Organizing Full Employment
CONSCIOUS DIRECTION NOT AUTOMATIC CONTROL
By RT. HON. ERNEST BEVIN, Minister of Labour
Delivered in House of Commons, London, England, June 21, 1944
Vital Speeches of the Day, Vol. X, pp. 690-696.
I BEG to move, "That this House takes note of Command Paper No. 6527 on Employment Policy and welcomes the declaration of His Majesty's Government accepting as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war."
I think that this Motion is one of the most important that has been debated in this assembly for many years. It embodies the most important principle that has come before the House for a very long period. In laying down that it is the primary responsibility of the Government to maintain a high and stable level of employment, we are turning our back, finally, on past doctrines and past conceptions and looking forward with hope to a new era. Unemployment has been the subject of many Debates in this House. We have had many marches of the unemployed.
We have had these marches of hungry men, demonstrating their poverty in a highly civilized society, during a century in which wealth has accumulated at a rate unprecedented in the history of the world. From 1886, when the late John Burns led the London unemployed through Pall Mall, onwards to the Northampton bootmakers, right down to the miners, between the two wars, we have had this horrid spectacle of unemployed men, not refusing work, but asking that society should so organize itself that work might be provided and their families maintained. During that period, all through the end of the nineteenth century and the first part of the twentieth, there was a tremendous agitation and disturbance. It is difficult to convince a great many people that, prior to the introduction of the employment exchanges and Unemployment Insurance, there was the assumption that unemployment did not exist to the extent that it did afterwards. It did, but it was not known. Statistical knowledge was not available, and the public was not aware of the intense suffering that ensued. But during that period the House of Commons and the country became conscious, and realized that the State could not be inactive when faced with the evils arising from mass unemployment.
Eradicating the Evil
If we take the period from the Seventies right up to the outbreak of this war, we have only had really full employment under three conditions—the making of armaments for impending war, during war, or on the discovery of more gold fields and the expansion of credit. On other occasions, unemployment in cycles has arisen from time to time. The problem became to acute that the State had to decide to introduce our social services, and an attempt was made, following on the work, which I am sure the House has been pleased to see honored, even late in the day, of Sidney Webb and Mrs. Webb in the break-up of the Poor Law, and the attempt to regularize assistance in its various forms. It was followed by new measures, which were tried out during the depression. There was a tentative public works policy, training, transference schemes and, lastly, the Special Areas. But all these were merely measures to minimize the effect of unemployment, not a recognition that unemployment was and is a social disease, which must be eradicated from our social life. The State's job up to this date has been to deal with the after-effects of the disease, and not to take active measures itself to promote and maintain economic health. This Motion is an assertion that, while there will still be difficulties to contend with, and the social services must continue to play their part, the first consideration must be the way to remove the cause. Having tried relief in all its forms, we now propose to diagnose, and we hope to cure.
The Government welcome the fact that Parliament is—I hope irrespective of party, and with widespread agreement —at last facing this problem as a fundamental issue. We are indeed grappling with the problem which is uppermost in the minds of those who are defending the country today, at home, overseas, and in those bitter fights across the Channel. With my right hon. Friend the Prime Minister, I had an opportunity of visiting one of our ports and seeing the men of the 50th Division, among others going aboard ship—gallant men, brave men with no complaint. They were off to face this terrific battle, with great hearts and great courage. The one question they put to me when I went through their ranks was, "Ernie, when we have done this job for you, are we going back to the dole?" . . . It was put to me in that way, because they knew me personally. They were members of my own union, and I think the sense in which the word, Ernie, was used, can be understood. Both the Prime Minister and I answered, "No, you are not." That answer of "No" to those brave men, going aboard those ships to fight, j was an answer which, I hope, will be supported by the House, and I hope that policy will be directed towards making that answer a fact, not only for them but for future generations. There is an obligation on all of us to bend our abilities and our energies to finding the right solution, and an obligation not to dissipate energy merely in destructive criticism.
The Government have come forward not only with a statement of their objective, but with an outline of the practical measures for attaining it, which, with the support of Parliament, they intend to operate with full vigor. I am convinced that although the Governments may change, and 1 hope, will change—I should not like this job forever—anyparty which faced the people of this country at a General Election and refused to accept the principle of full employment, would not be returned to this House. It may be argued that we ought to have laid down a carefully-designed blueprint, a plan worked out for every phase which might conceivably arise. But I suggest that in a changing world, such a course is impracticable. It is in the attitude of mind, the direction of Government policy, in the whole of Civil Service, as well as Ministerial support, that this problem must be faced with a view to adjustments being made, from time to time, in order to achieve the objective.
The Government do not claim that the White Paper is the final solution of this problem. The proposals do not raise the question, for instance, of whether industry will, forever, be privately or publicly owned. Some say that all benefits of enterprise arise from private industry, and some say they arise from public ownership. Well, I have seen a bit of both. 1 have seen enterprise absent from public ownership and I have seen enterprise completely absent from private ownership. Therefore, the question of how you can give effect to decisions as to who will own industry, is not prejudiced by this White Paper. The proposals of the White Paper will operate, whatever the ownership of industry may be. There are those who have gone "cock-a-hoop" in certain parts of the Press, because they think that we who represent the Labour Party in the Coalition Government—and I do not apologize for it—and who have made our contribution to this White Paper, and to all the other great social changes which have come before this House, have abandoned our principle concerning what we think the right ownership for industry ought to be. What we have tried to do, is to devise a plan which, however you may decide the ownership of industry by adjustments which may have to be made, seeks to attain the objective.
The main purpose of the White Paper, and the Motion, is to declare war on unemployment, and to indicate how our resources should be harnessed for that purpose. Our monetary system, our commercial agreements, our industrial practices, indeed, the whole of our national economy, will have applied to them the acid test—do they produce employment or unemployment? Under the system which governed our economic life from the industrial revolution onwards, unemployment and deflation were regarded, in the main, as automatic correctives for the lack of equilibrium in our financial and economic position. Incidentally, it was just 100 years ago, after the passing of the Corn Law Act and the Bank Act, that that automatic control was introduced. This meant that industry and human beings had to adapt themselves to the working of the financial system, instead of the system being adapted to the needs of the individual. The need for adjustment was thrown at industry. Revisions of rates of wages or production had to be made from time to time, very suddenly, as a result the two sides in industry Were set in conflict. Strikes and lockouts followed, there was lowered production and the national income was cut down still further. We had, moreover, to buttress the old system with our social services, as I have already indicated, and directly this was done, the automatic adjustments which were the basis of the old system could not be made in the way intended under the doctrines of laissez-faire. The stronger the trade unions became the more the resistance to change in money wages. With the buttress of the social services, the weapons of starvation and bankruptcy did not operate quickly enough, in order to make the old system work, and it was doomed from the day when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his social services into this House.
The Waste of Energy
It is worth while briefly to call attention to what had to be done between the two wars, leaving out the temporary boom, and beginning with the time when the first adjustments under deflation were made. There are very striking figures. From 1922 to 1939 we lost 250,000,000 days of production through strikes and lock-outs alone. Over 60 per cent of those disputes arose from the need for adjustments due either to deflation or Gold Standard adjustment, and were outside the control of industry. Therefore, you set two parties to settle a dispute that someone else has created which they have no power to settle. That is a most unfortunate situation to create, and the way things work in arriving at it, is unjust.
I may be forgiven for referring to the General Strike, for which I have never apologized. What happened? In 1921 there was an adjustment of 40 per cent. Many of us trade union leaders had to spend three solid years in making new agreements and, when we had made them, within a year we were thrown out by 12^4 per cent. No industrialist in this House will get up and say that you can adjust industrial efficiency to make up 12J4 per cent in one year. No one can do it, however he may try. Yet that was thrown at us. And how was it proposed to deal with it ? It was sought to take 2s. 6d. a ton off coal, which meant so much off steel, and so off other things, all the way up through industry. And so, the people who suffered were one class of the community. I make the assertion, and this is a basic principle of this White Paper, that if either exchange or financial adjustments had to be made, they must be made over the community as a whole, not singling out one particular industry or class. [An Hon. Member: And by this House?] And by this House certainly; but if the House had understood it, we should never have had the General Strike.
What happened? With all that loss of 250,000,000 days, wages went down, wages went up, went down again and went up again. What was the net result at the end? The change in money wages over the whole field of sheltered and unsheltered industries, which I admit did not suffer equally — the unsheltered trades suffering more than the sheltered trades and professions—was only five points. In the 17 years from 1922 to 1939, we had all these fights and struggles going on throughout the country, with all the consequent difficulties, and the adjustment was five points. I suggest that the House ought to find some better remedy than that. There will be strikes, there will be disputes, but they ought not to be on this issue, which those concerned cannot settle of themselves. In that same period of 17 years, we had an average of 1,700,000 unemployed, and we paid out a total of £1,260,000,000 in benefits and unemployment assistance. That payment helped to keep the consuming market going and, to that extent, probably prevented unemployment from being worse, but we had not a single pennyworth of production for all that expenditure. I do not think that that was good for the country. That state of affairs reflected itself in sickness. There cannot be long periods of unemployment without malnutrition and a weakening of physique; and then what did we get? During that period just over a week in every year for every man and woman in industry was lost owing to sickness. That is a terrific loss. I do not know how much it could have been avoided, if there had been good employment, good health and a reasonable standard of living, but all of us with experience know how the one thing reacts on the other.
Another very difficult thing arises from this awful business, which I would ask every hon. Member who has had a reasonable income during all his lifetime to remember. One ofthe most demoralizing; accompaniments of unemployment is that the people run into debt, which becomes a millstone around their necks. Further, if there are 1,700,000 unemployed people on an average, there are not far short of about 6,000,000 people who are suffering from unemployment. The 1,700,000 are not always the same people. Therefore, over a wide area of our social life, this difficulty is constantly recurring, and the total loss of production and national income is incalculable. We shall be facing a very difficult situation at the end of this war, and apart from all sentiment that one might impart into this proposal, we cannot afford that loss of production this time. It would be unsound economically. We have to carry the aged on the new pension scheme —good luck to them. We are raising the school-leaving age in order that our children may have a better chance in life. That is right, but if we are to do this, then we must employ every able-bodied man to the full during the best productive part of his life and under recent conditions.
A Concerted Attack
Therefore, we are dealing with the situation through the education proposals, the health proposals, the policy of this White Paper and the housing policy, and I want the House to view it as a concerted attack, and not as being dealt with in isolation by the White Paper alone. The coming of the State into the arena, full-blooded, as is now proposed, must mean the writing of a new code of conduct for industry, a new set of rules in our economic life, which must be respected and respond to the will of Parliament, if the problem is to be solved. Let me say, in passing, that no one can look at the astonishing variety of products which we have produced during this war, without realizing that they are far more varied than our production in peace, and our technical development has far outstripped anything we had done previously. What has done it? The pressure of all towards a common objective—to win victory. I ask the House whether a common objective, nationally, cannot be adopted to carry us, not only through the transition period, but into a better economic state after the war. . . .
In industry there are certain standards that are accepted, and I think a new code, a wider code and a better code will have to be written for the conduct of industry generally in this country—a code of conduct and relationships in carrying on the business of this country. We have made great strides in this war in the way of Production Committees and all sorts of things. The whole thing is growing up, but it is really only the beginning. It has been introduced under the pressure of war.
Now I would like to turn to the basic features of the White Paper itself. The White Paper naturally draws distinctions between the measures proposed for the aftermath of war, and those for application later when we have arrived at more stable conditions. The basic problem of the post-war period will not be the maintenance of demand and a high level of employment, but the orderly change-over of our productive capacity. There will be an enormous demand. It will outstrip supply for a time. To this I shall refer later. I propose, in the first instance, to deal with the long-term side and return to the transition period. Under the longterm proposals, we proceed in chronological order, and it may be an advantage if they are looked at with minds attuned to a normal period, because that brings out more clearly the approach to the problem on the whole economic front. It will be seen in paragraphs 39 and 41 that the Government whole-heartedly accept the proposition that total expenditure on goods and services must be maintained at the level necessary to prevent general unemployment. This involves a complete reversal of the policy of the years between the wars when it was held that the onset of industrial depression must be met by cuts in public expenditure and economies in all directions. Diminished purchasing power was diminished still further, and the depression thereby accentuated, with results which are only too familiar.
Ironing Out the Trade Cycle
In future the Government's policy will be to meet the onset of any depression at an early stage by expanding and not contracting capital expenditure, and by raising consumption expenditure and not reducing it, by such means and devices as may be found most effective. Paragraph 62 declares that this is a policy directed to the deliberate ironing-out of the slump and the boom, but that it will involve more economic control by the State than has hitherto been experienced. There are three elements to be considered in this matter; there is capital expenditure, both private and public; there is consumption expenditure, both private and public; and there is the foreign balance. In the case of private investment,, one has to admit that this covers the greater part of the field at the present moment, because it is the most subject to fluctuations and is, admittedly the most difficult to control. Various devices, such as variations of interest rates and that kind of thing, have some effect, but we cannot rely on that, because the policy of the Government is to maintain our policy of cheap money. That must be the set purpose and direction of our efforts. I will leave that to the Chancellor to deal with tomorrow. It is impossible to see very far ahead, but, in any case, as at present advised, cheap money is our policy.
Nothing, by itself, will stop a slump. It is necessary to have a combination of activities to stop slumps. Private enterprise will be encouraged to follow the Government's line in timing investment. Then we want submitted for further consideration a proposal of deferred tax credit, or similar devices. I do not object to an equalization of Budget Finance. It is not an uncommon thing today, in every business in the country. The practice hitherto in local authorities and in the Government has been to reduce taxation when we are doing well, and to increase it when we are hard up. I would rather pay it when I am doing well, than when I am hard up. There is nothing wrong in that, surely, and the fundamental principle behind this is to use every possible device, in order to check any possible slump. The public investment is more easy of control and it can be more easily organized, but if we are to encourage local authorities and public utilities, to submit their plans in advance, that would involve a change of procedure in this House. One of the great troubles hitherto when these things have come upon us, and public works and other things have been advanced, has been that the procedure is so long, that the effectiveness of the thing is lost before you have your Bill through to remedy it. I submit, therefore, that in considering this matter and encouraging local authorities and public utilities to advance their plans and have them ready to be turned on, Parliament must adjust itself to some new procedure in order to be effective.
The idea is that these plans will be co-ordinated and that a target will be set each year for performance in the following year. This is not to be regarded as a public works policy, as understood in the old sense. I well remember when Ministers sent round to the Departments to show how few people could be employed in public works. The works then envisaged were either the building of the dock or the cutting of a road, but this is intended to include the whole range of public activity, using developments of all kinds—just as when there
is a slow-down in industry, every wise management turns on the maintenance for the next turn of the wheel and improves the productive capacity of its undertaking. This sort of thing is being translated into this public works policy—to turn on national capital at the right moment to improve our country, and improve our health and efficiency for future developments. It is in that sense, that we should use the Public Works Funds, and we want to adjust it in order to meet these ebbs and flows which are, to a very large extent, outside our control.
The ebbs and flows of overseas trade, harvests and such things are very largely outside Governmental control. We cannot control the harvest failure in the Argentine or something of that kind. The Coalition can do a lot of things, but not that. Past experience has shown, however, that speed is essential and we want to urge the House to help in carrying out this program in that sense, and to be parties, with the local authorities, the utilities, and the Cabinet of the day in giving effect to it. The other advantage is that it will be a continuous process. It will not be sporadic. The State will know what is needed, and will have available the plans for development which I have already mentioned. It does not mean, however, that we shall hold back every kind of public building, waiting for the slump, or waiting for the fall. Schools, hospitals and similar amenities and all urgently needed work following the war, will have to be tackled, together with certain housing. I cannot enumerate every item, but there are wide developments of public enterprise far beyond these.
The second line of defense is consumption expenditure. If we are not successful in preventing a decline in capital investment, purchasing power for consumers' goods will inevitably decline, and we must avoid the vicious downard spiral. It is important at this moment, to realize that the methods of adjusting money wages and production, which have obtained in the past were very uneven in their application. I have already mentioned the effect on the export trades, when adjustments are made in coal, and it is worth repeating that the method of avoiding a fall in consumption, is one of the vital things which has a bearing on many problems, including the distribution of industry. When people tell me that there is a great population in London, with a great purchasing power, what they are really saying is that between the two wars there was not the purchasing power in certain other areas with an equal population. Therefore, the adjustment of these things on a vast scale has a very big effect, from the point of view of purchasing power, and a greater equilibrium over the whole areas.
We venture to suggest that there might be a variation in social insurance contributions. In the past, when these events overtook us, the only way has been the cutting of wages, which affects the whole family. Contributions under the social services, as we have seen from the Beveridge proposals, will be raised, and spread over the whole community universally. After further study, it may be worth while making an actuarial calculation of which carries the greater load in good times because, if you can work it successfully, it has the effect of lowering the cost on the employer's portion, and increasing the consumption on the man's portion, by leaving greater purchasing power in his pocket. That is a device well worth studying and I hope the House will give it careful consideration. There are, of course, variations of other arrangements, which I will leave to the Chancellor tomorrow, because he is the expert on these things. I want to express very sincere thanks to the much abused Treasury officials. No one has been more helpful than they, in trying to evolve the plan of the change-over we are now proposing.
I believe in giving credit where it is due. If we had not had the help and experience of these men who, for years, have never had very much kudos, I doubt if the Papers could have been produced. Therefore, I pay my tribute to them. Of course, there will be the turn-over of labor, and I hope, in the future, to devise a method which will distinguish between the ordinary turn-over of labor and unemployment. I think the two things need to be segregated. I do think—and I will refer to it again in a moment—that in the social services plan, in connection with unemployment, the method of using social service benefits as a subsidy to wages, and as an excuse for inefficiency in industry itself, is wrong. It should be designed for the special purpose of unemployment, and industry must undertake the other obligations. We must treat our economy as a whole. Whatever we do internally, we cannot leave out the foreign balance and export trade. This element of our economy is largely dependent on the policies of other countries. The importance of restoring and expanding our export trade to make up for the loss of our overseas investments, is generally recognized, but Government action to this end cannot be taken in isolation. I have said publicly before that if the creative ability of the State is really brought out now, and we act as Arms and individuals, and are all governed by the great objective that I mentioned just now, the worry that might arise from the loss of overseas investments and living on interest might well be limited. I think there is a great future for this country. It is not only going to survive in war; I believe it will survive well in its economic life.
The International Aspect
The amount of production entering into what is called the foreign trade of the world is not a very large proportion of the world's total production and consumption. It is very small in comparison with the total production and consumption. We must have foreign trade because the raw materials are outside our country. We must buy them, and other countries must buy goods from us, if we are to have the raw materials, and we must do so under conditions which will ensure that our internal economy is not brought near disaster with every storm that blows. Before the war, the number of people actually employed on what are called exports in this country was about 2,000,000 of our total working population. Unless there is a method of insulation, there is always the danger of the whole economic structure being upset by this comparatively small number. Therefore, in association with other countries, we must try to agree on measures which will prevent the appalling fluctuations in the international price level, which characterized the years between the wars and which, if there is a reasonably stable international price level, make for expansion all over the world and give security and confidence. I am hoping that the negotiations now being carried on throughout the United Nations will lead to that end. We have wholeheartedly committed ourselves to this in the Atlantic Charter, the Mutual Aid Agreement and the Hot Springs Conference. We welcome the initiative taken in the employment field by the International Labour Organization. Attention should be particularly directed to the resolutions passed at Philadelphia on the economic policies for the attainment of social objectives which are broadly in line with the policy of this White Paper. Therefore, international discussions will proceed on a wide range of subjects and Parliament will be informed of their progress as in the case of the monetary proposals. There is one great field that must call for special attention,
and that is the development of the Colonial Empire. It must have a proper place in our expanding overseas trade. It must be systematically organized and have as its objective the raising: of the standard of life of the 66,000,000 people in the Colonies. They can gain and we can gain. It is a common effort achieving a common purpose. Success in maintaining a high level of employment at home will in itself assist the export trade. The more products sold on a good home market the more they carry the overheads and assist in a reasonable price to meet competition.
Mobility of Labor
All these efforts will he nullified unless industry itself concentrates on raising its efficiency. I have noticed in the public discussions that everybody's mind turns on the efficiency of the workers. Efficiency must be meant in a broader sense than that. It is not even efficiency in the finishing end of industry or part of an industry. If you take the metallurgical industry as an example, and want to study efficiency, you must go from the raw material, coal, right up to the finished product, and see whether in each stage you have an efficient and well-conducted operation, just as much as on the horizontal basis you study the product at a particular stage. When we discuss efficiency we cannot have somebody just butting in with a lot of out-of-date selling price arrangements, carrying redundant capital, paying each other levies and all the rest of it, and adding them on to the price and creating a moribund attitude to the whole development of their industries. That is not efficiency. While efficiency will be applied generally, there is the difficulty of localized unemployment. It may develop in particular industries for particular reasons. Last week there was a long discussion in the House on the distribution of industry and I do not propose to refer to it, but perhaps I may be allowed to refer to the distribution, transfer and training of labor. Large-scale transfer of labor is not, in my view, the answer to localized unemployment. Certain grave social disorders arise from it. One is that it denudes the areas concerned of their most valuable resources, their young man-power, and results in appalling waste of social capital which would be better spent on developments.
We do not, therefore, regard large-scale transfers as the solution. At the same time, we must have mobility of labor; that is an essential condition. An expanding economy entails a certain degree of mobility of labor as well as of industry. I have not found in the war, given the right conditions, much difficulty in transferring labor. (Interruption.) I know that difficulties have arisen from those I have taken, but there has not been much difficulty. If I had to direct people to jobs that were inferior, they very properly objected, but where the conditions have been pretty good I have not had very much trouble. There are other reasons why they may object—home reasons, and so on. I do not regard the transfer of women as I have had to do it in the war in the same category. It is a different problem altogether. One of the first things we must do is to establish training under Government auspices and no longer regard it as remedial action for long-term unemployment. It must be part and parcel of our economic system. It must be part of our permanent arrangements, and industrialists or anyone establishing an industry can help in this respect. I have seen works going up, and I hive seen the unemployed standing about in the neighborhood, but nobody has thought of beginning to train the unemployed while the works were actually being built. In very few cases have facilities been there, and my predecessors have had to go to the employers and say, "I have 10,000 unemployed and you must give them a preference in this area," or they have had to use persuasion, and all that kind of thing. There has been no organized attempt to have training programs arranged in advance so that no time would be lost when the equipment and premises were ready to start up.
There will be an enormous lot to be done in that direction, and there must be a scientific approach by employers and trade unions. We must pay the trainees better than unemployment pay. It must be a step up to the full wages they will get in industry. We must have full co-operation with both sides of industry. I know how hard craft prejudices die, and there are good economic reasons for them all. If the State comes in in the development of full employment and the fears that have helped to produce these prejudices are removed, I think it is possible to get greater flexibility than we have hitherto had. One great trouble is that of housing. If a person has to move from one area to another and the only way he can get a habitation is to take up a mortgage and get his furniture on the hire-purchase system, it acts as a dead-weight round him. Therefore, houses for rent are enormously important in order to get mobility of labor.
Wages and Prices
The White Paper also makes it clear that the Government's policy for maintaining expenditure cannot succeed unless there is reasonable stability of prices and wage rates. The fundamental issue is simple. It is little use injecting purchasing power to keep up the volume of employment if the additional money all goes in profit. It is equally useless if it all goes in wages and you get no production for it. If the effect of making more money available, for example, for housing, is simply to put up the price of houses and not to get more houses and more workers employed, the Government's policy will fail. The adjustment of wage rates must go on through the ordinary processes, but the general level ought to be related to productivity. I do not object to that principle. If we had had through the nineteenth century a rise of wages comparable to the productivity of the working people, the standard of living in this country would have been about double. The people were not organized then.
We have to discuss it with the parties and work out the methods, just as Parliament, I hope, will work out the legislation as we go along. I have not worked out the precise methods, but I have asked my trade union friends, industry, and everybody to realize that this is an essential thing that must be done. If it is to be done, we have to alter the old catch-as-catch-can methods that we have had in the past. I am glad my hon. Friends behind me cheer. No one has had more throws in the wrestling system with wages than I have had, but the catch-as-catch-can method was not always on one side. I would like to see that old system in wages go. We want to relate wages to efficient production. There are many industries which I have had the honor to represent which were on this basis. The result was that our wages came out of the sweated level up to a decent standard. The adjustment of prices will also go on, but there must be no action on the part of any sectional interest to force prices to an artificial level. The test of good management and distribution, if this scheme is to work and consumption is to be maintained, is how near the cost of production the producer, when he comes home and becomes a consumer, can buy his own goods.
We want to get rid of equalization of labor. I will not elaborate that point now. The House knows enough about it and how demoralizing it is. The less equalization there is, the more efficiency you get in industry. As one great industrialist once said to me, "Keep a steady pressure up; by a steady pressure on wages you will make the man on topuse his head." Nothing promotes efficiency more than a steady pressure on organized industry. Another matter that enters into this problem is the hours of labor. This, again, will need to be very carefully and scientifically studied. The growth of mechanization makes for the right use of the organization. If I may offer a predilection of my own, it is that if I had a choice between a few minutes off a day, or an extension of the annual holiday, I would prefer the annual holiday. . . .
When you are reducing on the one hand, you must not reduce to a point which makes it difficult, whereas longer holidays give an opportunity of bringing your maintenance up to date and rejuvenating your industry while your main productive workers are off. That may be a real economic asset, while serving two purposes. That is the point I want to make. I am open to argument and conviction but these are points, I think, in the new economic adjustment. Indeed, the new responsibility of the State develops important machinery at the center. We must have the analysis of a great deal more information about our economic life. I hope there will not be too much talk about forms. We must have the information, in order to arrive at a right judgment. There must be a systematic review of our resources at home, so that we can use them, with our exchange position, to the absolute maximum, both material resources and human.
Importance of Statistics
It is proposed to establish a small central staff of experts, which will not be like the old Economic Council, of which I used to be a member and which met once a month. It never knew what it decided, or perhaps did not decide anything. We shall need continuous examination of evidence, papers and statistics, upon which the Ministers can come to their conclusions, and not from some outside body, but with Ministerial responsibility. There are five broad categories which we shall need. There is the financial survey—and my right hon. Friend the Chancellor of the Exchequer will deal with that side of the matter in his speech. There is a very important survey which will be charged to my Department in future, called the Man-power Budget. This proposal we regard as absolutely vital. The Ministry of Labour hitherto has come in after the event, and paid the benefit. It was a misnomer to charge the Minister of Labour with responsibility for unemployment. He can only persuade. It is now proposed that there shall be supplied to the Ministry of Labour all the information necessary so that the Minister can predict pretty well where employment will rise or fall, and it is not difficult to do. There is the credit position of the various industries, the forward bookings, the rise and fall of markets and so on. I would say to the employers of the country that I really believe if they have to sit down and make for us this forecast of their forward orders, that it will make them think what their forward orders really are, and it may cause a different approach altogether to this problem. When the information is in and the Budget is prepared, it will be for the Minister of Labour to hoist the danger signals at once to his colleagues in the Cabinet. . . .
The returns of the human budget will be compulsory. We did not put down compulsion of this and that in the White Paper, but we have projected it for the Debate. The intention of the Government is that this kind of return, with the Census of Production, should be obligatory. You must have it or you cannot work the system, just as we get returns of people who are discharged, and the rest of it, at the present time.
Before the war, we had about 15,000,000 people insured against unemployment, of whom I have already said 1,700,000 were, on an average, unemployed. This total of 15,000,000 will be affected in a variety of ways at the end of the war. The raising of the school-leaving age will affect it, and so will increasing longevity. We have talked about the sixty-fives hitherto, but all the evidence goes to show, thank heaven, that we sixty-fives are much younger than we used to be. One cannot tell exactly what the numbers will be, but I estimate, taking the same categories that were insured before the war, with the women who will remain in industry and in the professions, that the number will be about 16,000,000. It will be almost sure to go up another 1,000,000, representing those who will be looking for employment or going into the Services. We shall have to estimate what the basic industries, such as agriculture, coal, cotton and so on, need and can carry; they are the staple industries. We shall have to estimate how many will be absorbed by those industries, in relation to the increase in consumer goods.
The main purpose of the human budget is to be looking to the future all the time, and not merely registering facts that have occurred. We have gained great experience about this during the war. This long-term policy will, as I have said, depend upon stability and the right adjustment of taxation and insurance and all those complicated by co-ordinated needs. I join with the Chancellor of the Exchequer in saying, particularly at this period, that the Budget should be balanced over a period of years. 1 have seen some criticism in some of the weeklies because of this statement. I am not myself going to depart, any more than he is, from the principle of reasonably sound finance. I think all these other measures can be supplementary and contributory to it, but I do not believe in using the wrong instrument for the purpose. After all, our credit position in the world will be a very important factor at the end of the war, and I would not like to pass this point, or let it be assumed that any other colleague—the Chancellor of the Exchequer or anybody else —is not, like I am, a party to this proposal. I should like to hear the views of hon. Members upon it during the Debate.
The Problems of Transition
Now I turn to the special measures for the transition. As I said at the outset, the transition is an entirely different problem. We shall have to exercise extraordinary care in the transition period. If we do not adopt the right measures then, we may not be able to adopt them at an early date. One must feed into the other. That is vital. To do it, there has to be national discipline. I do not suggest that we shall need all the controls that have operated during the war, but let me mention one or two. Let us assume for a moment that everybody is agreed that the export trade has to be revised. The home market will be clamoring for goods; are we to start on the export trade when we have satisfied the home market? I suggest that if we wait, we shall have lost our export market. Therefore, we shall have to ration supplies for the home market, to reserve a proportion, and to begin building up good will and trade for our exports. It is no use people turning this thing into a political conflict. It is a question of absolutely essential measures.
The same thing applies in the home market. One of the things that have carried us through this war is that people accept the view that if we have not always been fair we have done our best to be fair. This deferred buying means a pent-up purchasing power. Millions of women will still go to work while lots of others will have time on their hands when they are released. If you want to keep peace in this country and not have disturbance, the woman who goes to work and has not the same advantage in shopping must be
able to get her sheets, blankets, and other domestic utensils on exactly the same terms as those who have plenty of time on their hands. These are simple domestic things, and some form of rationing will be absolutely essential until the market is full. We do not know what the food situation will be in Europe for a considerable time after the war. No one can foresee it. There may be a great strain on the foodstocks of the world. Who, then, would be foolish enough to say, immediately the balloon goes up and the Armistice is signed, "away with controls." You must keep order by maintaining these things, and a sense of fairness right throughout the community.
Then we have to make a selection, according to our use of raw materials for home production of the industries we can start up and develop. We have no foreign investments from which to buy anywhere. We have to get from abroad things that we can turn into finished products which will maintain our purchases of foreign materials. Therefore, control of raw materials is absolutely vital for a considerable period after the war. In that, there may be difficulties about patches of unemployment, but I can assure the House that we shall utilize all the experience we have gained during the war in order to get over them. I have been asked whether this will involve the direction of labor. It may not, but I do not believe I should have any difficulty, if it takes a long time to re-tool an industry in a given place and if I have an industry 20, 30 or 40 miles away, in making temporary arrangements, to develop where I can develop, during this interim period. The working people of this country are not unreasonable. They have common sense like everybody else, and I am certain that, handled properly, this thing can be got over without any very great difficulty . . . purely in the transitional period. You cannot switch over. There will be co-operation among all parties to maintain stability and order while we get on to a more stable level and can see where we are. Another very important thing we must do during this period is to keep up the savings effort, to maintain the surplus savings of the country. That must be done. We must control the use of capital and access to the capital market. All these devices are intended to give the Government of the day a stable, steady position during the transition, so that they can devote their minds and attention to working out by an ordinary method, the more permanent conditions.
I conclude by commending the Motion to the House, with this word: It is not final, it is pioneering, it is blazing a new trail. It is turning our backs on the old system. It is introducing, as against automatic control, conscious direction. It places a great responsibility upon Parliament and upon the Government of the day, and the integrity of its action: to have in its hands the direction of the economic life of the country as it wills is not something to be taken lightly. But having taken on that responsibility, then with the great standard that has been built up in our Civil Service, with the standard of our public conduct in dealing with these affairs, and with our great traditions in public life, both local and national, we can with safety start out on this road this week and begin to say that we have left the old vexed disease of unemployment behind us.