Just after the War, when people's minds were disturbed and there was considerable unrest and criticism of the Government of the day, the late Mr. Bonar Law expressed what he then thought would be not only a cure for all the ills but would bring prosperity to the country. He said that what the country wanted was a period of tranquillity. What he meant was that we should be saved somewhat from the difficulties and upheavals which characterised things at that moment. The Government in the King's Speech, to which we are now moving an Amendment, appears to assume that the right thing is tranquillity in any form. Having made certain promises, to which I will refer in a moment, they said in 1924 to the electors, "Unemployment is to us the only thing that matters. Unemployment to us is a question that brooks no delay; unemployment is the one dominant question facing the country. The existing Government have not only failed to deal with it; they have not only made a muck of things in general, but they have been so absorbed in their intrigues with Russia that we will produce a Red Letter which will squash them, and then you can return us and we will cure the greatest of all evils, unemployment."

I am paraphrasing the speeches of hon. Gentlemen oposite. My reason for shortening their statements is that the Prime Minister, I know, would blush if I dared to read out the additions and supplements that some of his colleagues made. For instance, I well remember that although there were all manner of charges made against the late Government, one particularly distinguished gentleman who sits on the Treasury Bench now, either in the excitement of being with the Primrose Dames or in a peroration, felt so sure, first, that he was coming back to a Cabinet position, that he said, "When we get to the archives of the various offices, I blush to think what we will find there." He left the Primrose Dames to imagine what would be found. At all events, the campaign had the remarkable effect of flooding the Benches on the Government side with minority Members and of putting the right hon. Gentleman the Prime Minister in the difficult position that he occupies to-day, quite temporarily, I believe.

I want to illustrate the difference between election promises and facts. I have never forgotten, and to me it is a sad reflection, the way in which my right hon. Friend, the present Leader of the Opposition, was not only abused and traduced and libelled, but I always felt that justice was not done even in this House. What I mean is this: When these promises and statements were made, the first being about unemployment, and when the second about our foreign policy and methods and especially our connection with Russia had done its worst and the election was over, what happened? How many Members of this House remember the first speech made by the Foreign Secretary in this House 1 The OFFICIAL REPORT can be referred to. The right hon. Gentleman's opening statement was something like this. "I have now had an opportunity of examining all the documents, of seeing all the papers and of reviewing all that took place and the Zinovieff letter, and in my first speech to this House and the country I feel it is my duty to say that, had I been in a similar position to the right hon. Gentleman the Leader of the Opposition, I would have done precisely the same as he did." [HON. MEMBEES: "Hear, hear!"] Hon. Members agree with that, apparently. Then what becomes of the false pretences by which many of them won their seats? How does that cheer square with some of the statements made before the General Election? The same governing principle that characterised that side of the question is equally applicable to the Government's industrial policy. What exactly were the words of the Prime Minister before the General Election?

sonal knowledge, as of that of the Minister of Labour, that there are many thousands to-day who, from the day they left school or from the day that they served their apprenticeship, often at great sacrifice on the part of their parents, have not done a day's work over a period of two, three and in some cases five years. Let the House come to grips with what that means. You cannot have young folk walking the streets day after day and week after week and year after year, at an age when the brain is very much like a sponge, able to pick up evil as well as good—you cannot have these young people walking the streets thus without permanent demoralisation of their characters.

We used to talk before the War of what were called the unemployed. In those days they were always associated with the sort of people who were at the street corners, who would go into the workhouse when it suited them and who did not want work. That was the pre-War description of the unemployed. More than once I have pointed out that when we are talking about the unemployable we should keep in mind the circumstances that make people unemployable. The decent and honest man who looks for a job day after day and week after week and month after month gets disheartened and distressed and "fed up" in seeing his home gradually going down, his children badly clothed and his wife hungry, in seeing the trinkets that adorn the walls going to the pawnshop. That is the kind of thing that makes a man unemployable. But in the case of hundreds of thousands of our young men and women to-day, I put it to the House that there is a bad outlook for the future in the demoralisation that is taking place at present. Therefore we have to face one of two things.

If tranquility means that it is nobody's business; that it is the duty of a Government to do nothing but to let private enterprise take its course, and allow the law of supply and demand to regulate things—then let the Government say so, and we shall be compelled to face it. On the other hand, I do not think the Government dare say so. But side by side with this great unemployment, side by side with this demoralisation and loss of character, something else was a stock argument in pre-War times and just after the War. I never believed in the policy of "ca'canny." I always took my stand in saying that the people who advised men to do as little as possible and get as much as possible for it, were advocating something which was not only false economically, but which would, in the end, be disastrous. In the case of my railwaymen I never hesitated to say that they had no right to demand maximum conditions and the best from their employers unless they were prepared to give the best in return, and that I would infinitely prefer a high standard of living for the people concurrently with high production. I think that is commonsense.

Members in all parts of the House will note that argument, but curiously enough to-day, side by side, not only with grave unemployment, not only with demoralisation, not only with low wages and underemployment, you have the fact that you cannot blame the workers for all this. You cannot say to them, "This is due to the 'ca'canny' principle; this is due to the fact that you are not giving your best." An examination of the figures of output shows some remarkable results. I am dealing with the period 1907 to 1924. That is a very fair test, and I think it will be accepted as not picking out a particular year but taking a broad general view of about 20 years. In the printing trade as shown in the Census of Production the output per man is 142 per cent.; in the engine and boiler trade, 133 per cent.; iron and steel, 100 per cent.; cotton, 101 per cent.; motors, 107 per cent.; tin plates, 134 per cent.; newspapers, 187 per cent.; silk, 364 per cent. If it is right and sound policy for an employer or a Government or a Labour leader to say to a man or woman, "In the general interests of the country, in your own interests and the interests of the development of civilisation the best method is to do a certain thing," then that man or woman is entitled to say, "Very well, if I take your advice, if it is sound, if you are right, there is one thing which you ought to prove to me—and that is that having delivered the goods, having given effect to your advice, and having gone even beyond what was expected from me, I should be at least in a position to ask if I as an individual will benefit, since the nation benefits as a result of my efforts and the community is better off."

Curiously enough, an examination of the wages and conditions of the workers shows that not only have they not benefited, but that they have suffered. When we talk of the existence of strong feelings and bitterness and ill-will and arguments against industrial peace, do let us try to visualise the situation outside this House. I always feel—and I felt it especially during the discussions on the Trade Disputes Act, how much better it would be if we could get hon. and right hon. Gentlemen on the other side of the House to understand the difficulties with which we have to contend. Just imagine the position to-day of a miners' leader who is genuinely anxious for industrial peace, who feels that we want to get away from turmoil and difficulty and strife and settle down, who feels that he has some influence with his men, that he has to persuade the men and that a large number of the men look up to him. There are many on this side in such a position. Imagine such a leader going to Durham or South Wales to-day and saying, "It is quite true that peace negotiations are taking place and that an effort is being made to create a better atmosphere, and we believe it will generally help the country." And he is met in Durham with the award issued yesterday. The men are equally sincere and equally anxious for peace—as is shown by the "Times" correspondent to-day. I quote the "Times" because I presume there would be a question of bias if I quoted from some other paper, and this correspondent expresses much better than I could what is the situation. He says, dealing with the gloomy outlook in the North-East: enables him to say to his own leader "Do not talk to us about peace, because there cannot be peace while such a state of affairs goes on." Here is another remarkable result and to show the effect all round of this policy I quote again the same correspondent in the "Times." He says:

Curiously enough, these things coincide with this remarkable position. Take the new Pensions Act. God knows, I hate to believe you have to make party capital out of these questions, because, after all, if you elevate people and bring some hope, happiness, and comfort into their homes, it does not really matter what Government does it. Therefore, I do not ally myself to any narrow sense in saying the Government are doing this or that. I am merely stating the broad facts. Does this House realise that even this 10s. grant coming out of the Treasury as a pension in thousands of cases, unless something is done, is going to be a curse instead of a blessing? I do not want to talk in a party sense or merely to get into a party argument, but I want to bring this home. Here we have men who have done 55 and in some cases 60 years' work, and surely we are entitled to say, under any state of society—call it what you like: Capitalist, Individualist, or Socialist—that an individual who does 55 or 60 years' hard work is at least entitled to some measure of comfort. But we have this anomaly, that men 70 years of age and some, to my knowledge, over 70 years of age, dare not retire because the 10s. pension is no good to them. Retirement in their case means starvation, and then, when they go to the guardians, the argument is used against them, and the 10s., instead of benefiting, is actually cursing them.

That is one side of the question. The other side of it is this: Side by side with the men of 70 anxious to finish their days in comfort and to have some ease and leisure in their retirement, you have men of 20 anxious to work, yet neither can be accommodated. There is something wrong in men of 70 being compelled to work and men of 20 being deprived of the opportunity of working. I think we have to tackle it quite boldly. We have to say, and to say definitely, that whatever the commitment is, we ought first to keep in mind that in the mining industry alone, and in some others that I could mention, this unemployment is not abnormal. I am one of those who take the view that instead of there being more miners employed, the tendency must be to have less. I do not quarrel with my mining friends on that at all, but I am convinced that you are face to face at this moment with the fact that there are at least 300,000 men whom, no matter what the circumstances of the coal industry may be, you are not going to put back into that industry. You have to face that fact boldly.

The Government are the only people responsible, and they have to say, "It is no good bringing children into a cul de sac employment, in which disaster is inevitable to them, and simultaneously keeping old men in who are bound to struggle on and, in the end, probably reduce the wages of those engaged to an even lower standard." Taking that broad view, I come to another significant fact, and it is that, side by side with this attack on wages, side by side with this awful unemployment, side by side with all this misery and poverty, it cannot be said that there is a lack of capital in this country. That is a remarkable thing. The "Economist" shows that there were 1,490 joint stock companies whose profits last year were increased over 50 per cent, above those of the period 1922, taking 1922 again so as not to fix upon a year immediately following the War. Side by side with a million and a quarter workers idle, side by side with practically every industrial worker in the country having a reduction in wages as well as underemployment, we find the "Economist" showing this extraordinary situation.

I will make only one brief reference to Lancashire. I have examined many of the balance-sheets, and I have gone personally into the figures of many of the mills, and if the President of the Board of Trade is going to reply, I do not think he will deny that an examination of the Lancashire cotton trade shows this: Taking a mill that was content with an average return of 5 per cent, in 1914, if the wages and hours of the cotton operatives could be based and shaped to a return of that kind, there is hardly a mill in Lancashire to-day which is not, in order to earn precisely the same return on the 1914 capital based at 5 per cent., compelled to earn 12½ to 15 per cent. Those in the House engaged in the cotton trade know that what I am saying is perfectly true. They know quite well that the whole capitalisation in the cotton trade is something from which the cotton operative is suffering very largely to-day. Still we hear the argument that there are certain trade booms. They say, "Look at silk stockings," and, incidentally, both in regard to motor cars and silk stockings the presumption is that the real cause of the boom is safeguarding. Let us examine both aspects, and let me take the silk trade first. The first of the artificial silk-producing companies, except Courtaulds, happens to be in my own constituency—Celanese. I remember a day even prior to the Prime Minister. I would not say what his views were about it, but I rather think he knew nothing about it when that million was put in. I remember someone, who has since been to gaol, booming it. I saw with amazement—because I have been in the thing myself, following what I thought was good advice to the Government— Celanese go to somewhere about 2s. 6d. I have since seen them go to £6 10s.— I want the House to observe how this will come back upon the workers—with four years' arrears on the preference shares which have never been paid. That has been followed by half-a-dozen other companies.

The point I am making is this: You cannot attribute the success even in the artificial silk industry to safeguarding. There has been a remarkable and phenomenal development of mass production, which has contributed very largely to the success, but, as far as the workers are concerned, it is no use going to the cotton operatives and saying, "Look what an advantage it is to you that artificial silk is booming," because correspondingly with that change you had the failure in the Lancashire cotton trade. Take the case of motor cars, which is the stock argument. The duty on imported motor cars is not 33 per cent.; it is 50 per cent., because it is not only 33 per cent. on the cars, but the charge is additional to the insurance and everything else, and it approximately amounts to 50 per cent. Nevertheless, American cars and others are coming into this country to-day. The point I am making is this: Is safeguarding the real explanation? Is it not true that you have had in silk the most phenomenal development from mass production? Just as the Ford car, with its mass production in America earlier, had such a phenomenal success, so has the Morris car here. Nothing has been said by those who attribute it all to the safeguarding as to the factors I am enumerating. That is the only case I am making, and, therefore, I would like to see some figures showing the development abroad, because, after all, we cannot live on our internal trade, and, in spite of all the speeches and arguments on the other side about trade and prosperity, while you have the fact that luxury trades are doing well, silk is doing well and motor cars are doing well—let it not be thought that I am using the argument that I do not want to see them do well; I want to see all do well—but coal, cotton, engineering, shipbuilding, wool—look at the horrible position of these, the staple trades of the country.

Therefore, I come back to the second point. The workers are not only suffering in the way I have indicated, but, curiously enough, the Government at last have indicated their view by one phrase in the Gracious Speech, and in a rather important speech by the Chancellor of the Exchequer. The Chancellor of the Exchequer has had more political experience than, I should think, anybody in the House, because he has had the advantage of knowing the inside tricks of every political party. [An HON. MEMBER: "The Labour party?"] There have been intelligent inquiries about ours. He is not quite sure of the date we are getting into office. Then we shall know more about it. At all events, the Chancellor of the Exchequer thought to himself, "I had better make it quite clear that, in spite of having robbed the Road Fund, in spite of having robbed the National Health Insurance, in spite of having got hold of every copper from every possible corner, I cannot see a chance of reducing the Income Tax, so I had better prepare them in advance." Then he made a remarkable speech, dropping a bombshell among those who wanted a reduction in Income Tax. The Government now are fully alive to something about which the Labour party have been talking all the time. We have continually, in this House and outside, and I repeat it today, said that when you are talking about the burden on industry, it is neither fair, equitable nor common-sense to compare a reduction of Income Tax with that of local rates. Income Tax, as we all know, is paid after profits are made. There are businesses to- day running at a loss; the heavy burden of taxation hits them first.

That is why we, as a party, have always asked the House to realise the injustice, even to the workers, because it not only affects them in their everyday work, by the handicap of their business with their competitor, but it applies to the workers' own home life. Go to any industrial constituency. Go to the poorest districts of London, where the rates are heaviest. There the workers have got to bear the burden. There is Harrogate with its 1s. 3d. in the £, and West Ham with its 9s. 3d. One could give other illustrations. I know certain coalowners who are the owners of pits and the increase in rates, which have got to be paid in order to keep some semblance of existence for the poor people in that district, render it impossible for those mines ever to be a paying proposition, all of which indicates that, after four years with an unprecedented majority, the Government have decided that it would be a good electioneering cry that they are going to do nothing now, but will promise it in the next King's Speech, on which they will go to the country.

I am sorry I was not here last night to hear another remedy propounded from that side of the House by the hon. Member for Mossley (Mr. Hopkinson), who, of course, contributed in his usual bright way to the Debate. He said that he spoke as a manufacturer, a business man, a coalowner, a coal factor, one who makes machines for coal mines, in fact as one to whom every phase of our national life is well known; and his view of the whole situation, he said, could be summed up in the sentence: every Saturday with their 45s., demoralising the rest of the community, and putting up the price of everything. I am sorry the hon. Member is not present, for I would say to him that, if he thinks that that is the real cause of the trouble, thank God the Railway Companies have more sense than he has, and do not intend to remedy it in the way that he would wish. Therefore, I say, in supporting this Amendment, that I would not like the House to believe that the views we hold are views merely held on one side alone. There are a number of boards of guardians in all parts of the country composed of all political parties, who are so alarmed, so distressed, that they are themselves protesting as we are protesting to-day.

I have a communication from the Derby Board of Guardians, and I conclude by saying this to the Prime Minister. He must be getting very tired; he cannot have the stress and turmoil of four years, as he has had, without feeling very jaded. I have a very strong personal regard for him, and I would say in his interests, and in the interests of the country, "Get rid of it at once; you cannot be feeling happy with the terrible state of affairs that I have pictured; you cannot be feeling happy with the incompetence that surrounds you, you cannot but feel that, after all, there ought to be some happy release." Speaking as a philanthropist, I give you a good chance. We believe that you have been in three years too long; we believe, as I said quite seriously, that you got in on a fluke. We hope that you will realise that, after all, this is a democratic country; and when Ministers go up and down the country pluming themselves on their majority, saying to the country, "Look what the by-elections prove, is not that sufficient evidence?" it is a serious matter. It is a very serious thing for Ministers to be happy with that state of affairs, when they were first returned as a minority Government with not very much more than one-third of the people voting for them, and when every by-election that has taken place has shown that that position has been emphasised. I hope, in the interests of the country, in the interests of the Government, and for the future of civilisation, that this Amendment will be carried, and that the Prime Minister will be relieved of a heavy burden.

12.0 n.

Everyone will have appreciated at its true value the charming and altruistic appeal that has been made by the right hon. Gentleman the Member for Derby (Mr. Thomas), but before he commits his party to such an appeal, ought he not to take counsel with those who sit with him on the Front Bench? I seem to remember that the right hon. Gentleman the Member fox Burnley (Mr. A. Henderson), who moved this Amendment yesterday, speaking in the country only a day or two ago, said1 that for the Government to give up at this time and to go to the country now would be a gross dereliction of duty and the act of traitors.

That was last week.

We are already accustomed to some small differences of opinion in the party opposite; we are not unaccustomed to changes of tactics, procedure and policy in that party, but I really have never known,, in respect of what I may call a major issue, quite such a quick change of front as that which has been exhibited by the right hon. Gentleman. I feel that, on reflection, he will be well advised to allow us to remain in office, at any rate, until such time as they will have settled who it is who will occupy the Prime Minister's place if we relinquish office. I come to the much more effective contribution which was made by the right hon. Gentleman in the major part of his speech. He delivered, as he always does, a very able speech, but it is always possible for any speaker, even one who has not all the ability, resource, and experience of the right hon. Gentleman, to draw a picture of difficulties—and we all know that there are very serious difficulties—which is most gloomy. It is more effective, however, for any speaker to give some constructive contribution as to how these difficulties are to be faced. The right hon. Gentleman said that this was not a question of Socialism against private enterprise, but is he not quite wrong? Is he not wrong according to the Mover of the Amendment; and certainly wrong according to every speech to which I listened yesterday. The whole gravamen of the charge which was launched by the Mover of this Amendment, and endorsed most eloquently by the hon. Member for Bow and Bromley (Mr. Lansbury) last night, was that the issue does lie between Socialism and private enterprise, and undoubtedly that is the fact. That is the great issue that is going to lie, and lies, before the country. It is the issue upon which we shall fight at the next election. It is the issue upon which you and we have got to justify to the electors our alternative policies. I agree that Socialism is the ark of your covenant, and I presume that the dinghy of what is left of the Liberal party will go wobbling along in the wake of your ark. [HON. MEMBERS: "It is sunk!"]

But may we come down a little more to the facts and the standards of comparison? The right hon. Gentleman said, by way of showing how badly we were doing as a Government and under our system, that the figure of unemployment to-day is 67,000 worse than it was when the House adjourned. The House will appreciate that we adjourned upon the eve of Christmas, and that just before Christmas, whatever Government be in office, there is always a great increase of employment, and that regularly after Christmas there is a considerable decrease in employment, and that this state of things gradually rights itself. [ Interruption. ] We all listened with great interest to the right hon. Gentleman, and I hope 1 may be allowed to deploy some arguments in reply. While he was speaking, T have had taken out for me the comparative figures in other years since 1920 and 1921. I have taken the figures for a late week in December—just before Christmas—and the last week in January. It is quite true that this year there are 69,000, I think—not 67,000—more people unemployed, or more registered unemployed, than there were on the 19th December last year. The year before the difference was 22,000, and the year before that it was 98,000. I just quote those figures in order to show how very fallacious may be an example taken from two periods which at the first blush may appear very suitable to the exponent's case.

I am sorry to interrupt, but the three years you have mentioned cover the period since this Government have been in office.

I was careful to say, "Whatever Government was in office," and if the right hon. Gentleman will carry back his inquiry he will find that exactly the same process takes place with great regularity every year. I am coming to the right hon. Gentleman's own contributions to employment in a moment.

The other example that was cited was furnished by the Leader of the Opposition himself. He said—I am paraphrasing his words—" I do not know why you are boasting that trade is rather better. You are no better off than you were in 1924"—that being a year which not unnaturally appealed to him. In the first place, that statement is not accurate. We are better off. I have said before, but it requires to be repeated, that the test of the number of people at work is not merely, or chiefly, the official percentage of unemployed; the real test is how many people are at work, not how many people are not at work, and if you take the actual numbers who are at work in the registered trades you find that in July, 1927—which is the month you can compare, because that is the month in which the total figures are always taken out— there were 488,000 more people at work last year than in July, 1924. We have, therefore, improved in the matter of employment.

How many people more were there at work than in the time of Alfred the Great?

That does not appear to me to be either a relevant or a pertinent observation.

The population has increased.

The whole argument of the party opposite has been that the population is increasing and yet unemployment is getting worse. I think I can say with confidence that, while there are very real difficulties in the way of placing in employment many who are older, I look forward to a much better opportunity for the younger people than the right hon. Gentleman does. I think he will agree with me in this. I say nothing again—it has been referred to by previous speakers—of the genuine effort which has been made by the Ministry of Labour to establish juvenile employment centres in all the most dis- tressed parts of the country. That is a big effort indeed. We find that in South Wales, in Northumberland, in Durham—I think I am right in saying this—a juvenile employment centre is within reach of practically every centre of employment. That is a large contribution. There is, too, a much better chance of placing the younger people in employment, because when we come to the War years we find a lower birth-rate and there will be a much better chance of absorbing in industry those who were born in those War years.

I return to my criticism of the Leader of the Opposition. Not only have we more people employed, but our trade is better—our export trade. I have never been unduly optimistic. The right hon. Gentleman will agree that I never talked nonsense about booms, but I have said that I see prospects of slow but steady improvement. Our export trade was better in 1927 than in 1924, and it was more particularly better in the last quarter, which is the best indication that one can have of the trend. The right hon. Gentleman talked about, boasted about, the financial stability of 1924. At that time the sterling exchange was at a discount of 10 per cent, compared with the dollar. To-day we see a parity, and sometimes a premium. He did not tell the House that the cost of living has fallen by something like 10 points between 1924 and 1927, which is a very real contribution when you come to take into account real wages.

It is a real contribution to the bond holders, who receive interest.

If prices fall by 10 points, surely that is a real help to everybody who goes into a shop to buy goods of any sort. It is perfectly obvious. So much for the comparison between 1924 and the present time. If things were comparatively steady in 1924 and finance was comparatively stable, why was it 1 It was not because Socialist views were being carried out. The reason was that the Government never attempted to put Socialist principles into practice. Therefore, to refer to the year 1924, when the Labour party were in office, as a justification for a policy of Socialism, is about the worst defence which could be put forward. The right hon. Gentleman the Member for Burnley stated that this Motion was a Vote of Censure of the gravest kind. I think I am entitled to refer to the more definite contribution to unemployment which was made by the Leader of the Opposition, not in the year 1924 but in the year 1926 when he was not in office. The contribution which he made at that period was the general strike. [An HON. MEMBER: "Lockout!"] Was it a general lock-out? I have never heard anybody before speak of the general strike as a general lockout.

We have to face the real issue on this Motion. I know there are many difficulties, but I would like to ask which of the two policies put forward are we to accept? The policy advocated by hon. Members opposite is nationalisation accompanied by large relief schemes, and there is no doubt that the more nationalisation you have the more relief you -will require. In competitive industry to-day the very qualities which are most necessary are those which you never can get under State enterprise. I have very often defended large combinations as being necessary for the effective development of commerce both from the point of view of production, salesmanship, and negotiations national and international. That is a subject upon which I have spoken many times. I think, however, that hon. Gentlemen opposite must really make up their minds which horse they are going to ride. I have steadily defended the combination of industry of an economic kind. I find that the policy of the hon. Member for Hillsborough (Mr. A. V. Alexander) and other hon. Members opposite is to pass legislation to make it absolutely impossible for any industry to combine. Of course, the hon. Member for Hillsborough puts this argument forward apart from the particular combination with which he is connected. For successful trading you need qualities which you cannot get under State enterprise. You want varied and accumulated experience, and you cannot get those qualities under State enterprise. You also want skilful buying, the willingness to take risks, and you also require unobstrusive buying. When a Government goes into a market to buy, everyone knows it is buying, and everyone puts up his prices to it. [An HON. MEMBER: "Now you have let the cat out of the bag!"] I have not let the cat out of the bag, because everybody in business tries to get the best possible price. In this country we have to buy our food and raw material largely outside our own country, and the whole experience of State buying shows that when you come to buy in a foreign market you buy under the maximum of publicity and at the greatest possible disadvantage. Under the machinery of State, every time you enter into competition in a foreign market, whether as buyer or seller, you go into that business as a Government, and you enter into competition with the nationals of two countries. This is a very different thing from competition between a Government and the nationals of another country.

We have done everything we can to get peace throughout the world and to remove difficulties between ourselves and other countries, but I cannot conceive of a more fruitful breeding ground for difficulties than adopting the policy of the Government of entering into competition with the nationals of every other country. There is one thing upon which I think we are all agreed, and it is that the last thing a Government or a Ministry, subject to all the criticisms of the House of Commons, should do is to undertake those risks which are the life-blood of business; if it did, it would be called upon to account for them in this House. If that be at all a correct account of the disadvantages of State enterprise in the competitive field, it means that you will be less successful, that you will have less employment, and that you will therefore require more relief and more maintenance. What does that mean? That means more taxation. Again, you must make up your minds where you stand about economy. It is no good coming and talking to us about economy when at the same time you are urging that heavier and heavier burdens should be put on industry and on individuals in order to find, a solatium for your own economic schemes. It means undoubtedly that taxation is going to be higher, and, if you study the increase of trade on a reduction of taxation, it is undoubtedly clear that taxation has a damaging effect upon industry. If we are to adopt this policy it means that the further you go into it the more relief you have to give and the heavier are rates and taxes going to be. There will be less money to invest, and, therefore, the less capable can your industries be to compete.

Against that, our policy has been to try to help the nation to remunerative trade. We do not believe that the State should take the place of the individual. It is perfectly certain that we shall only save ourselves and prosper in this country by our individual exertions. But there are certain things which, within its proper field, a Government can do. It can work for peace, as we have done. It can try by its policy to develop markets, and there is no greater field overseas than the development of our Empire markets. When you look at the trend of trade year by year, and see the way in which many foreign countries are trying to satisfy their own demands by their own production, and are doing that behind large and often increasing tariffs, and when you see that something like one-half of our manufactures are going to-day in Empire trade, surely the whole policy of the Government in the field of finance ought to be to give a preference within the Empire wherever it can do so consistently with its fiscal policy.

What contribution has been made in that direction by the party opposite? The right hon. Gentleman the Member for Derby must be to-day a convert to Preference, with all his experience; but what we have to count upon is not his sympathy, but the policy of his party. Where do they stand in regard to it to-day? Do they stand where the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) stood when he was Chancellor of the Exchequer? Presumably they do. He is going to be Chancellor of the Exchequer again— [HON. MEMBERS: "Hear, hear!"]—if ever they come in—[ Interruption. ] If there is no doubt about that, there is no doubt what the policy is going to be. The policy is going to be to abandon all the preferences which we have given. It was the right hon. Gentleman the Member for Colne Valley who refused to implement the preferences which had been, I will not say pledged, but which had been proposed at the Economic Conference, and he has laid it down that not only would he go out of his way to avoid a preference, but that a pre- ference is a bounty, and is a part of our policy which ought to be opposed to the utmost. What sort of contribution is that towards putting people into work, when the most hopeful market of all for us is the Empire market? How much are we to be helped in that market by a policy which makes Empire trade as difficult as it can?

Then we need to have a much greater share of the home market. [HON. MEMBERS: "Create one!"] You will not create a large home market by taxing people out of existence. There is a great deal of truth in the old Gladstonian theory, though I think the Liberal party have largely neglected it, that money fructifies better on the whole in the pocket of the taxpayer than it does in the pocket of a Government administration. I do not think it is sufficiently realised how large a part the home market plays in our economic life. You have the extraordinary spectacle that, in spite of an increase in Empire trade, the aggregate of our export trade has gone down by something like 20 per cent.; you have the spectacle that our imports have increased by something like 20 per cent.; and yet you find that many more people are in employment in this country. They are in employment in one way alone, and that is because there is a relatively much larger home market; we are satisfying our home demands more and more at home. But every effort, voluntary or legislative, which has been attempted by this Government, and which has been achieved by this Government, to give us a better share of our home market, is met with the unstinted hostility of hon. Gentlemen opposite. They boast that when they come in the Merchandise Marks Acts will go, that duties will go; and the only thing that is going to be put in their place is the Capital Levy and the Surtax. Applying the test of employment every one of those Measures has put people into work; every Measure which we have passed and which the party opposite has opposed has helped employment.

The duties that have been imposed have not only helped the industries concerned. No one is going to doubt that. The right hon. Gentleman said, "What about mass production in the motor in- dustry?" But why is there mass production in the motor industry? Because it has been given security in its market. If it has gone forward, it has gone forward because it has been given more security. And it is not only the industry itself that is helped. We were told that other industries would be injured, but exactly the opposite has taken place. A great industry like the motor industry, which calls for supplies of steel, glass, woodwork, leather, machine tools, of a hundred and one commodities, is not only helping employment for the people directly engaged in the industry, but it is helping employment for an army of people in the different industries which supply it. Take one other example, that of chemicals. We were told that you could not possibly establish a fine chemical industry in this country. We have established it with brilliant success. This fine chemical industry was not here before, and, if the right hon. Gentleman has the faintest experience of what happened in the War, he will know that we came very near to defeat because we had not a fine chemical industry ready to our hand. We are determined never to be put in that position again. To-day, not only is that industry here and of vital importance if ever we should have to go to war again, but it is even more important for our peace work. Chemistry enters into almost every industry to-day. All the latest developments that have taken place in the metallurgical industry, for instance, have taken place under the management of trained chemists. How can you train up your chemists unless you have a chemical industry? Therefore, the scientific development of which we hear so much has been more helped by the development of key industries than by anything else.

The Merchandise Marks Act, again, although it plainly adds to employment in this country—even the voluntary preference of buying our own goods, the products of our own people produced within our own Empire—is violently opposed by, at any rate, a large section of the party opposite. The broad issue is not whether there are difficulties, or whether there is unemployment. Of course, there are difficulties; of course, there is unemployment; everyone recognises that; but that is not the issue. The sole issue is, which policy is most likely to make employment better; which policy is likely to put you on the road to steadier, more stable and more prosperous conditions? I say, without fear or hesitation, that, whether we are challenged in the House or ultimately in the country by experience or by proof, we will stand on our policy as against yours.

I feel I ought to apologise to the right hon, Gentleman for the way I find myself following him in debate. He would seem to have for me a sort of unholy fascination; but it is not so. It is that I am always seized with intense sympathy for him. He labours so hard to make out a good case. A good man struggling with adversity will always secure at least the sympathy of the House, and surely he has never had a worse case than he has at present. Under normal circumstances a Government faced with an Amendment such as this has two simple arguments to bring forward. If trade is improving they say, "We have done it. We are responsible for the reduction in the number of unemployed and the improvement in the returns." If, on the other hand, trade is getting worse, the Government can always say, "Well, it is notorious that questions of good or bad trade do not depend on, and cannot be affected by Governments. These are matters of international cause. Some spots come in." At present the unfortunate Government is not quite certain whether trade is going to get better or get worse and they cannot use either of these normal arguments. We had yesterday the Minister of Health coming down on the side that really unemployment was a matter outside the effective control of the Government. We have to-day the President of the Board of Trade quite confident that, given a free hand by his colleagues, he could do the trick. It is true at one time I saw signs of hesitation about him. He allowed the House to see he felt, perhaps, that the best cure for unemployment was a reduction in the birth rate. Gradually it is working itself out. In fact the right hon. Gentleman builds his hopes upon Marie Stopes. That is fully in accord with all I know of his political economy.

I have always advocated increased output.

That is one of the inconsistencies one so frequently meets with in Ministers. They will do one thing one day and another the next. But economics are stubborn things and I should like to ask the right hon. Gentleman this one question. Generally speaking, is that country most prosperous which has the smallest population or the largest?

I do not know whether the right hon. Gentleman is serious or not, but he really must not attribute to me any nonsensical ideas about the desirability of limiting the birth rate. I was dealing with a specific point raised by the right hon. Gentleman the Member for Derby (Mr. Thomas), who was discussing the possibility of placing in employment the young people who were born during the War. I said, as a pure statement of fact, that during the War years the birth rate was comparatively low and therefore those who were born in the War years were now coming to an employable age and there would be considerably less difficulty in finding employment for them than is often supposed.

I am glad to hear that the right hon. Gentleman does not think a reduction in population indicates an increase of prosperity, because I feel certain that is one of the fallacies which are having a very considerable effect upon the Conservative party. The desire to exclude aliens coming into a country is all part of the same fallacy. But the point which, it seems to me, ought to be made to-day is that these monthly Debates on unemployment ought to be directed towards what can be done to reduce that unemployment. It is not any service to this House to have elaborate statistics of employment, either in the time of Alfred or in 1922 or 1927, or in the month of December or the month of March. The Board of Trade can always produce sheafs of statistics. By selecting years and months I will undertake to prove that trade is going anywhere you like. What we have to see is how can the Government make things worse, and how can they make them better? First of all, what is it we want to make trade better and unemployment less. The only thing we are dealing with is compulsory unemployment. I do not mind how many people are voluntarily unemployed, but I object to your going on keeping people compulsorily unemployed, and I want to see how you can stop that. The Government, to my mind, during these last few years have done several things to make more people compulsorily unemployed. The restoration of the gold standard at dollar parity was one. Every business man recognises nowadays that the restoration of the gold standard, the raising of the value of the pound sterling from 19s. to 20s., done by the Chancellor of the Exchequer in 1925 in a fit of egotism because he wanted his name to go down to posterity as the restorer of the gold standard without reflecting on its effects was premature. Take the next illustration—I think the right hon. Gentleman was responsible for that as much as the Chancellor of the Exchequer—the embargo on foreign loans, which went on for nine months, preventing any money being lent abroad from this country, thus hitting our export trade. After all, our loans go abroad as goods. Again the Government were responsible.

Or take the strange method of financing widows' and orphans' pensions. The money had to be found somehow and the Government took great credit to themselves for making it a contributory scheme. I will not bother the House with the question of the contributions of the workers. If you are going to have a pension scheme a contribution from the workers is a very good idea provided the worker's wage is measured by the value of the work he does and not by what it costs him to live. What the Government did was to take taxes, compulsory contributions, from the employers, whether they were making any profits or not. That means that all the people with fixed incomes, all business people, bankers, merchants, insurance companies, people like us with a nice, solid, fixed income, escape taxation; and the employers, the producing industries, and particularly the iron and coal industry, pay instead. The charge, of course, does not appear in our annual Budget, but it is a tax all the same. Just at a time when those trades were in the very worst position, this enormous new tax, which should have been met by those best able to bear it in the community, was instead imposed on those least able to bear it. There you have three things—the dollar parity, the embargo on foreign loans, and the imposition of the cost of pensions upon the factories in this country employing the most labour. You have, therefore, three steps which no economist can possibly deny have had the effect of injuring our foreign trade and throwing more people out of work. I can assure the right hon. Gentleman that the country hears a great deal about those things on the platform although he may never have perceived the mistakes made by his own Government.

The question is whether the right hon. Gentleman has discovered the method to put things right? I pass over his momentary illustration of the advantages of a reduction in the number of children and come to his main cure for the disease, because, after all, he, like the Minister of Health yesterday, has at the back of his mind the idea that there is a way out. He calls it "watching the trend of trade." He watches the trend of trade, and he says to himself "the one way in which this trend can be in the right direction is for business in this country to be united together in great combinations." The right hon. Gentleman the Member for Carmarthen (Sir A. Mond) is his Pooh-Bah. There he sees the quintessence of wisdom and the hope of the future for foreign trade in this country. I wish that I could be quite as hopeful as the right hon. Gentleman. We have seen some of these trusts in operation. I feel certain that the right hon. Baronet the Member for Carmarthen is always filled with public spirit and that his connections with the Combines are in the interests of the public. I am not quite so certain about some of the others. The Tract Trust in the Metropolis does not fill me with unalloyed enthusiasm. I feel certain that even the right hon. Gentleman as he comes to know these Trusts better—after all, he had very good experience in one in the engineering trade himself—?will realise that they are inspired first and foremost, not so much by public spirit as a desire to create a cinch as they say in America. Directly you can acquire a monopoly and prevent any competition the consumer submits with a lamblike simplicity and recognises the hand of fate.

What is the alternative? Statesmen on those benches, seeing the trend of trade is in the direction of greater combina- tions, might recognise that the only logical end of that trend would be to the biggest combination of all—to the public trust instead of to the private trust. I am sure that the President of the Board of Trade would conduct any of those big international concerns just as well if he were a public servant as if he were a private servant. I do not hesitate to say that, whether his salary was £2,000 or £10,000 a year, his work would be precisely and identically the same. I think he would have as efficient a staff under him in either case as well. Whether it was paid by public money or whether it was paid for by the Trust, I am confident of this, that he would run that business all the better for being subjected day by day in this House to a little criticism; that he would run it all the better when he knew, not merely at the bottom of his soul but by constant contact with his fellows, that it was his duty to run that Trust in the interests of the whole community and not in the interests of a small number of directors and shareholders. That is all the difference there is. His buying abroad, whether it was buying for Imperial Chemicals or whether it was buying for the British Government, would be carried on in precisely the same way.

It is true that I do not think the present Government have very great business capacity. I do not think that the right hon. Gentleman, with all his admirable qualities, would conduct that business quite as well as my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander). I think the experience of the hon. Member for Hillsborough is more valuable even than the right hon. Gentleman's experience with the Metropolitan Amalgamated. I cannot help thinking that that ability, working for a low salary, which has shown itself in in the conduct of our co-operative movement in this country, applied in the interests of the community as a whole would be just as efficiently applied. A great deal of nonsense is talked about the inefficiency and corruption involved in public management. It is the normal commonplace of hon. Members opposite who have got half way, who believe that the great trust is the best means of preventing our trade going to pieces, but who cannot face the necessarily logical conclusion of Socialism; public control instead of trust control. I do not intend to discuss that. Many of my colleagues who are more enamoured of collective management than I am will no doubt be able to make that case. What I would point out to the right hon. Gentleman is that his partner in crime—his colleague who spoke yesterday, the Minister of Health—is not trending on precisely the same lines, fortunately, as he is.

The Minister of Health has also ideas up his sleeve. It is referred to in the King's Speech. I do not notice in the King's Speech any great safeguarding proposal, on iron and steel for instance. But I do notice in the King's Speech a reference to the desirability of relieving the burdens of rates upon industry. My right hon. Friend the Member for Derby (Mr. Thomas) has perhaps read that in a different way from what I have done. He evidently read it that there was to be an equalisation of rates between, heavily rated areas and lowly rated areas. That may be so; I do not know. I hope that it is not so. What I hope it means is the consideration of the incidence of local rates upon the people at present paying the rates in the various localities. I want to see the burden which these rates place upon industry reduced and improvements no longer penalised. Rates are an overhead charge on industry. Every penny-piece paid in rates on improvements adds to the overhead charges, adds to the cost of production of the article, and forces up the price to the consumer. Therefore, if we can reduce that burden, it will enable us to compete on better terms in neutral markets and to supply the home market on cheaper terms. We on these benches have advocated year after year a very simple method of doing that. I hope that the right hon. Gentleman is supporting his colleague on this matter and is going to urge him to do all that is possible to change the basis on which rates are levied at present.

It is little short of scandalous that when a pit closes down the owner of the pit pays no rates, although he may be throwing 300 men out of employment. Directly the pit opens, the assessment committee say to him, "You villain! you are allowing 300 men to work again. We will make you pay for it." That does not assist industry or tend to develop trade. I hope that in future the Government will collect a little less from the industries of this country and invite to join the army of ratepayers, those blessed individuals who, at the present time, own the land round the towns, who are contributing not one penny piece to the rates of the town, who are receiving all the benefits from the ratepayers' money, who are deriving benefit from money spent on making beautiful parks, good roads, playgrounds, etc., and are yet contributing nothing, because their land is not permitted to be used by men anxious to use it. It seems to me that the right hon. Gentleman's' colleague the Minister of Health is smelling out the best way to deal with this matter. Just as his colleague was the first to discover that it was wise to take the rates off machinery, he may discover that it is wise to take the rates off all those improvements that are being used to-day for the building up of our trade, and the construction of the things that we want—that such taxation can be removed from the men who work and fall instead upon those who own the land values of this country.

A curious vein of pessimism has run through our Debates during the last few days for which I do not think there is real justification. What is the exact position in which we find ourselves in this country to-day? With four notable, and I admit substantial, exceptions, we are passing now through a period of marked and steadily increasing prosperity. Our light and highly technical industries are not only doing well, but expanding rapidly. We are heavily invested abroad, and those investments bring in a substantial income, because interest rates are high, and a large part of that income is being spent at home, not only through taxation, but in the high charges of our sheltered industries. That is a good thing for the general welfare of the country. Our invisible exports are enormous, and I think the President of the Board of Trade underestimated our trade balance in his speech the other day. They are to be found chiefly in our banking, insurance and shipping services, and they are responsible, in addition to our visible exports, for supplying us with a really considerable favourable balance of trade. In view of what happened in 1926, that is a most remarkable performance. There has also been in the last five years a wider spread in the distribution of wealth. There have never been so many people in this country as there are to-day who enjoy what can be called a reasonable standard of living. And I should also say that there were never so many men and women in employment in this country as at the present time.

1.0 p.m.

Despite the position, therefore, in the basic industries, and what happened in 1926, we are maintaining a favourable trade balance, and one most astonishing thing is the way in which our tax returns are also maintained, both is regards direct and indirect taxation. This indicates our fundamental economic strength and virility as a nation, and gives us good reason for a qualified optimism, qualified in view of the position of the four basic industries of agriculture, coal, iron and steel, and cotton. If we could get back some measure of prosperity to those four basic industries, I think we should be able to say that we were more or less "home" from the economic point of view.

The Labour party have put forward two methods of solving the problem of these four industries, because the problem of these four industries is really the only one that matters to-day—Socialism and the Surtax. I do not propose to argue either of these two propositions, because the President of the Board of Trade has made a complete and final argument against Socialism, and there is not much more to be said on the subject. I was talking in Germany the other day with some of their leading industrialists, and one said quite naturally and simply, "We are maintaining a moderate level of wages in our coal syndicates, but there is one owned by the State, and therefore it is much more difficult to pay as high a rate of wages in it as in the others. We hope to bring it up to the general level, and in time we may be able to get it away from the State altogether, and then there will be no difficulty in maintaining wages at a reasonable level." In numberless cases in Germany, in the smaller States, and in the Reich as a whole, they have tried Socialism, and in other parts of the world, for instance, in Australia, it has been tried, but the machinery has always broken down; the thing will not work; it has been abandoned, and I think abandoned never so whole-heartedly as by those who have enjoyed a complete Socialist majority in the respective States where it has been put into operation.

The Liberal party, who are present in such force to-day, have also recently put forward a solution, or rather a series of solutions for the economic problems which confront us. I have been spending the last two or three days reading the industrial report which they have issued, irreverently called "Jaundice," and as I read it, it appeared to me increasingly familiar. It takes a long time to read, and I have not got through it altogether. It seemed to contain a lot of sound sense, but as I read about trustification tendencies, the necessity for statistical information and an economic general staff, the incidence of taxation and the pressure of rates upon industries, the necessity for currency stability, the desirability of statutory trade boards, and the development of works councils and co-partnership schemes, I was reminded more and more forcibly of a little volume which was published recently, entitled "Industry and the State." I am perfectly certain that if this "jaundice" and this plagiarism continues to the end, an action on the part of the authors of that little volume may lie in the Courts, if they care to take it up. But I think that, on the whole, the authors of "Industry and the State" should be pleased that their humble efforts should have so inspired the Executive Committee, the Secretary, the Assistant Secretary, the Economic Adviser, the Statistician, and the 25 experts of the Liberal party appointed by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) some time ago to consider our economic position. These eminent gentlemen inevitably command a wider public than four young and inexperienced Members of this House, and, if they use their influence and experience for the wholesale propagation of the opinions and ideas of four of the least distinguished of their political opponents, I do not see why they should be discouraged from doing so.

I should like to say a few words about the agricultural industry, because I believe that industry could give more direct employment to the people of our country than any of the other industries which are undergoing so much depres- sion at the present time. I have always maintained, and I still think, that the two main causes for the depression in agriculture have been the steadily falling price level, and the high cost of production, an almost intolerable combination. The same reasons can be applied to the other basic industries which have been undergoing so much depression. That price instability has been primarily due to monetary instability cannot be denied, and would not be denied by anybody, but if you accept this view, there is no cause for undue pessimism at the present time. Similar phenomena have occurred in the history of British agriculture and British heavy industries in the past; and there is every reason to suppose that we have passed through the worst period of depression already.

As regards the question of price stability I believe we are nearer a stabilised international currency at the present moment than we have ever been in the economic history of the world. Every nation is realising the vital necessity of having a stable measuring-rod for the conduct of international credit. Every important nation has now gone back to the gold standard, with the exception of France, and there is every reason to believe that France will do so before very long. Then you will get in practice a stabilised international currency, flexible in action, but based on gold. At the present moment the Bank of England and the Federal Reserve Board are in a position to maintain world prices at a comparatively stable level. They are doing so to an increasing extent, and when France comes in you will get a real combination between the central banks in each country, real co-operation, and we may see a lengthy period with the general international price level stabilised in a way that the world has never known before, with very beneficial results upon trade generally. I noticed that an hon. Member opposite drew attention to some recent remarks of Mr. McKenna with regard to the danger of the Federal Reserve Board operating in a manner adverse to our interests. In my opinion there is no justification for any apprehensions in regard to that. In the first place, if the Federal Reserve Board took action which seriously jeopardised our price level, the Bank of England could always counter such action by moving the discount rate. But there is no reason to suppose that the Federal. Reserve Board would ever take such stupid and silly action. The main objective is to have a stabilised international price level. It is to the advantage of the United States of America. It is to the advantage of ourselves; it is to the advantage of France and Germany; and there is not the slightest reason to suppose that the central banks of the leading countries of the world will not agree in the future to do their best, acting in co-operation, to maintain both currency and prices at as steady a level as possible. Practically we have achieved it now, and I think we shall see it increasingly maintained in the future.

There are signs to-day, as the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has said, so far as the great basic industries in the country are concerned, of a movement away from unrestricted competition, with all the waste and dispersal of energy which that involves, towards combination, co-ordination, and economy of effort. When the demand for the product of an industry is increasing far more rapidly than the supply, there is everything to be said for the policy of laissez-faire. Take the great industries of coal and cotton during the last century. The coal figures are amazing. In 1800 we were producing and selling 10,000,000 tons; in 1860, 100,,000,000 tons; in 189V, 200,000,000 and in 1913, 287,000,000 tons. When you have such a demand for coal, you can afford to go ahead as hard as you can, and pay little attention to anything except the actual production of coal. Now we are faced, perhaps not with a declining market, but at any rate with a more or less stationary market.

The same thing applies to cotton, and iron and steel; and you have, of course, to apply different principles altogether, as my right hon. Friend the President of the Board of Trade has pointed out. I have just returned from Germany, where I had the advantage of studying some of their methods of industrial organisation, and no one can fail to be impressed by the progress they have made. I would point out to hon. Members opposite that I never found a more unanimous hostility to any form of State ownership or Socialism from all classes of industrialists than I did in Germany. They have tried it there, and it simply would not work. But they have adopted a different set of principles for running their basic industries, coal and steel and iron to those which are in operation in this country. The basic principles of this policy, which were originally adumbrated by Mr. Walter Rathenau, are the scientific concentration of all firms within one industry for the execution of common functions by means of a central independent executive. There is no question of State control, it is simply a scientific combination of these firms within one industry; but they have created1 in the coal industry and in certain other industries—I think the President of the Board of Trade might well consider this point—statutory central advisory industrial councils, representing both masters and men, to take decisions on certain matters of vital importance to the industry concerned. This point was mentioned yesterday, and it is a matter which is well worth our attention.

What is the main objective of this German industrial reorganisation? What are they trying to get? Their chief object is two-fold. They want stabilised production and stabilised prices. I should like to dilate at some length upon the industrial reorganisation in Germany, which covers 12 or 14 industries; but the only industries with which we are really concerned at the present moment are the coal industry, and the iron and steel industry. For the iron and steel industry they have formed one trust which in effect covers the whole country. For the coal industry they have four different syndicates, but there is a central council at the head of these four syndicates, and one man can come forward and say that he is able to speak for the whole of the coal industry. That is a coal organisation which we shall have to aim at in this country. The methods they have adopted have been the centralisation of the administrative financial, and technical machinery in the various districts. In the Ruhr, for instance, there is one centralised executive for the steel industry and the coal industry; and similarly in Silesia and Southern Germany. They have concentrated on the production of modern units, and have ruthlessly scrapped all units which are uneconomic. Finally, they have adopted the principle of a single agency for buying and selling. But in, order to do this, they have had over 12,000 bankruptcies; and we have to remember that in some of these depressed industries we shall have to go through a similar, although less stern, process before we can get real reorganisation. The bulk of these 12,000 bankruptcies occurred in one year, 1923–24. Yet despite this wholesale elimination, the reorganisation which followed actually increased production. In pig-iron in 1923 they produced only 4,900,000 tons. But in 1924 after a large number of firms had been scrapped, and the industry had been reorganised, they produced 7,812,000. The same applies to steel, the figures of which are, for ingots, 6,000,000 tons and 9,000,000 tons, and in the case of finished steel, 5,000,000 tons and 8,000,000 tons. This was entirely the result of reorganisation, and despite the fact that many firms were put out of action altogether. Let me quote from the Report on economic and financial conditions in Germany issued some time ago by the Department of Overseas Trade: that the Germans are now preparing a retaliatory campaign, in which they are going to supply coal at a rather high price to their steel manufacturers in return for a very strong protective duty, so that they will then be able to subsidise their coal exports, and export coal to the European markets at a price far below the cost of production, and far below what is economically justified. It is the only way they can retaliate. So you go on with lower and lower prices, and not making any sort of profits.

It is a most senseless business. It has nothing to do with Socialism or State ownership, but is a very stupid policy on the part of our coalowners. For between them this country and Germany could control practically the whole of the coal markets of the world, outside the United States. At the moment both industries are running at a loss. And that brings me to another point. I believe in Protection. I have often got up and talked about the value of safeguarding industries and protecting not only the industry itself in this way, but the standard of wages and the standard of life generally, and hours and everything else. At the moment there is no conceivable doubt that the policy that we are pursuing with regard to coal is going to force the Germans to lengthen their hours and to lower wages in the coalmines. We are doing the very thing in this industry that we justifiably resent other countries doing. It is a wrong and stupid policy to carry out from everyone's point of view.

International agreements in finance and in many classes of industry have not only been carried out, but are approved and are regarded as essential in all quarters. I see no reason why they should not be carried out in industry as well. Such a move is becoming more and more necessary. I would say this to the President of the Board of Trade: The German coalowners, and the iron and steel industrialists also, are not only willing but most anxious to come to an agreement with this country with regard to markets and prices. They regard iron and steel as less important than coal; but they are very anxious—the Federation of German Industries, German bankers, and others —to come to an early agreement with our coal industry. They say it would be a generous agreement on their part. That would be a matter of negotiation. When I asked them why they did not make proposals they replied, "To whom are we to make proposals? If we want to talk to your coalowners we have to speak to over a thousand people, many of whom are not on speaking terms with each other. We cannot possibly come to any sort of agreement with your industry unless we are able to talk to someone who is authorised to speak at any rate for a substantial portion of the industry, and as things are now that is quite impossible."

Therefore, an essential preliminary to an international agreement, which they believe would lay the foundation of another period of economic prosperity for the whole of Europe, is a reorganisation and a trustification of the coal industry in this country. How are we to carry it out? It is very difficult to ask anyone to declare himself inefficient and unable to go on, and to get him to say that in the interests of the country and of national and European prosperity he proposes to go bankrupt, to close his pits and to clear out. Some sort of pressure has to be brought to bear on inefficient units in any industry to carry out trustification. That pressure was supplied in Germany by the currency inflation. We have not had to do that, largely owing to the wise and cautious policy of the Chancellor of the Exchequer; we have not had to go through any such violent financial upheaval. Therefore, the pressure has not been applied. Yet I think pressure will have to come from somewhere, in order to get the coal industry reorganised.

I would speak and vote against any suggestion that the State should take over the coal industry, because that would put the finishing touch on any hope of successful reorganisation. The Germans would not wish to come to an arrangement with a nationalised industry. Nationalisation would be reorganising the industry in a completely wrong way, and I think it would "put the lid on" the industry. At the same time, I do think that some sort of pressure will have to be put on the coalowners to reorganise. The Government, as a last resort, might conceivably do it. The German Government did it in Germany. And they do it now. When a big amalgamation is carried out and two or three small firms hold out against it, an ad hoc Act is passed, which simply states that as from such and such a date these firms are in fact members of the trust. And in they go. I would be prepared, as a last resource, to urge that the President of the Board of Trade should carry through such a Measure. But I think that would not be the best way; and that a far better way would be through the banks.

The leading bankers of this country, speaking at the annual meetings of their shareholders recently, said that they conceived it was no part of their duty to take an active part in the organisation of industry in the country. Such a conception of their duty is not held by Continental bankers. I think that the bankers of this country might well adopt a more forward attitude with regard to industrial reorganisation. If we could get the banks to insist on efficiency as a conditon of financial accommodation, and compel the amalgamation of uneconomic and mutually competitive units, we should get a drive further forward. I do not care how it is done, but I am certain that if the President of the Board of Trade were merely to suggest in any speech that the banks might bring more pressure to bear on uneconomic firms which are holding up the development of whole industries and compel the amalgamation and rationalisation of efficient units, the change could be quite easily carried out without any fundamental alteration in our economic system.

What is the alternative to this policy? The alternative seems to be a sort of ghastly combination of dumping and tariffs on all sides. I am certain that if we go on pouring coal into Germany at uneconomic prices, they will try to retaliate in other industries. Then the demand for Protection in this country would become irresistible, and I should support it. But if you could get agreements without tariffs, it would be far better. I believe in Protection, both economic and political, against unfair attack from any quarter. But I also believe that treaties of arbitration and agreement are better than armaments, if you can get them.

I am certain, as a result of my visit to Germany, that an economic Locarno is possible in Europe to-day; and for this industry, which is so hard hit, it is more desirable than anything else. If we could get an agreement as regards coal, and it worked well, we might well achieve a similar agreement for iron and steel at a later date. Such an agreement would ensure a certain standard of living to the miners in both countries, a more or less estimable demand, and a more or less fixed price. If we can get that—and I believe we can get it by a reorganisation of the type which the President of the Board of Trade has approved this morning—then I believe we shall see in this country and in Europe and, therefore, in the world as a whole, a period of unparalleled economic prosperity and development in the course of this century.

If the speech to which we have just listened had come from these benches I feel sure the President of the Board of Trade would have been preparing to make a savage attack upon the speaker, in reply. The hon. Member for Aberdeen and Kincardine East (Mr. Boothby) who has just spoken has been very careful to disown any suggestion of a leaning towards Socialism; though, once or twice, he showed his hostility towards that economic theory, but almost the whole of his speech went to show the hopelessness of private enterprise. His observations indicate that the simplest solution of all these great problems is that such pressure should be brought to bear by the Governments of the nations involved as would compel unification—or rationalisation, as he puts it—in industry, by putting down unnecessary competition and replacing inefficient units. The hon. Member's speech, which is based, no doubt, upon a great deal of travel and close contact with those who- are in charge of big industries, may be summed up in two words. If his policy were applied it would be "Socialism, Limited." It would be Socialism in so far as organisation is concerned, but it would be limited at the point where the profits were made available for distribution.

The hon. Member wants national organisation for certain purposes. He wants a national organisation as distinct from 3,000 or 4,000 different units, and then he wants to follow the Socialist lead and to develop international organisation, and he suggests that this is the only solution of our present problem. I rather like the hon. Member's suggestions, but I lament the fact that he is so weak in his conclusion. The thing for which he pleads he makes impossible by supporting a party which is hostile to his own proposal. He said that it was utterly futile to extend the working hours of mine workers in this country. He referred to unnecessary cutthroat competition and to the giving away of the value of the work of one million people, and showed the reactions of that policy—how it caused the other country concerned to take steps which automatically cancelled out the effect of the extended working hours in this country. But the hon. Member voted for the Eight Hours Act. He supported the extension of the working hours of mineworkers. He was one of the Members who went into the Lobby, not to bring pressure to bear on the mineowners to establish pools, to unify, to rationalise their industry, but to permit them, as a result of that Act, to carry on this miserable internal competition which has brought the mining industry to the present impasse. I suggest to him that when he goes out seeking further information he should attempt not only to collect vital statistics concerning national basic industries, but also to gain a little courage on his way, so that when he reaches this House he will have the tenacity to give effect to the conclusions which he must inevitably reach.

The President of the Board of Trade to-day has made one of his usual speeches. He opened by suggesting that the Opposition always fail to put forth constructive contributions. I listened very carefully to the right hon. Gentleman's speech in so far as it outlined the Government's policy and programme. He told us what the Government had done during the past three years or more and, briefly, the Government's contribution towards the solution of the unemployment problem as explained by the right hon. Gentleman consists of four things. They supported Imperial Preference, they supported the Safeguarding of Industries, they passed the Merchandise Marks Act and they were responsible for assisting certain employers to extend the hours of the workpeople and to lower wages. These were the constructive proposals carried out by the Government, according to the right hon. Gentleman. Whatever we may say or think, the final test of our theories is to be found in the results of their application. We can afford to take the right hon. Gentleman's statement as indicating a final test in determining whether or not this Government has fulfilled its function as a Government during the past three or four years. Whatever Acts they have passed, whatever policies they have supported and carried out, we find ourselves to-day, notwithstanding the optimism of the last speaker, with nearly 1,200,000 unemployed. That is after three years of Tory Government which has been preceded by many years of Tory and Liberal administration. We are informed that agriculture was never so badly depressed, that the mining industry is well-nigh on its last legs, that the cotton industry is in a hopeless position—unless and until the workers agree to longer hours and lower wages—and that engineering and shipbuilding and several other industries are in a similar position. Those are the facts, and the final test of the Tory party's administration is that it has left us with such a legacy. Is it too much to ask that, the Government's policy having so lamentably failed, some other policy should be attempted in this country? The last speaker indicated the line which each nation has to travel, but instead of falling at the last fence he ought to have faced the inevitable deduction, that the Government of a nation must in the last analysis make itself responsible for an economic organisation which will not only maintain Super-tax and Income Tax returns, but will provide the millions of working men and women with that standard of life to which twentieth century organisation entitles them.

The Government have failed even to touch the fringe of the great human problem of unemployment, with all their temporary expedients. They have failed to establish prosperity where it is most needed if a nation is going to advance and that is among the millions of people who do the nation's work. The Government have a special responsibility towards the industry with which I am connected. Reverting to yesterday's Debate, I observe that the Minister of Health, referring particularly to the mining industry, made, what is to me, a very curious statement. No less curious, I thought this morning, was the failure of the President of the Board of Trade to make one single statement about the mining industry. Yesterday the Minister of Health, who for once in a way had got completely out of his depth, trespassed upon the mining industry and commenced to argue that, because the hours of labour and the individual output per man had been increased and more coal had been sold, the miners were better off. Again I want to apply the final test of the President of the Board of Trade, and that shows that we have 100,000 miners more unemployed to-day with an eight hours day than we had before that Act was passed in 1926. That is the final test, whatever the Minister of Health may argue about the possibility of having lost some of our trade and so forth. The Minister of Health went on to say:

I want to suggest to the Parliamentary Secretary to the Board of Trade, whom I congratulate upon his recent appointment, that he should pay particular attention to this, that we noticed very particularly the failure of the President of the Board of Trade to make any reference to the mining industry. I recall a speech which he made in December in this House, when he used the same argument, with more information available, as the Minister of Health used yesterday with less information, and he failed to carry on the argument successfully. The President of the Board of Trade argued in December that our export trade was increasing because individual output had increased and more people had been employed than would otherwise have been the case. He was more careful this morning. He knows that that same argument does not exist. He knows that notwithstanding the fact that British coal has been given away to Continental customers by millions of tons, we have not improved our export trade in 1927 as compared with 1926. I know the Parliamentary Secretary is a general ferret for hunting up figures from various publications, and perhaps he will be interested to listen to some that I have to give to him. If he replies, I hope he will tell us what he thinks in 1928 of the policy the Government have pursued with regard to trying to get back our export trade.

When the Eight Hours Act was going through, we all remember that the submission from the Tory benches was that working longer, producing more, and enabling prices to be reduced, would get back our foreign markets. Alternatively, we argued that unless the world demand for coal increased, there was no point in increasing the output, unless we wanted to dispossess some 250,000 mine workers of their employment; and we said: "If you do extend the hours and increase the individual output, the very competition to get rid of that increased output will reduce the price to a point where the workers will receive less wages for more work than they used to receive for the shorter working day." What have been the facts? Let us take, first of all, our exports and see how much of our export trade we have regained. For the year 1927, as compared with the year 1925, when mine workers were on the seven-hours day—

Is that the subsidy year?

The year 1925 was one during which for four months the Government gave to the coalowners an unlimited sum of money with which to get back their trade either internally or abroad. If the hon. Gentleman wants to go further back, he may, but I am giving the figures recorded in the annual return of imports and exports. The increase in our export trade of coal for 1927 was 332,000 tons, or, at the rate of production of 250 tons per annum, the export trade you have recaptured would employ 1,332 men. What does the balance-sheet show? You have put roughly 1,000,000 men on eight hours as compared with seven hours, and the net result has been, from the point of view of sales, to increase your export trade by 330,000 tons in a full year, but in doing so you have received, for the coal you have sold in 1927, £4,946,000 less than you received in 1925. What it means in effect is that, as a result of your legislation and the actions of the coalowners, you have compelled British mine workers to make a present to the Continent of 330,000 tons of coal and a financial present of nearly £5,000,000 to receive that gift of 330,000 tons of coal.

The net result in the mining industry is such poverty and destitution as have not been witnessed in this country for half a century. In spite of our exports increasing, if the Parliamentary Secretary will look at the figures—and apparently the President of the Board of Trade has seen them, and that is why he did not refer to them—for the month of December, he will see that our exports of coal are going down and down.

Was it not bad weather in December?

I should imagine that, bad weather or not, that would make little or no difference in our exports of coal, and I happen to know that, taking month by month and comparing like with like, for the month of December, 1925, as compared with the month of December, 1927, you will find, if you look at Sweden, Norway, Denmark, Belgium, France, and Italy, that in every case our export trade has gone down. We find that our trade with France in 1927, as compared with 1925, according to the statement made by the hon. Member for Eastern Aberdeen and Kincardine (Mr. Boothby), was 1,000,000 tons less than it was in 1925. Therefore, this mad-headed policy of increasing the hours of labour for mine workers has had no other effects than to cause destitution and poverty in the mining districts of this country, and it seems to me that the Government are in a very special sense responsible for the calamity that that Eight Hours Act has brought about. The hon. Gentleman now decorating the Front Bench and all his colleagues must know, if they know anything at all, that if the mining industry is to be preserved, it will not be as a result of a further extension of hours. It can only be preserved by the scientific utilisation of the raw material. We shall be called upon and be compelled to take other means before speculators feel disposed to enter that particular phase of activity.

In the meantime, the hon. Gentleman opposite and many of his colleagues say that there is no room for pessimism, but ample room for optimism. Anyone can be optimistic with an income of £l,000 per annum, but it takes a good deal to feel optimistic with an income varying from 20s. to 30s. a week. This Government really ought to be compelled to extend their pressure upon people responsible for the management of our great industries if at the end of their term of years they are to be able to claim that they have gone as far as they could in their pursuit of finding opportunities of employment for men, women and children. The Minister of Health told us yesterday that they have certain schemes in hand; that they have found ways and means of training 4,000 people. Four thousand people for what period? Even when those 4,000 have been trained, and they are made into bricklayers, engineers and workers of that description, they are to be sent, as it were, after six months' training, to compete with thoroughly skilled men. The numbers are totally inadequate when coping with a problem the size of the unemployment problem in this country, and the net result is that these men are being placed at a tremendous disadvantage, since they can only obtain work at the expense of someone who happens to be in work at the present moment.

In conclusion, I suggest that the coal policy of the Government has been a lamentable failure. It has been a crime almost, as far as the men who work at the mines are concerned. There seems to be no sort of arrangements in hand capable of adequately dealing with this colossal human problem, and because they were responsible for the passing of the Eight Hours Act, helping the coalowners to do their worst, instead of compelling them to do their best, they ought now to take their courage in their own hands, realising that their policy has failed, change that policy and compel the coal- owners to do the one and only thing that is likely to bring prosperity to that industry—organise it as it ought to be organised, start, to utilise the raw material as it ought to be utilised, and provide employment for men who have been discharged from this industry. Otherwise, we shall have to conclude, as many of us have concluded long since, that not only is the Government of this country the one European Government preventing the ratification and application of the Washington Eight Hours' Convention, but we shall be bound to conclude that their one policy is longer hours and lower wages, for the cotton industry as for the mines, as indeed for all the rest, and that there is no hope for the millions of dispossessed men, women and children in this country while such an intolerable Government as the present one exists in office.

My hon. Friend the Member for Aberdeen and Kincardine East (Mr. Boothby) has come back from Germany obviously full of enthusiasm, but he has rather overlooked the fact that we did pass a Mining Industry Bill through this House. German methods, as we who have been in Germany know quite well, are very different from British methods. It is suggested, I think, broadly that we should introduce a sort of Prussianism into our mining industry, to force amalgamation to take place, but may I draw attention to the fact that in the Mining Industry Act drastic provisions are made for amalgamation? We all, I think, on both sides desire amalgamation. In point of fact, supposing under this Mining Industry Act one concern out of 12 wants amalgamation, they can take all the other concerns to Court, and if their point of view be upheld, the other concerns have to fall in and amalgamate. That is a fact that will not be disputed on either side of the House. So, perhaps, my hon. Friend went a little too far when he upheld the Prussian system to the length he did, and rather led the House to suppose that we had no sort of compulsion, as we know it in our British way, for dealing with these things. As I say, we arc all eager for amalgamation. I, personally, think amalgamation will come, but I realise that if we interfere in the opening stages of amalgamation, we may upset the whole thing. In this respect our eagerness, perhaps, makes us a little impatient. We might say again what has been so often said in joke in this House, namely, "Wait and see" a little bit, and not rush in all of a sudden.

In the meantime, the mine workers will starve to death.

I feel this just as much as hon. Members opposite who are in the same position as I am, but I believe that if we enter into these things rashly and unsoundly we shall do more harm than good. We heard from the President of the Board of Trade on the 7th December, in a very great speech he delivered in this House, what steps have been taken by the Government,, and we know quite well that the great majority of hon. Members opposite had absolutely no idea, until the right hon. Gentleman got up in his place to explain the actions of the Government, that the Government had been taking any steps, and those bigger steps than had ever been taken before, to guard, retrieve and rescue the mining population from unemployment and distress. I believe if they had known it, they would not have been quite so rash in bringing that Vote of Censure against the Government on unemployment at that time. The last speaker has drawn attention to the Coal Mines Eight Hours Act. He said there are 100,000 more men out of work in the coal fields of the country on account of that Act, but that information was not the same as we received from the President of the Board of Trade on the 7th December in the speech which is well within the recollection of this House. He then said that in October, 1925, there were 247,000 men out of employment in the coal trade, and that in October, 1927, there were 223,000, which is, of course, a decrease of 24,000 in the employment figure.

The hon. Gentleman who has just sat down said—and I heard it said from the opposite benches yesterday—that there are 100,000 more men out of employment in the coal mining industry because of the Eight Hours Act. This being essentially an unemployment Debate, I will not reiterate all the facts which the President of the Board of Trade gave us on the 7th December. They are well within the recollection of the House, and, at any rate, they can be read. But I say from my place here, that it is a great pity if the facts which were given us then should be at all distorted. To distort facts to people who are in distress, and to lead them to suppose that things have not taken place when they have, in fact, taken place, is cruel and should not be done by anybody holding a responsible position. I do not think that there are hon. Gentlemen opposite who would wish to do such a thing, so let us be very careful of the actual facts and obtain them from official figures before we give them either in the House or before the miners in the country in discussing this Eight Hours Act. The value of our exports, as I gather from the official figures, in 1927 was £661,000,000; in 1925 it was £580,000,000. I know the Socialist argument which says, "You are selling your coal abroad at a loss, and therefore the miners engaged in the pits are not making as much as they would do if you were selling it at an economic price." That is true, no doubt, but suppose you did not sell abroad at an uneconomic price in view of the stoppage of 1926 when our markets abroad were absolutely closed, how about the unemployment side of the question? We have been able to gain in employment in the pits in 1927 as compared with 1925.

We deplore low wages; they bring distress into the homes; but, if it be a choice between shutting a pit down and discharging the men, and keeping them on at low, uncomfortable wages, we should keep the pit open and do all we can to get the mining industry on its feet. That is a far better thing to do, and I hope hon. Gentlemen will look upon the whole question as one of employment or non-employment. Anybody who knows anything about the coal-mining industry will agree that, if a pit closes down, it takes some time to get it started again. It is not a good thing for the pit; it means a loss to the mining community, and it is far better to keep the pit going. The general policy of the party opposite in regard to unemployment in the country is obviously nationalisation. I am one of those who say that if nationalisation is going to be, without any doubt, the best thing for our coal-mining industry, and if it can be proved to be the best thing, we shall not be foolish about it. We are seeking for the salvation of the industry, but we have had no experience of nationalisation. They have had experience of it, however, in other countries. The hon. and learned Member for Altrincham (Mr. Atkinson) and the hon. Member for Lichfield (Mr. Roy Wilson), in their speeches yesterday afternoon, drew attention to the fact that where countries in Europe with Socialist Governments had the power to do so, they had discarded nationalisation. They came to the conclusion that it was not the best thing for the economic structure of the country; in other words, that it would not work. I know it quite well, because I went to Germany after the War, and the German Socialist Cabinet which was set up just after the great debacle of the War, withdrew the Bavarian pits from the system of nationalisation. The attempt at nationalisation has not been a success in Queensland. Hon. Gentlemen opposite sometimes pick out one particular branch of an industry or a trade in Queensland, and say that it has made a profit. I invite them to take the whole thing in a lump, and see whether all the State trading concerns made a profit.It has never been found to work.

2.0 p.m.

I have often asked to be told of some great attempt at nationalisation which has been proved to be a success. Do not let us be stupid about it. What is the good of coming here for party purposes, and saying "I want nationalisation," or "I want private enterprise"? These are simply silly slogans. Is it fair for the Labour party to go to the miners now, after all the happenings and distress that they have been through, and to say, as a responsible party in the State, "If we are returned to power we are going to impose nationalisation upon the industry"? Is there one Member of the party who could tell an audience that he would apply nationalisation and that he could assure them that it has been a success 1 If he could not do that, it would be a shame; it should not be done for by doing it he would lead these people further and further into distress while pretending to care for them. The hon. Member for Bow and Bromley (Mr. Lansbury), evidently does not believe in nationalisation, so that there is one gentleman, who has been lately promoted to the Front Bench opposite, who does not entirely run with the pack. He said last night:

Now the party have moved a vote of censure on the Government for the unemployment in the country. The number of unemployed was raised to 1,612,700 by their suicidal policy of 1926, when they plunged the country into a general strike. Then they sat on those benches threatening us, telling us the general strike was going to be a great success. Now we have the aftermath, we have the results of their action in 1926, and we find that these self-righteous gentlemen, who are now censuring the Government for unemployment, were those responsible for raising the number of the unemployed to 1,612,700. What right have they to blame the Government, who have made the most earnest and longsighted efforts to decrease unemployment and have succeeded? In 1926 there was a deficit of £7,000,000, but because of the wise action of this Government in 1927 that was converted to a credit surplus of £96,000,000. That speaks for itself, and shows that the nation as a whole has respect and confidence in the Government, and that the world at large has respect and confidence in this country. I beg leave to think that there is no other Government which has ever achieved such marvellous success. It is easy to ask, How does that affect the workers? It does affect the workers. Every worker benefits when trade is good. This was an achievement of which the President of the Board of Trade could not tell us when he made his great speech on 7th December, because the figures have only become available in the last three or four weeks, but it is an achievement which ought to be known up and down the country.

We do not want to say too much about the past. The past happened and the misery is here. The right hon. Gentleman the Member for Derby (Mr. Thomas) referred to the cutting-down of the wages of the miners on the North-east coast. Every Member of this House deplores that reduction, everybody with a heart in him deplores that sort of thing, but if we have read all the facts of the case we know that the owners proposed a certain cut, which the representatives of the men, as in duty bound, resisted, and that the matter then went to arbitration. The decision was that a certain cut ought to take place, but not the whole cut; and those pits are still being worked at a loss, though some of the loss no longer exists owing to the cut in wages. I say we deplore this state of affairs, but that is no reason for trying to make party capital out of it. The door is open to us, and the way in which to benefit the mining industry is to go forward wholeheartedly and assist with the movement for bringing peace in industry. I believe that the Big Five, the masters in industry and the members of the Trade Union Congress, who are meeting together, may do a great deal of good, but I believe that the thing is coming about through the voices from the workshops; that is why I believe it will succeed.

All in this House who are accustomed to go about the country and into the industrial areas cannot help being struck by the change which has come over the whole situation. Men and women are groping for something tangible and honest to catch hold of. They were betrayed by the Miners' Federation; and hon. Gentlemen opposite did not say a word to rescue them from the clutches of Cook and company—with the exception of the hon. Member for Broxtowe (Mr. G. Spencer), and he was persecuted by some of the hon. Members opposite. Will not they now join us in throwing aside this sort of thing—the Independent Labour Party and all that we hear so much about, the class warfare and all the rest of the nonsense that is being talked up and down the country? [ Laughter. ] Hon. Members opposite laugh, but this is not a matter to laugh at. It affects miners and the other industrialists in their homes, and hon. Members would not laugh quite so much if they had to endure what those people are suffering at the present time. Let us go forward in this matter, let us not stop to get party gains out of it. I believe that when we have really got prosperity in the country— even with 100 per cent, prosperity we shall always have some unemployed left —it may be possible for the industries themselves to carry their own reserves, just as in my own service, the Navy, we carry our own reserves, and as the other fighting services do. When industry has revived and has reached a prosperous stage why should not each industry carry a certain number of men, employing them, even if they do not really want them for present output, in order to maintain them as their reserves against the time when the trade boom comes and they will be in need of them. I believe it could be done, and I believe that may prove some sort of constructive proposal, and so I give it to the House as my last word.

I was one of those Members laughing just now to whom the hon. and gallant Member for Stirling (Captain Fanshawe) referred. What made me laugh was his statement that one of the cures for the present state of the coal-mining industry was that we on this side of the House should leave the Independent Labour Party. I certainly should not advocate as a cure for unemployment that hon. Members opposite should abandon the Primrose League, or the Economic League, or the Navy League, or the British Fascisti, or any of the other organisations of which hon. Members opposite are members. I do not think that matters at all. I was also rather amused when the hon. and gallant Member began his speech, because he told us that we ought not to do anything in haste in the matter of amalgamations in the mining industry. Nothing that is being done can be said to have been done in haste. The mining industry has shown signs of collapse for a number of years now; there have been a number of enquiries and there was a disastrous lockout, and I think there has been time to find out how far any proposal may be useful. If, as a good many of us think, amalgamations ought to take place, they should be carried through at once, and even then there could be no accusation of undue haste.

With his tongue in his cheek, I think, the hon. Member always misrepresents what we on this side are doing. He tries to impress the House with the idea that we stand in the position of reformist shopkeepers in our dealings with the affairs of the nation. Our policy really is more of a philosophy, and we are preaching, talking rather in terms of service, just as the party to which he belongs talks in terms of laissez faire. What we are concerned about is that the affairs of the State are organised at present on the basis of people being able to get as much as possible for themselves out of industry while rendering as little service to the community as they can. That is quite different from the practice of the Service in which the hon. and gallant Member and his ancestors have spent their lives. They are never paid adequately for the services they render to the community, but nevertheless they render their services joyously and give their lives if necessary. What I ask is that hon. Members opposite should bring that ethic into their politics and apply the same spirit to the national life.

An hon. Member referred to Queensland and the effect of a Labour policy in that Colony, but how can he expect their system of Government to be an unqualified success as interpreted by the balance-sheet? We know that the Government of Queensland, by the policy which has been adopted, have brought down the price of foodstuffs in that country in a way which was never the case before. Of course, you cannot have it both ways. In Queensland they have cheaper food and a healthier people. You cannot assist the health and stamina of the people and their development by a balance-sheet in the way which the hon. and gallant Member for Stirling has suggested. Hon. Members opposite always talk in terms of a balance-sheet, but you cannot adopt that policy successfully as applied to national affairs. We do not talk about the balance-sheet when we are dealing with such questions as the rates, the police, or the sewers, but we talk in terms of the common good, and that is the point of view from which we should approach these problems.

What is the hon. Gentleman's authority for stating that the health of the people in Queensland is better than in the other States of Australia?

I am afraid that I cannot give my authority. I obtained my information through reading the statistics and attending the lectures we have had at Westminster Hall, in the course of which we were told that the health of Queensland has gradually improved owing to the fact that the people are getting better and cheaper food. I remember that the representative of the Co-operative Wholesale Society, when giving evidence before the Colwyn Commission, pointed out that when the taxation on tea and sugar was reduced in 1924 the sales of those commodities went up considerably, which shows that the people were able to consume more of those articles than they had been in the habit of doing before the reduction took place.

The Minister of Health said yesterday that he was very much surprised that we could find nothing more important than unemployment upon which to base our Amendment to the Gracious Speech. We are raising a question upon which we feel very deeply. The hon. and gallant Member for Stirling spoke as if he thought some of us on this side of the House have not known poverty, and consequently that we were not able to appreciate the suffering of the miners. I am in a position fully to appreciate their sufferings. As a boy I have gone to bed without any tea or supper, and my mother has not known where the breakfast was to come from the next morning. Some mornings we did not have any breakfast. Consequently, I am in a position to appreciate the sufferings of the miners.

It is this kind of experience that makes us feel so keenly about unemployment. We believe that unemployment is the one vital question before the country. Unemployment is merely the effect of certain causes, and we have to find out what are those causes. The Minister of Health said that the great Socialist experiment in Russia had produced unemployment, and then he went on to say that we have unemployment in this country because we have had a war. Was Russia not affected by the War? I believe she was affected to an even greater degree than we were. Was not Russia much poorer before the War than we were? Russia was hampered after the War, and the people were reduced to such a state that they had to eat their seed corn in order to keep themselves alive. I think a comparison of that kind was a very weak one, but even if war can be said to be the excuse for so much unemployment, did that War make the needs of the people any less? Did the late War make our people less able to produce what we require to-day? I maintain that we get hungry just as regularly, we wear as many clothes, and our human needs are just as great as ever they were.

We want to find out some way of providing all these things. Under our present system, we do not make for ourselves those things which we could make with our own raw materials at home if we adopted a proper system. I know it is said that we cannot get food in exchange for our goods unless we are able to export them, but there are a good many things we can make for ourselves at home. I remember that in 1923 the Prime Minister said that he was not sure that we were not exporting too much. In one sense I agree with the right hon. Gentleman. I think we lay too much stress upon what we export and do not attach sufficient importance to what we produce for ourselves. It is our duty to see if we cannot find a way of satisfying all these human needs, and supply them through our services at home, using the raw material we have in this country.

It cannot be said that the income of the worker is too much, because the last figures I saw of the income of the community coming under the review of the Income Tax Commissioners showed that the amount of unearned income was rapidly approaching that of earned income. In 1926 the total income coming under the review of the Income Tax Commissioners was £2,375,000,000; £1,300,000,000 was earned income and £1,075,000,000 unearned income. This shows that the unearned income is gradually overtaking the earned income, and that is one of the reasons why there is so much unemployment. Too much is being taken by those who are receiving unearned income, and a large part of that money under a proper system could be applied here at home to the development of industry.

A great deal has been said to-day and yesterday on the question of safeguarding. The Prime Minister, in 1923, told us that he could not deal with the problem of unemployment, and so he decided to appeal to the country and ask for power to erect tariffs. That was denied him, but since then we have had the question of safeguarding, and now we appear to have a bond of Empire in the form of wrapping paper, supported on silk stockings and nourished by musical instruments.

And carried in motor cars!

And carried by motor cars. But the curious thing about motor cars is this: We often quote the Morris-Cowley, and I am a victim in this case. I bought mine in 1923, and the next year, without safeguarding, the price fell by £25. The next year, again without safeguarding, it fell another £20. The decrease in the price of the Morris-Cow-ley car was greater in the years before safeguarding than it has been since.

Competition!

There was no competition then; it was leading the market. The competition has been since, and, since other cars which I will not name have competed more keenly, the price of the Morris-Cowley car has not been so greatly reduced. That has nothing to do with safeguarding; it is due to organisation. With regard to silk stockings and artificial silk, it is quite true that safeguardng has not increased the price, but that seems to prove, at any rate to my satisfaction, that there was no need for that industry to come to the House and waste our time by asking for safeguarding, because, as we knew at the time, huge profits were made in it, and with later developments it has been able to beat its foreign competitors. But what is the effect of the development of artificial silk on woollen and cotton textiles? Surely what has gone in stockings and other goods made from wood pulp has come out of—

Flannel petticoats!

The hon. and gallant Member for Bournemouth (Sir H. Croft) yesterday made the mistake of grouping musical instruments all under the heading of pianos. The sales of musical instruments have certainly gone up, but what instruments are they? We have the growth of the jazz band, and it may perhaps interest some hon. Members present to know that the fully equipped saxophone player to-day has three instruments, of a kind which cannot be obtained as cheaply as tin whistles. The cheapest instrument of this sort costs £25, and a saxophone player will have at least £100 worth of these instruments; and jazz bands are growing up all over the country. Then there is the development of the gramophone with electrical recording, and there is also the organ. We stand pre-eminent in organ building, and whereas 20 years ago there were not 20 organs outside a church, to-day we are putting organs in cinemas all over the country, and in foreign countries, too. That is where the extra production of musical instruments takes place. But what about pianos? The piano industry was never in such a parlous state as it is to-day, and safeguarding has not saved it. We cannot expect employment to be helped in that way.

The hon. and gallant Member for Stirling (Captain Fanshawe), speaking in regard to coal, put forward the greatest argument that I have heard during this Debate for the ratification of the Washington Convention, because, if we pass that, and the employés in other countries also get the eight-hour day, that will eliminate a good deal of the competition. I would point out in passing that, in those of our industries which are hit the most, namely, the heavy iron and steel industries and shipbuilding, which have an eight-hour day and sometimes less, surely we stand to gain if all Continental countries who have these industries also ratify the Convention. It is the most-developed countries that are our greatest competitors, and, if they ratify the Washington Convention, surely one great factor in regard to price would be put right. I was very surprised to hear the Minister of Health say yesterday that we could not guarantee that other countries would ratify the Convention on proper terms. It seems to me that that was throwing very grave doubt upon the integrity of a number of friendly countries, who are the most advanced countries in the world, judging by their industrial position. It seems to me that that was a very grave thing to say.

It has been said that we on this side have not many constructive ideas. I think that one thing which could be done, and ought to be done, is to look into the whole question of banking. At the first sign of a slump in trade, the bankers look after themselves. That is their job; they are organised to do that. They immediately restrict credits, just at the moment when manufacturers all over the country want cheap money; when we want plenty of currency to keep things going, the banks work the other way. Then there is the question of the cheap loaf. The Canadian wheat farmers, so far as I can gather, are for the most part in the hands of United States financiers. It seems to me that the Government might very usefully look into the question of giving credits to Canadian farmers in the same way that the United States financiers do. I understand that the United States financiers advance a proportion of the price of the wheat—about 75 per cent.—before the harvest, and then the wheat belongs to them. They advance the other 25 per cent, afterwards, and the wheat is taken away to the seaboard, absolutely in the hands of these people, who hold it up and get what price they like. It seems to me that here is a chance for this country to assist the Canadian wheat farmer, taking charge of the product, setting up our own elevators here, and bringing the wheat over. I discussed this question a year or two ago with the Canadian Minister of Agriculture when he was over here, and I believe that if we could do this we could bring the price of the loaf down a good deal. That would have a great effect on our national life.

In listening to this Debate, as I have with considerable interest, I have noticed that the Amendment before the House has faded away into the distance, and we have had questions of party politics, we have had questions of economics, we have had every sort of question except the fundamental one that is before the House, namely, how to deal with our terrible problem of unemployment. The hon. and learned Member for Altrincham (Mr. Atkinson) yesterday seemed to me to put his finger on the fundamental point of the whole matter. He said:

"We have, I suppose, in England and Wales, the most densely populated country in the world."—[OFFICIAL REPORT, 9th February, 1928; col. 296, Vol. 213.]

We seem to have forgotten entirely the fact that 100 years ago our population, which lived mainly on the land, did not amount to 15,000,000 people, while to-day we have a population of 47,000,000 people, who are quite unable to live on the land. The difficulty is that there is no land to which they could go—

Oh!

and, furthermore, if they were put back on the land, they could not live. I am very glad to think that we have been able to give up the old method of living by the sweat of our brow. No man sweats to-day. I was in a factory the other day in which all the work is raised by machinery to the level of the man. Even when we retire from the Army we are obliged to stoop 30 times every morning to get sufficient exercise. The life of the workman of this country is totally different from that of 100 years ago, and we must realise that the problem we have to face to-day is a totally different problem from that, not only of 100 years ago, but from that of the French, the Germans, the Americans, Australians, Canadians, or almost any other part of the world.

What is the solution of this problem? We are living like children. We are obliged to obtain our food from others. We cannot even produce the food we eat. We are entirely dependent for our food on what is brought from overseas, and in order to pay for that food we are obliged to make manufactured goods from raw materials, which also must come from overseas, and sell them abroad in order to earn our living. We are failing utterly to do that, and the result is that we have about 1,000,000 men who ought to be employed but who are unemployed. The problem is how to employ those people. I do not think recrimination by one side of the House against the other as to whether Socialism or individualism is going to solve the problem is to the point. The point is to find work for those who are out of work. How are we going to do it? There is only one way and that is the way found by the Prime Minister when he went to America. I happen to have been in America and I saw it too. I saw America demobilised from the War with 10,000,000 men unemployed. She did not argue the point. She formed a Committee to inquire how those men could be absorbed into industry, and the Committee reported that certain industries should be revived if their home market were protected. I am not going into the details of the Fordney tariff. I will only mention the 66 per cent, put on British woollen goods, because every American, even working men, insisted upon having British or European woollen goods rather than American, which were practically not in the market. They practically shut out those goods from their market. They flooded their home market with their own goods and absorbed 9,000,000 men in two years into industrial employment, and to-day America is paying vastly higher wages than any other country in the world. That is the obvious solution of our problem, and I am certain if we do not realise that that is the solution of the problem—I am speaking for my party— you on the Opposition Benches will realise it and will protect the wages of the working classes. That is what it comes to. We talk about safeguarding. What does it matter about the industry? It is the man who works in the industry. What we want to do is to protect the wages of our workers against the competition of those who are working longer hours for lower wages, and have the enormous advantage of a better rate of exchange.

The last thing I would point out is this. We have to sell our goods in a foreign market. How are we going to do that unless we have something to bargain with with these foreigners? Apart from that, no country ever had an export trade, except in raw materials, unless it had a home market. Your home market is the first market. Make the goods for your people and then you will be able to export goods at a price which will enable you to compete with the foreigner. Not long ago the American firm of Colgate was selling bath soap at 6d. a cake in some of our cheap chemists' stores, and 5½d. if you bought a dozen. I have bought that same bath soap in New York at 20 cents, which is 10d. How is it that soap sold in America at l0d. can be sold here at a profit at 5½d.? They supply their home market, and then they can afford to supply our market very much cheaper. We want to look at the problem from a practical and not a political point of view. The practical solution is to find a market first of all at home for the goods our workers make, and then we shall get our export and overseas market, which is the only means we have of paying for the food we cannot produce for ourselves. When we have got that, the first thing that will happen will be that we shall be able to raise the wages of our workers as they have been raised in America. I have seen the American worker drawing his £2 or £3 a day for skilled work, and the ordinary labourer draws £1 a day, and although I admit the cost of living is a little higher than here, it is not very much higher for the working man. It is very much higher for the class who live in hotels, people of the luxury class, but for the working man it is very little higher than in this country. The standard of living is much higher because the wages are higher.

I hope to live to see the time when we shall be able to follow that example and when our working men will have wages far above anything dreamt of in this country, which will enable them to live happy and comfortable lives. But we are not going to do it by political arguments across the Floor of the House. The only way is to follow what other nations are doing. I entirely agree with Mr. Cobden when he said that if we only had Free Trade we should be the richest and most prosperous country in the world. But he was thinking that all the other nations of the world would freely trade with us. To-day that is not so. The old times when we first wedded coal and iron together and produced steel are gone for ever. All the other nations of the world can do that now. The hon. Member for Pontypool (Mr. Griffiths) told us yesterday that America had obtained a contract from us. I wanted very much to remind him that that contract, which was a difference of 2d., was got because she protects her steel industry and allows no steel to come into her country. She is paying workers at Birmingham, Alabama, at least twice what our workers are paid, and yet she can undersell us in a foreign market. Can you not see for yourselves that the only thing to do is to follow the example of all the world and protect your home market against unfair foreign competition, and then and not till then shall we solve this problem of unemployment.

I share, in some measure, the disappointment of the hon. and gallant Gentleman who has just preceded me, that the Debate this morning has strayed somewhat from the terms of the Amendment which has been placed before the House. I am extremely sorry that in the course of to-day's discussion so little attention has been directed to the present position of the local authorities operating in areas where coal and other industries are being carried on. If I may further add this remark, I am extremely sorry that the Minister responsible for offering to us some measure of hope in this matter, namely the Minister of Health, disappointed us so terribly yesterday in the course of his speech. With one part of the remarks made by the right hon. Gentleman yesterday I was in complete agreement. He tried to attribute our present discomforts in industrial areas to two causes—one set of causes which we might call the natural consequences of the War, and the other set of causes which we regard as less natural or less inevitable. I think that in discussing the natural consequences of the War the right hon. Gentleman was not entirely fair in his argument in some respects. He introduced the usual reference to Russian conditions as compared with our own. I do not feel called upon to defend in any sense whatever what may or may not be happening in Russia. All I will say is this, that I believe that the statement of the right hon. Gentleman that a good deal of our present industrial depression is a natural consequence of the War is in accordance with the facts of the case. I believe he said that £50,000,000,000 worth of capital was lost during the operations of the late War. But it is just because there was such a dislocation as a consequence of the War, just because industry has been so disturbed, just because there is so much disorder that we accuse the Government of failing in their duty in applying themselves to the business of reorganisation of the coal trade in order to meet the new situation. There I think is the gravamen of our charge against the Government as far as the coal trade is concerned.

There are three parties in this House. I would ask the House to note this fact, that the Government party which is here in overwhelming numbers is the only party at this moment which cannot point to any sort of well-thought-out programme for dealing with the coal trade. The Liberal party has its programme which it thinks would be effective. We will not discuss whether it would be so or not. It has its policy called "Coal and Power." The Labour party has its policy. It was presented to the Samuel Commission some time ago. But I would ask the Prime Minister who has authority in this matter: Is there any single document, is there any single booklet, is there any single book published in connection with the Conservative party in which I can find a definite statement of the Tory policy with reference to the coal trade in this country? I have not found one. I cannot find one. I have done my best to find one. If it be true that the Government party is helpless and indeed inarticulate in the presence of this difficult and complicated problem, then there cannot be a greater indictment against its ineffectiveness. When the Members of the Government are anxious to excuse themselves for their incapacity in this matter they find some measure of consolation by reason of the fact that they can point to the industrial struggles and troubles of 1926. It is not necessary for anyone to argue, and I certainly would not argue, that industrial troubles have nothing to do with these things and that they do not affect the industrial situation and do not aggravate the troubles in these local areas, but, all the same, even if we had had no industrial struggle at all in 1926, is it less, arguable that we should still be up against the problem in the coal trade which is now troubling us to such a great extent?

I think it can be proved that what is happening in the coal trade at this moment is this. We are passing through something very much like another industrial revolution. We are at a period when we are passing, as it were, from the steam age to the oil age, if I may put it in that way. On account of the production of various substitutes for coal the market for coal must inevitably, in the course of time, contract, and, as a consequence, the number of men employable in the coal trade must also decrease. Therefore, I think that the condition laid down by speakers on this side of the House that something like 200,000 or more men who were associated with the coal trade up to some two or three years ago will in future never again find employment in the coal trade because of this industrial transformation that has taken place is justified. I do not require to lay that down on my own authority. If the right hon. Gentleman the Prime Minister will refer to the report of the Commission appointed by himself— I think on page 19—he will find that the Commission reported that the depression in the coal trade was due not so much to industrial troubles inside the country as to the fact that it was a world condition—a condition where production was in excess of the demand in the world. Consequent upon that, we had our struggle of 1926. It was a bitter struggle lasting for seven months, but I would ask hon. Gentlemen opposite to note this point. Though the miners fought hard and courageously they lost, and it was the coalowners' remedy which was applied. It was not Mr. Cook's remedy that was applied; it was not the Miners' Federation's remedy that was applied. It was the remedy of the coal owners.

Nor the Samuel remedy.

Nor Sir Herbert Samuel's remedy. It was, in fact, the remedy of the coalowners, and it limited itself to two simple propositions, namely, longer hours and lower wages. We have had it in operation for 15 months. We have tried it for 15 months, and I think that one can gainsay that the result of operating the coalowners' remedy has been that we now find that not only can we not re-engage the same number of men that were engaged before the lockout begun but that we have had to tell men who are still in employment that they must now accept fewer days per week employment than would otherwise have been the case. You cannot ask them really, fairly, honourably to accept lower wages, for wages cannot go very much lower in South Wales than they are at the present moment. The only alternative is to reduce the time during which they are employed, and the consequence is that from the standpoint of the individual citizen and of the local authorities there is a growing paralysis entering these local government areas, a paralysis to which I beg the Prime Minister to pay very grave attention in the coming months. It is to that particular position that I wish to direct the attention of the members of the Government for a moment.

The Minister of Health said yesterday, in a moment of confidence, speaking of his own party, "We are performers." There never was a better confession than that. Let us see how they have performed in the areas to which I have referred. Let me refer to my own area in South Wales. The right hon. Gentleman yesterday took credit that in the area referred to by the hon. Member for Abertillery (Mr. Barker) a sub-committee of the district council of Abertillery was doing certain things which met with his approval. What is happening in South Wales? The right hon. Gentleman started in South Wales with the same methods that he adopted in West Ham. He went to the Poor Law Union of Abertillery and said, "You, the duly elected guardians must clear out and I will put in your place three Commissioners." Not one single Commissioner, I believe, enjoys a salary of less than £500 a year. That may not be a princely salary, but the fact is that in order to get these Commissioners they have to be paid a salary. The story of how the system has been operating has yet to be discussed in this House on the appropriate occasion. Let us see the effect of it. The right hon. Gentleman wanted to bring pressure upon the Abertillery Council, and for them it was a case of Hobson's choice. They were told by the Minister of Health that they must do this, that or the other. He said: "I must get from you a policy of economy." They knew very well that in the background there were three Commissioners ready to enter, and rather than have three Commissioners, entirely foreign to the neighbourhood, they appointed a sub-committee of three from their own number, and the Minister of Health then says: "See how these people, two of them Socialists, act in accord with my demands." He speaks as though it was entirely a voluntary act on their part and as though it had been done entirely gratuitously.

How has this thing developed in South Wales? Look at the Merthyr Tydvil Union area. Two urban council areas and the town council of the borough represented by the hon. Member for Merthyr Tydvil met in conference last Monday week at Merthyr. Why did they meet? The clerk of the local board of guardians had sent out to the various areas contributing to the coffers of the Poor Law authority a letter which said that the Minister of Health had denied them any further privileges in the matter of loans. Therefore they convened the conference, and at that conference the clerk of the local board of guardians said that the condition of the Poor Law guardians of Merthyr was so parlous that they were now driven to consider whether they should ask the Ministry of Health to declare that board of guardians in default and to put in charge an official to administer, as it were, the estate of the Poor Law authorities. The position is that these people cannot repay their loans, their indebtedness is extraordinarily heavy, they cannot move, and they do not know how to function.

3.0 p.m.

My own district council, of which I once had the honour to be Chairman, is in this position that its rates now stand at 32s. l0d. in the £ and because, I understand, of an omission in the recent Rating and Valuation Act, because of the failure to give them power to effect readjustments, they are called upon to pay an additional bill of £46,000. A penny rate in that area only produces £600 a year. Now I come to the position of Pontypridd and Rhondda areas which were favourably referred to by the Minister of Health yesterday. Two weeks ago, I was told that the finances of the latter area, which received an encomium from the Minister of Health for its good conduct, has been so driven by financial stringency that they have had to send out clerks not in the Finance Department to beg and pray of ratepayers to pay their rates in advance, otherwise they could not meet their bill for wages at the end of the week. In regard to the Pontypridd area, when the Minister was speaking he did not tell the House, although I saw it in the South Wales papers yesterday, that the night before he spoke the Pontypridd Urban District Council discussed a letter from the Minister in which he insisted that they should put in charge of that urban area six people—the big six. It is the big three in Abertillery. They always resolve themselves into big ones everywhere.

You pass from one area to another and you find places against which the Minister has had some charge, real or other wise, in the past, and also areas where there has been no charge, where they have carried out absolutely the Minister's behests, and authorities of every kind cooperating with the Minister heartily, in the same parlous condition and utterly unable to know where the next few weeks wages of their employés are to come from. I ask the Prime Minister: "What do you think of this situation. You say you will inquire. You say that you have heard of it. That is what you say in the Gracious Speech from the Throne." The Government have heard about it scores of times on the floor of this House. Over and over again Members on this side, Members on the Liberal benches and even Members on the Government side have put the facts either on the floor of this House or by deputation, showing that there are necessitous areas in this country which are rapidly reaching the position of a collapse of local government, and now the Prime Minister in the King's Speech says that the Government have heard there is a problem such as this. That is a sample of the "performing" mentioned by the Minister of Health.

It is true that industrial troubles have caused us some financial dislocation. May I here mention a glaring fact which the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) will be glad to hear, in support of his arguments on the taxation of land values, and that is, and it is a well ascertained fact, that the actual contribution per ton of coal to the rates in my area is not as great as the contribution per ton of coal in that area to the landlord by way of royalties. Imagine a toll such as that! The contribution to the public authority is less than the contribution paid into the private pockets of absentee landlords. Surely a case like that has only to be stated to bring home to everyone the urgency of the problem.

Let me give another sample of the performance of the Government. At Merthyr Tydvil recently there was a discussion as to the after effects of the Widows', Orphans' and Old Age Pensions Act, and its staggering effect was stated by two members of the board of guardians, one of whom belonged to the Labour party and the other a stalwart supporter of the Government. They said that the operation of this Act in the area of the Pontypridd Board of Guardians will mean an additional burden of £300 per week and in the Merthyr Tydvil area an additional burden of £250 per week. At a time when these people are struggling all they can to get out of a morass of indebtedness they have this additional burden placed upon them. I beg the Prime Minister to realise that these local authorities are struggling with a problem which certain other areas know nothing at all about. The right hon. Member for Derby (Mr. Thomas) has instanced Harrogate. I was looking at the return of Poor Law authorities given in the White Paper, up to the end of June, 1927, and comparing country areas in Wales with certain industrial areas in Wales. The respective measure of burden as between these two areas is simply ridiculous. It is incomparably greater in industrial areas than in rural areas, and I hope the right hon. Gentleman will urge upon his colleagues the advisability for some Measure being passed whereby this intolerable burden may be removed

Just one word of commendation. The Minister of Health yesterday referred to the development of training centres for our younger people in various towns and to the extension of the scheme. During the Recess I made it my business to visit one or two of these centres in order to acquaint myself with what was being done, and, speaking for myself, and I think for the whole of my colleagues, we are extremely grateful for the development of this scheme, limited as it is. Our only objection to it is that it is rather too limited in scope; it is not general enough. At the same time I would like to say that there are one or two criticisms which may be justly applied in regard to these training centres. In the first place, the largest training centre in Cardiff is very much hampered for space. It is staffed by willing and cordial people who are anxious to do the best they can, but the equipment, which is not their concern, is wholly inadequate and, moreover, the machinery for providing jobs for these people when they are trained is rather inadequate. At the same time, I make no adverse comment on the idea of training centres. On the contrary, I would like to see them vastly developed. I am glad, too, that the scheme has been devised for removing young miners to areas like Dudley and Birmingham, and I am much obliged to the Parliamentary Secretary to the Ministry of Labour for explaining to me personally why it is that a place like Dudley has been chosen as distinct from places in the heart of industrial areas. I see very much strength in the argument in favour of the choice.

But after all we must get back to the fundamental issue. My hon. and gallant Friend the Member for Enfield (Colonel Applin) became almost lyrical about the condition of affairs in America. He happened to be in America just before the Prime Minister was there. I returned only a month ago, and I would say this to my hon. and gallant Friend. While he speaks so enthusiastically of the merits of Protection in America, he must remember that when speaking of America he is speaking not of a country but of a continent, and that within the confines of that continent there is Free Trade, and that that very materially alters the situation. He spoke enthusiastically about the textile industry. In my investigations recently in America I found that that very industry was at the moment one of those which was suffering most. Whether to attribute that to Free Trade or to Protection, I leave the hon. and gallant Member to decide. I am with him, however, in one thing. It is the policy of the capitalist leaders in America to pay their men a high standard of wages. It is, however, no use saying that the high cost of living in America pertains only to the middle and upper classes. The amount of money exacted from the workers for their rent is a substantial item in the cost of living. The estimate is that one week's wages out of every four must go to pay for rent.

:I put my case for the home market because I took the British Empire for granted. Our Empire is vastly greater in every way than the. United States.

But the population is not nearly as great. That is by the way. I am entirely with the hon. and gallant Member in his just attempt to point to the high standard of wages which obtains generally in America. Is not that of itself enough to justify the point that we on this side of the House are constantly making, that what is wanted in this, country more than anything else is some substantial addition to the purchasing; power of the people here? You will not get a good home market until the people here have money to spend. The policy of reducing wages and lengthening hours must reduce the purchasing power of the people, and until you reverse that policy and give our people more money to spend, you do not give them an opportunity of creating a demand for goods. That is the one way to lead us into the new era of economic prosperity. The Minister of Health himself suggested a very suitable epitaph to be inscribed on the tombstone of this Government when its belated burial at last takes place when he claimed that they were the performers. I think there is a play running in London at the present time which is called "The Terror." A play has been enacted at Westminster now for four successive years and this presumably is the last scene. There has been great applause from the dress circle but less enthusiasm in the pit. In due time I verily believe the people in the industrial areas, bereft as they are of the power to earn their livelihood and sustain themselves honourably and decently, may be tempted to seek some other and perhaps reprehensible forms of economic and social emancipation. I hope not, but I beg Ministers to have a care what they do.

They may speak as much as they like about safeguarding, about horrors, alleged and otherwise, in Russia and elsewhere, but unless some security can be brought to the workers of the country soon, the iron of disappointment and disgust will enter into their souls and they will seek some other remedy less acceptable to leaders of public opinion in this country than Parliamentary forms of expression. For my part, I always understood that the purpose of Parliament was to help us to devise ways and means for the happiness and contentment of the common people. For four years this Government has been in office and it has utterly failed in that respect. The sooner the curtain is rung down upon this final scene the better it will be for the country and the sooner we shall have a chance of resurrecting industries which are decaying so rapidly in our land.

I would like to make this Debate turn to some more practical question connected with its main subject, namely, unemployment, and I do not propose to go into those very wide and, as I think, alien regions to which nearly all speakers in my judgment have wandered from the main topic this afternoon. I do not propose to deal with more than one subject, and that subject only covers a small part of the whole question of unemployment. I do not suppose, however, there is any Member in the House who does not feel that the smallest practical contribution towards the permanent removal of even a small number of men from the ranks of the unemployed would be acceptable, and I do not suppose there is any Member who does not feel that such a proposal would be worth inquiring into and acting upon, if and when action is found possible. I am satisfied that there is one region in which action which will remove a certain number of men permanently from the ranks of the unemployed is possible. I do not at this moment attempt to say what is the number so removable, but, that it is substantial, seems to me to be certain. That action consists in working out a careful, economical, well-considered scheme of land settlement. It is no new subject, either on its own merits or in connection with unemployment, but it seems to be a subject which in this House as elsewhere has only been touched before in very general terms. Nobody has got down to the hard facts and the real problems connected with it.

I have spoken generally on the subject of land settlement many a time in this House, and there are certain matters which now it is unnecessary to argue in the way in which it was necessary to argue them even a few years ago. In the first place, it is now beyond doubt that we who are Unionists, and this Government in particular, are the friends and not the enemies of land settlement. Land settlement as a principle is accepted as one of the policies, not merely of the Unionist party in general, but of the Unionist Government and party in this House in particular. The second point that we need not argue is that it is now proved beyond need of substantiation that men who have previously been in other occupations, even in urban occupations, can, under suitable conditions and if they are of a suitable type, make good, to an extent which a few years ago no one would have believed possible, if they are settled on the land. That, which is a fundamental point in such a discussion as this, is proved beyond doubt by the various reports on land settlement which have been submitted, and indeed it is accepted, not perhaps by the Secretary of State for Scotland, but by the other Minister responsible for agriculture in these islands, namely, the Minister of Agriculture south of the Tweed, because he has so stated to me in answer to a question, that it is now a proved fact that the experience of land settlement shows that men of previously urban occupation can make good upon the land. If we get that length without arguing or the need of proof, we shorten the general discussion and can the more adequately deal with actual and practical points.

The first of these points is that any scheme should be in its nature economical and not wasteful of public expenditure. I know of no topic of public interest on which more nonsense is talked than the inevitableness of extravagance and "un-economy," if I may use the word, in land settlement. Its enemies turn back again and again to the extra efforts that had to be made in the immediate post-War years, when everything was at famine prices, and the figures of land settlement in 1919–20 they pretend, often with their tongues almost visibly in their cheeks, to be the figures of land settlement to-day. It is not so. The cost of houses has been enormously reduced, the cost of various other things has been considerably reduced, and what is as important as the actual reduction in costs, is the added experience that the post War settlement has given; and I have no doubt, though this is not the moment to elaborate the point, that if any practical men were asked by the Government to inquire into the definite question how, under present-day conditions, land settlement could economically and cheaply be brought about, they could produce a scheme which would be at least 50 per cent, cheaper than the scheme of the 1919 settlement. Nobody could do such a thing off-hand, however, and the first practical point that I want to make is the necessity of an inquiry along these lines and the expression of very great regret that no such inquiry, so far as I know, has been made by the Government.

If we have reached this position, that land settlement in general is the policy of our party; if, secondly, it is now known that, given suitable conditions and suitable men, even men of urban experience can make good on the land; and if it is, as I think, very clear that it can be done much more economically than in the immediate post-war experiences, then we reach a position in which, in my judgment, it is a matter of real and high importance that the Government should closely examine the possibility of settling a certain number of miners and others— and I emphasise miners for reasons which I shall give in a moment—on the land. I have emphasised miners for this reason. Everybody, I think, will agree that, in the first place, there are many districts in which miners are not altogether unconnected with rural interests and rural knowledge as it is. Everybody knows the extent to which miners interest themselves in keeping fowls and live animals of various sorts. For the smallholder, the man who is to be settled on the land, the knowledge, the understanding of fowls, or whatever it is, is half the battle; and, further, with regard to the miners, this also is true, as I ventured to say before in this House, that of all the classes of urban industrialists, some of whom are now known to be permanently out of employment in their own districts, there is no class the average physique of which makes them more suitable for the cultivation of the land. That is a practical matter, the importance of which by practical men could not be overestimated.

So much for that. What remains? Surely this, that it is a matter of the utmost importance, when the fact is known and admitted that in the mining industries there are probably at least 100,000 men who will never be employed in the industry again, that you should, if you can, drain that pool of unemployed persons even to the extent of 1,000, 2,000, or 3,000 families by settling them on the land. My complaint—to use no stronger word, and I do not desire to use strong language—against the Government is that neither the Minister of Labour, the Minister of Agriculture, nor any other Department which is concerned with employment, labour or the land, has ever seriously considered and seriously investigated any of the questions connected with this problem. Nobody can say, if you had the money, how many men you could put upon the land with a fair chance of success. Nobody, I venture to say, knows how much it costs to-day per family to put people on the land of this country, nobody knows; nobody has taken any trouble to inquire. The Departments have made no efforts to combine in an investigation of this sort. That seems to me to be a really serious matter.

It so happens that the situation in that respect may have changed for the better, because there has now been set up—I think most wisely—by the President of the Board this Committee of three to investigate what should be done with people permanently unemployed. Will the right hon. Gentleman see that that Committee of three does not exclude from1 its inquiries the possibility of settling men upon the land? It may seem a very far cry for the Board of Trade to consider anything to do with rural England, but surely, in a matter like this, it is the narrowest and most foolish outlook not to regard the matter as a whole and widely, and I do venture to urge my right hon. Friend to make it quite clear to his Committee that one of the subjects into which he would like inquiry made is this question of how far it is possible to settle these men upon the land.

May I speak of some of the practical things one sees oneself? It is only a week ago that, near Preston, I saw men going in for poultry farming on holdings of from three to eight acres. Some of them were injured ex-service men, and none of them had had much previous agricultural experience. Their story, which was clear from looking at them, was that they were getting on extremely well. So well had they got on in the course of the four or five years that they had been on their holdings, that loans granted to them by the county council, in one case amounting to £400, had been fully repaid. Their buildings had been very much increased and improved, and it was impossible to look round the holdings without seeing on every side the evidence both of skill and of prosperity. Those of us who care to go and look at the holdings that have been established and inquire into the previous experience of the men who are on them, know perfectly well that, if you get the right type of men; they will make good. Why cannot we look among these sensible, energetic, athletic, practical class of miners, the 100,000 or 200,000 men who will never be employed in the mines again, and see whether some of them, if it be only 100 or 1,000, might be put upon the land in this country?

There is one other aspect with which I want to deal. I give way to no one in my desire to see the people of this country given greater prosperity by emigration to the Dominions, but I am confident that so long as we concentrate our attention on urging men to go to the land in the Dominions, and make no real effort to get some of them settled on the land in this country, there will always be a stigma and a suspicion connected with our emigration policy. I do not say that out of my own head. It is no theory I have spun for myself; it is the result of conversations I have had with people of all classes both in Scotland and in England; and I am sure that I do not exaggerate when I say that, in the minds of many people who are the most suitable people for the transference from the crowded urban districts to the rural districts, either at home or abroad, so long as you make no effort to put any proportion of them on the land of this country, but urge them to go away to the furthest corners of the world, they will feel that you are shutting the parlour to them and asking them to go to the outhouse. I am certain, looking at The thing from a wider aspect, that nothing will help our policy of emigration more "from the psychological point of view than that we should develop a policy of land settlement at home. It appeals to different kinds of people. If I were asked offhand what the difference is I should say we ought to send the young men abroad, but in the case of a middle-aged miner with a growing family, who has in his days of prosperity perhaps bred champion fowls, champion pigeons, champion rabbits, or whatever you like, and is accustomed to handling animals, but is a man of 40 or 50 or 60, it would really be absurd to say: "If you want to try to make some use of your knowledge of animals you must go to Australia or Canada." That is the type of man who ought to be settled on the land in this country, and then the younger generation would be all the more willing to take the wider flight.

It would be folly for me to attempt— I have not got the material, and, indeed, the material is not extant—to estimate the number of unemployed persons who, with a reasonable expenditure in the present circumstances, could be placed upon the land of the country at the present time. I should never attempt to exaggerate the number, but I know there are a certain number who could be so placed. More than once in this Debate reference has been made to joint committees and so on considering the subject of unemployment. I suggest to the Prime Minister that if there is one aspect of the problem in which we could very well make use of the assistance of hon. Members on the other side of the House —indeed, we very much require their assistance—it is this. If we were to put into operation a scheme of settlement at home for a certain number of unemployed miners, it would be vitally important to get the right sort of men, and to keep down the cost while yet making the scheme practicable. For all these reasons we want to get out of the party region. If there were a scheme for settling unemployed miners on the land in this country, the close and constant co-operation of hon. Members opposite would be absolutely invaluable. If they were cooperating with us we should be more certain of not making mistakes in the selection of the personnel. Without goodwill from the very start there would have to be far too liberal an equipment of holdings for the men before they could begin to improve them themselves.

We all know that hon. Members opposite associated with mining areas are at their wits' end to know how to assist their friends and constituents, and I am sure they would come to help us, and their help would enable us to do the work more economically and reduce the risk of failure by making it more certain that we got the right sort of men I think it is a mistake, and I hope that mistake will be righted, that no clear and definite thinking-out of this problem has been done by the Government, so far as I am aware. I venture to urge the Prime Minister, whose interest in the land, and whose knowledge of all these matters it would be both impudent and absurd to comment upon, should give a little of his precious time to the fresh consideration of the question of whether we cannot do something to settle unemployed people on the land in this country. I urge that upon him not only because I believe it to be possible and practicable, but because it will be economical and valuable for this country; and also on the wider ground that it will assist what will no doubt always be the larger solution, that is a widespread development of the Empire through the migration of our people; and in my belief it is inexcusable that we should do nothing in this matter.

The hon. Member for Perth (Mr. Skelton) has introduced into this Debate a note for which I am very grateful. The thing that strikes one most throughout the whole of this Debate is the extreme pessimism that settles upon the human heart when the subject of unemployment comes to be discussed. I think it is of the greatest importance to change that attitude if ever we are to find a solution. I would like to draw the attention of the House to the different attitude with which we approach this grave social problem compared with the way in which we approach the great cosmic problems. It does not matter whether it is television, some new discovery in physics or chemistry in regard to which men have tried to find a solution; in all those instances the scientist never becomes despondent. If he fails he starts again and leaves all his previous failures behind him, because he feels that he is going to succeed in the end.

But when it comes to the question as to how human beings shall live together in one community, and how those who are unfortunate are to be shielded from the grievous forms of poverty, a pall of pessimism settles down upon us which nearly breaks one's heart. I am glad that the hon. Member for Perth has struck a hopeful note, and has given us an indication of a way out of the difficulty. For this hon. Members on this side are grateful for his intervention. I would ask the House to remember that however admirable the scheme may be which the hon. Member for Perth proposes—and it can never be wrong to get men settled on the land, whether they be miners or people from the streets of London or Glasgow—at least it is not immediately a practical thing. We would welcome any Committee set up to explore that suggestion, just as we would welcome any other suggestion, but, meantime, the problem is one of such importance that somehow or other we have to try and find a solution for it on a wider scale than land settlement offers.

I hope I am not criticising the hon. Member's scheme when I say that not upon one particular line but upon many must a solution of this problem be found. If I am right in my diagnosis of what unemployment means, it is something which has been produced from various sources. It is the custom of hon. and right hon. Gentlemen opposite to state that unemployment has to be borne because there has been a War, and because there has been industrial dislocation and things of that kind. Unemployment has always been with us. There was unemployment before the War, before the lockout, and before the general strike, and we shall not face the situation with any degree of seriousness unless we. regard the unemployment problem as something which hitherto has been permanent in our midst.

I have become almost impatient during the Debate listening to the manipulation of figures by the President of the Board of Trade and others intended to prove that there are a few less unemployed now than at any other date. It seems to me that that is not facing the problem in the least. We have to make up our minds that, as unemployment has been with us in the past before the War, so it will be with us in the years to come unless we approach it in an entirely different spirit, trying to go to the very fundamentals of the question and to build from the depths of our experience. The Amendment which I am trying to support calls the attention of the House to the fact that no mention is made in the Gracious Speech of any Measure designed to grapple with the pressing urgency of unemployment, especially in the coal and other basic industries. It seems to me that, if we are not able, in the Session on which we are entering, to produce startling legislative remedies, our bill of fare is not so overloaded that we could not find some time for very serious inquiry into the causes and possible means of solution of the unemployment problem.

We have to try to analyse in our own minds who are the people who are unemployed, before we can find a remedy for their distress. In the first place, it occurs to me that there is that perhaps growing set of people who have been in permanent situations for many years, and then, owing to the invention of a change of process, or owing to a change in fashion, suddenly find that the demand for their labour lessens, or ceases altogether. These are essentially people of good character; that is proved by the fact that for many years they have been in permanent employment, but, because they have been in permanent employment, because they have worked steadily for years, they have, perhaps, lost something of the knack of getting a job for themselves. It is not always the best man who is the readiest at presenting his own case. They will not complain of poverty, but will gradually sink down spiritually, morally and materially on to a lower grade. It is one of the great tragedies of unemployment, not that it reduces men to physical poverty alone, but that bit by bit, day by day, year by year, it lowers their moral and spiritual status, and that is especially true of the grade of men to whom I am now referring.

Then there is a second section of the community, who are the victims of what one may call discontinuous employment— people who are always employed on short contract, a day here or a few days there, who, as it were, are never out of work but are never in work, who drift from job to job and from place to place, and of whom it might almost be written:

How are we to face the situation as it presents itself to us? I suggest that we cannot face it in a piecemeal way; the problem is entirely national in its extent, and not local. First of all, the local authorities are at the end of their resources. Now they have exhausted practically all the local schemes by which they can hope to deal with the problem, they have incurred very heavy financial obligations and the Government is faced with the choice of courageously facing the matter in its fundamental sense, setting up an inquiry, a nonparty inquiry if you will, to find out what are the causes of unemployment and how we in our time may remedy them, or leaving it alone, as they seem inclined to do, believing that supply and demand will settle the matter and just leave good men to starve.

In common with the President of the Board of Trade the hon. and gallant Gentleman the Member for Enfield (Colonel Applin) appears to imagine that all would be well if you introduced more Protection into the country, and especially if you could emulate the experience of America. Only this week the Governor of New York State has been compelled to appoint a Committee to deal with the rapidly growing problem of unemployment, not only in New York itself but throughout the whole of the area of Massachusetts and other places. There you have Protection. You have everything in America that the President of the Board of Trade would wish us to have, and yet they have, and are likely to have to face in the future, the same problem that we have, so there is no outlet along those lines. The hon. and gallant Gentleman spoke about men in America who earn £l or more a day. That may be true but what would be the effect if they earned £l a day in this country? Not long ago I was in America and was speaking to a manufacturer who indeed was my host, and he said: "My men drive up to my works in the morning in their cars and I am glad to see it. I like to think that people belonging to my firm are prosperous and I should hate to see them come in a poverty stricken condition." But were a man in this country to drive up to his daily work in a motor car the employer would say, "These fellows are getting too much; I shall reduce their wages." That is the key note of the situation.

We remember when there had not been a war, when profits were good, they were not passed on to the workers, who worked for starvation wages, and what they did then they would do now if the same conditions prevail. I get tired, and perhaps a little impatient, when I hear sophisms of that kind applied to this great human problem. In some way or another we have got to approach it and, it may be, to find a solution. I do not despair. I do not believe any human problem is incapable of solution if we approach it in the right way. This is not a party question. I do not say that hon. Members opposite are less keen about solving it than we are, but it cannot be solved by the kind of attitude the President of the Board of Trade has adopted. It seems to me, therefore, that our business is to apply all the knowledge and experience we have, to look for a solution in many directions, but above all to regard it as one of a permanent character which is not caused by this or that tragic event of recent years, but which has been with us through generations in the past, and which we wish to bring to a speedy end if that is within our power.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[ Mr. Parkinson. ]

Debate to be resumed upon Monday next.