The Manchester Resolution of 1917—The Memorandum on War Aims, 1917—The Memorandum on Unemployment after the War, 1917—The London Resolution of 1918—The Prevention of Unemployment Bill, 1919—Labour’s Recommendations to the Industrial Conference, 1919—The Right Hon. A. Henderson’s Addendum—The Southport Resolution of 1919—The Resolution of September 1919—The Recommendations of the Joint Committee on Cost of Living, September 1920—Vote of Censure in Parliament, October 1920—Resolution of December 1920—Labour’s Refusal to Co-operate with the Government, 1921—Labour’s Statement of Policy for Unemployment, 1921—Manifesto on Unemployment, 1921.
The Labour Party claims to have foreseen the present prostration of industry, and asserts that it recommended in advance of the disaster complete preventives and remedies which, if they had been adopted, would have neutralized the present world-wide conditions of unemployment. The successive statements of policy issued, and resolutions passed by the Labour Party and the Trades Union Congress since 1917 on the subject of unemployment, disprove conclusively any such claim of prescience.
At the Labour Party’s Annual Conference in 1917 a resolution asserted that the Government could, if it chose, prevent any considerable unemployment in this country, by maintaining from year to year a “uniform national demand” for labour. This was to be done by co-ordinating the carrying out of public works, and of orders for State Departments and local authorities. “To prepare for the possibility of there being extensive unemployment either in the course of demobilization or in the first years of peace,” the Government was called upon to arrange for immediate execution, either directly or through local authorities, of the most urgently needed public works. These were described as housing to the extent of two millions sterling, new schools, roads and light railways, reorganization of canals, afforestation, land reclamations, harbour development, etc. To reduce the risk of adult unemployment it was urged that the school age should be raised to sixteen, scholarships established, and hours of labour shortened for young people, and a 48-hour week introduced generally without reduction of wages. It will thus be seen that Labour, in 1917, in exercise of those powers of prevision now so amply arrogated to itself, thought that unemployment after the war would be so limited in this country that it could be remedied by the adoption of the simple measures mentioned above.
In London, in December 1917, a Memorandum on War Aims was approved at a Special Conference of the Labour Party and the Trades Union Congress, and in February 1918, was accepted by the Third Inter-Allied Conference held in London of Foreign Allied Labour and Socialist organizations. This Memorandum proceeded in the same strain. Section 5 urged the Socialists and Labour Parties of every country to press their Governments to execute numerous public works, roads, railways, schools, houses, etc., at such rate in each locality as would, when superadded to capitalistic enterprise, maintain a uniform demand for labour and so “prevent there being any unemployment.” Then followed this fallacious proposition: “It is now known that it is in this way quite possible for any Government to prevent, if it chooses, the very occurrence of any widespread or prolonged involuntary unemployment,” and this comment, “if such is allowed to occur it is as much the result of Government neglect as is any epidemic disease.”
There was also issued, in 1917, a Memorandum called the Problem of Unemployment after the War, adopted by the Joint Committee on Labour Problems after the War, representing the Parliamentary Committee of the Trades Union Congress, the Executive Committee of the Labour Party, the Management Committee of the General Federation of Trades Unions and the War Emergency Workers’ National Committee. Its proposals for the prevention of unemployment are worthy of analysis. It maintained that unless prevented by concerted action there would be considerable unemployment after the war, and from these specific causes, namely, the discharge of munition workers, delay in works changing over from war to peace production, congestion of ports, demobilization of the Army and Navy, difficulties in securing adequate industrial capital. Again the remedy recommended was the maintenance from year to year of a uniform national demand for labour by the Government and local authorities giving out their orders “in such a way as to make them vary inversely with the demands of private employers.” The public works that were to be executed were much the same as before: housing schemes, water and drainage works, parks, schools, public libraries, works planned by the Development Commission and Road Board and held up owing to the war, the development of agricultural and rural industries on a national and co-operative basis, afforestation, and the execution of Government printing postponed during the war. The Government was also pressed to encourage works of which the output, like bricks and cement, were necessary for the carrying on of other work, for example, building.
There could be nothing plainer than this sentence in the Memorandum: “It may be urged that no such action would keep up the demand of other countries for our products, and thus the export trades might fall off; it may be assumed, however, that the principal export trades will certainly be busy (coal, machinery, shipbuilding, constructional iron and steel and all woollen goods) and the home demand for cotton goods is also expected to be brisk.” It is obvious, therefore, at this date that the Labour Party never contemplated the present depression in our export trade.
The proposals of this Memorandum were in advance of previous recommendations. To enable local authorities to execute public works, legislation was demanded to facilitate the acquisition of the necessary land. The Government was to use for national purposes the 200 national factories, but for what purpose the Memorandum is eloquently silent. A systematic plan of short-time with full wages was to be introduced for a certain limited period in Government dockyards, arsenals and factories, when the final adjustment to peace-time conditions was taking place. To prevent an overstocked adult labour market there was to be no employment, partial or otherwise, of children under the school-leaving age, which was to be raised to sixteen, and only part-time employment up to a maximum of a 30-hour week for young people between sixteen and eighteen years, the balance of whose normal working week was to be devoted to physical and technical training and education. Twenty thousand additional scholars were to be trained as school teachers, and additional bursaries granted to the secondary schools, universities and technical colleges for pupils from the elementary schools, who would otherwise go into industry. Overtime was to be prohibited, and an 8-hour day to be imposed by statute.
The Memorandum claimed maintenance, apart from the Poor Law, for all persons who were unemployed and for whom no suitable work could be found. Where persons were entitled to unemployment benefit from the Trade Unions they should receive it and in addition be paid unemployment benefit under the Unemployment Insurance Acts; the rate of benefit, under those Acts, to be increased to a sum to be fixed in regard to the prevailing cost of living. Unemployed persons who did not receive benefit under the Acts, and those who had received it, but had run out of it, should be paid maintenance up to a total sum per week fixed in due relation to the cost of living. Trade Unions paying unemployment benefit were to receive a Government subsidy.
In addition the Memorandum called for wide extension of the National Insurance Act, 1911, and for abolition of its restriction to a limited number of trades, and also for amendment of the National Insurance (Part II) (Munition Workers) Act, 1916, which brought in munition workers and persons engaged in metal and chemical industries under the Act of 1911, and created, it was said, invidious distinctions, as for example, between a worker who would be insured if engaged on a particular article needed for use in war, but who would not be insured if engaged on the same type of article when it was needed for ordinary commercial use. The Memorandum also called for amendment of the Act of 1916 in regard to its application to women, and for the extension generally to women of the National Unemployment Insurance Scheme.
When one passes to the year 1918, we find no indication whatever that the Labour Party had any premonition of the decline in trade which commenced in the spring of 1920, or were gifted with any widening vision as to the remedies required to meet it. This appears from the proceedings of the Labour Party’s Annual Conference in that year, and from the resolution which was passed on the prevention of unemployment. This resolution, after declaring that the years immediately following the war would probably include periods of grave dislocation of profit-making industry, called upon the Government to arrange the carrying out of the next succeeding ten years’ programme of national and local government works, including housing, schools, roads, railways, canals, harbours, afforestation, reclamations, etc., in such a way as “any temporary congestion of the labour market may require.” This resolution solemnly and without reservation committed the Labour Party to this sweeping generalization:—“Now that it is known that all that is required to prevent the occurrence of any widespread or lasting unemployment is that the aggregate total demand for labour should be maintained year in and year out at an approximately even level, and that this can be secured by nothing more difficult or revolutionary than a sensible distribution of the public orders for works and services so as to keep always up to the prescribed total the aggregate public and capitalist demand for labour, together with the prohibition of overtime in excess of the prescribed normal working day, there is now no excuse for any Government which allows such a calamity as widespread or lasting unemployment ever to occur.”
One can thus realize what, up to the end of 1918, were the sovereign panaceas of the Labour Party for the prevention of unemployment after the war. Let us proceed to trace from and after 1919 the recommendations of Labour, which it is now said, had they been adopted by the Government, would have averted the present conditions of unemployment.
On March 21, 1919, the Labour Party brought to second reading in the House of Commons their “Prevention of Unemployment Bill,” which embodied only the old principles that Labour had been advocating since 1900, to meet seasonal and cyclical unemployment. The Bill in no sense met the present abnormal trade depression, and was rejected. It proposed to vest in the Minister of Labour all powers and duties in regard to unemployment insurance, the prevention of destitution, and the relief of the able-bodied poor. It provided that the Minister should advise the Treasury how the various Government works and services should be organized and apportioned over different seasons of each year, and spread over different years, so as “to regularize” the national aggregate demand for employment, including both public and private employment, as between the different seasons of the year, and as between the good and bad years of a trade cycle, and so, by maintaining at an approximately constant level the national aggregate demand for labour both by private employer and by public departments, prevent irregularity of employment. It also put the Minister under an obligation to establish and maintain such institutions as he should deem requisite, in which he was to provide for able-bodied persons entitled to public assistance under the Act, and for whom no suitable situation could be found, such employment of an educational character and such physical and mental and technological training as he should think fit. All persons admitted to such institutions were to be provided by the Minister with proper maintenance. The Bill in addition proposed to constitute as the local unemployment authority, who were to act through an unemployment committee, the London County Council in respect of the Administrative County of London, and the council of every borough and urban district of a population of 20,000 or over, and the county councils in respect of the rest of an administrative county. Each such council, acting through the unemployment committee, was to be bound to organize all work—manual or clerical—under its control, so as to maintain the labour demand in its district at a constant uniform level. In addition, each such council was to be put under obligation to provide every person, for whom suitable employment could not be found, with such maintenance as its medical officer of health might certify to be necessary to maintain such unemployed person and his dependents in a state of physical efficiency. All the expenses of the local unemployment authorities in carrying out the Act were to be met out of the local rates to the extent of a 1d. rate; all expenses over the proceeds of a 1d. rate were to be recovered from the Treasury. There was no limit whatever to the charge under the Bill[9] upon national funds.
The next important declaration in 1919 by Labour in respect of unemployment is contained in the Joint Report of the Provisional Joint Committee presented to the Meeting of the Industrial Conference, Central Hall, Westminster, April 4, 1919 (Parliamentary Paper, 1920, Cmd. 501). It will be remembered that on February 27, 1919, the Government called together, under the shadow of a miners’ strike, a Conference consisting of representatives of employers and Trade Unions to consider the industrial situation. That Conference, after expressing its opinion that any preventible dislocation of industry was always to be deplored and in the then existing critical period of reconstruction might be disastrous to the interests of the nation, resolved to appoint a Joint Committee to consider, amongst other things, the question of unemployment and its prevention. A unanimous report was presented by the Joint Committee, signed by the employers’ representatives and also by the Trade Unions’ representatives, the latter representing all the great Trade Unions, with the exception of the railwaymen, the miners and the transport workers.
In their Report the Committee stated that they had not had sufficient time at their disposal to investigate thoroughly the problem of unemployment, and therefore would only indicate briefly some of the steps which might be taken to minimize it or alleviate it. As aids in this direction they recommended organized short-time, the working of overtime only in special cases, postponement, until bad times, of Government non-urgent contracts, prosecution without delay of a comprehensive housing programme, State development of new industries such as afforestation, reclamations of waste lands, development of inland waterways and, in agricultural districts, the development of light railways and/or road transport. In addition the Committee recommended that the normal provision for maintenance during unemployment should be on a more adequate scale, and be wider in its application than was provided by the then existing Unemployment Insurance Acts, and advocated the extension of the National Unemployment Insurance Scheme to underemployment (i.e. workers on short-time or casual employment for less than a full working week). They also recommended the provision of facilities whereby workers while unemployed and in receipt of unemployment benefit could obtain access without payment of fees to opportunities for continuing their education and improving their qualifications. Child-labour, they advised, should in times of unemployment be limited, and sickness and infirmity benefits increased, the age of qualification for old age pensions reduced and the amount of the pension increased.
The Memorandum by the Right Hon. Arthur Henderson, on behalf of the Trade Unions’ representatives, appended to the Report, dealt further with the question of unemployment. This Memorandum, while in no way disagreeing with the Joint Report which the Trade Union representatives had signed, stated (p. v.) that “the prevention of unemployment and provision against unemployment should have been one of the first thoughts of the Government as soon as the question of industrial reorganization began to be considered. The workers fully understood that steps were being taken to bring into immediate operation, upon the conclusion of hostilities, a permanent scheme both for the prevention of unemployment wherever possible, and for the maintenance of the unemployed where this could not be done.” Further, “we are of opinion that the unequal distribution of wealth which prior to the war kept the purchasing power of the majority of the wage-earners at a low level, constituted a primary cause of unemployment.” Then followed this finding (p. viii): “We are of opinion that a general increase in wages by improving the purchasing power of the workers would have a general and permanent effect in the direction of limiting continuous unemployment by bringing consumption up to something more like equilibrium with production.”
They accordingly recommended (p. viii) first:—the appointment of a sub-commission to investigate (1) the whole problem of unemployment and especially under-consumption as a cause of unemployment; (2) the allocation of all Government contracts in such a way as to steady the volume of employment, and (3) the co-ordination of orders given by State Departments and local authorities; secondly, the establishment of a comprehensive scheme of unemployment provision extending to all workers on a non-contributory basis, providing for adequate maintenance of all workers unemployed, and for the making up of maintenance pay to workers under-employed. All were to receive a flat rate of benefit with a supplementary allowance for dependent children. The scheme was to be administered directly through the Trade Unions, or, where such were not available, through the Employment Exchanges, which were to be placed under joint committees equally representative of employers and Trade Unions. The Government were to pay to a Trade Union, providing an additional benefit out of its own funds, a subsidy equivalent to 50 per cent. of the amount expended by the Union on unemployment allowances. In addition special provision was recommended for the maintenance of widows with dependent children and for the endowment of mothers “to prevent their being forced into industry against the interest of society.”
In June 1919, the Labour Party again considered at its Annual Conference the question of unemployment, and passed a resolution that full and adequate maintenance should be granted by the Government, through the Trade Unions concerned, for unemployed persons, mothers with dependent children and unable to work, juveniles leaving school and becoming unemployed below the age of eighteen, women receiving training under the Government’s training schemes, and women whose out-of-work donation had ceased and who had not secured suitable work from the Labour Exchanges.
Again, in September 1919, the Trades Union Congress passed a resolution affirming the right of every member of the community to work or to the receipt of maintenance, and accordingly called upon the Government to regulate national and local authorities’ work, and to organize schemes of “socially necessary” work so as to provide employment, and, failing that, to provide adequate maintenance for all workers who could not find suitable employment, and facilities for training while they were out of work. This resolution contained this interesting sentence: “It deplored the inaction of the Government during the past year which had wasted the resources of the nation by allowing hundreds of thousands of willing workers to remain in a state of enforced idleness at a time when the needs of the world called imperatively for increased production.”
The decline in trade and failure of demand for commodities first appeared in the summer of 1920, and gradually increased in severity as that year went on.
In September 1920, a Joint Committee on the Cost of Living was appointed by the Labour and Co-operative movements. That Committee made certain recommendations which were not original but a mere reiteration of matters which the Government had previously indicated were of prime importance in connection with the restoration of international trade. The measures which this Committee claimed to be essential for the revival of industry and restoration of trade were as follows:
(1) The re-establishment of international peace;
(2) The definite fixing of war indemnities at reasonable amounts;
(3) Rehabilitation of currencies;
(4) In countries where a return to the gold standard was impracticable, the establishment of a new parity of exchange;
(5) The exchange of goods between different countries by barter pending re-establishment of the machinery of exchange;
(6) An international loan by the League of Nations to enable impoverished countries to resume normal production.
But there was nothing in this programme which was not at this time well under the consideration of the Government.
On October 21, 1920 (see Parliamentary Debates, Vol. 133, 1115), the Labour Party unsuccessfully moved a vote of censure in the following terms:
“That this House views with regret the growing volume of unemployment, and, recognizing the responsibility of the State towards members of the community who are bereft of the means of livelihood, is of opinion that every possible step should be taken to arrest the decline in trade and industry and to provide work or, in default, adequate maintenance for those whose labour is not required in the ordinary market.”
The current views of the Labour members in respect of unemployment were very fully stated, and the parliamentary debate should be read. Shortly put, their points were these:
(1) The unemployment problem is a national problem; it can only be successfully solved by the State; it ought not to be left for local treatment by local authorities.
(2) Work should be found by the Government for every workless citizen, willing to work, and, failing that, adequate maintenance.
(3) The volume of agriculture should be increased and smallholdings encouraged.
(4) Trade relations should be established with Russia, Bulgaria, Turkey, and other former enemy countries.
(5) The Government should establish new trades and industries in this country.
(6) Public works should be undertaken, like afforestation, main and other roads.
Critically read, the debate seems strangely barren of any really constructive suggestions by the Labour Party.
Later, on December 16, 1920, the Labour Party sent a deputation to the Minister of Labour to urge him to accept the following propositions in regard to unemployment:
(1) That unemployment insurance is no remedy;
(2) That it is the Government’s duty to provide for the unemployed useful work in various Government establishments;
(3) That a grant should be made to the Distress Committees under the Unemployed Workmen’s Act, 1905, in order that local schemes for the provision of work might be put in hand;
(4) That the principle of the out-of-work donation granted after the armistice should be restored for the benefit of every unemployed person not covered by unemployment insurance, and that provision should be made whereby persons at present unemployed, but not covered by the Unemployment Insurance Act, would receive benefits under that Act.
This last point was conceded by the Government subsequently in the House of Commons.
On December 29, 1920, the Labour Party Conference, called to consider the report of the Labour Commission in Ireland, proceeded somewhat inconsequentially to discuss the problem of unemployment in Great Britain and subsequently passed the following resolution:
“That this Conference, realizing that the growing volume of unemployment and under-employment is due in a large measure to the interruption in world trading following on the war and the defective peace treaties, in addition to the folly of British and allied policy in relation to the Soviet Government of Russia, condemns the British Government for the unwarrantable delay in securing peace and opening trade relationships with the Russian Government.
“The Conference further condemns the Coalition Government for failing to make provision for the prevention of unemployment and for the proper treatment of unemployed persons; it calls attention to the fact that in February 1920, the Labour Party in Parliament introduced its Bill for the prevention of unemployment, containing provisions for the maintenance and training of unemployed persons, which the Government refused to accept.”
The last paragraph of this resolution is important. It has been customary in recent years for Socialist advocates to assure the workmen that unemployment can never exist under any of the types of socialistic organization of industry, but that it is an evil peculiar to what they call the “capitalistic regime,” and that unemployment is merely one of the devices of the employer to break down Trade Union conditions and so lower wages. How exactly the consumer, who, after all, is the person who really controls the production of commodities, is to be persuaded to consume and pay for more commodities under a socialistic organization of industry than under a capitalistic system is not-perhaps wisely so-explained, but the suggestion of the final paragraph is that were the present “pernicious economic system” abolished and the Labour Party in power, then if its Government were unable to provide work it could and would provide maintenance and, the ordinary worker is told, at full Trade Union rates of wages. As to how such scheme is to be financed the resolution is sagaciously silent.
In January 1921, the Government decided to set up two Committees on unemployment and invited Labour to join one of the Committees. Labour took the view that the terms of reference were too narrow to serve any useful purpose, whereupon the Government at once expressed its willingness to widen the terms, but on January 11, at a Joint Committee of the Parliamentary Committee of the Trades Union Congress and the Executive Committee of the Labour Party, it was unanimously decided that Labour would not accept the invitation of the Government to join in any inquiry into unemployment. The public resentment aroused by that attitude soon convinced the Labour movement that it had put itself entirely in the wrong, and it tried energetically to put the blame for its decision on the Government. Labour leaders charged the Government with lack of frankness and straightforwardness in regard to the terms of reference, without giving any corroborative particulars whatsoever beyond that unsubstantiated general statement; they contended that co-operation with the Government had never led to anything—forgetting entirely the many benefits which during the war were secured to Labour both in rates of wages and conditions of employment wholly through co-operation with the Government. Truly memories were short. Then finally Labour unconvincingly charged the Government with failing to keep faith, or, if faith had been kept, with keeping it unwillingly and ungraciously, and only as a result of Labour’s agitation. The first proof adduced in support of this latter contention was the action of the Government in regard to the Joint Industrial Conference of 1919. The Conference, Labour said, was originally called by the Government; the Joint Committee presented a unanimous report which the Conference accepted; the Government took no action to give effect to the recommendations of the report and the Committee ultimately resigned, and the Conference dissolved. The second case on which Labour relied was that of the Royal Commission on the Coal Industry of 1919; the majority findings recommended alteration of the then existing system of control of the mining industry; “to these the Government refused to give effect.” The inaccuracy of this statement will be seen from Chapter XIV. The Government would not accept nationalization. “Labour,” so it was declared, “has lost all faith in the good intentions of the Government, and refuses to allow itself to be used once again as a smoke screen.”
As a counterblast to the Government’s Committees of January 1921, the Labour Party in that month produced an elaborate programme to deal with unemployment. This will be found in a pamphlet entitled Unemployment: A Labour Policy, issued in January 1921. The whole of the suggestions fall under two main heads:
(1) Maintenance of the unemployed and under-employed, and
(2) Provision of work.
The categorical demand was repeated that work should be provided by the Government, and that if work is not, or cannot be, provided, then all unemployed and under-employed should be fully maintained at the expense of the State.
In regard to unemployment benefit, every one for whom no suitable work was available at the Employment Exchanges, or through his or her Trade Union, was to be paid maintenance, which, including benefits under the Unemployment Insurance Acts, should amount at least to 40s. per week for each householder and 25s. per week for each single man or woman over eighteen, with additional allowances for dependants. Increases in these rates were subsequently claimed as the year went on. Neither maintenance nor benefits under the Unemployment Insurance Acts should be limited to any period of time, but should continue as long as no suitable work was available. In the case of under-employment resulting from short-time, the maintenance allowance should be of such an amount as, when added to the actual earnings, would yield a sum equal to the amount of maintenance which the worker would receive if he were totally unemployed.
Training schools were to be provided for women attracted into industry during the war but who, after the war, found themselves unable to secure permanent peace employment. The local educational authorities, assisted by grants from the Exchequer, were to provide courses of training for unemployed male workers. To relieve adult unemployment the Board of Education should be authorized at any time to raise the school-leaving age, and should be restrained from discouraging local educational authorities from making by-laws raising the age of full-time attendance. Local education authorities should be urged to submit fresh schemes for schools, etc., under the Education Act of 1918. Any exemption from school attendance below the age of fourteen to be made illegal; local education authorities to proceed with schemes of “continuation education”; the Government to increase the number of free places in secondary schools and provide maintenance allowances to all free-place pupils in need of them. The number of free-places in all centres of higher education to be increased, maintenance allowances to be given under grant from the Board of Education to persons holding such places; training centres for young persons unemployed to be opened by local educational authorities under grants from the Board of Education.
“Socially necessary” work was to be provided for all. This was to be facilitated by the withdrawal of juvenile labour, and the general introduction of a 44-hour week without reduction of wages, coupled with a drastic regulation of overtime. The work so provided should not be “relief works,” but of a “socially productive character” carried out under regular wage-earning employment by workpeople in the appropriate trades. Work merely providing employment for the unemployed without social results was characterized as wasteful for the community and demoralizing to the workers.
The Labour Party tries of set policy to make the Government the scapegoat; so the Report delivered itself as follows:
“We recognize that the insensate policy of the Government during the last two years both in home and foreign affairs has brought the nation to the point at which wholesale relief is the only alternative to wholesale starvation, and that those who suffer by it must be provided for directly out of the pockets of those more fortunately situated.”
In order to increase the volume of employment the Government was enjoined to put in hand, at once, as much as possible of its works programme for the next decade, and cause commodities ultimately needed by the State to be manufactured forthwith; and local authorities and public bodies were similarly called upon to anticipate their requirements. Road improvements were demanded on a much larger scale, and afforestation and foreshore reclamation. Then came the recommendation that the Government should compose its differences with the Building Trade Unions by giving them a guarantee of an adequate minimum housing programme for the next five years, so as to meet “their reasonable claim for safeguards against unemployment”—this to induce the Building Trade Unions, who had more housing work than they could do, to allow unemployed unskilled men, mainly ex-service men, to enter temporarily the building trade! The report alleged that many raw materials and other necessary supplies were being held up by capitalists, for instance, cement, bricks, light castings; to remedy this supposititious state of affairs the Government was urged to take drastic steps to compel the production of these materials in the required quantities. An enormous amount of work in respect of the construction, improvement and repair of railways, roads, waterways and harbours, it was said, ought no longer to be postponed. Schools and other public buildings should be built. The embargoes laid upon borrowing by local authorities should be removed and loans provided for them through the Public Works Commissioners or otherwise by the State to enable them to carry out local public works. The Government was required to resume through county agricultural committees its war-time powers to enforce the proper cultivation of land.
Then follows a series of measures for the restoration of overseas commerce. The root of the problem of unemployment lay, it was said, in the revival of industry and of commerce abroad. “The Government had shirked that duty,” and these were Labour’s demands:
(a) An end to be put to wars, and all expenditure on armaments and semi-warlike expeditions in this and other countries.
(b) The immediate inception of trade with Russia, and normal political relations with the Soviet Republic. The Russian Government was known to be ready to supply to this country large quantities of timber, hide, flax, platinum and gold in payment of extensive supplies which it needed of railway equipment, means of transport, agricultural machinery, implements of all kinds, clothing, boots, and a thousand and one other commodities. This necessitated and justified the immediate conclusion of an effective trade agreement with Russia.
(c) The restoration of production in, and trade with, other continental countries, but not under the export credits scheme of the British Government—which is “merely an attempt to enable British manufacturers to palm off their surplus goods upon foreign countries instead of supplying the goods to those countries which they really need.” The ordinary normal course of international trade is then described, with this naïve observation. “At present, however, conditions in Central Europe are such that, without further assistance, it is very doubtful if this normal trade transaction would be carried out.” The report is most admirable in its modesty as to what “further assistance” it recommends. We may assume that if a recommendation had been available, that would stand criticism, it would have been proffered.
The only proposals which the Report advocated were as follows:
(1) The fixing of the German indemnity at an amount which is both reasonable and practicable in order to end uncertainty and encourage the re-establishment in Germany of normal production.
(2) Credits to be provided for “several European countries” (unfortunately left anonymous), and to be devoted to the production of commodities of which there is no danger of overproduction, and the provision of transport facilities; the granting of these credits to be conditional on the removal by the benefiting-state of all barriers against trade and on rehabilitation of its currency.
(3) All Governments boldly to intervene to arrange on a large scale the barter of whole stocks of surplus commodities. “This, while yielding no profit to speculators, would do much to revive economic prosperity and set going the wheels of industry.”
(4) The reorganization of the continental transport systems and the institution of unified control, under the League of Nations, of the railway system between Germany and Russia.
(5) The encouragement and fullest possible use, for trade transactions, of the Co-operative movements of the various nations of Europe.
The Report expressed a halting agreement that large sums of money would be required in respect of the maintenance of unemployed and under-employed, the undertaking of work of social utility, and the financing of schemes for the revival of British industry and the restoration of industry and commerce abroad. It did not attempt to discuss how this money was to be provided; it disposed of the whole question by this facile observation: “We shall be met at once by the criticism that sufficient money cannot be found to meet our demands. We do not believe it. We refuse to be put off during this grave national crisis, imperilling the welfare of the whole population, with pleas of financial stringency.” Reference was made to large sums of money which, it was stated, were being spent by the Government on unjustifiable purposes, for example, on expeditions in Mesopotamia, operations in Ireland and in other places. Money, instead of being so expended, should be devoted to the relief of unemployment. If such retrenchment of military and other wasteful expenditure did not yield the total sum required, then, said the Labour Party, “other resources must be tapped,” but those resources are not indicated. “While an increasing number of families are daily sinking into starvation, the well-to-do classes have suffered only minor embarrassments. Luxuries must go, if needs be, to provide the means of life and livelihood for those in distress.” Hardly a constructive financial scheme.
The last important announcement was the Manifesto on Unemployment issued by the Parliamentary Committee of the Trades Union Congress and the National Executive of the Labour Party after the Trades Union Congress at Cardiff in 1921, “for the information of the Government and the public.” It declared, in now familiar language, that unemployment is a national problem, and that the Government is wholly wrong in adopting measures of local treatment. No district, it is asserted, has any control over, or any responsibility for, its unemployment. To make districts responsible is to subject working-class areas of low rateable value to excessive and unjust burdens which they cannot bear and which ought in equity to be spread over the whole country. The Party expressed its strong objection to the limited advances made by the State to the local authorities in respect of relief works, especially to the necessity for so much expenditure being raised by local loans, by that method placing, it was said, the burden upon the backs of ratepayers of the very areas whose affliction was already the greatest. Once again the Trades Union Congress at Cardiff reaffirmed what was described as the fundamental principle—“the duty of the State to provide work or adequate maintenance for every willing worker.” Accordingly the Government was required to discontinue countenancing wage reductions, and to stimulate normal production by maintaining the purchasing power of the workers and thereby sustain the whole market. It is also affirmed that sufficient orders for work to relieve unemployment will not be forthcoming except on the basis of national credit. The Government Departments are urged to anticipate, and now place orders for, their future needs, and the Government itself is recommended to place substantial orders for staple commodities with manufacturers, at prices agreed after an examination of costs, and to export these commodities on credit to continental countries needing them, selling them either directly to the Governments of those countries or to Co-operative Societies or other organizations in them, and at the same time to arrange for the sale or other disposal at home of any remaining portions of the stocks of such commodities. In addition a 40-hour working week should be introduced. This, it is said, would result in (i) the maintenance of the morale and efficiency of the people; (ii) the maintenance of machinery in working order pending the return of normal trade; (iii) the maintenance and improvement of the home trade and the stimulation of foreign commerce; (iv) the saving of enormous sums on unemployment benefit and poor law relief. So, it was claimed, the problem of unemployment could be reduced to proportions capable of being adequately dealt with by public works. These formed the next consideration. The Government was requested to prepare a list of schemes of national works in the order of their demand for labour, giving preference to those most calculated to foster the revival of industry, comprehensive housing schemes to be included prominently amongst them. The Government’s distinction between schemes of public works as revenue producing and non-revenue producing, it was admitted, was sound, and should be maintained, but in the case of the former, the Government should make a grant of 75 per cent. of the necessary expenditure and lend the remaining 25 per cent. to local authorities free of interest for three years, the rate of interest thereafter being 3 per cent., with arrangements for repayment at stated intervals. In the case of non-productive schemes, the Government to make a grant of 90 per cent. of the necessary expenditure and lend the remaining 10 per cent. to local authorities free of interest for five years, at the end of which time interest and repayment should be the same as in the case of the productive schemes. “If, however, employment is still not forthcoming for all workers, provision for maintenance must be made by means of unemployment insurance benefits on an adequate scale.”
In Part II of this book it will be seen how far the Government has gone for the purpose of alleviating unemployment in the directions desired by Labour.