Privy Seal Office.

Class 1. – in the House of Commons on 19th May 1930.

Alert me about debates like this

Motion made, and Question proposed, That a sum, not exceeding £14,784, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for the Salaries and Expenses of the Office of the Lord Privy Seal."—[NOTE.—£8,000 has been voted on account.]

Mr. CHAMBERLAIN:

I am sure that no Member of the Committee, least of all the Lord Privy Seal, will be surprised that we again raise the subject of unemployment. The Government, which owe their place upon those benches to their repeated and specific promise that they would immediately and successfully deal with the problem of unemployment, will, in a few days, complete 12 months of their administration. Hon. Members opposite are fond of reminding us that the present Government is a minority Government. I am not sure whether they will still be able to put forward that pretext for any shortcomings, but certainly they cannot complain of the fact that their having been a minority Government has in any way hampered or hindered them from putting before the Committee or the House any proposals which they might have to make for the relief of unemployment. On the contrary, all parties in the House have continually assured the Lord Privy Seal of their earnest desire to help in trying to extricate the country from a situation which grows graver every month, and if there has been any criticism at all it has been rather directed towards urging greater exertions on the part of the Government than by way of putting forward an objection to anything that has yet been proposed by the Government.

When we last debated this subject some two months ago I remember that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) made a speech which caused some of us a good deal of surprise. He had accustomed us to a somewhat gloomy view of the prospects of British trade, and he had been indulging in the most outspoken criticism of the Government; but on that particular occasion he declared that he saw no symptoms of any decline in British trade, and he confined his censure of the Government to a mild suggestion that the Lord Privy Seal had been directing his attention almost solely to the permanent causes of unemployment and had quite forgotten that there was also a temporary problem. Subsequent events have somewhat mitigated our surprise at the line which the right hon. Gentleman took. No doubt there had already entered into his mind the knowledge that presently there would be a Naval Conference, and it had indicated to him the unpatriotic nature of any action on his part that would tend to embarrass the Government.

But since then the figures of the unemployed have risen by another 165,000, and we have had before us the very alarming and deplorable trade returns. I shall be interested to see whether, if members of his party take any share in this Debate, they still take the sanguine and optimistic views about the situation which they held last March. For my part I must say that with the best will in the world I can see very little to be hopeful about either in the present situation or the future prospects of trade and employment in this country—perhaps all the more so because I cannot but feel that the Government themselves are largely responsible for the present situation in which we find ourselves, and that unless we can see some realisation on their part of the mistakes that they have made, some recognition of the realities of the situation, there can be little hope of amendment whilst they continue to occupy their present position.

I do not want to occupy the time of the Committee by any long investigation of the contrast between the performances and the promises of the Government. It is a somewhat barren pursuit. But I cannot altogether forget the treatment that we received in the late Government from hon. Members opposite, when the whole responsibility for unemployment was always thrown upon our shoulders, and members of the present Government, including the Lord Privy Seal himself, vied with one another in taunting us with figures which were far less formidable than those which we are considering to-day. The present Government were specific in their pledges before the election. We all remember the words that were used in the election manifesto of the party opposite. Labour pledged itself then to deal "immediately and practically" with this problem.

It would have been quite easy for the party opposite to have qualified that pledge in some way, to have said "subject to world conditions," or "subject to causes which may be outside the power of any Government to control." But if they had said that they would have felt that it was to some extent a contradiction of what they had been saying in Opposition, and so they actually gave an unqualified pledge to deal with this matter "immediately and practically," and they went on to add that their record of unemployment was a guarantee that the pledge would be carried out. That was not all. They actually went out of their way to ask that this should be the test and the criterion in any judgment that was passed upon them if they should hereafter take office. I find in the pamphlet "Labour and the Nation" this passage: They will judge the present Government as Governments should be judged, not by its words but by its deeds, by its achievements, its actions and its omissions. The Labour party accepts that criterion, and when once again it assumes office it not only will be willing but will desire that the nation should judge it by its works. Even after the election, perhaps before the Lord Privy Seal had fully appreciated what was before him, he told his friends at Brighton that the Government would be judged, and rightly judged, by the handling of the unemployment problem. That is, in fact, what they are being judged upon, and by their own standard they are not only a failure, but the most colossal failure of any Government since the War. The other day I was looking at the official organ of the party opposite, and I saw a great headline on the front page "Now for the Second Million." A closer examination showed me that it referred only to its own cir- culation. But it was equally applicable to the figures of unemployment, and in the race that is going on between the circulation of the "Daily Herald" and the figures of unemployment, I am afraid that unemployment is going to be an easy winner.

Even the figures, bad as they are, do not tell the whole tale of the downfall of trade and industry since the present Government took office. I think we do not always realise the fact that before the late Government left office they had introduced, perhaps, the greatest Measure that any Government has ever brought forward in this country for the assistance of industry. Under the Local Government Act, industry was relieved of a burden which even the Chancellor of the Exchequer admits was a burden—a burden of rates to the extent of something like £24,000,000 a year. [HON. MEMBERS: "Who pays it now?"] What has been the effect of that upon industry? Here is an instance. I have a communication from an iron and steel company—d do not want to mention the name for obvious reasons, but it is a well-known company and the name would be familiar I dare say to every Member of the Committee—and they say: This company finds that the derating of its premises, together with the benefit which it receives from the railway rebates included in the derating scheme, effect a saving for it of 4s. 8¾d. on the cost of every ton of steel plates and sheets which it produces. We all know that great orders, great contracts for steel, turn upon far smaller differences than that—[Interruption]—and taking that typical instance of the benefits which have been conferred upon industry by the derating provisions of the local Government Act, how can anybody doubt that, if it had not been for that Act, these figures, which are so rapidly approaching the 2,000,000 limit, would be far greater to-day even than they are? I dare say we shall be told—[Interruption.]

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

At the beginning of this Debate, I would ask hon. Members in all parts of the Committee to pay attention to what is being said, and to allow those who are addressing the Committee to do so without interruption.

Commander Sir BOLTON EYRES MONSELL:

On a point of Order. May I represent to you, Mr. Young, that the hon. Gentleman who has just interrupted is continually interrupting speakers? We look to you, Sir, to stop this practice.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I do not know that the hon. Gentleman in question was interrupting intentionally, but he was certainly speaking to another hon. Member in a tone loud enough to interrupt the speaker who was addressing the Committee.

Lieut.-Colonel WATTS-MORGAN:

I was merely addressing a remark to an hon. Friend of mine here.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I have said that I do not think that the hon. and gallant Member was intentionally interrupting the speech, but, as I have pointed out, he was speaking in a tone loud enough to interrupt the speaker who is in possession of the Committee.

Lieut.-Collonel WATTS-MORGAN:

I am sorry.

Photo of Mr John Beckett Mr John Beckett , Camberwell Peckham

On a point of Order. May I point out to you, Mr. Chairman, that the Noble Lord opposite is continually indulging in interruptions?

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

Surely it is in the interests of Debate that Members in all parts of the Committee, who are addressing the Committee, should be permitted to do so without interruption.

Mr. CHAMBERLAIN:

I have no doubt that we shall be told by the right hon. Gentleman, as we were told last week, that a great part of our trouble is due to a wide-spread, in fact world-wide, depression of trade and industry which is to be seen in many other countries besides our own. I remember that the President of the Board of Trade expressed a sort of hesitating hope that we had now begun to turn the corner. I think that hon. Members opposite must have heard that phrase with a wry smile of recognition, because it is, as they so often used to tell us, the expression of a hope which is put forward and has been put forward by every Government at least once a year ever since this trade depression began. I am going to be more generous to the right hon. Gentleman than his friends and supporters were to us, and I am going to admit, quite freely, that some part of his troubles are in fact due to world causes and that the depression which we are feeling has its counterpart in the United States, in Germany and in fact in almost every part of the industrial world.

I notice that the Chancellor of the Exchequer the other day attributed that depression to the general fall in prices. It is perfectly true that a general fall in wholesale prices such as has been experienced in the last few months, not only reduces the purchasing power of the producer, but it also destroys the confidence of the consumers, because, of course, they do not dare to buy until they are satisfied that the market has touched the bottom. I am not sure that the Chancellor's explanation does any more than carry us one step further back. What causes this universal fall in the prices of commodities? We are told that it is over-production, but what is overproduction to-day, may be underproduction to-morrow, if the demand increases, and it is very difficult to believe that over-production has occurred simultaneously throughout the world in so many different articles of general use. I had a letter last week from a friend in Kenya Colony deploring the fall in prices which had occurred in every single one of the productions of the Colony. He said that the last to go was coffee. Three weeks ago coffee was selling at £140 per ton, but to-day it ranges from £50 to £70 per ton. What has caused the fall in the price? Not over-production in Kenya, but over-production in Brazil; but Brazil had been overproducing for years, without causing a fall in price, because she had succeeded in keeping her surplus off the market. But eventually the time arrived when she could no longer hold up her stocks; they had to be thrown upon the market, and, immediately, there came a break in the price which coincided with, or followed closely on the tremendous break in the prosperity of the United States which had been going on for so long.

4.0 p.m.

In that case the fall in prices came after the industrial slump and was not the cause of it, and the fact is, that the ultimate causes of these world movements are so obscure that it is almost as difficult to trace them out as to determine the old problem as to whether it was the hen or the egg which first appeared in the Creation. It may be that some day the world may learn how to regulate production so as to keep it more in accordance with supply. We are moving, perhaps, towards that consummation to-day, but it will not come about in the time that anyone here will live to see, and, in the meantime, we have to anticipate that these fluctuations will occur, and it is the duty of a Government which fully realises its responsibilities and is prepared to fulfil its duties, to look out for these movements, to anticipate them and to take such measures as may, if possible, counteract the effects, and particularly at such a time, when industry is beset by such circumstances, is it necessary that a Government should be more careful than ever to do nothing that will hamper or hinder industry or destroy future confidence. The fact that this depression in trade in this country may be due to causes affecting other countries besides our own, does not alter the fact that the situation here is growing worse from day to day. It does not alter the fact that, apart from those special and particular circumstances, there are factors affecting this country, apparently, alone, which have put it in a special position, and which have given it a state of unemployment which has been going on ever since the break in the post-War boom, in contrast to those sharp but sporadic and temporary outbursts of unemployment which we see in the United States of America, or in Germany or elsewhere.

I suppose that everybody will agree with me that there are two angles from which you can look at the problem. There is the long view and there is the short view. Either you can try to estimate what are the fundamental and underlying causes of unemployment, and endeavour to effect such permanent changes in the structure of industry as may remove them, or you can treat it as a temporary and passing phase to be treated by such temporary measures as may mitigate its severity and provide some temporary means of enabling the people who are out of work to maintain themselves and their families. I think any thoughtful person will see that the first view is a sound one, and, to do the right hon. Gentleman justice, it was not very long after he accepted office that, with his quick mind, he saw that the view he had held before had got to be modified. On 24th May last year, almost exactly a year ago, speaking at Oldham, he said: Labour is going to solve unemployment by spending money. On 2nd October, at Derby, he told his constituents: The assumption that mere spending of money would solve unemployment was a delusion and a snare. That was a quick, but, at any rate, complete conversion on his part, and, apparently, for a time, at any rate, he succeeded in converting his colleague the Chancellor of the Exchequer. I see that the Chancellor of the Exchequer, just about the same time, addressing the International Thrift Congress, used these words: We have still a gigantic problem of unemployment—a problem which has, so far, baffled the wisdom of our statesmanship; but I think we all see that there is only one effective way of dealing with that problem, and that is to improve our trade, to recondition, to re-equip and re-organise our factories and our workshops. and he added: and that needs capital.

Photo of Mr Philip Snowden Mr Philip Snowden , Colne Valley

I have said that before.

Mr. CHAMBERLAIN:

I hope that the right hon. Gentleman will not only say it again, but will practise it. May I finish the quotation? He went on to say: It is, unfortunately, a fact … that the total volume of saving in Great Britain to-day, is, after we take the changed value of money into calculation, less than it was in the years before the War, at a time, mark you, when the need for saving is greater than ever. What is the right hon. Gentleman doing now to assist that saving, and to assist in the accumulation of that capital which he recognises is necessary if we are to take the only effective way of dealing with our problem of unemployment? The trouble is that our iron Chancellor will not "stay put," and that that wise economist and philosopher, who addressed the International Thrift Congress, continually transforms himself into the bigoted Socialist politician who plays up to the ideas of his more extreme followers, and who undoes in a single night all that his colleague beside him has been trying to do in 12 months. That language which I quoted from the address of the Chancellor of the Exchequer is, really, a description in a very few words of the process which we so frequently nowadays call rationalisation. Now rationalisation is not a policy which commends itself to all hon. Members opposite, although I believe they have recently issued a document which says that it is inevitable. But what is their reason for objecting to it? As I understand it, they see that the first effect of it is to throw a certain number of people out of employment. They say that implicit in it is the idea of greater production, and that, as we are already producing more than we seem able to consume, the only result of adding to production will be that prices will be still further depressed, and we shall be all worse off than we were before.

That seems to me to be founded on a fallacy, for rationalisation in this country does not necessarily mean an increase of production. I remember very well at a time when I was myself engaged in a manufacturing industry, that we carried out the process to which I have alluded, although we did not call it rationalisation in those days. But we bought out some of our competitors, and we attempted to concentrate in certain particular departments work which had been distributed over four or five factories, and, on the strength of that concentration, we installed labour-saving machinery with a view to reducing costs. A certain number of our people were found to be redundant, and we discharged them. The older ones we pensioned; the others had to try to find employment elsewhere. But what was the result? The result was that we had so much reduced our costs, that very soon we began to extend our trade, and, before I left the business, we were employing more men, and those men were earning higher wages per week than they had been before. And that did not mean an increase in the world production of the articles we were making. What it meant was that we had taken a certain amount of trade from our competitors.

Mr. CHAMBERLAIN:

In addition, we had extended the market by reducing the costs. That is, of course, the aim of rationalisation—in the first instance to reduce the costs, and, in the second instance, to recover for the manufacturers of this country some of the trade which is now being done by their foreign competitors. An hon. Member said that that is my idea of peace. Does he think we have got peace now?

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

I am not blaming you; it is their policy also.

Mr. CHAMBERLAIN:

It is not for me to try to find arguments in reply to the hon. Member, but we have to face the fact that in this country we are engaged in an industrial war, and that we have to protect ourselves by any legitimate means we can find. While in old days we were by far the largest exporters of manufactured articles in the world, to-day we have become the largest importers of manufactured goods in the world. If you take the proportion of retained imports of manufactures to exports of manufactures from this country, you find that in 1913, before the War, it was 40 per cent. In 1926, it had risen to 53.6 per cent., and in the first three months of the present year it had gone up to 67.6 per cent. That is a very serious position, and when I reflect that last year, 1929, we imported into this country over £334,000,000 worth of foreign goods, of which, probably, something like £220,000,000 worth might have been made in this country, and could have been made in this country, then I say that, without in any way adding to the world's production, if you could, by rationalisation, so reduce your costs that a great part of that £220,000,000 worth of goods could be made by our people instead of by foreign countries, then we should be, indeed, on the way to solving our unemployment question. The real choice between us is not whether we will remain where we are, or, accept a, process of rationalisation which may mean a primary addition of—I think the right hon. Member for Carnarvon Boroughs put it at—10 per cent. additional unemployment. That is not the choice at all. We cannot stay where we are. The question is whether we should take rationalisation, with its ultimate increase of employment, or whether we should watch a steady decline as industry after industry is submerged by competition from foreign countries.

We at any rate, on this side of the House, are convinced that rationalisation is right, and if it is right for this country, it is still more right if it can be carried out in combination with those who are carrying on similar businesses in the overseas Empire. I do not mean to develop that theme this afternoon, because it would take me off the point to which I want to come, but I might perhaps just point out to the Committee, in passing, that the purchasing power of manufactured goods in the Empire as a whole is about double the amount of manufactured goods that Great Britain supplies to the Empire; and if, therefore, by trade arrangements between manufacturers here and in other parts of the Empire, supplemented by appropriate Government action, we could transfer to our factories some considerable part of that surplus, which amounts to hundreds of millions of pounds, it would be a real opportunity to reduce our unemployment problem.

I want to examine why it is necessary, in this country of all others, to take special measures in order to get rationalisation going, when apparently it goes of itself in other countries which are competing with us to-day. I come to the conclusion that there are two main reasons for our difficulties—first, insecurity in our own home markets, and second, the constant drain on capital imposed by excessive taxation. I have already drawn attention to the gigantic importation of manufactured goods into this country. The same thing applies to the importation of agricultural produce. We are all agreed that the real solution of the unemployment problem is to be found in a reduction of costs, and that that reduction of costs must be obtained by the reorganisation of our factories and the re-equipment of the farms. We all agree that that can only be done by the expenditure of new capital.

Mr. CHAMBERLAIN:

I should have excepted hon. Members opposite. They do not agree with anything. I say that we are all agreed, with one exception—[HON. MEMBERS: "No!"]—that new capital must be provided. How can you expect manufacturers or farmers to embark large sums of new capital in re-equipping factories or farms when they know that the fruits of that expenditure may be taken from them at any moment by the importation of goods produced abroad under conditions that would never be allowed here? We put our farmers and our manufacturers in a perfectly in tolerable position when, at the same time as we allow the most complete freedom of importation, we put on the maximum amount of interference with the conditions under which they are allowed to carry on their business. The logical corollary of Free Trade, of free importation, is that you should have free manufacture and free agricultural production, and if you are not going to allow that—of course, I am not suggesting that we should—then at least you ought, in the name of common sense, to realise that you cannot possibly maintain your standards of living in this country unless you are prepared to put up some barrier against the waves which are washing around them and which will presently wash them away.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

Get rid of the National Debt. We are going to repudiate that.

Mr. CHAMBERLAIN:

Let me turn to the question of the inroads on capital by excessive taxation. In one of those books, the preparation and publication of which is, I think, the most useful service that the Liberal party has performed during the last few years, there is a careful analysis of the way in which the new savings of the people in the post-War period are invested. The amount of the new savings is taken at the figure given by the Colwyn Committee, namely, £500,000,000. Out of that £500,000,000, a possible £245,000,000 is assigned as investments in industry at home, and out of that £245,000,000, no less than £195,000,000 is believed to consist of company reserves. The remaining £50,000,000 is bank loans and advances and new issues. Those are the funds on which industry depends for the reorganisation and renewal of equipment, of which the Chancellor of the Exchequer spoke, and without which we cannot hope to reduce unemployment. What is going to be the effect of putting new taxation upon these funds? The Chancellor of the Exchequer himself at one time recognised what the effect would be. In January, 1928, speaking at Liverpool, he said: High Income Tax affected savings and reduced them, especially when placed on company reserves. A few days later, speaking at Hanley, he said: Taxation generally was a burden on industry; it prevented its development. How can you reconcile those two statements with the declaration of the Chancellor, in his broadcast speech after his Budget, that he had placed no burdens upon industry? The two things simply cannot be made consistent one with the other, and I am afraid that the temptation for the Chancellor to use his great position for the purpose of the redistribution of wealth under the pretext of raising revenue has overborne the sounder views which prevailed with him when he was considering the question in a somewhat calmer atmosphere. There were some very pertinent observations made on this subject by the Colwyn Committee. They said: When a company saves by retaining part of its profit.… the flow of capital is just in the place where it is required; it is at the growing paint of industry, enabling new needs and opportunities to be met without delay, as and when they arise.… Generally speaking, it is true that the income-tax, when it falls upon company reserves, entrenches upon a form of saving which is of special value to the community. In another place they said: We conclude with regard to the supply of capital from individual and corporate savings, that industry has suffered materially from the effect of high income-tax and super-tax. This remains true, when full allowance has been made for the proportionate application of revenue to the large payments on account of the National Debt which accrue directly or indirectly to the benefit of trade. I do not see how it can be doubted that the effect of the Chancellor's Budget must be seriously to add to the difficulties under which industry is now struggling, and gravely to hinder, if it does not render entirely nugatory, the plans which the Lord Privy Seal has been formulating for the recovery of industry. The Chancellor of the Exchequer tells us that, in the absence of further considerable expenditure, there should be no need to increase taxation next year. We all know, of course, that further heavy expenditure is contemplated. I suppose that I should be out of order if I were to discuss the legislation which is proposed for the purpose of compulsorily raising the school age, but at any rate I might make this suggestion to the right hon. Gentleman, that he could employ, with a far better hope of profitable return, a fraction of the expenditure that would be involved in that proposal, if it were devoted to the advancement of education in the universities in order to equip the coming generation for the conduct of industry. The enforcement of amalgamations may indeed open the way to economy and to fresh methods of efficiency, but they will be of no avail unless you have the men ready to take advantage of them. I do not think the right hon. Gentleman can disagree with me when I say that one of the serious difficulties in industry to-day is the dearth of men who are capable of carrying through these amalgamations, and making a combination successful when it has been achieved.

Let me turn for a moment to what, in an earlier stage of my observations, I called the short view, and by the short view I mean the provision of temporary work, possibly in anticipation of work which would have been put in hand in any case a few years hence. In a speech two months ago, the right hon. Gentleman gave us a list of schemes towards which he had sanctioned Government contributions, for the development of railways, harbours, water supplies, electricity, roads, etc., amounting, I think, to some £65,000,000. No doubt he will be able to tell us later this afternoon what is the present figure to which he has brought up that sum, and I am hoping he will tell us also what the figures are going to mean in actual employment of those who cannot now find employment. I very much fear that when has comes to do that, it will be apparent to the Committee that these schemes are only touching the mere fringe of the problem.

The right hon. Gentleman himself does not believe in the efficacy of work of this kind. He has told us that these works—more particularly the work on roads, for the work on railways, harbours and electricity is in a different category—are not a suitable occupation for skilled artisans or people who are out of work, for instance, in the cotton industry. He knows very well, too, that work of that kind is not helping the women who are on the list. He has told us that in the period between 1920 and 1927 no less than £190,000,000 was spent upon the improvements of roads and bridges. He declared that nobody could state that that had made any permanent contribution to the unemployment problem. I am not going to press him to-day to do more in that direction. I am sorry for the right hon. Gentleman. With the Chancellor of the Exchequer at his side and the Chancellor of the Duchy of Lancaster at his back, he is like Issachar, embarrassed with a two-fold burden. I agree with what was said by one who spoke in the last Debate, whose place will know him no more in this House, but whose face and personality we shall not forget for a long time. I agree with much that was said by the late Mr. Wheatley about the uselessness of many of these schemes. Indeed, I believe that they are worse than useless in that they actually make more difficult the long range schemes upon which the right hon. Gentleman has been engaged, because they make inroads upon capital which would have been more profitably used in the development of industry. I do not believe that in the further extension of these schemes, many of which are largely of the nature of out-relief, the right hon. Gentleman will find salvation.

There is one way in which I believe that he could get some measure of immediate relief. It is a way to adopt Which would require a considerable amount of moral courage, but the right hon. Gentleman is not deficient in that quality, and I appeal to him to give careful consideration to what I am going to say to him in all sincerity and earnestness. Nothing is so injurious and fatal to industry as constant uncertainty. You can lay your conditions upon industry, and, however onerous they may be, as long as industry knows what they are, it will struggle to adapt itself to them. It is difficult, however, to plan ahead, to make schemes for the future, and to embark upon new enterprises when industry knows that, when all these enterprises have come to maturity, conditions may and very likely will be altered to its disadvantage. The Chancellor of the Exchequer has repeatedly stated his intention to abolish, before he leaves office if he can, every duty which has any protective effect. He has not yet carried out that threat in its entirety; he has extended it to only a few industries, whose voices are so small that they can hardly be heard except when there is a by-election in progress. But the threat is still there. It is only suspended. It hangs, like the sword of Damocles, over the heads of these industries, some of which are important, employing large numbers of men and women. So long as it hangs there, there will be doubt and uncertainty among them.

I am not going to ask the Government to adopt a Safeguarding policy. I realise full well that, whatever may be their innermost doubts and uncertainties, it would be too much against the declarations to which they are committed for them to think of it, but I do ask this of them: I ask the right hon. Gentleman to put aside party pride and to make a declaration that for a period of time there shall be no further interference with the duties which now exist. I ask him to do this without prejudice to any convictions which he or his colleagues may hold upon the general subject of Safeguarding or Protection, and in view of the grave situation in which the country finds itself to-day, when unnecessarily to add even another half-dozen to the numbers of unemployed would be a crime against the workers of the country. This can be done without the expenditure of a penny of money and without the use of a single day of the time of this House. If it were done, there would go out a sigh of relief from thousands of men and women who are to-day oppressed with a nightmare—

Photo of Mr James Thomas Mr James Thomas , Derby

The right hon. Gentleman makes a very important suggestion. I gather that he says, "Would it not be possible to remove the uncertainty of those trades which are now safeguarded, by making a declaration that for a period they will not be interfered with." Does that carry with it, so far as the right hon. Gentleman and his party are concerned, a declaration that they equally would not interfere with those trades which are not intefered with now?

Mr. CHAMBERLAIN:

The right hon. Gentleman seems to be in some confusion as to which is the Government of the day. His Government is responsible for affairs to-day, and his Government alone can take action on the lines which I suggest, and which I ask him to consider in the spirit in which the suggestion is made, in the spirit of that Council of State of which we hear so much and see so little. If it is to be rejected, if the right hon. Gentleman will not, or his colleagues will not allow him, to depart from the stand that they have already taken up, even for the sake of those people who are to-day employed, but who will not much longer be employed, we must go into the Lobby to make our protests against the obstinacy of this Government, who have betrayed the electors who pinned their faith to the pledges which they made, who have increased and aggravated the employment which they promised to reduce, and who, by their own action, have postponed, perhaps indefinitely, any prospect of the recovery of our trade and prosperity.

Photo of Mr Frank Griffith Mr Frank Griffith , Middlesbrough West

It seemed to me that no answer was given by the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) to the very pertinent question which was addressed to him by the Lord Privy Seal. It is a perfectly possible and conceivable thing to happen that the leaders of the three parties should meet, and that they should undertake that for a period of five years, six years, or 10 years, or whatever period might be chosen, whatever Government should happen to be in power, they would not interfere with the existing duties, and that, on the other hand, they would not put on any new duties. That would create certainty, if certainty be the object. It is ridiculous for those who are asking for certainty to combine the plea for certainty in the same speech with an advocacy for tariffs, because as soon as you start setting up tariffs uncertainty is introduced into industry. Nobody will know whether a tariff is to remain or is to be increased or decreased, and all the trades which are consumers of the protected product will not know what the conditions of their own production will be. Therefore, by all means, let those in favour of tariffs continue to advocate them, but do not let them combine with that an advocacy of certainty, when they themselves would introduce an atmosphere of pure chance into our whole industrial system.

It was rather difficult to follow the right hon. Gentleman when, in the course of his very interesting remarks with regard to rationalisation, he laid down the proposition that our traders will not rationalise of their own accord because of the difficulties from which they suffer, because they have an insecure home market and because of the drain upon their capital. Because they are in such great difficulties, it appears, according to the right hon. Gentleman's argument, they refuse to make any effort to get out of them. I cannot suppose that that is how the mind of any sensible trader would move if he found himself up against great difficulties and if he thought, as the right hon. Gentleman evidently does, that rationalisation is the royal road out. In the beginning of his speech, the right hon. Gentleman made some observations about my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) and some remarks that he had made with regard to the prospects of trade. There appears to be a complaint levelled against my right hon. Friend that he dared to find some gleam of comfort somewhere on the horizon. It is significant and curious that we should have that particular complaint coming from the Front Bench above the Gangway. I remember in the last Parliament that my right hon. Friend was, taken severely to task by Mr. Williams who was then an able Parliamentary Secretary in the last Government, and was told by him that it was unpatriotic to suggest that there was anything wrong with our trade. I remember that distinctly because some of his disapproval slopped over on to so humble a back bencher as myself. It is strange how the whole atmosphere changes as soon as a Government go into opposition.

I want to address myself to the Lord Privy Seal and the perfectly terrible problem with which he finds himself faced. I am not going to insult him by asking him to regard this problem from its human side, because, for one thing, I notice that nearly all the worst speeches in this House start like that. Apart from that, it would be an insult to him to suggest that he does not see as clearly as anybody else the human side of this problem. He knows perfectly well that all these 1,750,000 unemployed people represent an enormous aggregate of human misery, and that the situation would be far worse and more intolerable if it were not for the insurance system which was founded 20 years ago by my right hon. Friends on the Front Bench below me. He must realise all these things. The question is how he is going to meet his responsibility? I am not taking the cheap line which says that the Government have added one man unemployed for every minute that they have been in power. It might as easily be said that the increase in the number of unemployed coincides, not only with the tenure of the Office of the present Government, but with the currency of the Local Government Act of which the right hon. Gentleman the Member for Edgbaston appears to be so proud. It is just as logical to attribute the result to the one as to the other.

But in another sense the responsibility undoubtedly is the right hon. Gentleman's, and I am sure that he feels it, in that all these hundreds of thousands of people are literally leaning with their whole weight upon him. They can only look for employment to the activity of the Government of the day, and the responsibility must certainly be bearing hardly upon him. He is not responsible for their being there, perhaps, but he is for their treatment now that they are there, and the worst part of his problem is that so many of the remedies which are glibly suggested to him have no real application to the actual living problem before him. All the tariff argument introduced by the right hon. Gentleman who spoke last rather ignores the fact that the worst of the unemployment is to be found in quite unprotectable trades, or in trades which depend largely for their employment-giving ability upon their exports, which are likely to get damage and not benefit from any move in the direction of tariffs. Also, it is no good to look in other directions for other long-range remedies. That would be far from my intention. I think it would serve no useful purpose to embark upon a discussion of Socialism. Anything which needs a great deal of time for its application is not really within the department of the Lord Privy Seal. It may be the problem, but it is not his problem. What is required for the unemployed is employment most definitely in our time, employment this year, next year or as soon as possible.

Approaching the question from that point of view, I think we find there is pretty general agreement that though relief is better than nothing, work is better than relief. That has never been put more strongly than by the Chancellor of the Exchequer. In fact, he put it rather more strongly than I should have dared to do. In criticising the last Government he said, referring to the plans of the present Government, when they were in Opposition: These plans would cost money, but the Government"— that is, the present Opposition— prefer to give it in the form of a miserable dole to keep men from work."—[OFFICIAL REPORT, 24th July, 1928; col. 1217, Vol. 220.] He is putting it that the operation of the relief is actually preventing people from getting work, and that is putting it a great deal stronger than I should have ventured to do so. Such a statement by me would, I think, have excited considerable protest. Still, it is fair to assume that the present Government will not be anxious to earn for themselves the reproach which they levelled at their predecessors through the mouth of the Chancellor of the Exchequer.

So we have to ask, when will there really be any work for these people to do? A great deal depends upon what is the Lord Privy Seal's real answer to that question. Does he think that there is no real work for these people to do, or no real work on a greater scale than that which he is providing? If he does make that pronouncement he will undoubtedly receive a great many cheers from the Conservative benches. I do not know whether he has noticed that he is getting distinctly popular above the Gangway. It is said, "Beware when all men speak well of you," and I think he should beware when some people speak well of him who are certainly entirely out of line with the main current of thought in his party. If he is going to say that, then, indeed, it is a bad look-out for the unemployed. What was said when his party were in opposition? On 24th July, 1928, the following words were used. They were not used for election purposes, because it was a considerable time before the General Election, and I presume it is a considered judgment of the right hon. Gentleman as to the prospects of work in this country: The first concern and the first field that has to be explored thoroughly and left completely explored before any other is considered is: Are we making the best use of our own material, are our own national resources being developed as they ought to be developed? He went on to draw a dramatic picture. He said: Come with me for a fortnight, and we will start a walk across country, and we will use neither high roads nor by roads but will make a bee-line. We will take a map in our hands and we will go straight, and we will defy every piece of landlords' legislation we come across, but we will see our own country. We will see what our country is. We will see its capacity, we will see its neglect, we will see where it is developed and we will see the use to which thousands and thousands of acres are put. He continued: There is the whole question of roads and bridges to be rebuilt. … Nobody who has gone over our roads will be satisfied with what has happened. … from John o'Groat's to Land's End there are roads to be widened and surfaces to be made new."—[OFFICIAL REPORT, 24th July, 1928; cols. 1111–2, Vol. 207.] That sounds very much like a quotation from the right hon. Gentleman the Member for Carnarvon Boroughs, but, as a matter of fact, it is a quotation from the present Prime Minister, and I want to know when these great national needs, which are not relief works, but development work, will be producing work. The answer may be, "We are getting on with the job now, but it takes time. You cannot develop a nation in the course of 12 months." I would be very ready to accept that answer if one could see that real progress was being made, but we have to remember that these schemes did not begin to be thought out when the present Government came into office this time. Very far from that. I do not know whether it is news to the Lord Privy Seal, but there are in the pigeon-holes of the Department schemes which were constructed by the last Labour Government when they were in office—worked out in detail and put in the pigeon-holes, waiting to be put into practice. It was one of the great complaints against the last Government that they left them in the pigeon-holes. The schemes are still there—unless the right hon. Gentleman the Member for Epping (Mr. Churchill) has appropriated them in some way.

All we are asking is that these schemes should be brought forward, because we have the assurance of the present Prime Minister that if they were adopted they would be in themselves a sufficient treatment for the immediate problem of unemployment. To be perfectly fair, he was speaking at a time when the unemployment figure was not much over a million instead of as now being nearly one and three-quarter millions, and therefore one bas to make allowance. The schemes already there would deal with one million. The Lord Privy Seal has to find additional schemes for about three-quarters of a million people, but there is a good beginning. We want to know what has happened. Have those schemes been abandoned, or have they already been embodied in the schemes which the Lord Privy Seal has already sanctioned? If so, one can only say the result is very disappointing and has fallen very far short of the bright hopes with which the Prime Minister regarded them when he spoke of them.

What we do not want to see is the Government falling back into that spirit of fatalism which infected their predecessors, that spirit which always found reasons for doing nothing—and they are easily found. I hear phrases like "Causes over which we have no control." I know that is perfectly true. There are many causes of unemployment over which neither this Government nor any other has any control. When I hear the claim that more people are being employed to-day than when the Government came in, I recall that I have heard that statement before, and it may be true, but it is not a complete answer to the question. When I hear it said, "We shall only find a real remedy in the revival of trade," I know that that is perfectly true, but it does not meet the immediate needs of the situation. All these statements are true, but all together do not remove in the slightest degree the growing need for some immediate action with regard to unemployment. Hon. Members opposite were not satisfied with these excuses when they were advanced by the late Government, and I am sure they are not going to be satisfied with them to-day.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

No, we expect more, of the present Government.

Photo of Mr Frank Griffith Mr Frank Griffith , Middlesbrough West

There is a distinct danger that this attitude may be adopted, and that the Government may sink into the position of putting forward these excuses instead of the plans which they always say they have. If they do that, I am certain that no brilliant successes which they may win in any other field of politics will avail them. They may win golden laurels in foreign affairs and in the matter of disarmament, they may please people with their coal policy or their housing policy; but if they do not meet the demands of the people in regard to this vital matter of finding employment then they are doomed. An attitude of fatalism with regard to unemployment was fatal to the late Government and it will be equally fatal to the present Government, and I do urge them to act and to act while it is yet time, because if they fail in dealing with this problem there is a danger complete despair may fill the hearts of our people regarding Parliamentary government, and mischief will be achieved of which no one can see the end.

Photo of Mr Thomas Dickson Mr Thomas Dickson , Lanark

I could not help contrasting the solemnity with which the right hon. Member for Edgbaston (Mr. Chamberlain) dealt with tariffs and safeguarding and the somewhat light-hearted opening of his speech. One had some doubt as to whether the object of his rising was to express deep sorrow and regret that the unemployment figures were increasing, or was merely to conceal, rather thinly, something resembling pleasure that they were actually what they proved to be. He began by reminding the House of the Labour party's promises, but however rash and irresponsible we may have been it was nothing to the rashness and irresponsibility of the promises made in 1924 by the right hon. Gentleman, or those who spoke for him. We did not, as a minority Government, promise to find good wages and steady work for all who desire and seek it; we did not have five years to carry out our programme; we did not have a majority; and the less the right hon. Gentleman and his party seek comparisons between promises and performances the better it will be for him and those who sit with him. He told us that we on these benches owe our places to a pledge that we would deal immediately and practically with unemployment.

I think everybody in the House and outside if they have any sense of proportion, if they have any sense of any sort, will realise that a minority Government has limitations. That is a point which cannot be repeated too often, in spite of its being a matter for jest and laughter. In this House it is not merely administrative gifts and ability which count, it is heads in the Lobby that count, whether there be little or much in those heads, and the policy and the programme of this party must be determined by the lengths to which we will be permitted to go in dealing effectually with this problem. I know of no Socialist textbook or no Labour statesman who ever predicted that the unemployment problem was to be cured by a minority Government within the four corners of the capitalist order of society.

5.0 p.m.

The right hon. Gentleman was rather gracious to us. He said that he would not attribute all the increase in the unemployment figures to the present Government, but he said the Government were largely responsible for the present situation and that until we grasped the realities of it he did not see much hope. He went on, as no doubt he believed, to grasp the realities. The right hon. Gentleman told the Committee that we could take two courses in dealing with this problem. He said we could either take the short view and deal with it immediately, or we could take the long view. Then the right hon. Gentleman proceeded to give what he believed to be the long view of the Conservative party, which consisted of a policy of making permanent additions to the fiscal alterations which the Conservative Government have made during the past few years. The right hon. Gentleman advocated not only the policy of safeguarding which was known in his illustrious father's days as Tariff Reform but also the older policy which was known in his grandfather's time as Protection. I always recollect the story of a man who was alias John Smith, alias Tom Robinson, and afterwards alias Ben Jones, and who was told when he appeared in the dock that a man who changed his name so often must have a bad record. When we get Safeguarding alias Tariff Reform alias Protection and finally alias Beaverbrook we must conclude that there is a bad record behind that particular economic doctrine, and that hon. Members opposite are either trying to bring forward a bad doctrine under a good name, or an old doctine under a new name.

If the right hon. Gentleman's theory is correct that the best way to face this question adequately and properly is by a method of Safeguarding by imposing tariffs, we are entitled to ask one or two questions. If tariffs are a solution for unemployment, why is it that the problem has not been solved in America which has been scientifically tariffed for many years past? If tariffs are a solution for unemployment why is it that they have not solved the problem in Germany which has been tariffed for many years? Where is the proof that if we accept the policy of Safeguarding things will be better, and that the workers of this country will enjoy better wages, when at the same time the complaint of hon. Gentlemen opposite is that our manufacturers are being undercut by the sweated products of the workers of foreign countries where they have tariffs? These are very simple questions to which we ought to have some answer.

When the right hon. Gentleman the Member for Edgbaston came to deal with rationalisation he got into a fearfully illogical mess. Looking towards these benches the right hon. Gentleman said that some of us believed that rationalisation was inevitable and that some of us thought that it was bad, and he seemed to think there was illogicality in the position we took up. As a, matter of fact, there is nothing illogical about it. We say that the production of more wealth is not a bad thing if that extra production is properly distributed among those who produce it, but the production of more wealth, if it is accompanied by a worse system of distribution is certainly bad and we say that rationalisation may very well bring about that position.

The right hon. Gentleman argued that rationalisation did not lead in that direction. He said that his own firm had gone through a process of amalgamation and improvement in machinery, and so on, and he argued that they had actually employed more men and that the world production had not gone up. The right hon. Gentleman's contention was that what had really happened was that his firm had secured a larger proportion of the world's trade. But rationalisation was not only going on in that industry or in this country; it was going on in other countries presumably with the same effect, with the result that firms in America and Germany were increasing their production and at the same time securing a greater amount of the world's trade. If it is true that all the firms in these countries are experiencing a greater production through rationalisation the inevitable result is an increase in unemployment, whether we like it or not.

The right hon. Gentleman asked us to get dawn to fundamental things, and I am going to try to do that. There was a certain amount of unemployment in this country prior to 1914 under a policy of Free Trade, though not to be compared with the amount of unemployment which exists to-day in this country; but if there be unemployment to the extent which there is to-day in America and Germany, which are tariff countries, it is obvious that neither tariffs nor Free Trade will solve the unemployment problem. It must be obvious to every right hon. Gentleman opposite that wherever you get a process of mechanisation and highly industrialised countries there you get unemployment not only in a more recurrent form, but in a permanent form and to a greater and greater degree. One only needs to look at what is happening in Germany, America and Italy to prove this argument. The same thing is happening in China and other, countries. Apparently, there is something in all those countries which over-rides the effects of both tariffs and Free Trade. Evidently there is a great process of mechanisation going on and a development of the ability to produce more and more products with lesser human effort. There is a change from the days when this country was looked upon as the workshop of the world, and when this country practically exploited the whole field of trade because other countries had not become industrialised. There was no, or little, unemployment here, but at the present moment, Germany, America and Italy are themselves in the position in which we were many years ago. They have the ability to supply all their own manufacturing needs and are looking for other markets abroad.

The process of industrialisation and rationalisation is going on simultaneously in all those countries and this can have only one effect, namely, that they, like ourselves, are looking for markets which are no longer there. That is one of the fundamental causes of the present state of things, and neither Free Trade, nor tariffs will break through that condition, and unless some other fundamental cause can be shown for the unemployment which exists in Germany and in America, my view is that a Safeguarding policy will carry little conviction amongst the thinking men of this country. A solution of the unemployment problem cannot be found next year or even in five or ten years' time, and the problem will last as long as the causes which give rise to that problem, and those causes will last as long as the people of this country believe in the economic theories held by hon. Gentlemen above and below the Gangway opposite. The right hon. Gentleman the Member for Edgbaston said that the problem was going to continue until we had devised some method whereby the purchasing and consuming power of the people would balance productivity. I agree with that argument, and have put it forward many times on public platforms. I would like to put the point that if you continue a system under which some get more than their share of the product other people must get less. It is perfectly easy to arrange to get goods consumed. It would be quite easy to adopt a method whereby all the eggs laid by hens in one area could be consumed by the people in that area, but the seriousness of the problem comes in When you have a system of society in which a certain number of people are taking more than their share and more than they can consume, and at the same time leaving other people with less than they can consume and less than they ought to consume.

When the right hon. Member for Edgbaston was dealing with the balancing of productive power I could not understand why he was seriously opposed to increasing the Death Duties on estates of people with incomes of £2,000,000 a year so that increased allowances can be made to people with small purchasing power. On this point the Chancellor of the Exchequer is doing his best to meet the right hon. Gentleman and still he is quite discontented. The immediate policy of the Government can only be one of alleviation and palliation, and the Chancellor of the Exchequer has been urged from the other side to do the only thing which he can do under the system in which right hon. Gentlemen opposite believe and in which we do not believe. I hope that the Chancellor of the Exchequer will seek to raise more money from the same sources as his present Budget. I trust also that hon. Members below the Gangway will speak to the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and try to impress him not to repeat the statement that we have already placed upon the nation a financial burden greater than it can bear. Hon. Gentlemen below the Gangway cannot have it both ways. If they demand a greater and greater expenditure they had better face the facts and arrange that their chief shall make quite a different reference to the financial charges laid upon the country.

I hope that the Lord Privy Seal will also take the point of view that alleviation is the only way to deal with this problem, and that the Chancellor will find more millions where he is finding them now, and will spend them in alleviating a problem which is largely due to a problem over which we have no control. I hope that he will be prepared to spend larger and larger sums, that he will be willing to make available more and more millions. I believe that millions of pounds spent in improving our cities and towns, in improving their sanitation, drainage, and water supply would be money well spent; it would be the finest investment that could possibly be made in this country. Therefore, if hon. Members opposite are desirous of having the only palliative that can be applied immediately, I hope that the Chancellor of the Exchequer will take their advice, that he will raise the necessary money, and will get it from the source from which he is getting it at present, and in a greater degree.

Photo of Mr Harold Balfour Mr Harold Balfour , Isle of Thanet

I was very glad indeed to hear the speech of my right hon. Friend the Member for Edgbaston (Mr. Chamberlain), which showed, if I may be allowed to say so, such breadth of vision, because, as a new Member who has not been in this House for long, I have been profoundly disappointed with all the Debates on unemployment that have taken place in the House up to date. In all quarters of the House, the problem seems to be dealt with by taking one particular industry or another, and comparing whether 10 more men are employed or whether 10 fewer are employed; and the many hours which the House has spent in debating one particular industry at a time, instead of looking at the problem with broad vision, seem to me to have been very much a waste of time.

I could follow the hon. Member for Lanark (Mr. Dickson), and speak about election promises, about promises versus performances, and I think one could make out a perfectly good case that hon. Gentlemen on the other side had done something for which people, if they do it in civil life, are put in prison. If I go to someone and offer them a bribe in order to get their vote, I am put in prison, but in political life—I do not say that it is confined to any one party—there is a great temptation, into which perhaps hon. Members opposite have fallen rather more than Members of other parties, to offer some inducement, to promise to do something. Is there anything more wrong morally in making a promise to do something for the sake of a vote than in offering money for the sake of a vote? I say that there is no difference in the moral degradation to which you come when you do that sort of thing deliberately. The hon. Member who attempted to deal briefly with our fiscal question said that he always considered that there was ground for suspicion when there was a change of name. He spoke of Protection, Tariff Reform, and Safeguarding, and said that, when he heard of some man with three aliases being put in the dock, he always regarded that man's character with suspicion. One can only suggest to him that there are people who, after sitting on the benches opposite, have gone to other places and changed their names, and one wonders whether he regards them with suspicion, and whether his suspicion will go on increasing when their names change as further political success comes to them.

I was very glad to hear my right hon. Friend the Member for Edgbaston speak on the broad issue of the fundamental causes of the problem of unemployment, and my small contribution thereto, although it may be of small value, will at any rate be made with sincerity. There is concerted agreement on one thing only in regard to that matter in this House, and that is the agreement among all parties that industry is depressed and that the unemployment problem is the greatest problem that we have to face. My right hon. Friend spoke of the industrial war which we have to face, and one of the first things, as I see it, that we have to realise, is that industrially we are at war. I do not speak as one with many years to my credit, or discredit, as the case may be, but, at any rate, I speak as one who has had to earn his living in industry all his life, who has gone through the shops, and who has had to see the other man a point of view, with which he may have disagreed but to which he has very often had to give way.

To my mind, our problem is one of industrial over-burdening. When one looks at the curves, one always finds that, whenever there is a world fall in commodity prices, or in any particular set of commodity prices, there is at once in our British industry a depression which is greater than that in the corresponding industries of other countries. The recovery, also, is always slower in our case. We have less resiliency, leas buoyancy in our industry, and it always seems that, just as we are recovering from the blow, or from the fall in commodify prices in one particular industry, we get another blow which knocks us down again, while someone else in another country has got beyond that state of depression. We have not had enough strength to withstand the second blow.

That appears to me to be due to, one important factor. Politics appear to me to be at the bottom of it, and no one party is to blame. We have overbalanced productive industry in relation to the administrative services of the country, in relation to the Government services, and in relation to the sheltered trades. The ship of industry is always on the Plimsoll line of safety, and is borne down by a dead weight of cargo of people who do not produce. I do not say that that applies only to the working section of the community; it applies also to the directorial, the administrative, and the government sections of the community. As a country we are overburdened. I see that one in every 120 of the inhabitants of this country is looking after the remainder in the Government service, while 60 per cent. of the insured workers, according to the statistics, are in sheltered trades, leaving only 40 per cent. of the insured workers of this country to carry on their backs the 60 per cent. in sheltered trades, the administrative staffs, and the Government staffs; while our greatest industry, namely, agriculture, is unsheltered, and suffers from a disgraceful standard of living of which I feel that every Member of this House and most citizens outside must be ashamed. I was in Hampshire this weekend, and I asked a farmer what was the standard agricultural wage in his locality. He said that it was 25s. a week. I am sure that hon. Members, to whatever party they belong, cannot agree that a state of affairs can be tolerated in this country in which one of our greatest industries has this 25s. a week basic wage; and even this basic wage, in the present circumstances of the industry, is uneconomic.

Our agricultural workers in this country, with 40 per cent. of the insured workers of this country, are carrying on their backs the rest of the community, and the consequent over-balancing of the overhead charges, the national oncost of the direct productive labour in this country, has a two-fold effect. In the first place, there is a disinclination on the part of labour to go to the staple industries, the heavy industries, the productive industries of this country on which we have built up our greatness in the past; and, furthermore, there is a constant transference of labour to the sheltered industries, and discouragement of enterprise and capital as regards these productive industries. The present state of affairs in industry is such that one can only regard future with gloom, because the result has been to eat away the foundations of our apprenticeship system in this country. Our apprenticeship system has always given us the nucleus for those staple heavy industries without which this country cannot go ahead in competition in the world's markets. We are losing our markets, and people are getting more and more disinclined to buy from us; and, unless people do buy from us, we as a nation shall be doomed industrially, no matter what political party is in power, or in office, or in minority Government.

As to remedies, I think that the very first remedy is a realisation of these facts, because anyone who has a problem to tackle had better leave the task alone unless he realises the magnitude of the problem. Therefore, let us first get that realisation. My right hon. Friend the Member for Edabaston dealt with fundamental causes, but one fundamental cause upon which he did not touch is the over- balancing, the overburdening of productive labour by heavy increased administrative charges and by the artificial standard of living which has grown up in the sheltered trades in relation to the standard of living in the productive trades and in agriculture.

The next thing to do, it seems to me, is to take the trades one by one and analyse the causes of depression, and see if the Government, by legislation, can do anything to remedy them. Hon. Members below the Gangway are always advocating non-party conferences, peace between parties, and getting round a table. I would ask any hon. Member who is going to speak from below the Gangway later if he will answer one question, which I have asked of that party many times, but to which I have never yet obtained a satisfactory answer. Would they enter a non-party conference on industry, if such a thing were brought about, with free, unprejudiced minds, and, if they found it to be the common-sense, obvious fact that a measure of Protection would be of advantage to an industry, would they abandon the prejudices of the old Manchester school, which bought labour in the cheapest market as a commodity with which to barter, and be prepared to support a tariff for that industry if it were proved to be right?

Free Trade is all very satisfactory when other things are equal, but we have legislation, which hon. Members below the Gangway have supported, and which is not at all Free Trade legislation. We have protected the consumable stores in every productive industry. We have raised some of these stores to an artificially high level, having regard to the economic facts. We are forcing our productive industries to pay more for coal than they would pay in a completely Free Trade market. Our power, water, gas, sewage disposal, housing, are all protected industries at the present time. They are sheltered. They have strong trade union agreements, and, under that form of Protection, their commodities cannot be produced at less than a certain price, because of the wage levels which have been fixed. Now there is a new form of inverted Protection which hon. Members below the Gangway have supported. We have heard of trusts that must not sell above a certain price, but now hon. Members below the Gangway who support Free Trade have gone into the Lobby with the Government to support a protective trust which penalises anyone who sells a commodity at less than a certain price, and a commodity which our productive industries need more than any other, namely coal.

As long as we have legislation protecting the consumable stores of productive industry, we must do one of two things. We must either sweep away that legislation and lower the standard of living of the workers in these protected industries, so as to give productive industry its raw material at an economic price, or alternatively, we must recognise the fact that we have put artificial barriers in the way of productive industry obtaining its commodities at economic prices, and, as a corollary, we must be prepared to give to productive industry the protection that it needs to enable it to bear the burdens which have been put upon it by this legislation. As regards rationalisation, I feel that we should approach this question realising that King Canute could not stop the tide. I was interested in the point of view of the hon. Member who spoke last as regards rationalisation. I do not want to go into any argument with him, except to say that if you do not rationalise, other countries are going to do it. I do not say we shall get ahead by rationalisation. We shall get ahead if we do it first, but everyone is going to do it and, unless we do it, we shall be in a worse state in competition in the world's markets than we are at present.

The third thing that is going to help towards getting at the fundamental difficulty of the problem of unemployment is the policy of Imperial development. Whenever the expression "Empire Free Trade" is used, there is a roar of laughter from the opposite benches and shouts of "Beaverbrook." At any rate, Lord Beaverbrook has brought into political life something that has stirred hon. Members opposite to action, as well as some Members on other sides of the House. We have the greatest undeveloped agricultural area in the whole world, except the Argentine, in the British Empire. If our Imperial policy has ever been founded on anything, it is that the natural inhabitants of a country that we have developed have gained by our rule. By the bold development of the British Empire, with the help of the Legislature, we can go far towards providing those new markets without which our industry will never regain prosperity, for we shall never regain the markets that we lost in 1026. I know from firsthand knowledge that industry is still feeling the effect of those black days. Those are the fundamental ways of curing the unemployment problem.

The remedies I have suggested do not attack the standard of life of the sheltered industries. I have dealt with that problem of the high standard of life in the comparison between the dustman who draws £3 10s. and the boilermaker or turner drawing 45s. or 50s. a week and carrying the dustman on his back. I am not advocating any reduction in the standard of life of the sheltered trades, but I am advocating realisation that that standard is artificially high and that other industries need compensation if they are to carry the burden of that standard. We are trying to avoid high overheads, and we have to do it by marketing methods and efficiency methods, but let us be sure that we do not add anything more to the overheads of industry. The Government charges of national oncost are mounting with legislation for raising the school age and more unemployment benefits, while heavier taxation all adds to the national oncost. We want to raise the standard of life of the community as and when we can, but we can only do it from the proceeds of a healthy and prosperous productive industry. I long to see a Government that has the courage to put before the country the solid fact that the productive workers deserve the first cut off the joint before anyone else has anything. Let there be an increase in the standard of life of the productive in relation to the sheltered, and let there be an increase of efficiency in the productive industries. One longs for a Government with the courage of a bold policy of work, not swayed by emotion. There has been also in the party in which I serve, in the past, too much of the old tradition of Hilaire Belloc: We had intended you to beThe next Prime Minister but three.The stocks were set, the Press was squared,The middle class were all prepared.But, as it is, my language fails,Be off and govern New South Wales. That is, however, I trust, of the long ago past. We have now to secure a Government, not swayed by sentiment, by vote catching and vote buying, from which every party has suffered in the past, but one that would be bold enough to say, "We are not going to give increased benefits for unemployment, we are not going to give sheltered trades, which can command great blocks of votes, increased benefits at the expense of the productive part of the community. We are going to concentrate on a bold policy of increasing the national efficiency, a policy which is truly Conservative and which will restore the country to prosperity."

Photo of Mr John McShane Mr John McShane , Walsall

I should like to warn the last speaker to be careful in his statements. One statement he has made, that the producer should get the first cut off the joint, is, if he only knew it, highly revolutionary.

Photo of Mr Harold Balfour Mr Harold Balfour , Isle of Thanet

I am a highly revolutionary person.

Photo of Mr John McShane Mr John McShane , Walsall

Had that been in practice during the last 130 years or so, we should not to-night be discussing this very grave unemployment problem. The hon. Member for West Middlesbrough (Mr. Griffith) made a perfectly reasonable and reasoned speech. I do not want to attempt to be in any sense clever at repartee or at scoring points against hon. Members opposite by quoting what they have said, but in reference to the schemes that the hon. Member demanded should be taken from the pigeon-holes in which they were placed by the Labour Government, he said in the last unemployment Debate, "What, after all, if the man of push and go should be the Minister of Agriculture rather than the Minister of Labour?" He said those highly complimentary words because the Minister of Agriculture had induced the Government to sanction a scheme of land reclamation that was to cost £20,000,000. Those who have watched agriculture in its parlous condition know that the spending of money on schemes like that is silly. It is a waste of £20,000,000, instead of using it for agricultural land that is in need of it. It is, no doubt, easy to score points like that. I have no doubt when I sit down the hon. Member would be able to score a point against me.

I should like to deal with the speech of the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain). He gave a definition of rationalisation which, on the whole, would have satisfied everyone on these benches, but with a difference. He said he would point out the fallacy in our argument that rationalisation, as it proceeded, displaced workers and the fallacy, he said, lay in this, that, as a matter of fact, when the rationalisation had taken place, there was an increase in production, in trade and in the number of those employed. There is a much more serious fallacy in the right hon. Gentleman's argument, for he assumed, as most Members assume, that rationalisation must increase production. But it may not increase production. Does the rationalisation of the coal industry mean increased production? On the contrary, it may tend to stop or to delay production. Does the rationalisation of the tea industry that is going on mean increased production? It is precisely because it does not mean increased production, and because it is totally regardless of the welfare of those who are displaced, that we object to rationalisation at all. The main objection to rationalisation methods is that they are not rational at all.

We have now had it boldly stated from the Front Bench that the party opposite believes in the system of industrial warfare that Marshal Foch declared to be merely war under another form. I hope men and women who call themselves Christian will reconcile that with their religion and with their conscience. [HON. MEMBERS: "He did not say that."] He said so quite explicitly. There is no doubt whatever about that. It was precisely because it was industrial warfare that he said we had to protect ourselves against what was happening in other countries. The truth is that, if rationalisation did mean what the right hon. Gentleman said, if it did mean only that meantime there should be some little suffering on the part of the masses of men and women, many of us, as long as there was something done for those men and women, something to give them a decent livelihood, would have no objection whatever to rationalisation. After all, rationalisation is simply a big new word for a simpler word—the word "machinery." A great trust is simply a machine. Trusts and combines are as truly machines as a lathe in an engineering shop. There is no fundamental difference in principle. It boils down to this, that it is labour-saving machinery. That is fundamental. The right hon. Gentleman, in referring to unemployment in the United States, said that now and again they have these temporary stages of unemployment. I should like to quote from an article in the "Times" of 8th March: It is difficult to avoid the conclusion that unemployment must henceforth be counted as a permanent American problem. To ascribe its occasional recurrence in an acute form to some special event is no less delusive than to explain it as a merely 'seasonal,' or due to a 'land boom' collapse or Missouri floods." … There is little reason to doubt that permanent unemployment is to-day the lot of an always growing number of American men and women. It attributes that mainly to rationalisation methods. I will give some examples of what happened in the United States. In the United States to-day, according to a census of production that was taken, all the coal needed in the United States can be produced in six months, all the boots and shoes needed in the United States can be produced in six months, and all the window-glass needed in the United States can, by increased machinery, be produced in 17 days only. I could give hosts of examples like that. In an electricity producing station in New York where there ought to be employed ordinarily about 14 men or women, an electricity producing station supplying the needs of a population of no fewer than 500,000 people, there is not within its walls a man or woman, boy or girl. That is rationalisation in excelsis, but there is, obviously, a corollary from that.

I should like to deal with a most important contribution which was made to the last Debate by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). He said, in the course of a very remarkable speech, the following, which I think the Liberal party and the Conservative party, and perhaps our own party, ought to take to heart: I have made some inquiries. Trade depression and unemployment are worldwide. They are not dependent, as far as I can see from a survey of the situation, upon any fiscal system. You have got it in Ger- many; you have got it in the United States of America. He goes on further to say: The most disquieting feature is that with regard to raw material, and it is very extraordinary and very odd that we should be suffering from an over-production of the things we all want. That seems to be the case now. There is over-production of wheat, cotton and rubber. There is not so much of wool. Then there is steel. I am taking raw material for the moment. There is an overproduction in raw materials as we all know, and that is one of the reasons which are responsible at the present moment for a kind of stagnation in trade—[OFFICIAL REPORT, 10th March, 1930; cols. 954–957, Vol. 236.] In regard to rationalisation he said that rationalisation methods were responsible for the displacing—according to the eminent authority who told him—of not less than 10 per cent. on the average of the labour of all industries all over the country. The right hon. Gentleman was being interrupted considerably and I did not at that moment ask him a question on account of that fact. I afterwards wrote the right hon. Gentleman a letter to ask him this question: You stated that 10 per cent. of the workers were displaced by rationalisation methods, but you did not state over what period your proposals existed or your statement held good? The right hon. Member for Carnarvon Boroughs caused the following answer to be sent: With further reference to your letter to the right hon. Member, the following is the information which was given to him, and is what his speech in the House of Commons on the 10th March was based upon. It was a 10 per cent. reduction over the last three or four years due to rationalisation, by which is here meant not only the organisation of a whole industry but improved organisation and individual production, and this was a very conservative figure. I went to the Library to look up what was the total number of insured workers four years ago, and I found that the total number was 10,500,000. According to the right hon. Gentleman the Member for Carnarvon Boroughs, 10 per cent. of those—1,050,000—have been displaced by rationalisation methods during the last four years, and that, he said, was a very conservative estimate. Some hon. Members on these benches explained at the time that the figure was 30 per cent. It is true that in some industries the percentage has been as high as that, and in some others as much as 50 per cent. The blacksmiths in their annual report this year state that whereas 10 years ago 100 men were employed in a certain factory, now only 48 are employed. So that in respect of blacksmiths, actually 50 per cent. of the workers have been displaced under rationalisation methods. It will be obvious to most hon. Members in this House, or it ought to be obvious, that the solution proposed by the right hon. Member for Edgbaston is only playing with unemployment, and that discussions on Tariff Reform, or Safeguarding, or Free Trade in themselves do not get near the heart of the problem we are discussing. I say seriously that I am disappointed at the attendance of this Committee at the present moment when we are discussing this formidable and terrible modern problem which is eating into the hearts of the men and women who have sent us here. Indeed, this ought to be an occasion for a special Session of Parliament summoned to deal with the problem, unless it is, that being accustomed to the atmosphere of this House we can allow the problem to slip along and lead us into greater and greater difficulties. The right hon. Gentleman the Member for Epping (Mr. Churchill) put his finger on the root of the difficulty on the 4th of April last, when he said that if wet could manage to bridge the gulf between the things produced and those who need them, we should have gone a great way to solve the problem. That is where rationalisation is needed most of al; not merely in the production of more goods but in a rational way of distributing the goods once they have been produced. Those who believe in private enterprise for their own sakes and in their own interests would be well guided in beginning to think in terms of distribution of output. They in their own industries would be very much better off. Rationalisation actually may lessen production, and I appeal to all, whatever their political views have been in the past, to give their minds to this problem. Even those who believe in private enterprise would do infinitely better out of it.

Those men and women who to-day are unemployed in the woollen trade ought to have a special claim upon this House, and I say, without hesitation, that steps ought to be taken in order to finish the outrageous starvation of men and women which is going on to-day. The respon- sible Minister—and all credit to her for having made the effort—has attempted to get the two sides together, but the employers have refused. Let them remember the words of an hon. Member who used to sit in this House but who has been transferred to another place, that men and women cannot do what they like with their own to-day. They should remember that their factories are not their own in a real sense at all, but that they have become, in a national sense, part of the national life. I would suggest, not merely in order to deal with that situation, but in order to deal with the tragic situation revealed by the unemployment figures to-day, that the Government Might well consider putting into operation the Emergency Powers Act summoning, if you like, a national council, so grave is the problem, in order to alleviate the terrible cancer which is eating into the heart of the country to-day.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

Perhaps the Committee will excuse me for intervening at the present moment, but I want to make what I hope will be a practical suggestion to the right hon. Gentleman as a line on which he really can make some contribution to what may generally be termed the immediate problem. The question to which I want to call the right hon. Gentleman's attention is that of the improvement of the smaller ports round the coast so as to facilitate the development of trade. It is only a couple of months ago that a deputation from the Chamber of Shipping, the Shipowners' Parliamentary Committee and the Port Facilities Committee went to see the right hon. Gentleman. They met with a sympathetic reception, and they put certain definite suggestions before him, after very exhaustive examination of the condition of over 60 of these minor ports, as to what they thought ought to be the real measure of Government support in order to get practical things done. They put the view before him that in order to get these small ports re-equipped and improved to a very considerable extent in many cases, the Government ought to go as far as the maximum allowed on non-revenue-producing schemes, namely, 75 per cent. of interest and sinking fund charges. The right hon. Gentleman told the deputation, I am informed, that the Government fully realised the importance of coastwise traffic, and he said that he recognised that we had in our seas round our coasts and small ports what would be equal to the finest canal system in the world. I am, as I believe are most of the party to which I belong, opposed on general, broad grounds to the finding of enormous sums of money for temporary works of any sort or kind if it is to be regarded as a solution in any way of the unemployment problem or even of the immediate unemployment problem, but I hold that this particular question is rather in a category by itself.

One of the greatest handicaps of productive industry in this country, compared with the Continent of Europe, is that the industries of our competitors have the inestimable advantage of extraordinarily cheap transport, not only much cheaper transport by rail than we have but also much cheaper transport on the great river and canal systems that they have built up in these countries. We have practically no canal system left at all in this country. In spite of the fact that Royal Commissions, one presided over by my right hon. Friend the Member for Edgbaston (Mr. Chamberlain), made definite suggestions 20 years ago, none of them has been carried out, and, practically, we have no canal system. The cheapest method of transport we have is transport by rail at a very greatly increased cost per ton as compared with only a few years ago. Here in the coastwise chipping of the country we have a system of transport peculiarly our own and peculiarly approriate to this country, and for the disposition of these industries we have in the right hon. Gentleman's opinion what would be equal to the finest canal system in the world. I ask him why he really cannot take up this matter quite seriously and determine that something should be done?

6.0 p.m

As to many of these small ports, any development in them is unlikely, at any rate, which will give good road access, because they are purely railway ports. I have one in my constituency which the Chamber of Shipping has visited on two separate occasions. We have had a great many discussions, and the local authorities are proposing to combine in order to get a port authority there. That little port of Fremington, between the Taw and Torridge, really gives access to an immense agricultural area, but it is quite inadequate to deal with the present volume of shipping, and it lies alongside a railway line, and there is practically no road access to it at all. It was built by the railway company. Of course, anything that is brought alongside the wharf must go on the railway. We want a port authority created. We want at least three more berths, which could easily be arranged. We want access by a decent road, and we want these new berths alongside a new quay. All that means a very large expenditure and a very problematical return. Considering the time that trade takes to develop, even if you give it facilities, it is not unreasonable that the Government should look at the matter from the national point of view and say that in this case, in view of the fact that compensation would have to be paid to the railway company, probably, and that large expenditure would have to be in curred in the improvement of road access and in the building of new quays and dredging operations in the river, they will put it on the most favourable basis, as if it were a non-revenue producing scheme. If they can do that, they will get a great deal done towards developing these small ports. At the present time the most that they will allow for small schemes is 50 per cent. for 15 year. In regard to the larger schemes, they are more generous, allowing 100 per cent. for the construction period, plus 50 per cent. for 15 years. These two percentages only amount in relation to capital coat to 26 per cent. and 32 per cent., respectively.

In the case of the fishing harbours, the Government are taking a more lively interest in their development and the Ministry of Agriculture and Fisheries on the fishery side of their activities are closely co-operating with the right hon. Gentleman. I would ask that the Board of Agriculture and Fisheries should realise what enormous importance this matter is to the agricultural industry. In the little port that I have mentioned they are handling 20,000 tons of phosphates a year. It is very important that the farmers should be able to have access to the port by road, so that they can get their fertilisers and feeding stuffs. The farmers could get all their maize and feeding stuffs from the foreign sources, which come into Avonmouth seaborne and, if they could be brought coastwise to the the little port of Fremington the farmers of Tiverton and Okehampton right round to Crediton on the east and Lynton on the north would have a much cheaper supply of sea-borne feeding stuffs and fertilisers and access by the same means to the market, which I hope will be a greater market soon, in South Wales for the production of their fauns. There is a great deal to be done in the national interests bearing not only on agriculture, which is one of the industries to which we ought to give most attention to-day, but other industries, in the development of sea-borne trade, which the right hon. Gentleman realises offers a fair balance in our favour as against the great Continental canal system.

I have not gone into the question that has been occupying the Committee during the afternoon. I thought that in making a practical suggestion to the right hon. Gentleman, which I hope he will take into his very favourable consideration, I should probably be doing more useful service than by continuing what is largely a very academic discussion as to the possible causes of our industrial depression. Speeches of that kind are very useful in their way, but I hope that the hon. Member for Lanark (Mr. Dickson) will forgive me if I do not take the time that would be necessary, which would be very considerable to deal with the very interesting abstract subject which he introduced. I do not therefore apologise for confining myself to one subject.

Photo of Mr James Thomas Mr James Thomas , Derby

My first feeling is to pay a personal tribute to the way in which the Debate has so far been conducted. I should be less than human if I did not frankly admit that, if we were to view the problem of unemployment fudged alone from the figures as they are to-day and from the purely party political standpoint, and solely with a view to scoring one against the other, a tremendous case from the party point of view could be made against the Government and myself. But everyone would realise that after the party advantage had been scored, it would not really make a contribution towards the solution of the problem that men and women in all parts of the House and in all parties, and outside the House, are genuinely and anxiously desirous should be solved. Not only do I not complain about the two Oppositions so far as their treatment of this question is concerned, but I frankly say that I appreciate the fair-minded way in which the problem has been faced to-day. What I say about the Opposition in this House I am entitled equally to say of finance, industry and labour in the country. While it is interesting to listen to many speeches telling me what to do with this industry, and that industry, I can truthfully say that there is not a leader of trade, commerce or labour in this country who, either individually or collectively, I have not met during the last 12 months. I adopted that attitude quite deliberately, because I believe the industrial future of this country, with all that it means as far as unemployment is concerned, will never be solved by any Government unless that Government can carry with them in their Measures the hearty co-operation of those engaged in industry. Therefore, in approaching the problem, in discussing the problem and in trying to find a solution of the problem I never once went without consulting, discussing and getting the point of view of those immediately engaged in the industries themselves.

I, least of all, will minimise the figures. I do not attempt to minimise them. They are bad, and they are getting worse. Tomorrow will show an increase of 27,000 for this week, mainly in one direction, in one place and, as I shall show, from one cause. Lancashire, once again, is paying its great toll, and included in the figure is a tremendous number of women. Seeing the figures mounting, and trying to answer the question week after week, I have asked myself, not once but a thousand times: "Is the cause due to any action of the Government?" If so, no party label or prejudice ought to prevent any Member of the Government or the Government themselves asking: "What are we doing that is bringing about this state of affairs?" I have asked myself that question a thousand times. I have also said: "If we are not responsible, is there anything that we as a Government can do either to deal with the problem as a whole or to deal with it in its immediate technical and temporary aspect?" I think that there will be common agreement that if this Debate had taken place 12 months ago no Mem- ber in any part of the House, whether he was thinking of outside or inside the House, would have dared to suggest that we should find ourselves to-day in the position in which we stand. No Members of this House, speaking honestly or conscientiously, with all the knowledge at their disposal as a Government or with all the experience that they may have as individuals, would 12 months ago have dared to suggest that the position would be quite like it is to-day.

I have said, and I say it to-day: "Is this world collapse due to anything specially inherent in our position or even in our fiscal system?" I want the House to bear with me while I examine the facts. I would like my right hon. Friend opposite and the House to answer for themselves this question: If our fiscal system is the cause, and if it is because we are so riveted to Free Trade that we are suffering as we are to-day, are we not entitled, in order to satisfy ourselves that the system is responsible, immediately to go to the nations which have adopted a tariff policy and to put two tests: (1) Is the general standard of the life of the people in those countries higher than ours? (2) Is the unemployment problem solved by their particular method? I think the House will agree that that is a fair test, purely from the standpoint from which I am examining it at the moment. I turn immediately to Germany. No one will dispute that when the fiscal controversies took place in pre-War days the one example held up to this country was Germany. Germany was set up as one example to be followed. What is the position of Germany at the present time? In February of this year their unemployment figure was 3,365,000, 1,000,000 higher than 12 months ago. In all the industrial conferences that I have had with business men in this country Germany has always been included as a competing nation whose standard of living is much lower than our own. I am giving these figures in order that the Committee should realise the first point.

Now I turn to the United States of America. It will not be argued that it is a nation with no experience of tariffs, nor will it be suggested that it is a nation which has had no experience of Protection. The President of the American Federation of Labour, a few months ago, took a deputation to interview the President of the United States to urge the Government to deal with the problem of unemployment, and Mr. Green's statement was that in the membership of his unions, that is to say, the whole of organised labour in America, 21 per cent. of them were unemployed, and that in the building trade there were 42 per cent. of their members unemployed.

Photo of Mr William Stewart Mr William Stewart , Belfast South

February is a bad month.

Photo of Mr James Thomas Mr James Thomas , Derby

It has been customary to look at the seasonal fluctuations, but, as a matter of fact, so far as we are concerned, this year we have lost all the advantages of the seasonal fluctuations which normally would have been to our benefit. Hon. Members must remember in regard to the American figures, that they have not the same methods of obtaining statistics as we have, and we may take it for certain that this figure is a minimum, not a maximum.

Photo of Mr Robert Boothby Mr Robert Boothby , Aberdeenshire and Kincardineshire Eastern

You are dealing with a period of financial catastrophe.

Photo of Mr James Thomas Mr James Thomas , Derby

I will show in a moment what effect that financial catastrophe had upon this country as well. I am dealing now with the general world situation, and I have limited myself deliberately for the purpose of asking whether, after all, it is the fiscal system which is responsible. That is why I have given these figures from these two countries. In regard to Japan, only last week in an official report it was stated that 935 factories had closed down.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Stockport

Was there not organised short-time in Japan?

Photo of Mr James Thomas Mr James Thomas , Derby

I am dealing now with factories permanently closed, and my object is to show that the problem with which I am dealing and which the Committee is now discussing is not a problem peculiar to this country; it is not a problem that we alone are compelled to discuss and deal with. Many hon. Members in the past have always looked upon the Empire as being able to make a substantial contribution to our unemployment problem, but how many of them realise that our figures are increased because of the unfortunate difficulties of some of our Colonies, which cannot take any more emigrants? I am not criticis- ing them; I am only stating a fact. Australia at this moment has 14 per cent. unemployed, with full Protection in operation; and in Canada there are 10 per cent. unemployed. My only object in giving these figures is to try to get the Committee and the country, if possible, to see that this problem is not peculiar to this country, but is so worldwide that any panic measures to deal with it, instead of helping, would in my judgment, do incalculable harm.

Let me give one illustration. Take the 27,000 increase last week, which will be reported in to-morrow's figures. If this afternoon I were to announce the sanction for £7,000,000 for any relief works you may mention, it makes no difference whether it is on roads, railways, canals or anything else—if I merely announced £7,000,000 increased expenditure for temperary work it would only find work for 12 months for the number thrown on to the register during the past week. I put it in that way because I want to bring home to the Committee and to the country the gravity of the situation and how, when you are dealing merely with relief measures, it is impossible to estimate any figure that could adequately deal with that side of the problem. But it would be equally wrong on my part and on the part of any Government to say, "We must do nothing." The hon. Member for West Middlesbrough (Mr. Griffith) well said that although the situation is serious and bad no greater mistake could be made by any Government than to throw up their hands and say, "It is so bad we will do nothing."

I have applied myself to this problem. On the question of finding work, if it is merely filling up a hole or loading a barrel, you may call it finding work, but it does not add to the general wealth of the community. It will not pay, and it will create more difficulties in, the future. The test which I apply, and which the Government apply, is: How can we spend money that will provide work which will ultimately be remunerative and which will in the end not only find work temporarily but add to the general economic efficiency of the nation as a whole? I ask the Committee to judge our actions from that standpoint. It is quite true that it is nearly 12 months since we took office, and it is about nine months since we obtained power; that is, in the sense of sanction for certain expenditure. I want the Committee to see exactly how the test I have laid down of providing useful work has worked out. The total amount sanctioned at this moment is £95,000,000, which will provide employment for 380,000 people for a year. Let us see how that expenditure is spread over all phases of industry and how it meets the test I laid down, namely, that ultimately it will tend to the general efficiency of the nation.

Mr. CHAMBERLAIN:

Can the right hon. Gentleman tell us what will be the average period of time which these works will take? Obviously, the number of men who would be employed for a single year is only what one might call an artificial standard. The work might take much longer.

Photo of Mr James Thomas Mr James Thomas , Derby

The difficulty of giving a precise answer to that question will be understood at once. Take the electricity scheme for the North of England, to which I attach considerable importance. It is spread over a period of five years, but it is difficult to estimate any particular time, whether six months or 12 months, when the maximum number of people will be employed upon it. And that applies to most of the schemes. I have been pressed to say at what particular point the maximum number will be employed—

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

Can the right hon. Gentleman tell us how many are employed at this moment?

Photo of Mr James Thomas Mr James Thomas , Derby

Subject to certain qualifications, the latest information at our disposal shows that there are 100,000 people, directly and indirectly, employed at this moment on schemes sanctioned by the Government, independent of the railway schemes. That is the nearest answer I can give.

Photo of Mr Herbert Samuel Mr Herbert Samuel , Darwen

Is all that fresh employment or old schemes?

Photo of Mr James Thomas Mr James Thomas , Derby

No, I am dealing now with work sanctioned. Let me give the Committee figures showing how some of the amount is spread. On classified roads it is £26,000,000; unclassified roads, £3,000,000; railways, £19,000,000; electricity, £11,000,000; docks, 26,000,000; Colonial development, £5,000,000; sewerage, £4,000,000; water supply, £3,000,000; land reclamation and drainage, £1,000,000; sea defences, £2,000,000; and miscellaneous, £2,000,000. The Committee will observe that all these items represent expenditure that will ultimately tend to make the nation more efficient. For instance, the expenditure on docks is directed to securing more efficient machinery, to securing a quicker turn round and deeper dredging. The expenditure on electricity is directed to giving cheaper power. The expenditure on railways, too, tends in the same direction of greater efficiency. Therefore I submit that if the Government are to be judged purely from the standpoint of temporary expenditure to meet a difficulty, the £95,000,000 is not a bad result.

But it would be deceiving the Committee, and I would be deceiving the country if I did not frankly say that, with the facts as they are before us to-day, and with those known facts open to the country, anyone who assumed for a moment that the problem can be solved by any expenditure of this kind is living in a fool's paradise. Therefore, whilst I shall encourage further expenditure in this direction, and will continue to urge municipalities and other people to take advantage of the position and make their undertakings more efficient, I want to make it perfectly clear that in doing that I am deliberately acting upon a policy, and that I am not going to add to the dead weight capital of the country, because that will only hamper us in future; nor do I pretend that this short range programme, as I call it, will in the end make any really permanent contribution to a solution of the problem of unemployment.

I want to turn to another aspect of the question. Let me try to summarise the speech of the right hon. Gentleman who opened the Debate. He said in effect, "I agree with you and that your policy of not wasting money is a good policy. I agree that your, policy of rationalisation must come about, and that it is a good policy, but I want to remind you that all that is useless unless we do two things—a little bit of Empire Free Trade and a big amount of Safeguarding." I think that that is about a fair summary of the right hon. Gentleman's speech. But he also said a number of things which I desire to emphasise. No greater mistake can be made than to minimise the effect on trade, industry and the problem of unemployment of a feeling of insecurity. It is quite true that the motor industry does not plan to-day for the sales of next week. That is equally true of most industries in this country. That is one of the grave dangers of Protection. It is true that from January to April of this year the uncertainty existing amongst certain trades did contribute to the unemployment problem. No one will deny it. And the evil of it is that from the moment the Budget was introduced, or within three months of the passing of the Budget, and this form of Protection, the same agitation starts right over again. That continued and perpetual uncertainty is ruinous to the trade of this country.

But there is another kind of danger, and it is unfortunately prevalent at the moment. I only wish that this Debate would have the effect of stimulating more confidence in the country. I do not disguise, and I want my hon. Friends on this side of the Committee to realise, that the feeling of want of confidence which at this moment is permeating the country amongst all business sections, is having a bad effect. Let me come to the question whether it is justified. I have been told that people are taking their money out of the country. I think it is true. I do not disguise it. I know it is frequently said that the position is so insecure that considerable capital is leaving these shores. But I have put it to people individually, and I now say publicly that, bad as the position here is—it is bad, and no one need minimise it—what nation is there to-day that, viewed from the standpoint of security, hope or general social condition of the people, offers a better opportunity than this country, with all its imperfections?

The right hon. Gentleman gave us a very good illustration of what I call the long-range policy of rationalisation that I am adopting. It was an illustration based upon his own experience of many years ago. He asked, "Why is it that it is difficult to get industrialists in this country to rationalise?" He followed the question by the answer, "It is very largely due to fear, because of the insecure position they are in, and to taxation." The curious thing is this: Let us view it from the standpoint of the right hon. Gentleman's own remedy of Safeguarding. What are the industries which at this moment are more in need of real rationalization? When I talk of rationalisation I do not assume that the mere amalgamation of three or six companies, their being merely merged together, is rationalisation. I refer to rationalisation that tends to make industry more efficient, more able to compete in the world's markets and better able to produce goods at the lowest cost. I ask, what three industries more than any others are in need of that at this moment? Will it be denied that coal is one of them? Never mind arguing the results of the Coal Mines Bill. Take the history of the coal trade for the last 50 years. Will anyone deny that rationalisation and competent organisation are not necessary in the coal trade? Everyone knows that they are. Safeguarding will not help them. If it will not help them—

HON. MEMBERS:

It will help them.

Photo of Mr James Thomas Mr James Thomas , Derby

It is very doubtful. Would hon. Members apply Safeguarding to shipbuilding? Will it be argued that Safeguarding will help shipbuilding?

Photo of Mr James Thomas Mr James Thomas , Derby

I accept the hon. and learned Member's view as being his. I can only pit against him the opinion of those in the industry.

Photo of Sir Basil Peto Sir Basil Peto , Barnstaple

The right hon. Gentleman man has misunderstood our view. There are two methods of helping industry, first, directly, and, secondly, by the general prosperity of the country, by increasing the quantity of goods that can be produced and consumed. In that way both coal and shipbuilding would benefit by Safeguarding.

Photo of Mr James Thomas Mr James Thomas , Derby

I am dealing with the opening speech of the right hon. Member for Edgbaston (Mr. Chamberlain), and I took this as illustrative of the view that be expressed. With the position of the country as it is, and bad as it is, I do not take the view of those who merely assume that we have done enough. Take the situation in Lancashire at the moment. The Lancashire people are suffering as badly as anyone engaged in the mining industry has ever suffered. There is no doubt about that. Moreover, the position at the moment is aggravated, not for any reason for which the Government are responsible. Everyone knows perfectly well that the position in India every day and every hour causes more anxiety and hardship to those engaged in the Lancashire cotton trade. Everyone knows perfectly well that with China, one-fourth of the world, cut off, as it were, from the rest of mankind, there is another aggravation of the problem. Those are factors that are contributing to our difficulties. The Government attitude is quite clear. What consolation is there in this horrible position? There is one that I at least can find. Thirty years ago I and many of my hon. Friends on this side of the Committee took part in unemployment agitations. We did so because we were associated with men and women who were in dire want. Many of those agitations and movements were due to the awful suffering of our people. I am not going to be accused of suggesting that all is well. God knows, I do not think so! But I do say that in spite of all the difficulties it is a credit to us to find that most of our people are far better off than the people in any of the countries that I have mentioned.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

But they have got that from the Tories and the Liberals.

Photo of Mr James Thomas Mr James Thomas , Derby

It may be that my hon. Friend takes consolation from that fact, but some of us who have been in the House over 20 years take consolation from the knowledge that there has been no legislation, either Liberal or Tory, that does not bear the hallmark of the Labour Members who sat in the House during that period.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

I think my right hon. Friend misses the suggestion of the interruption. If the right hon. Gentleman and his colleagues who were in the House 20 years ago could extract so much from Liberals and Tories, surely we have a right to expect something more from them now?

Photo of Mr James Thomas Mr James Thomas , Derby

I felt sure that my hon. Friend would want to improve upon that interruption, and his improvement merely means this. Yes, from these benches I say that the conditions I have named are not in the least due to any other Government and the boards of guardians returns of to-day are the best tribute to what this Government has done as far as that matter is concerned. But I am sorry that even my speech should have aroused the ire of my hon. Friend. [Interruption.] He will have the oppor- tunity of giving the Committee his views later on. I am giving them mine at the moment. I content myself by saying again, that, as far as we can stimulate and encourage legitimate expenditure for useful work, we will do it. Merely to talk of millions of pounds being sanctioned is not solving the unemployment problem. That will merely aggravate it. We will continue the policy of efficiency. I will continue in the direction in which I am going, of trying to make the industries of this country better able to compete in the future than they have been in the past. I conclude by saying that black as it is at this moment—and the whole world position is such that no one can feel happy—yet we have the consolation at least of hoping that when the tide turns, and there is an improvement, this country as a result of our efforts will be better able to take advantage of it.

Photo of Mr Godfrey Collins Mr Godfrey Collins , Greenock

The Lord Privy Seal has described to the Committee his policy and has made a defence of the Government in connection with unemployment, and in the course of his statement he has told us that he is anxious to support any scheme which will add to the economic efficiency of the nation. He has also given the Committee information as to certain schemes which have been under consideration. Our only regret on these benches is that the right hon. Gentleman appears to be hastening very slowly. Although he has been some 12 months in office not many schemes have yet been passed. We hope therefore that in the coming months his Department will be speeded up, and that more schemes in the various categories which he mentioned will be passed. The right hon. Gentleman went on to speak of the feeling of want of confidence which exists at the present time. It is true that there is that want of confidence and it exists not only in Great Britain but in America, Germany and other parts of the world. It will pass in time and I was glad to note that in his concluding remarks the right hon. Gentleman struck a note of confidence and of hope that our country, with a return of confidence, would regain her trade and that our unemployment figures would decrease.

The speech of the right hon. Gentleman the Member for Edgbaston (Mr. Chamber- lain) suggests that the shades of Opposition create pessimistic views in the minds of hon. Members above the Gangway. He pleaded for a complete change in the fiscal system as a means of dealing with unemployment. My mind goes back to 1914 and the years following, and when hon. Members above the Gangway plead for a change in our fiscal system, I think they ought to answer this one simple point. For 70 years before 1914 this was a Free Trade country. The War came and we found we were the richest nation in the world, with the greatest manufacturing facilities in the world, with a Navy financed by Free Trade finance, and a shipbuilding industry created under a Free Trade system. We were able during the War to bring to our ports the food we wanted, and during that time of stress and strain our system stood the test. I suggest to the right hon. Gentleman that the test of practical experience spread over three generations and followed by the War, is the best test, and that he and his friends should address themselves to the question of how this country stood that strain successfully when other countries nearly cracked.

Like many other hon. Members, I am anxious to make suggestions to the Lord Privy Seal. Many and various suggestions have been put forward in the course of our Debate, and it may be that the points which I submit will not meet with the approval of hon. Members opposite. Yet if I can get them to go with me into a short analysis of the present situation, they may be more disposed to accept my findings. I divide our recent industrial history under three heads. We have our pre-War trade. Then we have the War period, and we had the seven years following the early years of the War. Before the War our manufacturers were being pressed by America and Germany, and though our manufacturers were not so efficient, yet we had a long start and our trade was good, wages were fairly high, profits were large, and this country became very rich. Up to 1914 our manufacturers, as I say, were being pressed by the manufacturers abroad because they were not so efficient as the manufacturers in Germany and America. Then the War came, and the War caused a greater disturbance to British industry than to any other country because we were a more highly industrialised nation than any of the others. During the War the producer came foremost, and the consumers' interest was pushed to one side. The law of competition broke down, and the Excess Profits Duty removed practically every incentive to efficient management. There was the extraordinary and unparalleled situation that the law of competition remained broken down for the seven years from 1914 to 1921, and that created strange views in the minds of people in this country.

Before the War our efforts here in the House of Commons were always directed to safeguarding the interests of the consumer, but, during the War, the producer became all-powerful, and so you had profits rising and wages rising, and the vicious circle going on higher and higher, with inflation to make it possible; and the result was that at the end of the War, when the post-War boom came, there was a completely anomalous situation. Traders and manufacturers had lost their sense of proportion, they had been so powerful for so long, and then the slump came. I think that Britain has faced trade depression during that slump in a very marvellous manner. Our people have suffered more than the people of any other nation. The suggestions which I offer to the Lord Privy Seal to enable our country to surmount its difficulties are few and simple. I repudiate entirely the tariff doctrine as any solution of the problem, and I think my first point as to the result of 70 years of Free Trade is a complete justification of my view in that respect. Tariffs will always create scarcity, and what Great Britain wants is not scarcity, but plenty, and plenty at low prices. We need plenty of capital. The Government could help in that respect. The Government might assist industry by not taxing reserves, which is a very vital point.

The Chancellor of the Exchequer was attacked by the right hon. Gentleman the ex-Minister of Health for his Budget but it is the House of Commons which determines expenditure and the Chancellor of the Exchequer is only responsible for finding the money. I think myself he found it in the right way, but the Lord Privy Seal could assist industry by urging his right hon. colleague to meet the claims of business men who place large sums to reserve each year. They are competing with manufacturers in America and Germany who have not this heavy taxation. They are being handicapped and that is a direction in which the Government could, I think, assist industry. But industry must assist itself. I reject entirely a Socialistic doctrine like Conservative doctrine of looking to the State to get you out of your trouble. Let industry look to itself. Let industry organise itself. The business men of this country are slow to move. It has been said of us that we are slow starters but good stayers and we have been too slow in reorganising the industries of this country. We are not so adaptable as the Americans, and we need to adapt ourselves to American ways, American outlook and American ideas. I was glad to hear the Lord Privy Seal pay his testimony to the assistance which he has received from business men since taking over the duties of his office. I hope he will inculcate in the minds of the leaders of industry not only a spirit of confidence but a recognition of the importance of internal reorganisation and of a changed outlook so that they will approach this problem not with a pre-War outlook, not with a War outlook, but with a post-War outlook.

7.0 p.m.

I hope that day by day and month by month we shall see the reorganisation of business proceeding. Like many other Members of this Committee I have been associated with business for many years and I know that, having worked in a certain way for a long time, it is difficult to adapt oneself quickly to new conditions, especially after years of prosperity under the old system. But, given time, I believe that our people will adapt themselves to new conditions. False economic views have been spread throughout the nation in such a way that it will take, perhaps, seven or 10 years, for those views to disappear but I believe that, given time and given wise leadership, our country will regain her former position. I regret very much that this controversy on tariffs has been thrust into the public life of our country, because it will create an uncertainty which is harmful to trade. I hope that the Lord Privy Seal during his years of office will continue to reject the extreme Socialist view that our unemployment can be wiped out by increasing the purchasing power of the public. We used to hear many speeches on that subject from these benches in former years. I congratulate the Lord Privy Seal on having repudiated those doctrines and on having adopted what is really the strict Liberal doctrine, being supported by the Chancellor of the Exchequer. I congratulate the Lord Privy Seal on his courage in taking the high office which he holds. I congratulate him on his policy, and wish him every success in the coming months.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

I listened with great interest to that portion of the speech of the hon. Member in which he suggested that we should adopt American methods. That was the last place in the world from which that observation should come, because American methods are being put into operation in his constituency in such a fashion that certain yards are being closed down, and others are being made more efficient, with the result that the hon. Member's voters are on the streets unemployed. That is how American methods are working out on the Clyde, and he had better get into touch with his constituents and see what they think of it.

Turning to the Lord Privy Seal, I have no personal feeling against him any more than he has against me, but, after listening very carefully to his speech, I am sorry to say that I found it a complete admission of abject failure. He is sticking to a job which, under present conditions, with his outlook in life and that of those who surround him, is an utter impossibility. It cannot be done the way things are. The Government of to-day are facing the unemployment problem in exactly the same way as the Tory Government. The Lord Privy Seal expects criticism from this part of the Committee, because of what we naturally expected, seeing that the Government had selected him, an outstanding trade union official with negotiating capacity second to none in our movement, for this special job, and had made a special Department of which he was in charge, taking it away from the Ministry of Labour and creating this new Department to deal specifically with unemployment. Yet here he comes forward and admits to the Committee that, instead of unemployment being less, it is getting worse and worse every month.

We told the Lord Privy Seal not only in this House but in the country—and we were denounced because we protected him—that it was inevitable if they went on with rationalisation or, as he classifies it, making the works more efficient. There is no other way given among men whereby you can make factories more efficient than in eliminating labour power and that means that the worker has to go on the streets. That is what is happening. He himself stated, not to-day but on a former occasion in this House, that, just when he got things operating that were going to ease the situation, some other circumstances over which he had no control came along and threw more men out of employment. That is the state of affairs, and he goes on still with this idea. Backed by big finance, backed by the big industrialists but not by the working class, backed by the ruling class of this country to make everything more efficient or, in his own phraseology, to make the works and factories of this country more efficient that we may be able to compete with the foreigners, I ask you where is that leading to? It was no idle interjection that I made during the speech of the right hon. Member for Edgbaston (Mr. Chamberlain), because he was making the same speech you were making in different phraseology.

Photo of Reverend Herbert Dunnico Reverend Herbert Dunnico , Consett

The hon. Member must address the Chair, and not individual Members of the Committee.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

I beg your pardon, Mr. Dunnico. I have no desire to fall foul of you. It was no idle interjection that I made during the speech of the right hon. Member for Edgbaston. I meant it in the same way as I meant it for the Lord Privy Seal and the Labour party. What does this efficiency mean? To make us more efficient to compete with the foreigner. Where is all our talk about brotherly love [...] Where is our Socialism gone? "Over the border and awa'". Where is all the talk about when man to man, the world o'er,Shall brothers be for a' that. Here we are sitting down in this country utilising the best brains we have to make this country more efficient in order that we may compete with the foreigner. It is an industrial war. There is no other name for it, while the Prime Minister calls all the world together for a Naval Conference. What balderdash it is! You cannot have it all ways. We are organising the works and man-power of this country in order that we may be able to compete efficiently and cut out the foreigner. What does the foreigner do? Is the foreigner sitting calmly and quietly by, looking at this great Lord Privy Seal that the Labour party has produced? Are the foreigners sitting calmly by seeing Britain being organised as it has never been organised before? The working class has produced a great organiser, and the great industrialists of this country, not being able to handle the matter, just as during the War they could not handle the war situation, have come down and tapped the brains of the Labour movement. That is how the Germans view it. I have talked to the Germans. I am only just back from the Continent, and they are saying that the great industrialists, just as they did during the War, have come to the Labour movement and tapped it of its best brains in order to organise this country against the foreigner.

The foreigners are organising their country, too. You have got the great Lord Melchett, that great friend of the working class, bringing over the German workers who are experts in chemicals in order to make the chemical factories of this country more complete and more efficient than they are in Germany. But what about Lord Melchett? He is interested in the same chemical factories in Germany. He has got a foot in both camps, and, after they have organised them and made them efficient, he will sit back in his arm-chair and see my class tearing the heart and soul of themselves because it means reduction of Wages. An industrial war does not stop at more efficient industry, or better organising in the workshops. It means reductions in wages and it spells unemployment. There is plenty of evidence of it. I would not care if the evidence was not there, but there is the unemployment. We said from these benches that before the year was out—that was last year—the figures would be up to 1,500,000. The late Mr. Wheatley predicted that before this year is out it will be up to 2,000,000. The Lord Privy Seal nods his head as if it is a fact. There is a state of affairs for you. What is the use of a Labour Government? What is the use of a Tory Government? The Tories cannot better it, or they would organise with their natural friends, the Liberals, in order to put Labour out. Because they do not see any way, they fear us. They fear the Independent Labour party because we hold the natural solution, Socialism. [HON. MEMBERS: "What is Socialism?"] My Socialism is this—that the whole of the trade and industry of this country should be organised to supply the needs not of a few of the people, but all the people.

It is at the very root of my Socialist faith that everyone should have a decent standard of life. But where is the decent standard of life to-day? Is it here? Is it in Yorkshire? What is going on in Yorkshire at the moment? Do you think that the Yorkshire weavers send Labour Members to Parliament in order that they would sit idly by and see them being starved into submission? I am satisfied they did nothing of the kind. There will be a day of reckoning for everyone who has sat idly by just now. I hold that this Government ought not to do so. Think of the Lord Privy Seal and the Minister of Labour asking and, in fact, begging of the employers to come together and meet the workpeople! It is too funny for words, and it will get worse unless the Government are prepared to assert their power.

What did the Chancellor of the Exchequer do at The Hague? Did he stand by and see the French and Germans do what they liked over reparations? No; he was then the iron Chancellor. Almost were we at war with France, and he would not move. The Prime Minister even came away from Lossiemouth to be ready at hand in case the Chancellor was going too far. Where is all that strength of character to-day? Where is the iron Chancellor, when the weavers who sent him here to defend them against the blood-suckers, the employers of labour, the big industrialists, the financiers, the City, want him? Where is all this strength, where is all this power, while my class are being ground down? I stand for them, but I do not care; they cannot grind me down, neither can they grind down those for whom I speak from this bench, because we are going to defend our class against all comers, and they are not being defended at the moment by the present Government. No defence is being put up for them at all.

The Lord Privy Seal says that Lancashire is largely responsible for this awful increase of 27,000. Here are tens of thousands of our folk, as good as any others, our own kith and kin. Members of the Government have relatives that are right up against it, who do not know what end to turn to, and all that they have got to-day from the Lord Privy Seal is, "You poor, lone women in Lancashire, you poor weavers in Yorkshire." It is that type in Lancashire and Yorkshire that has backed the Labour party through thick and thin, the descendants of the Radicals, who are standing to-day fighting even against the advice of their trade union leaders, refusing to surrender, but there is not a word from this House, not a word of encouragement from the Labour Government that was sent into being to protect the workers.

Photo of Reverend Herbert Dunnico Reverend Herbert Dunnico , Consett

The hon. Member is not entitled to discuss an industrial dispute upon this Vote. We are dealing with the general question of unemployment, and the Lord Privy Seal's responsibility for it. The hon. Member must keep within those limits.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

Yes, but the Lord Privy Seal instanced different countries that were up against it, and I am trying to show that there are no countries worse off when you are unemployed, when you are on strike, after you have been working for years at reduced wages, and when you have not another stitch but what is covering your nakedness, when there is no chance of the clothing you have on being renewed, when the goods and chattels you had when you were working are in pawn and now you are out on the street. There are no people worse off, not even the Indians, because they do not know better, but the Lancashire lassies and the Yorkshire weavers do know better, and therefore it is more hellish to them to be in this condition. The Lord Privy Seal went on to tell us that this terrible state of affairs was worldwide. He even instanced far-away Japan, and he gave us the figures of America and of Germany. The latest figures from the Ruhr show that the Ruhr miners have from 10s. to 11s. a day for a 7½ hour day. These are the worst conditions, the lowest standard of life, that they have in Germany, as against what we have in Britain.

The present unemployment problem has lasted far 10 years, and it began when the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George)—I am sorry he is not in his place—was the head of a Coalition Government, proving that neither Liberals nor Tories, neither Free Trade nor Protection are any use. This trouble arose through the policy that was adopted by the Coalition Government, both its financial policy of deflation and reduction of wages. I leave the financial aspect of the question to the financial experts, but the country and this House are entitled by now to have at least an interim report from the Committee that was set up nearly a year ago. I hope that whoever is replying for the Government will give us some indication as to whether they have any report to submit.

In my view, and in the view of those who think with me, there can be no revival, no minimising of unemployment, until the workers have an increase in wages. The purchasing power of the working class has to be increased so that they are able to buy back what they have produced. The trade union movement has not the conditions necessary for that purpose. Therefore, the Government must step in and aid the trade unions. We of the Independent Labour Party suggest to the Government that they ought to establish a living wage, sufficient to enable the people to buy adequate supplies of goods, and if there is 10 per cent. unemployment, there ought to be an increase of 10 per cent. in wages equivalent to that.

Photo of Reverend Herbert Dunnico Reverend Herbert Dunnico , Consett

The question of a minimum wage involves legislation, and is out of order on this Vote.

Photo of Mr David Kirkwood Mr David Kirkwood , Dumbarton District of Burghs

I am only throwing out a suggestion. We have had reductions in wages in the cotton industry, and we have the operatives in the woollen industry out in the street, and the Government are evidently unable to prevent those terrible conditions arising in the different industries. To take my own industry of engineering, because I am an engineer representative here, for three years we have been fighting for an increase in wages, and after using all the power of that powerful trade union movement, all that we have secured, after 2½ years of negotiation, is one farthing per hour, given to the shipbuilders of this country, than whom there are no more highly skilled men in the world; and even with that farthing increase—and it was only some of them who got it—they have not £3 a week. You are bound to have unemployment when you have such low wages and such bad conditions.

I throw out another suggestion to the Government, and it is something they can do now. They can use the Emergency Powers Act. The Tories did it when they were in power. They had no hesitancy in defending their class; they never hesitated a minute. The ex-Chancellor of the Exchequer, in his day and generation, when there was a railway strike, organised the Army and made no bones about it. He would not hesitate for one minute to shoot down my class. He organised the Army ready, if necessary, to crush the railwaymen back to their work. They were not so well organised as they are to-day, but organisation and counter-organisation have gone on. I suggest to the Government, something they can do at the moment, that would do the working class a power of good, and it would demonstrate to the working class of this country that all was not lost because a Labour Government was in. Believe me, men and women throughout the country are breaking their hearts because of what is going on, breaking their hearts because there are men in the Government whom they expected would stand by them, no matter what became of them, but they see them sitting tight and nothing being done, while our class are being driven, through sheer starvation, so submit to conditions to which they have no right to submit.

My suggestion is that the Government should make it illegal from now on for a reduction in wages to take place in this country. That would not require a great deal of legislation, and it would not require any bloodshed. Any individual would have great difficulty in standing up in this House and opposing that. I had hoped that the Prime Minister's Economic Council would have had some proposals to make on this terrible scourge of unemployment. I would like to know what they are doing. They were appointed with a great flourish of trumpets, although we common Back Benchers, we Socialists, protested at its composition. The Socialists were in control; we told our people that if they would give us a chance, we would show them how we could run the country. When the Socialists got the chance, the first thing they did was to select this Economic Council from men who are arrant Tories and Liberals. The last individual that they thought of bringing into their council was a Socialist, thus giving the lie to everything that we ever stood for. If we are capable of running the country, why call in all this supposed great brain power? Has not the country always been run by this great brain power, and has it not ended in the terrible tragedy of the working classes? Yet, immediately the Labour Government get control, they hand the business over to the same individuals who have been responsible for ruining the country. We were going to set the matter right, and we do it by bowing down to individuals who we said were not superior to us.

I would like whoever is replying for the Government to tell us when this Economic Councils meets, if they have ever met, and what has been the result of their deliberations on unemployment? Have they no compassion for the Lord Privy Seal? Can they not make one intelligent suggestion that would ease the situation? The members of the Economic Council were elected to the job because they were supposed to be men of outstanding ability, great captains of industry and the rest of it, but they have left the Lord Privy Seal to face, not this House, but the country, and every intelligent worker—and there are millions of them—will read and analyse his speech. He has been left here to carry the baby for the whole Cabinet; he has been left to carry it for the Economic Council, for all the great brains which the Prime Minister and the Chancellor of the Exchequer have roped in. The result of the labour of this great mountain of intellect and outstanding organising ability is the production of a mouse. The Government had no right to take on a job if it cannot be done. We, speaking for the Independent Labour party, make all allowance for the minority Government point of view, but when the Government took office they must have believed that, in spite of the fact that there might be a minority Government, they could substantially improve the lot of the working class. They have not done so. If the Government now find that they cannot do it, they should get out at the earliest possible moment.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Stockport

I beg to move to reduce the Vote by £100.

The hon. Member for Dumbarton Burghs (Mr. Kirkwood) will not expect us on these benches to agree with everything that he has said, but we sympathise with and appreciate the disappointment which he must feel at the growth of the volume of unemployment. We sympathise because we are disappointed, although we had not that volume of trust in the Government that he had. Now, that it has been brought home to Members of the Labour party that international trade and trade in general are a kind of economic warfare, they are perhaps beginning to appreciate some of the problems which we on these benches consider extremely important. Trade as a form of international warfare may not be a pleasant topic; it may be right or wrong, but it exists, and as it exists, we have to deal with it. Perhaps there are hon. Members on the other side of the Committee who in after years will consider that the proper way to deal with this international economic warfare is by organising the country nationally. If we do that, we shall find that it will have repercussions in the protection of labour through the protection of the prices at which our goods are to be sold. That, of course, is implicit in the policy of Safeguarding.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

It is implicit in the policy of Socialism.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Stockport

Then to that extent the two policies must be similar. I have listened to many speeches on the unemployment question, and I have taken part in several Debates on the question. I remember in the last Parliament feeling that the Government were, perhaps, not pursuing the question and solving the problem with that vigour which industrialists felt that they ought to do; and I confess that when, as a result of the General Election there was returned to power a party dependent for its success on the workers of the country, I felt that there would probably be a great chance of a solution of the problem of unemployment being put in front of any other question of the day. Instead of the expectations which were aroused in the minds of industrialists on this side of the House, as well as in the minds and hearts of the workers of the country, being realised, instead of the state of affairs growing better, and instead of a greater concentration of attention on the problem, the situation has grown considerably worse. The Government have hardly decided to tackle the matter as a Government. They have substituted for the authority of the Government a number of committees, and we are asked to wait, may be for years, or it may be for ever, for the findings of these various committees.

The Lord Privy Seal gave us to-day a comprehensive view of his policy. He stated that he realised that the burden of unemployment lay in the export trade, and the main basic industries, and that the solution of the problem was to be found through rationalisation. He wanted greater efficiency of production, a reorganisation of the various sections of industry, and a general building up of economic efficiency. It is well known that the basic trades cannot be reorganised without the assistance of finances; you have to get the use of finance in order to integrate production on the basis of the best use, and therefore, if the Lord Privy Seal sticks to his policy, the implication of it is that he is going to make this country a country fit for investors to invest their money in. The old cry to make this country a land fit for horses has gone by the board, and we have now a policy put forward by the Lord Privy Seal, an important part of which is that this country has to be made a country fit for investors to invest in. That must be so, otherwise there would be no point about the speech of the Lord Privy Seal to-day; there would be no point about his speech at Manchester, in which he promised the support of finance to every well considered scheme of rationalisation; and there would be no point about the remarks which he has made in connection with the good will of the Government for the new Bankers' Industrial Trust, which is being started in order to rationalise industry and, presumably, to carry out the Lord Privy Seal's plan.

Therefore, we have a situation in which it is necessary, if the problem of unemployment is to be solved in accordance with the views of the Lord Privy Seal, that this country should be a satisfactory place in which investors can invest their money. How has that policy been carried out by the rest of the Government? Nothing has been done to relieve productive industries of the burdens which they at present carry. Probably the most statesmanlike act that has been performed since the days of the boom was the removal of the burden of rates by the Derating Act of the last Government.

Photo of Mr Richard Wallhead Mr Richard Wallhead , Merthyr Tydfil Merthyr

It does not seem to have effected much, does it?

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Stockport

Certainly, it has had very great advantages, but they have been overborne by the existing depression and lack of confidence caused by many of the activities of this Government. The Government have added £45,000,000 to the burden of direct taxation, while our industrial rivals, France, the United States of America, Germany and Italy have all reduced taxation. Therefore, while the Lord Privy Seal is pursuing a policy of saying to investors, "Invest your money in this country," the other sections of the Cabinet are doing nothing to help that policy forward. It is true that the Chancellor of the Exchequer has congratulated himself on providing cheap money, but I would like to hear from the Government something about their views on cheap money in relation to helping industry and solving the unemployment problem. By a reduction of the volume of Treasury Bills the discount rate has come down, and it is suggested by hon. Members opposite that industry has been benefited by a reduction of the Bank Rate. The point I want to make is that, productive industries are harmed, when the Bank Rate goes up, and when it comes down they do not reap any benefit.

An hon. Member on the Treasury Bench appears to think that is not true. I will give him chapter and verse. Industries work their business on an overdraft which bears a minimum rate of interest. Invariably that minimum rate is 5 per cent., so that however low the Bank Rate may go the rate of interest on the overdraft does not fall accordingly, though it goes up when the Bank Rate goes up. That is one important point to be borne in mind; and this is another. The foreign producer who sends his goods into this country through an importer does get the advantage of the temporary cheap money brought about by the activities of this Government. The goods are imported on a bill, and that bill is discounted at the prevailing rate of discount. So it comes about that by this policy of cheap money producers in this country get no benefit but importers do get the benefit, and the foreign producers are to that extent being benefited. The Government have cheapened short money, that is, cheapened borrowing over a short period, but have made capital scarce. It is almost impossible to obtain money for capital reconstruction purposes.

Take the cotton industry, which the Lord Privy Seal is anxious to see reorganised from top to bottom. We all know that it ought to be reorganised, and we are all anxious to do it. It cannot be done without the constructive aid of finance, yet the situation in this country is such that if you were to endeavour to raise money on a mill in Lancashire, even a modern mill, you would probably get only something like 4s. per spindle over the whole mill; whereas, if that same mill were in certain other countries in the world, in identically the same circumstances, you would be able to go to the City of London and get something like 40s. a spindle—because the mill was in a different place. That arises from a lack of confidence in the future of the industry. If the Lord Privy Seal is going to base his policy on making this country a good place in which investors can invest their money he will have to be much more effective than his colleagues in the Cabinet.

The President of the Board of Trade, in a comprehensive review of the tendency of British trade which he delivered last week, in his usual lucid way, had nothing to say of a cheerful character, except in the peroration. In his peroration he said: "There is one bright speck. During the last fortnight we have lent £16,000,000 abroad." Abroad! The President of the Board of Trade is apparently taking some satisfaction because we now lend money, and a small amount at that, abroad. He had nothing to say about money being lent to reorganise British industry, nothing about money being lent to get employment in this land. Is it the view of the Chancellor of the Exchequer and the President of the Board of Trade that the invisible exports which arise from the money lent abroad are just as good as visible exports? Do they think that because last year we lost £7,000,000 of visible trade, and added to our credit £7,000,000 of invisible trade, that we were just as well off? I believe that view is profoundly wrong. Invisible exports may be advantageous to this country if our people are in full-time work; it is all right to use invisible exports as a basis on which to build up the standard of living; but if our people are not in work, it may well be that the greater the amount of the invisible exports the greater the amount of the unemployment. I would like to know whether that view that invisible exports are just as good as visible exports is shared by the Front Bench of the present Government.

Our excess of exports over imports of manufactured goods in pre-War times was one and a-half times that of the retained imports. Now it is only three-quarters. That must show that we are occupied less with enterprises which provide employment for our people and more with enterprises which merely allow imports to come in without any corresponding work being required to pay for those imports. The policy of the Lord Privy Seal may be a good policy, but it seems to me that it is rendered nugatory and ineffective by not being backed by the policy of the Government as a whole. We used to hear the phrase "Wait and see." When one looks round Lancashire and Yorkshire, those great counties which are the backbone of the support of the party opposite, and see the growth of unemployment and the increasing feeling of dissatisfaction among their people, it may very well be that we shall have to alter the slogan from "Wait and see" into "Starve and wait."

Photo of Mr Robert Taylor Mr Robert Taylor , Lincoln

No thoughtful person could listen to the speech delivered by the Lord Privy Seal without grave misgivings and anxiety as to the possibility of any recovery of our trade in the immediate future or any serious diminution in the number of the unemployed. I rise to draw the attention of the Government to one item which was in the programme or the manifesto issued by the Labour party at the General Election, and which contains a principle which I think has the support also of the Leader of the Liberal party. Before I come specifically to that point, however, I would like to review the position in relation to the unemployment problem, as it appears to me. There is a proportion of unemployment which may be regarded as a normal feature of a capitalist society. In the production of even the simplest commodities a great deal of the activity is, under modern conditions, based upon estimates of future demand. From time to time such estimates will be the subject of miscalculation arising from unexpected political disturbances abroad, a bad harvest or changes of fashion, and unemployment is the result. That kind of unemployment becomes increasingly severe as processes of production become more specialised and more sub-divided. That unemployment may properly be provided for by a system of insurance.

8.0 p.m.

In addition to that type of unemployment, since the beginning of the slump round about 1920 we have had a situation in this country in which the great bulk of our unemployment has been concentrated in a number of great exporting industries, where the depression has reacted upon other industries which partly cater for the internal market and partly for the export market. If you take great groups like the cotton industry, the iron and steel industries, the textile industries, and engineering and shipbuilding, which account for more than half the whole volume of unemployment, and in which industries unemployment has been chronic, and has remained a settled feature during the years of depression, we have to face the facts and realise that the conditions in the world markets are such that we have to aim at a reorganisation in certain forms of our economic activity in order to bring our economic organisation more in line with the new conditions in the world. For instance, it has been stated with some truth that we used to export in the decade before the War on an average about £100,000,000 worth of goods every year for the purpose of railway construction. It is obvious that the market for that particular class of export has been seriously diminished, not merely temporarily, but permanently, by the revolution in transport which has affected every urban centre in the world, and, while to some extent the loss in that direction has been offset by the growth of newer industries like the motor car and motor vehicle trade, and the export of artificial silk and electrical and engineering and wireless apparatus, there is from that one fact alone a great shortage affecting the coal industry and the iron and steel trade, and it is no use expecting that we are going to restore that particular type of demand.

During the War period the conditions accelerated the growth of industries in other countries and in our own Dominions, which are now competing with us for a local market behind high tariff barriers. In addition to that, we are faced with a tremendous increase of productive power and industrial efficiency in Germany, Japan, the United States, and certain other countries. It is quite useless to expect that we are going to restore the volume of our export trade by relying upon the old lines of activity. We have to look at the new situation, and base our policy in relation to unemployment upon new facts. In addition to this type of unemployment, which was more or less chronic in post-War years, and was concentrated in a number of industries, the situation during the last few months has been further complicated by a world crisis which has affected industrial nations like Germany, Japan, and the United States just as adversely as it has affected this country. During the past few months we have had an abnormal increase in unemployment due to the fall in the price of raw materials and foodstuffs.

A factor which has not been so frequently commented upon is the great uncertainty in certain markets which formerly absorbed considerable quantities of British goods. In Spain, Egypt, India and China the political conditions are such that our trade has seriously diminished during the last few months on this account, and in some markets it has totally disappeared. Unless the Government can find smile different lines of approach and some different principles upon which to base their unemployment policy, I do not believe that things will get better, but, on the contrary, we are moving on to an even greater crisis than that which exists to-day. Not only is there depression due to world conditions in our export industries, but in the countryside you will find agriculture paralysed and tens of thousands of agricultural labourers but of work. Many smallholders find that they cannot sell the produce which they have worked so hard to produce.

We do not seem to have had from the Government any indication that they realise the nature of the crisis which is confronting this country. It is clear that the power of the Dominions and other export markets to absorb increased quantities of British manufactured goods depends entirely upon the extent to which they can increase their sale of foodstuffs and raw materials in the markets of the world, and the extent to which the sale in foodstuffs and raw material can be extended in this country depends, in turn, and entirely, upon the consuming power of the great mass of our population. Unless we can raise the consuming power of the 75 per cent. of the population, who can do with more boots, clothes, shirts and other goods, it is impossible to extend the sale either of Dominion or other world products or foodstuffs and raw materials in this country. The Government policy should be based upon the principle of raising the consuming power of the mass of the population, and that seems to be the necessary basis for any extension of our export trade.

In order to do that, I hope the Lord Privy Seal and the Chancellor of the Exchequer will not hesitate to be unorthodox in relation to finance. If they can start by a system of children's allowances, or other palliatives, to increase the purchasing power of the mass of the people, even if it leads to a measure of inflation of the currency, it will be far better to set into operation an era of rising prices calling for increased productivity than merely to worship at the shrine of financial orthodoxy, and deliberately to limit the productive power of the country in order to secure what are called the principles of sound finance. I hope the Lord Privy Seal will stand up to the banking and financial interests, who are not so powerful if the right hon. Gentleman will only get off his knees and look them straight in the eye. In that case, I am sure they will not be so powerful as we have been led to believe in the past.

I ask the First Commissioner of Works to pay particular attention to another point. The Labour party issued a manifesto during the General Election, and I was proud to be a candidate under the banner of the Labour party. At that Election, I advocated the principles laid down in our programme, and I have no doubt many people voted for me because they felt that I would certainly do all I could to see that those principles were carried out, so far as was in my power. I am very anxious to honour those undertakings and pledges, more especially when I believe that they are principles which would make an immediate contribution to the solution of our national difficulties. The statement in the Labour manifesto is as follows: A Labour Government will set to work at once by using Export Credits and Trade Facilities Guarantees, to stimulate the depressed export trades of iron and steel, engineering, and textile manufactures. Shipbuilding and shipping will immediately be benefited by an increase of foreign trade, and the improved employment in those industries will be a great addition to the purchasing power in the home market. I have on more than one occasion drawn the Lord Privy Seal's attention to the necessity for a change in the policy of the Government in relation to the financing of our exports. It is true that there have been some slight alterations in the machinery of the Export Credits Department which has been used, up to the present time, mainly for the purpose of financing short-term operations and small-scale operations. It is true that under that machinery it is possible for the Government to give credits up to five years for the heavy industries, but the type of credit machinery available for traders under that Department of the Government, while it is quite suitable for dealing with smaller operations, is totally unsuitable for dealing with a type of credit operations which would attract business in a way that would affect some of our mast heavily depressed industries.

Prior to the formation of this Government, we had for some years in operation a scheme under the Trade Facilities Act, under which we could not only deal with capital expenditure in the home market, but which we could use for the purpose of guaranteeing loans raised for projects abroad, not only in the Empire but in foreign countries as well, provided that by so doing we secured for British workshops and British workers the work to be carried out in connection with those undertakings. The great irrigation scheme in the Sudan is an outstanding example of the type of transaction that I have in mind. We have frequently been told by the Minister for Oyerseas Trade that this gap exists in our credit system, but up to the present time the Government have not revived that form of credit machinery, nor have they brought forward any new proposals to meet the kind of need that was visualised at the time when that machinery was put into operation. I am not suggesting for a moment that there is not a need for much greater protection for the taxpayer than was afforded in the earlier stages of the Export Credits Scheme, and also in relation to certain transactions under the Trade Facilities Act. There is no doubt that proper care and precaution were not exercised by previous administrations, and that a good deal of loss fell upon the taxpayers of this country that with proper administration might probably have been mitigated.

In any case, however, it is far better to take a limited risk in order to put men to work at the jobs that they are accustomed to doing, where you have the capital and the technique waiting for them to be employed, and where their skill is much more productive than under a policy which means a continual pressure upon local authorities to enter upon a large number of schemes many of which with the best will in the world are of very little use when they are actually carried out. I remember that, when we analysed the effects of some £400,000 worth of relief work carried out in my own constituency, we discovered that on the average it cost the municipality £8 to put £1 in the form of wages into the pockets of unemployed workmen. Roughly speaking, one-third went in materials, one-third in management and overhead charges, and one-third in wages, and, as we had to borrow the money that we used for the purpose, it worked out that, as I have said, to put £1 into the unemployed worker's pocket cost us £8.

It seems to me to be the utmost folly to refuse to take a limited risk in relation to exports when you have all your capital equipment and technique, and where the labour of your workers is so much more productive, because, if you do not maintain them in that way, you have the additional expense falling upon public funds for their unemployment benefit or for Poor Law relief. In this connection I would like to remind my right hon. Friend of a passage in the election address of the present Leader of the Liberal party, and I am quite sure that, with the record that the right hon. Gentleman has for keeping all his pledges, the Government might very well approach him and ask him to support them in a matter of this kind. Referring to the export trades, the right hon. Gentleman said that the Liberal policy sought to restore the prosperity of our industries by encouraging in every way greater efficiency in industry and by restoring the Trade Facilities Act, which gave the support of the national credit to industrial enterprises of a substantial and valuable kind which could not be initiated or carried out without such assistance. Before that Act was abandoned by the present Government, enterprises of the aggregate value of £74,000,000 were put through at an infinitesimal cost to the Treasury. It may be perfectly true that in some markets and in large areas of the world no amount of credit machinery would enable customers to buy our goods, simply because they cannot get rid of their production, they cannot sell their products; and it is not in those particular areas a matter of credit machinery, but a matter of complete inability to buy until they can get rid of their products; but, nevertheless, it is undeniable that a very considerable volume of work could be brought to the factories of Britain, not in the dim and distant future, but now, in the next few months, if the Government would adopt a policy such as I have indicated, and I hope and trust that my right hon. Friend who is on the Front Bench will see that this particular side of our policy is considered immediately by the Government, and that an endeavour is made to get men into work at the jobs to which they are accustomed.

Mr. ALLEN:

It has become a matter of routine in this House to return periodically to this painful subject of unemployment, and we are accorded from time to time the advantage of listening to arguments particularly on the question of Free Trade and Protection, which are elaborated by right hon. and hon. Members who frequently spend long lives in polishing the arguments applicable to that great fiscal subject. Per- sonally, I am a believer in the development of Safeguarding, but not because I believe that Safeguarding or any other form of protective tariffs can be an absolute cure for unemployment. I believe, however, that it would afford a substantial alleviation, and I think that half a job is better than no job. When we come dawn to a frank examination of the subject of unemployment, we have to admit that neither Free Trade nor tariffs can solve the world's problem of overproduction and under-consumption, which is fundamentally a problem of congested distribution.

We find unemployment on a large scale in America, which is supposed to be a paradise of protected markets and high wages; and we find unemployment in Great Britain, which is the happy hunting ground of Free Trade, where we have not only facilities for importing free goods, but for exporting jobs. There is also unemployment in Russia, which I believe is the seventh heaven of practical Socialism, and where we find at once high tariffs and an equal distribution of wealth. The causes of unemployment in these three countries, in which the fiscal and social conditions are substantially different, must obviously be different. In Russia, I think it is attributable primarily to the destruction of material wealth during the revolutionary period, and obviously also to the failure to secure credit for the restoration of productive capacity now.

In Great Britain and America the first obvious cause lies in the difficulties arising from the adjustment of labour to modernised industrial plant. Some dislocation during a period of invention and gigantic development is obviously unavoidable, but the pauses of the present unhappy gap between production and consumption seem to me, so far as I can pretend to try to understand them, to lie much deeper. Why have we, on the one hand, all the primary products of the world being, as it is described, overproduced, with grain, rubber and various other raw products a burden on the market or rotting in their warehouses? The same thing applies to the industries of this country—not only the heavy industries, but the industries which consume raw materials and directly supply the needs of the people. It seems to be an extraordinary position that, where you have these gigantic congested stocks, you have machines lying idle which can make more goods if goods are needed, and you have the men who can work the machines standing at the street corners without jobs, and, what is almost more important, without consuming power or purchasing power. The goods are unbuyable, the consumer cannot buy, and, really, it seems to be a mockery of the whole of our civilisation. We have been fighting ever since the Bronze Age against the problem of scarcity. Now we have plenty, and yet, for many reasons which are largely incomprehensible, we fail to get distribution.

I am not ashamed to confess that I can see no cut-and-dried solution to this problem. It does not lie in any of the creeds of any political party in this or in other countries, where they are all worrying at the same problem, and I feel that many hon. Members may admit themselves to be in the same position. It is a question that can only be solved by approaching it in an unbiased state of mind, free of all preconceived political ideas, free of all principles of economic theory. I can never really see how political theories enter into these practical economic problems, any more than they enter into business. I am a director of one or two companies. It would be an extraordinary thing if three directors out of eight always adhered to one code of principles and the other five to another. Any company run on those lines would be in liquidation within a year, and if we had the politics of this country run on those extraordinary principles, although the State is not in liquidation, it has to be subsidised by the unfortunate people who run their economic affairs on more practical lines. Political incantations cannot cure the situation. We cannot rely on the infallible theories of the last century, which are proving fallible to the extent of two millions of unemployed. I have 20,000 of these unfortunate unemployed behind me in my own constituency and I am in a mood to try to study all the possibilities in preference to adhering to any particular principle.

The hon. Member for Stockport (Mr. Hammersley) referred to exports. Exports are one of the standard incantations of these Debates. Although I am afraid my qualifications are not very substantial for attempting to examine the question, it strikes me roughly as follows. The Government take the position that the solution of the problem of unemployment depends upon the expansion of our exports and it is, therefore, extremely relevant to consider to what extent the expansion of exports is hindered by the favourable balance in our trade, that is the favourable balance that arises from the so-called invisible exports, such as insurances and investments. I do not think enough consideration is given to the bearing of invisible exports upon unemployment. It must, however, be definitely borne in mind that customers have to pay as much for our invisible exports as for our visible exports in manufactured goods. India imports the services of our mercantile marine and our investors and our insurance agents and other services, and it has to pay for them by the export of goods, exactly as she pays for our visible manufactured exports.

The principal item in invisible exports is really the export of coupons for the collection of interest upon British capital invested overseas. The income from British capital invested overseas is estimated at about £285,000,000 a year. We collect that income only in goods but, as the annual reviews of the Board of Trade show, we are absorbing goods in liquidation of our interest on British capital invested abroad only to a limited extent and not to the full extent of the investments. That seems to mean that, to a given extent in each year, we have not received goods in settlement of our interest claims. In consequence, the debtor countries are forced to borrow to meet their obligations on the London money market, and the same thing applies to the other great creditor country, where they are borrowing on Wall Street.

The case of Australia is a very typical one at present. I am told that approximately £1,000,000,000 of British capital is invested in Australia. Australia needs a favourable balance in her trade of £40,000,000 to meet her interest obligations. She has not got that balance. In consequence, she has met her obligations wholly out of fresh loans. It was stated some time ago in reply to a question that, during the past 10 years, the total amount of Australia's borrowings in London exceeded her interest obligations by only £50,000,000. If that were the only fact to be considered in relation to this infallible export incantation, the position would be serious enough, but the obligations of the debtor countries compel them to seek a favourable balance against us, and they seek that by the imposition of tariffs against us. The recent increases in the Australian tariffs were made for the explicit purpose of reducing imports in order to create a favourable balance against us and to enable her to pay her debts. If we were freely absorbing and consuming the produce of debtor countries, like Australia and Canada and the Argentine and India, the primary producing countries in which British capital has been sunk, we should not have a favourable balance in our trade and these countries would not be forced to raise tariff walls against our goods. It is, therefore, necessary for us, as far as I can see, without suggesting a solution, to consider to what extent our economic difficulties really arise from our failure annually to import to the full extent of our means of payment and why it is that, despite the fact that we are a Free Trade country, despite the fact that there is no deliberate check on imports to meet debt payments, there is this annually recurring balance of our invisible investments.

The old-fashioned argument was that the debtor countries were unable to produce the foodstuffs and raw materials with which to meet their interest obligations in this country. That argument hardly holds good to-day, because the principal debtor countries—Canada, Australia, the Argentine, Africa and India—have produced such quantities of goods that the markets of the world have become absolutely glutted. It is this country alone that can be a market for the raw produce of the debtor countries, and it is surely very serious that we should year after year be registering a favourable invisible balance in our trade— a money balance and not a goods balance—by failing to take raw produce in liquidation of interest obligations while the raw produce markets of the world are flooded and prices are tumbling and dislocating the primary producing industries and manufacturing industries all the world over. The kernel of the problem seems to me to be that there is not enough money among the masses of producers in this country and throughout the world to allow them to consume the goods that are being produced and becoming available for exchange. This again is a most difficult and complicated problem, and its solution may lie partly in some reform of the world's monetary system. I think it lies also partly in the fact that money become congested in a large number of hands, but relatively few hands in proportion to the consuming population the world over.

Inequality of distribution is far greater in foreign countries, such as the Argentine and India, than in this country. I feel that one of the big Indian problems is the congestion of wealth there and its failure to circulate. The people into whose hands the money flows and becomes congested can only consume a small proportion of the wealth of what one may call the common primary products—the products produced in great mass everywhere. Of the rest of the money at their disposal, part of it goes by re-investment at interest back into industry, but in a way it seems to complicate the congestion by increasing production or allowing facilities for increasing production without correspondingly increasing the capacity to consume. The rest goes to inflate values in what one may call the gigantic luxury market. It produces what seems to be absurd phenomena, such as, for instance, £100,000 being paid for an old master, or £11,000 for the manuscript of "Alice in Wonderland." There is, obviously, something uneconomic and unsound in a system or method of distribution of wealth when such things occur.

I do not think that the solution lies, as probably hon. Members opposite are thinking, in the application all round of Socialism, but it lies, possibly, in the substantial and wide application of profit-sharing and increases of wages and other methods of increasing the power of 99 per cent. of the people to eat and wear and buy the things which the capitalists and manufacturers are engaged in producing for them. This is a thing which I have brought before me almost every day, because my business happens to be that of trying to sell large quantities of goods through the medium of advertising to people who have not the money to buy them. It comes home to one as a sort of fundamental indigestion which is tying everything into knots.

Lastly, there is another thing which might be considered, namely, the distinction between industrial capital and debt capital. Industrial capital is mortal; it depreciates; dies. Any business man knows that he has to allow at least 7½ per cent. per annum for depreciation of machinery, and that after a certain number of years the machinery becomes worthless, and he has to write it off his capital. At the same time, debt capital—mortgages, war loan and debt of that kind—is immortal. At the end of 100 years a printing machine or a loom has long been set aside—I have one printing machine which we keep as a museum exhibit, and it is 100 years old—but £100 invested in war stock will be as good at the end of 100 years under the present system, or, presumably, at the end of 1,000 years. I submit, although I am afraid it is possibly a financial question, that a solution may lie in applying discriminative taxation, in relieving industry, consumers, and particularly the small Income Tax payers, who are a large and valuable class of consumers, of taxation, and applying it to the taxation of fixed paper wealth. It is a very difficult problem, and I am merely throwing it out as a suggestion. But on the principle that individual industries, such as breweries and distilleries are taxed, I can see no moral objection from a Conservative and capitalist point of view in applying a particular form of taxation to foreign investments and to paper investments, such as war stock, and giving a corresponding relief to industry and to all classes of consumers, both Income Tax payers and wage earners.

Photo of Reverend Gordon Lang Reverend Gordon Lang , Oldham

As this Debate has proceeded this afternoon, some of us have been compelled to wonder exactly what were the reasons that lay behind the question being raised at all. We have heard quite a lot about the necessity for public confidence, and the speech with which the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) opened this Debate was scarcely a speech to inspire that confidence. Neither was it, as far as I was able to listen to him, a speech that bristled with suggestions for the solution of the problem. One is therefore led to feel that the real object in raising this Debate was to attempt to discourage the Government. That may be a good political practice, but it will scarcely help the unemployed, nor will it, I think, have a very great effect upon restoring industries.

I wish to examine some of the charges which have been made. I want to say very emphatically that, as far as the problem of unemployment is concerned, the people responsible are not the persons upon the benches on this side, nor upon the Front Bench either. We are not responsible for unemployment. The people responsible for unemployment are, in the main, the employers of industry themselves. The cotton industry, which is the predominant industry in the large and important town which I represent, is in a deplorable position. The gravity cannot be over-estimated. The responsibility rests upon the employers of industry in their refusal to face facts and the refusal of the various parties in that industry to come together. My hon. Friend the Member for Stockport (Mr. Hammersley) urged just now that the depreciation in the value of the spindle was a sign that the public had no confidence in the future of the cotton industry. That may be partly correct, but, if so, it is because the public realise with what complete incompetence the industry has been conducted in the past.

When one turns to any large Lancashire town and remembers the immense sums of money that have been made in those towns, even in recent years, all that money has not gone into thin air. In most large cotton towns it is possible to find people who made large fortunes and have lost large fortunes, but not all of them are in that position. Even in cases where individuals have made and lost large sums, the money has gone somewhere; it does not now remain in the town where it was made, and it has not become the property or the recompense of the people who had to work in the mills to help to produce it. When hon. Members are inclined to taunt us with the incidence of taxation, and to suggest that there will have to be a decrease of these national charges—I gather that they refer, amongst other things, to Unemployment Insurance benefits—we are entitled to ask how it is that in industry which has made money and which has seized the money, one part of it or another, either in the actual manufacturing or the selling and, in some shameful cases, the banks behind the whole of the business, somebody has had the benefit of the money, but it is not the people who worked in the mills.

Photo of Mr Samuel Hammersley Mr Samuel Hammersley , Stockport

Is the hon. Member aware of the fact that in the town which he represents, more money was given to the Government in Excess Profits Duty than was received on the whole throughout a period of years, by those who were investors in the industry?

Photo of Reverend Gordon Lang Reverend Gordon Lang , Oldham

I am fully aware of the hon. Member's contention but even if I assent to that, it does not affect what I am now suggesting to the Committee. I suggest that, irrespective of how much of a share the Government took from the profits of the industry, immense sums of money were made, and no one knows that better than the hon. Member, and, however much has been lost since, the money was not distributed amongst the people who actually produced it. Yet to-day we are asked to say that these people must be made responsible for the distress of the industry. Before the hon. Member for Stockport returned to the House, I was quoting from what he said, in his very lucid speech, and I was contesting his statement that the depreciation of the value of the spindle was because people had no confidence in the future of the industry. I was suggesting that so far as that is true it has its basis in the fact that people have only too great a knowledge of the incompetence of those who have been managing the industry in the immediate past.

The right hon. Member for Edgbaston made one or two suggestions as to what could be done with the unemployment problem. One was Safeguarding. I do not propose to develop that argument, except to say that there are some of us who are not prepared under any circumstances to agree that the process of rationalisation shall be subsidised for the employers and investors at the expense of the consumers generally. I cannot but believe, in view of the fact that quite recently there has been this wholesale demand for this form of protection, much more vociferous than in the preceding five years of the late Government's term of office, that this is again an attempt to ask the consumers to pay for the reorganisation of industry. We have seen examples where incompetent management of business has profited by Safeguarding duties, and we must be very careful be- fore we consider seriously increasing any subsidy of incompetence.

Apart from the question of Safeguarding, the only other suggestion that I could gather from the right hon. Member for Edgbaston was the extraordinary one that the money that he thought was about to be spent in raising the school age would be better put into the universities. That was one of the most extraordinary statements that I have heard in this House, and it ought to compare as a contribution towards the solution of unemployment along with the equally extraordinary statement of the right hon. Member for St. Georges (Sir L. Worthington-Evans) who, speaking in the Debate on the Army Annual Bill, suggested that the Government might have to consider whether any man could be deemed to be unemployed if the State was prepared to employ him in the Army. We are, therefore, left with these Conservative proposals for dealing with unemployment—to him that hath, more shall be given; put more money into the universities for those who are fortunate enough to benefit, while for the rest of the people who are out of industry through no fault of their own but largely through the incompetence of friends of hon. Members opposite, let those unemployed be conscripted into the Army. That is the only contribution that I have heard towards a solution of the unemployment problem from those two right hon. Gentlemen.

We have had a speech that was reasonable and, I think, impressive from the Liberal benches. It was the speech of the hon. Member for West Middlesbrough (Mr. Griffith). With all the freedom and irresponsibility of a back bencher, I do wish that it were possible that there could have been more discussion between the party to which I have the very great honour to belong, and the Liberal party, as to their own proposals. At my own election in Oldham my colleague and myself had two very competent and very gentlemanly Liberal opponents, and we had also a gentlemanly and gallant Conservative opponent. Our Liberal opponents fought their election almost entirely on the slogan: "We can conquer unemployment." I was unable to agree that they could conquer unemployment. I never claimed that we could completely conquer unemployment, but what I did say at the election, and what I repeat here, is that I believe that many of the Liberal proposals were very useful and very important, and I do feel that every avenue ought to be explored without any relativity to party gain or party kudos.

We have had, and I am proud of it, the courage and vision of the Prime Minister, exemplified in his splendid dash across the Atlantic to re-establish understanding, so soon after we came into office. The result of that has been the Naval Conference, with a measure of success for which we are all grateful. I do not believe that the Atlantic Ocean is narrower than the Floor of this House. Neither can I believe that it is easier to negotiate with the Americans than it is to negotiate with Liberals. Therefore, I would suggest that if the Liberal party proposals are examined carefully it might be possible for us to find some kind of agreement on reasonable methods that could at once be put into operation.

I represent a town which is staggering under phenomenal unemployment; a town of very great people. Lancashire people are known everywhere for their courage, and how they brace themselves in any difficulty. But we who represent industrial towns realise that there must come a breaking point sooner or later, and I want to avoid that if I can. If there is any method that, by any kind of agreement, will help the situation and do away with this haunting fear of poverty which rests upon our people and will avoid the breaking point in our industrial life, then let us have it. During the War it was found possible for the most diverse parties and temperaments to come together in a time of national emergency. The present, as the hon. Member for Walsall (Mr. McShane) said, is a time of equal national emergency. It is a time when we should get people together to face this problem, and for those reasons I have made my suggestion. It is easy for me to make the suggestion and it may be just as easy for it to be answered, but I shall feel much more contented when I have to face my constituents, as face them I must, and face them I desire to do upon this question of unemployment, if I am able to say to them, without regard to personal or party interest or kudos, that every avenue has been explored. If then we find that nothing can be done, we shall be acquitted, but so long as any reasonable chance is not considered, we are not acquitted.

Although I am aware that the speech of the Lord Privy Seal had to be disappointing this afternoon, it does not alter the fact that in the minds of many of us depression, anxiety and fear are deepened as a result of this Debate. I hope there will be no hesitation at all in taking a bold course. What is wanted is not only guidance but courage, too, great courage, and that party or section of a party which will take its courage in both hands in dealing with this problem is the party which will win back to our people some measure of prosperity.

I listened with considerable interest and, to be candid, with considerable amusement to the speech of the hon. Member for Dumbarton Burghs (Mr. Kirkwood). It was good for him to beat his drum and draw attention to his own particular performance, but nobody knows better than the hon. Member that it was the sheerest propaganda. There is no majority in this House for Socialism. Until we have Socialism as I conceive it, that might not be quite as everybody else conceives it, we shall not have a final solution of our troubles. There is no majority in this House for Socialism. There was no majority at the last Election for Socialism. There was no majority for Safeguarding or for the militarism of hon. Members opposite, but there was a majority, and a big majority, for the two parties both of whom put forward specific proposals for dealing with unemployment. Hon. Members on the Conservative benches put forward no proposals, and some of them objected to the idea that unemployment was the great problem we said it was. Amongst those was the right hon. Member for Epping (Mr. Churchill). Since they have been on the Opposition benches they have discovered what a serious problem it is; but the two parties which put before the country specific proposals, though they disagreed with each other about the proposals, obtained an overwhelming majority for action with regard to unemployment.

Photo of Reverend Gordon Lang Reverend Gordon Lang , Oldham

Yes, that is what I am asking. I am asking why with this majority for action no attempt has been made to produce that action, and I am glad the hon. Member is as eager for action as I am myself. It is much better than sending unemployed working men into the Army. I hope I have not detained the Committee in vain.

Photo of Mr Gervais Rentoul Mr Gervais Rentoul , Lowestoft

The hon. Member for Oldham (Mr. Lang), who has just resumed his seat, prefaced his very interesting and persuasive remarks by questioning the object we on this side of the Committee had in raising this subject to-day, and he said that he had come to the conclusion that the only object must be to discredit the Government. I agree that that may be the inevitable result of this Debate, but it certainly was not the object. The object we had in view was to give the Lord Privy Seal and the Government a further opportunity of explaining to the Committee and to the country in some detail what they were doing to cope with the gravest problem that has confronted us, from a domestic point of view, in the whole of our history in order to fulfil the very specific pledges they gave during the General Election, less than a year ago. The memory of the hon. Member must be extremely short when he says that the Conservative party put forward no definite proposals at the last Election for dealing with unemployment. On the contrary, we put forward very practical and definite proposals which many of us have been advocating for years, by which we still stand to-day, and about which I want to say a word to-night. That is the safeguarding of industry. That is not a matter which can be brushed aside. It is meant as a very serious and definite contribution to the solution of the problem.

9.0 p.m.

Like other hon. Members who have been in the House for some years, I have sat through innumerable and, as far as repetition of argument is concerned, interminable Debates on the question of unemployment. Except on one or two rare occasions I have hesitated to intervene, not merely because it was extremely difficult to say anything fresh on so threadbare a subject, or because, fortunately, my own constituency, depending as it does so much on the two great industries of agriculture and fishing, has not been one of the hardest hit or one of the depressed areas, but because I felt whilst listening to these Debates how difficult it was to get at the true facts, how difficult it was to obtain figures that really gave an accurate picture of the situation. Nevertheless, so grave a change has come over the whole situation during the past 10 months and unemployment bas spread so fast in new directions where until a short time ago it was unknown, that I am tempted to say a few words.

It seems now to be more or less expected that we may look forward in another winter to an unemployment figure of something like 2,000,000, and I should like to ask the First Commissioner of Works, if he is going to reply to the Debate, to give the Committee any idea as to where he thinks that process is likely to stop; any indication as to whether the number of unemployed will stop at 2,000,000. One is extremely doubtful about it, especially when we remember that something like 66 per cent. of the workers of this country are engaged in and depend for their livelihood on luxury or semi-luxury trades which, as depression spreads, must inevitably be amongst the first to suffer. No one will dispute it, although they may argue about the reasons, that this change has come over the unemployment situation for the worse contemporaneously with the period the present Government has been in office. I agree that the entire responsibility cannot fairly be laid at their door, that there are many other factors, which are entering into the problem, but I suggest that they cannot escape responsibility altogether, and certainly will not be able to escape responsibility in the eyes a the country unless they can persuade the people that everything in fact has been done that might reasonably have been done to cope with the question; that every avenue has been explored. Unfortunately, that is far from being the case. Hon. Members opposite won their seats almost entirely on this one issue.

Reference has been made not only to-day but very frequently to the kind of pledges and statements that were made by hon. Members opposite both before and during the General Election. I do not want to take up time by referring to any of these pledges and statements, except that I might quote one, because it is rather important. The Lord Privy Seal on 18th May of last year con- tributed an article to a capitalist newspaper, the "Daily Mail." In the course of it he said: The Labour party appeals to the electors with a policy that will not only set the workers to work, but also, by removing the root cause of unemployment, will effectively prevent its recurrence. That does not mean the destruction of the capitalist system. Personally I do not believe that the Lord Privy Seal wants to see the destruction of the capitalist system. I quote the article as an indication of the kind of promises and statements that were made at that time—promises which, I am convinced, thousands and hundreds of thousands of people really believed and accepted. I believe there are thousands of men and women in all parts of the country who, as a result of the statements that were made to them and the pledges that were given, thought that they had arrived at the dawn of a new era and were really looking forward to much better times. That is why, however little foundation one may feel that they had for these beliefs, one cannot help sympathising with the disappointment that they must to-day be experiencing. After 10 months of a Socialist Administration that disappointment must be tragic indeed in the hearts of a great many people.

I do not criticise the Government because it has not solved the unemployment problem, or indeed made much impression on it, in the course of 10 months, although certainly we did not expect, and I do not think hon. Members opposite themselves expected, that after 10 months of a Socialist Government, there would actually be 600,000 more unemployed than there were when the Government took office. In the measures that the Lord Privy Seal has outlined to-day and on previous occasions I think that he is adopting the best policy for dealing with the matter, but it is certainly not a new policy and they are not new proposals that have been put before us. We do claim the right to criticise the Government for two things: first, for the false hopes that they deliberately raised at the last Election, and raised in many instances for mere party advantage; and, secondly, for the attitude that they have since adopted and for their hide-bound prejudice towards the Safeguarding of industry. Since the Lord Privy Seal took Office and assumed responsibility he has talked on many occasions very wisely on this question, especially when he has pointed out that the only real and permanent remedy for unemployment lies in the expansion of trade at home and abroad. That, of course, is a somewhat different thing from the kind of thing that he and his colleagues said at the Election.

But the right hon. Gentleman has gone further than that. I am rather surprised that so experienced and astute a politician should involve himself in the pitfalls of political controversy, but he did say in October last, when addressing the Socialist Party Conference, that "he was confident that when February came the figures of unemployment would be far different and far better than the figures of their predecessors in office." We cannot congratulate him on that prophecy, although his reputation as a prophet may be saved by the truth of this other prophecy, that "the Government will be judged, and rightly judged, by its handling of the unemployment problem." But the Lord Privy Seal was not alone, because the Chancellor of the Exchequer some months ago said: I shall be gravely disappointed if the average of unemployment during the next 12 months is not below 1,200,000. The 12 months have nearly gone, and certainly the average of unemployment is well above the figure that the right hon. Gentleman contemplated. I do not want to labour that point, except to demonstrate that false hopes undoubtedly were raised, and false hopes of a very unfair and indefensible kind. I want to say a few words on the question of the Safeguarding of industry as a remedy for unemployment. An hon. Member has said that the demand for Safeguarding had grown a good deal more vociferous daily, and he referred to it as a subsidy for incompetence. I do not know whether the motor trade will accept the compliment that the hon. Member paid it. I hardly think that the British motor trade could be held up to the world as an incompetent industry. The Lord Privy Seal very soon after he took office made a statement which gave a good many of us a certain amount of hope that we were about to gain a distinguished convert to our cause. He used these words in almost the first speech that he made after he accepted office: I ask myself, what is there that we import to-day that we can make ourselves? I am going to explore every avenue and see whether we can make in this country goods that we are now importing from abroad. That is the whole Safeguarding policy in a nutshell. When the spokesman of the Government replies I ask him to state whether, having regard to these words of the Lord Privy Seal, there is any one thing that we are making ourselves or are likely to make in this country to-day, which we used to import from abroad?

Photo of Mr Gervais Rentoul Mr Gervais Rentoul , Lowestoft

I should be glad if the Government spokesman would state whether any steps had been taken to "explore every avenue" on those lines. I do not claim for a moment to be a profound student of political economy, but I do know enough about it to realise that some of the most cherished theories of the political economists have been proved to be utterly wrong in practice, or at best merely half-truths. Nor does it seem to me to help very much to quote masses of figures on the subject. This question of Safeguarding, especially in regard to its effect on unemployment, is a matter that will be settled, not by politicians nor by political economists, but by the man in the street, by the people themselves. The man in the street is beginning to sit up and take notice of this question, and he is arriving at certain irresistible conclusions.

I agree with the hon. Member who spoke last, that we do not suggest that Safeguarding would banish unemployment altogether, but we do say that it would be a very substantial help. If that is so, at a time when we are confronted with a problem so grave and terrible, I suggest that we cannot afford to neglect any avenue by which some succour might be obtained. The ordinary man in the street, looking at the question, sees first of all that the one bright spot in the unemployment problem is the condition of the safeguarded trades. It is very curious, if Safeguarding is of no use, that those trades, of the most diverse character, to which it has been applied should have benefited to such a remarkable extent. We had a long argument recently as to whether more or less people were employed in the lace industry as a result of Safeguarding. The President of the Board of Trade seemed to suggest that there were less people employed in the industry to-day than when the Duties were applied. I am afraid that statements of that kind leave the man in the street absolutely cold. He much prefers to accept the unanimous opinion of employers and employed in the trade itself as to the benefits of Safeguarding. That opinion appeals to him more than any theories or any masses of figures which may be hurled at his head.

I think it is now beyond argument that the safeguarded trades have substantially benefited from the application of the duties, but the excuse is offered that if they have benefited, it is only because they have had the best of both worlds; that while receiving Protection, they have been able to buy their raw materials in a Free Trade market, and that, if Safeguarding were extended, those benefits would cease to exist. That is a pure hypothesis and a hypothesis which is not accepted by any other country or by any of our great commercial competitors. In any event, one of the advantages which we suggest in connection with Safeguarding is its importance, as a weapon of retaliation, in coming to bargains and arrangements for the benefit of our own people and in order to protect our home employment. After the result of the experiments which we have made in Safeguarding, the onus now lies on those who oppose that policy. They say that safeguarded industries may have prospered, but only at the expense of other industries. Where is the evidence in support of that statement? Some weeks ago I took part in a public debate on this question, with a leading economist of the Liberal party, one of those responsible for the production of the Yellow Book, and I put that point to him in the course of the debate. The only answer that he was able to give me was this: "You are asking me to prove a negative. I can only tell you when I say that other industries have suffered as a consequence of Safeguarding, that it must be so, because Safeguarding is contrary to the canons of economic common-sense." I suggest that that is not good enough as an answer when a practical suggestion of this kind is put before our people.

We have been appealed to by hon. Members opposite to treat this question as a national question. They say, and I agree with them, that it cuts across all the regular party lines. But what is the use of asking us to treat it as a national question when hon. Members adopt such an attitude towards the one contribution of a practical and immediate nature which we feel ourselves constrained to offer—that is a further experiment in safeguarding our own industries. If we came into a non-party conference on unemployment we should be bound to demand the consideration of that proposal without prejudice and without party bias. Why not? Every other remedy suggested has been tried, except the wholesale destruction of the capitalist system, and there has never been any argument forthcoming to show that if the capitalist system were abolished we should get rid of unemployment. If you abolished or undermined it, you would do irremediable damage, and it would be sheer madness to destroy the system under which we have risen to be one of the greatest, most powerful and most prosperous countries in the world unless we had clear evidence that some real advantage would inevitably follow upon such a course. Safeguarding, on the other hand, is not an irremediable matter. It has been experimented with and can be experimented with still further. The whole basis of Safeguarding is that you should advance cautiously, step by step, after careful inquiry in each case.

Though I am not sanguine that any attention will be paid to my appeal, yet I make an appeal to the Government not to close the door on the one immediate practical remedy which seems to hold out some hope. Probably they are committed too far to retrace their steps now, but a very grave responsibility rests on the Government if they refuse to adopt any possible remedy of a reasonable kind which seems to offer itself. It would, undoubtedly, need a great deal of courage for them to change their attitude on this question at this time but already they have agreed to receive a deputation from the lace industry—because there happens to be a by-election in Nottingham. No one has the slightest doubt that the deputation would not have been received and that the original decision would have been adhered to, had there not been a by-election in progress. Why not show still greater courage and agree to approach the whole question of Safeguarding a new, with unprejudiced and unbiased minds, free from party considerations and inherited antipathies? If the Government do so, I believe they would thereby earn the gratitude of hundreds of thousands of unemployed men and women throughout the country.

Mr. PALMER:

The question has been asked from several quarters this afternoon, why is this Debate taking place? It has been suggested that it is because it offers an opportunuity for attacking the Government and the hon. and learned Member for Lowestoft (Sir G. Rentoul) suggests that it is an opportunity for advocating Safeguarding. I think that if one thing more than another has been amply demonstrated in this Debate it is the fact that those countries which depend on Safeguarding, on high tariff barriers, on the taxation of food and raw materials and the like, are the very countries which are suffering most from unemployment. [HON. MEMBERS: "What about France?"] The situation has been explained half a dozen times already in this Debate, and I shall not waste time by going into it again. The unemployment problem cannot be measured by figures. Neither can we pretend that it is something new, something which has developed in the few months during which the present Government have held office. To hear some of the speeches one would imagine that the unemployment problem arose at the time of the last General Election, and had developed since then. The unemployment problem has been with us as long as we have had the capitalist system. It is a corollary of the capitalist system and, until we deal adequately and properly with the capitalist system, the probability is that we shall never find any real solution of the unemployment problem.

You have to face up to the fact that the figures, bad as they are, are not the responsibility of the present Government. The hon. Member who has just sat down was good enough to say that it was not wholly our responsibility. I want to go just a step further and say that, bad as the figures are at the present moment, they would have been much worse under a Tory Government. There is a cumulative effect in unemployment figures which cannot be ignored. There was a time when you did not even list the people who were unemployed. One feature about adopting a register and listing people is that you have to face up to the numbers. There is a cumulative effect, for people are getting older and impaired, and they remain on the registers while the registers are there. The older the scheme there must inevitably be cumulative effect. That is borne out to some extent by the figures that the Lord Privy Seal gave us as to the schemes he has in hand and the number of people who have been already employed and absorbed under them and the number he expects to employ.

Further than that, I suggest that, taking these figures, bad as they are, they are more an indictment against the previous Government and former Governments than against the present Government. Hon. Members may laugh at that, but the more you examine it, the more you will come to realise that if the War had any relationship to the accentuation of unemployment—and it is generally admitted that it had—then those Governments who have handled the situation since the War must take a, large share of the responsibility. The present Government, before they assumed office, told the Government of the day plainly what would happen after the demobilisation following the Great War and they made concrete suggestions as to how to meet that time and absorb the people who would be unemployed. It was never done, and it is idle to attempt to suggest that the present unemployment figures are an indictment against this Government. They are an indictment against former Governments who failed to take steps that should have been taken to deal adequately with the problem. In 1924 there was a Labour Government who immediately began to handle the problem and did effect a reduction in the unemployment figures. If they had been allowed to continue their work and obviate the four years of mis-government of this subject by the Conservative party, they would have brought, if not a complete solution, a much happier state of things, but they were not suffered to do it. It may be that the older forms of Govern- ment saw that there was an outlook of determination in this Labour Government which they could not allow to go on, and so its lifetime was cut short, but the facts stand on record that the problem then was being tackled.

Furthermore, we must allow the necessary time for even this amount of money and these schemes which have been laid down to operate. There has been either a deliberate misrepresentation as to the purpose of this Debate, or Members of the House must have failed to see that it is for the purpose of securing party capital. We have had all these speeches delivered from the Conservative benches to the effect that unemployment is a problem which does not admit of partisan spirit and there has been talk about a council of the House coming together and contributing to the solution of this problem. I should have liked to have seen greater manifestations of that, for, while it is the fashion in many speeches, it has not been the practice throughout the country. We have seen Press campaigns against the Government on the question of unemployment. We have seen refractory town councils and city councils who, much as they have been urged to put utility works into operation, have shown little or no disposition to do so. In many ways the position has been hampered.

There is a lack of consistency between speeches which purport to convey to the House that Members of all parties would join hands to find a solution of this problem and what we find in practice, namely, the strings being pulled in the constituencies to hinder works which might be put into operation. You have to face the fact that while, on the one hand, there is unemployment, on the other people are being literally overworked. One feature of the late Government was its action in increasing the hours of work for miners. You cannot increase the number of hours in any industry without displacing labour. That kind of thing passes too often for that so much overworked system of rationalisation. The more I hear about rationalisation, the more I am convinced that it is the most potent instrument that could be introduced into industry to lessen employment rather than to extend it. The first concern of any industry which adopts rationalisation is to do the irrational thing and to increase hours, or speed up, or adopt means here and there of prejudicing employment instead of helping it.

Labour, surely, is not the only factor in industry. A lot has been said about capital, and the Committee will be eternally grateful to one hon. Member opposite who has adopted a new designation for capital. He divided it into two categories—mortal capital and immortal capital. There is a lot too much immortality, as far as I can see, about capital. The primary function of capital seems to be that once it has established itself it must go on drawing dividends for ever and a day, and it may well be that if we want rationalisation we have to be rational beings, and see how irrational it is, at a time of stress and unemployment, to make the first attack on employment by lengthening the hours and, on the other hand, fortifying this immortal capital idea by providing Government subsidies to certain industries. The coal industry got £25,000,000, not to help employment, but to fortify capital and establish profits, not wages, at a certain level.

If we are serious in the desire to contribute anything at all to the solution of unemployment, by this three-party idea of getting together and forgetting party points, and settling down to the problem, we have to see that the present system is very irrational in many respects, and we have to rationalise industry on very different lines. The one and only object of rationalisation seems to be, How much can we cheapen production at the expense of the worker? Production has been another fallacy. We have been putting all the emphasis on production, and "Produce more" used to be the slogan, but we have to be rational in this respect. We have to see that the whole situation is changed, and we have to preach the doctrine of consumption and say, "Consume more." We have to put the workers of this country on a higher standard of living and wages, so that they can buy the essentials of life, live in better houses, be fed and clothed adequately, and have enough wherewith to enjoy themselves.

There is no reason why rationalisation should not take its proper turn by reducing the emphasis on production and putting it, where it would be more properly placed, on consumption. There is no lack of wealth; there is no lack of the essentials of life. It is a matter of rationalising these things and adjusting the relationship between capital, so long as it exists, and labour, so long as it exists. [Laughter.] Hon. Members laugh. Some people think it is a sine qua non that there should be an eight-hours day, but scientists have worked it out that, if we were all properly rational and rationalised, four hours might be quite sufficient. It would be better to introduce a little science and make a four-hours day fit the situation, and every person do his quota of work, than have a big army of people overworked, on the one hand, and under-worked or without work on the other.

Another much over-worked word in this Debate has been "uncertainty." The uncertainty referred to by the right hon. Member for Edgbaston (Mr. Chamberlain) was the uncertainty owing to the decision of the Government not to renew the Safeguarding Duties, but no one who has followed the history of those duties, and their effect upon the industries concerned, can deny that the uncertainty has been created in these industries by the fact that Safeguarding was ever introduced at all. Safeguarding, as far as it was practised by the former Government, contributed nothing at all to the solution of the problem of unemployment, and no one ever expects that it will. I give credit even to its advocates for at least knowing and understanding that Safeguarding is not really intended for the workers of this country. The only thing in their ken is immortal capital, the capital which never dies and is always bearing dividends.

This is a subject which deserves the co-operation of the House in an endeavour to find a solution, but I have seen very little manifestation of a disposition to come to the help of the Government in this respect. The House of Commons could do much in the country to remove the erroneous impression that this is a subject which has been accentuated in the last few months under the present Government. It is rather a problem which no Government, so far as I can see, has ever tackled to the extent that this present Government had tackled it. The record of the Government is not to be measured by the figures of unemployment at the present time; their record should be measured by the number of schemes that have been sanctioned, by the attitude which they have adopted to the problem from the first day on which they took office, and by the amount of work that they have put into the problem. I have yet to find in the records of any previous Government that so much time has been given, so much money voted, and so extensive a programme drawn up for attempting to deal with this problem as during the office of the present Government.

Photo of Colonel Harry Nathan Colonel Harry Nathan , Bethnal Green North East

If the test by which the Government is to be judged as to their success or failure in dealing with the unemployment problem were to be those matters referred to by the hon. Member for Greenwich (Mr. Palmer), I fear that the nation would not regard them with the same satisfaction as the hon. Gentleman. He suggested that regard should be had to the number of schemes put forward, the amount of money voted, and the amount of work found. The ultimate test of the result of the efforts of the Lord Privy Seal is not to be found in the amount of money voted or in the number of schemes put forward, but rather in the unemployment figures and in the ocular demonstration of the long queues of unemployed, ever-growing longer, outside the Employment Exchanges In one part of his speech, the hon. Gentleman suggested that the Government were in no sense responsible for the growth of the unemployment figures, but that nevertheless, the weapon which the Lord Privy Seal has taken to his hand, and upon which he most relies—the weapon of rationalisation—is a weapon not for reducing, but increasing unemployment. The rationalisation and reorganisation of industry is a long task; it is a task which brings difficulties in its train, and in the carrying out of which more unemployed must necessarily be created. It is a sound, and I believe, genuine remedy, if courageously and resolutely pursued to its logical conclusion, of much of our present industrial discontent, but it is very poor comfort to the 1,750,000 unemployed—a figure gradually becoming 2,000,000—to suggest that the right hon. Gentleman's schemes must take time to fructify, and that they will one day reduce unemployment. They look at what has taken place in the last few months, and they ask what is going to happen in the next few weeks and months, and what steps are being taken in anticipation of yet another winter of severe distress and unemployment. When they ask whether the Government are pursuing any steps with resolution and courage, I fear that they will be disappointed. Almost every scheme which has been put before the House to deal with immediate difficulties has resulted in nothing but words. So far, we do not even know if the Channel Tunnel scheme, which would provide employment, is to be adopted by the Government. The Charing Cross Bridge scheme, which was to have given employment by Christmas—that was the right hon. Gentleman's prophesy—has been destroyed.

Photo of Mr James Thomas Mr James Thomas , Derby

The hon. and gallant Gentleman was not in the House when I made my speech, and I must correct him. The Charing Cross Bridge scheme was killed by Members of this House, including Members of all parties. The Channel Tunnel, as he must know from his leader, is a subject on which the leaders have been called in.

Photo of Colonel Harry Nathan Colonel Harry Nathan , Bethnal Green North East

I do not impute to the right hon. Gentleman personally, or to the Government exclusively, the failure of some of these schemes to come to fruition. I am stating the facts of the position as they are, and the facts are that you may search the columns of the OFFICIAL REPORT since this Parliament first met, and it will be found that of the suggestions which have been put forward by the right hon. Gentleman, nearly all of them have ended where they began, in the pages of the OFFICIAL REPORT. Indeed, the record of the Government was not put in exaggerated form by the Chancellor of the Duchy of Lancaster when, in a speech not long ago, he said that the steps taken by the Government had not had any effect one way or the other. That speech has been quoted before, and no doubt it will be quoted up and down the country, as being the real verdict of the effect of the unemployment policy of the Labour Government. The country, looking for resolution and courage, has found so far neither the one nor the other. When I say that, I wish to make it clear that I am dealing with the immediate problem, for, as I said before, I believe that in rationalisation and re-organisation of industry is to be found the real remedy.

An hon. and gallant Gentleman above the Gangway made many generalisations about Safeguarding as a remedy for unemployment. I do not propose to follow him in that argument, except to ask him whether, in considering the arguments for and against Safeguarding, he has ever faced the fact that if you take the figures of imports into this country, over the whole field of industry, and take the figures of employment, you find a clear and definite relation between the two. Imports come in and employment goes up; and as imports are excluded unemployment goes up. It is a fact which I commend to the notice of hon. and right hon. Gentlemen above the Gangway as evidence of the fact that this country depends not merely upon its general prosperity for employment, but also upon an unrestricted import of those commodities for which the nation calls. I was very much struck by a speech made by the hon. Member for Oldham (Mr. Lang) in which he made a claim for co-operation between the opposite side of the House and Members upon these benches in regard to this problem.

The hon. Member for Greenwich suggested that there was some failure on the part of those upon these benches to respond to any suggestions from the Government side. I will only say that twice I have asked the Prime Minister whether he would take into consultation—I think that was the phrase used—the leaders from this side of the House with a view to elaborating a policy to deal with unemployment, and on neither occasion did that question meet with a sympathetic response from him. Our unemployment policy on this side does not divide us so much from the party opposite as the policy of those above the Gangway in reference to Safeguarding divides them from us, but there is this difference between the benches opposite and ourselves for we, like them, are prepared to take our courage in both hands. We are prepared to use the national credit for reducing unemployment, and to use it with vision and with resolution, whereas there is on the part of hon. and right hon. Gentlemen opposite a failure to appreciate the vital use to which our credit might be put at this time in order to ensure that great works of national reconstruction for the capital equipment of the country shall be put in hand. It is sometimes suggested by right hon. Gentlemen opposite that to use our national credit for such a purpose would be akin to artificial respiration. I ask, What is wrong with artificial respiration? When a man is drowning you rescue him and restore him to life by artificial respiration; you put him on his feet in that way and when he is once on his feet he will remain there of his own volition and his own strength.

10.0 p.m.

Photo of Sir Albert Braithwaite Sir Albert Braithwaite , Buckrose

I would like to say how much I sympathise with the Lord Privy Seal in the work he has been trying to do, and I am glad to find that on the Labour side hon. Members are beginning to realise that the future strength of this country rests on the restoration of industrial prosperity. I fear that the two sides of the House are far too divided on the fiscal question for us to bring about any advancement of the Safeguarding ideas which we on these benches have, but I wish to make a serious suggestion to the Lord Privy Seal. I have watched with great interest the success of the national mark in promoting sales of home-produced goods, and I am emboldened to envisage a still greater sale of Imperial and home-produced goods by this method. I suggest to him that just as the co-operative societies have developed their business by sharing with their purchasers the profits in those undertakings, so we could, by a further use of the national mark on home-produced and Imperially-produced goods, develop an Imperial co-operative society. With the co-operation of the Chancellor of the Exchequer, I believe that an Imperial co-operative society is not out of the bounds of possibility.

I suggest that we have a national mark upon commodities manufactured under the requirements of the national mark, and that purchasers of those goods be given some sort of coupon or receipt which will entitle them to a bonus on the increased prosperity that would come to this country. Those vouchers or coupons might be made redeemable by His Majesty's Treasury or by the local taxation office. It would give a definite incentive to people to purchase home produced commodities. What we are short of and what is creating more unemployment than anything else is the lack of national turnover. If we can raise that turnover to a, sufficient level we shall be able to absorb more people. The Government ought to look most carefully into the fact that we are losing such a volume of business in our home market.

I ask the Lord Privy Seal to inquire into two questions: what percentage of British labour enters into the total volume of goods sold in this country to-day, and what percentage of foreign labour? It is a question that has never been satisfactorily answered. The "man in the street" does not understand sufficiently what amount of foreign labour he is paying for when he buys commodities. If people could understand that in buying home-produced or Empire-produced commodities they would be bolstering up British employment, whether here or in the Colonies, it would do a great deal of good to the Empire in general. Only by the collective efforts of the Empire can we expect to rise again to a position of world supremacy in commerce. I offer these suggestions to the Lord Privy Seal for his earnest consideration, because I am a believer in the future of this country. I believe that the glories of the past are going to be surpassed by the work that will be carried forward by this great Empire in the future, and I ask him to get into Government circles more of this Imperial spirit and more of the spirit of building up a world Empire, because in that direction, above all others, will he find the solution of the unemployment problem.

I would like to say a word or two about the position of agriculture. In my constituency, which is wholly agricultural, we have had more serious unemployment this winter than at any time which anybody can remember. We have had 1,000 unemployed farm workers this winter. The Government must take some notice of the incredible harm which is being done to arable districts by the importation of foreign wheat and oats. It has done very grave harm. Not only has it had the effect of the farmers in my constituency not being able to sell their crops, but this winter they have not had enough money to carry on their work. In agricultural districts we have no unemployment pay, and the men who are out of work have to accept parish relief. It is not fair of the Government to do nothing at all for the agricultural industry. There has been no action by the Government which has put a, single agricultural worker into employment, and that is too bad after the promises made to agriculture by responsible Members of the Government. The least we could expect from the Government is some gesture of good will towards agriculture. We want legislation that will give more business and more work for the countryside. By the development of the national mark I believe the Lord Privy Seal will find some real good will follow, and I hope the right hon. Gentleman will carefully look into that suggestion. What I have suggested may not be practical, but I ask the right hon. Gentleman to be good enough to say if anything can be done along those lines.

Photo of Sir Frank Merriman Sir Frank Merriman , Manchester Rusholme

It is almost indecent for me to intervene in a domestic dispute between the Lord Privy Seal and his supporters, and I propose to allow the First Commissioner of Works time to give the information which we are anxious to receive. The three joint authors of the famous memorandum are now sitting side by side on the Treasury Bench. I am eagerly awaiting information from the First Commissioner of Works, first of all, as to the contents of that memorandum, and secondly as to its ultimate destination. With regard to the speech of the Lord Privy Seal, I hope he will not think that I am being in any way offensive if I say that the spectacle of a brave man struggling with adversity is not very edifying, and is certainly not a subject for mirth. I hope that the right hon. Gentleman will not resent me saying that the speech he made to the Committee this afternoon was a courageous one, and, if the conversion of the Government as a whole had proceeded during the last 12 months so completely and so rapidly as the conversion of the Lord Privy Seal, it might not have been necessary to move a reduction of this Vote.

I shall not spend any time upon that part of the right hon. Gentleman's speech in which he dealt with schemes. The right hon. Gentleman told us, not for the first time, that a comparatively small number of unemployed were affected, and he reiterated his determination, with which we are in cordial agreement, to refuse to be driven into the introduction of panic measures. On these benches we are in substantial agreement with the whole of that part of the Lord Privy Seal's speech. Our real complaint is that the Government, as a whole, and the Lord Privy Seal himself, have resolutely turned a deaf ear to any plea on behalf of Safeguarding Duties, past, present or future. The Lord Privy Seal is either content or compelled, as the case may be, to tackle this problem blindfold, whereas if he would only allow himself to take the bandage off there is a remedy staring him in the face. [Laughter.] Hon. Members laugh at that remark, but this problem cannot be dismissed merely by asking whether we are aware that there is unemployment in Germany and the United States, or by asking whether the standard of living in Germany is as high as it is in this country.

Does anybody seriously contend that unemployment in the United States and in Germany has been as constant, as chronic, or at such a high uniform average level as it has been in this country for the last 10 years? If you are going to draw deductions from unemployment figures in Protectionist or Free Trade countries, what about France and Italy? Are the unemployment figures there comparable to the unemployment figures in this country or in Germany, or in the United States? In talking about the standard of living, the Lord Privy Seal was, I observed, very careful to refer, not to Germany and the United States, but to Germany alone. It can hardly be suggested, I should imagine, that the standard of living in the United States of America is so vastly inferior to the standard of living in this country, and, when you talk about the standard of living in Germany, it is quite obvious that you have to take into account the enormous disturbances in that country which are the result of the War.

The Lord Privy Seal said, and perfectly truly, that one of the most disquieting factors at the present time is the pessimism and loss of confidence which prevails throughout industry; but the Government have a good deal to answer for in regard to this pessimism and lack of confidence. Somebody once described a pessimist as a person who, of two evils, chooses both, and it is precisely that type of pessimism in which the Government are compelling the country to con- tinue to indulge, because, after all, the Government are insisting on an insistence on the pure doctrine of Free Trade when the conditions in which that doctrine can properly be applied have really ceased to exist.

I hope I shall be forgiven if I say in my own way what was touched upon by my right hon. Friend the Member for Edgbaston (Mr. Chamberlain) in opening this Debate. Free Trade does assume that competition is really unrestricted, not only on the part of our rivals, but on our own part, and, however good and desirable in themselves factory laws, trade union restrictions and the cost of social services may be, they are undoubtedly an addition to the cost of production; and, if they happen to be heavier in this country than in the rival countries, they are to that extent a handicap. When you add to them the burden of taxation in respect of standing debt, which is incomparably heavier than in any other country, the dead weight of unemployment benefit, and, last, but not least, the latest addition to the prospective burdens on industry represented by an artificial reduction in the output and a rise in the price of coal, it really does become impossible to say that the conditions in which Free Trade doctrines can flourish continue to exist at all. And yet hon. Members opposite are insisting on industry continuing to suffer unrestricted competition from countries which have not anything like the same burdens as those I have mentioned; which, so far as several countries in Europe at any rate are concerned, have re-equipped themselves as competitors and have freed themselves from standing charges in respect of debt, by a flight from currency; and which, again so far as Europe is concerned, are paying what in effect are lower real wages than those which prevail in his country.

May I just say in passing that the hon. Member for Lanark (Mr. Dickson), if he will allow me to say so, made a false point in that connection. He called attention to the fact that we were talking about competition from countries in which there was a lower rate of wages, and that those were Protectionist countries. That is quite true so far as regards those countries in Europe to which I have just alluded, but it is not true of the United States of America, and it is not true of many of our own Dominions.

Photo of Sir Frank Merriman Sir Frank Merriman , Manchester Rusholme

I quite agree. I do not say that the hon. Member said that, but I am pointing out that no positive inference one way or the other can be drawn, merely from the rate of wages, on the question of the merits of Safeguarding or Free Trade as the case may be. You cannot draw a safe deduction from the mere fact that wages are low in certain Protectionist countries without also calling attention to the fact that they are a great deal higher in other Protectionist countries.

When we talk about the responsibility of the Government for a spirit of pessimism and lack of confidence, I should like to say one other thing. My right hon. Friend has already called attention to the effect on the confidence of the country of the increase in taxation, but it is not merely that there is a material added burden in terms of money. I suggest to the Committee that, in addition to that, there is the psychological effect of the apparent vindictiveness with which this taxation is imposed. [Interruption.] Hon. Members laugh, but I wonder whether they realise what the effect of the obvious vindictiveness displayed in face of the House by the Chancellor of the Exchequer actually is. After all, when the rod of chastisement is wielded with apparent enjoyment, it is apt to create a feeling of unfairness on the part of the victim. It certainly does not make for confidence in the fairness of the person who is wielding the rod. In the case of the Chancellor of the Exchequer, if I may misquote Gilbert, it is exasperating, for he is such an irascible Chancellor. It does not help to establish confidence when, in spite of what the Lord Privy Seal said to-day about the leaders of finance and industry, the Chancellor of the Exchequer indulges in the accusation of a wholesale conspiracy on the part of industry to create unemployment, nor does it help to restore confidence that, whenever there is any attempt seriously to argue the question of the burden imposed on industry by unduly heavy taxation, the arguments are received with roars of derision from those who sit behind the Chancellor.

The Lord Privy Seal touched one note which I am bound to say touched me nearly as one of the Members for Manchester. He was discussing the state of the cotton trade, and it is common knowledge that the state of that trade is absolutely deplorable, at any rate so far as that part of it represented by the American section, both in the spinning and weaving, is concerned, and not only so, but the deplorable results are felt in the warehouses in Manchester almost to the same degree. The troubles in the cotton trade cannot be dismissed merely by saying there is over-capitalisation and lack of organisation. The cotton trade is confronted undoubtedly with newly acquired technical skill and newly acquired equipment in Eastern countries in which we were formerly supreme, equipment and skill, be it noted, which have been acquired against us under the shelter of tariffs, and the plain position is that Lancashire must be prepared to re equip or run the risk of going further backwards than is even now the case.

I think that the Lord Privy Seal, if he had not been interrupted, was going to ask a question which he asked on another occasion, whether anyone was prepared to suggest that Safeguarding would be considered by the cotton trade. On the former occasion he said anyone who dares to talk Safeguarding in connection with Lancashire would be laughed out of Court. I dare say that in my time I have been as strongly convinced as anybody on the Liberal benches that the doctrine of Free Trade, particularly in connection with the cotton trade, was an eternal verity and an immutable law, and I dare say that I have often been as positive as was the hon. Member for Oldham (Mr. Lang) that the whole of the rival case with regard to America and Germany, and other countries as well as with regard to this country, can be summed up in the pithy phrase "subsidising incompetence." But there are many in Lancashire who, like myself, are now prepared to ask themselves the question whether Free Trade was really any more than a wise and proper expedient in the circumstances in which it could properly be applied.

The hon. Member for Greenock (Sir G. Collins) asked us to reflect on the fact that a fleet had been equipped in the good days of Free Trade, and had been available for the War. Certainly, but those days were days, first of all, of low taxation at home, of expanding markets abroad, of very little competition from rivals in the East, and as far as India, our largest market, was concerned, they Were days in which, if India put on an import duty on Lancashire goods, it was countervailed by a corresponding Excise Duty, and last, but not least, there was no question of any artificial manipulation either of the output or of the price of the essential raw material of the textile trade—coal. Every one of those facts has now been reversed. We are suffering from high taxation, from contracted markets in the East and from effective and increasing competition on the part of Oriental nations. The countervailing Excise has gone, and, further, the Indian tariffs have increased and are increasing, and we are threatened with an artificial rise in the price of coal. If the Lord Privy Seal is forming his policy on the basis that Safeguarding will no longer be examined on its merits in Lancashire, I can assure him that he is acting under a delusion. The proof of that is that at this very moment, I understand, though I have not actually seen it, there is circulating from the Manchester Chamber of Commerce a questionnaire to its members on this very subject.

Apart from any question of Safeguarding, there is one other way in which, I think, the Lord Privy Seal can help actively. We all know that trade unions have some influence on the Government. The Lord Privy Seal is credited with having some influence on the trade unions. Lancashire is suffering from competition of the automatic loom, and, as I understand it, the automatic loom cannot compete in cheapness with the Lancashire loom on the strict one-shift basis. But the moment you get on to the two-shift basis, as do the countries which are using the automatic looms, the automatic loom is much cheaper than the ordinary power loom. The trade unions up to the present have refused to consider working automatic looms on the two-shift system. We are literally confronted with something which is very like the original struggle between the hand loom and the power loom, only that the struggle is now between the power loom and the automatic loom. I would ask hon. Members opposite to consider the fact that 120 years ago that struggle took place and that it resulted in riots which were designed to maintain the hand loom and to destroy the possibility of its being replaced by the power loom. Those Luddite riots began in Nottingham, and it is not impossible that Nottingham may sound a note of warning against Luddite mentality in the present day. The Lord Privy Seal has been reminded that this Government is to be judged by the way in which the unemployment problem is handled. We for our part are quite content to take that test. It is not a cheerful prospect, but the Government have laid down the challenge, and we are prepared to take it up, and, lest there should be any greater mischief meanwhile, we hope that the judgment of the country will not be unduly delayed.

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

I should like to ask right hon. Gentlemen on the other side who may take part in any future Debate on unemployment whether they would care to answer the question which I am going to put to them. I put the question because we have time and again been asked, and the question has been pretty fully discussed, about the weight of taxation which this country carries and that industry has to bear, as against the burden of German industrialists or French industrialists. I have had the matter looked up, and in the economic report of Mr. Cahill, the Commercial Officer of the British Embassy in Paris, on page 5, he reports: In 1927, France wiped out four-fifths of investments made pre-War and two-fifths of War and post-War investments. I would like to ask hon. and right hon. Gentlemen who have been challenging us as to the burden of taxation in this country whether they are prepared to advocate the same methods that were adopted in France. Until hon. and right hon. Gentlemen opposite are ready to adopt some drastic method for getting rid of the enormous War debt that has been imposed upon this country some method about which they have not vouchsafed to tell us anything, they must not accuse us of loading the country up with taxation. Hon. Members appear to forget that something like £500,000,000 of our taxation is War taxation, post-War taxation, and taxation for the prevention of other wars. Until something is done to deal with that burden I cannot see how the country can expect to have anything than very heavy taxation. I am not aware that anyone has said that we should repudiate the National Debt, and I should like hon. and right hon. Gentleman opposite to tell us how we can get rid not of social services taxation but of the taxation to pay off these debts which are the heaviest burden of taxation at the moment. I should like to ask the hon. and learned Member for Rusholme (Sir B. Merriman)—[Interruption]—is there anything extraordinary in asking the hon. and learned Member a question? In the early part of this Debate, Mr. Chairman, you called upon hon. Members on this side of the Committee not to interrupt, and most speakers on the other side have had a fair hearing. I am too old a campaigner to be talked out or laughed out, and I want to ask the hon. and learned Member this question: What does he really mean when he talks about Safeguarding in connection with the cotton industry? As I understand, nearly 80 per cent. of cotton products goes out of the country. Will he tell me how Safeguarding will assist the development of the industry in its export trade? The first great crisis in the cotton industry took place during the American Civil War, for reasons exactly opposite to those which are operating to-day. It was then impossible to get raw cotton for manufacture.

There are two reasons for the crisis in the cotton trade to-day. One is the inflation which took place at the close of the War, coupled with the fact that there has been an enormous increase in labour saving appliances in the production of cotton goods. We have also a further fact that the markets for cotton goods which have been open to this country ever since there has been a cotton trade have been practically closed. India has been closed and China very largely closed. Again, British capital has been invested in purchasing machinery specially adapted for Eastern peoples to use, in India and Japan, in order to compete with us in those Eastern markets. I appeal to any hon. Member to tell me how Safeguarding is going to assist the cotton industry in these circumstances. It does not matter one bit whether the hon. and learned Gentleman has recanted some of his Free Trade opinions—

Photo of Mr John Remer Mr John Remer , Macclesfield

May I ask the right hon. Gentleman—

HON. MEMBERS:

Order, order!

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

As the First Commissioner of Works did not give way the hon. Member should not insist upon addressing the Committee.

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

How will Safeguarding assist the cotton industry?

Photo of Mr John Remer Mr John Remer , Macclesfield

The right hon. Gentleman dare not give way.

HON. MEMBERS:

Name!

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

The hon. Member for Macclesfield (Mr. Remer) must not rise up and address the Committee in that way.

Photo of Mr John Remer Mr John Remer , Macclesfield

He will not give way; he dare not give way.

Sir GEORGE HAMILTON:

The right hon. Gentleman asked for an answer and he will not give way.

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

The state of the industry being what it is—

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

In the early stages of this Debate I asked that there should be no interruption. I hope that the request I made then will be followed now by the hon. Member.

Photo of Mr John Remer Mr John Remer , Macclesfield

He dare not give way; he dare not give way.

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

If the hon. Member persists in interrupting, I shall have to ask him to leave the Chamber.

Photo of Mr John Remer Mr John Remer , Macclesfield

I merely said that he dare not give way.

HON. MEMBERS:

Name, name!

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

The hon. and learned Member raised the question of the automatic loom. He will not expect me to discuss that matter with him to-night. It is purely a question for the trade unions and the employers to settle between themselves. But if the hon. and learned Gentleman has any idea that the Lord Privy Seal or myself have inherited the Luddite tradition, he is making a profound mistake. We have learned that it is the control of the machine at which we must aim, and not at the smashing of it. Personally, I have no feeling whatsoever against machinery, but I have always said that work is a curse. According to the Scriptural story, work was imposed as a test, and mankind has been trying to use the brains that God Almighty gave him to get rid of the test at the earliest possible moment. I am very glad to think that mankind is slowly but surely reaching that desirable end. None of us wants to go to manual labour. I ran away from it myself at the earliest possible moment. None of us wants to go back to it; I certainly do not. I must also say that when the hon. and learned Gentleman talks about France and Italy and other countries, he seems to forget, as other speakers have forgotten, first of all the fact to which I alluded a few minutes ago, and the further fact that both France and Italy carry conscript armies, and that each year there is a very considerable number of men maintained by tht State in those countries in order to fit them for war, if war should come. Here they would be counted largely as unemployed. The number of men employed in our Army is small compared with the number employed in the armies of those countries. [Interruption.] No one can deny that in any comparison between ourselves and France and Italy we must take into account, first of all, what they have done with their finance, and, secondly, the fact that they make provision for a large number of men by taking them into the army and navy each year. [HON. MEMBERS: "Oh!"] Hon. Members may say "Oh!" but that is a fact which no amount of "Oh-ing" will contradict.

As to the burden of social services, I say, quite frankly, that I consider most of the social services very good investments. I have never been in favour of giving men something for nothing, whether they belong to the upper class or to any other class, but when you have a large mass of men and women for whom there is no work within the industrial and social system under which the country exists, there is nothing else for it but to provide them with maintenance of one sort or another. I have not yet heard anyone on the other side say definitely that they want to repeal the Insurance Act or any of the other social services and, as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) pointed out in a previous Debate, right hon. Gentlemen opposite boasted at the last Election of how they had increased the social services. I ask them to-night, when they call attention to the burden on industry, if they are prepared to adopt the suggestion of the right hon. Gentleman the Member for Epping (Mr. Churchill) that we should make Unemployment Insurance and other social services a cost on the taxes instead of on industry. I am sure that the Government would be prepared to sit round a table and discuss that proposal, because my right hon. Friend on this side, during the speech of the right hon. Gentleman the Member for Epping in the last Debate on unemployment, offered to discuss that matter, but to-night we have heard nothing at all about it. Even if hon. Members opposite do not agree with that proposal, even if they believe that the social services must be maintained, who is to pay for them? How are they to be paid for?

There has been some controversy as to who should have the credit for Unemployment Insurance. I do not mind who has the credit for it, but I believe that if it had not been for Unemployment and Health Insurance and the social services generally, this country would have been plunged into revolution at the dose of the War. About that, I think, there can be no two opinions, and I believe the money spent upon them has been an insurance against revolution. Further, I say that it is a matter for congratulation—certainly it is so to me—to be able to listen here to speeches on this subject, not one of which accuses the workmen of being responsible for their own unemployment. Hon. Members may wonder why I am glad at that. I would advise them to read the Debates which took place when the late Mr. Keir Hardie first raised the question of unemployment here. If they do so, they will find that the whole trend of thought on this subject has changed and that now, instead of penalising the individual, we recognise that unemployment is some- thing for which individuals are not responsible and that society must find the way out.

We have begun to find the way out as is shown by hon. Members opposite adopting proposals to which at one time they thoroughly objected but which experience has taught them must be put into operation. Just think of the question of rationalisation. Think what the party opposite themselves did in the Electricity Bill which they passed through the last Parliament. That was a Bill to rationalise electricity undertakings in this country, to unify the production and to control the distribution. It was recognised by the late Government that when that came into operation large numbers of ordinary workmen would be thrown out of work and a Conservative Government carried in that Bill a Clause in which they said that the workmen who were displaced must, just as though they were officers, receive compensation. I believe that, sooner or later, this country will be driven to that in regard to workmen who are displaced in this way.

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

Is that in the memorandum?

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

I will talk about that. This party, anyhow, moved the Amendment, which was accepted by the late Attorney-General upstairs, giving effect to the principle which I have stated, and therefore we were in favour of it. The thing that this House has to face up to is that everybody is agreed that rationalisation is necessary. Where we fall out with one another is that we say the workman must not be the person to bear the whole burden of rationalisation. In some way you have got to find him a means of living while that process is going on. I do not believe that there is any big industrialist in this country that really objects to it. One of the biggest gas companies which is reorganising its whole industry, is putting that into operation at the present time. The fact that there are large numbers of industries that are not able to do it throws a burden on to the community or on to the nation.

It is all very well for people to imagine that trade must, of necessity, get better quickly. An hon. Gentleman opposite put a conundrum to me when he said, "You are going up to 2,000,000, and where is it going to stop?" I say again, "Ask me another." It is impossible for me to say. I will tell the Committee why it is impossible in the words of the Leader of the Opposition and of the late Chancellor of the Exchequer. The last time the right hon. Gentleman the Member for Bewdley (Mr. S. Baldwin) spoke on unemployment, he gave us one of his delightful speeches in which he traced the history of industry in this country. He said, in effect, in that speech that the problem before us was how to adjust all these wonderful means of production with consumption, not merely in our own country but throughout the world. The late Chancellor of the Exchequer, speaking the other day, said we had got too much coal, too much agricultural produce, too much cotton and too much of other things, and he said we do not know what to do with it. We had to find out how to adjust that enormous international production with consumption.

The right hon. Gentleman, speaking in the true line of the faith this afternoon, said exactly the same thing to us when he said that it was a question of how to adjust the international production with the international consumption. I am glad to feel that I am in agreement with three good Tory leaders as to what is the cause of the difficulty. That is the root cause. We, on this side, hold to a theory that we believe, if we could put it into operation nationally and internationally, would solve that problem, and the difficulty is that, just as hon. and right hon. Members opposite have not been able to convince the country about tariffs, we have not yet convinced the country about Socialism. We need not fall out about that. That is the fact.

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

What about the memorandum?

Photo of Mr George Lansbury Mr George Lansbury , Poplar Bow and Bromley

We are discussing the memorandum, and if the right hon. Gentleman will possess his soul in patience, one day he may know all about it. The shout from the other side just now was, "Tell us what you are going to do." We are doing our best with the machinery of this Parliament. There are two Bills upstairs dealing with housing and slum clearance for England and Wales and Scotland, and I think there is one dealing with land drainage. If hon. and right hon. Members opposite will assist us to get those Bills through, we shall without any doubt almost immediately solve unemployment in the building trade. Hon. and right hon. Members opposite can very easily put that to the test. Let us have the Bills. They gave us the Second Reading of those Bills; let them help us to get the Third Reading also. I believe that this country, like many another country that has passed through the same economic stages, will have to look back, as it were, to agriculture and the land generally, and when the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said the other day that he hoped the Government would be ready to consult both with the right hon. Gentleman opposite and with himself on that subject, I am quite certain that if such a conference

as that can come about, we shall in all probability be able to do something for unemployment in agriculture. I want to say, quite frankly, that if we were in power in this House, I think we should be able to carry through Measures of our own without having to consult other people—

Sir B. EYRES MONSELL:

rose in, his place, and claimed to move, "That the Question be now put."

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

I think the Committee is ready to go to a Division.

Question put, "That a sum, not exceeding £14,684, be granted for the said Service"—

The Committee divided: Ayes, 209; Noes, 224.

Division No. 298.]AYES.[11.0 p.m.
Acland-Troyte, Lieut.-ColonelCrichton-stuart, Lord C.Hudson, Capt. A. U. M. (Hackney, N.)
Ainsworth, Lieut.-Col. CharlesCranborne, ViscountHunter-Weston, Lt.-Gen. Sir Aylmer
Albery, Irving JamesCroft, Brigadier-General Sir H.Hurd, Percy A.
Allen, Sir J. Sandeman (Liverp'l., W.)Crookshank, Cpt. H. (Lindsey, Gainsbro)Hurst, Sir Gerald B.
Allen, Lt.-Col. Sir William (Armagh)Croom-Johnson, R. P.lveagh, Countess of
Allen, W. E. D. (Belfast, W.)Culverwell, C. T. (Bristol, West)James, Lieut.-Colonel Hon. Cuthbert
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Dalkeith, Earl ofJones, Sir G. W. H. (Stoke New'gton)
Astor, Maj. Hn. John J. (Kent, Dover)Dalrymple-White, Lt.-Col. Sir GodfreyKindersley, Major G. M.
Astor, ViscountessDavidson, Rt. Hon. J. (Hertford)King, Commodore Rt. Hon. Henry D.
Atkinson, C.Davidson, Major-General Sir J. H.Knox, Sir Alfred
Baillie-Hamilton, Hon. Charles W.Davies, Dr. VernonLamb, Sir J. O.
Balfour, George (Hampstead)Davison, Sir W. H. (Kensington, S.)Lane Fox, Col. Rt. Hon. George R.
Balfour, Captain H. H. (I. of Thanet)Dawson, Sir PhilipLaw, Sir Alfred (Derby, High Peak)
Balniel, LordDuckworth, G. A. V.Leigh, Sir John (Clapham)
Beamish, Rear-Admiral T. P. H.Dugdale, Capt. T. L.Leighton, Major B. E. P.
Beaumont, M. W.Eden, Captain AnthonyLewis, Oswald (Colchester)
Berry, Sir GeorgeEdmondson, Major A. J.Little, Dr. E. Graham
Betterton, Sir Henry B.Elliot, Major Walter E.Llewellin, Major J. J.
Bevan, S. J. (Holborn)Erskine, Lord (Somerset, Weston-s-M.)Locker-Lampson, Rt. Hon. Godfrey
Birchall, Major Sir John DearmanEverard, W. LindsayLocker-Lampson, Com. O. (Handsw'th)
Bird, Ernest RoyFalle, Sir Bertram G.Lymington, Viscount
Boothby, R. J. G.Ferguson, Sir JohnMcConnell, Sir Joseph
Bourne, Captain Robert CroftFermoy, LordMacdonald, Capt. P. D. (I. of W.)
Bowater, Col. Sir T. VansittartFison, F. G. ClaveringMacquisten, F. A.
Bowyer, Captain Sir George E. W.Ford, Sir P. J.MacRobert, Rt. Hon. Alexander M.
Bracken, B.Forestier-Walker, Sir L.Maitland, A. (Kent, Faversham)
Braithwaite, Major A. N.Fremantle, Lieut.-Colonel Francis E.Makins, Brigadier-General E.
Brass, Captain Sir WilliamGanzoni, Sir JohnMargesson, Captain H. D.
Briscoe, Richard GeorgeGault, Lieut.-Col. Andrew HamiltonMarjoribanks, E. C.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)Gibson, C. G. (Pudsey & Otley)Mason, Colonel Glyn K.
Buchan, JohnGilmour, Lt.-Col. Rt. Hon. Sir JohnMeller, R. J.
Buckingham, Sir H.Glyn, Major R. G. C.Merriman, Sir F. Boyd
Bullock, Captain MalcolmGower, Sir RobertMitchell-Thomson, Rt. Hon. Sir W.
Burton, Colonel H. W.Grace, JohnMoore, Lieut.-Colonel T. C. R. (Ayr)
Butler, R. A.Graham, Fergus (Cumberland, N.)Morden, Col. W. Grant
Cadogan, Major Hon. EdwardGreaves-Lord, Sir WalterMorrison, W. S. (Glos., Cirencester)
Carver, Major W. H.Greene, W. P. CrawfordMorrison-Bell, Sir Arthur Clive
Castle Stewart, Earl ofGrenfell, Edward C. (City of London)Muirhead, A. J.
Cautley, Sir Henry S.Gretton, Colonel Rt. Hon. JohnNewton, Sir D. G. C. (Cambridge)
Cayzer, Sir C. (Chester, City)Gritten, W. G. HowardNicholson, Col. Rt. Hn. W. G. (Ptrsf'ld)
Cazalet, Captain Victor A.Guinness, Rt. Hon. Walter E.Nield, Rt. Hon. Sir Herbert
Cecil, Rt. Hon. Lord H. (Ox. Univ.)Gunston, Captain D. W.Oman, Sir Charles William C.
Chadwick, Capt. Sir Robert BurtonHacking, Rt. Hon. Douglas H.O'Neill, Sir H.
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Hall, Lieut.-Col. Sir F. (Dulwich)Ormsby-Gore, Rt. Hon. William
Chamberlain, Rt. Hon. N. (Edgbaston)Hamilton, Sir George (Word)Peake, Captain Osbert
Christie, J. A.Hammersley, S. S.Penny, Sir George
Churchill, Rt. Hon. Winston SpencerHanbury, C.Percy, Lord Eustace (Hastings)
Cobb, Sir CyrilHannon, Patrick Joseph HenryPeto, Sir Basil E. (Devon, Barnstaple)
Cockerill, Brig.-General Sir GeorgeHarvey, Major S. E. (Devon, Totnes)Pilditch, Sir Philip
Colfox, Major William PhilipHenderson, Capt. R. R. (Oxf'd, Henley)Power, Sir John Cecil
Colman, N. C. D.Herbert, Sir Dennis (Hertford)Pownall, Sir Assheton
Courtauld, Major J. S.Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.Purbrick, R.
Courthope, Colonel Sir G. L.Howard-Bury, Colonel C. K.Ramsbotham, H.
Rawson, Sir CooperSmith, R. W. (Aberd'n & Kino'dine, C.)Ward, Lieut.-Col. Sir A. Lambert
Remer, John R.Smith-Carington, Neville W.Wardlaw-Milne, J. S.
Rentoul, Sir Gervals S.Smithers, WaldronWarrender, Sir Victor
Reynolds, Col. Sir JamesSomerville, A. A. (Windsor)Waterhouse, Captain Charles
Richardson, Sir P. W. (Sur'y, Ch'te'y)Southby, Commander A. R. J.Wells, Sydney R.
Roberts, Sir Samuel (Ecclesall)Spender-Clay, Colonel H.Williams, Charles (Devon, Torquay)
Rodd, Rt. Hon. Sir James RennellSteel-Maitland, Rt. Hon. Sir ArthurWindsor-Clive, Lieut.-Colonel George
Ross, Major Ronald D.Stewart, W. J. (Belfast, South)Winterton, Rt. Hon. Earl
Ruggles-Brise, Lieut.-Colonel E. A.Stuart, Hon. J. (Moray and Nairn)Withers, Sir John James
Russell, Alexander West (Tynemouth)Sueter, Rear-Admiral M. F.Wolmer, Rt. Hon. Viscount
Salmon, Major I.Thomson, Sir F.Womersley, W. J.
Samuel, A. M. (Surrey, Farnham)Tinne, J. A.Wood, Rt. Hon. Sir Kingsley
Samuel, Samuel (W'dsworth, putney)Titchfield, Major the Marquess ofWorthington-Evans, Rt. Hon. Sir L.
Sandeman, Sir N. StewartTodd, Capt. A. J.Wright, Brig.-Gen. W. D. (Tavist'k)
Sassoon, Rt. Hon. Sir Philip A. G. D.Tryon, Rt. Hon. George Clement
Savery, S. S.Turton, Robert HughTELLERS FOR THE AYES.—
Shepperson, Sir Ernest WhittomeVaughan-Morgan, Sir KenyonCommander Sir B. Eyres Monsell
Simms, Major-General J.Wallace, Capt. D. E. (Hornsey)and Major Sir George Hennessy.
NOES.
Adamson, Rt. Hon. W. (File, West)Groves, Thomas E.Mathers, George
Adamson, W. M. (Staff., Cannock)Grundy, Thomas W.Matters, L. W.
Addison, Rt. Hon. Dr. ChristopherHall, F. (York, W. R., Normanton)Melville, Sir James
Aitchison, Rt. Hon. Craigle M.Hall, Capt. W. P. (Portsmouth, C.)Messer, Fred
Alexander, Rt. Hon. A. V. (Hillsbro')Hamilton, Mary Agnes (Blackburn)Middleton, G.
Alpass, J. H.Hardie, George D.Mills, J. E.
Ammon, Charles GeorgeHartshorn, Rt. Hon. VernonMilner, Major J.
Arnott, JohnHastings, Dr. SomervilleMontague, Frederick
Attlee, Clement RichardHaycock, A. W.Morgan, Dr. H. B.
Barnes, Alfred JohnHayday, ArthurMorley, Ralph
Barr, JamesHayes, John HenryMorrison, Herbert (Hackney, South)
Batey, JosephHenderson, Rt. Hon. A. (Burnley)Mort, D. L.
Bellamy, AlbertHenderson, Arthur, Junr. (Cardiff, S.)Moses, J. J. H.
Benn, Rt. Hon. WedgwoodHenderson, W. W. (Middx., Enfield)Mosley, Lady C. (Stoke-on-Trent)
Benson, G.Herriotts, J.Mosley, Sir Oswald (Smethwick)
Bentham, Dr. EthelHirst, W. (Bradford, South)Muff, G.
Bevan, Aneurin (Ebbw Vale)Hoffman, P. C.Muggeridge, H. T.
Bondfield, Rt. Hon. MargaretHollins, A.Naylor, T. E.
Bowen, J. W.Hopkin, DanielNewman, Sir R. H. S. D. L. (Exeter).
Bowerman, Rt. Hon. Charles W.Horrabin, J. F.Oldfield, J. R.
Broad, Francis AlfredHudson, James H. (Huddersfield)Oliver, George Harold (Ilkeston)
Bromfield, WilliamIsaacs, GeorgePalin, John Henry.
Bromley, J.Jenkins, W. (Glamorgan, Neath)Paling, Wilfrid
Brooke, W.John, William (Rhondda, West)Palmer, E. T.
Brothers, M.Johnston, ThomasPerry, S. F.
Brown, C. W. E. (Notts, Mansfield)Jones, Morgan (Caerphilly)Pethick-Lawrence, F. W.
Burgess, F. G.Jowitt, Rt. Hon. Sir W. A.Phillips, Dr. Marion
Buxton, C. R. (Yorks, W. R. Elland)Kennedy, ThomasPicton-Turbarvill, Edith.
Buxton, Rt. Hon. Noel (Norfolk, N.)Kenworthy Lt.-Com. Hon. Joseph M.Pole, Major D. G.
Caine, Derwent Hall-Knight, HolfordPotts, John S.
Cameron, A. G.Lang, GordonPrice, M. P.
Cape, ThomasLansbury, Rt. Hon. GeorgeRaynes, W. R.
Carter, W. (St. Pancras, S. W.)Law, Albert (Bolton)Richards, R.
Charieton, H. C.Law, A. (Rosendale)Richardson, R. (Houghton-le-Spring)
Chater, DanielLawrence, SusanRiley, Ben (Dewsbury)
Church, Major A. G.Lawson, John JamesRitson, J.
Clarke, J. S.Leach, W.Roberts, Rt. Hon. F. O. (W. Bromwich)
Cluse, W. S.Lee, Frank (Derby, N. E.)Robinson, Sir T. (Lancs, Stretford)
Clynes, Rt. Hon. John R.Lees, J.Romeril, H. G.
Compton, JosephLewis, T. (Southampton)Rosbotham, D. S. T.
Daggar, GeorgeLindley, Fred W.Rowson, Guy
Dalton, HughLloyd, C. EllisSalter, Dr. Alfred
Davies, Rhys John (Westhoughton)Logan, David GilbertSanders, W. S.
Day, HarryLongbottom, A. W.Sawyer, G. F.
Denman, Hon. R. D.Lovat-Fraser, J. A.Sexton, James
Dickson, T.Lowth, ThomasShepherd, Arthur Lewis
Dukes, C.Lunn, WilliamSherwood, G. H.
Duncan, CharlesMacdonald, Gordon (Ince)Shield, George William
Ede, James ChuterMacDonald, Rt. Hon. J. R. (Seaham)Shield, Dr. Drummond
Edmunds, J. E.MacDonald, Malcolm (Bassetlaw)Shillaker, J. F.
Edwards, C. (Monmouth, Bedwellty)McElwee, A.Shinwell, E.
Edwards, E. (Morpeth)McEntee, V. L.Short, Alfred (Wednesbury)
Freeman, PeterMcKinlay, A.Simmons, C. J.
Gardner, B. W. (West Ham, Upton)MacLaren, AndrewSmith, Alfred (Sunderland)
Gardner, J. P. (Hammersmith, N.)MacNeill-Weir, L.Smith, Ben (Bermondsey, Rotherhithe)
Gibbins, JosephMcShane, John JamesSmith, Frank (Nuneaton)
Gibson, H. M. (Lancs. Mossley)Malone, C. L'Estrange (N'thampton)Smith, H. B. Lees (Keighley)
Gossling, A. G.Mansfield, W.Smith, Rennle (Penlstone)
Gould, F.March, S.Smith, Tom (Pontefract)
Graham, Rt. Hon. Win. (Edin., Cent.)Marcus, M.Smith, W. R. (Norwich)
Greenwood, Rt. Hon. A. (Colne).Markham, S. F.Snell, Harry
Grenfell, D. R. (Glamorgan)Marley, J.Snowden, Rt. Hon. Philip
Griffiths, T. (Monmouth, Pontypool)Marshall, FredSnowden, Thomas (Accrington)
Sorenson, R.Tout, W. J.Whiteley, William (Blaydon)
Stewart, J. (St. Rollox)Turner, B.Wilkinson, Ellen C.
Strachey, E. J. St. LoeViant, S. P.Williams, David (Swansea, East)
Strauss, G. R.Walker, J.Williams, Dr. J. H. (Lianelly)
Sutton, J. E.Wallace, H. W.Williams, T. (York, Don Valley)
Taylor, R. A. (Lincoln)Watson, W. M. (Dunfermline)Wilson, C. H. (Sheffield. Attercliffe)
Taylor, W. B. (Norfolk, S. W.)Watts-Morgan, Lt.-Col. D. (Rhondda)Wilson, R. J. (Jarrow)
Thomas, Rt. Hon. J. H. (Derby)Wellock, WilfredWinterton, G. E. (Lelcester, Loughb'gh)
Thorne, W. (West Ham, Plaistow)Welsh, James (Paisley)Young, R. S. (Islington, North)
Thurtle, ErnestWelsh, James C. (Coatbridge)
Tillett, BenWest, F. R.TELLERS FOR THE NOES.—
Tinker, John JosephWestwood, JosephMr. Allen Parkinson and Mr. T.
Toole, JosephWhiteley, Wilfrid (Birm., Ladywood)Henderson.

Original Question again proposed.

It being after Eleven of the Clock, and objection being taken to further Proceeding, the CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.