Employment Policy

– in the House of Commons at 12:00 am on 21st June 1944.

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Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central 12:00 am, 21st June 1944

I beg to move, That this House takes note of Command Paper No. 6527 on Employment Policy and welcomes the declaration of His Majesty's Government accepting as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war. I think that this Motion is one of the most important that has been debated in this Assembly for many years. It embodies the most important principle that has come before the House for a very long period. In laying down that it is the primary responsibility of the Government to maintain a high and stable level of employment, we are turning our back, finally, on past doctrines and past conceptions and looking forward with hope to a new era. Unemployment has been the subject of many Debates in this House. We have had many marches of the unemployed.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

The hon. Member may have enjoyed them but the unemployed have not. We have had these marches of hungry men, demonstrating their poverty in a highly civilised society, during a century in which wealth has accumulated at a rate unprecedented in the history of the world. From 1886, when the late John Burns led the London unemployed through Pall Mall, onwards to the Northampton bootmakers, right down to the miners, between the two wars, we have had this horrid spectacle of unemployed men, not refusing to work, but asking that society should so organise itself that work might be provided and their families maintained. During that period, all through the end of the 19th century and the first part of the 10th, there were tremendous agitation and disturbance. It is difficult to convince a great many people that, prior to the introduction of the employment exchanges and unemployment insurance, unemployment did not exist to the extent that it did afterwards. It did, but it was not known. Statistical knowledge was not available, and the public was not aware of the intense suffering that ensued. But during that period the House of Commons and the country became conscious, and realised that the State could not be inactive when faced with the evils arising from mass unemployment.

If we take the period from the seventies right up to the outbreak of this war, we have only had really full employment under three conditions—the making of armaments for impending war, during war, or on the discovery of more gold fields and the expansion of credit. On other occasions, unemployment in cycles has arisen from time to time. The problem became so acute that the State had to decide to introduce social services, and an attempt was made, following on the work, which I am sure the House has been pleased to see honoured, even late in the day, of Sidney Webb and Mrs. Webb in the break-up of the Poor Law, to regularise assistance in its various forms. It was followed by new measures, which were tried out during the, depression. There were a tentative public works policy, training, transference schemes and, lastly, the Special Areas. But all these were merely measures to minimise the effect of unemployment, not a recognition that unemployment was and is a social disease, which must be eradicated from our social life. The State's job up to this date has been to deal with the after-effects of the disease, and not to take active measures itself to promote and maintain economic health. This Motion is an assertion that, while there will still be difficulties to contend with, and the social services must continue to play their part, the first consideration must be the way to remove the cause. Having tried relief in all its forms, we now propose to diagnose, and we hope to cure.

The Government welcome the fact that Parliament is—I hope irrespective of party, and with widespread agreement—at last facing this problem as a fundamental issue. We are, indeed, grappling with the problem which is uppermost in the minds of those who are defending the country to-day, at home, overseas, and in those bitter fights across the Channel. With my right hon. Friend the Prime Minister, I had an opportunity of visiting one of our ports and seeing the men, of the 5oth Division among others, going aboard ship—gallant men, brave men with no complaint. They were going off to face this terrific battle, with great hearts and great courage. The one ques- tion they put to me when I went through their ranks was, "Ernie, when we have done this job for you, are we going back to the dole?"

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

Yes, it was put to me in that way, because they knew me personally. They were members of my own union, and I think the sense in which the word "Ernie" was used can be understood. Both the Prime Minister and I answered, "No, you are not." That answer of "No" to those brave men, going aboard those ships to fight, was an answer which, I hope, will be supported by the House, and I hope that policy will be directed towards making that answer a fact, not only for them but for future generations. There is an obligation on all of us to bend our abilities and our energies to finding the right solution, and not to dissipate energy merely in destructive criticism.

The Government have come forward not only with a statement of their objective, but with an outline of the practical measures for attaining it, which, with the support of Parliament, they intend to operate with full vigour. I am convinced that although of course Governments may change and, I hope, will change—I should not like this job for ever—any party which faces the people of this country at a General Election and refuses to accept the principle of full employment, will not be returned to this House. It may be argued that we ought to have laid down a carefully-designed blue-print, a plan worked out for every phase which might conceivably arise. But I suggest that, in a changing world, such a course is impracticable. It is in the attitude of mind, the direction of Government policy, in the whole of Civil Service, as well as Ministerial, support, that this problem must be faced with a view to adjustments being made, from time to time, in order to achieve the objective.

The Government do not claim that the White Paper is the final solution of this problem. The proposals do not raise the question, for instance, of whether industry will, for ever, be privately or publicly owned. Some say that all benefits of enterprise arise from private industry, and some say they arise from public ownership. Well, I have seen a bit of both. I have seen enterprise absent from public ownership and I have seen enterprise completely absent from private ownership. Therefore, the question of how you can give effect to decisions as to who will own industry, is not prejudiced by this White Paper. The proposals of the White Paper will operate, whatever the ownership of industry may be. There are those who have gone "cock-a-hoop" in certain parts of the Press, because they think that we who represent the Labour Party in the Coalition Government—and I do not apologise for it—and who have made our contribution to this White Paper, and to all the other great social changes which have come before this House, have abandoned our principle concerning what we think the right ownership for industry ought to be. What we have tried to do, is to devise a plan which, however you may decide the ownership of industry by adjustments which may have to be made, seeks to attain its objective.

The main purpose of the White Paper, and the Motion, is to declare war on unemployment, and to indicate how our resources should be harnessed for that purpose. Our monetary system, our commercial agreements, our industrial practices, indeed, the whole of our national economy, will have applied to them the acid test—Do they produce employment or unemployment? Under the system which governed our economic life from the industrial revolution onwards, unemployment and deflation were regarded, in the main, as automatic correctives for the lack of equilibrium in our financial and economic position. Incidentally, it was just 100 years ago, after the passing of the Corn Law Act and the Bank Act, that that automatic control was introduced. This meant that industry and human beings had to adapt themselves to the working of the financial system, instead of the system being adapted to the needs of the individual. The need for adjustment was thrown at industry. Revisions of rates of wages or production had to be made from time to time, very suddenly, and as a result the two sides in industry were set in conflict. Strikes and lockouts followed, there was lowered production and the national income was cut down still further. We had, moreover, to buttress the old system with our social services, as I have already indicated, and directly this was done, the automatic adjustments which were the basis of the old system could not be made in the way intended under the doctrines of laissez-faire. The stronger the trade unions became the more the resistance to change in money wages. With the buttress of the social services, the weapon of starvation and bankruptcy did not operate at all quickly enough to make the old system work, and it was doomed from the day when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his social services into this House.

It is worth while briefly to call attention to what had to be done between the two wars, leaving out the temporary boom, and beginning with the time when the first adjustments under deflation were made. These are very striking figures. From 1922 to 1939 we lost 250,000,000 days of production, through strikes and lock-outs alone. Over 6o per cent. of those disputes arose from the need for adjustments due either to deflation or Gold Standard adjustment, and were outside the control of industry. Therefore, you set two parties to settle a dispute that someone else had created but which they had no power to settle. That is a most unfortunate situation to create, and the way things work in arriving at it, is unjust.

I may be forgiven for referring to the General Strike, for which I have never apologised. What happened? In 1921 there was an adjustment of 40 per cent. Many of us trade union leaders had to spend three solid years in making new agreements and, when we had made them, within a year we were thrown out by 12½per cent. No industrialist in this House will get up and say that you can adjust industrial efficiency to make up 12½ per cent. in one year. No one can do it, however he may try. Yet that was thrown at us. And how was it proposed to deal with it? It was sought to take 2s. 6d. a ton off coal, which meant so much off steel, and so much off other things, all the way up through industry. And so, the people who suffered were one class of the community. I make the assertion, and this is a basic principle of this White Paper, that if either exchange or financial adjustments have to be made, they must be made over the community as a whole, not singling out one particular industry or class. [An HON. MEMBER "And by this House."] And by this House, certainly; but if the House had understood it, we should never have had the General Strike.

What happened? With all that loss of 250,000,000 days, wages went down, wages went up, went down again and went up again. What was the net result at the end? The change in money wages over the whole field of sheltered and unsheltered industries, which I admit did not suffer equally—the unsheltered trades suffering more than the sheltered trades and professions—was only five points. In the 17 years from 1922 to 1939, we had all these fights and struggles going on throughout the country, with all the consequent difficulties, and the adjustment was five points. I suggest that the House ought to find some better remedy than that. There will be strikes, there will be disputes, but they ought not to be on this issue, which those concerned cannot settle of themselves. In that same period of 17 years, we had an average of 1,700,000 unemployed, and we paid out a total of£1,260,000,000 in unemployment benefit and assistance. That payment helped to keep the consuming market going and, to that extent, probably prevented unemployment from being worse, but we had not a single pennyworth of production for all that expenditure. I do not think that that was good for the country. That state of affairs reflected itself in sickness. There cannot be long periods of unemployment without malnutrition and a weakening of physique; and then what did we get? During that period just over a week in every year for every man and woman in industry was lost owing to sickness. That is a terrific loss. I do not know how much of it could have been avoided, if there had been good employment, good health and a reasonable standard of living, but all of us with experience know how the one thing reacts on the other.

Another very difficult thing arises from this awful business, which I would ask every hon. Member who has had a reasonable income during all his lifetime to remember. One of the most demoralising accompaniments of unemployment is that people run into debt, which becomes a millstone around their necks. Further, if there is an average of 1,700,000 unemployed people there are not far short of about 6,000,000 people who are suffering from unemployment. The 1,700,000 are not always the same people. Therefore, over a wide area of our social life, this difficulty is constantly recurring, and the total loss of production and national income is incalculable. We shall be facing a very difficult situation at the end of this war, and apart from all sentiment that one might impart into this proposal, we cannot afford loss of production this time. It would be unsound economically. We shall have to carry the aged on the new pension scheme—good luck to them. We are raising the school-leaving age in order that our children may have a better chance in life. That is right, but if we are to do this, then we must employ every able-bodied man to the full and under decent conditions during the best productive part of his life.

Therefore, we are dealing with the situation through the education proposals, the health proposals, the policy of this White Paper and the housing policy, and I want the House to view it as a concerted attack, and not as being dealt with in isolation by this White Paper alone. The coming of the State into the arena, full-blooded, as is now proposed, must mean the writing of a new code of conduct for industry, a new set of rules in our economic life, which must be respected and respond to the will of Parliament, if the problem is to be solved. Let me say, in passing, that no one can look at the astonishing variety of products which we have produced during this war, without realising that they are far more varied than our production in peace, and our technical development has far outstripped anything we had done previously. What has done it? The pressure of all towards a common objective—to win victory. I ask the House whether a common objective, nationally, cannot be adopted to carry us, not only through the transition period, but into a better economic state after the war.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

They do not like that over there.

Photo of Dr Leslie Haden-Guest Dr Leslie Haden-Guest , Islington North

Does the right hon. Gentleman mean a continuous Coalition?

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

No, not even if my hon. Friend were a member of it. In industry there are certain standards that are accepted, and I think a new code, a wider code and a better code will have to be written for the conduct of industry generally in this country.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

A code of conduct and relationships in carrying on the business of this country. We have made great strides in this war in the way of production committees and all sorts of things. The whole thing is growing up, but it is really only beginning. It has been introduced under the pressure of war.

Now I would like to turn to the basic features of the White Paper itself. The White Paper naturally draws distinctions between the measures proposed for the aftermath of war, and those for application later when we have arrived at more stable conditions. The basic problem of the post-war period will not be the maintenance of demand and a high level of employment, but the orderly change-over of our productive capacity. There will be an enormous demand. It will outstrip supply for a time. To this I shall refer later. I propose, in the first instance, to deal with the long-term side and return to the transition period. It may be an advantage if long-term proposals are looked at with minds attuned to a normal period, because that brings out more clearly the approach to the problem on the whole economic front. It will be seen in paragraphs 39 and 41 that the Government wholeheartedly accept the proposition that total expenditure on goods and services must be maintained at the level necessary to prevent, general unemployment. This involves a complete reversal of the policy of the years between the wars, when it was held that the onset of industrial depression must be met by cuts in public expenditure and economies in all directions. Diminished purchasing power was diminished still further, and the depression thereby accentuated, with results which are only too familiar.

In future the Government's policy will be to meet the onset of any depression at an early stage by expanding and riot contracting capital expenditure, and by raising consumption expenditure and not reducing it, by such means and devices as may be found most effective. Paragraph 62 declares that this is a policy directed to the deliberate ironing-out of the slump and the boom, but that it will involve more economic control by the State than has hitherto been experienced. There are three elements to be considered in this matter; there is capital expenditure, both private and public; there is consumption expenditure, both private and public; and there is the foreign balance. In the case of private investment, one has to admit that this covers the greater part of the field at the present moment, because it is the most subject to fluctuations and is, admittedly, the most difficult to control. Various devices, such as variations of interest rates and that kind of thing, have some effect, but we cannot rely on that, because the policy of the Government is to maintain our policy of cheap money. That must be the set purpose and direction of our efforts. I will leave that to the Chancellor to deal with to-morrow. It is impossible to see very far ahead, but, in any case, as at present advised, cheap money is our policy.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

Nothing, by itself, will stop a slump. It is necessary to have a combination of activities to stop slumps. Private enterprise will be encouraged to follow the Government's line in timing investment. Then we want submitted for further consideration, a proposal of deferred tax credit, or similar devices. I do not object to an equalisation of Budget finance. It is not an uncommon thing to-day, in every business in the country. The practice hitherto in local authorities, and in the Government, has been to reduce taxation when we are doing well, and to increase it when we are hard up. I would rather pay it when I am doing well, than when I am hard up. There is nothing wrong in that, surely, and the fundamental principle behind this is to use every possible device, in order to check any possible slump. The public investment is more easy of control and it can be more easily organised, but if we are to encourage local authorities and public utilities to submit their plans in advance, that will involve a change of procedure in this House. One of the great troubles hitherto when these things have come upon us, and public works and other things have been advanced, has been that the procedure is so long, that the effectiveness of the thing is lost before you have your Bill through to remedy it. I submit, therefore, that in considering this matter and encouraging local authorities and public utilities to advance their plans and have them ready to be turned on, Parliament must adjust itself to some new procedure in order to be effective.

The idea is that these plans will be coordinated and that a target will be set each year for performance in the following year. This is not to be regarded as a public works policy, as understood in the old sense. I well remember when Ministers sent round to the Departments to show how few people could be employed in public works. The works then envisaged were either the building of a dock or the cutting of a road, but this is intended to include the whole range of public activity, using developments of all kinds—just as, when there is a slow down in industry, every wise management turns on the maintenance for the next turn of the wheel and improves the productive capacity of its undertaking. This sort of thing is being translated into this public works policy—to turn on national capital at the right moment to improve our country, and improve our health and efficiency for future developments. It is in that sense that we should use the Public Works Fund, and we want to adjust it in order to meet those ebbs and flows which are, to a very large extent, outside our control.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

The ebbs and flows of overseas trade, harvests and such things are very largely outside Governmental control. We cannot control the harvest failure in the Argentine, or something of that kind. The Coalition can do a lot of things, but not that. Past experience has shown, however, that speed is essential, and we want to urge the House to help in carrying out this programme in that sense, and to be parties, with the local authorities, the utilities, and the Cabinet of the day, in giving effect to it. The other advantage is that it will be a continuous process. It will not be sporadic. The State will know what is needed, and will have available the plans for development which I have already mentioned. It does not mean, however, that we shall hold back every kind of public building, waiting for the slump, or waiting for the fall. Schools, hospitals and similar amenities and all urgently-needed work following the war, will have to be tackled, together with certain housing. I cannot enumerate every item, but there are wide developments of public enterprise far beyond these.

The second line of defence is consumption expenditure. If we are not successful in preventing a decline in capital investment, purchasing power for consumers goods will inevitably decline, and we must avoid the vicious downward spiral. It is important, at this moment, to realise that the various methods of adjusting money wages and production which have obtained in the past were very uneven in their application. I have already mentioned the effect on the export trades, when adjustments are made in coal, and it is worth repeating that the method of avoiding a fall in consumption, is one of the vital things which has a bearing on many problems, including the distribution of industry. When people tell me that there is a great population in London, with a great purchasing power, what they are really saying is that between the two wars there was not the purchasing power in certain other areas with an equal population. Therefore, the adjustment of these things, on a vast scale, has a very big effect, from the point of view of purchasing power, and a greater equilibrium over the whole area.

We venture to suggest that there might be a variation in social insurance contributions. In the past, when these events overtook us, the only way has been the cutting of wages, which affects the whole family. Contributions under the social services, as we have seen from the Beveridge proposals, will be raised, and spread over the whole community universally. After further study, it may be worth while making an actuarial calculation of which carries the greater load in good times because, if you can work it successfully, it has the effect of lowering the cost on the employer's portion, and increasing the consumption on the man's portion, by leaving greater purchasing power in his pocket. That is a device well worth studying and I hope the House will give it careful consideration. There are, of course, variations of other arrangements, which I will leave to the Chancellor tomorrow, because he is the expert on these things. I want to express very sincere thanks to the much abused Treasury officials. No one has been more helpful than they, in trying to evolve the plan of the change-over we are now proposing.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Seaham

It is a change for them.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

I believe in giving credit where it is due. If we had not had the help and experience of these men who, for years, have never had very much kudos, I doubt if the papers could have been produced. Therefore, I pay my tribute to them. Of course, there will be turn-over of labour, and I hope, in the future, to devise a method which will distinguish between the ordinary turnover of labour and unemployment. I think the two things need to be segregated. I do think—and I will refer to it again in a moment—that in the social services plan, in connection with unemployment, the method of using social service benefits as a subsidy to wages, and as an excuse for inefficiency in industry itself, is wrong. It should be designed for the special purpose of unemployment, and industry must undertake the other obligations. We must treat our economy as a whole. Whatever we do internally, we cannot leave out the foreign balance and export trade. This element of our economy is largely dependent on the policies of other countries. The importance of restoring and expanding our export trade to make up for the loss of our overseas investments, is generally recognised, but Government action to this end cannot be taken in isolation I have said publicly before, that if the creative ability of the State is really brought out now, and we act as firms and individuals, governed by the great objective that I mentioned just now, the worry that might arise from the loss of overseas investments and living on interest may well be limited. I think, there is a great future for this country. It is not only going to survive in war; I believe it will survive well in its economic life.

The amount of production entering into what is called the foreign trade of the world is not a very large proportion of the world's total production and consumption. It is very small in comparison with the total production and consumption. We must have foreign trade, because the raw materials are outside our country. We must buy them, and other countries must buy goods from us, if we are to have the raw materials, and we must do so under conditions which will ensure that our internal economy is not brought near disaster with every storm that blows. Before the war, the number of people actually employed on what are called exports in this country, was about 2,000,000 of our total working population. Unless there is a method of insulation, there is always the danger of the whole economic structure being upset by this comparatively small number. Therefore, in association with other countries, we must try to agree on measures which will prevent the appalling fluctuations in the international price level, which characterised the years between the wars and which, if there is a reasonably stable international price level, make for expansion all over the world and give security and confidence. I am hoping that the negotiations now being carried on throughout the United Nations will lead to that end. We have wholeheartedly committed ourselves to this in the Atlantic Charter, the Mutual Aid Agreement and the Hot Springs Conference. We welcome the initiative taken in the employment field by the International Labour Organisation. Attention should be particularly directed to the resolutions passed at Philadelphia on the economic policies for the attainment of social objectives, which are broadly in line with the policy of this White Paper. Therefore, international discussions will proceed on a wide range of subjects and Parliament will be informed of their progress as in the case of the monetary proposals. There is one great field that must call for special attention, and that is the development of the Colonial Empire. It must have a proper place in our expanding overseas trade. It must be systematically organised and have as its objective the raising of the standard of life of the 66,000,000 people in the Colonies. They can gain and we can gain. It is a common effort achieving a common purpose. Success in maintaining a high level of employment at home will in itself assist the export trade. The more products sold on a good home market the more they carry the overheads and assist in a reason- able price to meet competition.

All these efforts will be nullified unless industry itself concentrates on raising its efficiency. I have noticed in the public discussions that everybody's mind turns on the efficiency of the workers. Effi- ciency must be meant in a broader sense than that. It is not even efficiency in the finishing end of industry or part of an industry. If you take the metallurgical industry as an example, and want to study efficiency, you must go from the raw material, coal, right up to the finished product, and see whether in each stage you have an efficient and well conducted operation, just as much as on the horizontal basis you study the product at a particular stage. When we discuss efficiency we cannot have somebody just butting in with a lot of out-of-date selling price arrangements, carrying redundant capital, paying each other levies and all the rest of it, and adding them on to the price and creating a moribund attitude to the whole development of their industries. That is not efficiency. While efficiency will be applied generally, there is the difficulty of localised unemployment. It may develop in particular industries for particular reasons. Last week there was a long discussion in the House on the distribution of industry, and I do not propose to refer to it, but perhaps I may be allowed to refer to the distribution, transfer and training of labour. Large scale transfer of labour is not, in my view, the answer to localised unemployment. Certain grave social disorders arise from it. One is that it denudes the areas concerned of their most valuable resources, their young man-power, and results in appalling waste of social capital which would be better spent on developments.

We do not, therefore, regard large scale transfers as the solution. At the same time, we must have mobility of labour; that is an essential condition. An expanding economy entails a certain degree of mobility of labour as well as of industry. I have not found in the war, given the right conditions, much difficulty in transferring labour [Interruption]. I know that difficulties have arisen from those I have taken, but there has not been much difficulty. If I had to direct people to jobs that were inferior, they very properly objected, but where the conditions have been pretty good I have not had very much trouble. There are other reasons why they may object—home reasons, and so on. I do not regard the transfer of women as I have had to do it in the war in the same category. It is a different problem altogether. One of the first things we must do is to establish training under Government auspices and no longer regard it as remedial action for long-term unemployment. It must be part and parcel of our economic system. It must be part of our permanent arrangements, and industrialists or anyone establishing an industry can help in this respect. I have seen works going up, and I have seen the unemployed standing about in the neighbourhood, but nobody has thought of beginning to train the unemployed while the works were actually being built. In very few cases have facilities been there, and my predecessors have had to go to the employers and say, "I have 10,000 unemployed and you must give them a preference in this area," or they have had to use persuasion, and all that kind of thing. There has been no organised attempt to have training programmes arranged in advance so that no time would be lost when the equipment and premises were ready to start up.

There will be an enormous lot to be done in that direction, and there must be a scientific approach by employers and trade unions. We must pay the trainees better than unemployment pay. It must be a step up to the full wages they will get in industry. We must have full co-operation with both sides of industry. I know how hard craft prejudices die, and there are good economic reasons for them all. If the State comes in in the development of full employment and the fears that have helped to produce these prejudices are removed, I think it is possible to get greater flexibility than we have hitherto had. One great trouble is that of housing. If a person has to move from one area to another and the only way he can get a habitation is to take up a mortgage and get his furniture on the hire-purchase system, it acts as a dead weight round him. Therefore, houses for rent are enormously important in order to get mobility of labour.

The White Paper also makes it clear that the Government's policy for maintaining expenditure cannot succeed unless there is reasonable stability of prices and wage rates. The fundamental issue is simple. It is little use injecting purchasing power to keep up the volume of employment if the additional money all goes in profit. It is equally useless if it all goes in wages and you get no production for it. If the effect of making more money available, for example, for housing, is simply to put up the price of houses and not to get more houses and more workers employed, the Government's policy will fail. The adjustment of wage rates must go on through the ordinary processes, but the general level ought to be related to productivity. I do not object to that principle. If we had had through the nineteenth century a rise of wages comparable to the productivity of the working people, the standard of living in this country would have been about double. The people were not organised then.

Photo of Mr Aneurin Bevan Mr Aneurin Bevan , Ebbw Vale

This is one of the crucial points in the Whole matter. What instrument does the right hon. Gentleman intend to use to raise wages to the index of production?

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

We have to discuss it with the parties and work out the methods, just as Parliament, I hope, will work out the legislation as we go along. I have not worked out the precise methods, but I have asked my trade union friends, industry and everybody to realise that this is an essential thing that must be done. If it is to be done, we have to alter the old catch-as-catch-can methods that we have had in the past. [HON. MEMBERS: "Hear, hear."] I am glad my hon. Friends behind me cheer. No one has had more throws in the wrestling system with wages than I have had, but the catch-as-catch-can method was rot always on one side. I would like to see that old system in wages go. We want to relate wages to efficient production. There are many industries which I have had the honour to represent which were on this basis. The result was that our wages came out of the sweated level up to a decent standard. The adjustment of prices will also go on, but there must be no action on the part of any sectional interest to force prices to an artificial level. The test of good management and distribution, if this scheme is to work and consumption is to be maintained, is how near the cost of production the producer, when he comes home and becomes a consumer, can buy his own goods.

We want to get rid of casualisation of labour. I will not elaborate that point now. The House knows enough about it and how demoralising it is. The less casualisation there is, the more efficiency you get in industry. As one great industrialist once said to me, "Keep a steady pressure up; by a steady pressure on wages you will make the man on top use his head." Nothing promotes efficiency more than a steady pressure on organised industry. Another matter that enters into this problem is the hours of labour. This, again, will need to be very carefully and scientifically studied. The growth of mechanisation makes for the right use of the organisation. If I may offer a predilection of my own, it is that if I had a choice between a few minutes off a day, or an extension of the annual holiday, I would prefer the annual holiday.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

Sometimes you cannot get both.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

That depends on the industry. When you are reducing on the one hand, you must not reduce to a point which makes it difficult, whereas longer holidays give an opportunity of bringing your maintenance up to date and rejuvenating your industry while your main productive workers are off. That may be a real economic asset, while serving two purposes. That is the point I want to make. I am open to argument and conviction but these are points, I think, in the new economic adjustment. Indeed, the new responsibility of the State develops important machinery at the centre. We must have the analysis of a great deal more information about our economic life. I hope there will not be too much talk about forms. We must have the information, in order to arrive at a right judgment. There must be a systematic review of our resources at home, so that we can use them, with our exchange position, to the absolute maximum, both material resources and human.

It is proposed to establish a small central staff of experts, which will not be like the old Economic Council, of which I used to be a member and which met once a month. It never knew what it decided, or perhaps did not decide anything. We shall need continuous examination of evidence, papers and statistics, upon which the Ministers can come to their conclusions, not from some outside body, but with Ministerial responsibility. There are five broad categories which we shall need. There is the financial survey—and my right hon. Friend the Chancellor of the Exchequer will deal with that side of the matter in his speech. There is a very important survey which will be charged to my Department in future, called the Man-power Budget. This proposal we regard as absolutely vital. The Ministry of Labour hitherto has come in after the event, and paid the benefit. It was a misnomer to charge the Minister of Labour with responsibility for unemployment. He can only persuade. It is now proposed that there shall be supplied to the Ministry of Labour all the information necessary, so that the Minister can predict pretty well where employment will rise or fall, and it is not difficult to do. There are the credit position of the various industries, the forward bookings, the rise and fall of markets and so on. I would say to the employers of the country that I really believe if they have to sit down and make for us this forecast of their forward orders, that it will make them think what their forward orders really are, and it may cause a different approach altogether to this problem. When the information is in, and the Budget is prepared, it will be for the Minister of Labour to hoist the danger signals at once to his colleagues in the Cabinet.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Seaham

The trouble is that it is voluntary.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

No, the returns of the human budget will be compulsory. We did not put down compulsion of this and that in the White Paper, but we have projected it for the Debate. The intention of the Government is that this kind of return, with the Census of Production, should be obligatory. You must have it or you cannot work the system, just as we get returns of people who are discharged, and the rest of it, at the present time.

Before the war, we had about 15,000,000 people insured against unemployment, of whom I have already said 1,700,000 were, on an average, unemployed. This total of 15,000,000 will be affected in a variety of ways at the end of the war. The raising of the school-leaving age will affect it, and so will increasing longevity. We have talked about the sixty-fives hitherto, but all the evidence goes to show, thank heaven, that we sixty-fives are much younger than we used to be. One cannot tell exactly what the numbers will be, but I estimate, taking the same categories that were insured before the war, with the women who will remain in industry and in the professions, that the number will be about 16,000,000. It will be almost sure to go up about another 1,000,000, representing those who will be looking for employment or going into the Services. We shall have to estimate what the basic industries, such as agriculture, coal, cotton and so on, need and can carry; they are the staple industries. We shall have to estimate how many will be absorbed by those industries, in relation to the increase in consumer goods.

The main purpose of the human budget is to be looking to the future all the time, and not merely registering facts that have occurred. We have gained great experience about this during the war. This long-term policy will, as I have said, depend upon stability and the right adjustment of taxation and insurance and all those complicated but co-ordinated needs. I join with the Chancellor of the Exchequer in saying, particularly at this period, that the Budget should be balanced over a period of years. I have seen some criticism in some of the weeklies because of this statement. I am not myself going to depart any more than he is, from the principle of reasonably sound finance. I think all these other measures can be supplementary and contributory to it, but I do not believe in using the wrong instrument for the purpose. After all, our credit position in the world will be a very important factor at the end of the war, and I would not like to pass this point, or to let it be assumed that any other colleague—the Chancellor of the Exchequer or anybody else—is not, like I am, a party to this proposal. I should like to hear the views of hon. Members upon it during the Debate.

Now I turn to the special measures for the transition. As I said at the outset, the transition is an entirely different problem. We shall have to exercise extraordinary care in the transition period. If we do not adopt the right measures then, we may not be able to adopt them at an early date. One must feed into the other. That is vital. To do it, there has to be national discipline. I do not suggest that we shall need all the controls that have operated during the war, but let me mention one or two. Let us assume for a moment that everybody is agreed that the export trade has to be revived. The home market Will be clamouring for goods; are we to start on the export trade when we have satisfied the home market? I suggest that if we wait, we shall have lost our export market. Therefore, we shall have to ration supplies for the home market, to reserve a proportion, and to begin building up goodwill and trade for our exports. It is no use people turning this thing into a political conflict. It is a question of absolutely essential measures.

The same thing applies in the home market. One of the things that have carried us through this war is that people accept the view that if we have not always been fair we have done our best to be fair. This deferred buying means a pent up purchasing power. Millions of women will still go to work while lots of others will have time on their hands when they are released. If you want to keep peace in this country and not have disturbance, the woman who goes to work and has not the same advantage in shopping must be able to get her sheets, blankets, and other domestic utensils on exactly the same terms as those who have plenty of time on their hands. These are simple domestic things, and some form of rationing will be absolutely essential until the market is full. We do not know what the food situation will be in Europe for a considerable time after the war. No one can foresee it. There may be a great strain on the foodstocks of the world. Who, then, would be foolish enough to say, immediately the balloon goes up and the Armistice is signed, "Away with controls." You must keep order by maintaining these things, and a sense of fairness right throughout the community.

Then we have to make a selection, according to our use of raw materials for home production of the industries we can start up and develop. We have not foreign investments from which to buy anywhere. We have to get from abroad things that we can turn into finished products which will maintain our purchases of foreign materials. Therefore, control of raw materials is absolutely vital for a considerable period after the war. In that, there may be difficulties about patches of unemployment, but I can assure the House that we shall utilise all the experience we have gained during the war in order to get over them. I have been asked whether this will involve the direction of labour. It may not, but I do not believe I should have any difficulty, if it takes a long time to re-tool an industry in a given place and if I have an industry 20, 30 or 40 miles away, in making temporary arrangements, to develop where I can develop, during this interim period. The working people of this country are not unreasonable. They have common sense like everybody else, and I am certain that, handled properly, this thing can be got over without any very great difficulty.

Photo of Mr Pierse Loftus Mr Pierse Loftus , Lowestoft

Not as a permanency?

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

No, purely in the transitional period. You cannot switch over. There will be co-operation among all parties to maintain stability and order while we get on to a more stable level and can see where we are. Another very important thing we must do during this period is to keep up the savings effort, to maintain the surplus savings of the country. That must be done. We must control the use of capital and access to the capital market. All these devices are intended to give the Government of the day a stable, steady position during the transition, so that they can devote their minds and attention to working out by an ordinary method, the more permanent conditions.

I conclude by commending the Motion to the House, with this word: It is not final, it is pioneering, it is blazing a new trail. It is turning our backs on the old system. It is introducing, as against automatic control, conscious direction. It places a great responsibility upon Parliament and upon the Government of the day, and the integrity of its action: to have in its hands the direction of the economic life of the country as it wills, is not something to be taken lightly. But having taken on that responsibility, then with the great standard that has been built up in our Civil Service, with the standard of our public conduct in dealing with these affairs, and with our great traditions in public life, both local and national, we can with safety start out on this road this week and begin to say that we have left the old vexed disease of unemployment behind us.

Photo of Mr Henry Brooke Mr Henry Brooke , Lewisham West

The House has appreciated the lucidity and sincerity of the speech to which we have just listened. I want to welcome this White Paper. I want to congratulate the Cabinet on it, and particularly to congratulate Lord Woolton, whose name it bears. I think we should all wish to join with the Minister of Labour in paying our tribute, as a House of Commons, to all those civil servants and economists who have worked hard to compile this document, which strikes me as the promising offspring of a not unhappy marriage between permanent and temporary civil servants. We shall have, in these three days, many points of constructive criticism raised. I am under no illusion that there may be destructive criticism too from extremists in various directions. But to my mind the virtue of this White Paper is that it affords a starting-point, on which all sane-minded people should be able to agree, a starting-point for the further exploration of this great subject. We in this House, irrespective of party, surely ought to see how far we can go forward together along the lines on which it points, and not pour our energies into theoretic and unrealistic controversies, whether about the nationalisation of every industrial undertaking in the country, or alternatively about the breaking of every link between Government and industry. Rather, as I see it, we have to play our part in creating a practical partnership between Government and industry. The Government needs to create conditions in which the natural genius of the British race can flourish. If we agree on that, and if we agree that the aim of full employment must be given high priority, then at any rate we shall all be working on the same puzzle, and we may have good success in fitting its various pieces into place.

One criticism I have heard brought I against this White Paper is that the against have not committed themselves to the words "full employment." I cannot take that particular criticism very seriously. The object of the policy is set out to be a high and a stable level of employment without sacrificing the essential liberties of a free society. That is not a bad definition, and as between the man who promises and fails to perform, and the other man who promises not too much but delivers the goods, I know which I should choose. My aim is that no man, except through his own fault, should ever have to be many days without the prospect of a job. If a man is out of work for a short time but knows that a job will be available quickly, that means an entirely different state of mind for him from the situation of the thousands of men in places like Maerdy in South Wales, or those poor derelict villages in South-West Durham—or indeed on Clydeside—where one saw that tragic sight of men sitting on their haunches at street corners knowing that industry there was dead, and not knowing if there was any chance of it reviving again. That is what the House of Commons has to kill.

The Minister, in his speech, referred to the long-term policy first and the transitional policy afterwards. As regards the transitional policy, dealt with in Chapter 2 of the White Paper, can there be any serious criticism of the aims and principles there set out? It strikes me that all of us can agree on Chapter 2 virtually without exception, and that our business as regards this transitional period, the business of Parliament, is to see that the Government's arrangements for carrying out those aims and principles are well and efficiently made in good time. If hon. Members will look on page 8 of the White Paper they will see a list of six objectives there. To take examples, the Government say they are making preparations to assist firms to prepare to switch over their capacity, are finding out in advance where the skilled labour available will be most urgently required, and are arranging that the disposal of surplus Government stocks shall not prejudice re-establishment of the normal trade channels. One matter on which I hope information will be asked for in speeches from back bench Members and will be given by Government spokesmen in this Debate, is the manner in which the Government are tackling these preparatory measures. Though I am sure it is the case that the work going forward, the ordinary Member of this House can have but little knowledge so far of what is being done, and the ordinary member of the public still less. There is need in all these matters, of the transitional period and beyond, for an accurate survey of the situation, and for the essential knowledge not only to be piled up in Civil Service files, but to be transmitted to the general public, to be transmitted to the key people in industry and the trade unions and else- where and to be passed on by them to all those whom I may call their constituents.

Of course the public recognises and accepts that the most urgent needs must be met first, so long as supply is short. The public, I am certain, can be brought to understand the need for special priority for export needs in the transitional period. What we must watch to see is that these various transitional measures, many of winch, as the White Paper says, will undoubtedly be unpalatable to many people —some perhaps unpalatable to the whole nation as individuals—are clearly explained to the whole nation so that they will be willingly accepted. That brings me to ask whether the Government have any publicity plans for this, their own, White Paper? I cannot help contrasting the relatively small amount of public attention so far given to it with the tremendous explosion with which the Beveridge Report first burst upon the world. Without in any way decrying the importance of that Report, this is infinitely more important as a pioneering document, and people ought to be enabled to know more about it.

Turning to the permanent policy, this White Paper necessarily has to be somewhat sketchy on the question of overseas trade. That, as the Minister says, cannot be wholly under our own control, as internal affairs and internal trade can be. There is a need here too to educate the public. The ordinary person, even the ordinary worker in exporting industries, has nothing like the full knowledge he ought to have of the extent to which this nation has to live by selling its goods abroad—by producing those goods of the right quality and at the right price so that people overseas will buy them when they are in competition with other goods offered from other sources.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

Is the hon. Member not aware that in that connection one big factor during the period between the wars was the question of managerial functions? The employers in industry considered that the workers had no right whatever to know anything about the industry, but that they were just there to work as they were told?

Photo of Mr Henry Brooke Mr Henry Brooke , Lewisham West

With great respect I do not think that was generally true. It would certainly be a wholly undesirable state of affairs. In any case, let me beg the hon. Member to look forward with the majority of us to the future, instead of always harping on the past. What we have to do in this country is to realise we must build our export trade on goods which we can make better than other people, and on goods which we can be the first to make. We shall not achieve prosperity or stability in our overseas business if we count on continuing to be able to export the commoner goods on which our export trade was first built up. One of the weaknesses of our policy between the two wars—and the electorate is as much to blame in this matter as the House of Commons or any Government—is that we all somehow went on hoping that the old export trades would revive to their old fulness, and were not quick or bold enough to recognise that many of them had been permanently reduced, and that special action had to be taken to transfer their capacity and their workers to new and more progressive lines of production.

In this connection it would not be out of place again to stress the need for the Government to train their own officials in first-hand knowledge and experience of the difficulties under which British goods have to be sold abroad. I hope that the report of the Committee on the Training of Civil Servants will receive further attention in this House. It has some useful suggestions on these lines, and the House ought to press the Government to go forward. Indeed, I should like to see in connection with the export side, on which, as I say, the White Paper is bound to be somewhat sketchy, the House asking the Government for further and more detailed statements about their ideas for the co-operation of the Government with industry and the whole British people's export effort.

Now as to home policy, that part of the policy which should be under our own control. In my view the White Paper is entirely right in concentrating, as the most important feature, on maintaining private capital expenditure steady at a high level. The first need of all for achieving that is political security, national and international. The second need is economic security; and by economic security, I mean, in this context, a responsible Government economic policy, which everyone can understand, and which is seen to be based on principles, and not on political opportunism. Beyond that, we have to give study to the various techniques, some of which are suggested in this White Paper, for ironing out fluctuations. The plan of encouraging private industry to make five or ten year plans of its future capital investment policy is right, but private industry can do that only if it is assured that the Government are giving it the maximum of political and economic security.

There are other measures—variation in tax incidence or in depreciation allowances; another which might have been given greater prominence in the White Paper is the possibility of influencing variations in stocks. In all these matters the Government must take the business world into their confidence. They must enable the business world, and the whole people, to co-operate with them because their own policy is understandable. In that way they may help to remove what has been an undesirable element in years past, and that is excessive speculation. Economists of old have praised speculation as a means of evening out minor fluctuations. Well and good; but speculation is also liable to give rise to major fluctuations, and I miss any adequate reference in this White Paper to measures to control financial speculation after the war. A point I would like to submit is whether the line of definition in the White Paper between public and private capital expenditure is right. It does not seem to me to matter so much whether the ownership is public or private. Surely, the important distinction is whether it is a business carried on according to ordinary economic laws, whether it has to be economically remunerative over a period, whether it has to cover its costs, or whether it is that other type of investment, like the building of roads or schools, which is not amenable to the profit and loss account in the same way. If we could seize hold of that as the true distinction we might be able to sidetrack the arid controversy about nationalisation, which I am afraid some people will try to drag into the discussion of this White Paper.

As to the proposal for offsetting fluctuations of employment by varying the social insurance contribution, that is an exceedingly interesting and original idea, which needs a great deal of further thought. It may be objected to by people at first sight. It may be objected to by those who, when they are out of work, say that the first thing the Government propose is to decrease the contributions which are being made each week for their upkeep, by those in work and by their employers. There are, obviously, psychological difficulties; but it is well worth following further. I hope that the Chancellor, when he speaks, will indicate his mind on the possibilities of arranging similar fluctuations with some of the taxes which enter into the national Budget. The virtue of making the social security contribution fluctuate is that it would be easy to turn the tap on and off—it may be, as the White Paper says, thermostatically controlled. But that might also apply to other taxes; taxes on articles of personal expenditure; the Income Tax, indeed; and I should not like it to be found that the social insurance contribution had been chosen for variation simply because that was the one item which did not enter into the Budget. We must not allow our outlook to be restricted to those items which we can alter without affecting the annual balance of the Budget. I am entirely with the Minister and with the Government that, over a term of years, the national Budget must be balanced, but there is a great deal more that might be done in introducing flexibility into our taxation system as it enters into the Budget from year to year.

In all this, it is not only what the facts are that matters, it is what people think the facts to be. For an illustration of that, think how any attempt to put into force a policy of full employment may be hindered by restrictive practices which have grown up. I cannot help hoping that, just as restrictive practices or demarcation rules have really been insisted upon by trade unions in the past as safeguards against unemployment, so, if this House shows itself, irrespective of party, determined to adopt a policy of full employment, trade union leaders will respond in their psychology to that, and will be ready to go with us all in getting rid of restrictions which dearly undermine the efficiency of industry. It affects not only the trade union side; on the employer's side too there are monopoly practices which are undesirable. Monopoly abuses are not nearly so common as a great deal that one reads in the popular Press would lead one to think. I want to bring the facts to the public. There is too much suspicion; there is a great deal of smoke, but I want to see how much fire there is. I would support any reasonable proposals which the Government put forward for having allegations of restrictive practices brought up to a tribunal which could objectively examine them, and submit its findings and its recommendations to the House of Commons.

I wonder whether there is any more important part of this White Paper than its proposals 'for a better information service. The war has brought into existence the Central Statistical Service, and we all ought to agree that that should be carried on and perfected. One of the things which this country has lacked is a first-class industrial intelligence service. It cannot all be done at the centre; it has to be done out in the country, too. It has to be based on regional services, finding out what is in people's minds locally about the economic situation, as well as analysing figures at the centre. This information, if it is asked for in the right way, can be obtained. Some Government Departments have learned, much better than others, how to send out forms and questionnaires in a way which enables the recipient to understand what is being got at, to sympathise with the purpose, and to respond to the invitation to give the information on which the Government can found a policy which will be helpful to all concerned. That, again, is a technique which is capable of great improvement.

A great deal of all the controversy about Government control is sterile. The Minister spoke about all this White Paper involving more economic control by the State. I hope that there is another side to that, and that, besides more economic control by the State, we can count on more understanding by the State. One without the other would hardly be acceptable. The objection of the ordinary person is not to regulations as such, but to arbitrary and unpredictable regulations. Nobody objects to the rule of the road, or traffic lights, or policemen on point duty, or one-way streets. What is upsetting is if one morning the one-way street labels have all been changed the other way round, and you find yourself in the police court for having committed an offence which you could not possibly have guarded against. There must be power to criticise regulations, to bring objections against them; there must be, as it were, no overnight changes: and they must not be designed to help certain interests against others. It is uncertainty which kills business and kills employment, because those who are responsible for the planning of business have to take everything they can foresee into account, and if there are complete unknowables which may enter in, they are bound to play for safety—every man is. That is why we need to have the principles of State action understood, we need to be sure that it is kept under the eye of Parliament, and we need to take measures to see that it is not misused for sectional ends.

Behind all this I would put the building up of a real constructive partnership between the Government and industry. There was an unkind story of the Board of Trade in old days, that its members, if dealing with a big business man, always suspected him, on the ground that he could not have become a big business man unless there was something crooked about him, and that, if dealing with a small business man, they always despised him, on the ground that if he had been any good he would have become a big business man. That, let us hope, is a thing of the past. Equally, there has been need for better understanding, on industry's side, of the things which Government Departments can perform. The passwords to full employment are unity and efficiency. Anyone who connives at action which leads to inefficiency, anyone who, by word or by deed, stirs up suspicions and ill-feelings between one section of the community and another, is a creator of unemployment. The Minister spoke of his experience in seeing men in the Army embarking for France. What the men and women in the Services want to see, what men and women in every branch of war work want to see, is Members of Parliament with a white-hot determination that there shall be work, as well as homes and food, for all in the years after the war. It depends on us in the House of Commons. But it also depends on them—the men and women who are looking to us —and we Members of Parliamnet ought to be bold enough to say so.

Photo of Mr Henry White Mr Henry White , Birkenhead East

I certainly would be bold enough to say to the men in the Forces that the future lies with them to a very great extent, and that the world will not right itself, as we hope it will, unless they are prepared actively to engage in and take responsibility for the conduct of the affairs of this country when they return to it. I have had letters from men overseas who say "What is going to happen to us when we come back?" I hope this is not going to be the spirit which dominates the men when they do come back. They must come back to the country with a full opportunity for responsibility in the conduct of its affairs. Work, food and homes is not enough for these men. We do not want a spoon-fed population here. They must take their responsibility, with the rest of us, for the conduct of our affairs and of their own affairs.

I pass now to the speech of my right hon. Friend the Minister of Labour. He has rendered great services to this country and very great services to this House, but I very much doubt whether he has rendered any greater service, in the Parliamentary sense, than by his speech to-day. He brought us from the somewhat rarified atmosphere of the White Paper right down to human needs and human realities, and he presented it to us, not in isolation, but as part of a great social objective which the people of this country have made up their minds to secure—the doing away with squalor and want, ignorance and the wretched evils which have faced us in the past. He presented this White Paper policy to us as a challenge to Parliament and a challenge to the people. I say without hesitation that neither this Government nor any other can carry out this policy, or anything which begins to look like it, unless, it can ensure the co-operation of the people of the country. When the war is over, the testing time of democracy will come. Democracy has shown in war-time that it is afraid of nothing and that there is no test of organisation that cannot be overcome. The critical days will come at the end of the war, when we shall have to see whether we are, individually and collectively, democratically organised for the purpose of building up the country and making it fit for human habitation, and whether we are prepared, for a policy such as this and other policies, to make such a sustained effort as the Germans have made in their country for the purpose of destruction and loot. That is the testing time, and the Minister is quite right to say, in presenting these proposals, that they are a challenge for discussion, because if we have a Government, after the war, which does not care about these things, then nothing will be done. The people, I think, will see to it that these things are done.

My friends and I welcome these proposals because they contain two revolutionary ideas. The first of them is one which the Minister emphasised in his opening remarks, and is the first sentence in the foreword to the White Paper, namely, that the Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war. I do not know about acceptance as a primary aim, but the people of the country would be glad if the Government had accepted it without qualification at all and have accepted it as a responsibility. The White Paper does not say "full employment." The two words do not come together in it. Certainly, there is no programme here for full employment, and there is no pledge. It is a policy, as is rightly stated, for maintaining a high and stable level of employment. That is a great thing and the Government are assuming that responsibility. Those of us who have, like myself, sat in this House for 15 or 20 years will know what a revolution it is. I shall never forget a Chancellor of the Exchequer, at a time when unemployment was at a very high level, and there was a procession of unemployed, to which reference has been made to-day, saying to this House: I must warn hon. Members that this winter, next winter and perhaps for many winters to come, there must he many men, perhaps a million or more, for whom we shall be unable to provide work. When one goes back to that, and remembers the efforts then made for the control of evils of that kind, one is thankful for the revolution which has taken place and be much more hopeful to set out on this great adventure. The other revolution, which is no less important, is the realisation and acceptance by the Government that if you do anything at all about unemployment you must prevent it. Unemployment has been described, I think by Mr. Seebohm Rowntree, as a prairie fire which goes sweeping forward destroying everything before it. This is a vital principle and it has been recognised, I am glad to say, and very important provision is made for it in this White Paper.

Regarding the Minister's proposal for an economic general staff, the whole of this proposal would be, in effect, meaningless if it were to be just a small central general staff. We want to raise the dignity of that central staff to a very high level in our transactions. Incidentally, I may say that the proposals in the White Paper —and it is interesting to look back historically—are almost precisely the same in detail, and, in fact, the same language is used, as in the argument for an economic general staff which was inserted in "Britain's Industrial Future," published in 1929. It is true that the evil was as great then as it was in 1939. The unfortunate thing is that the proposals were not adopted then. I am not trying to make a party point; I am only pointing out the similarity. We claim no copyright in that argument, and if the Goverament propose to adopt it, we shall have no objection. We are glad to note that the speech of the Minister had that ringing note in it, and the conviction that something can be done.

The Minister did well to remind us of the great difficulties that will arise in the transition period. We must not forget that all these things have to be related in practice to the human needs and modes of rife of 20,000,000 to 25,000,000 human beings. In the transition period we shall have in fact a considerable number of men dealing with priorities, for export and home production and the like, and men may have to change their jobs three, four or even five times. These problems will call for a very high order of responsibility and administration; and there are others which are more serious than that. When one thinks that, in the last 2½years, 50 per cent. of our school-leavers have gone into the light engineering trades though, in the future, the industry will not require them in any such numbers, one sees arising problems of a human character of the most serious kind. I find satisfaction in what the Minister said about dovetailing arrangements. The training schemes of the Ministry must be so organised that they will take out of an industry people who can he no longer employed, though they had been directed into it in the exigencies of the war. We may hope that some parts of the building trade may take over some of the surplus from the engineering industry. It is a terrible thing to think that 50 per cent. of our school-leavers have gone, in the most formative years of their lives, into an industry and into work which is not going to be their life's work. This problem is terribly important.

It is difficult to find cheerful and encouraging features in looking forward to this post-war period, but I think there are two which are encouraging in relation to the problem we are considering to-day. The first is that, if the war ends, as we hope it will and as we know it will, in abolishing the fear of war, which had retarded the general development of industry and economics and caused catastrophic movements of capital and led to a general damping down of industry, which were among the most potent causes of unemployment in the world, the world will be free, for the first time for 25 years, from the most serious factor which has been clogging the wheels of industry. If the House of Commons can succeed in persuading people that we are determined to carry through a policy of expansion and a policy of abundance, as opposed to a policy of scarcity which has existed since the first German war, we shall have removed from their minds the belief, which was widely but wholly wrongfully held, that there was only a certain limited amount of work to be done, from which conviction there had sprung up practices of all kinds which were perfectly understandable. The Minister knows what they are—questions of demarcation and of spreading the work. If we can succeed in doing this—it is a great aim and a great ambition—it will make things ever so much easier.

We want this country and its people to have a greater sense of awareness of what is going on. They are not aware of it yet. It is greatly to our credit, and, indeed a marvellous thing, I think, that, in the midst of this colossal conflict so much of our time, both as a Government and as individuals, can be directed to the processes of peace and reconstruction. I am not sure that all of it is going in the right direction, but I hope that our discussions in this House may perhaps lead it into the right direction, In the many communications which reach me—resolutions from trade associations, proposals for planning from professional associations and the like—I notice that nearly all of them demand something from the Government; also many of them are quite prepared on occasion to denounce the Government for all their works. It is good that associations of all kinds—trade unions, trade organisations, professional organisations—should be planning for the future and should be sharing their views —such is the way to work—but do not let them ask what the Government are prepared to give without saying what they propose to contribute themselves. I hope that that tendency will be overcome in the light of the discussions proceeding in this House.

I do not wish to deal in any great detail with the actual proposals in the White Paper, but there is one matter which I hope will receive further attention from the Chancellor of the Exchequer when he speaks in the Debate to-morrow. I refer to the proposals with regard to central finance which are embodied in paragraphs 74–79 of the White Paper. I have read these paragraphs several times and am still unable to make up my mind just exactly what they mean. The opening sentence in paragraph 74 says: None of the main proposals contained in this Paper involves deliberate planning for a deficit in the National Budget in years of subnormal trade activity. I should like to know what is meant by "deliberate". If it means that we are to have a casual or a chance Budget deficit what becomes of the plan? By the time you get to a deficit in the Budget your plans will have gone very far awry. It disturbs me personally; other people may be more fortunate in the way they can read it, but I do not know what is meant. Do the Government mean that it will be necessary to unbalance the Budget and meet the fluctuations in the supply of private and public capital by creating a deficit, or do they not? If they are not prepared, upon occasion, to borrow for the purposes of supplying expenditure to increase the consuming power of the country, they cannot do what they claim to be the object set 'before them in this White Paper. I certainly hope that the Chancellor will give some little time to explaining exactly what is meant by these proposals. It cannot be expected that the Government will be able to deal with the fluctuations in public expenditure unless they are prepared, upon occasion, deliberately and not by chance, to unsettle the Budget.

The proposals for central finance seem to be the least satisfactory of the pro- posals and consequently a part to which I hope Parliament will give a good deal of attention. There was no reference made directly to proposals for a double Budget—a capital Budget and a revenue Budget—which has had a great deal of support in many quarters. I doubt whether anyone knows what the capital assets belonging to the Crown and the State really are, and if they do not, I suggest that it is high time that somebody finds out. There is a psychological point in connection with the continued growth of the National Debt. The National Debt, I suppose, is of the order of£20,000,000,000, but I do not think that there is anybody in the Government who can tell me or the House what amount of capital assets stand behind that£20,000,000,000. I inquired from the Financial Secretary to the Treasury recently the amount of land held by the Crown and by local authorities in this country, excluding the land now held by Service Departments for war purposes. He reproved me gently, but firmly, and said that to get information of that kind would involve an amount of work which it certainly was not worth, and he hoped that I would not insist upon getting it. I thought that he ought to have apologised to me for not giving a piece of information which the House and the country ought to have. If we have to increase our borrowing to deal from time to time with the unemployment problem, and even fluctuations of capital expenditure of all kinds, it is desirable that we should have a double Budget—a Revenue and a Capital Budget—and it is absolutely essential for the peace of mind of the people of this country that we should know what are our national assets. I would ask my right hon. Friend opposite now whether he will ask the Chancellor to say whether he will in fact set an inquiry on foot to enable a future Minister to come to this House and let us know what the capital assets of the country are worth. It would make our burdens easier to bear and easier to understand.

We welcome these proposals as far as they go, and they go a very long way. They start on roads along which there is further to travel than any proposition that has ever previously been put before the House. How far we shall get will depend upon the enthusiasm with which they are pushed by the Government and the responsibility with which they are undertaken by the country. They are a challenge to the House of Commons and a challenge to the country, which I hope the country will accept.

Photo of Mr John Tinker Mr John Tinker , Leigh

I cannot follow the ramifications of the hon. Member for East Birkenhead (Mr. G. White) into finance, what the National Debt represents arid what the national assets are. In my opinion it does not matter very much. We have to carry on the country, and to me the national assets are the human beings in the country. They are the assets, arid they have to be looked after. I am pleased that the spokesman for the Government has been my right hon. Friend the Minister of Labour. There had been some doubt as to who would move the Motion, but to me he is the embodiment of the employment policy. We on these benches regard him as being the chief man in anything of this character, and I was very glad indeed that he was chosen by the Government to put the case for the White Paper and I appreciate fully the way he has dealt with it. He has done his work very well indeed. I agree that it was a somewhat difficult task, but at a certain point in the White Paper I shall have to criticise. I am glad of the recognition of the fundamental principle under-lying the White Paper that, for the first time, all the chief orthodox political parties have come down on to a common basis that this country must recognise that a fundamental policy of employment must comprise employment for every able-bodied man and woman in the land requiring it. No longer should we tolerate unemployment in a country like this. If that is the policy of all Governments who take office, the country will be on a fair way to getting something like what it ought to have had many years ago.

My criticism is with regard to the policy of allowing private enterprise a lot of play in the reorganisation of employment policy. Everybody who examines the White Paper will find running through it the idea that for a time there will be no unemployment. As time goes on, and we have covered the various requirements of society there will be a slackening somewhere; some industries will fail and other industries will be wanted elsewhere. I find, according to the White Paper, that it is proposed to approach private enter- prise and find out exactly their position. In the meantime the Government will have examined different parts of the country where employment is necessary—the distressed areas—and will say to the private enterprise people, "We want a different kind of work introduced into this part or that part of the country. Are you prepared to take it there?" That means that there is to be an inducement. It must be profitable before private enterprise will go anywhere at all. If they refuse to go, the Government will make certain overtures to them in the matter of financial aid in order to persuade them.

Where are we getting? The practice of private enterprise in the past has been "To get all you can; make the best out of the labour you have regardless of the consequences; make profits wherever you can, and when profits cannot be made, the industry must close." We have had examples of that in my time in the various collieries where employers had worked a rich seam of coal. When they exhausted it, they went to a worse seam, and when it was realised that there would be a loss of money they departed and left the mine altogether. That is how private enterprise expresses itself. It is driven to make profits or it has to get out—or cut the wages of the workers. The Government will now say, "We want you to go to some other area and we will see that you are adequately financed." That is the inducement they will get. What does that mean to us? It means that we are going to put employers in a safe position; they will never lose at all at any time. In my opinion we are going to make those in private enterprise glorified middle men.

We have already attempted to cut out the middle man because we have said he is of no use to anybody. The middle man gets prospective buyers for the commodity, markets it, and makes a good thing out of it. We have always recognised that the private employer had to risk something, and the consumer has to chance what he can get. Now, in this White Paper we are creating glorified middle men, the employers Of private enterprise who will never have to run any risk at all. All they will say is, "We cannot carry on in an area where you may want us to take our work without having help from the Treasury."

I claim that that is the wrong way to look at what I term the employment policy of this country. I want private enterprise to have its chance, but, if it fails, the Government should have no qualms at all but should step in and say that the time has come when they must control industry because private enterprise has failed. It is often argued that private enterprise has all the brains. Why cannot these men of high capacity be taken into the service of the State and use their brains in that direction rather than be allowed, as this White Paper suggests, to make whatever they can out of private enterprise with Government backing? It would be far better for them to be servants of the State when that position arises. That, to my mind, is one of the implications of the White Paper which is detrimental, especially to our side, because we have always asserted that unemployment is bound to follow our present system. Nothing can stop it, and unless the Government are prepared to step in and take over heavy industries such as coal, I do not see how unemployment can be prevented. Here is a grand opportunity for the State to step in and do it now. We have laid down the fundamental principle that employment must be for every one. When we feel that private enterprise is tottering, then the Government should have no hesitation in taking over all kinds of private industry for the benefit of our people.

Photo of Mr Henry Brooke Mr Henry Brooke , Lewisham West

May I ask a question? I have always understood that the policy of the hon. Member's party was that the State should take over certain basic industries. Now the White Paper policy, as I understand it, is that the Government should get the industrial economy of different regions in the country more diversified, by inducing all kinds of smaller industries to grow there. Is the hon. Member arguing that the State should take over all those smaller industries too?

Photo of Mr John Tinker Mr John Tinker , Leigh

Yes, I am arguing somewhat on those lines. If the Government have to look after a distressed area, they offer an inducement to a firm, saying that they want some factories put down in that place. The firm may say, "But we cannot go on an ordinary business basis. We want from you some subsidy or some help by way of loan." When that time arrives, when the private employer cannot go voluntarily but has to be induced by the Government to do so, then I say the time has come for the Government to take over that particular industry and finance it and control it. If you do not, if you tell these people that they will not suffer any loss by going, that will lead to incompetence because they will know very well that they have the Government behind them. When that time arrives, I say the State should take full control as they ought to have done years ago.

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

Might not reluctance to go to a certain area be due to the fact that it would be disastrous for the undertaking? In my own industry it would absolutely murder any firm to take it to a place where the water is not suitable. Therefore a firm might refuse, not because it did not want to go, but simply because it would be disastrous to do so.

Photo of Mr John Tinker Mr John Tinker , Leigh

I am arguing that if it is necessary for an industry to go to a certain area the Government should not say, "We will see you do not suffer any loss at all." To my mind that is only putting middle men in to control industry, and when private enterprise cannot go on its own initiative, then the Government ought to take over control. That is one thing in the White Paper with which I do not agree. I am not blaming the Labour representatives in the Cabinet. The Cabinet at the present time is composed largely of private enterprise, therefore there has to be some compromise to get a White Paper before the House. The Government representatives have said, "We cannot at this moment throw over private enterprise," and therefore certain points have been insisted upon, but it is for the House of Commons now to express how they feel on this matter, and, especially from our side, to warn the Government that we cannot accept this wholeheartedly, although we do agree that the employment policy is something which ought to be carried out.

Now I want to turn to a happier point. During the early part of the war I went to some of the training centres in Manchester where I saw attempts being made to do something for the derelicts of industry. Men unemployed for a long period, owing to the necessities of the war, have been advised by the employment exchanges to take up training. It was a revelation to anybody who went to those training centres to see men and women appreciating that they were getting recog- nition, and applying all their skill and industry, vying with each other to mace a good return. To the men and women I said then, "When the war does end, I hope that what is being done now will be recognised by the State, and that no one will be allowed to waste his energies by standing unemployed at the street corners." If there is no employment for them, they should be trained ready to take whatever may come along later.

Another good point in this White Paper is the creation of a research department to find out about fluctuation of trade and to be ready for it. That is another step towards the right way of getting to work, but when industry is showing any signs of failure—and as we know in modern times various kinds of industry cease 'to be wanted—then we have to provide means to establish another. The training scheme to my mind is essential in that direction. On that point I want to say something to the Minister of Labour. It says in the White Paper that they will not receive unemployment benefit but something higher. I want that something higher to be equal to the wages of an ordinary man or woman in any other industry. When a man or woman is sent to be trained, I want the Government to say to them, "You are an asset of the State," and they must not be paid something lower than ordinary wages. I believe humanity will show its very best if it is trusted and given a sense of security. I have always thought that it is the sense of insecurity which has caused much of the prejudice and petty jealousy in our people up to the present time. So I ask the Minister that when he sends anybody to be trained, their wages shall be comparable to whatever wage will be earned in the industry they are to follow. If he can do that, I believe it will be hailed with great satisfaction.

I shall not take long because, although there are many other points to be covered, I am an advocate of short speeches. I want to say how glad I am that at the time of the greatest war in industry the Government of the day can come forward with an employment policy to be examined so that the House of Commons can give some lead on what we want. I look upon this White Paper as a charter for the British people.

Photo of Mr Stanley Prescott Mr Stanley Prescott , Darwen

I consider myself extraordinarily fortunate to have been able to catch your eye at this time, Mr. Deputy-Speaker, and to have been allowed to take part in this Debate which, after the actual prosecution of the war, is concerned with the most vital matter before the British public to-day. I am sure that every hon. Member will agree with one thing: that whatever measures are necessary to ensure full employment, those measures must be taken. If the measures which have just been adumbrated by my hon. Friend the Member for Leigh (Mr. Tinker) were necessary to ensure that every man and woman in this country were set to work, and if this House and the country were so satisfied, then I am quite certain everyone would agree that those measures would have to be put into effect. But I, and some of my hon. Friends on this side of the House, do not share the conviction which my hon. Friend has just uttered. However, one thing is absolutely certain, and that is that the millions of human derelicts which existed in this country, between 1930 and 1940, can never again parade our streets.

I am concerned, by virtue of the constituency I represent, with cotton, and I thoroughly appreciate that this Debate is on full employment as a whole and is not necessarily concerned with any particular industry. I feel, however, I should be entitled to-day to deal shortly with this particular industry, and to bring it forward as an illustration in regard to the policy of full employment. The first observation I want to make with regard to the cotton industry is that, so far, this Debate has proceeded entirely upon the assumption that one has to find jobs for men and women who will be only too eager to take those jobs. But in the cotton industry I would venture to say to my right hon. Friend that that does not entirely represent the situation. I need not go into the history of the industry. It is one of our oldest industries, and it is the industry to which this country owes possibly more than to any other industry. It has been going for centuries. Its mills are old, some of its machinery is also old, and a position has now arisen—and I think this House and the Minister should face it—in which it is very difficult to persuade young men and young women to go into the cotton industry. It has a history, over a long period, of insecurity of employment. The facilities in the mills are not always of the best; there is not always opportunity for promotion among adult operatives. These and some other matters, cumulatively, have undermined the confidence of the young people in the Lancashire cotton towns, and to-day it does not follow that, because mother and father went into the mill as lad and lass, the child will also go into the mill. The children have developed a wider vision, they have developed greater knowledge and a greater wish to explore than were ever known by their parents. Therefore, something more must be offered to them; and they are entitled to expect that their wishes should be considered.

So I would say to my right hon. Friend that, with regard to the cotton industry, consideration must be given to how employment in that industry can be improved—the conditions of the workers and also the mills. I fully appreciate that is a very difficult question. The industry, over the years, has passed through very difficult times, and not all the miseries which it has suffered could have been avoided. Many of those miseries were the result of affairs overseas, which were beyond the control of the Government and the people of this country.

The fact remains that the industry has been through very bad times, and that unless something really effective is done those times might recur. In considering all these matters, one also has to take into account how one can improve the conditions in the industry, while, at the same time, trying to restore it to its former greatness. Yesterday, I addressed a Question to the President of the Board of Trade because I hoped that I might be fortunate enough to be able to take part in this Debate. I asked the right hon. Gentleman whether he had considered a recent Report made by the Cotton Board Committee on the future of the cotton industry, and whether he could make any statement on that Report. The right hon. Gentleman replied that he was not yet in a position to do so, and that he was still engaged in, conversations with other Departments and representatives of the industry and trade unions on that Report. I most fully appreciate the complexity of the matter, and would be the last to press the right hon. Gentleman unduly to make a statement, unless and until he thought every possible avenue had been explored. But it is rather diffi- cult to take part in a Debate on full employment in relation to Lancashire, when not a word has been uttered by the Government on the Report which was made to the President of the Board of Trade by the Cotton Board Committee.

Many industrialists in Lancashire are opposed to the major recommendations of that Committee; others welcome them. Many operatives and representatives of organised labour in the industry favour the Report more than the employers but I had hoped that before this Debate started we should, have had some statement from the President of the Board of Trade. As we have not, one is rather in the dark on this matter. I speak as a layman who knows nothing about cotton, save that for six months I have represented a cotton constituency. What I have to say in regard to that industry has been gleaned from my wanderings in -the mills and my talks with the people concerned, and I think it also applies to industry as a whole. Very effective and violent action will have to be taken with regard to the cotton industry, and it will not be the slightest use for methods of production or organisation in that industry to be retained, merely on the ground that they have been in existence for many years. I would hazard the suggestion—the industry is organised on a horizontal basis—that it may be necessary to cut out a large part of the dead wood, and put the industry, as a whole, on a sounder and more economic basis than that which has existed in the past. While supporting the thesis of private enterprise, as the basis for our national life, I sincerely hope that the Government, and the President of the Board of Trade in particular, will not hesitate to take such action as is considered right and proper, in order to increase the efficiency of the cotton industry, and to provide better facilities for the hundreds of thousands of men and women who work in it.

Before I turn from cotton may I mention one other point in connection with another Question which I put to the President of the Board of Trade yesterday, about the possibility of furthering the entrance of young people into the cotton trade? Again, on that point, the right hon. Gentleman replied that he was in consultation with various Government Departments, including the Ministry of Labour. He said that everything was being done that could be done, but he could make no pronouncement on the matter at the moment. Again, I appreciate the complexity of that matter, but I hope that, soon, Lancashire and her cotton people will be given some guidance on both these matters, which are very pressing. We have heard to-day the suggestion of an economic council. I hope the Government Departments will most fully take into their confidence Lancashire Members of Parliament on these matters, so that, if necessary, they may form a nucleus to discuss these great issues with the Ministers concerned. If the Government are to be in possession of more information from industry, then individual Members must also be in possession of more information from industralists arid workers in their constituencies. I hope that all those in our constituencies will take us into their confidence in these matters, and thus enable us to play a fuller and more useful part in this House.

I do not wish to keep the House much longer. I conclude with a slight repetition by saying that in the comparatively small town of Darwen, which has a population of about 30,000, there were 10,000 people unemployed in 1931. Out of 5o mills, over 25 were closed, and the misery, want and poverty which were experienced there were indescribable. Whatever our political views may be, I hope that a message will go forth from this House to-day and in the ensuing days of the Debate on this White Paper, that will make it clear that those conditions will never be allowed to return. I was not in the House then, but I remember being told when I was in the Services how, just before the outbreak of war, when the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) rose to speak, a Member who is now my right hon. Friend the Secretary of State far India said, "Speak for England, Arthur." I hope to-day that everybody in the House will speak for the working men and women of England, and that they will give of their best and treat this House as a Council, so that the policies expressed in the White Paper may be brought into operation. I believe that private enterprise and public enterprise must march side by side. I hope each one of us will welcome this White Paper and will see that, so far as we can, it is made effective for the benefit of all in the country.

Photo of Mr Lewis Silkin Mr Lewis Silkin , Camberwell Peckham

I rise to give general support to the policy and principles laid down in the White Paper, and to congratulate my right hon. Friend the Minister of Labour on the remarkable statement he made to-day, and also the Government—it is quite a change to be able to congratulate them—on the fact that they have been able to produce a document which will have momentous effects. I am able to say this the more readily because my right hon. Friend himself referred to the fact that the issue as between private enterprise and public enterprise was not prejudiced by anything in the White Paper. That document lays down a number of general principles which progressive economists and the Labour Party have advocated for many years, and which we are now delighted to see have been accepted in principle by the Government. But, of course, unemployment is not relieved merely by laying down principles, and I should be very interested to know what the Government are actually doing to prepare for the time when we shall be faced with unemployment, unless preventive measures are taken in time.

A great deal of importance is attached, quite rightly, to the question of the export trade. On the extent of that trade, depend not only employment but also the standard of living of our people and, therefore, we must do everything we can to foster as great an export trade as possible. The White Paper, quite rightly, recognises that fact, but I should be glad to know what steps the Government are taking now to ensure that we do get a proper proportion of the export trade of the world. It is no good blinking the fact that, unless something is done now, when the war is over, our American Allies will be in a position to capture a large proportion of the export trade of the world, it is an open secret that America is making extensive preparations for securing a large export trade, whereas we in this country, possibly for very good reasons, are not in a position to carry out the necessary planning and research to enable us to get our share of the export trade. I happen to know a number of manufacturers who desire to secure the services of one or two men and a small quantity of steel with which to carry out experimental work, with a view to preparing for future export trade. Their applications have been refused. I do not challenge the fact that, possibly, there have been good reasons for that refusal, that the war effort must come first, but we shall be greatly handicapped unless something of that sort can be done as quickly as possible.

The White Paper declares that negotiations are taking place with the United States of America, and with our other Allies, for the purpose of securing international co-operation. It is along those lines that our most hopeful channel for securing a fair share of international trade lies. I shall be glad to know whether any statement can be made as to how these negotiations are progressing. Unless we can get some success in these discussions we shall be thrown back to the scramble and chaos which faced us before the war and we shall come out very badly in the fight. It is, therefore, of the utmost importance that we should get down to discussions and to agreements, so far as possible, and should make the necessary plans. The White Paper forecasts legislation. It does not specifically state upon what points legislation will be required, but undoubtedly a good deal of legislation is involved in the carrying out of the proposals of the White Paper and I should like to know whether it is contemplated that any legislative Measures will be brought forward in the near future.

In the transitional period we shall undoubtedly have a shortage of labour and, consequently, an inadequate supply of goods. That will be general throughout the country, but it is quite possible—and the White Paper contemplates that possibility—that in certain areas there will still be unemployment, particularly in areas which during the war were provided with war work and which, before the war, were Special Areas. To remedy that position, the White Paper contemplates that key industries should be encouraged to go to certain development areas where it is necessary to obtain diversity for the purpose of securing employment. In my view the method laid down in the White Paper will be inadequate. Unless it is possible to direct industry to go to areas where it is necessary, I doubt very much whether the desired object will be secured. I do not think you are going to get your object merely by using persuasion.

The White Paper lays down the general doctrine of maintaining the spending power of the nation and attaches con- siderable importance, in times when unemployment appears to be threatened, to being able to secure capital expenditure on the part of public and private undertakings, local authorities and public utilities. My right hon. Friend said that the power of securing capital expenditure by private undertakings was a very difficult one. I agree that it is, and I am very doubtful how far it will be possible to secure agreement generally on the part of private undertakings to expend capital moneys at the time when it will suit the Government. After all, a private undertaking exists for the benefit of its shareholders. The time when the nation would prefer that it should incur its capital expenditure is not necessarily the time when the undertaking itself would wish to incur that expenditure. I foresee considerable difficulty and conflict between the two interests, and I am a little doubtful whether my right hon. Friend will get the required result. Take, for example, railway companies. I do not know what control the Government will have over their capital expenditure, but, if the railway companies were publicly owned, there would be an enormous opportunity for timing correctly the capital expenditure they will inevitably have to incur in bringing railways up to date, electrifying them and making them more useful to the country.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

I classified railways in the same category as public utilities for this purpose.

Photo of Mr Lewis Silkin Mr Lewis Silkin , Camberwell Peckham

If the public utilities are in private hands my argument still remains. My right hon. Friend will not have the same control over their capital expenditure as if they were publicly owned. That is one of the reasons why we, at this time, advocate the public ownership of these large undertakings and public utilities.

Photo of Mr Alexander Walkden Mr Alexander Walkden , Bristol South

And have railways on the same plane as London Passenger Transport.

Photo of Mr Ernest Bevin Mr Ernest Bevin , Wandsworth Central

I tried to explain, without attempting to set out what we describe as public utilities, that certainly railways, docks and that kind of thing all come under the term "public utilities."

Photo of Mr Lewis Silkin Mr Lewis Silkin , Camberwell Peckham

So long as railway companies are privately owned my right hon. Friend will not be able to control the timing of capital expenditure in the national interest. It will be incurrred at the time when it will suit the railway companies. It is natural that it should be so. I should like to know what powers it is proposed, in default of the public ownership of the railways, to secure in order to ensure that capital expenditure which is so vital a factor in the success of the scheme will he incurred at the time when it is most in the public interest. The other method of capital expenditure is by agreement with local authorities and public utility undertakings. My right hon. Friend admitted that it would be very difficult to control the expenditure of local authorities. If the object is to secure capital expenditure rapidly when he can see the danger of unemployment, I am very much afraid he will not get it through local authorities with their existing powers, because from the inception of a scheme until someone is actually at work an it may well take several years. In the case of the London County Council they have to bring forward a Money Bill and get it passed by this House. I wonder whether the House would like to give the London County Council power to spend capital money without coming to the House.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

As I understand it, the idea is to give powers for a particular purpose, and for the Government to encourage the use of those powers only in time of unemployment and trade depression. Is not that the idea?

Photo of Mr Lewis Silkin Mr Lewis Silkin , Camberwell Peckham

It may be so, but the fact remains that the capital expenditure of all local authorities is controlled, quite properly, year by year, and they have to come either to Parliament or to the Minister to get it approved, and it is a fact, with all the machinery involved, which I admit can be speeded up, that it takes a very long time before you can begin on the project. Then many objects which it might appear would provide a great opportunity for labour do not in fact do so when you come to look at them closely. I remember the Charing Cross Bridge Scheme, which was to cost£12,000,000. It was encouraged by the Government because it was regarded as a very desirable and important traffic improvement, and also because it was thought it would provide work on a considerable scale. When we looked into it we found that it would provide work for 730 people on the spot, though it would also have repercussions on employment in the provision of material. You might double or treble that number but, if you trebled it, you would only have employment for 2,000 people for an expenditure of£12,000,000. It is very disappointing.

Probably my right hon. Friend is relying on the speeding up of such things as housing. I visualise that for many years to come local authorities will be engaged right up to the hilt in providing housing and carrying out other duties, such as providing new schools, which they will be under an obligation to do under the Education Act, new hospitals in connection with the extended medical service and so on, and it will be very difficult at short notice to get them to do any more. Moreover, it is asking the local authorities to embark upon considerable increases in their rates at a time when conditions are beginning to deteriorate. That is, of course, the time when people draw their horns in and retrench, and it will be very difficult from the public point of view to justify increasing the burdens on people just when things are beginning to go badly. It would require a good deal of political courage to face the ratepayers with that position. Local authorities will be unwilling to jeopardise their public influence by imposing additional burdens at a time when the public will need to be relieved of them.

I should like to say a word about the social insurance scheme. Of course, that is a very quick way of pumping in a certain amount of consumption expenditure. It can be done at very short notice, this reduction of contributions. It will have its effect in increasing spending power, but on any basis, certainly on the example given in the White Paper, it will be quite inadequate to do anything substantial. While it will be a move in the right direction, I doubt whether it will do as much as my right hon. Friend hopes. I should have thought you could do very much more by juggling, if I may use the term, with Income Tax. The Chancellor of the Exchequer is very favourably situated for doing this with the Pay-as-you-Earn scheme. He can regulate changes in Income Tax at short notice and, though it may be heterodox to contemplate the possibility of having changes in the Income Tax during the year, nevertheless it has been done during the war, when we have had two Budgets in one year. I see no reason why the right hon. Gentleman should not have a second Budget during the year if it should appear to be desirable to bring about changes in Income Tax for the purpose of securing greater expenditure.

I have made these observations because they strike me as showing possible weaknesses in the White Paper; nevertheless I give general approval to the principles laid down. It is obvious that, as the scheme proceeds, there will of necessity be changes in detail. Weaknesses will be discovered and they will be strengthened. Nevertheless, I hope the House will give its general blessing to the scheme and give directions to the responsible Ministers to get on with the preparations for carrying it out as quickly as possible and, if they do, I am sure that, regardless of political complexion, they will have earned the gratitude of everyone in the country.

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

I feel that I must congratulate the right hon. Gentleman on his statesmanlike speech. Though I do not agree with him politically, I hold very strongly that, no matter whether he pleases one side or the other, he says what he thinks is right and fair, and I honour him for it. There is no doubt that all sections of the House desire to see prosperity after the war, and the White Paper is tangible evidence of the Government's desire to help. But one cannot close one's eyes to the fact that all that is in the White Paper is purely speculative. There is very little in it that is based on experience of the past. Therefore, many of those points which are dealt with in the Paper may not, in days to come, come to fruition. My right hon. Friend dealt at some length with the importance of the export trade. As an industrialist I feel I should like to spend a moment or two on this point. The White Paper attaches very great importance to export trade and says that it is of paramount importance and necessary for maintaining our standards of life. I have been asking myself what positive steps the Government intend to take to increase our export trade. My right hon. Friend partly answered that question by saying that there should, first, be a steady home trade which keeps the overheads down—no doubt that is a sound policy—and that if we have not a steady home trade, it will be all the more difficult to produce goods for export at competitive prices for the remainder of the world.

The Minister said that the question of export trade must be dealt with immediately, or as soon as possible. I must say that I do not think the outlook is as bright as he painted it to the House, or as he thought it was, with regard to the future of the export trade. It is going to be a very difficult task. It has been estimated that, as the result of the decline in our overseas investments, we must, after the war, increase our exports by roughly£200,000,000 from what they were in 1938. That is a tremendous, a herculean task. We have also to put this point to ourselves, that you can only export if there are buyers. But buyers abroad, to a far greater extent than in the period of the last war, have become manufacturers in increasing numbers.

There is a delegation from the United States Government in this country at present to discuss the question of the allocation of certain primary products in my own industry between this country and America. The greatest difficulty with which we are faced is that in some countries, in India and South Africa, the consumption of these primaries has gone up at such an alarming rate that there is a definite shortage for the United States and this country. [An HON. MEMBER: "What are the articles?"] I do not mind saying what the articles are, but I always understood it was not considered good taste to mention one's own particular business in this House. As a matter of fact they are goatskins. Brazil, which exported 2,500,000 skins a year, is now only exporting 1,000,000. The same thing is happening in the Argentine where consumption has gone up, and Africa and Australia have become greater manufacturers.

We shall have to face these difficulties after the war and, therefore, I ask the House, How is this export drive to be undertaken? Despite what the Minister said about the necessity of exports being attended to as soon as possible, I feel that there is not the slightest encouragement for the export trade in this country to-day. It sometimes seems to me that every possible step is taken to prevent export trade. During the last 10 days, I have come across two cases in my own constituency, where firms which were in a position to export second hand material to various parts of the world, were refused licences to export, because of an agreement with the United States. The House knows perfectly well that that agreement was arrived at when Lend-Lease became operative. The United States then, rightly, asked us not to export goods into which entered these primary commodities, which we purchased from the United States. In the meantime, Lend-Lease in reverse has come into operation to an enormous extent, and it seems to me that that is one of the reasons why we should consider the desirability of terminating that particular Agreement, in order to allow us to export our goods to the various countries of the world. The United States is pushing ahead in many markets in the world and is getting her foot into these markets, which will make it very difficult for us after the war.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

Will the hon. Member explain how the export of machinery, which is designed to assist the country buying it, will help the export of manufactured goods in this country?

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

Even if we do not sell them our machinery, the firm that wants it will get it from somewhere. If you do not sell them yours, they will get it from somebody else.

Photo of Mr Samuel Silverman Mr Samuel Silverman , Nelson and Colne

I represent the Lancashire cotton trade whose workers have had a bad time. When we try to persuade the employers to pay better wages they say that they have to compete with the Japanese trade, which pays very low wages. But who taught the Japanese how to do the work? How does that help our cotton trade?

Photo of Sir Granville Gibson Sir Granville Gibson , Pudsey and Otley

If my hon. Friend would speak to the textile machinery manufacturers who are centred in Lancashire, he would find out how this country has benefited from the sale of those machines, although it does not follow that the cotton trade might. If Lancashire had not exported that textile machinery, it would have been bought from the United States, or from France or Germany. You cannot adopt the kind of policy suggested by the hon. Member, because it does not land you anywhere.

I will give another another case in point. It does not affect me personally, but many firms in my own industry have, at this moment, large quantities of goods in stock in their warehouses, and cannot get export licences to export them to any country of the world. There is no opening of any description for the sale of those goods in this country, because of the quota system operating at the moment. I say it is a wrong policy to stand in the way of export trade, when, in every direction, that trade is helpful to this country, and I have felt many times recently that, if the licensing department of the Board of Trade tried its best to murder export trade, it could not be more successful than it is at the present time. The only way to obtain maximum results from export trade is for industrialists to have their hearts in the work. At the moment, industry is actuated by patriotism and the desire to see this war brought to a successful conclusion. When the war is finished, the incentive in industry will be profit, because anybody who goes into industry knows that success in industry is measured by the profit one makes. After the war, it will be necessary for the Chancellor of the Exchequer very seriously to consider a reduction in taxation because, unless there is a reduction in taxation, it is not reasonable to expect industrialists to make an effort to extend their businesses.

When a man is in his fifties and sixties and has lost a little of the urge of youth, he will not want to lock his money up in bricks, mortar and machinery if taxation is so penal that there will be nothing left for him except simply work. Therefore, I suggest that the Chancellor should bear in mind that in normal times new enterprise will not spend large amounts of capital if taxation is so penal and harsh as to leave no profit.

With regard to the location of industry, I agree that a one-industry area is a misfortune in bad times, because if the industry is depressed the whole area is depressed. The White Paper says that steps will be taken to prohibit the establishment of new factories wherever they desire to be established. That is a dangerous policy to pursue. The direction of industry will not only be dangerous, but Government pressure might result in compelling a firm to go where from practical experience they know it is bad policy to go. I will give A personal experience. I am glad that the hon. Member for Gower (Mr. D. Grenfell) is in his place, because it refers partly to him. I remember sitting in the House some years ago when, time after time, there were warm Debates on the question of the movement of a tin-plate firm of South Wales to Lincolnshire. The hon. Member will remember how he pleaded vehemently for the retention of the works in Wales, and said that it was not right or fair to build new works in Lincolnshire, and leave thousands of unemployed in South Wales. What happened? Richard Thomas & Co. had their iron-ore supplies in Lincolnshire, and they had the coal on the spot. Although I have no proof, I have always felt that either political pressure or financial consideration entered into the matter, but eventually they built their new works in Wales. I was informed at that time by a director of the company that every ton of iron-ore which was taken from Lincolnshire to Wales, cost 10s. to carry. That is not the way to run an industry economically. It is in such a case where the transference of labour might become operative.

At the end of the White Paper, there is a plea for co-operation between industry and the Government. There is no doubt in my mind that industry will respond to this appeal if they get a square deal and encouragement to face the tasks of the future. I hope that when the various provisions of the White Paper are placed before the House in the form of legislation, those of us who are connected with industry will do our best to play our part, in order that there may be a more amicable relationship between employers and employed than there has been in the past, and a more happy and contented people in this country.

Mr. Pethiek-Lawrence:

In common with the hon. Member who has just spoken, and with other hon. Members and, I think I may say, the House as a whole, I listened with the utmost interest to the notable speech of my right hon. Friend the Minister of Labour in opening this Debate. He made us realise his life-long experience on this subject, and the great sincerity that he brings to bear upon it. I feel that it is a great privilege to take part in this historic Debate, and to be entrusted by my party not only to speak for myself, but, as far as I am able, to express their point of view. We support this Motion whole- heartedly, because, without reservation, we welcome the assumption by the Government of responsibility for employment. This attitude on the part of the Government is not wholly new, because they and the country as a whole have been moving for a long time past away from pure laissez faire in this matter. Looking back as I can do over 5o years of political experience, and remembering the time when Keir Hardie first came to the House, and was derided for suggesting that Parliament should interest itself in employment, I realise the immense distance that public opinion and the House of Commons have traversed since that time.

While according this welcome to the basic assumption by the Government, and finding a great deal in the White Paper with which we are in hearty agreement, we must make it quite clear that we do not accept the whole of its contents with the same unmixed satisfaction, and this for two reasons. In the first place, while there are many sentiments which are un- exceptionable, the positive proposals in the Paper are often nebulous and, to some extent, inadequate. We cannot, of course, complain of that, because this is a very large field, and it is natural that the Government should not be able, as my right hon. Friend himself said, to give us a blue-print at this stage. Further, we recognise the mixed parentage of this White Paper. It is all the more incumbent on us, holding the views that we do, to make quite clear where we stand on these matters. I shall not have time to detail it in full, but no doubt in the Debate it will be put forward by other speakers on this side. In the second place, we remain unconvinced that under a system largely of private enterprise, unemployment can be completely cured. I shall have other points to make with regard to that later in my speech. I may say at once that we are not so foolish as to imagine that, if we could socialise industry over-night—which, of course, we cannot, for one cannot socialise even a single industry except with considerable delay and forethought—there, is some magic about public ownership, that would turn a depressed industry into a prosperous one, or bring back into it a large number of those who had become unemployed.

What we do maintain, however, is that there is a vital difference between employ- ment created by private enterprise, and that created by the State. To the former, a man turned out of employment is one less burden on the wages bill. The private employer has no obligation, apart from the general obligation to pay his contributions to unemployment insurance, to keep a man thrown out of work, or his family, for one day after his employment contract runs out. Therefore, he is able to disregard entirely what happens to a man who leaves his employment. That is riot the case with the State. The State has no such easy way out. If a man is dismissed from his employment, the State must put on the debit side of the account, the cost of looking after that man and his family. So much for the position of the State, with regard to unemployment generally.

When you come to local unemployment and the location of industry, at the best the State can offer inducements or some form of direction to an enterprise, to establish itself in a distressed area. That inducement may be inadequate and private enterprise may say: "If I can only go to that certain place, I will not go at all." When it comes to public enterprise and employment, the State, if it is proposing to start something, can, of itself, directly, start in the place where it thinks it is important that activity should be commenced. In consequence, we are not favourably impressed with the proposal that is mentioned in paragraph 14(f) of the White Paper, which states that factories, which have involved the State in the expenditure of many hundreds of millions of pounds—altogether well over£800,000,000 or something approaching£1,000,000,000—shall be handed over after the war to private enterprise, to use for its own purposes.

There is one other point to which I should like to address myself before I come to the main part of my speech, which I propose to devote to the general financial position. This remaining subject is the question of exports. I quite recognise the great importance of re-establishing the export trade of this country, not because I think exports are anything particularly desirable in themselves, but because we desire imports. We cannot have imports unless we have exports, arid we must have imports because in this country we neither grow all the food that we need to consume, nor, what is equally important from the point of view of industrial employment, do we grow the raw materials which are essential to our industry. I recognise to the full the value of exports, but there is a tendency in some quarters to exaggerate their importance. Some people talk as though exports were the only real trade, and that all the production and work inside a country meant something in the nature of taking in one another's washing and could not increase the real income of the country as a whole. Of course, that is nonsense, and only needs to be stated to be put in its proper place.

Foreign trade can only be successfully carried on, and our requisite supplies maintained, if we do not abandon at the end of the war the policy of bulk purchase which has [been so successfully pursued during the war. I hope that the Chancellor of the Exchequer will endorse what I am saying on this point when he speaks to morrow. Bulk purchase and possibly bulk sale are the means by which the fundamental difficulties of price levels can be overcome. To take the most simple illustration: We want to buy our food from abroad in the cheapest markets. We want to give to our own agriculturists a price sufficient to enable them to give us such proportion of our food supply as we think it is necessary to grow in this country. It may well be that those prices are not identical. During the war we have realised that fact. I do suggest that one of the essentials in post-war development will be the continuance, and possibly the expansion, of bulk purchase, which seems to me the natural method of conducting this very important aspect of our economy.

I come now to the main thesis of this White Paper. As I see it there are several different kinds of unemployment. There is, in the first place, what I think the White Paper refers to as general unemployment, or mass unemployment, which broadly affects all trades and all localities. Then, in the second place, there is structural unemployment, which means that while some trades may be expanding, other trades are contracting, and that while you may have a general level of employment, you may have bad unemployment in a particular industry. Then there is local unemployment, by which employment may fall far below the general level in a particular locality. Finally, there is seasonal unemployment.

Other hon. Members will, no doubt, address their remarks to different parts of that list. I shall confine myself to the first category, that is, to general or mass unemployment. Apart from that, there are two periods which the Government have rightly separated in this White Paper, the transitional period and the later period. I do not propose to say anything about the transitional period but shall confine myself wholly to the later period. I want to consider the responsibility for different parts of the social organism towards unemployment defined in that way.

First, with regard to finance. Finance has had, in the past, a double responsibility for unemployment. In the first place, it has, on occasions, actively promoted it. In the period after the last war, it deliberately pursued a policy of deflation. This was, primarily, the policy of the Bank of England, but the Government and the Parliament of the day acquiesced in it. The White Paper definitely repudiates this policy and undertakes that, after the present war, it will not be repeated. In particular, we are promised cheap money and stable prices. This is a great step forward, and it is one to which we give our full support. I may mention, incidentally, that the White Paper brackets stable wages with stable prices. If this merely means the prevention of the ups and downs to which the right hon. Gentleman referred in his opening speech, I take no exception to it, but if there is any suggestion that the share which labour will get from industry is not to rise appreciably above the pre-war level, then I, and I am sure those who are behind me, violently dissent from it. We believe that the share of labour in the product must and should increase, because that is the only means by which the standard of life can really go up.

Apart from promoting deflation deliberately after the first great war, financial authority has pursued, all down the last century, a negative attitude towards unemployment, which my right hon. Friend accurately described in his opening speech. It recognised no responsibility for counteracting the disastrous cycles of booms and slumps, with their terrible repercussions on employment. Perhaps I can best express the matter by using a word with which we have become familiar in another connection, the word "gap." During the war we have used this term, "the gap," to express the apparent excess of expenditure for war production and civil production, over the annual resources of the country as a whole. It was the object of the White Paper which Sir Kingsley Wood brought out, helped by Lord Keynes, and which the present Chancellor has extended, to show what the nature of the gap, if any, really was. In the later period after the war we shall have to face the possiblity of a gap of the opposite kind, the excess of productive capacity over the spendable income of the country, or, to put it in a different way, the attempt on the part of the community to save more than is being absorbed by physical new investment. This gap, if it occurs, as it did occur after the last war, produces automatic deflation. In the past, when this has arisen, finance has washed its hands of this problem. It is an essential part of the White Paper we are discussing to-day that instead of this negative policy, the Government for the future have the positive determined intention to close the gap.

Before coming to consider how this can be done, let us consider the part which private enterprise has played in the past. Confronted with falling prices, private enterprise not unnaturally tried to pull out of full production. It reduced employment and it reduced production. It abandoned capital construction, waiting for prices to fall still further. In this way it reduced purchasing power and aggravated the slump. Just as during the war, if expenditure exceeds potential income, the gap creates inflation, so in the post-war period, if potential income tends to exceed actual expenditure, potential income will not be earned, and deflation will ensue. That is one thing that private enterprise has done, and not unnaturally. But in some instances, private enterprise has gone further than that, and in order to raise prices and boost profits, combinations have restricted production. This is a criminal conspiracy against the community. How do the Government propose to tackle these two activities, or lack of activity in some cases, of private enterprise? I take the second matter first. If hon. Members look at the White Paper, in paragraph 54, page 19, they will find these words: The Government will therefore seek power to inform themselves of the extent and effect of restrictive agreements, and of the activities of combines; and to take appropriate action to check practices which may bring advantages to sectional producing interests but work to the detriment of the country as a whole. I presume this means legislation, and fairly early legislation. If that is so, all I have to say in regard to it is that I hope such legislation will be adequate. If the combines are to continue to exist in their present form, I hope the powers will be adequate to control them and prevent these unsocial practices. In some cases, at any rate, I hope the Government will find it desirable to step in and take the place of the combines themselves, particularly if the restrictive practices are riot checked at the instigation of the Government.

Photo of Mr Arthur Molson Mr Arthur Molson , High Peak

Before the right hon. Gentleman leaves that point, may I point out that the beginning of paragraph 54 deals with the restrictive practices of trade unions and so on. Would he care to define his attitude to this matter?

Photo of Mr Frederick Pethick-Lawrence Mr Frederick Pethick-Lawrence , Edinburgh East

I do not wish to occupy too much time on that point, but if the hon. Gentleman wants an answer, I suggest that he should turn to a paper called "Labour," in which there is an important article by Sir Walter Citrine on this White Paper, and he will see that Sir Walter Citrine quite frankly says that if there is co-operative action all round, the trade unions will have to consider practices which have been restrictive in the past, and will be quite ready to make their contribution to the social results.

Photo of Mr Jack Lawson Mr Jack Lawson , Chester-le-Street

They have had to protect themselves.

Photo of Mr Frederick Pethick-Lawrence Mr Frederick Pethick-Lawrence , Edinburgh East

I do not object to the interruption at all. It was an important point.

Having dealt with that point, I turn to the issue of general unemployment. In the first place, if the Government propose to intervene in this matter, the White Paper specifically suggests that they will need much fuller statistics. They will need, in fact, a barometer which will tell them the economic weather, in relation to which they have to take action. Therefore, I hope that the Government will be forthcoming in providing statistics for their own use and for that of the general public. Having got the barometer, and having decided what the economic weather will be, the Government are to take action to fill the gap and create the expanding economy for which the country is looking.

How do they propose to do this? In the first place they propose to give inducement to private enterprise and local authorities. My hon. Friend the Member for Peckham (Mr. Silkin) made some very interesting points in that connection, and spoke of the local authorities who were induced to take action finding the money out of rates. I recall the remarks that the Treasury made some years back about the finding of public employment only taking away money that would have been spent on private employment. I do not think the action of the Government in inducing local authorities to undertake public work for which they are going to pay by increasing the rates would cure unemployment. If they are to do anything effective, they must borrow the money—that is the essence of the solution to the problem—and pay it back later on.

In the second place, the Government propose to undertake public works. My right hon. Friend the Minister of Labour showed in his speech how inadequate in the past, both the time of application and the amounts paid to cure unemployment by public works, had been. He said there were to be public works of a different kind in future. Some cross-current of conversation went on between him and my hon. Friend the Member for Peckham (Mr. Silkin) on that point. I am not very clear about what precisely the Government have in mind, but I hope that the Chancellor of the Exchequer, when he speaks to-morrow, will extend the remarks of my right hon. Friend, and tell us a little more of what they have in mind. Personally, I see great difficulties in having a public works programme on a really large scale, which can be started in a hurry or stopped in a hurry. It is exceedingly important to have public works, housing, and all sorts of things, but it takes some time to start when there is a slump, and it will be exceedingly difficult to stop after the barometer goes up to "set fair" I shall want a lot of convincing that a public works programme can have quick results in a time of industrial slump, and that it can be stopped quickly after a boom. What I said about rates, applies equally to taxa- tion. If public works were to be paid for out of taxation, I do not think it would help employment.

The third Thing that the Government propose is to assist consumption and to encourage private enterprise to engage in capital expenditure. The method which they propose is to alter the insurance contribution. It is quite a bright idea on the part of the Government, and it has its advantages, because the immediate loss falls on a separate fund and not on the Exchequer, but I do not really think that it would go very far. I agree with what was said by my hon. Friend the Member for Peckham on that point. It is a very small amount: I think something like£25,000,000 a year. I may be wrong about that, but it is of that magnitude. What is wanted is not a matter of tens of millions, but, if the thing gets at all out of hand, hundreds of millions, to put it straight. The Government will have to think on a very much larger scale, if they want seriously to influence the unemployment situation. In that respect, it has been pointed out to me that there is a danger in saying that the better the employment, the higher the contributions should be. I do not know that that would seriously influence a big firm adversely. I agree that it may promote a little more employment than would otherwise be the case. With regard to the Government intervening to fill what I call the gap, so far as public works are concerned, it will have to be much more in the nature of the Tennessee Valley experiment than the public works to which we have been accustomed.

I come to the strictly financial point. Do the Government contemplate, or do they not, putting the Budget out of balance in the course of the year? The relevant quotation from the White Paper is in paragraph 74: None of the main proposals contained in this Paper involves deliberate planning for a deficit in the National Budget in years of subnormal trade activity. I do not know whether hon. Members have read the article in this week's "Economist." If they have, they will recognise that if there is one section which betrays the mixed parentage of the White Paper more than another, it is this section on central finance. It is hardly too much to say that a definite statement—or a nearly definite statement—in one paragraph, is either entirely reversed, or seri- ously modified, in the one which follows it, and that goes on more or less through the whole section. I quite recognise that the Government, in starting out on this proposal to close the gap, are embarking on an uncharted sea. I appreciate that the Government cannot be too definite about it, and that there will be different shades of opinion, in the House and in the country, about it. Therefore, I do not complain about the contradictoriness of different sections of the White Paper, but I think it desirable to call attention to it, because the Government clearly have to make up their mind a little more definitely, on what they have in view.

Modern economic thought really comes to this: that, unless you definitely and deliberately unbalance the Budget in a time of depression, you will not do anything material towards creating employment by Government action, and closing what I call the gap. I admit that that is a very serious proposition. So long as the Budget must be definitely balanced every year, you had a strict rule, which you could obey or disobey; and if you disobeyed it you were held up as one who broke one of the established rules of finance. The moment you throw one of these rules overboard, you are like a person who has broken a moral code there is a danger that you may go entirely to pieces. I appreciate the perilous sea on which the Government feel they would embark, but it is no good saying, "We are going to teach people to swim; but there is a danger that if they go into the water they will get drowned, and, therefore, they must stay all the time on dry land." The Government must determine what rules, if any, they are going to impose in this matter. They must realise that it is necessary to have an expanding economy. An expanding economy means expanding finance, it means expending credit, and, I think, more than possibly it means expanding the public debt. That is not necessarily evil, provided it is watched and carefully guarded against abuse.

As I said on a previous occasion, a prosperous company is not one which does not expand its debt; it is one which does expand its debt. It is not a necessary evil for the Government to expand their debt. The question is—Are you going to set any limit to that expansion? If you do not, you may get into very serious trouble, and I commend the sug- gestion put forward in the "Economist," in which it is stated that there is no harm in expanding debt, provided that it is not expanded out of proportion to the growth in the national income. That may, or may not be, the right answer to the question, but it is one to which I ask the Government to address themselves. I ask them to tell us whether they do or do not agree with the dictum of the" Economist.' Do they, in spite of a good deal of talk, really come down on the side of unbalancing the Budget, not only for a single year, but for a period of years, and, if so, what limit do they propose to adopt?

I have dealt with this question at considerable length because I think it is of fundamental, basic importance in relation to the whole of this White Paper. I have not attempted to cover other questions, with which many of my hon. Friends are far more capable of dealing than I am. I hope the Chancellor of the Exchequer, when replying to-morrow, will say, with such caution as we know he will adopt, what the answer is. I will only say this in conclusion. I regard this White Paper as a milestone, but a milestone on a road is not the terminus of the road. It is a point to be reached and passed, and it is in that sense, that I welcome the introduction of the White Paper.

Photo of Sir George Schuster Sir George Schuster , Walsall

There are very many points in the speech to which we have just listened to which I should like to reply, but I wish to raise another issue, and I will only put one point to my right hon. Friend the Member for East Edinburgh (Mr. PethickLawrence). I cannot believe that he would not agree with the statement made by the Minister in opening the Debate to-day that he stands for reasonably sound finance. I am sure my right hon. Friend will agree that behind what can fairly be described as sound finance there lie realities which cannot be disregarded, and it would be disastrous if this country were to disregard these realities to the ruin of the country's credit or public confidence.

Photo of Mr Frederick Pethick-Lawrence Mr Frederick Pethick-Lawrence , Edinburgh East

I have always taken the view that economic realities cannot be disregarded, but the principles of finance have been too rigidly interpreted.

Photo of Sir George Schuster Sir George Schuster , Walsall

I only wanted to clear up what was in my right hon. Friend's mind, because I think if he were to stand before the country as a supporter of deliberately unsound finance, it would be a very serious matter. The whole question is how we are to interpret the rules of sound finance. Obviously, they have been too rigidly and narrowly interpreted in the past, and we all recognise that we shall have to have a more liberal interpretation in the future, but I put it to him that it would be a somewhat disastrous doctrine to-day to advocate working deliberately for an unbalanced Budget as something good in itself. I think the words of the White Paper, if I interpret them rightly, had that in mind and proceeded to show how the main measures which it proposed do not involve the "deliberate" unbalancing of the Budget. I do not think I am in disagreement with my right hon. Friend on this, and I was very glad to hear the Minister of Labour say to-day that he did stand for reasonably sound finance. We have got to bear that in mind, although we recognise that a new interpretation is necessary.

I want to join with those who have given a cheer to this White Paper. I regard it as an epoch-making document. It is something which cheers my heart in that the Government have had the courage to declare their faith in a document of this kind. Further, I think the speech made by the Minister to-day was worthy of the White Paper. Like other hon. Members, I recognise, as the Government only too well recognise, that it is only a sketch, or perhaps I might call it a "mock-up", which has got to be developed into a working model. It is, in fact, all in the doing. If, then, I raise certain questions and want to know more as to how the doing is to be carried out, I do not do so as a critic of the Government, but merely as one wanting to strengthen the arm of those who have inspired this White Paper.

The White Paper, in paragraph 86, talks about strategy and tactics. That is quite a useful analogy, because I think that the methods of military thought, in appreciating a situation, are of considerable value and helpful to straight thinking. This analogy brings to my mind Lord Wavell's lectures on Generalship, in which he said that where the amateur strategist goes wrong is not in failure to appreciate the principles of strategy, which can be apprehended in a short time by any man with average intelligence, but in his ignorance of what he calls the "logistics" of war—the sense of what is practicable, knowledge of the mechanism of war, of movement, topography and supply. These are apt words as regards some of our economic planners. And I have some doubt about the "logistics" of the White Paper plans—whether they will get our forces to the right place at the right time, whether, in fact, we shall know what the right time is, and whether, in any case, the forces proposed are going to be adequate to deal with the situation.

I should have liked to have talked on that, but I want to deal with a second and greater doubt in my mind, and that is this—Does the White Paper show the right conception of the strategic task? Through all that I have to say there runs this very urgent plea—that it is time that we got away from general economic thesis to a realistic study of the British economic structure and of what is going to be the British problem. What will that be? An immensely formidable one—as was well appreciated in what the Minister told us earlier to-day. It is the problem of satisfying the demands which our people will make at home, and of keeping our place in export markets. That means higher standards for all workers in production, and a greater allocation of man-power than ever before to non-productive purposes, which we all accept, such as defence and education as well as more generous allowances to the old and infirm. And all this greater productive effort will have to be achieved in circumstances of difficulty never paralleled in our history. It is common knowledge now that imports are vital to us, and that, to support the volume of imports we had before the war, we need to increase our exports in volume by 50 per cent.—even if we can retain the same favourable "terms of trade" as before the war, which we may not do. That, I put it to the House, is a task which can only be fulfilled if we make the very best possible use of our resources, human and material, and if we can develop the highest possible industrial efficiency.

This then is my chief comment on the White Paper. It concentrates too much attention on levelling out ups and downs, too little on raising the whole level of efficiency in production. Too much on stabilisation: too little on progress. I recognise of course that there are several passages in the White Paper, which emphasise the need for efficiency—particularly the final paragraph, which says that the aim can only be achieved if the whole productive power of the nation is employed efficiently; it is not enough that it should be employed. I welcome those words, but I want to see them not thrown in by the way at the end; I want to see them blazoned on every page—the leit motif of the whole composition. And I want to see practical recognition of their meaning in the measures that are being prepared. I cannot find it in the White Paper. Let me select a few passages to reinforce the point that I am making—which is, I repeat, that the one crucial task over-riding everything else is to work up the standard of British industrial efficiency and to make the utmost use of our resources, and that this is not fully recognised in the White Paper. First, then, I would take a matter which was referred to in a very good and highly commendatory article in the "Economist", which after saying that it would be unreasonable to expect more than a generalised sentence or two on the matter of industrial efficiency in a White Paper of this sort, since other reports are promised, went on to say that the Paper raises doubts "whether the magnitude of the task is appreciated" and that it is a little disturbing to see the Budget proposals for the amendment of taxation put forward as the main constituent of Government policy. I cordially welcome those proposals. They represent a very important step but we certainly cannot safely regard them as the only weapons in our armoury for stimulating the increase of efficiency.

Secondly, I find it somewhat disturbing that, in paragraph 18 dealing with the priorities in a transition period, an export drive is put first, civilian necessities second, and only after these comes the production of capital goods needed for restarting and re-equipping industry. An exact order of priorities may be difficult to work out precisely in every case—and we must of course devote something to the immediate supplying of our export markets, or we may lose them for ever. But I would like to have seen some sentence in the White Paper saying that while all these three things have to be considered together, nevertheless, there is one thing we are not going to neglect and that is allocating a due portion of resources to secure the first-class capital equipment of our industries.

Thirdly, I am disquieted at some of the things said in Part II dealing with local unemployment and the location of industry. In paragraph 25 there are three ways given in which the Government propose to tackle the problem: first, influencing the location of new enterprises; secondly, removing obstacles to the transfer of workers; and, thirdly, providing training facilities to fit workers from declining industries for jobs in expanding industries. But where is the justification for assuming that there are going to be any industries expanding sufficiently to absorb them? I get the impression from this whole section that the matter is being regarded too much as a reshuffling of an old lot of cards. That will not do. What we shall need is not a mere "New Deal" of the old lot of cards, but a new set of cards and a new game.

Photo of Sir George Schuster Sir George Schuster , Walsall

As a fourth point I had intended to draw attention to the significance given to the distinction between the period of transition and the long-term policy.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

My hon. Friend has used the word "game" and some hon. Members seem to misinterpret what he means by "game." Will he clear that up?

Photo of Sir George Schuster Sir George Schuster , Walsall

It was obvious to me that certain hon. Members might be interpreting my words to suit their doctrines, but that did not really worry me. We do want a new "game" in the sense that I intended and thought was clear to everybody. Our industry needs to be conducted in a new spirit appropriate to the era of epoch-making scientific and technological change that we are approaching, and I am sure that my right hon. Friend will agree, too, that we are approaching one of the most critical periods of the whole history of this country. I was, lastly, going to draw attention to the distinction drawn in the White Paper between the transition period and the ultimate long-term programme and I had wanted to emphasise that, although that distinction must obviously be drawn, the years of transition will be our years of opportunity to prepare for our long-term policy. I was going to plead that we should not have to look back on them hereafter as years which the locusts had eaten. But my right hon. Friend speaking earlier on recognised to the full the urgency of making the most of that time, so I need say no more.

Now, it is in line with all that I have been saying if I express the matter in another way and, using the jargon of economists, say that in my view the White Paper concentrates far too much on cyclical unemployment and too little on structural unemployment, with special reference to changes in external demand. I should be the last person to argue that we ought to shape our future policy merely with an eye to avoiding the mistakes of the past. But it is of value to look back on the lessons of the past, and it is certainly necessary to test the proposals in the White Paper by asking ourselves, How would they have worked in the conditions that we had to face in the years between the two wars? I maintain that it was the dislocation produced by the last war, the mal-adjustment of the economic structures of various countries, which meant to us the loss of some of our main export markets—I maintain that it was that which, added to the normal effects of cyclical fluctuation, brought unemployment to a degree which has now been recognised by people in all parties as intolerable—an evil intolerable in a Christian society. But it was that special additional margin which really made the difference.

And we must keep the significance of this in mind. If I take only three industries—coal, shipbuilding, including marine engineering, and textiles—I find—and the figures are well known—that just under 1,250,000 workers lost their employm4nt—that means to say, they had either to leave the industry or become unemployed—between July, 1924, and July, 1934. Now that was almost entirely due to the loss of foreign markets which our industry was not elastic enough to refill with other goods. When Lancashire's exports of cotton piece-goods dropped from 7,000,000,000 to 3,000,000,000 yards, when we lost half of our exports in coal, would any of the proposals of the present White Paper have found employment for the 334,000 textile workers who lost their jobs, or the 621,000 coal miners who had to look elsewhere than to coal mining for employment? Where would have been the "expanding industries" to which to go? Nowhere. And where will they be in the future? Nowhere, unless we reorganise our industries and take the lead and get right into the forefront of industrial advance in what is going to be an era of epoch-making change after the war.

Doubtless I shall be told that we shall not again have anything like the same concentration of structural unemployment in special areas—areas with all their eggs in one basket. That is true, but I put it to my right hon. Friend, that spread over the whole country, the combined effect of structural changes on our export markets will not be less. And our need to offset that effect will be much more urgent. We can only meet that need if we are prepared boldly to scrap old methods, and make the best possible use of our national resources—chief of which is coal, coal as a source of power or as a basis for chemical and other industries.

That leads me to another point. The key-note of the White Paper is that Government policy should be directed to bringing about conditions favourable to the maintenance of a high level of employment. "Conditions favourable"—that is certainly a vague phrase. How is it going to be interpreted? That is one of the questions I ask myself, and I put this to hon. Members opposite. Do not let us get into political controversies about private ownership or State ownership. Let us ask ourselves this question, a question which I believe would bring many of us together: First, what are the purposes required in the national interest which can be best achieved or only achieved by bringing in the organising power of the State? And secondly, what are the points at which it is best to decentralise if you are going to have effective execution? I believe, if we look at our national economic problem in that way, we shall find a very great measure of agreement and a way to go forward without sacrificing the essential liberties of the people of this country.

For the present I want to put this question to the Government: If it is found that the existing sectional interests of private enterprise do not fit in with the pattern which is needed for the opti- mum use of national resources by modern methods, that they cannot afford to scrap old plant and make new combinations, that they cannot afford to risk the millions required for pioneer plants in new processes, what then? Are the Government going to step in to mobilise the credit of the whole community, to stimulate pioneer work, to back new ventures in the pattern and on the scale required? I want an answer to that question. I do not ask for it at once, but I do ask to be satisfied that we are moving towards the right answers on the points that I have raised.

I can sum up quite shortly what I want at this stage from the Government. I want a review of the main foundations of the structure of British economy. I want a national inventory and an appreciation of the problems and of the possible courses ahead. It is no use saying that we cannot plan because we do not know what world conditions will be. We do know what we have got in our own resources, and it is on those that we shall have to live. If I know that British coal is going to be raised and utilised with maximum efficiency; if I know that the British iron and steel industry is to be brought into the forefront of modern progress; if I know that our power supply and transport are to be properly organised, then I should feel that we have a sound foundation for "conditions favourable" not only to full employment but to a rising standard of living. If on top of that, I knew that we had a ten year housing programme for 4,000,000 houses and all that that means, and a proper target for agricultural production, then I should feel that, without getting involved in the bureaucratic planning of all the details of our consumption and personal activities, there would be a solid foundation for progress, stability and activity. I want Government pronouncements on these matters, and over them all hangs that major question of how we are to keep our place or rather improve our place in export markets.

The Chancellor told me the other day, in replying in the Debate on International Monetary Policy, that the Government were confident that we could achieve a 5o per cent. increase in the volume of our exports. But how? I want to know. I want to know the basis for that confidence. I want to know it, not as a matter of inquisitiveness, but so that a lead may be given to our British industry from this knowledge and confidence of the Government as to what are the hopeful lines for expanding exports. What are the things on which they ought to be concentrating? So I repeat that I want an inventory of all British resources, a study of the British economic structure and the preparation of definite plans by Government working with industry to make the best both of our resources and our structure. I have little doubt that my right hon. Friend the Minister of Production if he were to reply would tell me that it is unreasonable to ask the Government, occupied with all their great cares, to prepare such things. It may be unreasonable, but that is no answer, because somehow or other it has got to be done. It has got to be done if we are to succeed in the task that lies before us.

There are many more subjects I would like to have covered, but I have taken too long. I believe we can on these lines find a way of progress which, as a Liberal, I could accept, because it would involve no sacrifice of essential personal liberties. I believe it is our duty, not only as Members, of this House, but in every walk of life where we influence our fellow men or carry responsibilities, to try to get together and find a way. I have told the Government to-day that I want to see more than is in this White Paper, but that is not because I do not support this White Paper. I want to pledge myself to support it and everybody who has had a hand in preparing it. I pledge myself as a Member of Parliament, I pledge myself in my position of responsibility for business undertakings, to co-operate in every possible way. If we all pull together and really face up to our problem, then I think we shall truly be able to say, as my right hon. Friend has said to-day, that we have set our feet on a new road of progress in civilisation.

Photo of Mr John Henderson Mr John Henderson , Leeds North East

I think that the House will appreciate the speech we have just heard and there are many points in it which it is well should be considered. I think it may be said however that the White Paper is limited to trying to find a remedy for unemployment. Undoubtedly we cannot find employment for people unless industry itself is efficient but it may be that this Paper has a more limited scope than my hon. Friend has said. However, I think this House will approach this Paper, as he said, as an epoch-making event. It is the first time that a British Government or, in fact, any other Government, have deliberately gone out to tackle the question of the lack of employment as a policy by itself.

Photo of Mr John Henderson Mr John Henderson , Leeds North East

I am sorry then, and I withdraw my statement. I have always felt that this question of gross unemployment was one which must be tackled—or attempted to be tackled because it is not a problem for which it will be easy to find a solution—and I think the hon. Member for Walsall (Sir George Schuster) has certainly rendered a useful purpose in pointing out that the solutions in the White Paper will be useless unless we achieve at the same time greater efficiency in industry and proper methods of developing our industry.

I want to raise three or four questions which I think the White Paper leaves slightly obscure. I heard practically the whole of the speech of the Minister of Labour but I was out for a few minutes and during that time he may have mentioned the question of women. During the time I was here I did not hear him refer to them. What is the Government position with regard to this matter? Is the employment they have in mind to secure employment of the numbers engaged in industry just now? Obviously, after the war there will be a great many women who will want to go back to their homes—married women and so on. What exactly have the Government in mind with regard to the employment of women? Is it part of their policy that considerably larger numbers of women should be attracted to industry after the war than were employed before the war, and does the scheme contemplate finding employment for a greater proportion of members of the community than was employed prewar? These are points on which we should have some enlightenment. I would have liked to have dealt with the transfer of labour, the suggested power to direct industries to certain localities and the restriction of private capital investment, which are very important questions, but I want to be brief so I will turn to the points which I think most important in the White Paper, and ones on which I would like some elucidation.

Public works expenditure is undoubtedly essential if we are to attempt to overcome periods of depression. I wonder whether, under the scheme adumbrated in the White Paper, there would not be too much of a time lag through working it through local authorities. Would it not be better that such expenditure should be arranged and carried out by the central Government, otherwise it seems to me that there would be considerable delays? The whole point of any such scheme must be that you act promptly. If depression and lack of confidence develop you get to the stage when it is too late to act properly. Therefore, you must be prepared to act quickly, and I should have thought that it was absolutely necessary that powers should be retained by the central Government. I think we all feel that one of the most important things in connection with public works expenditure is that it should be on useful work. Nothing is worse for the country and for workmen than that men should dig a hole, and subsequently have to fill it up. It is soul-destroying and bad for everybody. Schemes should be worked out in advance by the Government. We should have schemes to assist our industries and make them more fit to meet competition. These schemes should be pigeon-holed in readiness to be pulled out when emergencies arise.

I welcome very much the proposal of deferred credits. I urged this in the Debate on the Budget Resolutions, because I believe that this method is the simplest solution—although it may be only a partial solution of the problem. The idea that when trade is booming a certain sum of money should be retained which would be released at the appropriate time is a good one. There is, however, one danger in the scheme, to which I will refer in a moment, but, as I have said, I welcome the proposal, as holding out great prospects of helping to solve this difficult problem by increasing spending power at the right time.

Photo of Mr Francis Bowles Mr Francis Bowles , Nuneaton

Does the hon. Gentleman think that the State can save money?

Photo of Mr John Henderson Mr John Henderson , Leeds North East

I do not quite know what the hon. Gentleman means by that remark. At any rate, it has nothing to do with what I am saying, that to withdraw a certain proportion of spending capacity at one time and use it later to increase spending capacity is a good idea. I am a little perturbed about paragraphs 81 and 83 of the White Paper. Paragraph 81 states: The Government intend to establish on a permanent basis a small central staff qualified to measure and analyse economic trends and submit appreciations of them to the Ministers concerned. In paragraph 83 there are suggestions as to the sort of statistics that will be required. Well, if previous history goes for anything that small central staff before long would be an enormous staff, and the number for forms which industry will be required to fill up will develop into a flood of paper. We all know the saying about taking in each other's washing. I hope the Government does not mean to give employment by asking people to fill in forms. That is not the sort of employment that any of us what to see, and I hope that the desire for form filling will be kept under control. I hope the House will watch both the small central staff and the kind of information which will be required.

I should like to have some sort of assurance about paragraph 44, because, as expressed, it seems rather dangerous. It states: Public expenditure on current services, including national defence, will also be fairly constant as a rule, unless the Government decide as an act of deliberate policy to vary expenditure on some items in order to compensate for swings in other parts of total national expenditure. I hope the Government will not treat our national defence as a factor in dealing with unemployment. Our national defence must be treated on its merits. It would be a very serious proposition indeed, if we started to call men to the Colours, or dismiss them, or spend or did not spend money on armaments merely for economic reasons and not because of our defence requirements. There is another point on which several Members may be out of sympathy with me, a point on which the Government seem to have realised the danger. Paragraph 86 states: …the restraining measures appropriate to a boom may meet with opposition unless they are seen and understood as part of a continuing policy for maintaining employment, and accepted as the price that must be paid for the success of that policy over the long period. I have a high regard for Front Benchers—I do not mean only this Front Bench; Ministers generally have as high a standard of integrity as any other body in the country, but in this White Paper we are placing political power in the hands of the Front Bench which I should not be prepared to leave to a choir of angels. Can you imagine any Government which would be willing to collect from the taxpayers a certain sum of money with the object of preventing them having too much spending power in their pockets being willing to leave it to their successors to disburse it? Can you imagine any Government facing a General Election in a year or so, being willing to withdraw money from the public and allow their opponents to spend it? Can you imagine that Government in the year of a General Election, being willing, if they find it necessary—I am not dealing with the question whether it is good or bad—to transfer labour from one part of the country to another, or can you imagine that Government being willing to increase contributions at such a time under social insurance? [An HoN. MEMBER "That would wait until after the election."] And before the election the tendency would be to reduce the contribution whatever the circumstances were.

It seems to me that questions like that —I could enumerate others—are very dangerous to entrust to any Government. It is worth consideration whether those powers should not work on a fixed basis. It is suggested in the White Paper that contributions should vary with the amount of unemployment. I do not think it would be a bad thing if it was laid down that, with a certain increase or decrease in employment, there should be a certain rise or fall in the contribution, so that it is taken out of the hands of individual Governments. It is a very difficult thing to ask any Government to deal with as an abstract question of right or wrong. Actually, of course, it would be an advantage, if that power of deciding when a sum that had been held back, should be paid out, was placed in the bands of some nonparty body. This is a matter which requires very careful consideration.

Our puzzlement over paragraphs 58 and 59 has been increased by the Minister's statement. Paragraph 58 says: In ordinary times the volume of capital expenditure is influenced by movements m the rate of interest. If the cost of borrowing money is high, some projects which are not profitable at that rate will be held back. When it falls again, those projects will be brought forward and others will also be taken in hand. Paragraph 59 says: For some time after the end of the war it will be necessary, as explained in Paragraph 16, to maintain a policy of cheap money. Thereafter, the possibility of influencing capital expenditure by the variation of interest rates will be kept in view. That seems to contemplate a departure from low interest rates and cheap money which has been the policy of the Government for some time. The Minister stated categorically that it was the intention of the Government to continue the cheap money policy. What is the policy of the Government with regard to this matter? I should have thought there was no question that a cheap money policy for ten years after the war would be absolutely essential. There will be hundreds, if not thousands, of millions of pounds of war loans falling in during that period, and, if we are not careful, we may find ourselves, as after the last war, paying interest at 7½per cent. We could thus add enormously to the interest payable on our Debt. I think this is a very serious point which will require careful consideration. I think also that the whole scheme has to be considered in relation to international monetary control. We have already seen the reaction from some of the New York papers. This policy cannot be taken in a vacuum. It has to be considered in relation to many other points as well and particularly the International Monetary Scheme. I think we should get a little more enlightenment on the subject.

I welcome this Paper perhaps even more for the fact that it is an attempt to deal with the problem than for the actual terms. Some of its proposals are, without question, admirable. Some others want more explanation. We are entering on this voyage on unknown seas and we must be prepared to run up against difficulties and dangers, but I am convinced that, if the country is united in desiring to find a remedy for the problem, and is patient, some solution can be found I wish the Government all success in their endeavours.

Photo of Mr Ronw Hughes Mr Ronw Hughes , Carmarthen

The House welcomed the contribution of the hon. Member for Walsall (Sir G. Schuster), and so did I. The House will like it even more, when I tell hon. Members that he raised two major queries on the White Paper which I wanted to raise myself, and that I will not repeat them. In general terms, I welcome the document. Before the Government produced it, we had all thought about other documents, and those that I studied were "Full Employment and the Financial Policy of the Labour Party," a document published by a group of Fabians. It is true that you will find in those documents, a certain emphasis on expanding the sphere of public ownership in industry, and a certain emphasis on the re-control of our financial system but, if we leave those two items aside, I am astounded to discover that the White Paper bears distinct traces of having been decidedly influenced by hese documents, or by thoughts upon parallel lines. I should be interested to know whether the Fabian Missionary was the Minister of Labour, or the Deputy Prime Minister, or even the Prime Minister himself, reverting to his more Radical days. Such is the coincidence, that I find little difficulty in accepting the main lines of the White Paper.

It appeals to me too, because it is an explosive document. It is surprising how many explosions there are in it. It explodes Tariff Reform completely. Here we are set with the task of trying to create employment in this country and of obtaining the material which is to come in to the extent of the consumable market here. Coming from the source from which it does, a Government overwhelmingly supported by Tariff Reformers, it is astounding to find that there is not a single suggestion in the White Paper that this instrument, which has been blazoned for years as the cure for unemployment and as a proper method of controlling trade and imports, does not even receive a gentle pat on the back. The document very delicately avoids the question of interfering with such tariffs as now exist.

It also explodes Free Trade completely. It proposes, for the regulation of our economy after the war, to retain the controls which are necessary in order that we may have the raw materials and food that we selectively require. It does not propose to allow anybody in this country to go abroad and buy anywhere he likes, what quantity he likes of what raw material or food he likes. The controls are still to be retained. If the White Paper went to its logical conclusion, it would say in terms what it says by implication that the last temples of Free Trade in this country have gone completely out of business, and will never be opened again. The commodity exchanges of this country have gone. The Cotton Exchange, the Atlantic, the Baltic and other exchanges will never have room to function in the economy of this country, if the policy of the White Paper is accepted by the House. It is true that we are employing their staffs and their operatives, at a fairly remunerative level, but all that can be said is that we are giving them a prolonged and bounteous breakfast on the morning of execution.

The White Paper is also somewhat explosive of Socialism. One of the major difficulties which the Paper envisages in controlling the economy of this country in order to secure full employment is the field of private investment. It says so in more than one place. It is the largest section of economy and it is the one which is the most intractable and difficult to control. One would have thought that when it is accepted that public investment is controllable, the logic of the situation would be to reduce as much as possible the intractable and to expand the sphere of public investment and, therefore, reduce the sphere of private investment. The White Paper rejects the logical conclusion of Socialism. There are one or two incidental matters about which the White Paper is explosive. It has ruined nine out of ten of the speeches made in support of war savings up and down the country. It says, in definite terms, not that people should subscribe money and save in order to buy aeroplanes, warships and tanks, but that the call of the Armed Forces for munitions is limited only by the availability of labour and other physical resources. Nine-tenths of the propaganda used for war savings has thus been exploded. It is worth drawing attention to one other minor explosion. The Paper explodes the very platform which brought hundreds of Members on the other side to this House.

Photo of Mr Ronw Hughes Mr Ronw Hughes , Carmarthen

Not on the same footing. They came back here in 1931, by telling the world that the reason for the slump was the failure of the Labour Government. I advise them to turn to the White Paper, where they will find this sentence on page 18: In 1929 the depression in British industry was transmitted to this country from abroad. It was not, then, the invention of the Labour Government of the day. I welcome the document because of its explosive contents.

That is not enough, however, and it is on the constructive side that we should lean. I am sorry to say that in the introduction to the White Paper the Government appear only to contemplate or to think that their scheme only contemplates a very small measure of legislation. In truth, a close examination of this scheme indicates clearly that a considerable mass of legislation is urgently necessary if its terms are to be implemented. Speaking for my colleagues on this side of the House, I say frankly to the Government that the test of their sincerity with regard to this policy will be patently revealed by the extent to which they implement it in legislation. I go even further, and say that the Government must not rely in their employment scheme upon the use of wartime Regulations. I will give the House an example. In the Debate on 7th June, upon the location of industry, the right hon. Gentleman the President of the Board of Trade said: We reserve the right to use those powers … by declining to give industrial building permits in any particular areas. Those industrial building permits must continue for some time to come. I would remind the House that those building permits arise under powers given to the President of the Board or to other Departments under Defence Regulations, and they are given for war-time purposes. He went on: It is idle for anyone to think that this particular form of Government Regulation can be swept away overnight, or can be swept away when we have merely got the surrender of Germany. It cannot, perhaps, be swept away even when we have the surrender of the Japanese enemy also."—[OFFICIAL REPORT, 7th June, 1944; Vol. 400, c. 1382–3.] These Defence Regulations, and the Orders published under them, were authorised by this House only for the period of the emergency. Are the Government going to rely on these Regulations, and so continue the period of the emer- gency, rather than face this House with specific legislation to enable them to carry out what they want to do? The Government must make up their minds. They will need these powers—the Minister and his successor will need them—beyond the period of the emergency. They must be based upon Acts of Parliament passed in this House.

The White Paper promises certain definite legislation. I need not repeat it, but it deals with the control of trusts, combines and trade associations. In specific terms, the Government say that they will ask this House for powers to deal with them. I ask them to do it quickly. They must have these restrictive agreements registered and examined, and try to control them if their object is anti-social. That is all we can do. I am glad that the Government did not try what was unsuccessfully tried in America, a form of anti-trust legislation, because you can use compulsion to make people not compete but there is no form of compulsion known to man that will make people compete when they do not want to. You cannot introduce competition by law among people who do not want to compete. It must be done by positive Regulation, and the powers must be sufficient to cover not only the combine but must extend to every type of monopoly.

A combine is not the only form of monopoly. You may have the monopoly of one single individual. Powers to examine must be directed to monopolies of every shape and kind, and the powers which the Government seek must include power to legislate for prices. After all, the Government have had plenty of experience. They have had no difficulty with price regulation committees and examination of costings. Government contracts through the Ministry of Supply, the Ministry of Aircraft Production and the Admiralty, all have clauses in them making it possible for the Government to fix fair prices, but, to judge from the reports of companies in the financial columns of the newspapers, that method of assessing prices and profits has not been too harmful. Beyond the immediate legislation that they have promised, I ask the Government: Do you really know enough about the extent to which these combines, cartels, rings and price-fixing arrangements exist? "The Times," in an article on 15th June, dealing with the subject of price-fixing associations said: Probably no one knows, and none but a much-needed official inquiry could elicit the extent to which associations do temper the 'competitive process. That means that all these arrangements are able to exact from the public higher prices than they should.

These combines are a definite danger to the public. Though the White Paper says that they are not necessarily so, experience goes to show that whenever discoveries are made about them there is always an anti-social element. They are against the efficiency of this country. We want to be able to use all the brain power and technical skill of our people, but how can we do this when thee rings and associations buy up good ideas and then lock them up so that nobody can use them? What happened to the three-penny incandescent lamp that would last almost for ever, or the endless match that you could strike 150 times? Those and other inventions have been bought by the rings and locked up in a safe so that the public should not have them.

I will give one example of the way combines operate. The other day, in one of the biggest research laboratories in the United States, the Dupont laboratory, the scientists discovered a new pigment. They were researching for a pigment for paint, but they found, for the first time, a pigment capable of colouring not only paint but textiles. What a wonderful achievement. What a great advance. There was a certain price-fixing arrangement governing pigments for paints at a somewhat low level, while another ring controlled colourings and pigments for the colouring of textiles, at a considerably higher level. Suppose someone bought pigment for paint and then went round the corner and used it for textiles. The result would be cheaper clothes for everybody. The textile combine turned to the scientists and said: "Go back to your laboratory and put something into it that will make it impossible for textiles. We won't touch it, unless it is to be used only for paint." That is an authentic instance. How can we have the best productivity from industry in this country if inventions and discoveries are to be wasted by those who control combines and cartels? Let us clear the way for the export trade by giving brain-power some of its freedom of action.

I am going to give the Government a challenge on this matter of exports, and a specific suggestion whereby they could produce an extremely valuable export which would make some part of the£400,000,000 that they want. When the war is over, there will be only two countries in the world with sufficient capital to make motor cars, ourselves and the United States. [An HON. MEMBER: "And Canada."] For this purpose, Canada is very largely subsidiary to the United States. There is an enormous post-war market—for what? Following the best advice I can get, I believe that the kind of motor car that could be sold all over the world after the war would be one from 15 to 20 horse-power. What are we building in this country? Before the war 62 per cent. of our motor cars were of 10 horsepower or under. They were not cars that we could sell outside this country at all. If my information is correct, motor manufacturers are busy experimenting behind closed doors to devise a 6 horsepower motor car for after the war. In all seriousness, where do we think we are to find an export market for these automatic perambulators?

The responsibility is the Government's. We can produce the best cars and the best technical skill in the world. The Battle of Britain was won by the pilots and the designers of the engines. We have the finest engineering skill in the world, but we also have the horse-power tax and the weight tax. Imagine the designer of the Merlin engine producing up to 1,500 horse-power. Suppose he said: "With a slight alteration of the cylinders I can get this Merlin engine from 1,500 to 1,800 horse-power." Standing at his elbow would he the Chancellor of the Exchequer, who would tap him, and say: "Mind you, if you do, that is another£300 on it." A tax has to go on the nose of the Spitfire. Designing a new type of wing, designing a new fuselage, the best streamlining, the best equipment, a little bit of additional armament—and "Weight," says the Chancellor. "Put it on the weighbridge. Let us see whether it is more than 2½ tons. If it is, up it g9es to another grade of taxation." Could we have produced these machines under those conditions? Yet those are the very conditions under which we are asking the motor industry of this country to produce one of the most valuable exports we can have.

I expect the Chancellor to-morrow to tell us what his programme is with regard to the one specific item of the possibility of increasing our exports. In this regard, before I leave motors, I would reinforce the argument about combines by quoting to the House one or two figures. Over two-thirds of the cost of a British motor car is made up of materials, semi-fabricated and otherwise, which are controlled by rings, combines and cartels. Look at the result. You can buy a steering wheel in America for 3s. 8d. They have not a ring there. Under the ring in this country it costs 6s. 8d. A manufacturer wants a dynamo. In America, where there is no ring, it costs 15s., as against 23s. 11d. here, where we have the advantage of a ring. In America a starter for a car can be obtained for 13s. 13d. Under the ring price in this country it is 285. 6d. To come to bigger components—steel body sheets for making the body of a motor car—the American price is£13 10s. a ton. In this country, with the advantage of the Iron and Steel Confederation, the motor manufacturer has to pay£21 a ton. I could go on with these figures. What encouragement are they to our export trade? We should control these rings and cartels to give this section of the export trade a proper chance to function. There are numerous other instances, but I will not weary the House.

That is one instance where the Government ought to state what it is proposed to do about the export trade. It is only one facet of this vast programme. I shall not deal with any other aspect, but I want to reinforce what was said by the Minister of Labour to-day. Why is it that twice in my lifetime I have seen plenty of work for everybody, more work than men can be found to do? Each of those two periods has been during a war. It is no good telling me that we cannot get full employment under a capitalist system. Give them a war and there is full employment. What gives full employment? It is what the Minister of Labour said, that there is a common objective. Everybody is agreed that we have to put every effort we can into defeating the Germans, subduing the Nazis. The same is true of this policy of the Government for solving unemployment. We must pledge ourselves to a common objective, not to give a man work, not to provide him with something to do, but to lift the whole status of our people. Give to the full extent everything we can produce; if we cannot sell it, give it away. That is what is done in wartime, either to ourselves or the other peoples of the earth. That is an objective—raising our own people, raising the peoples of the earth where we can. Inspired by that objective, this policy can go a long way towards solving the problem of unemployment.

Photo of Sir Cyril Entwistle Sir Cyril Entwistle , Bolton

I do not know who drafted the White Paper, but its diction does not seem to bear the imprint of the regular civil servant mind. I expect that Lord Keynes had something to do with the drafting. I think we are all agreed it is a brilliantly written document, and much more interesting to read than the normal White Paper. To my constituents when I have had to declare my viewe on industrial policy, and what I thought were the future prospects of post-war trade, I have always called myself an expansionist. By that I meant that the future standard of living must depend on the total that the country can produce. That has been limited in the past by faulty distribution and the inability to adjust consumption to production. I am very glad indeed to see that the White Paper uses the very word "expansionist," and that the Government are committed to an expansionist policy. That, I think, is the main reason why it has been so welcomed in all parts of the House.

I shall delay the House only for a very short time, and the point I want to deal with is Chapter 1, which refers to the export trade side of our policy. The White Paper quite candidly admits that it has no specific practical proposals to put forward on the expansion of our export trade. It points out how essential is the expansion of exports. We are told we have to increase our exports by at least 50 per cent. over what they were before the war. The measures mentioned in the White Paper as having been taken up to the present by the Government in looking after the export trade are: Entering into the Atlantic Charter, the Mutual Aid Agreement with the United States of America and the Hot Springs Agreement. All of these are admirable so far as they go, but the White Paper admits quite frankly they are only a statement of general principles and intentions, which are admirable, but which will bear no fruit until they are actually implemented in some practical form. What surprises me about the White Paper—and it is chiefly to make this point that I have got up to speak—is that it does not mention one achievement which I think is one of the best to the credit of this Government, and that is the International Wheat Agreement.

The International Wheat Agreement is a practical measure for carrying out the very thing which is stated in a general form in the principles of the Atlantic Charter, the Mutual Aid Agreement, and the Hot Springs Agreement. It tackles one specific commodity, wheat. It estimates the total productive capacity of the world and the total consumptive capacity of the world, and provides for the whole of the wheat-producing countries to share, in certain percentages, that production, which is to be adjusted, as needed, to the consumptive capacity of the world. In my view, for the future prosperity of the world, the whole of foreign trade will have to be carried out, at any rate as regards the basic commodities, on lines similar to that.

I suggest that there are practical measures, which the Government could institute straight away, to attain the principle to which they have adhered, with other Governments, of fostering the mutual interchange of the maximum quantity of goods between nations. That is being done with regard to wheat; and why should it not be done with regard to other basic commodities, all the main commodities? I do not say that it would be suitable for every specific article which enters into international trade. There will have to be a certain balance and margin for changes of fashion, invention, and so on; but that should be subject to the principle that no country, in the long run, can sell more than it is prepared to buy. That principle is acknowledged in the White Paper on Monetary Policy. I know that the White Paper has been criticised, because it accepts gold as the basis of money, but there is one cardinal point—and the important thing is that the United States has agreed to it—that certain practical measures immediately come into force when one country is attaining the position of being a permanent creditor country and others are becoming permanent debtor countries.

We must have practical measures for arriving at the desired end that each coun- try must be prepared to sell only as much as it is able to buy. We cannot just say, "We will have a general formula on those lines"—although that would go a long way. We must have practical measures for seeing that there is a maximum interchange of goods. We should take each basic commodity in turn, and have negotiations between the industrialists and the Governments of as many nations as possible, starting with the United Nations, and allowing any other nations which are willing to come in. Then there should be agreement on how the world's production of that commodity should be shared out between the different countries, The objection might be raised that all this would take a long time; but we could have negotiations about all the commodities taking place simultaneously, because not the same people have to negotiate for each commodity. There would be an industry, concerned with one commodity, negotiating with the corresponding industry in another country, exactly as the negotiations with regard to wheat were carried on.

I have spoken on this matter twice before. I do not often speak in the House, but this is one of the subjects on which I have laid very great stress. I think it is the most important of all subjects for the future prosperity of the country, and of the world, and I suggest that the Government should immediately initiate negotiations, to be undertaken by the industrialists in this country, having Government representatives with them, and the consumers' interests being thoroughly represented—I am not suggesting anything to the contrary. Those various negotiations should take place simultaneously. The trouble in the past has been that however much you might desire a particular system of internal economy in your own country, you were not at liberty to introduce it because you were dependent on your foreign services. We all know that we have to import a certain minimum quantity of goods in the form of food and raw materials, and that, in order to pay for them, we have to export a certain quantity of goods. Hitherto, we have had to compete for those exports in the markets of the world, and we have had to reduce prices to a level that foreigners were prepared to pay. The cotton trade knows how impossible that was when it had to compete with such countries as Japan. We know that highly-paid labour, although generally more efficient than lowly-paid labour, is not so commensurately more efficient than lowly-paid labour, where equally good machinery is available in both cases, as to enable us to compete with countries that pay sweated wages.

I am glad to think that the hon. and learned Member opposite, although he said that the White Paper exploded Tariff Reform, admitted that it equally exploded Free Trade. The doctrine of Free Trade is antipathetic to the whole policy of the White Paper. Hitherto our internal economy was dictated by the conditions of our foreign trade. Where a country had an adverse balance of trade, it had no alternative but to take restrictive measures and to drag down its prices, to enable it to compete in foreign markets, and, as the main element of cost was considered to be wages, the attack started on the wage level. Unfortunately, the method that had to be adopted to create lower wages was unemployment first. That was the only method available to us for correcting an adverse balance of trade. It is recognised that that should not be the case. The White Paper on Monetary Policy lays down, as a condition, that no country shall be forced to keep to the exchange rate that is fixed, if that means that that country cannot pursue its own domestic policy and keep up the standard of living at which it is aiming. That cannot be done if we are dependent for our export trade on the old-fashioned method of competing in foreign markets. Our foreign trade will have to be got by agreement, on bulk lines, quantitatively. We have shown the way with the Wheat Agreement. I suggest that we should follow that example with all the other commodities which enter into foreign trade. I hope that the Government will take measures to enter into as many agreements, on the lines of the Wheat Agreement, as they possibly can, before the war ends.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

I am very glad that this White Paper has been introduced. As the Minister says, the White Paper is important for the fact that this is the first time the Government have taken upon themselves the responsibility for seeing that the citizens of the country are provided with continuous employment. I am not so satisfied that the con- ditions as presented in the White Paper are capable of doing the job. In the first place, I would like to say a word upon what is in the minds of very many hon. Members on the other side, the question of exports. One great export market has not, so far as I have heard, been mentioned. It is a terrific market—the Soviet Union. In the past every conceivable obstacle was placed in the way of an export market in the Soviet Union. There was every provocation; the most difficult terms were imposed against getting a free supply of goods between this country and the Soviet Union. Yet it is obvious that on the basis of the 20 years' agreement, ail kinds of mutual understandings can be arrived at in regard to a variety of commodities. It is also certain that, if we are to get anywhere after the war, there will have to be not only these agreements with the Soviet Union, but agreements with the United States, and that brings in all the others. Between these three outstanding nations, there must be understanding of some kind. The first part of the White Paper deals with the international and industrial background, and, in connection with the international situation, those observations will have to do, though there are wide implications to be worked out.

I come to the all-important question of full employment. Hon. Members on the other side have insisted that they want to see full employment. But they also want private enterprise. I want the hon. Members on the other side who spoke on this question to tell us openly which they put first—full employment for the citizen or private enterprise. All the time they have at the back of their minds, the idea that private enterprise must come first. If it does come first, you will never get full employment.

Photo of Mr Stanley Prescott Mr Stanley Prescott , Darwen

While not necessarily accepting the deduction of my hon. Friend, may I say that if he had heard my speech earlier I think he would have found that his question had been answered?

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

As a matter of fact, it was the hon. and gallant Member's speech that first raised the question in my mind. I listened very carefully to him, and he was for full employment and private enterprise. I ask him to say now that he is prepared to put full employment before private enterprise.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

Well, that is a concession, but there are other hon. Members who put private enterprise first, and who will say that it is not possible to get full employment unless you have private enterprise, despite the fact that, between the wars, private enterprise gave us millions of unemployed? The Minister said to-day that, hitherto, we had sought to treat the disease after it had started, but that now we intended to deal with the cause and to prevent the disease. That is very desirable, if the Minister and the Government are in earnest, but on page 16 of the White Paper, in paragraph 41, I read: The Government are prepared to accept, in future, the responsibility for taking action at the earliest possible stage to avert a threatened slump. Not to stop unemployment, but to "avert a threatened slump." When we have got to the stage when the disease will spread all over the country, the Government will take steps to try to avert it. Is that the attitude to adopt? Is that giving a guarantee of security to the citizens of the country? Is that how you are going to treat them?

Photo of Mr Quintin Hogg Mr Quintin Hogg , Oxford

Although the hon. Member has quoted, rather appropriately, a sentence from the middle of the document, I cannot believe that he has read the first sentence of that document, which says that the Government accept, as a primary aim and responsibility, the maintenance of a high and stable level of employment. If the hon. Member had read that sentence, I cannot believe that he would make the point he is now making.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

I think the hon. Member was here when I started my speech. Obviously, the hon. Member's mind is unfortunate; it has blank spaces in it. The first thing I said was that I welcomed the White Paper because, for the first time in the history of this country, the Government had taken upon themselves the responsibility of providing full employment for the citizens. Then I added that I was not satisfied that the proposals in the White Paper were sufficient to meet that obligation. That is what I said. Every hon. Member heard me, except apparently the hon. Member for Oxford (Mr. Hogg). Maybe a term at the university would not do him any harm. It is quite clear that it is not my language, but the mind of the hon. Member, which is at fault, and the minds of some of his associates among the young Tory Progressives. The White Paper is not getting at the cause of the disease. That is what I want to deal with. Take another remark in the White Paper, which is obviously in the grossest contradiction to the Introduction. The appendix, in paragraph 4, says: Should it occur that, in a period of difficulty, average unemployment changes by four points from 8 per cent. to 12 is per cent. If unemployment goes from 8 to 12 per cent., what does it mean? It means 2,500,000 unemployed. What do you make of that? How does that square with the Introduction? Two and a half million unemployed—and they visualize the possibility of that. When we are dealing with the transition from war industry to peace, shall we take into account that millions of lads are coming back from the Army, millions of men and women who will have to be transferred from war to peace industry? How is it to be done? I have put this point before to the hon. Member for Oxford, but he did not answer it. I would like to know if some other hon. Members could answer it. If I say that every one of these lads who have been defending this country has the right, when he comes back, to a home and a decent standard of life, is there anyone who will object to that? No, everybody will agree with that, but we have to recognise the fact that, unless a man has a right to a job, he can have no right to a decent standard.

We have seen much unemployment, poverty, the selling of furniture, of people being thrown out their houses because they could not pay the rent. The home and a decent standard of life depend on the first fundamental right of all—the right to work. I ask hon. Members opposite who are associated with the Government, representing the people of this country: Will they get up and say that our people are to go back to the dole? The Prime Minister and the Minister of Labour say, "No." Do they mean it? Is any Tory Member prepared to say that we as a House of Commons want these lads, when they come back to this country, to have the right to work in the country for which they are fighting? Not one of them dare answer that question, because private property comes first.

We have had said to-day, what was said yesterday in the Scottish Debate, that we should all pull together. Yes, provided we accept the right of the privileged few to get everything and the masses of the people to get nothing. Not one of the hon. Members opposite will pull together, to do justice to these lads who are fighting for their country at the present time. It is a question of asking not for privileges for soldiers, but for rights for soldiers. This Government and this House of Commons, representing the people of this country, should say to the lads who are now fighting—and this I put to every Tory—"We are going to give you the right to work, which will guarantee you the right to a home, and a decent standard of living." But before we can give that promise, we must ourselves have the means of providing it. We must not leave it to the speculators on the Stock Exchange. Is the Stock Exchange to carry on after the war, with men speculating and making millions of money while millions of people suffer and go short of the necessaries of life? Is it that for which the lads are fighting?

I like the White Paper because of the Introduction and because of the spirit, which, I feel, is behind the Introduction, but I say to the Government and to this House of Commons, "If you are going to do justice by the lads who are fighting and the people of this country—a, great people who have proved themselves a great people—the Government, backed by the House of Commons, representing the people, must take possession of the land, and the principal industries of this country, and so organise and direct our resources, as to ensure that the whole of them will not be drawn away by a privileged few, but will be expanded, so that the mass of the people will be able to enjoy what they are entitled to—a healthy, a happy and a peaceful life."

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

Wonders will never cease, for the hon. Member for West Fife (Mr. Gallacher) has just said the very thing that I wanted to say myself.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

I am very pleased to hear that.

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

Possibly I would not say it in quite the same way as he said it; but lacking his force and precision, too, the very same thought was running through my consideration of the White Paper as was running through his. But I come to different conclusions about it. The same thought has been running through quite a number of speeches we have heard today from both sides of the House. A number of speakers have mentioned the dramatic interest of the opening words of the White Paper: The Government accept as one of their primary aims and responsibilities the maintenance of a high level of employment after the war. That was one of the most important pronouncements from a Government we have ever heard, and one which I welcome, when it is made by the British Government; although secretly I congratulate myself that I am not a Member of the Government who have made that commitment. Apart from that, the White Paper does appear to me as being complete in itself. It is an admirable production, an admirable lay-out of the problems and difficulties with which the Government who have made this commitment will have to deal. As I read the opening chapters, I made notes, wondering whether or not the Government would have thought of this point or of that point. I was very interested to find as I read through the document, before I got to the end, that every one of these points had been met; I will not say dealt with, I will not say solved, but they had all been acknowledged. The Government are to be congratulated on having produced a first-rate treatise on the problem of unemployment.

I would like to propose a general proposition which really is almost the same as that which the hon. Member for West Fife raised in slightly different words. I myself am intellectually convinced of its truth, and still more so after listening to speakers on both sides of the House; but, oddly enough, I may be wrong; so I would like the problem to be examined by better minds than my own. My proposition is that it is only an authoritarian Government which can deal effectively with unemployment. If we examine the nature and causes of unemployment it can be shown in theory that the only effective technique in the prevention of unemploy- ment which a Government can employ is interference with individual freedom of choice—that is to say interference with private enterprise—and not only can we show it in theory but also we have seen it in practice in the last 10 or 20 years. In those countries which have for a time made a success of dealing with unemployment the technique which they have employed for that purpose has been interference with freedom of individual choice. In Germany the Nazi Government took away from the people the right to make their own decisions. In this country we voluntarily gave our Government, for the purpose and period of this war the power to interfere with our freedom of choice. In Russia, a paternal Government took over the running of the whole nation, and interfered with freedom of choice. In America, they tried to deal with unemployment, but so long as they refused to interfere with freedom of choice, they failed; and it was only when war came along and the Government gat the powers to interfere, that unemployment was effectively dealt with. So I think I am saying, in a slightly different way, exactly what my hon. Friend the Member for West Fife said, that we cannot have private enterprise, and deal effectively with unemployment at the same time. I think that is true. It is going to be a question of choosing between the two. Which is, in the long run, the greater end in itself? Freedom of individual choice or dealing effectively with unemployment?

Photo of Mr Francis Bowles Mr Francis Bowles , Nuneaton

May I ask the hon. Member a question? He has used the phrase "freedom of choice" very often in the last few minutes. Does he mean freedom of choice to sack other people, or freedom of choice to employ them?

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I am afraid I do not quite understand.

Photo of Mr Francis Bowles Mr Francis Bowles , Nuneaton

The hon. Member hasused the phrase "freedom of choice" over and over again. Does he mean freedom of choice on the side of the employer to employ or to discharge labour, or freedom of choice to get a job where a worker wants to get a job?

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I meant much more, the freedom of the individual to say "I will—or will not—go to Brighton"; "I will—or will not—buy this particular hat"; "I will—or will not—start, or go into this particular business." All those things, in respect of which we are to-day limited in every way, are different aspects of what I meant by freedom of individual choice. I meant private negotiation, the idea of a man negotiating for his own advantage. That is private enterprise, a man negotiating for what he conceives to be his own advantage. I think therefore that what we have to consider is: Are the Government to continue to hold all the powers of interference which we have granted them for the period of the war? Are they to continue to hold their powers of rationing, licensing, control of production and supply and distribution? Are they to hold their power to direct labour of all kinds to what they shall work at, at what wage, and where it will be? That is the question we have really to decide in choosing between dealing effectively with unemployment on the one side, and the maintenance of what I call freedom of choice, or what my hon. Friend opposite called private enterprise, on the other side.

Now without myself saying which I think is the better end of the two, I think it is possible to forecast which is most likely to find favour in this country. I doubt very much whether in this island, inhabited by 45,000,000 people, each of whom is rather the counterpart of an island in himself, or herself, we will continue indefinitely to grant those powers of interference to the Government. I do not think these powers of interference which we have given to this Government during the war will stick to the Government indefinitely. That is merely an expression of opinion. Without saying whether they ought or ought not to have it, I say I do not think they are going to, as a matter of business judgment.

There is another aspect of this, which is really the same thing stated in another way. As I read through all the proposals in this White Paper, this thought struck my mind, that it would not be possible to put them through except by means of a Coalition Government. They involve so many compromises between different political philosophies that I believe the White Paper could only be made effective by a Coalition Government. What then? How are we to regard this? Is this a bid of the present Government to continue in office? Can we look at this as an election address?

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I rather thought so myself. I am glad I am able to mention these matters from the position of security of a Private Member who has no responsibility. [An HON. MEMBER: "Freedom of choice."] Exactly. Then my comment on that is that if this is an election address, I think one may surely forecast that, during the period of postwar readjustment, it is very probable that the people of the country will grant to the Government those powers of interference which are necessary. But the problem with which the Government will have to deal during that period of readjustment will not be unemployment; the danger is very much more likely to be over-employment—the difficulty of dealing with runaway price markets, of commodity and money markets—and during that period I believe that we shall still be prepared to put up with the controls and the rationing and the licensing and so on. But, at the end of that period, I do not think the country generally will allow the Government to retain those powers. In other words, when we reach the period, when we really want those powers for dealing with unemployment, I do not think the Government of the day will have them, for free citizens only grant such powers to their Government when they believe that the existence of the nation is at stake.

Turning to the methods of the Government's proposals, there are a good many aspects which one would like to discuss but there is one in particular which should be mentioned. The key note of the policy in practice, as I see it, is to be found in the central phrase on page 26, section 80: To-day, the conception of an expansionist economy and the broad principles governing its growth are widely accepted by men of affairs as well as by technical experts in all the great industrial countries. That confident phrase might have come straight out of a leading article in "The Times." It might almost have come from one of those thoughtful speeches on finance by my hon. Friend the Member for East Aberdeen (Mr. Boothby). I am not absolutely certain what it means, but I know what it connotes to my mind, and I have had that impression confirmed by what every hon. Member has said in speaking of it. It connotes to my mind the pressure of equal suffrage on taxation, a continually expanding National Debt, and a steadily if slowly depreciating currency. I may be wrong but I think that while, unquestionably, some such methods will be necessary as part of the general scheme of dealing with unemployment, one may be forgiven if one looks upon the acceptance of that phrase with a certain amount of misgiving. For what does it mean put another way round? What does it really amount to? It is stated in an affirmative, confident, positive way. But what it really means is that, under the pressure of suffrage on taxation, the horses of national debt have already begun to run away, and instead of pulling a long face about it, we have decided to look pleasant and say that that was what we had really meant them to do all the time.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Seaham

Surely it does not mean that. Is the hon. Member not stressing the point unduly? Surely it means that an attempt is to be made—whether it succeeds or not, or whether the appropriate machinery is organised—to meet unsatisfied demand? Surely that is the point.

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I do not think it is intended to say that, but that is what it represents to my mind—the acceptance under pressure of something which is unquestionably—after a long period of time —pointing to disaster. I think we are entering on a period when it will be politically impossible to oppose the idea of an expansionist policy. It must run its course, it must work itself out, and it is only when it has worked itself out that we shall realise to the full what are its defects. To-day I was talking with a very wise friend of mine on this very subject, and this was his comment. He said, "I wonder why it is that at this particular moment in history the idea should have become so prevalent that everything was done in the wrong way in the past, and that therefore it is to be done differently from now on." He said, "Is there not something crazy about that idea, is there not something almost conceited about the idea that only now, in this epoch of history, we find that everything done in the past was wrong and that we ought now to do it in a different way?"

Photo of Mr Alfred Edwards Mr Alfred Edwards , Middlesbrough East

Does the war mean nothing to the hon. Gentleman? Has it taught him nothing?

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

This central phrase is largely a business of making a virtue of necessity. There are various minor aspects of the plan which I should like to mention, in particular the social insurance contribution suggested in Appendix II. There is no question, now we are in the field of considering palliatives, that that suggestion is in the right direction. I agree, however, with others who have said that it is not on a scale large enough to be effective but, nevertheless, it is a step in the right direction. There is little doubt that the effects of unemployment have been far less severe in Great Britain than in other countries, largely on account of our system of social insurance. Anything that tends to even out swings is a move in the right direction. But a shortcoming of it is that it is a quantitative remedy for a maladjustment that is qualitative and local, rather than quantitative. To increase general spending power will be a palliative to the effects of unemployment, and not a prevention of its causes.

Another suggestion in the White Paper which I welcome is contained in Paragraph 73, where it is stated that the Government will continue study of the problem of building up stocks in times of plenty in order that they may be let out in times of scarcity. When I was speaking the other day in the Debate on Monetary Policy I put that suggestion forward, and I hope that it may receive consideration both in this country and in America. It may possibly be approached from a different angle, such as that which was in the mind of my hon. Friend who spoke just now with regard to the Wheat Conference. What are generally regarded as times of great prosperity are, in fact, almost invariably times of great shortages of commodities. High prices generally mean shortage, and what we need to do, stripping the whole problem of all its complications of money, is, when there is an abundance of things, to store them and let them out again when there is a shortage. I am reminded of Pharaoh's dream of the seven fat kine and seven lean kine, when he took advantage of the times of plenty, to store up for times when there was a shortage of goods. I hope very much that both in this country and in America these problems will receive consideration and may result in joint Governmental action.

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

We are living in a different age. Thousands of years have passed since the time when Pharaoh's lean kine came out of the river and swallowed up the fat kine. It did not make the lean kine any fatter. We are living in an age of superabundance, a time when we are able to meet all demands.

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I do not quite understand the relevance of what the hon. Member has said. While we are living in a different age, many of our problems are just the same. We are clouding and fogging our minds by the complications of modern industrial structure.

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

The lean kine were not fatter after they had swallowed the fat kine. The hon. Member cannot apply that analogy now, because we are living in an age of superabundance, an age of machinery which will enable us to produce everything we want.

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I still do not quite understand the relevance of what the hon. Member has said, but I shall be glad to discuss it afterwards in order to try to understand him better. There are two or three minor suggestions I would like to make, all in the realm of palliatives to unemployment, which I hope the Government may find opportunities to study. I hope very much that it may be possible to keep in existence after the war the main fabric of the national salvage organisation. Salvage is something which is not economic, but it is economical and at a time of general unemployment, when we have to pay people anyhow, they may just as well be employed on the many aspects of salvage, which serve to maintain the general fabric of our living, and helping the general structure of saving. Another suggestion which I hope will receive consideration, is that we may gradually get a larger proportion of industry paid on monthly, rather than weekly, wages. If wages are paid on a monthly basis, over a wider range, there would be infinitely greater balance in the swing between boom and depression.

Photo of Mr George Griffiths Mr George Griffiths , Hemsworth

It might be possible in Eastbourne, but we would not have it in Hemsworth.

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

I conclude by saying that I regard the White Paper, as a whole, as a most genuine attempt to solve a problem which appears to me, as it seems to appear to the hon. Member for West Fife, to be practically insoluble.

Photo of Mr Tom Driberg Mr Tom Driberg , Maldon

Arising out of the interesting passage in the hon. Gentleman's speech about control, does he not assume rather too readily that all controls and interferences, as he call them, are of one character? Are they not of three characters—those like Regulations 18B and 2D, which will go immediately the war ends; those which may last two or three years, such as food rationing; and those, like the location of industry and town and country planning, which should be permanent?

Photo of Mr Maurice Hely-Hutchinson Mr Maurice Hely-Hutchinson , Hastings

The hon. Member's Question is too long for me to attempt to answer it.

Ordered: That the Debate he now adjourned. — [Captain McEwen.]

Debate to be resumed To-morrow.