No. It is the greatest common measure of economic sanity in the world. The report says:
"It is no longer by stock exchange quotations, or by statistics of production, or by trade returns that progress is now judged so much as by the number of persons out of work. When all has been said, unemployment still remains the crucial test of economic and social policy. A community which has failed to enable all its citizens to contribute by their work to their own well-being and to the common heritage of the society to which they belong has failed to solve the fundamental problem of statesmanship."
A little later there is one other statement made:
"There is a general view now prevalent that it is the volume of spending that counts more than anything else. A small number of large buyers consume less, and less regularly, than a large number of small buyers."
Let us see what we have done towards creating a large number of small buyers. We have subsidised wheat and beet. It cost us £3,000,000 a year. What is the return? According to the statistics that we have there is no advantageous return, no permanent labour employed on the farms. We have lost 600 permanently employed and we have gained 2,400 employed for about a quarter of the year. Those two figures balance. We have not gained any paid employment on the farms. For that £3,000,000 per annum subsidy what have we gained? The returns show that as far as the families of farmers are concerned there is a nominal gain of 9,000. The peculiar thing is that last year that figure was higher, and in 1934 it was higher than for 1935. The reason for it is easily enough to be seen; that particular return does not necessarily mean people actually employed on farms, because that particular figure was only engineered by returns made up of people who were qualified for certain benefits. The agricultural grant has taken a new turn. It is distributed according to certain qualifications that are set down, and the necessary impact of that upon the farming population of the country is that farmers gain more through the agricultural grant if they return more of their families as working on the farms. In fact, in the year 1934 the number returned was greater than the 9,000. The figure of 9,000, I suggest, does not represent the actual number of people employed, but only some deflation of the enormous inflation of the actual figure which took place owing to the `persuasion of this extra amount of the agricultural grant.
Let us take the figure of 9,000. Let us say there are 9,000, not extra paid labour but extra members of families of farmers working on the land. What are they working for? Are we to count that we have 9,000 small buyers? If we are, we can add the qualification that they are very small buyers. Are they working for wages? What remuneration are they getting? What addition to the purchasing power of the community do they represent? What extra field for activity amongst industrial producers do they offer? What are they except a nominal figure of extra people on the farm thrown in as working, probably not working any more than they used to, and certainly not to any degree, not a measure in money's worth, not a measure in purchasing power, and at the best if there are 9,000 extra small buyers that is what we get in the whole agricultural community for the expenditure per annum of £3,000,000 on two crops. Is that an economic return? If we had no other production it might be worth while suffering this loss—because it is a loss to the community—to get those people doing something, but it is a different matter when we get them by turning our backs on another good type of activity with a production of goods easy for us; with a market, as I say again, yawning wide open to get those goods, and with circumstances attached to this country which would enable us to get for those goods in that market yawning wide open for them better terms than any other producer sending goods into that market can get.
We neglect that out of national pride, and we decide that we are going to subsidise crops of an uneconomic type. Those subsidies are costing this community £3,000,000 per annum, and the best return we can get is an extra 9,000 people. That is the best; I want anybody who thinks there is anything more to be added as the fruits of the agricultural economic policy in this country to tell me where it is, and I want that related to a figure of employment and to a figure of wages, because then I will get the purchasing power that has been created and the benefit that has accrued to the community. I have spoken about the industrial side before and will, presumably, have to speak on it at length and often again. The Minister for Industry and Commerce told the House on one occasion that there was a real barometer to improvement in industrial employment in the country, and that was the Unemployment Insurance Fund. It is a great test, and, possibly, the only test, and a test in which, I think, there cannot be a mistake, with one reservation. If the Minister were to tell me that there was not very good compliance with the Act, we should have to say that, as a test, this particular fund fails. In my time, I had calculations made, and asserted often in the House, and never met with contradiction, that there was no great evasion of the Act. The present Minister for Industry and Commerce has assured me in the House that there is no evasion at the moment more than would be represented by a figure of 2 per cent. I think he put it even much lower—at point something. The Unemployment Insurance Fund is made up of contributions from every employee in insurable occupation, from every employer who has an employee in insurable occupation, and a State grant of a fixed proportion to these two sums, and, as that fund rises or falls, there is a definite barometer to the increase or decrease of those in insurable occupations in this State. It is even better than that, because that fund, analysed, can be made to bring out a tot of figures, and if we take as our comparison men whole-time employed throughout the 52 weeks of the year, we get an exact comparison year by year.
There may be some little evasion of the Act. If it is not extravagant in one year over another, although these figures may be vitiated some 2 or 1 per cent. of their absolute value, for comparative purposes between year and year they are exact. If the contributions made in regard to a person in insurable occupation over very nearly the 52 weeks of the year are analysed, and the calculation made, this is a conclusion that cannot be denied: that the fund swells by £4 in respect of every man in insurable occupation for whom contributions in accordance with the Act are being paid if he is in an insurable occupation for about the 52 weeks of the year. I have asked questions over and over again to get a comparison, and occasionally there is some question raised in this House as to the standard of comparison. I take the full year 1931 as my basis. I had control of the Unemployment Insurance Fund in all of that year. I do not go into the financial year 1931-32 because I had not control of the fund during all of that period and because the latter portion of that period was overclouded by the general election. The year 1931 is a good test and the test will not vary very much, although it will vary somewhat if the financial year is taken instead of the calendar year. In the calendar year 1931, the income of the fund was something over £1,000,000; in the calendar year 1935, it had gone up to £1,105,000; in my last year, it was £1,009,000; and the comparison I want to make is between 1931 and 1935. The Insurance Fund had swelled by something short of £100,000 in that period. To reduce that to terms of men, or to terms of persons employed in industry in insurable occupations, we divide by four. The increase in that fund means that in the year 1935, there were 25,000 more people in employment right through the year than there had been in 1931.
Is that due to tariffs? Is that due to new industry in this country? To what is it due? I suggest that there is one activity in this country which must strike the ordinary beholder—the building industry. If the ordinary beholder cannot believe the evidence of his own eyes, he has certain statistical information to fall back on. In the month of October, in 1934, the Minister for Industry and Commerce was alarmed at the statements made in the Press about the growth of unemployment, and he summoned the Press into conference and issued a statement to them. In the course of that statement, he asks people to turn their view away from unemployment, and to direct it much more healthily upon the aspect of employment, the actual people put into occupations. One would have thought that the Minister for Industry and Commerce in 1934, full of pride in the industries and the factories and the work houses which had come into being in the country, would have spoken to the Press representatives about industry. He did not. He said:—
"The evidence of substantially increased employment was fully supported by evidence from sources such as the production returns of employment in the tariffed industries——
and then he threw that aside, never to be mentioned again. He then said:—
"—but notably by the following: In house-construction—in 1926-27, the number of houses built was 3,711, giving average direct employment to 7,800 people; in 1933-34, the number of houses built was 6,960, giving average direct employment to 14,700 people.
He was speaking in terms of average direct employment and he went on to say:—
"However, in May, 1934, the estimated direct employment in house-construction was 21,500 people."
That is in the year in which he said there were 6,960 houses built. I was anxious to find out just what that figure meant, and I asked a series of questions to discover whether that related to houses built and completed, or to houses built and in course of completion, and I find that, for the year 1932, the number of houses completed and in progress was 7,316. It is so near the calculation made by the Minister in 1934 that I think that was what was meant. In the year ended the 31st March, 1933, there were 7,316 houses either built or in course of completion by private persons, public utility societies and local authorities, and the Minister tells us that on a tot of 6,960 houses, there is average direct employment to 14,700 people. In the year ended 31st March, 1935, the number of houses completed and in progress had gone up to 25,898, and in the year ending the 31st March, 1936, the number of houses completed and in process of completion had gone up to 38,616. I ask that a simple deduction be made from that.
Seven thousand houses give average direct employment to 14,000 people— it is something over two per house. How many people were given employment when the number of houses had risen to 25,000 in the financial year ended March, 1935, and in the last year had risen to 38,000? The figure must be doubled, at any rate. If a mere total of 7,000 houses under completion can give direct employment to 14,000 people, 38,000 houses, or, taking the earlier year ending 31st March, 1935, nearly 26,000 houses, must have given a great deal larger direct average employment. Suppose we take it at only one and a half per house either completed or in progress, which, I understand, is another calculation, we find that there were 37,000 people getting direct employment in house-building alone. They are not all new because there was some house-building being done in our time.
I asked questions of the Minister for Local Government about that, and was told that the average employment given in 1930 was about 3,000 to 4,000 people. Let me take it at 4,000 people. House-building, therefore, is responsible for a vast total of people employed. I do not attempt to make an exact calculation from that, but if 7,000 houses can give direct average employment to 14,000 people, the direct employment average given by the construction of either 38,000 or 25,000 houses must be many times 7,000. If I take the tot of two to a house, there are 50,000 finding employment in the year ending 31st March, 1935, and the number should have risen, in the year ending 31st March, 1936, to about 70,000 people.
Now, that is the main activity. It must be remembered that employment in house-building is an insurable occupation. Every person who is engaged in building a house stamps a card and gets a contribution into the Unemployment Insurance Fund for him. If you have 25,000 people extra—that is to say, if you have 30,000 people engaged in house-building—you have exhausted the increase in the Unemployment Insurance Fund. You have drained the full tide of new work in so far as that was represented by the Unemployment Insurance Fund. I have recited these figures from time to time. The Minister can tell me, at any moment he likes, that his calculation made to the Press, made deliberately, because he said himself it was backed by statistical information, was wrong and an exaggeration. I should like him to tell us by how much was it an exaggeration. Calculations that I have got, made in another way, do not show that it was very much of an exaggeration, and if I take the tot of a man and a half per house, either completed or in progress, for the year ending 31st March, 1935, there must have been about 37,000 people finding employment through house-building alone. That would mean an increase in the Unemployment Insurance Fund of £148,000, but the Unemployment Insurance Fund only showed an increase of £100,000.
What has happened to industry in the country? Perhaps I may be permitted to refer again to the German Minister for Finance to the effect that the potential forms of energy to get industrial progress going in any country are economic activity, improving agriculture and improving industry, and Germany, looking after motor-transport, house-building and road-making, we have forestalled already on road-making. We are exhausting any demand there is for houses. We have done all that the Government think they ought to do in regard to industrial production. They are subsidising farming to the extent of £3,000,000 a year on two crops alone, and the whole increase represented by the increase in the Unemployment Insurance Fund figures shows that a tot of 25,000 people, whole-time, employed in building will more than account for all that number. Now, there are advantages from building. Building is a good social activity. It is a good amenity. House-building has now become one of the matters that have to be subsidised permanently—at least, relating the term "permanently" to our own lives. There is a fair amount of money put into circulation in this country as a result of house-building activity. The Ministry say that there is a fair amount of money put into circulation through subsidies to wheat and beet. How is the community faring? Is there any improvement? In America, the report says that, although some of this activity may be wasteful, at any rate it has this good result: that during one, two, or three years a big number of people are raised from the ranks of the unemployed and put into occupation; that they become a large number of small buyers and, as such, develop a certain amount of purchasing power, and that creates a demand for goods. We have 27,000 people getting wages for building. We have something in the way of subsidies for agriculture from the moneys being thrown out into circulation through the veins of this country, and what is the return? Wages have gone down. Agricultural wages are down to the extent that the community is losing in purchasing power a sum of over £800,000. Industrial wages are down to an extent that, even if we were to count this 25,000 people or so as being in a good type of employment, the average purchasing power of the moneys they get is defeated by the decrease in the wages paid all round.
Wages in agriculture are down and wages in industry are down. There is no extra purchasing power. What is happening? If the private individual cannot earn enough to pay his way, he must do one of three or four things. He may borrow as long as he can get credit. He may cash in certain reserves as long as they last, or he may just flatly refuse to pay his bills and run into debt. Does there seem to be any increase in debt in this country? Clearly there is. Rates are in arrear. Rates are definitely worse in arrear than they used to be. The moneys that are being withheld from the local authorities in order to pay the arrears of land annuities have increased. In 1934 the amount withheld was less than £500,000. In 1935 it had increased to £1,185,000, and in 1936 it had increased to £1,299,000—and that after all arrears of annuities had been forgiven at a particular period and the annuities have been halved. In regard to the halved annuities, however, the debt as represented by the moneys withheld from the local authorities to meet these defalcations has gone up from less than £500,000 to one and a third million pounds.
The Minister told us, during the course of the Budget discussion, that the National Debt had advanced by £5,885,000, and we know that in two years the local authorities' debts increased by £5,000,000. There is a tot of almost £11,000,000 if there is no overlapping between these two figures, and there is undoubtedly some overlapping. In any event, the ratepayers of the country are running into debt more than they used to. People who have got to pay only the halved annuity are more and more falling into arrear in the payment of the halved annuity. The National Debt has gone up by almost £6,000,000, and the local authorities' debt, in a period of two years, has gone up by £5,000,000 and, in a period of three years, by £6,000,000 and we do not know what increase, if any, there has been up to the 31st March this year from the 31st March last year.
The National Debt is on the increase, the local authorities' debt is on the increase, the ratepayers' debts are on the increase, the land annuities debts are on the increase, and although there has been a fair circulation of money, amounting to very big sums, through activities on building, and through the subsidising of certain uneconomic crops, despite that fact, our resources are being wasted. The waste should have brought about as much good as it brought about in other countries, and there should be better circulation of money, more purchasing power, and some uplift for some type of industry. Our only plus is 9,000 farmers in agriculture, and whatever the building industry shows, but debts everywhere else. Not merely that, but the Government had the advantage of spending a considerable amount more than they took from local authorities through forced debt on the State, and spending it on house-building. They also spent an enormous amount of money otherwise. The extra taxation gathered in —if we add in this year, which we can see in prospect—for the other four years amounts to £26,750,000 more than used to be taken. The Government has had the pleasure and the advantage of spending £26,750,000 more, spread over the five years, than used to be spent. There is still a sum of £2,000,000 that used to be collected— and that is still collected—from the taxpayers in each one of these five years which used to be remitted to England, but which is now kept at home. That is £10,000,000 in five years, and when added to the additional taxation makes £36,750,000, while the National Debt and the local authorities' debt is somewhere between £5,800,000 and £11,000,000.
I can only discover in the Minister's speech an overlapping of £1,500,000, but there is another £10,000,000. There you have £43,750,000—and I emphasise that—gathered from the people and spent. What have we got? Is there anything else? We might abolish the £46,000,000 spent if we were to do like Russia. We are turning from one phase of production which was bad to another phase of production not so good or so bad. We are turning waste spaces and desert places into productive areas. One might tolerate the expenditure of money, but what permanent benefit is this country getting from that expenditure over four years? What permanent benefit is the country going to get for the expenditure of nearly £50,000,000? Let us get back to the speech. As far as activity is represented by men in employment we get a suspected total of £9,000 extra farmers' families working on the land, and we get whatever employment is given by the passing phase in the building industry. There is nothing permanent about building; certainly nothing permanent about building which is being subsidised, and rents which have to be borne by ratepayers other than those who live in the houses. There is nothing of permanent benefit in attempting to have rooted into this country two crops that are entirely uneconomic; certainly two crops about which no man can say he sees the day when subsidies will end and that the crops will continue. For our wasted money there is no return of a permanent type. We can say, as is said in the report, that we have kept certain people from destitution. There need not be any question of destitution if the markets that were open to us had been gripped, and if the old type of production had been allowed to go on. Even if we were to forget the blunders and to count only the plusses we could say that certain people we found out of occupation had been kept alive and kept from destitution, always excepting the orders of the Minister for Industry and Commerce deeming people to be employed who have not got employment. We know that they have been kept from destitution at the enormous cost of nearly £50,000,000 in five years.
But that is not the worst. People may ask: How did we meet the extravagance? We met it in the way that an ordinary individual would meet it when faced with the same situation. Farmers are saving in every way possible. Money is not spent on outbuildings, needed repairs are not being done, while the power of the land, live stock, and the moneys they had are all being exhausted. The banks have noted time and again the tendency of people to withdraw small deposits in order to live upon them, and that is backed also by another movement, that money that this country had invested abroad is being cashed-in by people to live on. It might be a good thing to call home moneys invested abroad if we could get them invested here. Are we getting them invested here? If not, there is a permanent loss, because moneys invested abroad brought in dividends. They brought in certain returns which helped to bridge the gap, and it is a widening gap, between our visible exports and our visible imports. If we lose on a certain part of current investments, and do not get a return at home, we have wasted money, and we have exhausted through taxation all the luxuries of the country. We have got to the point when Ministers must stand up and say, as two of them did say, that they are going to tax the working people because that is the only way to get the taxes; that they are going to tax necessities because they are things that people must buy. We are at the point that we are going to tax these things because the rest have failed. We have dragged in that through mulcting the poor and the middle classes and everybody else on their bread, butter, sugar and tea, and we are getting nearly £27,000,000 extra in forced taxation over what used to be got. The Government has had the advantage of spending nearly £50,000,000 but there is no permanent reduction. There is not even a temporary reduction that anybody could pride himself on.
We get definitely to this point, that if the building industry were to stop to-morrow the Unemployment Insurance Fund goes back to a lower point than it was in 1931, and if we were to decide to save £3,000,000 on it it would be well worth the saving. We did not get any decrease in paid employment. All we got is certain people entered as working on their fathers' farms who would not be entered any longer, and would continue to do the same work as they did before. The report I quoted from does point to that as a distressing feature of world production. If a huge amount of money was spent, although relieving a certain amount of destitution, rather wastefully, from the humanitarian aspect it is praised because it kept people alive, from the angle of pure economics it is derided and the International Labour Office report founds itself in the first chapter and in the last chapter in this—that there is only one hope for the world, and that is that the idea of economic self-sufficiency will be rooted out by hard experience from the minds of the people, and that they will get back to some sort of freedom in international trade. They point out in the pages of the report that the tendency against economic nationalism was developing fast under the hard pressure of economic facts and experience, and they deplore that that tendency is now getting a set-back because of the new fear of war all over the world which is driving people to expenditure on armaments which they describe as unproductive as the dole or relief schemes. Unless we are to imagine that we are more blessed in our economic views and have more forethought in our economic plans and chances of reaching our objectives from the pursuit of these plans than any nation for five years has reached, unless all these impossible things are to be regarded as either possibilities or certainties, we look fair to close some period in which there will be nothing to record as gain. We will have spent a sum of £50,000,000 that might have been used profitably to help people who are in a good type of production to better develop that type of production and to get proper returns.
We are faced at the moment with taxation imposed on all the necessities of life. We get that done at a time when the Minister for Industry and Commerce tells us that the whole unemployment problem turns on 40,000 people. So he said, as reported on the 1st May. Within a week he was saying that under his new Turf Development Bill alone he was going to find employment for 50,000 people. His problem is not merely solvable but is within sight of being solved if that be true. Yet in these circumstances, when we are faced with only 40,000 unemployed, and when the Minister for Industry and Commerce has the answer to that problem, the Government decides on a grand policy of public works to be financed out of savings on other Votes, and by forced votes from local authorities, in order to end a problem that only concerns 40,000 people and that is in process of being solved by the Turf Bill! The Minister for Finance prides himself on doing all this and on having kept within the system. I take it the use of that phrase was in answer to comments made here repeatedly by Deputy Norton and sometimes by adherents of his. Deputy Norton has often asked the President to remember the words that he used here on one occasion, that if he could not get a cure for unemployment within the present economic system he would not hesitate to go outside it. I often wonder when Deputy Norton asks him to go outside the system what does Deputy Norton mean? Has he a scheme? The House is nauseated with schemes and plans but let him risk producing his plan outside the system and let us see it.
The Minister said that he is inside the system. Is he? I take "the system" to be the capitalist system. It does not require the putting on of any white sheet for anybody to say that the capitalist system was notable for many defects. There were many errors connected with the capitalist system and many faults flowed from it. The Minister says he has kept within it. Has he? I always understood that one of the benefits of the capitalist system was that, by a constant process of economic warfare, enterprise was encouraged and that people who had got old and stale in certain types of industrial activity were being urged out by people with better brains and with better enterprise. As long as there was a free field existing in the country, there was an outlet for talent and courage. Whatever might be the evils of the capitalist system —and it was said that there was no appreciation of the human element behind it—the people derived certain advantages from the economic warfare that went on because goods were produced cheaply. A man who had only a small amount of money to spend was able to purchase the necessities of life very cheaply indeed.
What is our situation? Long ago in this country, not by deliberate legislation but by a series of judicial decisions on legislation as it was passed, the licensed trade in this country got into a peculiar position. Men in that trade found after a very short period that premises which they owned had their value considerably enhanced because of the view taken that a new licence must not be granted until an old one was destroyed. The licensed trade became a sort of closed borough but, at any rate, other fields of activity were open to people here. I find resolutions now emanating more and more frequently from industrial associations in this country calling attention to the fact that industry is getting near the saturation point. The Minister for Industry and Commerce has been frequently asked to introduce legislation to license all future industries in order to avoid over-saturation in production. I know that is the viewpoint held by a few industrialists in this country. It was presented to me in such a form that it amounted to a detailed demand to form statutory rings in two industries and to give people in these industries power to prohibit anybody else coming in. Here we get a certain industrial association coming out in the open and demanding generally that all future industries should be licensed in order to prevent over-saturation.
I should have thought that the impact of that would have been realised more keenly by Labour representatives than by anybody else. Do those who stand for Labour in this country want to see industries getting into the grip of small groups so that nobody is allowed to go into those industries except a Government Minister or those to whom the groups will allow a further licence to be given? If that system is developed, does it not mean that we are going to get in every industry a system that pertains, say, in the licensed trade? Yet, these are the demands that are put up. And the Minister, whose Government has brought about a situation for the licensing of almost everything, thinks that he is keeping within the present system. Where is there any of the good elements of capitalism in men coming into this country and getting loans and credits to start industries, getting certain goods declared reserved commodities, getting a free hand by the prohibition of any competition either external or internal—getting all these in circumstances in which the prices of their products cannot be controlled? Not merely do we get that in circumstances in which prices to the consumer cannot be controlled, but there is no possible control of these people in relation to the wages they pay to their employees and the consequent benefits that might be gained through the increased purchasing power of these employees.
We have a Prices Commission of which I have spoken often before. It met recently to discuss the prices that were charged for certain minerals. The Chairman of the Commission, after certain evidence was given, drew the attention of the witness who was speaking to the fact that the dividend he had declared in his industry for the year—at least what he had given in profits and what he had put to reserve —amounted to 22½ per cent. on the capital. The Chairman of the Commission professed himself aghast that a price could be charged which would bring a return of 22½ per cent. on the capital and, after getting that information and after being astounded by it, the Chairman of the Prices Commission dismissed the witness with the phrase: "Now, you will remember the consumer in future, won't you?" And this is the way prices are to be controlled, and these are the safeguards that the Prices Commission attempts to give to consumers in the country. That is the system that is being developed.