THE Trade Disputes and Trade Unions Bill received the Royal Assent on July 29, 1927, and has now been placed on the Statutebook as an effective Act of Parliament.

I regard this Act as the most useful piece of legislation which the present Parliament has so far produced, for it is the first definite step taken towards muzzling the irresponsible and fanatical leaders who hitherto have been the chief obstacle to friendly negotiations between employers and moderate trade

unionists.

The agreement which was reached last summer between representatives of the employers and the trade unions in the engineering industry is a gratifying indication that the counsel of moderate men is already beginning to prevail over the disastrous leadership of labour agitators.

As far back as April 1924 the various unions connected with the engineering trade submitted to the employers a demand for

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a substantial general increase in wages. Thereafter no less than fifteen national joint conferences were held to discuss the question, and on several occasions it seemed as if it would be quite impossible that the opposite sides would ever arrive at an agreement. The dispute, however, was conducted throughout with much moderation and understanding, the employers freely recognising the low rates of pay prevailing on the exposed, or competitive, side of the engineering industry and the unions equally recognising the grave condition of trade which the employers had to face. The employers ultimately offered an increase of 2s. on the existing weekly post-war bonus of 10s. to all plain-time workers over the age of twenty-one years, but not to workers employed on piece work, or to those whose wages fluctuate in accordance with the wages of workpeople in other industries. This restriction means that about 50 per cent. of those engaged in the engineering industry will be excluded from the award. The trade union representatives, realising at length that no better terms under the existing conditions were possible, wisely agreed to put this offer to the vote of their members, with the result that a majority of nearly 2 to I was in favour of its acceptance, and the advance duly came into operation on August 1 last. Nevertheless, it is still conceded that the wages of skilled engineers in the industries exposed to foreign competition are low in comparison with those paid in sheltered trades where the influence of political and social agitators has been allowed to prevail over constitutional authority.

It was stated on good authority not long ago that the workers in the sheltered industries of this country are receiving in wages about 200,000,000l. more per annum than they would obtain were they engaged at the rates in force amongst workmen employed in the competitive, or exposed, trades. There is no doubt that the high rate of wages now prevailing in the sheltered industries largely contributes to the economic difficulties which stand in the way of increasing the wages of competitive workers, for the extra 200,000,000l. per annum which the sheltered workers receive means an additional charge on transport, power, rates and taxes, all of which become a deadweight load on our export trade and constitute, in themselves, potent reasons why we are unable to sell our goods at competitive prices in the world's markets.

It is one of the worst features of the privileged position of sheltered labour that it breeds justifiable discontent amongst skilled craftsmen working in exposed industries, more especially when the latter see, as they often do, less proficient members of their own trade, and even totally unskilled workers, drawing higher wages under easier conditions simply because they are fortunate enough to be in sheltered employment. It is not likely

that these disproportionately high wages in the sheltered trades will be indefinitely maintained, for if they are, then many of our hitherto successful competitive industries will gradually cease to exist. The best men will either emigrate or become absorbed in a sheltered branch of their trade, to be replaced on the competitive side by less proficient workers. The result will be that the present world-wide respect for British craftsmanship will gradually disappear, more especially as parents are not going to apprentice their sons to trades which are becoming decadent, or less remunerative than unskilled employment for which no special training is required.

These deplorable changes in the engineering industry are already taking place, and no one—except, perhaps, the Chancellor of the Exchequer—is sanguine enough to believe that with 12 skilled workmen out of every 100 still unemployed and subsisting on the dole, and with the industry languishing in the face of a relentless foreign competition, an increase of 2s. per week in the wages of time workers is going to restore the peace and contentment in engineering workshops which everyone so ardently desires. My own opinion is that the attainment of these conditions might be more successfully achieved by agreement between the employers and the trade unions on the adoption of some method of merit grading for workmen, and I shall indicate later in this article my views in that connexion. But the fundamental , remedy for industrial unrest is to improve the workers' standard of living by enhancing the prosperity of our industries, and that, I maintain, can only be achieved by extending the policy of preferential trading within the Empire and by a wider application of the Safeguarding of Industries Act than the Government have hitherto had the courage to adopt. It is therefore desirable briefly to consider the present attitude of the Government with regard to industrial problems before submitting my suggestion for improving labour conditions.

About this time last year, when the Imperial Economic Conference was taking place, it looked as if opinion was at length definitely hardening, even amongst political supporters of free trade, in favour of stronger protective measures for safeguarding industry within the Empire, and, although industrialists have learned in recent years to attach little importance to the political barometer, they awaited the result of the Conference with the keenest interest. Unfortunately, as everybody now knows, they were sadly disappointed, for once again the vital interests of the nation appear to have been sacrificed on the altar of political expediency.

On the opening day of the Conference that great Imperialist Mr. Bruce, the Prime Minister of Australia, struck the right note

by urging his colleagues to concentrate on attaining practical decisions on the true and co-ordinated development of the resources of the Empire.' His advice was not followed. The longsuffering taxpayer was assured with somewhat suspicious frequency that unanimity prevailed throughout the deliberations of the Conference, much was vaguely stated with regard to concerted measures of Imperial defence, and at all public functions stirring allusions were made to the indissoluble' union of hearts' that bound the Empire together; but, paradoxically, the one outstanding achievement of the Conference was to proclaim the Mother Country and the Dominions as separate and coequal States. In other words, the daughters were raised to the status of the mother, an arrangement which in domestic life would hardly conduce to the union of hearts,' more especially as this declaration of independence was carried out at the instigation of its youngest members. The development will be watched with some anxiety, particularly in relation to the younger Dominions of South Africa and Ireland, but we have no misgivings as to the genuine sentiments of kinship which at present prevail in the older Dominions.

Nevertheless, human nature is too materialistic in these days for any empire to exist on sentiment alone, and the longer we philander with the question of a preferential interchange of staple commodities the weaker our hold on the Dominions must become. Our reluctance in the past to adopt that wise and far-seeing policy has already forced them to raise protective tariffs behind which they are striving for autonomy by building up basic industries of their own. This can only result in the gradual loss of Empire markets for British products, just as the protective tariffs of other countries are at present causing our steady loss of foreign markets. Both these deplorable tendencies may be checked by the extension of Empire preference and the safeguarding of home industries, and I find it difficult to believe that a Government known to be in sympathy with those remedies can continue to fail the country on such vital issues.

A striking illustration of the deplorable results which follow our strange adherence to the economic fallacies of free trade is being afforded at present by the condition of the British steel industry, which since the war has been struggling against the constantly increasing pressure of foreign competition. The success achieved in this direction by Continental manufacturers is attributed to (1) longer working hours and lower wages; (2) subsidies paid by their Governments, specially designed to aid exports; (3) lower railway rates; (4) lower general rates and taxes; (5) depreciated exchanges. The hardship suffered by British makers in these respects, coupled with the entire freedom

of their Continental competitors to dump their surplus material upon us, is reflected in the rate at which imports of iron and steel into this country have risen. In 1923 these were valued at 14,000,000l., last year they were 29,000,000l., and, if the present rate is maintained, it is estimated that this year the value will reach 50,000,000l. This means that something like 100,000 British workmen are standing idle, subsisting on the dole, and losing their skill and efficiency. Yet, in spite of the national necessity to maintain this basic industry in a healthy condition, the Government have hitherto declined to set up any safeguarding tariff, and at the very moment when recently our free trade Chancellor had the hardihood to announce to a Scottish audience that 'the trade of the country is again in full swing' our steel makers, in despair and at further sacrifices to themselves, were offering substantial rebates to British steel users who undertook to confine their purchases to British materials.

We cannot blame the steel user for such a bribe being required, as he may be equally pressed by foreign competition in his own product, but it appears to me that this case demonstrates the futility of the Merchandise Marks Act introduced by the Government last year.

That Act was described in the House of Commons as a very anæmic substitute for full-blooded protection, and I consider even that description flatters the Government. As a cure for trade depression it is probably about as useful as the slogan Buy British Empire Goods' on which various members of the Cabinet have bestowed their blessing. I confess that it does not impress me as a dignified proceeding for the rulers of a great nation to evade their responsibilities by appeals to sentiment of this kind. Surely, if our Ministers are justified in advising the people to buy British Empire goods, it is their duty to enact legislation which will ensure that everybody does it.

The present Government has lamentably failed to make the most of its unique opportunity for consolidating the Empire and restoring the fortunes of British industry by means of preferential tariffs and safeguarding duties. That they have not rendered any appreciable assistance to industry, even in the latter respect, may be gathered from a statement made in the House of Commons by the Parliamentary Secretary to the Board of Trade just before the autumn adjournment. Asked by a member to give, up to the latest date, the number of applications for safeguarding, the number granted, the number rejected, and the number pending respectively, the Secretary replied as follows:

Up to the present forty-four applications under the safeguarding of industries procedure have been received by the Board of Trade. Fifteen of these have been referred to the Committees for inquiry, and seven