HC Deb 25 October 1932 vol 269 cc824-953
Mr. LANSBURY

I beg to move, That by their failure to deal effectively with the economic situation at Home, as shown by the increasing volume of unemployment, insistence upon a false economy in the social services, the imposition of a means test upon unemployed persons, and the unauthorised pursuit of a policy opposed to the restoration of world trade, His Majesty's Government have forfeited the confidence of, the country and of this House. We do not propose to discuss the whole of the Social Services which the Govern-mint have attacked during the past 12 months. We hope to secure in the arrangements with the Government for time, opportunities for special discussion on education. We think that that subject ought to be discussed alone and that the House should be given an opportunity of coming to a decision on the latest proposals of the Government with reference to it. We shall discuss the means test to-night, but we hope that there will be sufficient time, and we shall do our best to help the Government to give us sufficient time, thoroughly to discuss and amend, and, if possible, to carry, the Bill which is coming before the House. There is no use touching the present means test or any means test unless we take the unemployed out of the Poor Law away from the public assistance committees and deal with them as a national question. If the Government consider that men who work in agriculture or on the railways or other industries that are not insured should continue under the Poor Law, I can only point out to the Prime Minister that the policy, which the party to which he formerly belonged laid down in "Labour and the Nation" and in our Amendment to the Derating Act, was that the whole of the able-bodied unemployed should be removed from the Poor Law for good and all.

The 1834 barbarity of the Poor Law has caused the difficulties with which we are confronted to-day. The present arrangement is based on the view that the nation cannot bear the cost of unemployment and also that the locality cannot bear it. The Chancellor of the Exchequer, in days when he was more free than he is now, used to lead the Birmingham Corporation on deputations to Ministers pleading that the locality could not bear the burden of unemployment; but the Government of which he is Chancellor of the Exchequer, which is lead by the Prime Minister, has turned it right round and said that the family shall bear the burden of unemployment. Young children are now called upon to maintain parents and parents are called upon to maintain adult sons and daughters. It is the wickedest and most, immoral imposition upon the working classes that has ever been made, and it is because of this iniquitous business, the fact that you cannot trust the administration of this business to Government Departments, that our party have come to the conclusion that we shall light any means test that may be proposed by the Government. I hope that is clear and definite.

Twelve months ago the scene in this House was very different from what it is now. The National Government came in "on their toes," as it were. There was tremendous enthusiasm. We were to be launched on the broad highway to prosperity, and everything was going to be better than ever—if only we had patience, if only we would trust His Majesty's Government. I am well aware Chat all the speakers were careful to hedge a little, arid to say, "It will take time; but we shall steadily and persistently get to our goal." In the 12 months since then we have not even moved sideways, like the crab, we have positively gone backwards. I am sure the Prime Minister will not deny that if we take into account the men and women who have been put off the Employment Exchanges and pushed on to their families, those who have lost hope and now do not register, the figure of the unemployed is well over 3,000,000. About that there cannot be any question whatsoever. When the right hon. Gentleman spoke recently at that famous luncheon—the luncheon at which all the Tory Ministers were present: it was called some jiggery pokery name that did not mean very much: I mean the National Labour luncheon—he claimed some credit because the number of the unemployed had not reached 3,000,000. I want to tell him across the Table that he knows perfectly well the number very considerably exceeds 3,000,000. During the 12 months the number has steadily risen.

Last week the right hon. Gentleman challenged us to say that the Government were responsible for the increase, and went on to give expression to a good Socialist doctrine that unemployment is inherent in the system of society under which we live. We do not deny that; but what we do say is that he is now at the head of a Government which does not accept that analysis of society, and he is now applying principles which he knows perfectly well cannot affect the question of unemployment one way or the other. The Government have had 12 months in which to apply their policy of tariffs, and they have at the same time converted some portion of the outstanding loans. All that has been done, and yet, in the end, the condition of the mass of the people is considerably worse than when they took office. I notice that a right hon. Gentleman laughs. It is the fact that the class to which he belongs and to which I belong are not suffering, but the great mass of the working people are suffering. About that there is no question whatsoever. It is quite true that in the midst of all this suffering last Winter, and I have no doubt in the midst of it this Winter, the West End of London's season will be, as it was stated to be last season, one of the most successful that has ever been seen. About that there can be no question. But no one can deny that the condition of the masses is worse than it was 12 months ago, and no one can deny that that is in spite of, if it is not due to, the Tory policy which the Government have adopted. That must be patent to anybody.

It is also quite true that no one is more hopeless about the present position than spokesmen for the Government and for the City. I listened last Thursday night to the right hon. Gentleman, and thought the latter part of his speech was the most pessimistic confession of hopeless failure that ever a Member of a Government could have made. It was honest and sincere, and I respect him for having made it, but it was not any compliment to the work of his Government during the past 12 months. If that be not sufficient we have had a speech from Mr. Montagu Norman, who was the archapostle of the policy which was forced on the country 12 months ago; because the Government and the country must not forget that Mr. Montagu Norman came to this House with Mr. Sprague, the American adviser to the Bank of England, and, up in the Committee Rooms, told two large bodies of Members of Parliament that wages must come down, that social services must be cut down or abandoned, that we must get right down to bed rock in regard to the costs of labour, and so on.

All that has been done, we have had 12 months of that, and at the end this great financier, this marvellous genius in the realm of money, tells us on Thursday that he feels he is looking to the end of a tunnel, that there may be a glimmer of light somewhere, but that he has really lost heart and does not know where he is. That is a pretty fine state of affairs! That is a pretty fine statement! If it had been made by a Labour Minister from the Treasury Bench all the Members now on the benches opposite me, if they were then on this side, would have made the House ring with their denunciations of us and their jeers. Then what do we hear from supporters of the Government in the House itself, men like the right hon. Gentleman the Member for Hillhead (Sir R. Horne), or the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) or the right hon. Gentleman the Member for Epping (Mr. Churchill), who we are all very sorry is away from the House—sorry for the causes of his being away. These three right hon. Gentleman have not ceased to say whenever they have spoken, that what is wrong with the world is the monetary and currency arrangements, and that until those are dealt with there is practically no hope. I am not now going to argue whether that is right or wrong. I am only pointing out that when we come to balance up the record of the Government even its chief supporters admit that its policy has done nothing, and it has left over something of even greater importance, without which everything else is of no avail.

4.0 p.m.

That was the miserere chanted by the right hon. Member for Sparkbrook the other evening, and I would ask the Prime Minister, "What are poor innocents like me to think about all this?" Here are the men who are the greatest geniuses in the country all confessing their hopeless failure. The right hon. Gentleman told us something just now—not very much. He said he knew what was happening to the Exchange Equalisa- tion Fund. As I read the placards about the pound conning down, I start shaking, and wonder whether the prophecies of the right hon. Gentleman are coming true, and that I. shall have to carry a sackful of notes around; whether the horrible fate which he pictured to the eletors of Seaham is really coming true under his rule and guidance after all. If these things had happened under a Labour Government hon. and right hon. Gentlemen opposite would have said, "Drive out of Parliament these wretched Socialist Members who are sitting there, a set of incompetents." But now nobody is troubling, and it is said although the pound may go a little lower, or a lot lower, "Thank God we are here, and it does not matter, so long as we keep the Socialists out." It only shows what humbug it all is. I really admire the cynicism of the right hon. Gentleman in all these matters. I enjoy it and appreciate it very much, but the people in the country cannot appreciate it, because while you are fooling round like this, while the Chairman of the Bank of England is having, as Low depicts, a merry-go-round with a pile of gold, people are starving, and nothing is being done to alleviate their misery.

The right hon. Gentleman the Chancellor of the Exchequer put in his word of hope which is something fresh for him, at any rate. He made a speech on Saturday at a municipal bank, of all places in the world. I wonder the right hon. Gentleman dare go near that Socialist kind of institution where they teach people how to deposit their money and not have it run away with by Kreuger and other people, but where their money is really safe, and the right hon. Gentleman tells them it is safe. He thought he would strike a note of hope and glory for the country. We were on the verge of new things. I used to hear my right hon. Friend the Secretary of State for Dominion Affairs. I heard him at the Brighton conference when he said, "All will be well," and I heard him at that Box, and I did my best to say "Hear, hear." I hoped for the best. The right hon. Gentleman said he can see signs, and Mr. Montagu Norman sees them at the end of a tunnel, but I do not know where the tunnel is going to. The right hon. Gentleman knows perfectly well there may be a slight fluctuation in the figures of unemployment. His right hon. Friend will tell him that at Christmas time there are a lot of people employed by the Post Office, in shops and at odd jobs, and if the numbers do not go down then, well, God help you! He knows perfectly well that there is no hope whatever of any improvement in the figures of unemployment. There cannot be with the world conditions as they are to-day. The world conditions are that everywhere in this country and abroad, in the Dominions and foreign countries, there are more goods, more commodities, than within the capitalist system the workers are allowed to use. When I say "workers," I mean the general body of the people. About that there cannot be any dispute. Everywhere there is superabundance, and how have the Government met this during the coming year? [Interruption.] Well, during the past year; and they are proposing to meet it in the coming year in exactly the same way. They have gone in for economy. They have gone in for reductions of wages, and they have generally depressed the spending power of the nation. They have so alarmed people that people with a little money to spend are afraid of spending it. They tell everybody that economy must be the order of the day, and in their own Departments they have cut down in every direction, and have supported directly or indirectly the chimand that wages must come down, with the result that there is everywhere a restriction of consumption.

I do not know whether people understand that in a place like Poplar, which is cursed with exceedingly high rates —[HON. MEMBERS: "Why?"]—because we have an exceedingly large number of poor people, and to-day they are being starved by the public assistance committee of London. The right hon. Gentleman can send down, if he pleases, and inquire from every shopkeeper in Poplar, and he will find that they would rather live under the conditions of heavy rates and maintain the poor than have practically no income coming in and the poor starving outside their shops. That is what is happening through this curtailing of expenditure on the unemployed and the poor generally. The same thing happens with regard to wages. If you cut down a man's wages, his spending power and that of his family is cut down. Consequently, in a time like this, in a time of abundance, to cut down expenditure is the most tomfool policy that could be adopted. What is needed today is more expenditure. I have heard an argument from Philip Snowden until I have got tired of hearing it, and I have heard the same argument from the Tory benches until I have been nauseated by it. It is the argument that if you take money from the taxpayer, and spend it on social service, then, in some mysterious way, that is all lost; it 'does not bring anything back. For the life of me, I cannot understand that argument at all. The money is not lost; it is circulated, and must be making trade in some form or another. If there is a millionaire from whom I take away £10,000, and he cannot buy a couple of £5,000 motor cars, and I spend that £10,000 on 10,000 poor people by giving them a pound apiece to spend, surely they will make as good use of the money.

I am certain that it is economically true, and I repeat deliberately that what is needed to-day is more real spending of the nation's money. That brings me to this point. It used to be said that there is not any money. I remember standing at this Box and denying that proposition 12 months ago. It was said that we were using up the nation's credit by using the money on social services. I denied it then, and I deny it now, and 12 months have proved that I was right, because to-day what is the matter with the City of London? We have commodities we cannot consume, and money and credit we cannot use. That is the position in which we have been placed to-day. I say deliberately that what is needed is that we should have a great public expenditure organised by those gentlemen here, or people they appoint, for the purpose of reorganising the staple industries of this country, and, incidentally, find employment for the people.

The idea that gold is something that is sacred and sacrosanct—why, if all the gold in the world were sunk to the bottom of the Atlantic, the world would go on just the same. This mysticism about gold has been stripped almost bare, and I hope to live long enough to see the mystery exploded for good and all. The idea that this or any country cannot get on without it is nonsense, and I put this against the doctrine of the Gold Standard and the present currency arrangements with which men gamble, that the Government long ago, and the right hon. Gentleman especially, should have insisted that the currency of this country, and, if possible, the currency of the Empire, should be based on a commodity basis, and it should be used for the only purpose for which money is necessary to be used, that is, to bring consumption into relation with production, to determine what goods you need to produce for the consuming power of the people. As it is, to-day the greater your productive power, the less the consumption of the people. About that there is no question. Look round the world and you see it everywhere, and the idea that the people are going to submit to this kind of thing seems to me to' be sheer madness. The people outside are wanting someone to tell them when we are going to begin to get out of this terrible plight. We are deeper in it than ever.

I want to say one word about the Empire in this connection. As I understand the argument of Ottawa, it is that we are doing our best to make the Empire a self-contained unit within which there shall be free trade between the partners of that Empire or Commonwealth, and that outside it you shall have protection against other people. I want only to point out, in passing, that America is a self-contained continent with free trade between all the various States, and with protection against the outside. Yet within that self-contained Empire there are 13,000,000 unemployed. There is the same poverty problem with which we are faced to-day, and the same monetary problems with which we are faced to-day, and all of them are due to one fundamental cause to which I want, finally, to bring this House back. The fundamental cause is that the whole world is organised on a competitive basis, each country competing one with the other, blindly, chaotically, without any relationship with each other at all, all of them pouring out commodities, turning out millions of pounds' worth of goods, quite irrespective of whether they are needed under the competitive system of marketing, and quite irrespective of the effect of their production either on the people who produce them or on the people all round.

The world has got to the position, the terrible position, that in every country the problem that we are talking about to-day is being put forward, and statesmen are trying to settle it within the four corners of the system which has produced it. The Labour party, up to a year ago, under the leadership of the Prime Minister, thought that we could work within the capitalist system and work outwards towards Socialism. We are convinced that the economic development of the world will prevent that being done. We are quite certain that it is no use trying to palliate or cure the evils that capitalism produces. Therefore, when we get the opportunity—[Interruption]—I should not prophesy unless I knew—

Mr. M AXTON

You have done that often enough.

Viscountess ASTOR

Now then, brothers!

Mr. McGOVERN

Playing the old game of cod?

Mr. LANSBURY

We have come to the conclusion that we must say to the people in the country with whom we come into contact that there is no cure, no short cut, and no roundabout way out of the evils from which they are suffering. We shall tell them that—and no one knows that better than the Prime Minister—and we shall ask them to give us power, or to give some party in the State power to take over the industries of the country, reorganise them, and rationalise them. [Interruption.] We cannot make a worse mess of it than other people have done. We shall rationalise them so that, instead of every increase in the power to produce meaning more unemployment and poverty, it will produce a higher standard of life. There is no sense—[Laughter.] An hon. Member laughs. Perhaps he will speak later. I will put this to him: Will he please tell me why there should be a single invention of any sort of machine, if that machine does not minister to a higher standard of life and comfort for the individual?

It is no use blinking this, and it is no use trying to dodge it. The increase of machinery, the continued application of science to manufactures has brought us to our present state. Within Capi- talism we have not yet found a way to distribute the enormous quantity of goods which are being produced. It may be that money has something to do with the circulation of the goods. I am not sufficiently acquainted with that to be able to say. I am simply stating the fact and the fact is as I have stated it, namely, that we are going to ask the people of this country, whenever we get a chance of speaking to them, to turn their minds away from the competitive struggle which beggars everybody, and, instead, to concentrate upon the principle of real co-operation in our own land and to see that every single acre of it is cultivated for the service of the country; to see that coal mining is organised, not as it is now, with districts fighting each other, but on a co-operative basis for service, and to treat all the other great staple industries in the same way.

There is no hope for the world within Capitalism by juggling with tariffs. Thee is no hope for mankind by going back merely to Free Trade, of which we have had much more than half a century, at the end of which we see the present plight of the world. I am not blaming individual employers, or individual members of the Government, except to this extent—if they know the truth then they ought to follow the truth wherever it leads them. The Prime Minister and those acting with him, Lord Snowden and the rest of them, have taught the masses of the people that within Capitalism the betterment of the people could not be accomplished. It is true that they said that it could not come all at once, but we have taken a long time to reach the point that we have reached to-day with the Prime Minister as Leader of the Tory Government.

The advocates of Capitalism, the great financial magnates of the City of London, have sent out the edict that they cannot maintain the unemployed, and that they cannot give the unemployed a decent standard of existence. They have sent out their edict to the Members of this House, to tell them that, in order to bring back capitalist prosperity, wages must come down and the conditions of the workers must be depressed lower and lower. We refuse to accept that, and we refuse to take that as any sort of doctrine that will bring peace or contentment. Against it, we put the old Socialist principle that industry must be organised, that money must be used for the purpose of bringing to mankind all the good things that capitalism has enabled us to produce, and which Capitalism does not know how to distribute.

Part of the House apparently is in a mood to think that we are moving this Motion from political and ordinary party motives. [Interruption.] I am quite willing that those who are impeccable in their conduct, and who are so unimpeachable in their virtues should think that. We must be responsible for whatever of conscience yet remains to many of us. [Interruption.]

Mr. MAXTON

The difference between myself and the Leader of the Opposition is that he is not allowed to be responsible for his conscience. He is responsible for the Labour party. [Interruption.]

Mr. LANSBURY

I will only say to the hon. Gentleman that he has known me for a good many years, and when he reaches my age after he has stood for his conscience, and has to suffer for his conscience—as I have done——

Mr. MAXTON

I would not give it up in my old age.

Mr. LANSBURY

That remark is worthy of the hon. Gentleman, but for my part he is welcome to that opinion. I was going to say that there is one aspect of this question which, whatever we may think or say about each other, still remains. There are 3,000,000 people out on the streets unemployed, the mass of them very poor people——

Mr. BUCHANAN

Who made them poor? Who robbed the starving girls, leaving them without a penny piece?

Mr. LANSBURY

That is the position in which many tens of thousands of them are to-day

Mr. BUCHANAN

What about the seasonal girls?

Mr. LANSBURY

Before I sit down I will repeat what I have said many times in this House. It may very well be that for a time at least the present Government, and those who manage the capitalist arrangements may continue, but they are building up and allowing to grow up a mass of young men and young women who are without hope, and who are depressed in mind, body, and spirit. People complain sometimes because those young people break loose. Surely it is better that they should show some fight against the infamous conditions under which they are condemned to live. Surely you do not want them to sink right down without any voice of protest? This is not going to be cured by soft words, or by any of us thinking that any sort of charity or kind words will heal it. Only deeds and action will heal it. What we are demanding is that this nation, instead of having its eyes on the ends of the earth, should look first at our own country which is still undeveloped, and is still waiting for developing, and that we should, here and now, use the immense resources which it possesses to develop our own land.

4.30 p.m.

The PRIME MINISTER (Mr. Ramsay MacDonald)

I must confess that when read this Vote of Censure on the Order Paper for the first time, I wondered why my right hon. Friend the Leader of the Opposition was moving it. It was appropriate perhaps to some of my hon. Friends, and my right hon. Friend had to excuse himself for sharing so largely in the deplorable results which are now cited from that bench. He referred to his conscience, and consequently before he finished his speech, he had to tell us something that really amounted to an extremely odd confession. He said: "Up to twelve months ago I was as bad as the worst of them. I was a Socialist. I believed in all the things that I have been expounding and explaining during the last 20 minutes. I believed in the co-ordination of industry, and this, that and the other thing, but twelve months ago I saw a great light. Twelve months ago I saw that all this was wrong, and then the whole method of the Socialist movement changed, and I who am responsible for the increase of unemployment, I, who am responsible for trying to show my approval of the right hon. Gentleman the Secretary of State for Dominion Affairs, now stand up and confess that the Labour party has changed itself completely, and has now ceased to be an evolutionary party, and has become a revolutionary party." The reason why he censures us, the reason why he censures the Government, is that he himself has changed his opinion, and wishes to have an heroic opportunity, and a political opportunity, and a more or less respectable opportunity, of palming off his own conversion on to public opinion. But I am going to deal with the Resolution, and not with my right hon. Friend. His Resolution is very sparing in its review of the facts. He describes the conduct of national affairs, but he confines himself very much to a small corner of them. He says nothing about the international aspect—

Mr. LANSBURY

I thought that probably the Patronage Secretary would have informed the right hon. Gentleman that we deliberately kept out foreign affairs for another day, so that we could have a nice day on that.

The PRIME MINISTER

I hope my right hon. Friend will be more successful. As a matter of fact, I did not mean the international situation in relation to what are commonly known as foreign affairs, that is to say, Foreign Office affairs. The Government, when it came into office, was faced with a very serious financial situation, which was both international and national. The Government had to balance its Budget; the Government had to protect the financial situation of the country; the Government had to restore international confidence in our position; the Government had to meet a situation which, if unmet, would have left the country absolutely in a bankrupt state. That is warded off, and, because it is warded off—because the Budget is balanced, because there is a restoration of confidence—the right hon. Gentleman holds forth in the way that he does. It is only so far as the action of the Government has restored confidence, only so far as the action of the Government has staved off the financial situation which existed 12 months ago, that the right hon. Gentleman can indulge in the somewhat loose language regarding future administration which he has indulged in this afternoon.

He seems to lay chief emphasis upon the increase of unemployment. Hon. Members will discover, from the wording of the Resolution, that that is the central fact, upon which everything else hinges. I thought the right hon. Gentleman might have examined that; I am sorry he did not. May I remind him of some of his own connections with it? This Government did not come into office, as I have said, with a clean slate. [Interruption.] Certainly not. This Government came into office with a condition of things that right hon. Gentlemen there had to face by passing an Anomalies Bill. [An HON. MEMBER: "Advised by you!"] It may be, and I stand by that advice. In any event, they are not white sheep. They may be sheep, but they are not white. It is very doubtful to-day whether my right hon. Friend really meant to appear in a white sheet or in a red tie. I, too, know something about Socialist theory and Socialist methods—the discussion, at any rate, of Socialist methods—and I feel that it is a white sheet, for I look in vain for a red tie. But the situation which we inherited was such that, before there was any retreat on the part of right hon. Gentlemen opposite, they passed that Anomalies Bill; and when my right hon. Friend talks about the figures of to-day having to be augmented by blocks of figures of people who have been knocked off the register, he, on all assumptions of united Cabinet responsibility was responsible, according to the best estimated figures that we can get, for knocking 90,000 married women off the register.

Mr. THORNE

That is not true to start with.

Mr. LANSBURY

It may ease the right hon. Gentleman and other people if I say that I stood here a year ago and said what I will now repeat. Whatever sins of omission or commission or whatever virtues attached to the Cabinet as a whole of which I was a member, I shall accept my share of the blame or praise—[Interruption.] I do not want to get out of it; I am not such a contemptible skunk as that. It may save a very great deal of this vituperation about my action and my responsibility. If I stayed in the Cabinet longer than I ought to have done, or did anything that I ought not to have done, the public can blame me, but I am free now to state my opinions. [Interruption.] Certainly. The right hon. Gentleman the Member for Darwen (Sir H. Samuel) will state a lot of things now that he did not state before.

Mr. THORNE

So will the others when they are out of the Cabinet.

The PRIME MINISTER

My right hon. Friend is perfectly right. I think lie used the word "recrimination," or something like that——

Mr. LANSBURY

Vituperation.

The PRIME MINISTER

I am not doing that at all; I am reminding the House, I am reminding the right hon. Gentleman, I am reminding the party which is responsible for this Resolution, of what the situation was when the National Government came in. The right hon. Gentleman may have made a mistake in supporting it—that is not my affair—but he knows perfectly well, and I am quite certain that he is the last man who will deny, that the Anomalies Bill was passed by his colleagues. The Anomalies Bill was not passed for fun. The Anomalies Bill was not passed because either he or I or any of our colleagues had any spite against these people. He knows perfectly well, and everybody knows perfectly well, that the Anomalies Bill was passed because a state of financial stringency and pressure was growing up which compelled the passing of the Anomalies Bill. I say that in the most friendly way. Moreover it was not only the Anomalies Bill—

Mr. WALLHEAD

It is a damnable instrument, anyway.

The PRIME MINISTER

The position as stated by the Treasury was that certain cuts should be made, and it is a fact—it is all printed and published—that those cuts, made shortly before the Labour Government went out of office, were made, not on account of the operation of the cost of living rule, but were made because a contribution in the shape of cuts of wages had to be taken from civil servants, and, owing to the mere fact that a reduction was due at a certain date owing to the operation of the cost of living rule, that was taken as a contribution to the cut that was going to be made a little later on. What is the use of coming and censuring us on a Resolution worded like that? They can censure us on other things, but not on that—unless the censure comes from below the Gangway. But there is something more than that. The position of the unemployed was becoming such that, first of all, there was a three-party conference—the committee to which I made reference in answering a question to-day—which was private, and which, consequently, cannot be referred to, at any rate so far as the substance of its work was concerned. But, in order to get out of the difficulty, the Royal Commission, whose report we have been awaiting for weeks and months, was appointed by the right hon. Gentleman and myself—[An HON. MEMBER: "By yourself."] Certainly not; I should like that to be asserted, too. That Royal Commission was appointed by the Labour Government in order to get a lead as to how to deal with the unemployment financial position. I repeat, what an extraordinary source that is for a Vote of Censure upon us to come from, worded in the words of this Resolution.

Mr. LANSBURY

Are we going to have a re-hash of the controversy that raged for about two months? I am perfectly prepared that every document that I submitted to the Cabinet about this particular question should be published, but it is not fair to do this by inference. The right hon. Gentleman knows perfectly well that we were told that, unless we had this Royal Commission, you would not get the next instalment of £10,000,000.

The PRIME MINISTER

It was held——

Mr. LANSBURY

Mr. Montagu Norman.

The PRIME MINISTER

We must apply ourselves to the situation which is being dealt with. We are censured, apparently, for certain things which arose out of the financial stringency and the position of unemployment, and the demand made in respect of unemployment by the very people who are now censuring us for that. I am not going into anything further, but, at the same time, I am not going to let them off. I see daily papers. I read accounts of speeches delivered at by-elections and on platforms scattered over the country. If they expect that I am going to remain quiet, they are under a profound misapprehension.

There is the first point about this extraordinary Vote of Censure. We have done all this, we have balanced the Budget and we have done the other things to which I referred, and, when we were doing it, grave prophecies were being made by speaker after speaker that the charges that were being imposed would have to be paid by the consumer. I remember a very lurid speech made by the hon. and learned Gentleman some months ago from that bench that the cost of living was going up, and he proved it by logic in such a way that nature was bound to respond to his logic. He said two and two made four, and so on. Unfortunately, he made a mistake. I saw a great tirade the other day about the increase in the cost of living that was going on. What is the truth? The cost of living index figure for 1st October was 43, as against 45 for the same date last year and 65 for the same date in 1929, the first year of the Labour Government. I can say it is going up and I can say it is going down, and I can say this and I can say that. If we base our arguments upon facts and not upon imagination and half-digested information, this stands, that the cost of living figure is 43 against 45 last year. If one goes back to 1924, when every Member opposite, then sitting on this side of the House, asked the working classes to be happy because their standard of living was higher than it had been before, then why is it down and down to-day so far as cost of living is concerned below what it was in 1924 I do not give the figures as being unassailable, but they are indexes. They certainly indicate that the exaggerated statements that are being made up and down the country just now of the increased cost of living caused by action taken by this Government are absolutely baseless and without any foundation.

To come back to the wording of the Resolution, there are two grave accusations. Is the number of the unemployed an indication of the neglect or failure of the Government? If it is, look back. What is the position? I can remember perfectly well those very terrible years when we were in office from 1929 up to last year. My right hon. Friend knows perfectly well that we moved everything we could move to discover a way of reducing the number of unemployed and putting them to work. He himself was on a Committee that was dealing with it, and I know perfectly well his feelings. Often and often we discussed and turned ideas over in our minds. It was very much easier then to spend £1,000,000 than it is now to spend £10,000. In any event, there was plenty of money at our disposal. One has only to look at the accounts. One has only to look at the millions and millions that were spent or that were had on loan or borrowed or that were morgaged during those years. I deny the extravagance. They were spent one way or another, for the purpose of tiding over the unemployment difficulty, on the assumption that that difficulty was going to be temporary and that when the temporary difficulty was over we were to get a return for the capital that we had spent.

But before we went out we saw that that was a mistaken view. We saw that this was a different thing. It was not an ordinary trade depression. We saw that what had happened was a very considerable revolution in industrial processes and a great fundamental change in the channels of international exchange, and we had to be driven back upon the foundations and the fundamentals. But the money was spent, and yet, when the right hon. Gentleman was spending the money, his returns week after week broke his heart, because the unemployment figures were going up month after month. He spent the money. He negotiated with employers—when I say "he" I ought to say "we," including us all. We negotiated with employers. We started new schemes to get employment. Even when we were convinced by experience that those great schemes of road-making and pure relief work were ceasing to yield the returns that justified their execution, we stuck to it. We strove and strove, and still the unemployment figures went up. The Labour Government received as an inheritance from its predecessor on 24th June, 1929, 1,117,000 unemployed. On 30th June, 1930, after enormous expenditure on relief the 1,117,000 had become 1,890,000. On 29th June, 1931, the 1,890,000 had become 2,664,000. On 21th August, when they went out, the unemployed return had become 2,733,000. In two years and two months the increase in unemployment was 1,615,000. We have been in office for just over 12 months. Our increase, not counting in those who have been knocked off, is 66,491 and, if we add the Anomalies Bill and the others, we only have to add to that something between 170,000 and 175,000. The very people who were responsible for an annual average increase of 800,000 in unemployment censures a Government which has been responsible for an annual increase of a little over 230,000. [An HON. MEMBER: "You were Prime Minister."] That observation has nothing to do with the subject.

Mr. LANSBURY

Does the right hon. Gentleman take the view now that, when a Labour Government is in, it is responsible for the unemployment figures and, when this Government is in, as he said the other night, it would be villainous—that is not the exact word, but it is equal to that—to charge him. I expressly did not charge him with being responsible. I said that in spite of his policy the figures went up.

The PRIME MINISTER

It is that kind of argument that I am resisting now. May I explain his argument to the right hon. Gentleman 7 It is that when he was in he was not responsible. Therefore, having been a Member of the Government which increased unemployment, he was not worthy of censure, but I, being a Member of both Governments, though not responsible for the large increase while his comrade, am responsible for the very much smaller increase now. My argument is that this kind of censure, this kind of observation used as the basis of a censure, is sheer humbug, and I hope with all my heart that the whole case will be persistently exposed in the country and that those people who are the victims of this terrible state of society may be no longer misled by the promises and alurements held out to them by right hon. Gentlemen who when they were in office were still greater failures in reducing the figures than this Government happens to have been. The Minister of Labour later on will deal with details that may arise, but I felt that it was necessary that the general situation should be stated quite plainly—the work that is being done now, the work of new administration, the means test, changes in the means test—another revolution by the by. They are no longer in favour of any means test. [An HON. MEMBER: "He did not say that!"] The Opposition has said it in the Resolution.

Mr. McGOVERN

He said they were not prepared to support any means test proposed by the present Government.

The PRIME MINISTER

I think the hon. Member is letting them off too easily. The Opposition now say they are not in favour of a means test, and that after the right hon. Gentleman himself has said again and again: I am not prepared to give people money year after year without knowing what is their own personal position. That is to say that, if a person has gone out of ordinary benefit and has the means of his awn to maintain himself, I am not prepared to pay him State money. What is the use of the right hon. Gentleman from whose lips that opinion fell using his fingers to write a sentence which contradicts that pledge that he has given again and again to the country? Why has he changed? Where does he stand now?

Mr. LANSBURY

Read the OFFICIAL REPORT in the morning.

5.0 p.m.

The PRIME MINISTER

We are now in this position, that the right hon. Gentleman and his followers apparently are perfectly prepared to give money to anybody who has once been insured whatever may be his position. As far as I am concerned, we are perfectly prepared to meet that in the face of every decent unemployed' man and woman, who, at any rate, are not sponging on the State.

The means test was adopted for very good reasons. It was adopted without any machinery being in existence for its application. Machine after machine was considered as to whether it could be adapted to the purpose of a means test. It was assumed that the means test was to produce such an enormous number of cases that machines like that which inquired into old age pensions were quite inadequate to do the work, and the only thing to be done was what the Government did. The Government do not intend to make a complete sweep of the administration either of the means test or of the others, because we do not budge one inch from the general position which we took up here 12 months ago. The Unemployment Fund has to be balanced. The amounts paid from the Exchequer must be limited and be severely within our capacity to pay. The means test so very well defined by the right hon. Gentleman is to he imposed. It may be that any matters like disability pensions and allowances ought to be reconsidered, and that will be done. There is also the question of how far thrift and savings should be taken into account. But the Government do not mean—and I hope that the House is not going to expect it—to produce a great sweeping Measure without full consideration of what it means. When that is done the time will be next Session.

I wish to assure the House and hon. Members who support us that it is no use talking merely sympathetically because the sympathy is here.

The problem of unemployment is a problem in business, a problem in finance and a problem of devising ways and means by which the workless man may get into contact with work. In order to do that, we have to straighten out such problems as those left to us by the financial clauses of the Treaty of Versailles. We have to go on applying the Lausanne Agreements. We have to go on working at the International Economic Conference in order to get international economic agreements. Slipshod work is not going to last. The mere granting of money is neither going to help those who give nor those who receive. The mere treatment of the unemployed as a problem which raises human sympathy—and I hope will continue to raise it—and which does more, enables papers to be put into ballot boxes, will not be followed by this Government. I beg and pray of those who support its to take their courage into their hands and show that we are fair and just and that we mean to get right at the root of the unemployment problem and to deal with it in such a way that there will be more production in this country, and that waste places will remain no longer wastes if it is possible to cultivate them at all. In that way and on those lines we shall proceed to develop a policy which really will overcome unemployment by employment and will mean making men, women and children feel the happiness and the joy of earning their own living.

Captain Sir WILLIAM BRASS

I am very grateful for having been given an opportunity of saying a few words upon this Vote of Censure, because I do not wish to give a silent Vote on this occasion and because the means test is mentioned in it. The means test is a question of paramount importance in my constituency, and it is for that reason that I am very grateful to you, Sir, for allowing me to say a few words upon it this afternoon. A great deal of the Motion has been dealt with by the Prime Minister himself, and I agree with everything that the right hon. Gentleman has said. It is a lot of humbug for the right hon. Gentleman slitting on the Front Opposition Bench to move a, Vote of Censure upon the Government because of the increase in the number of the unemployed and of the imposition of the means test when the right hon. Gentleman the Leader of the Opposition has said that he agrees with the principle of the means test and the right hon. Gentleman the Secretary of State for Dominion Affairs (Mr. J. H. Thomas) has told us that the late Cabinet of which he and the Leader of the Opposition were Members were in favour of the principle of the means test for the unemployed before the late Government resigned. Therefore, it is humbug for the Leaders of the Labour party to come forward and try and censure the Government on the imposition of a means test, for that is what is included in the Motion.

If the Motion were solely for the purpose of censuring the Government on the administration of the means test I am not at all sure whether I would not have found myself in the Lobby with the Opposition, because I do not think that the Government have dealt with the means test in a proper fashion. I have raised the question on many occasions in this House because I think that the administration of the means test at the present time is all wrong. [An HON. MEMBER: "Who by?"] By the present Government. [An HON. MEMBER "By your people!"] By the present Government I said. I have put many questions to my right hon. Friend the Minister of Labour, and to the Parliamentary Secretary, who has been very courteous in his answers but not very helpful. As I have said, if the Vote of Censure had been upon that particular point, I should have been quite prepared to Vote against the Government, because I think that the Government knew all about the matter before, and I see no reason why the Government should have waited for Birkenhead and for Liverpool people marching upon London to bring in something to alter the administration of the means test as it is applied at the present time. I will show what sort of thing happens under the present conditions. The Parliamentary Secretary, I think in November of last year, said with relation to the electors at the last election:

To their enternal credit, they disregarded —the pamphlets and so on which were issued by the Labour party— these statements, and decided that the interests of the country must come before the interests of the individual. He went to to say: I do think that…imposes upon us a special responsibility to see that that faith is Justified."—[OFFICIAL REPORT, 26th November, 1931; col. 662, Vol. 260.] I entirely agree with what he said then, but I do not agree with the administration which has taken place since. I will put before my hon. Friend the sort of thing which happens in Lancashire in my constituency. I happen to be in the Lancashire County Council area, and I wish to draw the attention of the Parliamentary Secretary and the Members of the Government to the disparity between the scales laid down by the Lancashire County Council and those laid down by some of the boroughs abutting on to my constituency to show that there is a complete lack of uniformity in the administration of the means test. I will take the Lancashire County Council area first, because my constituency is in the Lancashire County Council area. The scale laid down by the Lancashire County Council for an adult male is 7s., that is, under the system of transitional payments. In a county borough, which I will call "A"—I am prepared to give the name if anyone wishes to know it—which is quite close to my constituency, instead of being 7s., the scale for an adult male is 15s. 3d. In another country borough, which I will call "B," and which is also quite close to my constituency the amount is 11s. There you see the great discrepancy. In the Lancashire County Council area, which is not an agricultural area but an urban area where the conditions are identical with those existing in boroughs abutting, you get one scale in my constituency of 7s., and in a borough within a few miles of my constituency another scale of 15s. 3d., and in a third borough within about 15 miles of my constituency yet another scale of 11s.

Mr. ENTWISTLE

Is that a gross figure?

Sir W. BRASS

It is the figure laid down by the county council for the public assistance committee. It is the figure of the Lancashire County Council limiting the amount to be given.

Mr. J. JONES

It is a Tory county council.

Sir W. BRASS

The scales down in Lancashire for a man, wife and three children are—in Manchester 39s., in Salford 36s., and in the Lancashire County Council area, where the conditions are identical in my constituency with either Manchester or Salford, 29s. If that money was raised locally there might be some excuse for that, but my right hon. Friend the Chancellor of the Exchequer provides this money, and I do not see why my constituents should receive only 7s. whilst somebody next door receives 13s. 6d. and somebody a little further off receives 11s. I do not see why a man in Manchester with wife and three children should get 36s., while a man with wife and three children in my constituency should receive only 29s. It is for that reason that I bring this matter forward and ask whether, when the Bill comes in to alter the Means Test, these things will be taken into consideration.

There is another point to which I should like to direct attention, which shows the complete lack of uniformity, which I have pointed out frequently to my hon. Friend opposite. I pointed it out over a year ago. I will take the liquid assets which are allowed. In the Lancashire County Council area no account is taken of savings under £100, but if there are savings over £100 the person is disqualified from benefit. In borough "A"—I am talking about borough "A" because I do not want to name the particular town—the first £200 is calculated at 5 per cent. interest, and the next £300 up to £500 at 7½ per cent. Over £500 there is a disqualification from receiving benefit. Therefore, in my constituency anyone who has over £100 is disqualified, while in a county borough which abuts on my constituency anyone can have up to £500 and only the interest is calculated on that amount. So far as another Lancashire county borough, which I will call "B," is concerned, the first £100 is exempt, and the rest, without any limit apparently, is reckoned at interest of 5 per cent. That shows again the lack of uniformity which exists at the present time and which ought to be altered.

When the scales are lower in the county areas, what happens, for instance, in my biggest town, Great Harwood, is that the scale is so low as laid down by the Lancashire County Council that the free meals for children have been enormously increased in number, and free milk for maternity benefit has been increased, and the cost of all that comes on to the rates. Therefore, besides the people in my constituency receiving less through the Public Assistance Committee, the rates are increased' also as a result of the activities which are taking place at the present time. I will quote one or two instances showing the percentage of cases of disallowed benefit, to show the disparity which exists. I will take Blackburn as an example, because Blackburn practically abuts on to my constituency. The percentage disallowed was 12.5 per cent. in Blackburn, in Oldham 15.6 per cent. and in my own constituency, in Great Harwood, 44.1 per cent., while in Darwen, the constituency of the right hon. Gentleman who has just run away from the Government, it was 45.1 per cent. There is a very great disparity in these cases.

There is also the question of the treatment of disability pensions. This is a matter which ought to be carefully considered when the Government are bringing in their new Bill. In the Lancashire County Council area no account is taken of 25 per cent. of the disability pension but the remainder is calculated as income. If a man has a disability pension of, say, £1, 25 per cent. is not taken into account, but 15s. is taken into account as income. In county borough "B," the first 15s. of the £1 is exempt, instead of only 25 per cent. in the County Council area, and the remainder for the purpose of income is reckoned as two-thirds of the income. Therefore, assuming the man has a pension of £1, his income for Means Test purposes in the County Council area is 15s. and in the county borough area which I am caling "B" it is 3s. 4d.That is a great disparity.

In order to discover whether these disability pensions were intended for the purpose of maintaining the family or for the purpose of maintaining the individual, I have consulted the Minister of Pensions. I asked this question. If a man is a bachelor and has, we will say, a disability pension of 100 per cent. as an ordinary soldier, and receives £2—it is a hypothetical case because he would not get any unemployed insurance at all —he would get his £2 as disability pension. If he were a married man when he was wounded he would receive a disability of £2, plus 10s. for his wife, 7s. 6d. for the first child and so on. That tends to show that the £2 is for himself, and the 10s. and 7s. 6d. are not for himself but for his wife. Therefore, I say that when disability pensions are taken into the income of the household the principle is wrong, and that the disability pension is a personal pension given to him. I think the example I have given shows that a pension is a pension for the man and not a pension for his wife and family.

I do not want to speak at great length, but I felt that before giving a vote on this Motion of Censure, I should like to say a few words on the subject of the means test. I am not going to vote with the Opposition, because the Opposition Vote of Censure does not talk about the administration of the means test, but refers to the imposition of the means test and the pursuing of a policy which is opposed to the restoration of world trade. That I think is all nonsense, because the Government are trying to do everything they possibly can to restore the trade of the world and the trade of this country. It is for that reason that I do not propose to vote with the Opposition. I propose to vote with the Government, but I would ask the Government when they come to consider the Bill that is to be brought forward with regard to the means test to take into account some of the anomalies and disabilities and the lack of uniformity which undoubtedly exists all over the country, because they are causing very great dissatisfaction not only in my constituency but all over the country.

Lieut.-Colonel CHARLES KERR

I understand that there are a great many hon. Members who wish to join in the Debate. Therefore, I intend to cut down what I had meant to say to the purely constructive side of the subject. I regret extremely that unemployment should have been embodied in the Vote of Censure as I feel, and I am sure that most hon. Members feel, that that is a subject which ought to be completely divorced from controversial politics. Therefore, I shall try to restrict my remarks entirely to a study of some aspects of the situation and also, with great respect, make one or two suggestions to His Majesty's Government. I will ask the House to consider the financial position in regard to unemployment. It is very interesting. I think the minimum sum we can put down as being expended to-day on unemployment is £150,000,000. That probably is not all, because there are many unemployed people who are fighting their way, getting help where they can, and not applying for public assistance.

What does this £150,000,000 represent? At the current rate of interest on gilt-edged securities it represents the gigantic sum of £4,000,000,000—five times the annual budget. Let me give another side of the question. I am informed that a family—when one says a family we mean four people—cannot cost the State less to-day than £100 a year. What does that mean on the current rate of interest prevailing? It means £2,800 at the current rate of interest to produce £100 a year. If we take £1,000 away from that £2,800, it leaves us with £1,800. I am informed that that is ample to settle a family overseas. I put forward these amounts because they show that we are gradually coming into a position where it would be economically sound to spend money in the direction of settlement. This £150,000,000 per annum, if one works it out, is enough to settle annually, at £1,800 per family, 80,000 families or 320,000 souls.

5.30 p.m.

Let me ask the House to think for one moment of the condition of the country with regard to markets. We, being a great industrial nation before any other country, have found that our old customers, the young countries, have now grown up and are not only supplying themselves with those necessaries of life and goods which we used to supply to them, but are also competing against us in the markets of the world. We have to face these facts, and unless we face them in a bold and courageous way we shall go from bad to worse.

I want to put forward, if I may, a suggestion which many hon. Members will no doubt remember. Soon after the War certain municipalities in this country adopted in the devastated areas in France certain towns and villages and assisted the French to repatriate themselves in their country, to rebuild, and to get back the life of the country as it was before the War. With great respect, I put this suggestion to the Government. There is an Act of 1922 which allows the expenditure of £3,000,000 per annum on settlement overseas. Whether this can be regarded as a success or not, I am informed that 400,000 people have been settled under that Act, and I respectfully suggest, taking the idea that the municipalities helped the French people to settle again in the devastated areas, that it is an idea which might now be extended in dealing with unemployment. That Act has not exhausted its usefulness, and if with the assistance of the Treasury and municipalities certain areas in the Dominions could be allotted and settlement in a small way begun we should be doing something to strike at the root of unemployment in this country.

I know it will be said that the Dominions do not want any migrants for the time being. That is only natural; they have their own troubles, but I feel that if the municipalities, who may send out these people, and the British Government took full responsibility for them, the Dominions would look upon the idea with sympathy. I have noticed a very interesting experiment in Germany with regard to rebuilding slums. No doubt this question is being seriously considered. I was told only yesterday that when a large firm of contractors was asked whether they would take over an area of slumland in London and rebuild it, they said that it was quite a feasible proposition to take over the land, pull down, and rebuild modern houses, and that it could be done with a considerable decrease in rents as a result. Those are two constructive ideas which, no doubt, have been thought of by other people and which, no doubt, are in the mind of the Government.

I feel most strongly that we have to try to be constructive on this question. It has come to us and been with us long enough; we must not think that something is going to turn up next year which will make things better. We have to realise that large numbers of unemployed are going to remain with us for a considerable time; therefore, let us build up some scheme which will be permanent in character. If we study the financial situation we are justified, from the economic point of view, in spending money in this way. With all humility, if any words of mine will help in any way to relieve the tragedy from which we are suffering, I shall not have spoken in vain. If we can by any means work together, putting party politics aside, to remove this terrible evil which is tearing at all our hearts, we shall have done well indeed. I make a final appeal to the Opposition that as a gesture of good will and co-operation they should withdraw this Vote of Censure.

Sir HERBERT SAMUEL

I am sure that I shall be expressing the opinion of the House when I extend to the hon. and gallant Member, on his maiden speech, our congratulations and a cordial welcome to our Debates. For my own part, I welcome him wholeheartedly as a personal friend, and now as a Parliamentary colleague, and I only wish that he were in even closer political association than is the case as yet. We have all listened with great interest to his thoughtful and constructive speech. His suggestion with regard to municipal initiative, with Dominion sympathy, is original and interesting. His proposal with regard to the extension of building construction is also of value, and I am sure that these proposals will receive the consideration of the Government and of the House. We hope that on many future occasions he will intervene in our Debates.

This Motion raises a large issue and one particular issue, and the Debate seems likely to concentrate on the wider ground, and on the narrower ground of the means test. The Motion definitely declares that the intention of those who move it is to advocate that the means test should be abolished. This has also been stated by the right hon. Member for Bow and Bromley (Mr. Lansbury), the Leader of the Opposition, in the speech he has made to-day. We on these benches are clearly and definitely of the opinion that the means test cannot be abolished and ought not to be abolished. If it were to be abolished it would mean that the conditions which prevailed before its enactment would revive; that is to say, that any unemployed workman who was out of insurance, whose insurance had lapsed, could nevertheless claim a payment from the taxpayer respective of his needs; and we know that before the institution of the means test there were grave and gross abuses, that many people whose household income was £5, £6 and £7 per week, and people who had possessions of £1,000 or £2,000 did not disdain to apply for unemployment benefit, and who had the right, and could not be refused, to draw sums from the taxpayers' pocket. That was generally disapproved by the whole country, irrespective of class.

If the present suggestion of the Labour party were to be adopted and the means test abolished, and no similar institution was to replace it, those abuses would instantly revive. There would be a vast expenditure from the taxpayers' pocket for persons who did not really stand in need of that assistance. An expenditure of £16,000,000,000 a year, from figures lately given to the Horse, would at once be required. If by some impossible upheaval the present Opposition to-morrow or next week became the Government, I am perfectly convinced that they would not attempt to abolish the means test, not only for financial reasons, hut because they would know that such a step would be disapproved by the general body of the nation, including the great majority of the working classes. But this proposal is in the forefront of the Motion now before the House, and in the speech of the Leader of the Opposition, and, therefore, in my view, no one can vote for it who is not prepared to declare himself in favour of the abolition of the means test.

I am exceedingly glad that the Government have now decided to introduce a Measure which will facilitate changes in several important particulars in the administration of the means test. My right hon. Friends with whom I lately had the privilege of being a colleague, are well aware that I have pressed this upon them continuously during the whole of this year. Of necessity such a measure as the means test must be unpopular. It must arouse antagonism, heart-burnings and bitterness. Its administration throws upon local committees an exceedingly unpopular and invidious task, and everything should have been done to facilitate their performance of that task. Every effort should have been made to keep the actual administration of the means test as far away from the Poor Law as it was possible to keep it. In several respects this has not been done, although it might have been done within the terms of the Order in Council as it was enacted by the Government last November. No doubt other hon. Members will deal with such points as disability pensions. I wish to draw the special attention of the House to the position of persons with small savings. I do not know what provisions the Bill will contain, and perhaps it is somewhat unfortunate that we are not given an outline of the Measure so that the discussion might take into account suggestions which are in the mind of the Government. However, since the Bill has not yet been introduced, I think we should take this opportunity of expressing our views as a House of Commons to the Government as to the provisions which we think the Bill should include.

I would very strongly urge that special consideration should be given to the cases of people with small savings. I am not referring to those who have £2,000 or £1,000 of capital and who really are not in need. But there is an immense number of persons all over the country who own £100, £200, £300 and even £400. Week by week and month by month they have been putting by pence and shillings, and gradually they have been able to build up this capital as a reserve for their old age. It frees them from acute anxiety; it is something to look forward to in case of need. Owing to the prolonged industrial depression many of these, tens of thousands of people, find themselves, through no fault of their own—it is no more their fault than that of a man who is struck by lightning or involved in an earthquake—through this economic cataclysm find themselves unemployed for so long a time that their insurance lapses. A year elapses, or two years go by, and they have to depend upon transitional payment. They cannot get work in the mills or the shipyards, and it is useless to go elsewhere, for there the conditions are exactly the same.

What has occurred in those cases? There is great inequality between different parts of the country. In many county boroughs and other places full and sympathetic consideration is given to these cases. The annual interest on the money saved is, of course, taken into account as income, whatever amount it may be, but they are not called upon in many cases to spend their small savings and to leave themselves destitute or nearly destitute.

In some districts, on the other hand, it is otherwise. For instance, in the county of Lancashire, which I represent, the county council has adopted au exceedingly strict rule, and it is currently stated that they have done so because they understood from the Ministry of Labour that the Order in Council required them to do so.

Observe the anomalies and inequalities of the administration. One man with £300 buys a house and lives in it. He is unemployed. He applies for transitional benefit. The committees in Lancashire and elsewhere say, "We do not require you to sell your house or to mortgage it. Under the terms of the Order in Council you can keep your house, and we shall merely debit you with the annual value of it, £15 or whatever it may be." Another man, having saved exactly the same sum in exactly the same circumstances, invests his £300 with the local corporation or co-operative society, or in Government securities. Instantly, when he applies and is recommended by his local committee for treatment on the same lines as the other, he is told that he must spend his £300 or £200, and go on spending until it gets down to 2100, and if he has only £100 left, or in some cases £80 or even £50, then and not till then is he given any transitional payments. When the local committees protested with vehemence against this—men of all parties have appealed to the county council to change their views—they have been told that the Government have said they must administer the Order in this way. Yet in other boroughs it is not done, and the Government have not intervened.

This is most deeply resented in Lancashire, where there is a very large number of the best element of the working classes, who are precisely in this position. The people cannot understand how it can be; why in the one case it is legal for the man who owns his house to get transitional payment, but not in the other case where a man has invested his £300 and uses it to pay for his lodging. They cannot understand why the latter man should be called upon to spend the greater part of his money and even to face destitution. It is felt that the thrifty are penalised and the wastrels helped. This is a movement in which all parties have joined. Ministers of religion, the mayors of the small boroughs, the chairmen of district councils and members of all three political parties have appealed to the Ministry of Labour, but the Ministry have turned a deaf ear. On the contrary, the hon. Member who is Parliamentary Secretary to the Ministry of Labour, speaking in Lancashire on 1st Match, said: The Order in Council lays down that persons applying to local authorities for transitional payment should be treated exactly as if they were applying to that authority for public relief, and the public authority has got to treat these people in the same way. That cannot be, because, as I say, they are allowed transitional payments when they have a house, and in the second place they are not required to spend the last £50 or £100; they are left with that, although under the Poor Law the rule is that if an applicant for public assistance is in possession of resources he is not a lawful subject of relief. My right hon. Friend the Minister of Labour and the Parliamentary Secretary have argued on this point in two entirely contradictory ways. They say at one time that they are bound by the Order in Council and must adopt a strictly Poor Law attitude, and on the next occasion they say that as a matter of fact they do not adopt a strictly Poor Law attitude, that considerable latitude is allowed, that the local authorities do exercise wide discretion in the matter, and that consequently no serious complaint need be made. The two arguments are contradictory. If the strict Poor Law attitude is to be adopted innumerable illegalities are going on. If these practices are conceded then the argument that the Order in Council requires a strictly Poor Law attitude falls to the ground.

For my part continuously, in November, in January, in March, in June, in August and in September, I brought this matter again and again before my colleagues, and I feel justified on that ground in bringing it now publicly before the House. I am very glad that a Bill is now being introduced, and I regret the delay that has taken place in introducing it. It will involve an exceedingly small cost to the public Exchequer to meet these cases, and I have no doubt that Parliament will rapidly pass the Bill into law. But the means test is not the unemployment question, and the new Bill when passed will, of course, leave the problem everywhere in all its magnitude, formidable, profoundly disturbing to us as a legislature, deeply distressing to each one of us individually as men and women. When we go into the back streets of the great industrial towns now we know the extreme distress and hardship which afflicts all these millions of respectable people in hard-working families.

What is the essence of the whole matter? I am not going to discuss the fiscal question, but I must draw attention to one aspect which does affect an international issue. The essence of the whole matter is this—that we are here on a comparatively small island, a few hundred miles long, with 45,000,000 of people. It would be impossible to support those 45,000,000 if we were to depend simply upon the resources of this island, its agricultural produce, its coal and other minerals and its fisheries. If we were thrown back upon our island alone our population could not be 45,000,000. No one can estimate what it might be, 25,000,000 perhaps or even fewer. Consequently, we live as a nation very largely upon the income which in one form or another we get from the rest of the world—the sales of our exports, the earnings of our shipping, the income from our investments, commissions and other items. Here we have had a most extraordinary collapse in the last few years. An answer which the President of the Board of Trade gave me to-day in reply to a Parliamentary question showed that in 1929 all those items together brought us in an income as a nation of £1,170,000,000. Now, after two years, that figure is reduced to £668,000,000, a loss of £500,000,000 of national income, or 46 per cent.

That is really the main cause of our unemployment. For example, if Lancashire sells to India only half the cotton goods she used to sell, it is impossible to employ more than half the cotton operatives who used to be employed in that trade. That is obvious. Nothing can make that good except some expansion of trade in other directions. If our collieries sell only one half of their usual exports you may have 100,000 miners thrown out of work. If our income from investments falls off from £231,000,000 to £169,000,000 those who receive that money, having less to spend, must economise, and the result is that people are thrown out of work. A friend of mine not long ago told rue that "he was just able to keep the wolf from the garage." There are very many people who are in that kind of position, who have to restrict their expenditure, and the failure of this country to receive that £500,000,000 a year which it had been receiving is undoubtedly one of the main causes of our unemployment.

6 p.m.

The question therefore arises, what constructive measure can we propose My right hon Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), whom we are all delighted to see in his place, will no doubt speak to us, as he often does, on the agricultural aspect of this question. He is himself a keen and successful farmer, engaged largely, I believe, in the production of fatted calves, which do not always find consumers. My right hon Friend is also, as we all know, in public controversy a master of the sharp and flashing sword, which he seldom allows to rust with disuse. My right hon. Friend has attacked everyone in turn and often three or four together. He has attacked the Conservatives and the Socialists and the National Liberal Federation and the City of London and Germany and France and the League of Nations and the Lord President of the Council, the Foreign Secretary and my hon. Friends and myself. There will soon be no one left to attack unless Lloyd attacks George and George attacks Lloyd, and, as my right hon. Friend in his time has advocated many contradictory policies, there will be plenty of material for such a controversy. Instead of attacking those of us who, like himself, have left a Coalition Government supported by a pre ponderatingly Conservative majority in the House of Commons, one would have thought that my right hon. Friend would have felt for us that fellow-feeling that "makes one wondrous kind." It re mains to be seen whether that feeling will be expressed or not.

My right hon. Friend will give us, no doubt, some constructive suggestions. The Lord President of the Council has said that the state of trade is appalling. "Appalling" is his word, and it is none too strong for the conditions in which we find ourselves. I will go so far into the forbidden ground as to say that in our view tariffs, quotas, exchange restrictions, constitute the principal among many causes of this. There are many causes but these represent the chief single cause of the present appalling state of trade. We hope that the World Conference will help us to find some solution. I have never said on any occasion that I thought that the Ottawa decisions would necessarily make the World Conference futile. What I have said was that the Ottawa Agreements will in our judgment make the task of that Conference far more difficult. It will make its scope much more limited and will deprive this Government of the moral authority of leadership that might otherwise have belonged to it.

Let us hope that the Conference will be able to propose monetary changes, monetary measures, which may be—I should be sorry to express a definite opinion—one of the means of curing the present depression. The matter is as we all know—and as some of us who have studied it know to our cost—one of extreme complexity and difficulty. We waited for years for the report of the Macmillan Committee. When it came, it expressed many divided opinions and, so far as I know, no measure has been taken as the outcome of that report. One definite conclusion—I will not say positive conclusion, because it is a negative conclusion—to which I have come, is that the proposals of my right hon. Friend the Member for Sparkbrook (Mr. Amery) and my right hon. Friend the Member for Hill-head (Sir R. Horne) in the direction of bimetallism, of introducing silver as a solvent for our difficulties, is not likely to be of value and might become of great harm. What is needed above all is stability in your medium of exchange and in its value, and silver, being a metal of fluctuating value and fluctuating production, would merely introduce, if it were brought into the currencies of the world, an additional element of instability, uncertainty and change. I trust that the Conference, where the best experts from all over the world will be gathered together, will give close attention to these matters—as of course they will—and they may hit upon some measure to assist the world to free itself from its present situation.

One positive, definite proposal I would make to the Government is that they should take more active measures to set free the capital that has now accumulated unused, to make it more accessible, if they can suggest some steps for doing so, than has hitherto been the case, and to encourage its active use. A few weeks ago, the Chancellor of the Exchequer asked for £150,000,000, which our fathers would have regarded as an enormous sum to borrow in a single day in the City of London. He obtained that £150,000,000 at 2 per cent. for a period of five years in 10 minutes. That is a splendid proof of the state of the Government's credit though it is a lamentable proof of the state of the nation's trade. I am very glad that the Government are able to borrow at that rate of interest, but I am sorry that the public should be compelled to lend at so low a rate, showing that there is no demand for capital at the present time in commerce and industry.

The restrictions upon the use of capital were necessary a year ago and until the last few months. It was essential to balance the Budget and to stop borrowing, in order to restore confidence throughout the world in the credit of this country. There were grave financial anxieties with regard to India about a year ago, and it was necessary to prepare the ground for the gigantic financial operation of converting £2,000,000,000 of loan to a rate of interest only two-thirds of what it was before. The complete success of that operation, on which the Chancellor of the Exchequer is wholeheartedly to be congratulated, has been the justification for the course hitherto pursued but now the course ought rather to be the opposite. Capital has been over-accumulated. The rate of interest is excessively low. The patient who had to be kept on a starvation diet while his temperature was high, now needs feeding up.

What the country needs more than ever is, not unremunerative investment, not expenditure of capital which will involve increased burdens on rates and taxes. Not for a moment do I suggest that. We must not imperil the balancing of the Budget. With great difficulty we have secured a balance and it must not be allowed to slip back, but it is desirable that all kinds of State and private enterprise—and I draw no distinction between the two—which are remunerative should now be encouraged rather than discouraged; and the cheaper money which is now available should make remunerative all kinds of schemes which a year ago would have involved a loss. In building operations, for example, it makes a very peat difference if your capital has to be borrowed on a 5 per cent. basis or on a 3½ per cent. basis. It may make all the difference between loss and profit. The Chancellor of the Exchequer two days ago made a speech with which I should like to express my respectful concurrence. He said: He was satisfied at present that both national and local public authorities ought to confine themselves to essentials, in which of course he included expenditure that would be productive of income, and expenditure necessary to maintain the efficiency of the services. I venture to underline those words:

he included expenditure that would be productive of income. I suggest that the influence of the Government and the Treasury in the City and elsewhere should now be devoted to rendering available the enormous accumulation of capital with which the banks are gorged, for it is only in that way that you will be able to set many industries going again and relieve the depression of many trades, such as the building trade or the iron and steel trade, which rely for employment largely upon expenditure of capital.

I would again take this opportunity in connection with unemployment of expressing regret at the steps that have been taken with regard to our trade with Russia. I am one of those who regard that as a very serious matter. Russia has a population already of 170,000,000, which is increasing with great rapidity, which is in a state of rapid industrial development and which might, if the matter is wisely handled by our Government, prove one of the most valuable of our export markets and one which would give employment to great numbers of our people.

An agricultural policy, of course, we all favour but that I will leave to my right hon. Friend the Member for Carnarvon Boroughs with whose views I am as a rule, in entire concurrence upon this point. Lastly, turning to a matter which is on a different plane, and not for a moment basing it on the same level as these large suggestions which we have hitherto been discussing, there are measures which might be taken for dealing with unemployed men while they are unemployed and endeavours to mitigate in some degree the hardship of their situation and to save them from the moral deterioration that is too likely to happen in prolonged idleness. There are many schemes by local authorities and well-meaning and active people throughout the country, which the Government might at very small expenditure assist—educational, and recreational schemes and some industrial schemes, including the provision of allotments. These things may, as I say, be some mitigation of the plight in which the unemployed find themselves.

This Motion is a Motion of Censure. There are phrases with which we on these benches agree but we must regard it as what it is, a Vote of Censure, which, if it were carried, would involve a change of Government and a change of Parliament and those who vote for it must contemplate that such would be the interpretation of their vote. When my right hon. and hon. Friends and myself withdrew from the Government, that was not the general course which we announced in our letter of resignation. We declared that on matters apart from those on which acute differences had arisen, in general we should lend the Government our support, and for that reason we shall vote against this Motion. At the same time, I feel sure that in expressing our own views, I shall also be expressing the general opinion of the House and of all parties in it, when I say that as a House of Commons, while rejecting this Motion, we desire and expect from the Government a large policy of energetic, resolute and effective action.

Mr. LLOYD GEORGE

The most important, I may say the only relevant part of the speech of my right hon. Friend the Member for Darwen (Sir H. Samuel) was the last sentence or two in which he committed himself to voting against this Motion. He was good enough to taunt me with having differed from time to time from people with whom I had previously collaborated. I should have thought that the right hon. Gentleman was the last man to taunt anybody with that after the exhibition which we had last week in this House of a very lively scratching tournament between two comrades who had been working together in Geneva and elsewhere a few weeks ago. But, if I may say so, the thing that matters to Members of his party, not in this House, but outside, is the attitude which he adopts towards the policies to which he has committed himself during the last 12 months. He talked about allotments, he talked about agriculture, he talked about building schemes, but he was a party to the document which scrapped all those proposals 12 months before; nay, more than that, during the whole of the 15 months that have intervened he stood by the abandonment of all those policies, and although to-night he has told us—to what extent he has got the consent of the Prime Minister to reveal Cabinet secrets I do not know—that on three different occasions, of which he gave the dates, he has pressed certain considerations inside the Cabinet——

Sir H. SAMUEL

I did not say "inside the Cabinet."

Mr. LLOYD GEORGE

Either the right hon. Gentleman pressed them in this House, or he pressed them in public speeches, or he pressed them inside the Cabinet.

Sir H. SAMUEL

As a matter of fact, I did not say "inside the Cabinet," and most of these representations were in writing.

Mr. LLOYD GEORGE

Surely communications of that kind, between colleagues, are of a confidential nature, and whether that is dune inside the Cabinet or by means of communications with his chief for the time being, they are secret documents. But that is not the point which I am making. My point is this, that he has emphasised to-night the fact that with regard to the means test he had been urging changes upon the Government, but although to-night he has talked about allotments and about great schemes of building and agricultural development, he has never told us that he has written a single letter during the whole of the 15 months to urge those considerations upon the Government. To-night he is going to vote against the Motion because he is committed to the scrapping of all those proposals 15 months ago. That is not what the party expected when he was snatched like a brand from the burning. But these compulsory renentances are never very satisfactory. There was something which was, I think, more or less semi-official as an explanation of the