Labour policy—false and true

by Lynden Livingston Macassey

Industrial Research

Industrial research becomes daily more essential for industrial progress. It has been developed to a greater extent in Germany and the United States of America than with us. Much of the industrial prosperity in those two countries is due to the establishment of associations, and, indeed, of highly developed departments by individual firms for industrial research. Much is being done, and still more remains to be done, by individual firms and by trade associations in this country in that direction. There is no doubt that this kind of work can more effectively be conducted in that way than by any Government Department, but, at the same time, a Government Department is required to co-ordinate and stimulate rather than to control such private efforts. In this way, most valuable work is being done by the Department of Scientific and Industrial Research. This will always remain an important sphere for Government industrial activity.

Need of a Real Ministry of Labour

If we are to have anything like effective and efficient labour administration, a Ministry of Labour is essential. Those who call for abolition of the Ministry are truly neophytes in the art of industrial government. Convinced believers, let us assume them to be, in the principle of laissez-aller, they actually think that if the Ministry disappeared there would be an end of all intervention by Government between employers and employed. What uninformed criticism! They forget that the Home Office has control of the administration of the Factory Acts—a matter embracing working conditions and welfare of workers which goes right to the root of the Labour problem. They omit to notice that the Mines Department of the Board of Trade exercises supervision over the conditions of employment and wages of miners; that the Ministry of Agriculture is responsible for the Joint Conciliation Committees which deal with exactly similar questions in agriculture; that the Ministry of Transport does the same in the railway service, and that the Ministry of Health has jurisdiction over health insurance so largely handled by the Approved-Societies-sections of the Trade Unions, and over the administration of the Poor Law relief which so nearly touches the unemployment problem. These various jurisdictions are admittedly to stand—it could not be, and indeed is not contended otherwise. The Ministry of Labour is, however, to disappear, and its responsibilities—unemployment insurance, trade boards, labour exchanges, conciliation of trade disputes, co-ordination of Labour administration in this country in conformity with the International Labour Organization created by the Peace Treaty—are to be extinguished or tacked on as appendages to other departments. The resulting position is too ridiculous to contemplate. Under such circumstances the Government could never be advised on any basis of consistent administration and policy in regard to any labour question; continuous touch would be lost with the representative Trade Union federations; there would be as many opinions as there were departments implicated. Whenever a national strike was imminent in any great industry, the Government would have to organize an improvised committee of the Departments concerned in labour—probably few of them even remotely connected with the particular industry affected—and try to evolve an ad hoc policy. We are suffering still from the effects of opportunist action of that kind and want no repetition. And when Government intervention in a national strike becomes inevitable for the protection of the community, he would be a bold man who would prefer negotiations by the Cabinet conducted on no set principle and founded on no experience of industrial conditions, to negotiations by the Ministry of Labour, which does conduct such business on a settled basis of principle, knowing the interconnection of trade with trade and the effect which a concession like the 12½ per cent. bonus to one section of industry produces upon all other sections, and appreciates the danger of settling strikes in the way the South Wales Coal Strike of 1915 was settled.

It has been amply proved by bitter experience that no branch of human activity stands in more urgent need of even administration on uniform and consistent lines than does labour. Granted that employers and employed should settle between themselves so far as possible their own disputes, there comes inevitably a stage when a settlement or failure to settle intimately affects the community. It is then that the offices of a properly constituted Ministry of Labour come into play. If it is desired to leave the public merely as a football between employers and employed then abolish the Ministry. Far from abolishing it, in my view it ought to be consolidated and vested with extended powers. It ought to be made in fact, not merely in name, a real Ministry of Labour. All the powers of the other Government Departments which relate to labour should be transferred to it, so that there would be one central department charged with and responsible for the administration of all labour in this country. A great part of the labour disorganization during the war which has been used as an argument for abolition of the Ministry of Labour, and in derogation of the great national services performed by it, was entirely due to this clash between different departments in regard to labour administration: the Admiralty bidding against the Ministry of Munitions by paying higher wages to the same class of men and settling strikes on more advantageous terms to the workers; the Agricultural Wages Board of the Ministry of Agriculture putting up wages of agricultural labourers to a height that upset the country railway porters who were drawn from them. Innumerable other instances could be given, all directly due to the sub-division of labour administration among a number of different and hostile Government departments. It is not unimportant in this connection to remember that when, in the beginning of 1917, the Ministry of Labour, which was originally a conception of the Trades Union Congress, was formed by Mr. Lloyd George’s first Coalition Government, it was intended to transfer to it all the labour powers of the other Government departments. This was fiercely resisted by every department which it was proposed to denude of any powers, and in great measure successfully. As a result of that internecine warfare, the present Ministry of Labour is unhappily but an emasculated edition of the fully endowed central department that Mr. Lloyd George wisely had in mind. The wonder is that it has done as well as it has with such a disappointing limitation of powers. But apart from home labour administration, we shall get into most serious international complications, and very great domestic difficulty, if proper touch is not maintained with, and the interests of the country properly voiced in, the International Labour Organization which exercises now very considerable influence over labour legislation and administration in every country, party to the League of Nations. That cannot possibly be managed if the responsibility is to be scattered over half a dozen partially interested and wholly unco-ordinated Government departments.

If the labour sections of other Government departments were united with the Ministry of Labour, very great economies could be effected: factory and trade board inspectorates could be combined; health and unemployment inspectorates could also be amalgamated; in fact, one central inspectorate could well perform all the four kinds of inspection duties. These are but a few illustrations. The various labour duties performed by the different Government departments are so obviously one and the same that it is inconceivable why the overlapping which exists should be tolerated any longer. It is the one thing in our labour administration that passes the comprehension of foreign critics.

Some of those who suggest the abolition of the Ministry of Labour propose to constitute in its place a National Industrial Council, consisting of an equal number of representatives of Employers’ Associations and Trade Unions with a chairman nominated by the Government, as recommended by the Report of the Provisional Joint Committee of Employers and Trade Unions to the Industrial Conference, convened by the Government on February 27, 1919, when the miners’ strike was threatening. The duty of the National Industrial Council would be to make recommendations in regard to controversial industrial matters. If the Unions bona fide will undertake to use such a Council, or Parliament of Industry as it is sometimes called, for the purpose of promoting good relations between employers and employed, its creation would be of value. That implies the continuance in industry of the private employer. But, on the other hand, if the Unions intend to work for the elimination of the private employer from industry, as they declared their intention to do in the Memorandum (see p. [59]) annexed by the Right Hon. Arthur Henderson to the Report of the Provisional Joint Committee, then the creation of a Parliament of Industry would be a farce, and merely degenerate into an organized means to the Unions’ real end. In any event, the scope of a National Joint Council is limited. No Union will acquiesce in the judgment of other Unions on its domestic affairs—imagine boilermakers accepting the decision of plumbers, electricians and fitters on a question concerning the demarcation of boilermakers’ work. As it was, miners, railwaymen and transport workers absented themselves from the Industrial Conference in 1919. Moreover, employers and Trade Unions will always agree, to the serious discomfiture of Government, on reforms of which the expenses are to fall not on industry but on national funds, but the question of such expenditure is surely one to be reserved exclusively for Parliament. The Ministry of Labour has always the General Council to consult, which represents the whole of organized labour, and the National Confederation of Employers’ Organizations, reinforced for consultation with any employers’ organizations outside that Confederation. If a joint conference with employers and Trade Unions is desired by Government such can always now be easily arranged.

Regulation of Combinations and Monopolies

Combination is inherent in industrial progress; this is fully recognized by Labour. The addendum to the Report of the Committee on Trusts (Parliamentary Paper, 1919, Cd. 9236) signed (amongst others) by such stalwart members of the Labour Party as Messrs. Bevan and Sidney Webb, stated: “We have to recognize that association and combination in production and distribution are steps to the greater efficiency, the increased economy and the better organization of industry; we regard this evolution as inevitable and desirable.”

This fact compels the Government to protect the consuming public against exploitation by combinations and monopolies. The principles along which such protective action should proceed are indicated in the Report of this Committee, which has received the official approval of the Federation of British Industries. Shortly put, they throw on the Board of Trade the duty of inquiring into any reasonable complaints, of referring any questions arising out of their inquiry to a special tribunal for investigation and report, and of recommending to the Government action for the remedying of any grievances found to exist by the tribunal. The Federation properly insists upon two safeguards: first, avoidance of any restriction prejudicing the position of British industry in the export trade, and, secondly, caution against any communication to foreign competitors of information regarding British trade associations or combines. There have been suggestions made by some public men that statutory limits should be placed upon dividends of industrial concerns. Such restrictions have in the past been imposed upon the payment of dividends by companies supplying, under powers of statutory monopoly, public necessities like gas and water, but economic history shows conclusively that anything in the nature of a statutory limitation of dividends for concerns not supplying a monopoly but marketing its product in a competitive market is seriously destructive of efficiency and enterprise.