The Committee on National Expenditure[12] (see _Parliamentary Paper_, 1922, Cmd. 1581) proposed to abolish the Industrial Relations Department of the Ministry of Labour. They observe that “with the knowledge that, in the end, there will be Government intervention, neither side will have the same incentive to make the final proposals which might lead to a settlement of the dispute.” This appears to me an exceedingly hazardous proposal. Anyone with experience of industrial disputes knows that occasions occur when reason disappears, tempers rise and responsibility vanishes, and neither side will meet the other. It is essential in such circumstances for a Government Department to act the go-between if the community is not to suffer. At some time intervention is imperative, and it is a question whether it should be that of the Ministry of Labour working on a consistent policy or of the Cabinet in Downing Street which, lacking the industrial experience of the Ministry, is apt to settle a dispute on any policy, but this question I discuss later at length. The Committee on National Expenditure found that, so long as unemployment insurance is on the present basis, Labour Exchanges are required as agencies for checking payments of unemployment insurance benefits, but not as Labour Exchanges; they recommended that if unemployment insurance by industry could be secured that the Labour Exchanges should be abolished. It is quite clear that that cannot be done, nor does the Committee recommend it to be done while the present National Unemployment Insurance Scheme continues. If insurance by industry is found to be practicable, it may be necessary, from motives of economy, to abolish the Exchanges. Apart from that justification it would be, I think, greatly to the national detriment to do so. While an employer cannot take all his labour through the Exchanges, employers generally learned during the war to appreciate their value. Trade Unions started by being suspicious of the Exchanges, largely because the local delegate of an organized Trade Union regarded it as an important piece of patronage to supply labour of his trade to employers in his district, and he considered the exercise of that patronage as no unimportant factor affecting his re-election. Although in certain districts, no doubt, Exchanges can be abolished, in the main industrial centres their continuance is essential particularly for trades which are ill-organized.