H. (Merthyr Tydvil)

    Muggeridge, H. T.

    Watkins, F. C.

    Hall, J. H. (Whitechapel)

    Murnin, Hugh

    Watts-Morgan, Lt.-Col. D. (Rhondda)

    Hamilton, Mary Agnes (Blackburn)

    Naylor, T. E.

    Wellock, Wilfred

    Hardle, David (Ruther'glen)

    Noel Baker, P. J.

    Whiteley, Wilfrid (Blrm, Ladywood)

    Hardle, G. D. (Springburn)

    Noel Buxton, Baroness (Norfolk, N.)

    Whiteley, William (Blaydon)

    Hirst, G. H. (York W. R. Wentworth)

    Oliver, George Harold (Ilkeston)

    Williams, David (Swansea, East)

    Hirst, W. (Bradford, South)

    Palin, John Henry

    Williams, E. J. (Ogmore)

    Hoffman, P. C.

    Paling, Wilfrid

    Williams, Dr. J. H. (Llanelly)

    Hollins, A.

    Parkinson, John Allen (Wigan)

    Williams, T. (York, Don Valley)

    Hopkin, Daniel

    Perry, S. F.

    Wilson, J. (Oldham)

    Hudson, James H. (Huddersfield)

    Pethick-Lawrence, F. W.

    Wilson, R. J. (Jarrow)

    Isaacs, George

    Phillips, Dr. Marion

    John, William (Rhondda, West)

    Picton-Tubervill, Edith

    TELLERS FOR THE NOES.—

    Johnston, Rt. Hon. Thomas

    Pole, Major D. G.

    Mr. B. Smith and Mr. Hayes.

    Mr. HAYES: I beg to move, in page 3, to leave out line 6.
    I will be as brief as possible because I am anxious to give the Home Secretary as much time as I can to reply. Let me put one or two questions to the right hon. Gentleman; they can serve as my speech. I want him to make clear whether it is proposed to abrogate the provisions in the Police Act for calling together the
    1990
    Police Council to discuss with him any alterations he may propose to make. The Police Council consists of representatives of all ranks of the police force and of local authorities who have to administer the Police Act, and in that sense it is a consultative body and acts in an advisory capacity. I waist to know whether he proposes to take powers to continue this help from the Police Council

    1991
    or whether by Orders in Council he is going to dispense with their services entirely. In the White Paper there is a reference to the procedure by which economies are to be effected. The first is an Amendment of Section 4 of the Police Act, 1919, which has reference to the question I have just raised, and the other is that Section 6 of the Police Pensions Act is to be amended. I hope the right hon. Gentleman will make clear the extent of this proposed Amendment. Clause 1 of the Bill itself refers to the remuneration—
    "otherwise than by way of pension assessed before the commencement of this Act of persons in His Majesty's Service."
    12 n.
    It is a doubtful point in many people's minds whether the police service is one of His Majesty's Services. Perhaps the right hon. Gentleman will make that point clear. I understand it is possible that the police service may not now be regarded as one of the Services, although they are subject to the inspection of an inspector of His Majesty's Constabulary. In addition para (d) refers to
    "the modification or termination of statutory or contractual rights."
    I want to know whether this para will apply to the police force. If not, I see no reason for the police to be included in the Schedule. Will the right hon. Gentleman also say whether the proposals to meet the economies set forth in the May Report and the proposals of the Home Office will have any effect on the pensions of the personnel of the service. There is a real sense of anxiety about this point. One of the reasons is that the occupation of a police officer is different to the majority of other professions. The health of the policeman has to be maintained almost throughout the whole of his service. In the course of his calling some trivial circumstance may cause injury to an eye or the twisting of an arm, which a surgical operation may not be able to put right, and that renders him liable to be taken away from his livelihood in the service for the rest of his life. The policeman's record of medical health is carefully preserved. If he be subject to continual illnesses, such as those of bronchial character, he might find himself suddenly placed in the position that owing to failing health he has to retire, although in any other occu-
    1992
    pation that illness would probably not handicap him. That makes his future and the preservation of the pension standard a matter of serious regard to him.
    We are entitled to ask the Home Secretary to make it clear that the mentality responsible for certain recommendations of the May Report—I have in mind a recommendation with regard to future pensions—is not the mind of the Home Office. The May Committee recommended that the rights of voluntary retirement be extended from 25 years' service to the age of 50. I do not think the Home Secretary will be much bothered about that, because a few years ago the service of the police officer was by Act of Parliament prolonged for four years. It is almost impossible now, under existing conditions, for any police officer to retire on pension until he reaches the age of 50. But the fact that there is a further recommendation that the whole subject of police pensions should be reviewed at a very early date does call for some statement from the Home Secretary that he will not follow the line of breaking the contracts in Schedules to the previous Acts.
    There is also the question of the treatment to be meted out to new entrants. The recommendation, and indeed the declaration to the Police Council by the right hon. Gentleman, is that the pay of the new entrants shall be subject to nearly 21½ per cent. cut. Fifteen shillings per week is to be the reduction in the starting pay of the new entrant. That brings the new entrant down to a net pay of about 50s. a week. Is this to be an emergency cut or is it to be a cut of a permanent character? In any case whatever cut it is, the fact that you are going to have men serving in the police alongside each other with fundamentally different rates of pay, is not calculated to make either for harmony or for efficiency.
    So impressed with this differentiation and the ill effect of it were the members of the Desborough Committee that they applied their minds to this phase of conditions in the service before anything else, and they made a specific recommendation to the effect that in their opinion this differentiation was responsible mainly for the disturbed state of affairs that had existed for so long in the police. Because of that, they went

    1993
    wholeheartedly for a standardisation of fundamental rates, and recommended in a definite way that there should be no such differentiation as between one class in the service and another. If there is another argument that ought to be adduced against a new entrants' rate less than the existing rate, it is that in the days to come, as has been shown in the May Report, the lower rate of pay tends to become the demand for the maximum rate for other personnel. It is suggested in the May Report that not only with regard to the police but in other Services what at one time was regarded as the new rate for entrants should eventually become an argument why all the rates should be brought down to that scale. I hope the right hon. Gentleman will be able to make it quite clear that the new entrants' pay is to be limited for a certain period, and that the new entrants will automatically reach the existing scale throughout the service.
    Then as to the monentary value of the cuts to be made, what is meant by the term "reserved for further consideration" on the second page? Is there to be any machinery appointed in order that the abolition of these cuts might be brought about within a reasonable time? There is one Member of this House, the hon. Member for St. Helens (Sir J. Sexton), who was a Member of the Des-borough Committee, and I am certain that he can confirm without any reservation the statement that the main basis of the Desborough Committee's recommendation was that the pay of the police should not be put on a level which would have relation merely to the cost of living, but generally and wholeheartedly that it was the creation of an entirely new status to set right the sad state of affairs existing hitherto.
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel): I am grateful to the hon. Member for an opportunity to reply to a number of points which I know have aroused very great interest and some concern throughout the police force. I will reply to all these questions as succinctly as I can within the time allowed to me, in order to allow time for further observations from the other side of the Committee. The recommendations of the May Committee were, roughly, that police pay should be reduced in the aggregate by
    1994
    about £1,570,000, and pensions by about £560,000; that of that sum of rather more than £2,000,000 one half should be obtained in the first year and the whole sum in the second year. As the Committee know, one half of that economy would accrue to the Exchequer and the other half to the local authorities. The late Government had included in their plan of economies a general support of this proposal, but as in other cases the actual method for securing the economies was left for further consideration. When I came to the Home Office I found that my predecessor had already made arrangements for the summoning of the Police Council in order that these suggestions should be considered, and if possible that they should be put in a form which would be—I will not say most acceptable but least unacceptable to those effected.
    Considerable changes have been made in the application of the May Committee's recommendation. In the first place it is not proposed to carry out the proposal that pensions should be cut by £56,000. Police pensions are to be left unimpaired by the economies now being made. In the second place the Police Council preferred that the reductions instead of being made by way of a percentage reduction of pensionable pay or deductions from pay, should be made by means of a flat rate cut, and the Police Council 'allocated the proportions of that cut between the various ranks of the force. Furthermore the Home Office and the Police Council agreed that instead of the whole of these economies falling upon the pay of the various ranks of the force, as much as possible should be effected by administrative economies. Arrangements have already been made to economise to the extent of £100,000 and a number of other suggestions are under detailed consideration, including a series of suggestions made by the hon. Member for Edge Hill (Mr. Hayes) on previous occasions. All these are now being examined minutely. There is a further modification in the May Committee's recommendation. They proposed that the period of service before retirement upon pension should be compulsorily extended. That recommendation is not being adopted in our proposals.
    Lastly, the change announced by the Prime Minister on 21st September has

    1995
    reduced all round the cuts that were previously proposed, and the consequent reduction of savings will be about £120,000, reducing the receipts in England and Wales to £780,000. That is for the first year. As for the second year the hon. Member bas said that the question of the procedure to be adopted is reserved for further consideration. We hope during the period that will elapse before any further measures are taken, to have an opportunity of very full consultation with the representatives of the police and of the local authorities. Pending that consultation we have not come to any conclusion, even a tentative conclusion as to the manner in which further economies might be effected. The hon. Member asked a question with regard to new entrants. That is also one of the questions which is reserved for consideration but meantime as men will be coming into the various local forces day by day and week by week, it is necessary, provisionally, to propose some figure, which might be open to consideration after the consultations to which I have referred. That figure was adopted by the Police Council and put in provisionally, reference to action to be taken by the local authorities meanwhile. The hon. Member asked whether the provision in the Bill dealing with contractual obligations to persons in His Majesty's services applied to the police force. It does not. The police force is not included in His Majesty's services. Most of the police are, of course, in the local police forces.
    Then the hon. Member asked why, if that provision is not intended to apply to the police, it should be mentioned in the Schedule and why should there be any Orders in Council at all? The reasons are these. Section 4 of the Police Act is to be amended, not in order to secure the general reduction of pay to which I have referred. That can be effected by regulation of the Home Office under the Act. It does not need new powers under the Orders in Council. One need for new powers under the Orders in Council is in consequence of the fact that there are persons employed by the police authorities whose pay is not police pay in the ordinary sense of the word. There are civilian clerks, medical officers, and a few others, not in the ordinary ranks of
    1996
    the police force, to whom these economies should in equity apply, together with others serving under the same authority and it is necessary to take powers under the Orders in Council to deal with these exceptional classes.
    Secondly, the whole field of police expenditure is to be reviewed apart from pay, in order, as I have said, to effect administrative economies. It is possible, perhaps probable, that in certain respects special powers, not covered by the existing Police Acts will have to be taken to effect these administrative economies and for safety sake those powers are being taken under this Schedule. Thirdly the hon. Member asked why the Pensions Act Section 6 was mentioned and did that mean any cut in pensions. No, it does not, but powers have to be taken under the Orders in Council to amend Section 6 for this reason. There is a provision under the present law that after a man has served for the period entitling him to pension—25 years—his pension may be secured to him by the police authority, so that even if he commits some offence, or, with very few exceptions, if he commits any disciplinary offence, or his pay is reduced, or anything untoward happens to him in the police force—whatever may occur to him his pension as from that date is absolutely secure and he need have no anxiety about it at all.
    That has been done in order to induce men to stay on even when they are qualified for their pension. They could retire if they liked, but this is done in order to induce them to stay on if they are valuable servants of the police authority, for a further period of years, without feeling all the time "I may be risking my pension if I do stay." But there is a provision in the Act which allows local authorities not only to secure pensions, but to give a special allowance of non-pensionable pay not exceeding 12½ per cent., in addition to the ordinary pay. This has nothing to do with the pension. The men are simply told "If you stay on, you will not only be securing your pension but we shall be willing to give you an extra 2s. 6d. in the on your pay to induce you to stay."
    Lieut.-Colonel WATTS-MORGAN: A bonus.
    Sir H. SAMUEL: Yes, a bonus, as the hon. and gallant Member suggests.
    Mr. HAYES: It does net apply to the Metropolitan Police.
    Sir H. SAMUEL: No, it does not apply to the Metropolitan Police. It has been thought by members of the Police Council and others that it is not advisable, when economy is so necessary to continue this extra bonus pay of 12½ per cent., but if the power still remains various police authorities will be tempted to do it. Unless there is some uniform rule there will be that inequality in the administration of the police force which everybody is desirous of bringing to a minimum. Consequently power is being taken to abolish this extra 12½ per cent. bonus—not pension—but it has to he done under the Section of the Act which relates to pensions, and that is the only reason why pensions are mentioned in the White Paper and covered by the Schedule.
    I should like to give this specific and definite assurance that there is no intention of using any power under the Orders in Council or under this Bill to affect policemen's pensions in any way. The hon. Member also asked whether the Order in Council would contemplate repealing the Sub-section of the Act of 1919 which requires the reference of certain matters in certain cases to the Police Council before any regulations are made. It is not intended to do anything of the kind. The status and functions of the Police Council will not be affected in any way. The Home Office regards the Police Council and, I will add, the Police Federation, as very useful bodies and, for my part, I would certainly not in any way affect their status. The police force is a disciplined force and they are expected to act with restraint and responsibility, but there is a corresponding duty on the Home Office to consider with careful attention all representations made through the proper authorised channels on all matters which affect the interests of the men who are serving. There is no intention to establish any system of arbitrary decrees. We wish to proceed in all cases on the lines of full consultation and, wherever possible, cordial co-operation.
    I would say in conclusion that I, for my part, deeply regret in all this matter not only that these cuts should have been made necessary, but also that they should have been announced without full prior consultation with the Police Council and
    1998
    the Police Federation. The action that has been taken in this case must not be regarded as a precedent. It was only justified by extreme urgency and by the necessity of at once informing the Chancellor of the Exchequer of what economies he could look forward to in order to secure a balanced Budget. The police may feel, if they have legitimate ground for complaint in this matter, that all other classes affected by the economies covered by this Bill have been similarly aggrieved and that their complaint is really a general one and arises out of the stern necessities of the case.
    Mr. CLYNES: The right hon. Gentleman, the Home Secretary, has indicated to the Committee that before I left office as his predecessor I called together the Police Council to consider the suggested reductions. That is true, but that act must not be construed as indicating on my part approval of such redactions as had been suggested, and a memorandum is in existence, which probably the right hon. Gentleman has seen, or certainly could see, to corroborate fully what I say. I agree that the right hon. Gentleman has evidently taken steps which tend to soften the blow, and I think I can say for all of us on this side that we welcome the attitude which he has displayed in respect to carrying through a very disagreeable task indeed.
    Policemen in former years were monstrously underpaid, and I hope he will regard these cuts as only temporary and that no character of permanency will adhere to them. Praises of the police were expressed loudly and in sustained terms by the Desborough Committee, which had full opportunity to inquire into what their position was as far back as 1919, and the substance of those praises is, I think, that there rests upon the policeman a greater degree of individual responsibility than in the ease of any other public servant who may at times be called upon to act in a collective capacity. His character, his conduct, his general attributes and qualifications for his duties must be very high, indeed beyond reproach in any and every form, and it was because these facts became recognised that the police were raised substantially in point of status and in point of remuneration.
    I have only one other word to say, as time does not allow of any further dis-

    1999
    cussion on this point. It is that I hope the right hon. Gentleman will keep in the closest touch, not only with the Police Council, but, as far as opportunity may permit, with the Police Federation, an extremely useful and, I think I may say, enlightened body in respect of the general conduct and work of the police force. Finally, let me say that I regret to see the announcement in this morning's papers of the enforced retirement of Lord Byng—
    Sir H. SAMUEL: Enforced by ill-health.
    Mr. CLYNES: Yes. To that I would add that his state of health has compelled him to discontinue his extremely serviceable public duties. His great administrative ability, his personality, his qualities in the government of men raised the tone and the serviceableness of the London police force. That force will be the poorer for his loss, and I think we may congratulate him upon the great service which at much sacrifice he has rendered to the country.
    Mr. MILLS: I wish to ask the Home Secretary whether, in view of the very friendly attitude that he has taken up this morning, he will institute an inquiry into the rents that have to be paid by young constables all over the Metropolitan area. Only this week there is a case from Woolwich of three constables who are paying 25s. a week for three rooms, and I hope those facts will be taken into consideration by the right hon. Gentleman.
    Lieut.-Colonel WATTS-MORGAN: The county councils are very much obliged to the Home Secretary and desire to thank him for—
    It being Half-past Twelve of the Clock, the CHAIRMAN proceeded, pursuant to the Order of the Rouse of the 22nd September, to put forthwith the Question on, the Amendment already proposed from the Chair.
    Question put, "That the word 'Police' stand part of the Schedule."
    The Committee divided: Ayes, 259; Noes, 180.

    Division No. 496.]

    AYES.

    [12.30 pm.

    Acland-Troyte, Lieut.-Colonel

    Cayzer, Maj. Sir Herbt. R.(Prtsmth, S.)

    Fielden, E. B.

    Ainsworth, Lieut.-Col. Charles

    Cazalet, Captain Victor A.

    Foot, Isaac

    Albery, Irving James

    Cecil, Rt. Hon. Lord H. (Ox. Univ.)

    Ford, Sir P. J.

    Alexander, Sir Wm. (Glasgow, Cent'l)

    Chadwick, Capt. Sir Robert Burton

    Forestier-Walker, Sir L.

    Allen, Sir J. Sandeman (Liverp'l., W.)

    Chamberlain Rt.Hn.Sir J.A.(Blrm.,W.)

    Fremantle, Lieut.-Colonel Francis E.

    Amery, Rt. Hon. Leopold C. M. S.

    Chamberlain, Rt. Hon. N.(Edgbaston)

    Galbraith, I. F. W.

    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

    Chapman, Sir S.

    Ganzoni, Sir John

    Astor, Maj. Hon. John J.(Kent, Dover)

    Christie, J. A.

    Gault, Lieut. Col. A. Hamilton

    Atholl, Duchess of

    Clydesdale, Marquess of

    George, Major G. Lloyd (Pembroke)

    Atkinson, C.

    Cobb, Sir Cyril

    George, Megan Lloyd (Anglesea)

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Cohen, Major J. Brunel

    Gibson, C. G. (Pudsey & Otley)

    Balfour, George (Hampstead)

    Colman, N. C. D.

    Gillett. George M.

    Balfour, Captain H. H. (I. of Thanet)

    Colville, Major D. J.

    Gilmour, Lt.-Col. Rt. Hon. Sir John

    Balniel, Lord

    Conway, Sir W. Martin

    Glyn, Major R. G. C.

    Beamish, Rear-Admiral T. P. H.

    Cooper, A. Duff

    Gower, Sir Robert

    Bellairs, Commander Carlyon

    Cranborne, Viscount

    Graham, Fergus (Cumberland, N.)

    Berry, Sir George

    Crichton-Stuart, Lord C.

    Grattan-Doyle, Sir N.

    Betterton, Sir Henry B.

    Croft, Brigadier-General Sir H.

    Gray, Milner

    Bevan, S. J. (Holborn)

    Crookshank, Capt. H. C.

    Greene, W. P. Crawford

    Birchall, Major Sir John Dearman

    Croom-Johnson, R. P.

    Grenfell, Edward C. (City of London)

    Birkett, W. Norman

    Culverwell, C. T. (Bristol, West)

    Gretton, Colonel Rt. Hon. John

    Boothby, R. J. G.

    Cunliffe-Lister, Rt. Hon. Sir Philip

    Griffith, F. Kingsley (Middlesbro' W.)

    Bowater, Col. Sir T. Vansittart

    Dalkeith, Earl of

    Gritten, W. G. Howard

    Bowyer, Captain Sir George E. W.

    Dairymple-White, Lt.-Col. Sir Godfrey

    Gunston, Captain D. W.

    Boyce, Leslie

    Davidson, Rt. Hon. J. (Hertford)

    Hacking, Rt. Hon. Douglas H.

    Bracken, B.

    Davies, Dr. Vernon

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Braithwaite, Major A. N.

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Hamilton, Sir George (Ilford)

    Briscoe, Richard George

    Dawson Sir Philip

    Hamilton, Sir R. (Orkney & Zetland)

    Broadbent, Colonel J.

    Denman, Hon. R. D.

    Hanbury, C.

    Brown, Ernest (Leith)

    Despencer-Robertson, Major J. A. F.

    Hannon, Patrick Joseph Henry

    Brown, Brig.-Gen.H.C.(Berks, Newb'y)

    Dlxey, A. C.

    Harbord, A.

    Buchan, John

    Duckworth, G. A. V.

    Hartington, Marquess of

    Buchan-Hepburn, P. G. T.

    Dugdale, Capt. T. L.

    Harvey, Major S. E. (Devon, Totnes)

    Bullock, Captain Malcolm

    Dudgeon, Major C. R.

    Haslam, Henry C.

    Burton, Colonel H. W.

    Eden, Captain Anthony

    Heneage, Lieut.-Colonel Arthur P.

    Butler, R. A.

    Edmondson, Major A. J.

    Hennessy, Major Sir G. R. J.

    Butt, Sir Alfred

    Elliot, Major Walter E.

    Hills, Major Rt. Hon. John Waller

    Cadogan, Major Hon. Edward

    Elmley, Viscount

    Hope, Sir Harry (Forfar)

    Calne, Hall-, Derwent

    Erskine, Lord (Somerset, Weston-s. M.)

    Hore-Belisha, Leslie.

    Campbell, E. T.

    Evans, Capt. Ernest (Welsh Univer.)

    Home, Rt. Hon. Sir Robert S.

    Carver, Major W. H.

    Everard, W. Lindsay

    Howard-Bury, Colonel C. K.

    Castle Stewart, Earl of

    Fade, Sir Bertram G.

    Hudson, Capt. A. U. M. (Hackney, N.)

    Cayzer, Sir C. (Chester, City)

    Ferguson, Sir John

    Hurd, Percy A.

    Hurst, Sir Gerald B.

    Muirhead, A. J.

    Simms, Major-General J.

    Hutchison, Maj.-Gen. Sir R.

    Nail-Cain, A. R. N.

    Simon, Rt. Hon. Sir John

    Inskip, Sir Thomas

    Nathan, Major H. L.

    Sinclair, Rt, Hon. Sir A. (Caithness)

    Iveagh, Countess of

    Newton, Sir D. G. C. (Cambridge)

    Skelton, A. N.

    Jones, Llewellyn-, F.

    Nicholson, O. (Westminster)

    Smith, Louis W. (Sheffield, Hallam)

    Jones, Sir G. W. H. (Stoke New'gton)

    Nicholson, Col. Rt.Hn.W.G.(Ptrsf'ld)

    Smith-Carington, Neville W.

    Jones, Rt. Hon Leif (Camborne)

    O'Connor, T. J.

    Smithers, Waldron

    Jowitt, Rt. Hon. Sir W. A. (Preston)

    Oliver, P. M. (Man., Blackley)

    Somerville, A. A. (Windsor)

    Kedward, R. M. (Kent, Ashford)

    Oman, Sir Charles William C.

    Southby, Commander A. R. J.

    Kindersley, Major G. M.

    Ormsby-Gore, Rt. Hon. William

    Spender-Clay, Colonel H.

    Knight, Holford

    Owen, Major G. (Carnarvon)

    Stanley, Lord (Fylde)

    Knox, Sir Alfred

    Peake, Capt. Osbert

    Stanley, Hon. O. (Westmorland)

    Lamb, Sir J. Q.

    Penny, Sir George

    Steel-Maitland, Rt. Hon. Sir Arthur

    Lambert, Rt. Hon. George (S. Molton)

    Percy, Lord Eustace (Hastings)

    Stewart, W. J. (Belfast South)

    Lane Fox, Col. Rt. Hon. George R.

    Perkins, W. R. D.

    Stuart, Hon. J. (Moray and Nairn)

    Leighton, Major B. E. P.

    Peters, Dr. Sidney John

    Sueter, Rear-Admiral M. F.

    Lewis, Oswald (Colchester)

    Peto, Sir Basil E. (Devon, Barnstaple)

    Thomas, Rt. Hon. J. H. (Derby)

    Llewellin, Major J. J.

    Power, Sir John Cecil

    Thomas, Major L. B. (King's Norton)

    Locker-Lampson, Rt. Hon. Godfrey

    Pownall, Sir Assheton

    Thompson, Luke

    Locker-Lampton, Com. O.(Handsw'th)

    Purbrick, R.

    Thomson, Sir F.

    Long, Major Hon. Eric

    Pybus, Percy John

    Thomson, Mitchell-, Rt. Hon. Sir W,

    Lovat-Fraser, J. A.

    Ramsay, T. B. Wilson

    Titchfield, Major the Marquess of

    Lymington, viscount

    Ramsbotham, H.

    Todd, Capt. A. J.

    MacDonald, Malcolm (Bassetlaw)

    Rathbone, Eleanor

    Train, J.

    Macdonald, Sir M. (Inverness)

    Rawson, Sir Cooper

    Tryon, Rt. Hon. George Clement.

    Macdonald, Capt. P. D. (I. of W.)

    Reid, David D. (County Down)

    Turton, Robert Hugh

    Maclean, Sir Donald (Cornwall, N.)

    Rentoul, Sir Gervals S.

    Vaughan-Morgan, Sir Kenyon

    Macpherson, Rt. Hon. James I.

    Reynolds, Col. Sir James

    Wallace, Capt. D. E. (Hornsey)

    Macquisten, F. A.

    Rhys, Hon. C. A. U.

    Walters, Rt. Hon. Sir J. Tudor

    Maitland, A. (Kent, Faversham)

    Richardson, Sir P. W. (Sur'y, Ch't'ey)

    Ward, Lieut.-Col. Sir A. Lambert

    Makins, Brigadier-General E.

    Roberts, Sir Samuel (Ecclesall)

    Waterhouse, Captain Charles

    Mander, Geoffrey le M.

    Rodd, Rt. Hon. Sir James Rennell

    Wayland, Sir William A.

    Margesson, Captain H. D.

    Rosbotham, D. S. T.

    Wells, Sydney R.

    Marjoribanks, Edward

    Ross, Ronald D.

    Williams, Charles (Devon, Torquay)

    Markham, S. F.

    Russell, Alexander West (Tynemouth)

    Wilson, G. H. A. (Cambridge U.)

    Mason, Colonel Glyn K.

    Russell, Richard John (Eddisbury)

    Windsor-Clive, Lieut.-Colonel George

    Merriman, Sir F. Boyd

    Salmon, Major I.

    Winterton, Rt. Hon. Earl

    Milne, Wardlaw-, J. S.

    Samuel, A. M. (Surrey, Farnham)

    Womersley, W. J.

    Mitchell, Sir W. Lane (Streatham)

    Samuel, Rt. Hon. Sir H. (Darwen)

    Wood, Rt. Hon. Sir Kingsley

    Monsell, Eyres, Com. Rt. Hon. Sir B.

    Sandeman, Sir N. Stewart

    Wood, Major McKenzie (Banff)

    Moore, Lieut.-Colonel T. C. R. (Ayr)

    Sassoon, Rt. Hon. Sir Philip A. G. D.

    Young, Rt. Hon. Sir Hilton

    Morris, Rhys Hopkins

    Savery, S. S.

    Morris-Jones, Dr. J. H. (Denbigh)

    Shakespeare, Geoffrey H.

    TELLERS FOR THE AYES.—

    Morrison, W. S. (Glos., Cirencester)

    Shepperson, sir Ernest Whittome

    Mr. Classey and Sir Victor Warrender.

    NOES.

    Adamson, W. M. (Stall., Cannock)

    Forgan, Dr. Robert

    Law, Albert (Bolton)

    Addison, Rt. Hon. Dr. Christopher

    Gardner, B. W. (West Ham, Upton)

    Law, A. (Rossendale)

    Alpass, J. H.

    Gibbins, Joseph

    Lawrence, Susan

    Ammon, Charles George

    Gibson, H. M. (Lancs, Mossley)

    Lawson, John James

    Arnott, John

    Gossling, A. G.

    Lawther, W. (Barnard Castle)

    Attlee, Clement Richard

    Gould, F.

    Leach, W.

    Ayles, Walter

    Graham, Rt. Hon. Wm. (Edln., Cent.)

    Lee, Frank (Derby, N.E.)

    Barnes, Alfred John

    Grenfell, D. R. (Glamorgan)

    Lee, Jennie (Lanark, Northern)

    Batey, Joseph

    Groves, Thomas E.

    Leonard, W.

    Beckett, John (Camberwell, Peckham)

    Grundy, Thomas W.

    Lewis, T. (Southampton)

    Bennett, William (Battersea, South)

    Hall, F. (York, W.R., Normanton)

    Lloyd, C. Ellis

    Benson, G.

    Hall, G. H. (Merthyr Tydvil)

    Logan, David Gilbert

    Bowen, J. w.

    Hall, J. H. (Whitechapel)

    Longbottom, A. W.

    Bromfield, William

    Hall, Capt. W. G. (Portsmouth, C.)

    Longden, F.

    Brothers, M.

    Hamilton, Mary Agnes (Blackburn)

    Lunn, William

    Buchanan, G.

    Hardle, David (Rutherglen)

    Macdonald, Gordon (Ince)

    Burgess, F. G.

    Hardle, G. D. (Springburn)

    McElwee, A.

    Buxton, C. R. (Yorks, W. R. Elland)

    Hastings, Dr. Somerville

    McEntee, V. L.

    Cape, Thomas

    Hayday, Arthur

    McShane, John James

    Chater, Daniel

    Henderson, Joseph (Ardwick)

    Mansfield, W.

    Cluse, W. S.

    Hirst, G. H. (York W. R. Wentworth)

    March, S.

    Clynes, Rt. Hon. John R.

    Hirst, W. (Bradford, South)

    Marley, J.

    Cocks, Frederick Seymour

    Hoffman, P. C.

    Marshall, Fred

    Compton, Joseph

    Hollins, A.

    Mathers, George

    Cove, William G.

    Hopkin, Daniel

    Maxton, James

    Cripps, Sir Stafford

    Horrabin, J. F.

    Messer, Fred

    Daggar, George

    Hudson, James H. (Huddersfield)

    Middleton, G.

    Dallas, George

    Isaacs, George

    Mills, J. E.

    Dalton, Hugh

    John, William (Rhondda, West)

    Milner, Major J.

    Davies, D. L. (Pontypridd)

    Johnston, Rt. Hon. Thomas

    Montague, Frederick

    Davies, Rhys John (Westhoughton)

    Jones, Morgan (Caerphilly)

    Morley, Ralph

    Duncan, Charles

    Jowett, Rt. Hon. F. W.

    Morrison, Rt. Hon. H. (Hackney, S.)

    Dunnico, H.

    Kelly, W. T.

    Morrison, Robert C. (Tottenham, N.)

    Ede, James Chuter

    Kennedy, Rt. Hon. Thomas

    Mort, D. L.

    Edmunds, J. E.

    Kenworthy, Lt.-Com. Hon. Joseph M.

    Mosley, Lady C. (Stoke-on-Trent)

    Edwards, C. (Monmouth, Bedwellty)

    Lansbury, Rt. Hon. George

    Mosley, Sir Oswald (Smethwick)

    Edwards, E. (Morpeth)

    Lathan, G. (Sheffield, Park)

    Muff, G.

    2002

    2003

    Muggeridge, H. T.

    Samuel, H. Walter (Swansea, West)

    Thurtle, Ernest

    Murnin, Hugh

    Sanders, W. S.

    Tillett, Ben

    Naylor, T. E.

    Sandham, E.

    Tinker, John Joseph

    Noel Baker, P. J.

    Scrymgeour. E.

    Tout, W. J.

    Noel-Buxton, Baronets (Norfolk, N.)

    Sexton, Sir James

    Vaughan, David

    Oldfield, J. R.

    Shepherd, Arthur Lewis

    Viant, S. P.

    Oliver, George Harold (Ilkeston)

    Sherwood, G. H.

    Wallace, H. W.

    Pal n, John Henry

    Shield, George William

    Watkins, F. G.

    Paling, Wilfrid

    Shiels, Dr. Drummond

    Watts-Morgan, Lt.-Col. D. (Rhondd)

    Parkinson, John Allen (Wigan)

    Shillaker, J. F.

    Wellock, Wilfred

    Perry, S. F.

    Shinwell, E.

    West, F. R.

    Pethick-Lawrence, F. W.

    Short, Alfred (Wednesbury)

    Whiteley, Wilfrid (Blrm., Ladywood)

    Phillips, Dr. Marlon

    Simmons, c. J.

    Whiteley, William (Blaydon)

    Picton-Turbervill, Edith

    Smith, Ben (Bermondsey, Rotherhithe)

    Williams, David (Swansea, East)

    Pole, Major D. G.

    Smith, Frank (Nuneaton)

    Williams, E. J. (Ogmore)

    Potts, John S.

    Smith, Lees-, Rt. Hon.H.B.(Keighley)

    Williams Dr. J. H. (Llanelly)

    Price, M. P.

    Smith, Tom (Pontefract)

    Williams, T. (York, Don Valley)

    Raynes, W. R.

    Sorensen, R.

    Wilson, J. (Oldham)

    Richards, R.

    Stamford, Thomas W.

    Wilson, R. J. (Jarrow)

    Richardson, R. (Houghton-le-Spring)

    Stephen, Campbell

    Wise, E. F.

    Riley, F. F. (Stockton-on-Tees)

    Sutton, J. E.

    Young, Sir R. (Lancaster, Newton)

    Ritson, J.

    Taylor, R. A. (Lincoln)

    Romeril, H. G.

    Taylor. W. B. (Norfolk, S.W.)

    TELLERS FOR THE NOES.—

    Rowson, Guy

    Thorne, W. (West Ham, Plalstow)

    Mr. Hayes and Mr. Charleton.

    Mr. JOHNSTON: I beg to move, in page 3, to leave out line 7.
    In view of the humane, sympathetic attitude adopted by the right hon. Gentleman the Member for Darwen (Sir H. Samuel) towards the claims and representations of the police force in the last discussion, we may hope—it may be a slender hope—that when we come to deal with our unemployed fellow-citizens, His Majesty's Government will at least adopt a sympathetic attitude towards them. We oppose the 10 per cent. economy cut at the expense of the unemployed not only because of the injustice, the wrong and the hardship which it inflicts upon the poor, not only because it is socially unnecessary, but because we believe—I believe—that the decision and judgment of the Commons of this country should not be delivered at the dictation of any great financial interest whether it be home, foreign or international. [An HON. MEMBER: "You took dictation from the Trades Union Congress!"] If I had to accept dictation, which God forbid, I would much prefer to have that dictation at the hands of my colleagues and friends in the trade union movement than at the hands of unknown, international financiers. But, since the interjection has been made again—and a most foolish one—may I repeat that when the Trades Union Council was met by the Prime Minister, the Chancellor of the Exchequer and others, so far from there being dictation by the Trades Union Council on this matter, the Trades Union Council was informed that it was no part of the policy
    2004
    of His Majesty's Government to reduce the standard rate of unemployment benefit.
    This section of the Economy Bill is, to me, the most repellent and the most indefensible part. Admittedly, it will be the cause of tremendous suffering and distress. Even publicists like Mr. Harold Cox, who writes in the "Sunday Times," declares that, unfortunately, it cannot be denied that these proposals will cause suffering. Lord Hailsham, speaking at Tredegar in June last, declared that the last thing we should try to do would be to reduce the remuneration given to the unemployed. Lord Melchett, whose opinions will be respected by the opposite side, speaking in the House of Lords the other day, declared that he felt grieved that this proposal was brought forward at all. He declared it to be a great mistake and said that it indicated a tremendous lack of statesmanship. I know, of course, that there are supporters of this policy for its own sake in the ranks of hon. Gentlemen opposite. Lord Belhaven and Stenton, rising from a dinner alleged to cost a guinea a head, said last week that he demurred strongly from having money taken from him to he squandered on ne'er-do-wells to make paupers of them.
    Great publicists whose opinions are respected by hon. Gentlemen opposite declare, like the Editor of the "Sunday Observer," that the first step that must he taken is to knock 400,000 persons off transitional benefit altogether and put them on to the Poor Law. On the other hand, this proposal has been denounced on its merits or demerits by economists like Mr. Maynard Keynes, who says that

    2005
    it is replete with folly and injustice; and by Mr. John A. Hobson, who, writing in the "Manchester Guardian" of 20th June, said:
    "Is our nation as an economic whole reduced to such poverty that it is compelled to let, down the health of its weaker members and keep them just above starvation but below efficiency. In the long run it is surely a short-sighted policy. An employer does not let his machinery rust or decay if he has to keep it idle for a season. The cost of the physical subsistence and unimpaired efficiency of labour corresponds exactly to this maintenance of capital. The productive efficiency of our nation will suffer if its waiting workers are not properly fed, clothed and housed."
    He talks about the
    "folly of reducing public and private consumption at a time when in almost every industry in almost every country the powers of productivity are greater than they have ever been before. They are only held in leash by the failure of effective demand for their products."
    This proposal has been defended by the Prime Minister in his broadcast speech. I need not quote it, because it is familiar to every hon. Gentleman. It has been defended also by the Home Secretary in a speech at the National Liberal Club on the 28th August. Both right hon. Gentlemen defended it on the same ground. They said that the cost of living has fallen by 11½ per cent.—not points—since the last amendment of the unemployment insurance rate, and that the cost of living having fallen by 11½ per cent., no injustice will accrue to the unemployed if their standard rates of benefit are cut by 10 per cent. The Prime Minister went so far as to say that this means that the unemployed are 1½ per cent. better off.
    I challenge the fact that the cost of living has in reality fallen by 11½ per cent. I do not want to enter into a prolonged examination of the figures, but there are hon. Gentlemen opposite who have declared that they are in fact worthless. Take an example. I refer hon. Gentlemen to the recently issued report of the Inter-departmental Committee on the Rent Restrictions Acts. We are told, on page 17, that one-eighth of working-class houses are decontrolled. No allowance has been made in the cost-of-living figures for the increase of rent through decontrol. In addition, there is another one-eighth of working-class houses not within the scope of the Rent Restrictions Acts at all, such as new houses under
    2006
    municipal ownership and control, making in all about one-quarter of the working-class dwellings which are not subject to the Rent Restrictions Acts, and where the rents, according to this Committee, are jumping upwards. On page 17 of their Report we are told that decontrolled rents are up 90 per cent. as against the 50 per cent. increase in controlled rents; so that there is a 40 per cent. difference in about one-quarter of the total of working-class houses. There is a 40 per cent. increase in rent apart from increased rates, for which increase no allowance whatever is made in the cost-of-living figures.
    That fact alone vitiates entirely and knocks the bottom completely out of the statement that the cost of living has fallen, even on an average, by 11½ per cent. Other factors are not taken into consideration in the cost-of-living figures. There are increased travelling expenses, doctors' fees, dentists' fees, insurance charges, changes in social custom and habit over the last quarter of a century—and it is over a, quarter of a century since the basis of these figures was first devised. No allowance is made for the fact that there are different standards and different movements in the cost of living in different parts of the country. There is a different cost of living movement in London from that in the Highlands of Scotland, and in the poverty stricken areas of South Wales from the expanding districts of Oxfordshire. All these factors are completely ignored in the cost-of-living figures, and in fact it is simply not true that the cost of living for the poorest of the poor has fallen by 11½ per cent. Therefore the unemployed will actually be worse off as a result of this 10 per cent. cut.
    What do these reductions mean? A single man is to be reduced from 17s. to 15s. 3d. a week. A single woman is to be reduced to 13s. 6d. a week. A man and wife are to be reduced from 26s. to 23s. 3d., with an addition of 2s. for each child. I beg hon. Members opposite who have had experience of local government to consider briefly what is going to happen as a result of these cuts. I will take as an example Sheffield—or I will take Glasgow. The present rate paid under the Poor Law to a man and his wife is 26s. That is the same figure as the present unemployment benefit

    2007
    rates. The unemployment benefit for a man and wife is now to be cut to 23s. 3d., and, therefore, the man and wife on unemployment benefit will be receiving 2s. 9d. a week less than under the Poor Law scale, a scale fixed by a moderate majority as the minimum standard upon which the physical efficiency of a man and a woman can be maintained. When the unemployed man and his wife become transitional benefit cases they will now automatically get an increase of 2s. 9d. a week, because they will go up to the Poor Law scale.
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Milner Gray): Does the hon. Member say they will go up to the Poor Law scale?
    Mr. JOHNSTON: Once the public assistance committees get on to the job, as they will under your proposals for dealing with transitional benefit cases, they will fix the amount at 26s., which is 2s. 9d. higher than the rate which will be paid to the non-transitional cases. Therefore, we reach the position in which an insured man and wife receive 23s. 3d., and a man and wife on transitional benefit get 26s., the same as a man and wife under the Poor Law. Then we move on to the next stage in the proceedings. Naturally a moderate majority on a public assistance committee will proceed to scale down the public assistance rates—or in most cases they will attempt to do it. In some districts at least I hope the committee will strike and refuse to do so. I hope that wherever there is a Labour majority there will be a definite refusal to scale down, but there will be a tendency for these moderate committees to begin to scale down the public assistance rate which up to now they have considered to be necessary. They will feel compelled by the action of the Government to cut down that public assistance rate by 2s. 9d. a week.
    1.0 p.m.
    It is bad enough to cut the unemployment benefit by 10 per cent., it is bad enough ultimately to cut the Poor Law rates by 10 per cent., but I would point out that this is to be done at a time when the cost of living for the poorest of the poor is going up—by any figure you like, by 25 per cent. or by 33⅓ per cent.—at a time when the cost of living is going
    2008
    up by the action of this Government. [HON. MEMBERS: "No!"] I do not want to be side-tracked, but I take it it is common ground that the cost of living is going up. [HON. MEMBERS: "Not by the action of this Government.") I would like to answer any relevant questions, but I trust that questions which are obviously irrelevant to the point will be kept for some other occasion. [Interruption.] What is wrong with the statement that the cost of living is going to rise through the action of this Government? [Interruption.] I beg hon. Members to believe that two sides can play at that game of interruption. We ask for a hearing. This is a place where we discuss public affairs, and I am stating a case. It may not please hon. Members opposite, but I am going to state it. I repeat that the time when the cost of living is going up by any figure you like to mention—25 per cent. or 33 per cent. or 40 per cent.—is the time chosen by the Government to cut the purchasing power of the unemployed, and, ultimately, the purchasing power of the recipients of Poor Law relief by 10 per cent.
    There will be many administrative difficulties of which the Government have not thought. I make them a present of this one. There are areas which allow 15s. a head income before any income is taken into account for Poor Law purposes. Paisley allows 15s. a head. In Lanarkshire over an imaginary line they allow only 7s. 6d. a head. Therefore, the Treasury are actually going to pay 7s. 6d. per head more in Paisley than they are in Lanarkshire. Such anomalies will occur all over the country. The Government are attempting now to produce a national system of Poor Law relief. They are doing it partly through the administration of the local public assistance committees, and they are doing it in such a way as to create the maximum chaos, in such a way as to create the maximum social injustice among the recipents of either Poor Law relief, transitional benefit or ordinary insurance benefit. Who are these people that you are going to subject to these cuts? On this point, I will give a quotation from the "Morning Post." That journal sent a representative down to the poverty-stricken area of Wales, and he reported as follows:

    2009
    "While the dole is sufficient to cover the rent and the cost of food, it is inadequate to provide for clothing and the replacement of household effects. Some of the homes, in spite of all, have been kept together for two to six years, but they are in a terrible condition. A school medical officer said to me 'I am giving many children cod liver oil for weak chests. The real cure would be good boots. I am treating them at the wrong end, but what can we do? We can get cod liver oil but we cannot get boots.
    The plight of many of these poor youngsters would break the heart of countless mothers whose children have never suffered in this way."
    That was written as far back as the 15th December, 1930, and since then there has been a prolongation of poverty. In these circumstances, the relatives who could previously assist are no longer able to do so. On this point I will quote from the Appendices 'to the Minutes of Evidence given before the Royal Commission on Unemployment Insurance:
    "Nor were the financial sacrifices by any means confined to the family circle. Even landladies were reported as having come to the rescue: for example, in Glasgow twelve persons were being fed and housed free in this manner. It seems indeed that the reluctance to be associated with poor law affects more than the individual concerned and others than those who are legally liable for his support."
    That quotation is from page 113 of the Appendices to the Minutes of Evidence given before the Royal Commission on Unemployment Insurance. Every one knows that, first of all, the relatives assist, and then after a prolongation of poverty the relatives can-not assist any longer and poverty gets worse. And now we have arrived at a state of affairs in which there will be a huge increase in the cost of living, and in those circumstances the Government come to this House and ask for a reduction in the monetary buying power of the poorest of the poor.
    Sir ARTHUR STEEL-MAITLAND: Will the right hon. Gentleman tell us what is the figure of this huge increase in the cost of living to which he has referred?
    Mr. JOHNSTON: I do not know. What I said was that the cost of living is rising. Is the right hon. Gentleman who has had experience as the Minister of Labour, prepared to make a prophecy that in the near future there will not be
    2010
    a substantial increase in the cost of living?
    Sir A. STEEL-MAITLAND: I. am not going to make any prophecy.
    Mr. JOHNSTON: I am informed that the prices at the exhibition have been increased by 12½ per cent. [An Hon. MEMBER: "Get your facts right."] My facts are right, and I believe that the cost of living is rising. Not only do I believe that it is rising, but it will rise very much more. I would like to ask the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland) if he is prepared to make a statement that, after what the Government has proposed, the cost of living will not rise within the next fortnight? [Interruption.] Who has ordered this change to be made? Who is responsible for this infamy? [Interruption.] I know there are hon. Member's opposite who hate this proposal, but l believe some of them like it. Here is a quotation from the "Observer" of 23rd November last:
    "The first essential of sound financial reform is to throw nearly 400,000 persons off the dole, and to relegate them to plain outdoor relief on reduced terms of subsistence."
    That was written long before these financial proposals were made. Who is responsible for this proposal? Quite a variety of statements have been made on this point. On Monday of this week the Prime Minister said:
    "The handling of the unemployment cuts was necessitated by special conditions of borrowing and they must remain."—[OFFICIAL REPORT, 21st September, 1931; col. 1272, Vol. 256.]
    On 22nd September, 1931, the following Question was asked:
    "MR. MCSHANE asked the Chancellor of the Exchequer whether, in the recent credits given to Britain, any condition, political or economic, were imposed?
    MR. P. SNOWDEN: NO, Sir."—[OFFICIAL REPORT, 22nd September, 1931; col. 1460, Vol. 256.]
    Whom are we to believe? This statement was followed yesterday by a further statement made by the Leader of the House, the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) who, in answer to a question by the hon. and gallant Member for South East Leeds (Major Milner) said:
    "I cannot answer for the contents of anyone's mind except my own. I would remind the hon. and gallant Gentleman that two days ago the Chancellor of the Exchequer,

    2011
    asked, in precise terms, whether any conditions, political or economic, had been imposed, and he answered, 'No'; which seems to me comprehensive, and to which I can add nothing."—[OFFICIAL. REPORT, 24th September, 1931; col. 1798, Vol. 256.]
    Somebody is wrong. Either the Prime Minister was wrong when he says:
    "The handling of the unemployment cuts was necessitated by special conditions of borrowing,"
    or the Chancellor of the Exchequer was wrong when he denied that statement. I do not believe that it was the French who insisted upon it as a condition of a loan. I never believed that it was the French, and I do not believe it now. I had the privilege of a long conversation with M. Flandin, the French Chancellor of the Exchequer, at the French Ministry of Finance in the first week in August, and he told me then that, so far from desiring to do anything to collapse the pound, he was prepared to do anything and everything in his power to save it, because he knew that the franc might be hit next. He never made any reference whatever to conditions about unemployment benefit; he never suggested any 10 per cent. cut; and I would ask, in justice to the French Government, will any statement be made publicly as to whether M. Flandin ever at any time, as representing France, insisted upon any cut in unemployment benefits in this country? For my part I do not believe it.
    Who, then, was responsible? Was it high finance in the City? Was it the men who have landed us in this mess. [Interruption.] I am going to answer that question. It is quite a good question. The May Committee reported to this House that they recommended a 20 per cent. cut in unemployment benefit and they recommended that half the unemployed persons, after 26 weeks, should be placed upon the Poor Law. The question may be asked, Who are the people who make these recommendations? I do not wish to say anything disrespectful, but there are organisations in London like the British and German Trust, Limited, which was formed in 1926. If any hon. Gentleman who asks me questions will go to Somerset House and examine the papers for himself, he will find, in the last filed documents there, a debenture prospectus which says this:
    2012
    "In view of the shortage of credit which has prevailed in Germany, it was possible to obtain 8 per cent, free of German taxation";
    and so this British and German Trust, Limited, politely began to put 1¾ millions of British money—insurance money—Prudential insurance money, Refuge money—to put these pennies of the poor into Germany, where they could get 8 per cent. free of tax. Who are the directors? Included in the directors is Sir George May. There are others, I know, but I should be out of Order—
    Mr. MAXTON: May I ask my right hon. Friend, were the Labour Cabinet unaware of these associations when they appointed Sir George May?
    Mr. JOHNSTON: As my hon. Friend knows, I cannot possibly answer that question. My hon. Friend knows that I was not there, and have no responsibility for and no knowledge of what passed. But I do suggest that this would be a very relevant question, and that is why I am raising it to-day, to put to those who are responsible for this Government and who are now being backed by hon. Gentlemen opposite, and who are desirous of using Sir George May and his friends as a method of cutting the unemployed by 10 per cent. I ought to add that the Trust referred to are making 8 per cent. on their money.
    I am afraid that I have detained the Committee a little longer than I had intended, but I should like to add this, that one of the memories in recent months that abides with me, and I hope I shall never forget it, is that of 20 men and one woman, representing the Government of this country, standing one black Sunday evening in a Downing Street garden, awaiting a cable from New York as to whether the pound was to be saved or not, and whether the conditon would be insisted upon that the unemployed would be cut 10 per cent. I asked an hon. Friend of mine—a Conservative Member of this House—privately the other day, what would he say, what would he do, what would be his reaction, if a group of foreign financiers said to him and his party. "You must cut the Navy 10 per cent., or 25 per cent., as a condition precedent to your financial system, being allowed to continue"? What would he

    2013
    say? [AN HON. MEMBER: "Tell them to go to Hell."] That is the answer that he would give—that he would see him in Hell first; and that is the answer I give, for my part, to every group of financiers, home or foreign, who attempt to dictate to the Commons of this country how they shall or shall not treat their unemployed fellow-citizens. I conclude by quoting a great statesman, who said this:
    "We do not believe that a nation can flourish on the poverty of its masses. Empty pockets are not only poverty, but breed poverty. Our own backs and stomachs still are the most neglected, and yet the most profitable, of all our markets. Those who believe that Safeguarding and Protection is any aid to the development of that market had better study protected countries, where wages are low, unemployment habitual, and poverty even worse than it is here. Work, first of all, but, if no work, maintenance."
    That is the statement which was broadcast from Newcastle on the 28th May, 1929, by the present Prime Minister.
    Sir BOYD MERRIMANThe speeches from the benches opposite on this question of national economy scent to divide themselves naturally into two classes. There are, first of all, those who at any rate pay some lip service to the necessity for economy and the balancing of our Budget, but attack in turn each of the economies proposed, and particularly the one which we are now discussing. There are those, on the other hand, who are absolutely unrepentant on the subject of national profligacy, and have no intention of being a party to any economies whatever. The right hon. Gentleman, in discussing this particular economy, said that it was absolutely unnecessary. I give him credit for meaning that this particular economy was absolutely unnecessary, and not that he was disputing that economy at all was necessary. But, for my part, I do not propose to go into any elaborate' argument about the necessity for economy at this particular moment, because I am going to start with the assumption that it has been proved—as, indeed, it is obvious—that at this present moment the necessity for balancing our Budget is even more vital than it was before the Gold Standard disappeared.
    The right hon. Gentleman has referred to the cost of living and, of course, the question of what will happen to the pound sterling now that the Gold Standard has
    2014
    ceased is absolutely vital in connection with the cost of living. Obviously, it needs no elaboration. The question of what will happen to the pound sterling, after all, depends not upon the nefarious machinations of some unnamed foreign financiers' meeting in some dark cellar, or wherever it is that financiers meet, in order to conspire against this country. They may be the voice through which is expressed foreign confidence in this country, but ultimately what is going to happen to the pound depends upon the confidence in this country that is felt by countless persons abroad and in the Dominions who either have claims at the present moment or are prepared to make contracts which ultimately will have to be settled in terms of the relation of the pound sterling to the currencies of those countries. Therefore, the point is not what we think ought to be the ideal way of balancing our Budget. The point is what way of balancing the Budget will re-establish the confidence of those upon whom the fate of the pound sterling depends.
    It is no use talking about a conspiracy. If you and I have a creditor he has the right to ask the terms of settlement of existing debts, and still more has he the right to suggest the terms on which he is prepared to deal in future, and what I am pointing out is that individuals in this country are dealing with individuals in other countres in countless numbers, and ultimately those transactions fall to be settled in terms of the relation of the currencies of the two countries. The result of that may be expressed, if you like through some banking medium, but at the end of it all the question is, what do A, B, C. D and all the rest of them in foreign countries think about the prospect of being paid in terms of the value at the time when they make the contract. It is precisely the same thing as prevents or dictates a run on a bank. There again, countless unconnected units, in the shape of private customers, either do or do not feel in the mass that they can safely leave their money in the bank because they know it will come out at the same value, and to the same extent to which they paid it in. It is exactly the same thing in terms of our relations with foreign customers. It may be that hon. Members opposite are quite convinced in their own mind that the proper solution of our im-

    2015
    mediate difficulties is to double the Super-tax and to increase unemployment benefits by 50 per cent. With the greatest respect to them, that is not the point. The point is whether our creditors and potential creditors abroad are of the same mind.
    With these elementary reflections—I am afraid they are elementary though sometimes they seem to me to be forgotten—I am going to ask the Committee to listen for a moment to my own experience in the matter. Just over a year ago I was in Canada and the United States on an all too brief visit. The visit, however, gave me an opportunity of meeting people from all over both parts of the Dominion and the United States—people of varied political opinions and different professions. The friendliness in both countries was absolutely unmistakeable and overwhelming. There was something else that was unmistakeable. It peeped out in private conversation over and over again. It was doubt and wonder as to where this country was going as the result of its handling of the dole question. Let it be observed that this was months before the Government actuary had given his evidence before the Unemployment Insurance Committee, months before the Chancellor of the Exchequer uttered his warning at the Box of the House of Commons and very nearly a year before the May Report was published. The point is—forgive me for emphasising it—that, whether or not they were right in thinking that, or even whether or not Members opposite think they were right in thinking that, they did think it. No one wants to cry "stinking fish" overseas. Whatever one might try to say in the way of pointing out that, at any rate, a distinction is made between covenanted and uncovenanted benefit and the like, the point is that there was that doubt, which was quite openly expressed, by people who were unquestionably well-wishers of this country as to our political sanity in the matter and as to our ultimate destination if we pursued the course that we were pursuing.
    Mr. STEPHEN: Will the hon. and learned Gentleman tell us how he can square that statement with regard to American opinion with the statement by many eminent Americans as to the need of
    2016
    some insurance scheme to provide for the much larger volume of unemployment in America?
    Sir B. MERRIMAN: If the hon. Member asks me that, all I can say is that I did not detect any vast enthusiasm amongst those I talked with for any unemployment insurance scheme. But I do not propose to pursue American politics, because it is not our business. The point I am trying to make is that it does not matter whether we are right or they are right. The point is that they think they are right, and that is the thing that counts. I want to approach this matter from another point of view. Assuming, for the sake of argument, that they are prepared to admit that there is some necessity of cutting our coat according to our cloth, that there is some necessity for balancing our budget in these matters, I ask myself why a different test should be applied to the nation's finances from the sort of test that is applied by any private body.
    Mr. BUCHANAN: Hear, hear!
    Sir B. MERRIMAN: I am glad the hon. Member accepts the test. I was going to take a trade union, for example the Amalgamated Engineering Union.
    Mr. KELLY: I hope you are well acquainted with it.
    Sir B. MERRIMAN: I have here—I have no doubt the hon. Member will correct anything afterwards which he thinks I am misrepresenting, but I am prepared to quote verbatim—the current number of the Amalgamated Engineering Union's Journal for September, 1931, and I am going to call attention to one or two passages in it. May I first of all say this matter was brought to my attention by a member of that union who is in this position. He is 68 years of age. Service in his old limbs lies lame. He has an Old Age Pension, and he has five shillings from this Union. That is his living—15s. 3d. less than the sum to which the unemployed benefit is going to be reduced under this Bill. What has this Union done? It may be quite right to have done it. Let no one misunderstand me. I am not suggesting that it was not necessary to do it, but what I am saying, and the moral I am leading up to, is that what is sauce for the goose is sauce for

    2017
    the gander. What have they done? They have increased contributions and they have reduced, or rather they have abolished certain benefit. It would not be right to say that they had reduced benefit because they have cut out certain kinds of benefit altogether, and the others apparently remain. This particular man's benefit of 5s. a week has gone. That being so, I ask hon. Members to consider—
    Mr. KELLY: May I ask what is the benefit?
    Sir B. MERRIMAN: Five shillings a week.
    Mr. KELLY: Is it superannuation, sick, or unemployment benefit?
    Sir B. MERRIMAN: It is called low benefit, and I understand it is super-annuation.
    Mr. KELLY: No, it is not.
    Sir B. MERRIMAN: Be that as it may, for my purpose it does not in the least matter precisely what the benefit is. The point is that it is 5s. a week to which he was entitled by contract. Hon. Members cannot get away from that fact. I am going to read an explanation of why it has been done. After setting out why it has been necessary, the following passage occurs in this journal—
    "We feel confident that those of our Members who have given any thought to the situation must have realised that eventually steps would have to be taken of even a more drastic character than those hitherto employed. The union's resources are not unlimited, and it, therefore, would not surprise the majority of our members when they learned of the steps that were to be taken last month in an endeavour"—
    to do what?
    "to balance the union's budget."
    Reading for the word "Union" where it occurs, the word "State," every single word of that applies to the present situation. They go on to say that the steps that have been necessary:
    "embody an increase in contributions to certain sections of the membership, and the suspension of the payment of low donation and sickness benefits."
    I said a moment ago that every word of that applies to the State. I was wrong. I was wrong in one respect. After all, in dealing with the problem as a nation, side by side, measure for
    2018
    measure with the reductions in unemployment benefit, the State at any rate has decided to reduce the salaries of its own servants. I will read this passage. After saying that originally there was a question whether these steps should be taken—increasing contributions and so on—it says:
    "It is indeed singular that now we are forced into taking such action, we are criticised for having done so, and resolutions are coming forward from branches suggesting alternative steps. In the main they take the line of calling for a reduction in the salaries of the officers, a reduction in the number of staff employed at Head Office, and in some cases, that the wages of the staff should also be reduced.
    "Leaving out the question of the salaries of the officers of the union, we regret that such a line of thought should be advanced. The reduction in the salaries of either the officers or members of the staff would have little value in meeting the situation even if wages were reduced to the lowest possible minimum. Incidentally, such a suggestion is scarcely in keeping with the true spirit of Trade Unionism."
    Mr. BROAD: Will the hon. and learned Member continue to read the article?
    The CHAIRMAN: The hon. Member must not rise unless the hon. and learned Member in possession of the Committee gives way to him.
    Sir B. MERRIMAN: There were moments earlier in the year when I suspected that that particular reflection was true, but I will not pursue the unconscious admission contained in the phrase beyond saying that the argument appears to be, that it is right for a trade unionist in the House of Commons to denounce cuts in the unemployment benefit even though all benefits are hit alike and even though they are accompanied by reductions in the wages of the servants of the State. But for a trade unionist whose all is taken away from him by a cut to which other members of the union are not subjected, to suggest that there should be a reduction in the salaries of the union is contrary to the "spirit of trade unionism." I want to know whether hon. Members opposite, in the attitude they are taking up in this matter, really think that they are making any constructive proposal to deal with what is one of the greatest of our national emergencies, or whether it is just so much nauseating humbug for the hustings? I have no doubt in my mind

    2019
    what it is. I have no doubt in my mind what the people in this country will think that it is, and for my part the sooner they have the opportunity of saying so, the better.
    Mr. BROAD: The hon. and learned Gentleman the Member for Rusholme (Sir B. Merriman) put constructions upon reports in the journal of the Engineers' Union which conveyed wrong impressions, and I will proceed to say why, in spite of interruptions of hon. Members opposite. For instance, in the same journal, even in the same article, the hon. and learned Gentleman will find reference to the fact that the officers of the union have just recently accepted a very substantial reduction in their salaries. That fact is commented upon in that article, but the hon. and learned Gentleman carefully excluded it.
    Sir B. MERRIMAN: The hon. Member says that I carefully excluded it. It is perfectly true that I knew that it was in the article, but I did not think that it was worth elaborating for the reason that precisely the same thing applies to the servants of the State.
    Mr. BROAD: And in addition, when referring to the particular member of 68 years of age whose reduced donation benefit has ceased, he referred to him as though he were a superannuated member. A superannuated member of the Engineers' Union who has any reasonable length of membership is entitled to, and still gets, a superannuation allowance of 10s. a week. If his health does not permit him to work, he gets it at the age of 60 instead of at the age of 65. There is no reduction in the superannuation benefit. This man must have joined the union in the later years of his life. In case of unemployment he is paid the full benefit for a certain period, and reduced benefit for another period, in addition to the State pay. If he is on sick benefit, the same thing obtains. After having exhausted the full rate of benefit according to his length of membership, the amount is further reduced. We expect that those who have been loyal members during the whole period of their working life shall get the benefit funds in proportion to their length of membership, and they do so.
    Sir B. MERRIMAN: Will the hon. Member enlighten the Committee further on the only real point so far as this particular member is concerned? Was that member, whatever the name of his particular benefit may be, entitled to it as a matter of contract with the union?
    Mr. BROAD: I do not know the circumstances of that particular member.
    Mr. KELLY: Neither does the hon. and learned Member.
    Mr. BROAD: Like other societies which are mutually dependent upon the contributions of their members, the allowances have to be modified from time to time as the circumstances may allow. For instance, during the War we increased the benefit to our superannuated members from 10s. to 14s. per week, but we soon found that that increased amount was taken into calculation in respect of old age pensions for those over 70 years. The 4s. per week extra which we were subscribing to give to our members was deducted from their old age pensions by the State, on the plea of economy. It is not fair to draw an analogy between the Engineers' union and the State. This union did its utmost, long before the State took any responsibility, to provide for old age, sickness and unemployment, besides securing conditions of work for its members. Within the last 10 years this union has spent over £10,000,000 of the money of its members in relieving its more unfortunate members, and it is not fair to pillory it as if it was breaking its contract. Largely owing to German ships being brought over here and the reparations policy, we have had 25 per cent. of our members unemployed. That has made a very great difference.
    I want to come back to the position of the unemployed generally, and to see whether the country can stand the unemployment pay. I have been looking at the returns of the Commissioners of Inland Revenue, showing the total amount of income received by the people who pay Income Tax and Supertax. In 1913–14 the total sum was £951,00,000. In 1920, when the pound was worth about 13s. 2d., the amount of wealth, vas £2,560,000,000, an increase of 2½ times. I have watched the reports since, and so far as the well-to-do are concerned there has been no reduction in the total in-

    2021
    come. The value of the pound went up to 20s., at which figure it remained until just over a week ago, and I find that in the year 1930 the income was returned at £2,540,000,000. Whereas in 1920 the total income was shared between three million tax payers, in 1930 it was shared by 2,250,000 tax payers, which shows that a considerably smaller number of people are sharing that huge income. The average income of each Income Tax payer in 1920 was £891, whereas the average income of the smaller number has gone up to over £1,100.
    Major COLVILLE: Is the hon. Member taking the gross sum or the sum after the deduction of Income Tax and Super-tax?
    Mr. BROAD: I am taking the actual income on which they pay Income Tax. If they paid between them the whole of the War debt interest charge, which amounts to something like £300,000,000 a year, that would still leave them with £2,200,000,000 as compared with £900,000,000 a year pre-war. If we take these returns as accurate, and they are the figures given by the Commissioners of Inland Revenue, it means that as far as total income is concerned there is as much to share as ever. But, it is not exactly in the same hands as before. Industry has been very hard hit. Nearly all the great industrial interests are in pawn to the bankers. It is those who have juggled with finance that are getting the money. We can never judge the prosperity of a city by the number and size of its pawnshops, neither can we judge the prosperity of a nation by the number of the pawnbrokers who hold it in pawn.
    We are suffering from this heavy deadweight of debt of fixed interest security. We are suffering from the huge game of playing with finance. We had inflation during the War time, when the bankers cried oat for a moratorium. Then we went off the gold standard. Great increases of fortune during the War were built up on fraudulent pound notes which, in the end, were only worth 13s., and in purchasing capacity only about 6s. 8d. They were, however, worth on the Exchange, 13s. The wealthy in this country more than doubled their wealth as measured in balance sheets and bankbooks during the War. How did they
    2022
    get it? Not by any great service that they did for the nation, not any risk they ran, but by the manipulation of finance. When the War was over they wanted their pound, which was only worth 13s., to be worth 20s. Then we had that long period of deflation, when exactly the same thing was attempted that is being attempted now—the cutting down unemployment pay and so on, and the discharge of Dr. Addison, because he believed in housing, and the putting in his place of Sir Alfred Mond, with the idea that a workman and his wife could be happy in one room. That policy inflicted a savage blow on trade and industry in this country, from which it will never recover. It has crushed down the standard of life of the people so that they cannot purchase the goods to keep down our imports, and in the midst of all this, the wealthy classes have just as much total income as they had before. We hear a great deal of the woes of the Super-tax payers.
    In a very glib and facile way the Financial Secretary to the Treasury told us that when they had paid their taxes the wealthy people were worse off at the end of the year than when they started, but when we discover the facts we find that they are wealthier than ever. We are oppressed with the dead-weight of debt and with the loans for which those who have lent the money have been able to charge high interest. When Sir George May is able for the companies and interests he represents, to get 8 per cent. secure fixed interest from Germany, others can do the same, of course they are not going to put their capital into industry in this country. When the great rentier class is able to get 7 to 8 per cent. for their money, they will not put it into industry. They are not going to reorganise the coal mining industry or to develop the railways. Until we have wiped off by some means or other this great weight of debt, England as an industrial and commercial nation will sink lower and lower, and the culmination will be the collapse of the pound.
    The British worker is not less industrious or less skilful than he was, and I repudiate the idea that it is the amount of unemployment benefit which need give us any cause for alarm. It is not the £1,000,000 per week unemployment benefit but the £1,000,000 a day which is paid to the war profiteers. If we follow the line

    2023
    of deflation we shall go on until the British worker is asked to work on the same terms as the Indian coolie, who is only able to purchase a loin cloth, subsist on rice and live in a mud hut; and even then we should still go on talking about the high cost of living—
    The CHAIRMAN: I do not want to say that the hon. Member is wandering from the point but I do want him to relate what he is saying to the Amendment under discussion.
    Mr. BROAD: The hon. Member opposite referred to the lack of confidence and the concern expressed in America and Canada as to the effect of what is called the dole on the position of this country to meet its obligations. He said that it did not matter whether this lack of confidence was justified or not, the fact was that there was this lack of confidence. Who has helped to produce that situation? I remember a former Chancellor of the Exchequer standing at that box and denouncing the unemployed, who he said were acquiring the general habit of learning to qualify for the dole. That was the way in which he characterised the unemployed. Anyone who has followed the question will know that the unemployed are not idle because they prefer to exist on the dole, they are idle because of the bad management of the financers of this country, who have deliberately caused unemployment in order to force wages down. A policy of deflation always causes unemployment. We have gone off the Gold Standard. We were told that, the end of the world would come if we went off the gold standard, but is a most remarkable thing that confidence seems to be returning, the Stock Exchange is busy, every body is exuberant, and we are told that we are going to have quite a busy time. If the £goes down I know what the end will be. It only shows that all the fetish of the Gold Standard and its effect on Great Britain was in the interests of the money lending class and not in the interest of the masses of the people. I got up really to reply to the hon. Member's reference to the engineers union. I have never been a paid officer of that union but I have 40 years membership in it, and I say that if the same management, the same capacity and integrity, of those who have managed that union, together with the loyalty of
    2024
    its members towards the union, had been shown by those who manage the nation's affairs we should not be in the position we are to-day.
    Mr. MANDER: I desire to put certain questions to the Government and upon the reply which is given to those questions depends the way in which some of those who sit on these benches will vote on this Amendment. I felt when the Government was formed that it was the only possible thing to do, and I determined—and have done so up to the present—to give it steady support. But in regard to the particular Amendment which is now before the Committee the situation has been very widely changed by two things. The object for which the Government was formed, to save the pound, has been unsuccessful. It has been suggested that the present Government are not responsible for that. Of course they are, they could not help it, they did right; but they are the Government which came to that decision and all who support them must bear the responsibility, and we are quite prepared to bear it. But the position is changed with regard to this 10 per cent. cut in unemployment benefit by the fact that it is clear now that there is bound to be an increase in the next few weeks or months in the cost of living. It may be that it has not occurred yet, and it ought not to occur. There is no excuse for any increase as there are large stocks in the country. But before much time has gone by there will be a substantial increase, and any Government that is in power will be bound to consider this particular matter, because if the value of unemployment benefit is substantially decreased there will be an overwhelming case for taking some action to restore it to something like its previous level.
    2.0 p.m.
    The Prime Minister in his famous broadcast speech, wisely or unwisely, made use of this one specific argument, that based on the present cost of living the unemployed would be no worse off than they were two years ago. That argument does not hold water at the present time, and in view of the fact that consideration has been given to the cuts in other services I want to make a strong appeal to the Government as to whether they cannot go into this matter with a view of removing from the field of controversy the item which is causing the greatest

    2025
    friction and disturbance and feeling at the present moment. I hope they will give serious consideration to this point, because I am sure it is felt on all sides of the House that if they could find it possible to take any action which would remove it from the arena of party strife they would be doing great service to the State, to say nothing of assisting those who will inevitably he hard hit by the proposal.
    Another element has been brought in, and I am afraid it will arouse rather more controversy and less agreement than the first. It has been suggested in the Press and in this House that the unemployed are not going to have two but three cuts; that, in addition to the 10 per cent. cut on unemployment benefit and the devaluation cut, they are going to have another cut. In the course of a few days, so we are told this great National Government, which was formed to carry on until the crisis was passed and the position safe, is going to throw up its task half done and is going into a General Election based on the old party cries of Protection and Free Trade; and that the object of going to the county under a National Government or other form of Government will be to get a mandate to put whole hogging protection on foods and everything else into force at the earliest possible date. That is a very relevant point in dealing with the Amendment. If in addition to the de-valuation cut we are really to be threatened with an increase in the cost of living through tariffs, I say that the situation has become almost intolerable. I ask the Government, is it true? We are entitled to know. We came here prepared to take all the risks of unpopularity in order to see this thing through, but if the Government is not really united and is not really a national Government—it never has been entirely—
    HON. MEMBERS: Hear, hear.
    Mr. MANDER: That is the fault of hon. Members opposite. I wish it had been a national Government, including all elements from the beginning, and I should be glad if that state of affairs could be brought about even now. But if the Government at this stage of their task are going to break up, if the Free Traders are going to be forced out of it and it is to become a purely protectionist Government, even with elements of all
    2026
    three parties in it—if that is the prospect, the sooner the break-up comes the better. If that is the prospect let us bring the Government down now and form a really national Government in its place.
    Mr. GEORGE HALL: I have been particularly interested in the speech of the hon. Member. I suggest to him that he should now settle his differences with his own Government. It was to the surprise of all of us on this side that the hon. Member crossed to the other side of the House, knowing his opposition to the present Government. I can assure him that whether it be to-day or on Monday or next week we shall welcome him back again to this side. I was particularly interested in the speech of the hon. Member for Rusholme (Sir B. Merriman), who has now left the Chamber. He dealt with the question of balancing the Budget. We hear that phrase so often repeated on the other side that we are inclined to ask ourselves whether or not there was any doubt at all about this or the late Government intending to balance the Budget, The position was put quite clearly times out of number that there was no doubt at all that the Budget would be balanced. But the method of balancing was quite another thing.
    Mr. CAMPBELL: Hear, hear!
    Mr. HALL: The hon. Member applauds that remark.
    Mr. CAMPBELL: We want to know what you would do.
    Mr. HALL: We would balance the Budget, but not at the expense of the poorest of the poor.
    Mr. CAMPBELL: Who are the poorest of the poor?
    Mr. HALL: Those whom the hon. Gentleman represents at Bromley cannot be compared with those whom some of us from the mining districts in South Wales represent. As far as he and his friends are concerned, the Government that he supports will see that his constituents at Bromley will not suffer, but that the constituents of those of us who come from the poorer districts are going to be the sufferers. One gets sick of hearing the talk of balancing the Budget. Take the Budget and ask what are the largest items of expenditure in

    2027
    it. I do not want to give my own view, but I would remind the Committee of the broadcast speech of the present Chancellor of the Exchequer, made to America within a few months of his taking over the position of Chancellor in the Labour Government. The Chancellor then referred to the tremendous cost of running this country at the present time. He said:
    "Let the American people remember that Great Britain is faced with an annual Budget of £800,000,000."
    He described how the money was spent. The first charge was £355,000,000 for interest and repayment of sinking fund. He said that in addition to the £355,000,000 no less than £55,000,000 went in war pensions, and no one suggests that there should be any reduction in the amount of those pensions. He stated that £355,000,000 and £55,000,000 together were £410,000,000. He stated that the cost of the fighting services at that time was £110,000,000, and that made the cost of the payment for the last War and of preparations for the next war over £520,000,000 in a Budget of £800,000,000. The Budget should be balanced, but it should not always be balanced at the difference between £520,000,000 and £800,000,000, or at the expense of the £290,000,000 which represents the social services of this country.
    An hon. Friend has referred to his visit to Canada. I notice that there are present two hon. Friends who were with me in Canada in 1928. Far be it from me to say an unkind word of the Canadian people, but there is one thing that struck most of us who were on that delegation to Canada, and that was the ignorance of large numbers of the Canadian people of the working of the Unemployment Insurance fund in this country. Almost every right hon. and hon. Member who meets Americans and Canadians finds that very large numbers of them, and of other people outside this country, are under the impression that the whole cost of Unemployment Insurance is met by the State. They have no knowledge of the fact that employers and employés pay contributions to the unemployment fund.
    During the last fortnight we have spent a considerable time in dealing with the question of economy. Important as
    2028
    economy is in education, important as are cuts in police pay and in social services such as maternity benefit and things of that kind, the most important and the cruellest cut of all is the cut in the unemployment benefit. It means that on 1st October, 2,700,000 persons automatically have their unemployment benefit cut by 10 per cent. We cannot measure the effect by merely stating the figure of 2,700,000. If only an average of two dependants be calculated, in addition to the person who receives the benefit, the number of persons who will suffer by the cut will be no less than 8,000,000, or one-fifth of the population of the country, and those the poorest of the poor. It is no use the Prime Minister and right hon. and hon. Gentleman opposite hiding themselves behind the broadcast speech of the Prime Minister, who said that even with the 10 per cent. cut in the benefit the unemployed would be 1½ per cent. better off than they were two years ago.
    Like the last speaker I have had a good deal of concern as to what prices are going to mean in this country, not two months hence, not a month hence, but immediately. I visited the Grocers' Exhibition on Wednesday of this week with some friends from my constituency who endeavoured to book orders for almost immediate delivery. They were told by the representatives of some firms that the orders could not be booked unless they agreed to an increase of 12½ per cent. on the current prices. That meant, within two days of going off the Gold Standard, an increase of l2½ per cent. in some essential foodstuffs.
    I feel sure that most hon. Members opposite will agree with us on this side that the condition Of the unemployed was not at all what it might have been, even before these cuts were applied. Going into the homes of the people, as some of us do at the week-ends, we have seen the conditions under which these men and their wives were living even before these proposals were made. We know what it has meant to people who have been compelled to live on unemployment benefit for three or four years, and one could not bring before this Committee any picture more horrible than some of the pictures of poverty that we have seen. This reduction will drive the poor further down the slope of poverty and destitution. We have seen what

    2029
    poverty means, but we will now see it much plainer even than we have seen it in the past. We have seen the effects of hunger; we have seen the ragged back, the empty cradle, the disease-ridden home; and we have seen the destruction of the moral, spiritual and physical lives of some of the best of our people.
    This reduction is to be made this year for the sake of gaining £22,000,000. Here is a country faced with a financial crisis on the edge of a precipice; and, according to the statement submitted by the Chancellor of the Exchequer, he proposes to save £22,000,000 by these economies, while at the same time he says that we must provide for a payment of £32,500,000 into the Sinking Fund, or £10,000,000 more than we are saving by these economies. I am not going to deal in detail with the May Committee's Report, I do not wish to take up too much time, but that Report has been described by one of the best-known economists in this country as nothing but rubbish. [HON. MEMBERS: "Which one?"] One of the best known economists in this country—[HON. MEMBERS: "Keynes!"]—he certainly does not belong to this party nor to the National Government.
    While the question of the 10 per cent. is a very important one, we are concerned not only with the reduction of 10 per cent., but also with the provisions regarding transitional benefit. I saw a report in the "Times" on 23rd September which inferred that no fewer than 927,000 persons will be on transitional benefit, or will have to be sent to the public assistance committees to have the amount of their benefit assessed. I observe that those figures have been modified by a reply given yesterday by the Minister of Labour, but even on the figures which he gave, the total number in these two classes is approximately 852,000, of whom 151,000 are women. I assume that the reply of the Minister to which I have referred means that these 852,000 persons will have to be referred to the public assistance committees in order that the amount of unemployment benefit to which they are entitled may be assessed; that is, by the application of a means limit from 1st October. I am one of the mining Members in this House, and there is no section of the community that will suffer as much, both from the, reduction of unemployment benefit and from putting them On to this
    2030
    benefit than those who were formerly employed in the mining industry.
    The MINISTER of LABOUR (Sir Henry Betterton): It will not be from 1st October, but some date subsequent to that.
    Lieut.-Commander KENWORTHY: After the election!
    Sir H. BETTERTON: It will be after the time when we can get the administrative machinery in operation.
    Mr. HALL: It can be applied after the 1st October, almost as soon as the machinery of the public assistance committees can be brought into operation. I heard the Minister of Labour refer to the position in the Rhondda. He referred to a speech delivered by my hon. and gallant Friend the Member for Rhondda East (Lieut.-Colonel Watts-Morgan), and he told him that, gloomy as he painted the picture, he was afraid that he could not give him a single ray of hope. That is the position as far 'as it refers not only to the Rhondda, but to almost every mining district in the country.
    Let me deal with this very important county of Glamorgan, in which the Rhondda is situated. My hon. and gallant Friend has been kind enough to give me some figures which he has obtained from the Ministry of Labour within the last day or two, showing that the number of persons in receipt of unemployment benefit in the administrative county of Glamorgan at the present time is no less than 130,000, of whom 30,714 will be transferred under the powers given in this Bill regarding transitional benefit. In one county alone no fewer than 30,000 persons will be brought under the stigma of the Poor Law system of this country.
    Brigadier-General Sir HENRY CROFT: Is it not a fact that the whole of these people could have been employed if you had not permitted to come into this country steel and iron from abroad, and is it not the miners' leaders above all others who are responsible?
    Mr. HALL: The hon. and gallant Member may be an expert on tariff reform, but he is not an expert on the coal industry, and he does not know the effect

    2031
    that tariff reform or any system of tariffs in this country is likely to have on the export of coal from this country. He must know that 70 per cent. of the coal in South Wales is produced for export purposes, and instead of any system of Safeguarding benefiting the coal mining industry, it would deal it a deadly blow in South Wales.
    Sir H. CROFT: Is it not a fact that in every industry safeguarded where coal is employed, the export has actually gone up?
    Mr. McSHANE: On a point of Order. Is the hon. and gallant Member in order in raising the question of Safeguarding on this Amendment?
    The CHAIRMAN: The hon. and gallant Member was raising a point with which the speaker was actually dealing at the moment. Therefore, if the hon. Member in possession chose to give way, the hon. and gallant Member was quite in order.
    Mr. HALL: I was dealing with the position in Glamorgan. I have asked the right hon. Gentleman a question with regard to the two Employment Exchange areas in my own division, and I hope to get a reply by Monday. Of the unemployed in those areas, something like 50 to 65 per cent. are in receipt of transitional benefit and therefore will have to submit themselves to these needs tests, and that in a county which is not prosperous. In addition to these large numbers of people in receipt of unemployment benefit proper, the number of persons in receipt of Poor Law relief is no less than 712 per 10,000 of the population. That is the position in the coal mining districts. We all know on this side that unemployment benefit is costing a lot of money. I heard the Home Secretary a week ago on Monday state in this House that unemployment has cost this country during the last 10 years something like £600,000,000.
    Sir H. CROFT: £700,000,000.
    Mr. HALL: The right hon. Gentleman said £600,000,000, but whether it was the one figure or the other, the right hon. Gentleman did not explain that that sum did not come out of the taxes of this country. Something like £176,000,000 was
    2032
    paid by contributions by the employers, and a sum of £153,000,000 was paid by deductions out of the workpeople's wages; the State contribution in addition was something like £152,000,000, leaving a balance of something like £118,000,000 if you take the £600,000,000, or £218,000,000 if you take the £700,000,000. That is a lot of money, but hon. Members opposite must remember that that £600,000,000 or £700,000,000 has been used for the purpose of keeping those men, and easily 60 per cent. of the men who are in receipt of unemployment benefit are ex-Service men, who fought for this country during the war.
    We are told on all sides that £600,000,000 is too much and that we have to economise, but the very people who tell us that will not tell us that the £420,000,000 to pay the interest on the War Debt alone is too much. That is sacred; that must not be interfered with. Hon. Members must realise that unless this question of the War Debt is tackled, there will be these inroads for unemployment benefit and social services for the next 10 or 15 years.
    I was very interested in the statement of my right hon. Friend the late Lord Privy Seal, who opened this Debate, as to the effect that applying this new scale of unemployment benefit is likely to have upon Poor Law relief in this country. He showed that in those areas where you have reactionary majorities as soon as ever the reduction of 10 per cent. in unemployment benefit applies, down will come the amount of Poor Law relief. That is not only going to apply with regard to Poor Law relief, because hon. Members opposite are hoping that as a result of the reduction of unemployment benefit, there will be a reduction in the minimum wages paid in this country.
    Sir H. CROFT: Who says that?
    Mr. HALL: I do not want to mention Dr. Sprague. I will deal with the Conservative Parliamentary Agricultural Committee's circular, issued on the 21st of this month, headed "Dole Receivers versus Agricultural Workers." It states:
    "The agricultural worker does not come upon the dole. His wages are from 28s. per week upwards, or, say, an average of 31s. 6d. over the whole country. He may have no children or many, but his wages remain unaffected thereby."

    2033
    Then they say:
    "The following figures are based upon the Memorandum presented to Parliament by the Financial Secretary to the Treasury (Command Paper 3952, page 9)",
    and they deal with the cases of insured workers who, after 26 weeks of insured pay, come upon the dole under the new conditions. They give figures showing that a man and wife with two children will receive in future £1 7s. 3d. per week, made up of 15s. 3d. for the man, 8s. for the wife, and 4s. for the two children; a man and wife with one child will receive £1 5s. 3d., and a man and wife without children will get £1 3s. 3d. This circular has been issued by the Conservative Parliamentary Agricultural Committee for the benefit of those Members who are endeavouring to justify a reduction of 10 per cent., in unemployment benefit. We know that the whole policy of the Conservative party has been to attack unemployment benefit. [HON MEMBERS: "No!"] The Leader of the Conservative party, the Lord President of the Council, on the 16th October of last year submitted a programme to the country, one of the points of which was "Reform in unemployment benefit," and that was followed by a speech delivered at the 1912 Club by the right hon. Member who is now Secretary to the Overseas Trade Department. He referred to the fact that the unemployment scheme must be reorganised so that only those actually entitled to benefit should receive it, and the figures given by him indicate that no fewer than 1,500,000 would be struck off benefit.
    I do not want to go into the question of a bankers' ramp, but I was one of those who were present at a meeting addressed by the Prime Minister on the Monday on which he handed in the resignation of the Labour Government, and there is no doubt at all that the Prime Minister, in a statement which he made to those of us who were present, said definitely that the new loan could not be obtained unless there were cuts in unemployment bnefit. That was confirmed in reply to a Supplementary Question put to the Prime Minister by the hon. Member for Hereford (Mr. Owen) during the course of this week. He said:
    "The handling of the unemployment cuts was necessitated by special conditions of borrowing, and they must remain."
    2034
    [OFFICIAL REPORT, 21st September, 1931; co. 1272, Vol. 256.]
    I would like to remind Liberal Members of this House of a speech delivered by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) in February of this year. We all regret his absence, and the cause of it, but I shall never forget his words when, speaking from the Front Bench below the Gangway, he said:
    "I want to urge him (the Chancellor of the Exchequer) again not to be too frightened of the City of London. Since the War the City of London has been invariably wrong in advising the Government, not merely in the advice which it gave us, and the advice which it gave to the late Government, but in the advice it is giving now. Rapid deflation was a mistake, and it had an injurious effect. The next was the settlement of the American debt … The precipitate establishment of the gold standard was another thing which undoubtedly dealt a staggering blow at our export trade."
    And he could have added another—the advice given by the Bank of England to the present Government since they came into office. The right hon. Member for Carnarvon Boroughs went on:
    "If you go to the City of London, what is their only remedy for depression? Their only remedy is by artificial barriers to prevent plenty from reaching want … As the Chancellor of the Exchequer—I have been Chancellor of the Exchequer—you must make allowances for the political bias of the City. They have always been against a progressive Government—always. They have always been tolerant of the faults a reactionary Government."
    I heard all the Members of the Liberal party applauding that statement, and now we find some of the Liberal Members sitting on the Front Government Bench, almost all of them supporting this Government in not doing what the right hon. Gentleman asked them to do. Finally, he said:
    "I beg the Government not to be too nervy and jumpy when the City of London threatens. The other day there were a few transactions, not many—I should like to know their whole history—when the talk came about a Development Loan. As a matter of fact, there was a fall to-day. These things will happen, but do not let the Government run away the moment a few volleys are fired from the City of London."—[OFFICIAL REPORT, 12th February, 1931; cols. 729–32, Vol. 248.]
    I will conclude with these words: Some of us have been in this movement which helped to build up this party for 30 years.

    2035
    For 30 years some of us have pledged our faith in those pioneers who helped to build up the Labour movement in this country, but two of those pioneers—I will not deal with the third—have failed us. One died in 1015. His name will ever be remembered by the working people of this country for his self-sacrifice and the services which he rendered. While we cannot, of course, forget some of the services rendered by the two right hon. Gentlemen who lead the present Government, what will be remembered most of all when the history of the last 30 and the next five years come to be written, will be the fact that during two or three months, and the last two or three months, while serving the public of this country they attempted to undo all the good work which they had done. I would appeal to them to remember some of the things which they did, and which they taught us to do in the early days of this movement. But the freedom of the City of London is not given for nothing, and we have seen a change taking place from the very day that that freedom was given. [Interruption.] I am not concerned about half a pint; perhaps the hon. Gentleman is. Since I have been delivering my speech he would have been very much more helpful to me having a half a pint outside instead of interrupting me.
    Sir H. CROFT rose—
    Mr, MARJORIBANKS: Is an hon. Member in order in suggesting that my hon. Friend should go out?
    The CHAIRMAN: There is no point of Order.
    Mr. HALL: We could have wished that the right hon. Members who now lead this Government would have remained with us to fight these evil things, this veto which is attempted to be placed by the bankers upon the public life of this country.
    Captain CROOKSHANK: One of the questions exercising most hon. Members, and, as far as one can judge, most of the Press of this country at the moment, is whether or not we are going to have an election, but, judging from the speeches we have heard here to-day, hon. Members opposite are certainly making this the opportunity for a, dress rehearsal of the speeches they are going to make on the hustings. I think that the right hon.
    2036
    Gentleman who opened the Debate, the late Lord Privy Seal, when he comes to read over his speech, if he prefers not to forget it altogether, will find that there were several things which he said which one who held his high position as a member of the Government would rather regret. It is presumptuous for me to say that, but I think, on reflection, hon. Members opposite will agree with those on this side of the House that the things he said about Sir George May were a little unworthy, if for no other reason than this. It was the Labour Government who appointed the personnel of that Committee, and up to this moment, although it was not a departmental matter of the Lord Privy Seal, all the same we always understood that for their acts, until they parted company, Cabinet responsibility existed. I think it was a little ungracious of the right hon. Gentleman to make the remarks he did of those whom his, colleagues, presumably with the assent of the Cabinet, selected for a most arduous and difficult duty.
    Again, the right hon. Gentleman made great play in his speech about the cost-of-living index, and said what a bad thing it was, and built up a case to support his argument to show that a, certain part of it was entirely inadequate owing to the change in rental values, and so on. He may be right. There has been an enormous amount of criticism with regard to the cost-of-living index, and many speeches have been made from all parties in the House on that subject. But, again, I say to the right hon. Gentleman that the last executive act of the Government of which he was a member was to reduce the salaries of the Civil Service because of a drop in the cost-of-living index of five points. Did the right hon. Gentleman protest against that? Did he resign his office on that account? Is it not rather ridiculous at this time of day to make that sort of attack on the cost-of-living index—however, wrong that may be I am not discussing—to make an attack upon something which his own Government, and to which he, so far as we know, all the time he was in office, assented? I quite agree that the Lord Privy Seal's department has precious few Civil servants in it, and, therefore, probably he did not get much protest from his underlings. But the fact remains that the Government before going

    2037
    out of office did make use of that drop in the cost-of-living index, and, as I say with regard to the other matter, it is unworthy of the late Lord Privy Seal to make that sort of speech here, and it reinforces my remarks that it is only a dress rehearsal of what will be said on the hustings.
    Then the right hon. Gentleman read us a very sad and moving passage with regard to the state of affairs in a poverty-stricken area in South Wales. What struck me was that it particularly mentioned cod liver oil and boots. The medical officer had pointed out that cod liver oil could only be a remedy if boots could be provided. My mind went back to the late Parliamentary Secretary to the Ministry of Health, who said that if a Labour Government went in, the want of food, clothing and boots would be settled by the Labour Administration without any Act of Parliament within three weeks. Once again, that sort of passage in the right hon. Gentleman's speech is nothing but a dress rehearsal of what he is going to say in the election.
    What I take most exception to, because it has been running through the Debate, is a statement which is put in a form which is purposely wrong, inaccurate, and misleading. I will not say whether those who use it know that it is wrong, but the fact remains that it is. I refer to the assertion, which is nothing but an assertion, and cannot be proved or disproved yet, that the cost of living is going up, and to the addition which is made to that assertion, that it is forced up by the Government. It is a most misleading assertion, because, whether when the cost of living does or does not go up, it is not forced up by the Government, and the right hon. Gentleman knows that just as well as everybody else. Of course, redistributed over a thousand Socialist platforms, and embroidered, as undoubtedly it will be, at street corners, the blame for every rise will be put directly upon the shoulders of the Government, [HON. MEMBERS: "Hear, hear!"] Everybody has evidently got his speech ready on those lines. To put it in that form is fantastic, and it is absurd to come to this House and make the statement. If you change the rate of postage from 1½d. to 2d., that would definitely be a rise in the cost of living as the result of Governmental action, but that is quite different
    2038
    from this. For the right hon. Gentleman to talk in the airy way he did, and try to make nut that there is to be a rise in the cost of living, and that that is clearly due to the 'Government, is entirely unworthy of one who has held high office, and who is one of the deepest thinkers in the Labour party, even if he happens to be one of the loosest talkers.
    The hon. Member who has just spoken produced some document which he said was circulated by the Conservative Agricultural Committee. As far as I can make out from what he said of the document, it contained statistics, which be did not deny were correct, as to the incomes of people receiving unemployment benefit and the incomes of other people. As he read the document on which there was nothing but statistics, he built up a mirage in his own mind as to what it was for. All I can say, as a member of that committee, is that I have not the vaguest idea for what the document was produced. There are no deductions on it; it merely contains figures which are correct. Then the hon. Gentleman went on to talk about £600,000,000 having been spent on the unemployed since the War. I wonder if he has stopped to reflect that, if his party had not been so pig-headed on the subject of Free Trade, some of that £600,000,000 might not have been required, because the people on whom it was spent would probably have been in jobs instead of letting the produce of their foreign rivals come pouring into this country. When the hon. Gentleman starts quoting figures like that, he might try and see whether that is not the real answer to the problem.
    The hon. and learned Member for Rusholme (Sir B. Merriman) made a devastating speech, which I regret so few Members were here to hear. He poited out with quotations what was happening in, at any rate, one of the largest trade unions in the country. Then the hon. Member for Edmonton (Mr. Broad) answered, no doubt with the official view of the case. It was a most extraordinary thing. When my hon. and learned Friend the Member for Rusholme showed how the unions were reserving to themselves the power to cut off sickness benefit, unemployment benefit, superannuation fund and the like, the hon. Gentleman said, "Of course, the trade union funds have to be modified as circumstances allow." That gave away the whole case,

    2039
    because the sole justification of this Bill is our national circumstances. That is the foundation of the whole thing. If you can in the case of your own trade union say that contractual obligations like the superannuation fund, the pensions fund, and so on, have to be modified as circumstances allow, every reasonable person is entitled to say that these are the very circumstances with which we as a nation are faced.
    In all these national economies the one thing that has not been cut and that it is not proposed to touch is that vast expenditure in the way of pensions—old age pensions, widows' pensions, orphans' pensions, and war pensions. These are untouched, but the trade unions, when they have to modify as circumstances allow, apparently do touch that form of benefit. I put it to the Committee that the case which my hon. and learned Friend put up is our case, that the national circumstances prevent us doing anything less than what we have to do. Hon. Gentlemen opposite in the rehearsals of their election speeches, seem to think that we enjoy doing this kind of thing. [Interruption.] Perhaps the right hon. Gentleman opposite does not, but some of the others talk as though they thought so. The hon. Gentleman next him wags his head and agrees.
    Let me come back to the preposterous claim always being made by hon. and right hon. Gentlemen opposite that they and they alone represent the workers. It is the most preposterous claim ever put forward. I have only to instance my own constituency. In the two years of maladministration by a Labour Government the number of the unemployed went up to more than 21 times what it was when they first came in. [An HON. MEMBER: "Lie." Interruption.] I really do not know why the ex-First Lord of the Admiralty should deny it. [Interruption.] The figures are in the OFFICIAL REPORT. Doubtless it is the experience, also, in the constituencies of some of my hon. Friends. We know just as much about the hardships which are going to be caused by this Measure as do hon. Members opposite. We are in touch with our constituents, we go into the homes of the people as often as they do, and probably more often, if the truth were known.
    2040
    The only possible line, regrettable, hard and difficult though it may be, is, as the right hon. and learned Member for Spen Valley (Sir J. Simon) said, to try to keep one sheet anchor. One has gone. To balance the national Budget is absolutely essential if anybody is to have any wages, or unemployment benefit, or anything. The right hon. Gentlemen on the front bench know that just as well as anybody on this side, and so, in fact, do those behind them, though they do not choose to acknowledge the fact, but use the opportunity of this House to do a little bit of public tub-thumping. It is an abuse of the opportunities which this House gives us to argue these matter to the best of our intelligence instead of saying things which we think will tickle hearers outside. Of course, we shall vote for keeping these words in the Schedule, because we have no option, if we are to maintain anything in this country, and, though hon. Members opposite may not agree with it, the best possible turn we can do for the unemployed is to make quite certain that our Budget is balanced on sound lines.
    We regret the absence through fatigue poisoning of the right hon. Lady who was Minister of Labour in the late Government. I regret her illness. But when the right hon. Gentleman opposite and his friends say that all the trouble was due to anti-Labour propaganda about the dole, let them not forget that it was the right hon. Lady herself who, on the first occasion when she had to ask for borrowing powers, said it was a vicious practice; the next time said it was dishonest: and then monstrous; and the very last time, at the end of June or the beginning of July, told us how she had been driven along a dishonourable course. Also, it was a Government of which she was a member which set up the Royal Commission to inquire into unemployment insurance. Therefore, it is a travesty of the facts to lay any blame for the corruption of the Unemployment Insurance Fund to anybody who now sits on this side of the House. Hon. Members opposite are responsible, and to save the Fund, to make the payment of benefits possible at all, it is absolutely vital for these words to remain in the Bill.
    3.0 p.m.
    Mr. BECKETT: I am sure the hon. and gallant Member for Gainsborough

    2041
    (Capt. Crookshank) will forgive me if I do not follow his speech at great length, but I would like to say that he has furnished what, to my mind, has been the first quite good reason for the change of sides in this House. It has relieved him from that midnight responsibility which used to haunt him in the first two years of this Parliament, and allows his natural wit to effervesce in the very delightful way we have seen this afternoon. I think it would be appropriate to say that I, and some of my friends for whom I speak, find very great amusement in hearing the two sides of the House arguing with each other as to who is responsible for the appointment of the unemployment committee, the Sir George May report accompanied by references to wicked people gambling in a foreign trust and then being appointed as chairmen of committees. Hon. and right hon. Gentlemen opposite made no objection to the appointment when it was first made. They did not support us in our objections.
    I suggest to the Committee that this proposal and the Amendment will provide an acid test of whether there is any independence among hon. Members, whether they sit here purely as images wearing a party label and voting automatically for or against the Government of the party to which they belong, or whether it will be found that the party label is beginning to wear as thin here as it has in the country during the past few years. I say that because whatever were the original arguments for this proposal, they have now entirely gone. The hon. and gallant Member opposite said it surely could not be thought that he and his friends want to do what is proposed, because they know the conditions in the homes of the people. I would like to assure him that I think that he personally would be very sorry it should happen, but I think that some others of his party are delighted. One of two hon. Members on the other side have been revelling in the prospect of getting at the unemployed, making the most hideous manifestations. [Interruption.] I can only say that is the conclusion I have come to while sitting on this side of the Committee and watching, for instance, the hon. and gallant Member for Uxbridge (Major Llewellin) while the late Lord Privy Seal was moving his Amend-
    2042
    ment. [Interruption.] Well, his demeanour certainly misled many of us as to his feelings with regard to these proposals. But I was saying that I was certain the hon. and gallant Member for Gainsborough represented the majority of those who sit on that side of the House in objecting strongly to having to put this extra privation upon people poorer than himself.
    I would remind the Committee of the only justification for this proposal which was ever put forward by people who, in their public utterances, have said over and over again that they did not care for imposing further privations of this sort. The statement was that it was absolutely vital that this country must remain on the Gold Standard. I do not wish to associate myself with any of the personal attacks which have been made upon the Prime Minister, because I think that his action during the crisis has been perfectly logical, and quite in line with his opinions. I do not agree with the Prime Minister's views, but I do not accuse him of any lack of straight line politics.
    The Prime Minister and the Chancellor of the Exchequer were genuinely terrified at the thought that if we went off the Gold Standard not 10 per cent., but probably 30, 40 or 50 per cent, might be taken off the rate of unemployment benefit. It was very difficult to say whether that contention before the event would prove to be right or not, and consequently they said, "We must make this enormous sacrifice." There was no divergence of views that the sacrifice should be made, but there was a divergence of views as to who should make the sacrifice. Nevertheless, it was genuinely agreed that one of the things that must be done was to take something away from the unemployed men and women at the bottom of the scale, and there seemed to be a general agreement that the sum of £3,000,000 should be taken in this way. May I point out, however, that the thing that was dreaded most has happened. The proposal was to take 10 per cent, from all these people in order to same the Gold Standard, but that standard has gone, and some people say, "A good thing too!" Hon. Members opposite who talk like that must have very short memories, because it is only a week ago that the

    2043
    two front benches were warning hon. Members about the danger of going off the Gold Standard, and they said "at all costs we must balance the budget."
    Captain WATERHOUSE: The danger was not going off the gold standard, but the flight from the pound.
    Mr. BECKETT: I do not see that that affects the point of my argument in any way. My point is that it is hardly a week since we were told that if we did tot maintain the Gold Standard it would be a terrible thing for this country. Now we are told that going off the Gold Standard is a blessing, that it will help the unemployed man to find work, and will be a good thing for everybody. 11 it is true that the change in regard to the Gold Standard has not radically affected the national position, then the whole argument seems to have gone for adopting the particular cut which we are now discussing.
    I would further suggest that, not only has the argument gone for doing what the hon. and gallant Gentleman quite truthfully said he did not want to do, but a tremendous argument has developed for not proceeding with this particular cut. I do not believe that there is a right hon. or hon. Member of the House who would be prepared to stake his political reputation on the fact that the cost of living will not have gone up fairly substantially within the next six weeks or two months. That is one of the prices that, as I think we all recognise, we shall have to pay for the alteration that has been made. [Interruption.] I do not think that the rise in the cost of living will have anything more to do with the Front Bench opposite than the rise in the army of unemployed had to do with the Front Bench on this side; I think that both are outside the control of a Government which regards its purpose in life as being merely to sit here and register the opinions of the City of London. When the Government does not govern, it cannot be blamed for the difficulties that arise in that respect, but merely for its failure to cope with the general situation.
    Here, at a time when no one will deny that the cost of living la going to rise, and when the only reason advanced for
    2044
    this economy has been disposed of, we have the Government persevering With it and bringing it before the House of Commons. There seems to be fairly general agreement that the main necessity for the economy has fallen through, but, if it were still true that everything depended upon this nation saving £12,800,000, which is the estimated economy from this proposal, I would like to ask hon. Members, not in any party spirit: Is this really the way that we feel proudest of? There are hon. Gentlemen on the other side of the House who during the War were occupying positions as leaders of men in the naval and military forces. I do not see any of them sitting here now, but I have been told by men who served under some hon. Gentlemen opposite what good officers they were, and how excellently they looked after the men who were under their command. I have been told that very often by friends of mine who were in' the ranks under those hon. Gentlemen, and who are now politically opposed to them, but who have paid them that compliment.
    That compliment was earned by entirely different methods from this. A naval officer did not take the battleship of which he was in command within reasonable reach of the enemy's fleet, and then order out the lifeboat, clear the ship of officers, and send the men to fight the battle alone. The Army officers who had the confidence of the men were officers who went over first, in advance of their men. Hon. Gentlemen know perfectly well that that was the way in which they won the respect of their fellow-countrymen during the War. But you are not carrying that out to-day. You are sending those same men to-day to the extremes of penury and privation which you know to exist. I think that the hon. and gallant Member opposite spoke the truth. I think that he and many of his colleagues know what they are sending these men to. You may talk about making sacrifices, and I think it is true that many Members of the House are going to be hit very substantially by increased taxation and so on; but you cannot really say, with the standard of life that is general in this House that we are going over the top first before these men.
    I spent most of Wednesday going round South London with more than 5,000 of

    2045
    these unemployed men, who were demonstrating, in a perfectly peaceful and orderly way, in search of work and against the proposal of these cuts. Those men were walking through the heavy downpour that we had all day on Wednesday. When I had to leave them to come here to the House in the afternoon, I stood for about half an hour and watched that long procession of weary, wet humanity going by They were singing "It's a long way to Tipperary," and "Pack up your troubles in your old kitbag"—exactly the same men, exactly the same spirit, exactly the same decency, exactly the same tunes, that bring back memories of 1914 in the minds of many of us. There were more broken boots than decent ones. They were wet and cold, and their physique did not compare with the physique of the demonstrations from 1918 to 1921, which many Members will remember, when the discharged soldiers' organisations were demonstrating. It is no good trying to ease our conscience with the idea that, after all, we are going through it as well. We are stopping ourselves. We do not go to the Savoy now. We go to a cheaper place for our lunch. We have given up expensive cigars and smoke something cheaper. We cannot afford an expensive car, and we drive a cheaper one.
    I know a very respected Member opposite—I will not mention his name— who, when the whole of the employers in his industry decided to impose a cut on their employés, refused to do it. When a friend of Mine was talking to him about it, he said he could not do it, because he was not yet driven down to the level where he could take away from the scanty wages that his employés were already getting. That is an attitude which a great Many Members on that side are perfectly capable of taking in a little isolated way with regard to their own particular people who come within their own particular purview. They would he ashamed in their private capacity to do what they are going to do to-day in their public capacity. This proposal ought to be withdrawn. The reasons for making it have disappeared. The urgency and danger that hon. Members might have believed in which would have driven them to take this inhuman and unChristian step have passed away.
    2046
    Not a single Member of the Government is in touch with the privations that they propose to put upon other people, and the least they can do is to keep their Whips off the Lobby and not have the spectacle of well-dressed, prosperous men of good physique driving others into the Lobby in order to force the submerged tenth to a lower and more bitter depth than it is in already.
    Mr. WEST: The hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) complained rather bitterly that Members on this side were making their election speeches. That may be true, but he, too, gave some indication of what line of policy he is going to adopt when he goes to his election meetings. He is going to tell his people that the tremendous increase of unemployment since the Labour Government came into office is due to the Labour Government. [HON. MEMBERS "Hear, hear!"] Others, apparently, will take the same line. The hon. and gallant Gentleman is not going to tell the people of Gains-borough that there has been a greater increase in unemployment in Germany and America, where they have not a Labour Government but where they have a tariff and a Tory Government. He is not going to tell them that. He is going to tell the people of Gainsborough quite obviously, as he said in his speech, that what we have to do to reduce unemployment is to put on a tariff. In other words, to put on a tariff to raise revenue from the goods that come in, and to put on a tariff to keep them from coming in; to bring them in for revenue and to keep them out in order to provide work. What he is not going to tell the people of Gainsborough is that this new and wonderful remedy for unemployment has been tried in many countries already, and that they have not enjoyed those tronderful results which have been prophesied. He will not tell them that. I am certain that he will not tell the people of Gainsborough, if it is true that foreign imports are very bad for trade and employment in this country, that the great bulk of imports now brought in from abroad are brought in by concerns which in the main support his own party financially. He will not tell them that. He will not tell them that the bulk of foreign imports are brought in by Tory importers.

    2047
    The hon. and learned Gentleman the Member for Rusholme (Sir B. Merriman) told us of his troubles in America and said that he did not want to cry stinking fish. He did not want to tell the people of America how dreadful were the conditions in this country. Stinking fish was a bad policy, he said. Yes, but it has been the policy of the Tory party and of Tory Members for two years to cry stinking fish against the Labour Government. He told us that the gentlemen he met in the United States were not very enthusiastic about the dole. The people in the United States of America apparently believe—they have been told by the Tory Press over and over again—that in this country any man who is unemployed just goes to the Employment Exchange and draws £2, £3 or £4 a week, and that that is how it is done in this country. Of course, they were not very keen about the dole in America.
    Employers in this country have never been keen about the dole. Employers in this country have said, as many Tory Members in this House have said for two years, that the dole has been the barrier that has helped to give rigidity to wages in this country. They want more fluidity—it is a very nice word—in the wage rates. Probably hon. Members will observe this argument. The Tory employer here says that wages must come down, because the German only gets 35s. a week. The German Tory says wages must come down in Germany because the Frenchman only gets 30s. The French Tory says the Frenchman must have lower wages because the Italian gets 20s. The Italian Tory says wages must come down because a Japanese gets 10s. The Japanese Tory boss says to the Japanese workers "Look here we have sympathy with your troubles, but the Chinaman works for 4s. a week, and we cannot afford more than that." What the Chinese boss says, I do not know, but I imagine that he says to the Chinamen, "You have rice for dinner and hot water for tea; why not cut out rice and have hot water three times a day." That is the policy of the Tory Party and has been for many years.
    This Debate has brought out some wonderful slogans. We have had the slogan for nearly three weeks of the
    2048
    "Flight from the pound"; the slogan of "Equality of Sacrifice," and the slogan of "Living beyond your Earnings." I remember one hon. Member here, speaking of the flight from the pound saying "Look at Germany." The Prime Minister, in his broadcast speech said that the pound cost 4,000,000,000 marks in 1923. What we were not told was that the comparison between Germany and this country is a grotesque comparison from the national point of view. Germany lost the war; we won the war. Germany not only had a great war debt of her own, but a tremendous reparation debt at the same time. Germany had lost all her colonies and all her foreign investments. We are told that this country has £4,000,000,000 invested abroad and that we have more colonies than any other country in the world. Obviously, to compare this country, which, as the Tory "Evening Standard" said, is the richest country in the world per head of population, a country with £24,000,000,000 national capital and an annual income of £3,500,000,000, with Germany is ridiculous and absurd. It is just a scare cry to delude the people.
    Talk about tightening belts. Really, for hon. Members opposite to talk about tightening belts is the biggest humbug anyone can imagine. Whose belts do they want to tighten? They do not mean to tighten their own belts, but somebody else's belt. The Prime Minister thanked His Majesty, and quite properly, for having sacrificed £50,000 a year for the time being. These economies were made at the expense of the wages of the King's servants, therefore the letter of thanks should have been sent to them. Hon. Members opposite who have made economies are doing so by reducing the wages of their servants. There is not much tightening of belts and making sacrifices in cutting down the wages of your employ£s. Is it equality of sacrifice when you take 6d. in the £ from a man with an income of £1,000 and 2s. from the unemployed working man? We are told that we are living beyond our earnings. It is perfectly true that a very large number of people are living beyond their earnings. A large number of people earn very little and spend a great deal, and it is those people whom I should like to see compelled to make a greater contribution towards the financial stability of the country. The right hon. Member

    2049
    for St. Ives (Mr. Runciman) who is a great Liberal banker and economist, told us the extraordinary story that the amount of savings a working people invested in various institutions was £2,400,000,000. With an average of 10,000,000 families this meant £240 per family. There may be some working people who have £240 invested, or £300 but if any hon. Member addressed a working class audience and tried to convince them that the average savings of a working man was £240 per family they would think he was qualifying for some mental institution.
    We are told that we must have these cuts because the rich have made tremendous sacrifices. We were told the other day that a man with an income of £50,000 a year would have to pay in taxation and insurance £53,000 every, year, that he was £3,000 a year out of pocket. If that were true—[HON. MEMBERS: "It is! "] Hon. Members know that that is not true—[HON. MEMBERS: "It is true."] If it were true, it would mean that the rich people of this country are year by year becoming poorer. You have only to state the proposition to see the futility and stupidity of it. [HON. MEMBERS: "Prove it."] I will try to prove it. In the last report of the Inland Revenue Commissioners, the income assessed for Income Tax was £2,600,000,000. The Income Tax and Surtax on £2,600,000,000 this year will be £400,000,000, leaving over £2,000,000,000 to keep these people from the workhouse during the year.
    Many statements have been made controverting the idea that the bankers of this and other countries have interfered with the Unemployment Insurance Fund, and that these economy cuts are being forced upon the country and the Government by banking interests at home and abroad. The "Manchester Guardian," of the 24th August, said:
    "It is the representatives of the great financial interests at home and, even more important, abroad who must be persuaded."
    Mr. Garvin, who will be regarded by hon. Members as an authority, said:
    "The representatives of the City pointed out that no foreign loans could he obtained unless powerful measures were taken at once to restore the world's confidence in the solvency of the British financial system."
    2050
    The right hon. Gentleman who is now Minister of Health, speaking in this House a week ago, said:
    "there was a widespread impression in foreign countries that the root of the financial trouble was our Unemployment Insurance Fund."
    That shows quite clearly that foreign financiers were troubled because of the state of the Unemployment Insurance Fund here. It would be true to say that it is not the French workman or the German workman who is troubled about the fact that we are paying unemployment benefit on the present scale. They are not angry because the English unemployed live decently. The French and German workmen would like to have the same services that we have in this country. It is not the workpeople abroad who are jealous, but the great financial interests at home and abroad, who are allied on this as on other occasions in order to bring down the standard of living of the people of this country. Hon. Members opposite know that if there was a threat of a cut in the Navy, due to foreign influence, it would be resisted with indignation. Why do they not show the same resistance against foreign interference with unemployment benefit that they would show towards foreign interference with the Navy? They have not done so because although they are big Navy men, in the main, they are small wages men, in the main. They want bigger navies and smaller wages. That is Tory philosophy and has been for many generations.
    Let me give an illustration of what these cuts will mean in London. In my own constituency, the Royal Borough of Kensington, the rents of two-roomed or three-roomed flats vary from 10s., 15s. and 20s. a week. There are scores of thousands and hundreds of thousands of families in London who are paying £1 a week for two or three unfurnished rooms. If I said that the rent for two rooms in my constituency would be 12s. 6d. I would really be putting a very low limit indeed. Take the case of the unemployed man with a wife and two children who is now getting 30s. a week in unemployment benefit. Say that his rent is 12s. 6d. There is no possible economy there, for the landlord will have his bit whatever the crisis in the country. Coal is about 2s. 6d. a cwt. I suggest 2s. 6d. a week for coal, light,

    2051
    soap and household essentials would be a very small allowance indeed. Thus 15s. is gone out of the 30s. and the married man with a wife and two children is left with 15s. a week to provide food and clothing for four people.
    I would put a question to the Parliamentary Secretary, who is a decent and humane man. I have heard him make Radical and humane speeches. How he can in any sense justify his past philosophy with his present position is beyond me. I ask him this question: There is 15s. a week left for the food and clothing of these four people. The 10 per cent. cut will not be a 10 per cent. on the 30s. It will be a cut of 2s. 9d. on the remaining 15s. A man cannot cut his rent or his coal and gas hills. He has to cut the 15s. for food and clothing down to 12s. 3d. I hope the hon. Gentleman has a wife and two children. Imagine him with those people to keep. Little boys wear out boots and socks and clothing even if they do not work, and the same amount has to be paid for repairs or renewals all the time. Does the hon. Gentleman really believe that four people can live on 12s. 3d. a week in a decent way? Does he think that any decent man or woman could vote for a reduction of the 15s. to 12s. 3d., as is proposed by the Government? We are told that this country is the richest country in the world. We were told that the Empire would go if the gold standard went. I say sincerely that if the Gold standard went and the Empire too, before I would vote for this reduction I would see the Government in hell ten times over. I am sorry to be warm, but that is what I feel. If there are mean persons in the world they are Members on the benches opposite, who privately probably are decent peopleߞ
    HON MEMBERS: Do not say that.
    Mr. WEST: Assume that they are decent for a short space of time. They have decent clothing, decent food, and decent houses to live in, and they can treat their own children decently. In my judgment there is nobody meaner than that man who himself possessing decent food and clothing is willing to economise at the expense of the unfortunate victims of capitalism, as this Bill proposes to do. If deflation is the cause
    2052
    of our trouble, if the War debt is the cause of our trouble, if the German crisis is the cause of our trouble—whatever be the cause it is quite certain that the unemployed have had nothing to do either with the policy of the bankers or the policy of the Government or the policy in Germany. If the unemployed are not the cause but the victims of the blunders which have been made by bankers or by statesmen of any party, why should they be made to pay for those blunders?
    I believe that these cuts are disgraceful; I believe that they are mean and inhuman. If it be true that we have a national capital of £24,000,000,000; if it be true that we have an income of £3,500,000,000 per annum; and that we are spending 21oo,000,000 on armaments, and paying £350,000,000 to the bondholders—if these things be true, then to try to cut down the incomes of the poorest people in this country when we are the richest country in the world, is a disgraceful and a typical Tory action.
    Mr. GRAY: I appreciate the compliment which the hon. Member for North Kensington (Mr. West) has paid me in suggesting that there was a probability that I might be a decent individual and that I do not like the particular task which falls to me at the present time. [HON. MEMBERS: "Why do it?"] I will tell hon. Members why. I am one of those who have taken as long and as close a personal interest in the question of insurance as any individual here. I believe that I wrote the first reply that was written to attacks upon health insurance in 1911. Those were the days when the cry was "ninepence for four pence" and when noble ladies declared that they would not lick stamps for the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). A great deal of water has flowed wider the bridge since that date. During the whole of those 20 years I have kept in personal association with the administration of both health insurance and unemployment insurance.
    I make no complaint whatever because I think there is no ground for complaint as to the nature and the tenor of the Debate this afternoon. I appreciate to the full the human emotion which has animated hon. Members as they have

    2053
    called to mind those members of our industrial community who through long and varying periods of unemployment have seen all their personal reserve disappear, the refinements of their homes pass away, and who are left with only this unemployment payment, supplemented by such extra relief as they may receive through the public assistance committees, appreciate to the full, as I say, the human emotion that is in the hearts and minds of hon. Gentlemen opposite in regard to the cases which they have put before the Committee, but I am bound to remind them of certain facts. Some little criticism has been made of the fact that I am for the moment sitting on this Bench. No man was more surprised than I was at the change that took place in my position in this House, but I am bound to remind hon. Members that I was invited by the Leader of a Government which was a Socialist Government, a Labour Government, who is at the moment the Leader of the present Government.
    Mr. HAYCOCK: What is he doing at the moment?
    Mr. GRAY: At the moment he is taking a slight rest from a tremendous strain. We may agree—I do not think it has been resisted from the other side—that the great political change that has taken place in this House did not arise from any unholy political pact. [An HON. MEMBER: "You have got it now!"] That may be in your mind, but certainly it is not in the minds of the right hon. Gentlemen who are sitting on the Front Bench opposite, nor is it in the mind of the Leader of the Opposition, who never denied that there was a crisis in the history and in the financial position of this country.
    The point that I want to make first is that we have had to make sacrifices, all of us. The contention is advanced that in this treatment of the unemployed we are making an unfair cut, a cut that hits the poorest of the poor. Is that really true I want for a moment to enter a caveat against that statement. It is so readily assumed that the unemployed person is the poorest of the poor, but it is not true. The Minister of Labour pointed out yesterday that something like half of the insured population of this
    2054
    country had made no claim for unemployment benefit, but the other half has, and the unemployed man to-day is not the poorest of the poor. [An HON. MEMBER: "No, the richest of the rich!"] He is not the richest of the rich either. I am not overstating the case.
    I have already pointed out that if the whole of the unemployed people of this country were represented purely and simply by the poorest of the poor, there would be a very much stronger case for the position taken up hon. and right hon. Members opposite than there is today, but the truth is that the people who are drawing unemployment pay to-day are not the people who can be described for a moment as the poorest of the poor. They are people who, by virtue of the payments they have made into the fund, are entitled to benefit. I have had the trouble taken to get a clear picture of what this army of unemployed really is. I have not taken a period of seven years, which is a long period and would show a better result, but I have taken the period for which we have the latest figures available in the Department, of the year ended 31st January, 1931, and on the sample of a half per cent. we get the following figures, that there are 456,000 unemployed who have drawn not more than 50 days' benefit, 432,000 who have drawn between 51 and 100 days' benefit and 352,000 who have drawn between 101 and 160 days' benefit. Taking that total out of a register of 1,946,000 on insurance benefit you find a total of 1,240,000. Over two-thirds of this unemployed army are not people who are living purely and simply on unemployment benefit; they are living on their other resources. Some have got investments—[Interruption] If the hon. Member is suggesting to me that the insured workers of this country who are represented by these people have got no investments at all, then I would refer him to the provident societies, the co-operative societies, the friendly societies and the trade unions. [Interruption.] Very little time has been left to me, and I hope hon. Members will allow me to proceed. I want to point out to the Committee that the elemental mistake, in my judgment, that hon. Members opposite are making is that they are confusing an insurance

    2055
    scheme with public relief. The man who is in an insurance scheme pays his contributions, and is entitled to a return from those contributions. I put this challenge to hon. Members opposite. There has been no lack of generosity on the part of the State to the Unemployment Insurance Fund.
    Mr. BROMLEY: How much did Lord Birkenhead owe to this country in arrears of Income Tax when be died? Generosity to your people!
    The CHAIRMAN: I must ask the hon. Member for Barrow-in-Furness (Mr. Bromley) to remember the Rules of the House.
    Mr. GRAY: I am sorry the hon. Member thought I was making any reflection. My point is a clear and simple one, and from the point of view of insurance it cannot be disputed. It is, that from the start of the Unemployment Insurance Fund until to-day an increasing contribution has been made by the State to that Fund. Although that contribution has come from the general taxation of the whole citizens of the country, it has gone to a limited class, and that limited class does not include the whole of the poorest of the poor. I want to make a challenge to hon. Members opposite, and I think I am entitled to make it, because at least nobody can charge me with not having clearly considered the claims of the insured workers. I am asking hon. Members opposite, and I think we are entitled to a clear answer from the representatives of Labour, is it their claim that there should be a certain section of the working-class population put in a privileged position as against another part of the working-class population? [Interruption.] Hon. Members mistake the privilege. I represent in the main, the agricultural labourer. I have spoken before on that point. My agricultural labourer, when he gets out of work, has no 15s. 3d. [HON. MEMBERS: "He ought to have!"] Yes, he ought to have, and I have pressed for it, but I never got it out of the Government that sat on this Bench. I would have liked to deal with this point more fully, but all I can do is to put what to my mind are the two fundamental issues that arise here. What is unemployment insurance? Is it insur-
    2056
    ance against a risk, with limitations on the contributions that you pay, and on the use of the fund—
    Mr. COCKS: Insurance against revolution.
    Mr. GRAY: In that case, do we only need to provide for the insured worker I Have we no responsibility for the other workmen in this country? The late Lord Privy Seal stated that by cutting down unemployment benefit we were cutting down the scales of Poor Law relief. I do not think for a moment that we are doing that. We are not touching that at all. What has been in the past the direct principle of an insurance scheme, and what must remain in the insurance scheme if it is to be insurance and not public relief? There must be some relation of the benefits that are given to the contributions that are paid. That has been the practice of organised labour in this country. The Government are not alone in reducing unemployment insurance benefit. The registered trade unions have reduced it considerably since 1920. In 1921, they paid about £7,000,000, and in 1929 just over £1,000,000. They have reduced their rates—
    Mr. BROMLEY: Where? Substantiate that!
    Mr. GRAY: I can substantiate it. I have the figures, but my time is short. I can give the hon. Member the trade unions and the figures.
    Mr. BROMLEY: Withdraw it!
    Mr. GRAY: No, I will not, for it is correct. I aim putting to the House the justification for this Measure. Do not let hon. Members think that because we are off the Gold Standard we are in a better position. We are not. We are now in the position in which the value of the pound rests upon the credit that this country has, not in one, but in every financial market of the world. Much as we dislike having to make these cuts, I make this claim, that, from the point of view of insurance, you cannot resist them. From the point of view of public relief, I object to a privileged class having better conditions than the rest of the citizens.
    It being Four of the Clock, The CHAIRMAN left the Chair to make his Report to the House.
    Committee report Progress; to sit again upon Monday next.

DIVISION NO. 496.
Sir VICTOR WARRENDER and Mr. CHARLETON (Tellers in Division No. 496), being come to the Table—
Sir VICTOR WARRENDER: I have to report that in the 12.30 Division I inadvertently counted the numbers in the "Noes" Lobby 10 short. The figure should be 180 instead of 170.
Mr. CHARLETON: I beg to confirm that statement.
Mr. SPEAKER: The alteration will be made.
The remaining Orders were read, and postponed.
Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.
Adjourned accordingly at Two Minutes after Four o'Clock, until Monday, 28th September.

UNEMPLOYMENT.
  STATISTICS.
  STATISTICS.
  BENEFIT, BRISTOL.
  BENEFIT, BRISTOL.
  MINISTERS (COMPANY DIRECTORSHIPS).
  MINISTERS (COMPANY DIRECTORSHIPS).
NATIONAL FINANCE.
  STATE SERVANTS' SALARIES.
  STATE SERVANTS' SALARIES.
  JUDGES' MARSHALS (SALARIES).
  JUDGES' MARSHALS (SALARIES).
ROYAL NAVY.
  LOWER-DECK RATINGS (PROMOTION).
  LOWER-DECK RATINGS (PROMOTION).
  ESTABLISHED DOCRYARDMEN, PORTSMOUTH.
  ESTABLISHED DOCRYARDMEN, PORTSMOUTH.
  LEAGUE OF NATIONS (UKRAINE MINORITY PETITION).
  LEAGUE OF NATIONS (UKRAINE MINORITY PETITION).
  PUBLIC ASSISTANCE COMMITTEES, WALES.
  PUBLIC ASSISTANCE COMMITTEES, WALES.
  ROYAL AIR FORCE (AIRMEN, COST).
  ROYAL AIR FORCE (AIRMEN, COST).