Labour policy—false and true

by Lynden Livingston Macassey

(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.

Manifesto on Unemployment, 1921

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.