§ Order for Second Reading read.
§ Motion made, and Question proposed. "That the Bill be now read a Second time."—[Mr. Baldwin.]
§ Sir D. MACLEAN
I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day three months."
Perhaps the House will forgive me if at the outset I make a reference to the death of a man who, although not at the moment a Member of this House, up to a very recent date sat with us on this Bench. I refer to Mr. William Crooks. He was a man who had almost the whole of life's handicap against him, but who in spite of that, owing to his sterling qualities and fine human sympathies, and his passionate determination in the pursuit of everything that he thought was right and true, achieved a position in this House which any of us might well envy.
Coming now to the subject of the business before the House, I may say that my right hon. Friend and Leader (Mr. Asquith) would have been discharging the duty which I am about to perform, with his usual masterly ability, had he not been laid aside temporarily by a somewhat severe chill. This Bill is not of the limited scope which many hon. Members seem to think. It casts three nets pretty wide. The first net I will describe as the list of articles, whatever the country, outside "the British Empire, they may come from. The second net is a list of countries with depreciated exchanges as regards ourselves, and that represents almost the majority of our foreign customers; a list of countries whatever the articles may be, provided that they are manufactured and do not include food and drink. The third net is the condition of sale below the cost of production as defined in the Bill; whatever the articles and whatever the country so long as such articles do not include food or drink. That is the scope of this wide, far-reaching and most important measure.
I wish to draw the attention of the House to the fact that the proposals of the Bill are against what I venture to call 1546 high authoritative opinion. I would first of all quote in support of that statement the very remarkable manifesto which was issued by the bankers of the United Kingdom immediately after the passing of the Committee stage of the Financial Resolutions, upon which this Bill is founded. They make a claim at the conclusion of their manifesto which I think is well founded. They say:With party or political considerations we as bankers are not concerned.There is a list of names to the manifesto, and I think I have a very fair idea as to the political views of six of those people. With regard to the rest, I have not the faintest idea to what political party, if any, they attach themselves. There can be no doubt that this manifesto has been issued with direct specific relation to the proceedings of this House on the Financial Resolutions. The manifesto says, with regard to the policy of the limitation of imports:We cannot limit imports into this country without limiting our export trade, and striking a grave blow at the world-wide commerce on which this island Kingdom principally depends.With regard to the other part of the Bill, which proposes to deal with the depreciated exchanges, and endeavours to rectify them, they use these very significant words:In such a situation we believe that all expedients that control and hamper imports into this country, whether by licences, tariffs, or any other means, can only retard improvement in the continental exchanges and prevent the natural recovery of trade.I pray that in aid of the statement which I have already made in regard to authoritative opinion. Another authority I would quote is the National Conference which was held at Brussels in September of last year. That Conference arose out of the recommendations and the initiative of the League of Nations. They considered the general situation, and the men who considered it were representatives of the very large number of countries who sent them there. The men who represented the countries at this most important Conference stood in the very highest class of financial reputation amongst their fellow citizens. They came to two very significant conclusions. The first of them was in relation to the tariffs and Customs barriers which have been set up by the national entities that have been created 1547 under the Treaty of Versailles. They said:That the States … should at once re-establish full and friendly co-operation and arrange for the unrestricted exchange of commodities, in order that the essential unity of European economic life may not be impaired by the erection of artificial economic barriers.That is the advice they gave to the new national entities, and yet we in this country, with a record of Free Trade which has been the envy and admiration of the financiers of the world, are taking a retrograde and backward step in this matter, when we ought to be maintaining our lead. In regard to the vexed matter of exchanges, the Conference repeated, not in identical terms but substantially, the statement which I have just quoted from the British bankers—Attempts to limit fluctuations in exchange by imposing artificial control on exchange operations are futile and mischievous. In so far as they are effective they falsify the market.They go on to say:All Government interference with trade, including exchange, tends to impede that improvement of the economic conditions of a country by which alone a healthy and stable exchange can be secured.4.0 P.M.
From my point of view, and from that of many of my hon. Friends, there is high authoritative opinion there against every proposal contained in the Bill for which the Government are now asking a Second Reading. The charge is made, I am sure with no malicious intent, against those who oppose this Bill, that they are lacking in patriotic interest in their country. It is said that in opposing the Bill we are not sufficiently interested in the military protection of our own country, thereby diminishing the influence and power of our attitude. Whatever may be said with regard to us, however, fully applies to the bankers of the country. They have had the whole of these matters in mind, and they have framed the frank and powerful indictment with which hon. Members no doubt are fully acquainted, and from which I have ventured to make one or two quotations. There is not the slightest doubt, whatever may be said for or against the Bill, that the only result of its operations must be to raise prices. That must 1548 inevitably be the effects of all protective measures. The Lord President of the Council (Mr. Balfour), in 1904, said:A protective policy is a policy which aims at supporting or creating home industries by raising home prices. The raising of prices is a necessary step towards the encouragement of an industry under a protective system.My right hon. Friend the Minister of Health (Sir A. Mond) the other night stated with the utmost frankness: "Of course it will raise prices; it is bound to do so. That is the object of it. If it did not do that, there would be no point in it." We are, therefore, at any rate agreed upon that result. The effect of this measure, if and when it be carried into law, must be to raise prices, and surely there never was a time when it was more undesirable to raise prices. We must, therefore, seek for some motive which dominates His Majesty's Government in the introduction of this measure, because naturally they do not want any more than any other Government to do unpopular things. What is the motive or justification? The justification, of course, is Part 1 of the Bill which deals with what are known as the key industries. There is no definition of "key industries" in the Bill, but there is a schedule which the Government have constructed to show what, from their point of view, is a key industry necessary for the military protection of this country. They must be vital and stand the test of experience and of time. Comparing the list which appeared in the proposal of 1919 with the present list, I find that there are two or three omissions from the present list. What are they? They are, lithophone and electric bulbs and gas mantles, both of which disappear in 1921. Those were reckoned vital then. Obviously, some experience of some kind or another has brought the Government to the conclusion that they are not vital now. That is likely to happen to any one in the list to-day, and I suggest that the Government, looking at it from their point of view, and on the experience between 1919 and 1921, would have been well advised to wait a little longer for some further experience. There is nothing in these articles now omitted to which I have alluded, in their character or in their general usefulness, which does not almost apply to any one of the others in the schedule.
1549 The statement of my right hon. Friend and Leader (Mr. Asquith) on the much-vexed Paris Resolutions was, at any rate to my mind, conclusive as to the view which he took and which others of us take with regard to them. I was refreshing my memory a few moments ago before I came into the House, and the objective then was the enemy country. In this Bill we include all our Allies. France, Italy, and the United States are all brought within the ambit of the Bill. If the main object was to preserve these industries as a military measure, surely the right course would be frankly to name Germany and Austria and take these selected; vital articles and prohibit them or put on a very heavy tariff. If prohibition be not adopted, the other alternative is to subsidise them and bring them under Government control, allowing whatever profits accrue to go into the public purse. There is this to be said for a subsidy as against a tariff. A subsidy at any rate keeps the price down. If we allow foreign goods to come in, and meet the difference between the cost of production here and the price of the foreign goods by a subsidy, obviously that keeps the price low. The effect of a tariff must be to raise the price, and we all know the overwhelming desire not to raise prices. If you are driven by military necessities, the remedy is not by a tariff, which must raise prices, but by a subsidy, which would keep them low. There is a very remarkable Section in Clause 2, which is combined with Clause 8 to arrive at a definition of dumping—Goods of any class or description (other than articles of food or drink) manufactured in a country outside the United Kingdom.come within the scope of the Bill if theyare being sold or offered for sale in the United Kingdom (a) at prices below the cost of production thereof as hereinafter defined.Let us look at the definition of "cost of production." Some of the arguments which seem to me to carry a certain amount of sympathy in connection with the question of dumping have always been based upon sweated labour, or conditions a little removed from slavery. A foreign country sending goods to us produces those goods under conditions with which no reasonable and fair conditions of industry can cope. What is "cost of production"? It is: 1550(a) the wholesale price at the works charged for goods of the class or description for consumption in the country of manufacture.These goods may be produced under trade union conditions in any one of the foreign countries, and those conditions may be of the most exemplary kind even to us in this country, but, if the price at which they are sold be included in the conditions set out in Clause 8, then they are dumped goods within the meaning of the Bill and come under its prohibitive and tariff Clauses. The most ingenious lawyer exercising fully all the arts of a long trained and acute brain may yet remain in doubt as to the meaning of paragraph (b):If no such goods are sold for consumption in that country, the price which, having regard to the prices charged for goods as near as may be similar when so sold or when sold for exportation to other countries, would be so charged if the goods were sold in that country.
§ Sir D. MACLEAN
I think, after much labour, I might evolve some kind of meaning. All that is opposed to the whole idea on which trade should be carried on. What trade wants is to be let alone. While the country is slowly emerging from the grip of the tentacles of Government control on every side, here we are passing legislation which will last at least five years which will fasten it again on the country, intensify bureaucracy and hamper trade not only in the scheduled key industries, but in the whole range of goods which are not manufactured and are not articles of food or clothing. A familiar point is, "Why do you not define what the cost of production is or the cost of manufactures?" That is a puzzle. Only the damage to trade, and the irritation of traders will show what Government officials may mean by it. The whole tendency of such a measure as this is against peace. I know that that is brushed aside so often, because it is supposed to be associated with the aspirations of the League of Nations, but it is the fundamental of any recovery by this country, or any other country in the world, of decent conditions. This Bill is replete with the war spirit, and I hope it will not only receive careful consideration by Members of all parties in this House, but that at the end of our deliberations, with 1551 the point of view as to how we should try to help not only ourselves, but the world, it will be rejected by an overwhelming majority.
§ Mr. STEWART
I gladly welcome back in good health the right hon. Gentleman who has just spoken, and I want very much to associate myself with the remarks which he made about our late colleague, Mr. Crooks. I intervene in this Debate because I was appointed a member of a Committee to go into the question of German penetration in regard to our industries. I am as averse as the right hon. Gentleman or any of his Friends to bolstering up struggling industries by special duties. Every industry should be able to stand against foreign competition, but there is a form of competition entirely unfair, and it is the duty of a Government to protect its subjects against that unfair competition. That unfair competition is when the private trader is called upon to face the direct competition of an organised State. Our late German enemies used to organise their trade against us. I am one who believes that there is a very organised attempt among our late enemies to injure this country in every way they can by propaganda and by subsidies to revolutionary speakers. Before the War they did it not only from without, but they did it most seriously from within.
The Report of the Committee to which I have referred is very short and to the point. The Committee sat for three years and went into the matter very closely. I do not blame the Germans for having used the facilities which we gave them, but I would blame our Government now if, having discovered them, they took no means to protect us from that unfair competition. German trade was divided into cartels. They brought together each trade in a cartel. They were managed like the divisions of an army, and they so arranged their finances, that not only did they arrange the prices at which they sold goods in their own country and elsewhere, but they accumulated large fighting funds which they could use against the industries of those whom they wished to defeat. One of their methods of procedure was to dump essentials upon a country to such an extent that they could put the manufacturers out of business or come to them and say that if they did not 1552 hand over their business to German hands they would inevitably be ruined.
May I give one or two instances of that. A large electrical company worked a patent. The originator of the patent was a British subject. The patent ran out in 1904; then the Germans attacked the industry in this country. They secured a footing in the business, they got complete control of it, and one of the conditions was that the old British company should never be allowed to sell a single article of its production in a British colony. To use a colloquialism, that strikes me as about "the limit." They, of course, wished our colonies to look to them for what they wanted. Another case was that of an old family business which for over 100 years was supplying goods to the Admiralty. The partners of that unhappy firm received an invitation one day to dine with a party of Germans in a large hotel of a neighbouring town. They began in good spirits, but before the dinner was over the Germans had notified these particular partners that if they did not give them the whole of their business they would undersell them until they were ruined. The consequence was that very shortly the business was acquired by the Germans, and held by so-called British trustees, and one of the conditions of the arrangements was that that firm should never be allowed again to sell anything directly to the Admiralty.
§ Mr. STEWART
They had not got the money to resist. Before the outbreak of the War the Germans destroyed our magneto industry successfully. They tried to do the same thing with our business of making accumulators, and thus to harass us in using submarines, and I am sorry to see that accumulators are not included in the Schedule to this Bill. They acquired Tungsten mines in our own colonies; they created in America German companies which passed as American companies, and they did their utmost to do their best to prevent a supply of tungsten coming to this country. They had a very simple and ingenious way of posing as British traders. In those spacious days it seems to me that any man could call himself anything he liked and nobody took any notice. I have known cases of 1553 Germans who managed by some means or other to get a passport out of the British Government twenty years ago, and use that as if they were British subjects. Then Germans also called themselves by such names as Brown, Jones, and Smith, and these families got recruits against whom they had no means of protecting themselves. They deluded their customers in this country into the belief that they were dealing with British subjects.
If you ever saw any particularly blatant advertisement by a British company you might be sure there was something German about it. They went in for fancy names for their articles. An article called Sanatogen, used by a great many people, was made by a German firm called Wulfing Company. The whole of their system of shamming was induced by cupidity and deceit. When they came to import goods into this country they had a skilful way of so arranging prices that the British offices showed no profit, all the profit was shown in the books of the Berlin office. The result was that after many years of lucrative trade, they succeeded in depriving our workmen of their fair work and cheating the Income Tax. Once they got us into their clutches, of course, they put their prices up. Yet we are told by hon. Gentlemen that we have got to fold our hands and do nothing, but let things go on exactly as they used to do. My answer is, that if that is free trade, the less we have of it the better. When I see the pathetic loyalty to this miscalled libel of free trade given by so many of my hon. Friends, I cannot help asking them, do they know what free trade really is?
It has been my lot to live in a very important colony of His Majesty's Government where there was enormous trade which was really free trade. There was no Custom House. You could land your goods or baggage any time of day or night, or you could go on board any ship with your goods and baggage without the slightest inconvenience. And when one returned to this country after years of absence, it seemed ludicrous to be harassed and worried at the first port at which one arrived by British Customs officers as in any other protected country. I submit that when hon. Members talk about free trade they are really giving a false title 1554 to the conditions of trade which have been existing in this country for some time. It is folly to refuse to face facts. The Minister of Health has got into trouble with some of his friends because as a practical business man he recognises that we have to be prudent in the way we allow our country to be exploited. The Minister of Health is perfectly right, and I hope that his friends will not carry their opposition to the Bill any further. The right hon. Gentleman (Sir D. Maclean) said that we claimed to be more patriotic than those he represents, but I will suggest that this is an occasion when free traders and fair traders should take the plunge together as Britons. I am told that mixed bathing is not so demoralising as those opposed to it assert. The right hon. Gentleman says that this Bill is replete with the war spirit, but we have not yet forgotten the War, and we have to act accordingly.
With due deference to the Lord Privy Seal, I would like to say a few words on the subject of exchanges. I have views of that subject which are not orthodox. I cannot see how we can ever get our exchanges right if the East and the West turn their backs upon each other and have no common medium of exchange. I ask the Government to consider the advisability of making some inquiry as to whether it is possible under existing conditions to stabilise the relative value of gold and silver. I put that forward as I think it is one of the means whereby we may get out of the quagmire of worthless paper which is submerging us in every direction. In this particular case of paper money the East is in a better financial position than the West. It must be remembered that Germany in the old days, after her war of 1870 with France, copied our gold currency and our free trade policy. She dropped free trade, and now she is dropping her gold standard. Her mark used to be worth one shilling; it is now worth one penny, and she is debasing it by an over-issue of paper money. Is it not possible for the Germans to be led back to their old policy? If we could ever reconstitute the mark at a shilling it would give Germany a chance of repaying her debt to us and the Allies, and it would relieve our manufacturers of the deadly competition they now have to face, owing to the depreciated Exchanges.
Our financial authorities in this country seem to me to approach this question of 1555 silver as a countryman might approach an elephant when he saw it for the first time. They are terrified. They do not realise that a well trained elephant under discipline is a most useful animal. If you harnessed it to our car of commerce it would help most materially. Our attitude towards it seems extraordinary. We boycott it whenever we can. There is only one free market for silver in the British Empire, and that was conserved by the late Mr. Joseph Chamberlain.
We are so frightened of silver that we recently put it on half rations, and are issuing throughout the King's Dominions, both at home, in Africa, and elsewhere, half-nickel and half-silver coins which are very little appreciated by anyone. A steady value of silver is good for our export trade, especially for the cotton trade, which wants any assistance you can give it. Now that I have both the Lord Privy Seal and the President of the Board of Trade present, I express the earnest hope that they will not hesitate about instituting some inquiry on this point. The worship of the golden calf at a certain time in Biblical history led those who were concerned into disaster. I hope we shall not be too strictly orthodox in refusing to consider another medium of exchange besides our gold standard.
I should like to say how whole-heartedly I support the principle in this Bill of a Committee to regulate duties. On that Committee I think you will be able to get high-class men who will carry public confidence. The Committee will relieve Members of the great trouble from logrolling and lobbying which would be likely to arise if the duties had to be regulated by the efforts of individual Members of this House. It is far better to have a Committee of that sort so that people can go into the detailed matters of every industrial concern which considers that it is not being fairly treated or is subject to some grievance. Such an industry can be represented before the Committee and have the whole matter properly discussed. The Committee will act as a Court of Appeal for any industry which feels itself being unjustly treated. After all, this House retains the last word. I would like to congratulate the President of the Board of Trade on the way he handled this question on the introduction of his Resolutions. I feel that if he could do so well with a foundling left to him, 1556 there is no limit to what we may expect from him when he has to push forward the interests of a child which is really his own.
§ Mr. FRANCE
The House has listened, I am sure with great interest, to the speech of the hon. Member, although in the early part of his speech he failed to make our flesh creep as much as he seemed to desire with regard to that elephant, which was not the well-trained and docile elephant to which he referred later, but the wild elephant of German competition, which he described as being so dangerous to our industry. I cannot congratulate him upon the example he gave. He spoke of a firm, a family concern, which was induced to abandon its trade because of the threats of German competitors. The reason given for the abandonment was that they had not capital. I can remember seeing one of the illustrated papers picturing the hon. Member in other surroundings giving a cup to the winner in another kind of competition. The spirit which enabled him to preside over a competition without expecting that the British competitors would have any undue advantage, but would rely on their own skill and enterprise for winning a place—in that spirit we shall do better than we can hope to do by any artificial aid.
I do not at all shrink from the responsibility of putting my name down to move the rejection of the Bill. I am undertaking a duty which some Members of the House would regard as a pleasure had they been free to do so, and that pleasure would have been shared with some satisfaction by some of those right hon. Gentlemen who enjoy the refreshing fruits of office on the Treasury Bench, and who to-day are singular by their absence. One must not criticise too freely the forms and language of Parliamentary methods, but the draftsman of this Bill has on the first page lapsed into somewhat cynical humour. He speaks in the first paragraph of the Bill of this Househaving freely and voluntarily resolved to give and grant the several duties hereinafter mentioned.Comparatively few Members heard the arguments against the Resolutions when they were introduced, and comparatively few heard the even more damaging arguments against the Resolutions used by those who spoke in defence of them. 1557 There were few present to mark the settled melancholy of the President of the Board of Trade, that highly respectable married man, who suddenly found himself the legal guardian of an unfortunate offspring under somewhat suspicious circumstances. They did not notice that he nursed his sorrow almost in silence, while the hon. Gentleman the Parliamentary Secretary to the Overseas Trade Department, who was given the child to nurse, displayed a rather eager but rather artificial affection for it. Few Members were in the House to hear the good-natured blessing given to the Bill by the new uncle, who pronounced his benediction with all the pathos of the nunc dimittis. But when the closure was moved, as it frequently was moved with so much success and humour by the Leader of the House, the Government lobbies were sufficiently filled by Members whose minds were refreshed by slumber, stimulated by conversation, clarified by chess, or soothed by nicotine, who came in hurriedly to respond to the call. I heard one conversation as a Division was taken. A Member was coming in to vote in that company of not very enthusiastic supporters of the measure. He said to one of the Government Whips, "What is this Amendment about?" and he received the telling and authoritative answer, "Aye"; and he went into the "Aye" Lobby.
I notice that to-day's Whip calls upon hon. Members to attend—which, I am sorry to see, they have not done—and warns them, not necessarily to be present to hear the arguments, but to be here at 9.30 as a Division may take place then, and not to fail to be in evidence when the Division takes place to-morrow night. I therefore have not the respect I should have for the opening words of this Bill, which refers to the House having "freely and voluntarily granted the duties hereinafter mentioned." In consequence I am bound to inquire what is the origin of this Bill, which to to safeguard certain industries and to deal with unemployment. The origin of this Bill is an agreed formula in a manifesto issued in 1918, and the first industry which it was calculated to safeguard was the industry of Cabinet-making. That is a perfectly legitimate occupation for any Prime Minister and his colleagues to be engaged in. If I thought that this Bill was a serious attempt to safeguard not only industries but the life of the nation in time of war and danger, that 1558 it was a serious and likely to be a successful attempt to prevent unemployment, I should be enthusiastically in favour of it. I might think it my duty to criticise, for all measures which endeavour to interfere with the delicate machinery of trade ought to be criticised before they are passed; but, if it had these objects in view, we should all be in favour of it. This Bill had its origin in a joint manifesto of 1918, when some possibility of a fiscal change was announced. I would like to remind the House of the words of that manifesto, as I think they are often forgotten—One of the lessons which has been most clearly taught us by the War is the danger to the nation of being dependent upon other countries for vital supplies on which the life of the nation may depend. It is the intention of the Government therefore—Not to introduce protection and not to introduce a tariff—to preserve and sustain, where necessary, those key industries in the way in which experience and examination may prove to be best adapted to the purpose.There is, there, the possibility of and the opportunity for examining each one of these industries carefully in detail and for finding out which is the best way in which that particular and essential industry, if it is proved to be essential, shall be dealt with. There is no suggestion of a tariff or of protective duties. There was, of course, something in the nature of a compromise reached. Without mentioning any tariff—so that the Free Trader might be satisfied—there is something which suggests a possibility of a tariff, so that the rampant Tariff Reformer may also be drawn in. I would like to quote some words used by the late Leader of the House showing most clearly that he never contemplated that the manifesto, to which he was a party, necessarily proposed to deal with this matter in the way the Government are now dealing with it. He was answering a charge that he had agreed to something which committed himself and his friends to what might be regarded as a trap to catch others; to something like Tariff Reform or something which might involve the putting on of a tariff. In the course of a speech explanatory of the manifesto and stating what it did not do, he said:It does not mean in the least I would not have entered into an arrangement of this kind if it had meant in the least that it will be said afterwards I have always believed 1559 in tariffs, and unless, when the time comes, you have a tariff we part company.'He made it perfectly clear that in his part of the bargain there was no intention whatever—while doing something to safeguard this country against being deprived of things required in time of war—to embark upon or rely upon tariffs for that purpose. [HON. MEMBERS: "When was the speech made?"] It was about three days after the manifesto was issued—in November, 1918. In regard to dumping, the manifesto said this:If production is to be maintained at the highest limit there must be protection against the unfair competition to which our industries have been subject by the dumping of goods produced abroad and sold in our markets below the actual cost of production.The Prime Minister has defined dumping, and I understand the Government have now accepted the definition as the continuous and substantial importation of goods manufactured abroad and sold below the cost of production. There, dumping was explained in a way which was calculated to satisfy Free Trade views, or what might be regarded as Free Trade peculiarities. It was supposed to mean the substantial and continuous selling of goods below the cost of production, not the occasional selling of cheaper goods. It did not mean the occasional embarking upon that kind of enterprise which every enterprising firm in every country in the world occasionally embarks upon for the successful carrying on of its business, namely, the selling of goods at a cheap rate and even below the cost of production, for the purpose of securing some particular trade or developing their business in a certain way. It is a method which has always proved not only of advantage to the seller but of infinite advantage to the customer. This definition of dumping clearly indicated something far different from that—something which might be regarded as a definite, deliberate, continuous, substantial attack upon a particular industry comparable to a declaration of war in other spheres. It was clearly meant to apply to attacks which had as their object the destruction of an industry and not to those fluctuations of prices to which I have referred. I understand this limited definition of dumping did not satisfy the hon. Member for Chippenham (Mr. Terrell)—whose advent to this side of the House does not, I hope, indicate any 1560 change of opinion. He suggested its omission from the Bill. As a matter of fact, there is no reference in the Bill to "continuous and substantial." There is no reference to deliberate, definite, declared and continuous policy, but simply a casual reference to goods being sold below the cost of production. What about the definition of "cost of production"? A new, artificial, and absurd definition has been introduced.
The third part of the Bill deals with collapsed exchanges. That is a new subject. There was nothing in the manifesto about collapsed exchanges, and there was no agreement arrived at on that matter. For this part of the Bill I think we are indebted to the Minister of Health. He was chosen for the task as being specially fitted to invent and defend this proposal. I do not think it is right to call it a "child." I think the President of the Board of Trade has been woefully taken in. When he went to the Board of Trade he found there a bundle which he thought was a living child, but he has now discovered that he did not take up a living child, but a mechanical doll, which is designed for certain limited, automatic, stiff action, but which can never do the wonderful and impossible tasks claimed for it by admirers and friends. I think the Minister of Health has had something to do with the part of the Bill dealing with collapsed exchanges and with the invention and defence of the methods suggested, because he knew better than anyone how hopeless and helpless this mechanical doll would be. He has done what other distinguished and unstable sportsmen have done, he has put something on both ways, and I am not sure that even yet he is quite satisfied as to the result. I wish we could have heard the speech the right hon. Gentleman who administers health in this country would have made if he had chosen to administer death to this Bill. It would have been a powerful and searching indictment of the weakness and defects, not only of the part of the Bill I am referring to, but of the Bill as a whole. No one thinks it will do very much good, and many think it will do harm. It has been forced on the House more with the idea of keeping the Coalition together than of preserving the soundness, purity, stability, and strength of our economic position and our trade throughout the 1561 world. I understand the House of Commons is to-day to be honoured by a visit from the team of brilliant and successful sportsmen who represent our kinsmen from across the seas. It would be just as sensible if the selection committee in choosing the Test team to meet them next Saturday at Lords were to choose six cricketers who admired the Leader of the House and five who admired the Prime Minister, with an umpire who habitually breakfasts with both, as to try and arrange industrial matters by attempting to choose a formula and a compromise to please two political sections.
I should like to examine a little more in detail some of the definite objections to the three parts of the Bill. Regarding the first, which deals with the safeguarding of industries, nearly three years have elapsed since the Armistice, and I would like to know what has been happening to the firms which we thought required assistance at the time of the manifesto. This Bill comes forward now with a list of articles which, I may say without offence, has been very poorly explained to the House. We have been given no particulars at all about the firms who make these articles, the capital involved, or the reserves which these firms have been able to acquire and accumulate during the War. We have been given no particulars about the profits they made during the War, the methods adopted by them during the War and since the War, or which they have in contemplation. We are not told how much money the Government have granted to them, or whether it is by gift or by loan. We are not told how much remission of excess profits they were allowed. We require these details before we can decide on the justice and propriety of these proposals. This help was for the specific purpose of developing these industries, and we have got none of these necessary details. These firms, quite unknown to us, are to be granted protection by this House without any guarantee, without any assurance on the part of the Government that they are to be asked to give a guarantee as to the quantity and quality of the work which is being protected. We are told nothing about the price, nothing about the profits, nothing about any limitation of those profits in the interests of the State. They are to receive the assistance of a duty of 33⅓ per cent., which they say is no good at all. Some of their eloquent advo- 1562 cates, such as my hon. Friend the Member for Farnham (Mr. A. M. Samuel), state that it is totally inadequate to secure the results desired.
§ 5.0 P.M.
§ Mr. FRANCE
Speaking for myself, I do not like the principle of a subsidy any more than I like the idea of nationalisation in general, but I for one am prepared to support a State grant of a limited amount for a limited period on definite guarantees and safeguards being given to the State as to how the money will be spent, and that it is only to be spent on scientific research and development. The object of such a subsidy should be that the firms so assisted by the State should do something to remove the slur on British industry and science. They may be helped in that way to be clever enough, industrious enough, and successful enough to compete with foreign competition. The House, I thought, jumped too eagerly, in its desire for economy, at the idea of cutting down expenditure on education, and reducing expenditure on that kind of work which might do something to make our workmen and employers better fitted to meet the highly trained and scientific competition of the world. The House is now apparently prepared to grant a measure of protection to these industries which may be quite necessary—I am not disputing that—but which in this form, instead of helping them to greater efficiency, will tend to inefficiency, because it helps them without requiring from them any guarantee of quality or excellence of work. For that reason I dislike and am prepared to reject the proposal of the Government for dealing with the safeguarding of industries. I notice that Part II of the Bill has a sub-title, "Prevention of Dumping." There is also an interesting and illuminating marginal note which the House would do well to pay particular attention to. It is "Power of the Board of Trade to apply Part II to certain Bills." The hon. Member who spoke last said he liked the idea of a Committee. I agree a Committee is better than one man. Government by Committees may be better than a limited autocracy. I feel very strongly that to hand over to the Board of Trade or to any Committee power to put into operation Part II with regard to any goods is a power which the House of Commons ought never to part with to any 1563 Department or to any set of men, however well fitted they may appear to be for such a task.
There has not been very much said in the Debates on the Resolutions about the dumping part of the Bill. I think we all agree, whatever our views may be with regard to the Prime Minister's definition of dumping, that there should be something done to prevent this particular kind of attack upon our trade. Clause 8 defines the cost of production to be something obviously which cannot be the cost, namely, the wholesale price at which the goods are charged for consumption in the country of manufacture; that is to say, the cost price is to be the cost price, plus x, and x may possibly be a profit of 40 per cent. or 50 per cent. With regard to the part of the Bill which deals with collapsed exchanges, with which the Minister of Health is concerned so eloquently, he does not like a subsidy in general, but he is advocating a subsidy to certain privileged industries to which other industries have first to contribute by paying more for the goods which are their raw material. That seems to me to be much more unfair than to give a general distribution of a subsidy, and the method suggested by the right hon. Gentleman seems to be not only unfair, but unlikely to achieve the object of removing unemployment in this country.
May I give one illustration of how this works out? I heard of an instance in the month of February in which a colliery company wished to buy steel goods. They received a quotation from an English firm of £24 a ton, and at the same time they received a quotation from a Belgian firm of £17 a ton. They asked the English firm if they could not reduce their price, and they brought it down to £21. The Belgian price then dropped to £13, and as the colliery company, being quite on friendly terms with the English producer, said, "What am I to do?" he replied, "You can only do the sensible thing, as a business man, and buy the Belgian steel girders at £13. We cannot do any better at the moment, as our costs of production are too high. We want to get our costs down, but we cannot do it." This Bill takes no notice of that question. It assumes that there must always be a certain price in this country and a certain profit, and it does not consider that the urgent necessity of this country is that of 1564 better management, more efficient management, better workmanship, and better work, by the total cessation of the false economic principle of "ca' canny," which is just as false an economic doctrine as that of tariffs; by an abolition and cessation of these things, and by co-operation between capital and labour, working together, not, I hope, for low wages, but for good wages, we shall get the costs of production down, so that we can compete successfully with any country in the world, and we shall never get those costs down if the first time we see a chance of buying some of the raw materials for many of our staple industries we say, "This is too cheap; let us devise means for making it a little dearer." In my view, it is only by a consideration of practical illustrations of that kind and the knowledge of the way in which these things work that we can meet the situation.
I want to refer to one other matter, and that is that this Bill revives the whole doctrine that you can increase trade generally, help employment, and remove causes of unemployment by putting up barriers against trade which will limit the total volume of trade done. It cuts vitally at the root of a principle which everybody knows is at the basis of all our import and export and international trade, that you cannot possibly do an export trade if you do not import those things that you require to buy to make that export trade successful, and moreover to make that export trade capable of being done at a price which will command the markets of the world. All these things, which are, I should have thought, elementary, seem to be ignored now, simply because we are face to face with unusual and difficult circumstances, but not with insuperable difficulties. There is a natural cure for these things which will operate quickly enough, I believe, if it is allowed to operate unrestricted by these artificial and elementary barriers which the right hon. Gentleman proposes to set up. The very act of these countries exporting goods and selling goods to us will inevitably have the effect of improving the balance of trade and the collapsed exchanges, whereas the method suggested in this Bill is likely to postpone that very thing which we desire to bring about. The attitude of the Government is really amazing, but I read something in a book 1565 recently which brought comfort to my soul. It said, "We blunder rather than go into sin. Few men set out to reach hell, but most of us are for ever losing our way to Heaven." So the right hon. Gentleman will believe me when I say that I am charitable regarding his intentions, but very fearful as to; his actual future. This Bill is so impracticable, is so absurd in its detail, is likely to do so little good on the showing even of some of its most ardent advocates, is likely to interfere so much with trade, and do so much harm, that I cannot believe it will have, if it is ever put into operation, a very long existence, and while it is in operation I believe it will reveal to many who are still in doubt, the terrible danger, by artificial, ill-considered means, of trying to improve trade, of trying by small and petty methods to interfere with the natural and the inevitable forces which we have relied upon in the past for making this country great and helping us to do a trade throughout the world, and therefore I believe that the future economic and industrial policy of this country will be helped by a demonstration that we cannot mend these matters by these rather puerile means.
§ Mr. W. GRAHAM
We have had an opportunity of discussing the Resolutions at very great length, and a considerable problem faces any hon. Member who tries to find anything new to say on the present occasion. An hon. Member behind criticised some of us on these benches very sharply indeed because of what he regarded as our negative attitude in connection with this difficulty. He indicated that we had no constructive policy, but I venture to submit that there are times when what is apparently a negative policy is the strong line that this country is called upon to adopt, and that is an argument which applies very closely indeed to free trade methods in Great Britain. They have the appearance of inaction and of refusing to use weapons by way of retaliation in response to steps which are taken, but in reality, on closer investigation, they prove to be the most powerful weapons which we can possibly adopt. That is a consideration at the back of our minds in considering this Bill, and there is no desire on our part to avoid taking any step which would safeguard employment or do anything to restore normal and healthy conditions in Europe at the 1566 present time. Our own case is that a perfectly fair and impartial examination of this Bill makes it plain that it is no remedy whatever for the existing situation and that it will as a matter of fact aggravate the disease it professes to cure.
I propose, mainly from the point of view of labour, to say a word or two regarding the anti-dumping Clauses. The House will agree that it is practically impossible, as we have seen in previous Debates, to define dumping in a manner which will find universal assent. If we take the definition of dumping as based on the export, and import, of goods manufactured under sweated conditions in their country of origin, it is clear that this Bill will not help us in the very least. As a matter of fact, the proper remedy in that sphere is international labour legislation, and a determined effort on the part of all countries to arrive at a kind of code of at least approximate equality in the production of those goods in which countries compete one with the other. Is there any effort at the present time towards an international labour code of that kind? I submit that in Europe efforts are being made in that direction, and there is no country in the world at the present time in which there is not an incessant demand for a minimum standard and for good working conditions, and, above all, for very drastic treatment of those so-called sweated industries.
So that part of the argument, if there is any argument of that kind behind the Bill, can hardly be advanced, and we are compelled to fall back on the other argument which has been employed, that those countries are offering here articles at prices below the cost of production in their country of origin with which we cannot reasonably compete. Will any hon. Member suggest that in the present conditions in Europe or elsewhere it is possible for any country to go on for any length of time offering goods below the cost of production? What country is in a position economically to-day to do anything of the kind on any extensive scale? Even if we take our strongest competitors, we find that financially and economically they are in very grave difficulties. They can only offer goods on these principles for the purpose of advertisement or sample, or for reasons perfectly proper, to obtain a large trade, which is a device commonly employed, and, so far from doing anything on our part to hinder that 1567 tendency, it should be our business at the present time to encourage it, believing, as I think we should believe, that that will lead to a larger volume of trade, and so help the general European economic recovery which we all so ardently desire. There is nothing as regards that argument from any substantial point of view. Individual commodities may be offered. A country may take certain steps within narrow limits, but any broad general policy of that kind is, in the present state of the world, and certainly in European economic circumstances, impossible. What criticism beyond that are we entitled to offer on this question? The Committee of the Ministry of Reconstruction which considered this problem made one or two definite recommendations, and up to the present time we have had absolutely no indication from the Government in this House as to what they mean to do on three points, namely, the question of the dumping of goods from our own Colonies and possessions; secondly, the dumping of goods which are really in process of transhipment across this country; and, in the third place, the dumping of goods of a kind which are not manufactured here at all. Though probably to-day, some information will be forthcoming, no information of a definite character on these heads has so far been offered, and I suggest that, in the light of one of the important committees which reported on this matter towards the end of the War, these are considerations which cannot be ignored.
The main criticism of this Bill turns really on the devices which are introduced for the purpose of dealing with the collapsed exchanges, and more particularly, as I would regard them, for the purpose of trying to deal with the situation which has been created mainly by the present position of Germany. I do not mind very much what fiscal views a Member of this House holds. I think it is beyond all question that a very large part of this Bill has been dictated by a fear of German competition, and by what I venture to regard as a false reading of the situation so far as Germany is concerned at the present time. It would be wrong on my part to detain the House to-night with any repetition of the recommendations of the Cunliffe Committee, but I think I am entitled to say that in his speeches the Minister of Health 1568 made no effort whatever to dispose of the recommendations of that Committee. He certainly made no attempt to meet them. All the reference he made was to the fact that the Cunliffe Committee sat in 1918, and the impression we gathered from that remark was that it had reported at a time when conditions could not be compared with those at the present time, and a similar remedy could not be applied. The fact is that the Cunliffe Committee reported finally on the 3rd December, 1919, when, of course, the exchanges were in a difficult position, when we were at a distance of one year and one month of the Armistice, and when presumably all remedies of the kind now under discussion would be considered by a committee of great expert knowledge, one of the strongest committees for that purpose that could have been got together in this country. They very appropriately indicated a line of remedy—the restoration of a sound system of currency, increased production, diminished Government and other borrowing, and, above all, the greatest public and private economy. As I think has been shown in earlier Debate, the proposals of the Government in this Bill violate practically every one of the proposals which the Cunliffe Committee laid down. That has never been met by the right hon. Gentlemen who, so far, has made the main reply for the Government upon this question.
I think we are entitled to ask to-night that if Germany is the danger in connection with this proposal, what is the present position of Germany, and will the measures incorporated in this Bill help the situation in the very least? I know that it sounds unpopular to say anything at all in defence of the recovery of German commerce. There is something a little unpopular in that at the moment, because the War spirit—a perfectly natural and understandable spirit—is still with us: but I think most hon. Members are prepared to agree now that we have got to get away from sentiment and feeling, and come down to business, and view this situation from the standpoint of a German recovery, in order that she may be able to make the reparation which this country and other countries have quite properly demanded. French experts in this matter will not be accused of a German bias, and one of the most distinguished of the French economic experts has in the past few days examined this 1569 question of currency, inflation, depreciation, and all the rest of it within Germany. He also examined it from the point of view of the kind of proposals that we are now discussing, and he came to the general conclusion that Germany had nothing to gain from any depreciation, and that, in point of fact, any advantages or any recovery which she had been able to make up to the present time were due to facts which, I think, no hon. Member would dispute, but which are of a very important character where economic progress is concerned. Those facts were, of course, mainly and particularly that her productive capacity had been very largely increased, that her factories and plant had not been destroyed, that her land had not been invaded, and, above all, in a very short time from the conclusion of the War she had embarked on considerable technical and other research, which had enabled her to take advantage of the situation which presented her, notwithstanding her difficulties, with certain opportunities of trade and commerce. That is the view of a French expert, M. Jules Decamps, as to Germany's position in this matter at the present time. That is from a hostile source—from a source that would put the very blackest complexion on this situation so far as Germany is concerned, and yet that is a conclusion which, I think, is hostile to the proposals in this Bill.
The argument which I am going to place before the Government this afternoon is this. Can they reconcile this Bill with their reparations policy, and can they reconcile this Bill with a Germany recovering her export trade, not merely in her own interest, but in ours? What is the situation in that respect? It would be irrelevant to review the whole history of the reparations. I do not propose to try to do so, but I do say that, now that the aggregate sum has been fixed by the Commission, and now that the principles of payment have been so far determined, it falls to us as a country to ascertain whether we are embarking upon the right kind of legislation such as will give Germany an opportunity of making payment. A certain sum is fixed, and then, over a period of years, there is provision for 26 per cent. of the value of German exports. Our own experts of the Board of Trade, reporting on Germany's economic conditions as recently as December last, made a very definite 1570 assertion that the revived power of Germany's export trade was necessary to us, to Germany, to Europe—I might almost say, to the whole world itself—so far as economic recovery is concerned. The statement of experts interested in reparations is to the very same effect. As a matter of fact, the actual payment depends upon the recovery of Germany's export trade, because, unless there is an alteration in the future, that has to be taken as a test of German progress, and here is a Bill which is designed for the express purpose of limiting the export of, probably, considerable quantities of German goods for the purpose of giving us a quite fictitious protection.
I do not care very much what economic argument you apply to this Bill. Even if you take the Government's case, you will find that it breaks down in practice, because the principles behind this Bill are thoroughly unsound. I will take another argument. I will take for the time being that the Government is perfectly correct in its contention. Assuming that the 50 per cent. tariff on German exports is to be maintained, I am going to take the Government's contention, for the purpose of debate, that that would be paid by the German Government to its exporters. How could they possibly do anything of the kind without increasing the quantity of currency inside Germany itself? It follows as the night the day that the greater the strain placed upon the currency of any country, the greater the strain placed upon the currency of this country, by State payments, by all manner of additional obligations which a country takes upon its shoulders the greater tends to be the quantity of currency; in short, by the increased pressure which is put upon the broad back of the currency itself. Even if their argument were correct, and if the German Government had to make payment of that kind, there must be an increase of currency within Germany. Hence the tendency—although I recognise that that policy will be modified by Bills of this kind—to increased currency and therefore to provide no remedy for the state of affairs which the Minister of Health has quite properly deplored, namely, the manufacture of currency, the depreciation and all the rest which, according to his argument, has brought about this great advantage which Germany is said to enjoy. For these reasons, this Bill cannot be considered from any 1571 point of view a proper treatment of the present situation. There is not a single Committee which has reported on the currency question in this country, orthodox or unorthodox, which has recommended this way of dealing with the collapsed exchanges.
What is the real road to recovery? Our difficulty in opposing this Bill is the difficulty of others assuming that, as an Opposition, we appear to have nothing to propose, whereas, of course, the truth is that all we can propose are the ordinary sound, economic, natural roads to recovery. Unfortunately, they are not spectacular. They do not appeal to the man in the street who is looking for some dramatic move against the Central Powers of Europe, for something which he can point to as a form of protection to his industry and his employment. There is no spectacular road to recovery of that kind. The only road to recovery is the road of giving the maximum of freedom you possibly can to the interchange of commodities, to improving the nature and the structure of industry within each country, in doing all we possibly can to make all this as efficient and as productive as possible in order that the recovery may come about in the natural and in the most convenient way. These are the things which hon. Members on this side of the House are compelled to recognise and keep clearly in mind in the discussion on this Bill.
There is only one other argument I am going to advance in conclusion. The present industrial situation in Great Britain is very dark. We have a coal stoppage in progress, and that stoppage may perhaps in a very short time, unless a remedy is found, extend to other industries. I deplore that stoppage as much as any other Member here, and I shall certainly within the very limited sphere of influence that I possess do everything in my power to find a remedy. Let us suppose for a moment that in a week or two a remedy will be found. Experts, by no means optimistic in this country, have been thinking that, assuming a settlement of the coal stoppage and other difficulties, we may reasonably look forward to a period of reviving trade. They say there are certain signs which point to a coming demand for British goods. Above all, they plead that we should have the maximum freedom from 1572 restrictions at the present time, when that promise of recovery is on the horizon. This Bill and kindred measures, with their cumulative weight of all devices, many of them contradictory, which the Government has so far introduced, is inevitably in the direction of stopping that freedom of intercourse and spoiling, or at least dimming, those hopes just at the time when in our common interest they were most required. What I am going to ask the Government to do is to fall back upon the recommendations, not of hostile Committees, but of friendly Committees; to take this Bill and all its useless devices away, so that under circumstances of freedom there may come that recovery of industry and commerce to which we are entitled in the common interests of the people of this country.
§ The PRESIDENT of the BOARD of TRADE (Mr. Baldwin)
I should like, first of all, to follow what was said by the right hon. Gentleman the Member for Peebles (Sir D. Maclean) and to express my own feeling and the feeling of those who sit on this side of the House at the death of our old friend, William Crooks. We endorse every word that the right hon. Gentleman has said. We all loved the late Member for Woolwich. His life was one more proof—if proof were necessary—that the most potent and the most pervading power in this world is the one that comes from love in the human heart. He had that in abundance. I hope that we may be able, in our own several ways, to follow his example. We shall never forget him.
We have arrived this afternoon at a further stage in our attempt to safeguard our industries. We have already had four or five days full Debate on the general principles of the Bill, which has now been formally introduced. I imagine that in those four or five days most of what can be urged against the principles of this Bill was urged. It is inevitable that in arguments on a subject such as this there must be a certain amount of repetition. That may account for what my hon. Friend the Member for Morley (Mr. France) said about me, that I do not present myself as an object of such cheerfulness as he feels is desirable in the circumstances. I remember, I think it was, the late Sir William Harcourt, who said it was no use hoping to make any impression on an audience until you had repeated a remark at least 12 times. 1573 I hope, and believe, that by the repetition we have been able to indulge in—on both sides, I freely admit—during these somewhat protracted Debates, we, at least, have got some comprehension of the subject under discussion.
It is my duty to-day to make some remarks about the Bill itself. Before coming to that, however, I should like, if I may, to amplify some remarks I made in the first speech I delivered on the introduction of the Resolutions, because, although that speech was not a long one, it reflected my views as clearly as I was able to present them. I think even now, after the intervening Debate, not much amplification will be necessary. There is a certain amount of unreality in this struggle. The most vivid eloquence cannot convince anyone who looks at the benches to-day that any principle is at stake for which a party would give its life. We seem still to be in that atmosphere when, with a constant economic environment and on foundations which stood firm throughout generations, we used to argue from the middle years of the last century until almost the time when the War broke out—the great principles of Free Trade and Protection. I myself for many years before the War was what was called a Tariff Reformer; but in my view, and that of many of us, the old economic labels are really as extinct to-day as the old political labels. Just as at this moment the old party struggles in their integrity are in abeyance, so it is quite impossible, having regard to the circumstances of the time, to imagine a contest between Free Trade and Protection—or Tariff Reform—as we knew it before the War.
What is the position? You have those foundations, the foundations on which our civilisation exists, which have remained secure for generations, now cracked and quaking. In regard to the currency about which so much has been said to-day—how is it in regard to that? There is not one of us here who cannot have admired at one time or another the dextrous manipulation of the conjurer who holds in his hand a pack of cards, and by some subtle motion of his fingers reduces that pack of cards before our eyes to a midget pack, the size of your thumb-nail, and makes that pack contract and expand at will. Something like that in appearance is what is happening to-day with the currencies of the world. There is no stability in them. 1574 We find ourselves in the presence of a phenomenon, strange to us, and to which we are unaccustomed. The whole economic environment in which we live, instead of being constant and stationary, is shifting and changing while we look at it. We are looking at a kaleidoscopic picture. In these circumstances, and in that environment, to my mind and in my view it is quite impossible for anyone to say what should be the economic principles which ought to guide a country. When we emerge from the shadow of the War—and no man can say how long we may be, passing out of that shadow—when we find conditions more stabilised, then we may be able to decide what may be the wiser policy in the changed circumstances of the world for this country to adopt, whether it be Free Trade or whether it be Tariffs. The time for that decision has not come yet, and the only answer that one can give to inquirers is the old answer that we must "wait and see."
In the meantime we are faced with this question. Are we going to do as some hon. Members desire, leave things alone, or are we to try to act? If we act I recognise as fully as any man in this House—and I make no secret of it—that action in a time like this must mean, to a certain extent, ad hoc legislation, which is not a good thing in itself, and which would be very undesirable unless one felt that the reasons for it were stronger than the reasons for inaction. The drawbacks of ad hoc legislation are perfectly obvious. You try to frame your legislation without sufficient experience to guide you, and when you legislate to meet a certain set of circumstances in a changing medium you are very apt to cause a repercussion whose incidence upon you it is difficult to predict. I said that in other words when I introduced the Resolutions, and I said this too: that I feel as strongly as anyone in this House that the easier course is to do nothing. Our great desire, however, is to restore the trade of all Europe. Here we are entirely at one with the hon. Gentleman who has just sat down—to restore it as quickly as may be.
There is one more point which I dwelt upon, and which nothing that has been said in these Debates can quite eliminate from my mind, and that is this: In every process of rectification, whether it be quick, or—which is far more likely—long, some of our people are going to be hurt, and it is just that question of whether 1575 we are going to try to minimise the hurt to them—we recognise there may be some prospect of pain on the other side—or whether we are going to leave things to themselves. This is no war measure, to use the phrase of the right hon. Gentleman the Member for Peebles (Sir D. Maclean), nor is it a taking up of the cudgels against any other nations. It is rather like putting up an umbrella to shield our own people, although I am fully conscious that the storm may be so great that that umbrella may be blown inside out. With these preliminary and elementary remarks I will pass to an examination of the Bill, and in doing that I hope to make one or two observations on some of the points which have been urged in the course of the present Debate. I do not think there is anything in the Bill, now that it has been printed, to which I did not call the attention of the Committee when the Resolutions were introduced. There is one subject to which I would make allusion upon which nothing will be found in the Bill, but I will come to that later, and I give the House an assurance that the matter will be dealt with.
The first part of the Bill is devoted to the safeguarding of key industries. The key industries schedule has been put through a very fine sieve, which accounts for the list being less long than hon. Members who are advocates of the Bill like to see, or even hon. Members on the other side of the House who are anxious to point out to us how little we are really doing for those whom we consider to be our friends. We are placing on the goods embodied in the schedule a duty of 33⅓ per cent., which is not exclusive of any other Customs Duty. That is to say, if there is now or at any other time a Customs Duty on goods included in the schedule, the duty cannot be increased under Part I of this Bill except when the Customs Duty is less than 33⅓ per cent., and in that case the total duty cannot be raised above 33⅓ per cent. That is the only basis upon which the duty on a key industry can exist at all. But, of course, the industry may become entitled, in addition, to the 33⅓ per cent. duty under either (a) or (b) of the dumping provisions of the Bill.
The right hon. Gentleman the Member for Peebles seems to have expressed to-day some preference for having sub- 1576 sidies or some form of prohibition instead of duties. That matter was very carefully considered while the Bill was being framed, and the reason why a duty was chosen was as follows: I recognise quite frankly and freely that any restriction means a certain amount of inconvenience but I think a duty means the least amount of inconvenience. I think a duty is best for this reason. Everyone will admit that a system of licensing and prohibition is about the most annoying which the business community has to deal with, and I will rule that out at once. Speaking for myself, after the acquaintance I have made, which ripened rapidly into an intimacy but never into a friendship, with subsidies during the War, I say that I never wish to see a Government subsidy again. Subsidies are bad in many ways, but let me point out two or three facts relating to them.
If the Government subsidises anything it has to pick out a firm to subsidise or more firms than one. It has to control them. If it controls them too much or takes away all their profits then it takes away all the incentive by subsidising, because they feel that they can always get fresh capital from the Government and there comes a day when the Government gets tired of subsidising, and feels it is much better to give up subsidies and wind them up. When you put a fixed duty on one of these scheduled industries everyone knows exactly what to expect. It is open to anybody that likes to try with that amount of protection given to see whether he can make goods as against foreign competition in the period of five years allowed under this Bill.
I come now to the question of the Committee. I propose later on to set down a proposal establishing a Committee to watch the development of these scheduled industries and to prepare an annual report to Parliament on their progress. I am considering, and I hope I shall be able to devise, some method which will commend itself to the House by which we can say to these industries that, if after the examination by this Committee we find that in a limited period, say, of two or three years no progress has been made, then we should consider the removal of that industry from the schedule.
§ Major HAYWARD
Will the right hon. Gentleman say what powers of investigation this Committee will have?
§ Mr. BALDWIN
I think that is an interesting point to raise on the Committee stage. I may say that I shall be ready at all times to make any alteration in this Bill which will improve it. My object is to make this Bill as efficient an instrument as it can be made for the particular purpose we have in view. I want now to pass on from key industries to the provisions as to dumping.
There are two kinds of dumping. One of them was with us in the old days and probably will be with us in the future—that is ordinary dumping. I would call the attention of the House to this fact, that before any goods can be scheduled as being dumped into this country a very careful examination is necessary. First of all complaints have to be made to the Board of Trade; and secondly, if the Board of Trade agree that a prima facie case has been made out that dumping is taking place then the Board refers the matter to a Committee. The Committee investigate the question of fact as to whether dumping is taking place, and whether by reason of that dumping employment is being or is likely to be seriously affected. If they report that these conditions are fulfilled the Board may then make an Order. That Order can be made for a definite term up to a maximum of three years, but it may be revoked in less time after reexamination by the Committee. It can be renewed after three years upon a reexamination, and this is the only part of the Bill which is permanent. My own view is that the mere fact of having this as a piece of permanent legislation will act as a deterrent so far as ordinary dumping is concerned.
§ Sir F. BANBURY
Am I to understand that the Bill proposes to make it a part of the permanent legislation of this country that the Board of Trade is to have power to impose taxes?
§ Mr. BALDWIN
I think it is a little early for my right hon. Friend to assume that. With regard to the second part, that is dumping connected with the depreciation in the value of the sterling currency, there the process for ascertaining whether dumping is in existence or not is the same as for ordinary dumping, except that there a limit is fixed at three years from the passing of the Act as the maximum period during or for which orders can be made. At the end of that time we 1578 shall have come to an end of our legislative powers with regard to this kind of dumping, and if they are required to be renewed the Act would have to be renewed. I would like to say a word or two with regard to this form of dumping. I am aware that this is the part of the Bill which has been the most criticised, and against which there is a good deal of feeling. I quite sympathise with the bankers in the City of London in the manifesto they have issued, and if I had been a banker and nothing else I should probably have signed it. But after all, there is a responsibility on the Government which does not rest on the bankers or the Opposition. It is very easy for the Opposition to criticise and for the bankers to issue a manifesto like that, but it is not so easy for the Government of the day, who see that this country may be visited with a flood of imports coming in owing to a series of causes which have never existed before, to see that and say there is nothing we can do to help you.
§ 6.0 P.M.
§ Mr. BALDWIN
I do not think there are any experts who can say what the course of foreign trade in the next two or three years is going to be. That is a very difficult thing to say, and I was interested to hear my hon. Friend who spoke last examining that subject with that skill and acumen with which he always examines every subject he touches. It is impossible to say what the course of business or trade will be in the next two or three years, and especially what the position may be in Germany and other countries of which the hon. Member spoke. We do not know exactly what the effect may be of the reparations and the effect of any part of this legislation that may come into force. There are men of great experience, not connected directly with politics, with whom I have had an opportunity of discussing this matter who believe that, so far as Germany is concerned, we may look in the near future for fiercer and more devastating competition than we have yet had. I do not pronounce with certainty whether that may be so or not, but I am quite sure that, in spite of all the arguments that have been urged against this part of the measure, no Government which was faithful to its trust could neglect taking some steps to protect employment in this country at a time like this, and 1579 with a future before us so full of doubt and uncertainty. If it should be that the exchanges rectify themselves more quickly than any of us anticipate, so much the better. If these provisions should not be needed, so much the better. But it is the path of wisdom to bring them at this time before the House for its acceptance. All I would say here would be to remind the hon. Gentleman who has said that we are attempting to rectify and standardise the exchange that we are doing nothing of the kind. This is not an attempt to standardise or rectify it. We are only aiming at taking such steps as we believe to be necessary within our own borders, and only within our own borders, at a time when the employment of our own people is very likely to be seriously affected.
Three questions were asked by the hon. Gentleman who spoke last. He asked about dumping from the Colonies, about dumping in process of transhipment, and about the dumping of articles not manufactured here. The House will be relieved to hear that my answers to these questions will be very brief. Dumping from the Colonies was dealt with at great length by my hon. Friend who assists me so ably with this measure during the Committee or Report Stage of the Resolution, and it can be further discussed in Committee on this Bill. As the Bill stands at present, dumping from the Colonies is treated in exactly the same way as dumping from other countries. Dumping in process of transhipment is dealt with fully, and I hope satisfactorily, in Clause 13. Dumping of articles not manufactured here is a form of dumping that cannot arise under this Bill, because the only question involved is as to whether employment here is, or is not, likely to be seriously affected.
I have detained the House at greater length than I had intended. This Bill has been presented, as I undertook it should be, as an honest and bonâ fide attempt to do something in a time of emergency—something of very great difficulty, something that we knew would meet with criticism from many of our old friends as well as from those who are politically opposed to it. But we believe the Bill at the present time to be necessary, and we shall do our best to secure its becoming an Act of Parliament. We are anxious to improve it in any way in which it can 1580 be improved as an instrument to effect that which we have in view, and we shall resist any attempt to take from it any part that we consider essential to preserve it in its main features. I understand that the Debate is likely to be continued for some little time. I have not spoken longer because when I was a private Member I used to add up the amount of time consumed in Second Reading Debates by Members of the Front Bench, and to see what balance was available for Private Members who might wish to speak, and I always found that the time left to me as a private Member was zero.
§ Mr. WINTRINGHAM
Nobody will begrudge the President of the Board of Trade the very small amount of time he has taken up in dealing with a very important subject. I think the House will agree there was an absence of that gloom which the right hon. Gentleman portrayed on the Second Reading of the Ways and Means Resolution. The right hon. Gentleman has always shown a considerable amount of conviction in the expression of his views. If I criticise him at all, I should like to say this. I think he is entirely wrong when he says that no fundamental principles are at stake. I think some are. I think the views put forward by him and held by him with such conviction would at any time find a backing from Protectionists in this country, and at any time before the War or since he would find them opposed by those who are called the Free Traders of this country. Ever since the Coalition came in we have had too much of the cry that no principles are at stake. We live in a time of mixed affairs. What has happened with no principles being at stake? The Coalition have departed from all arithmetic, they have lived on promises, on perorations and on dreams, and if we are to live on this continuous diet of no principles being at stake, then I venture to say matters in two or three years' time will have become worse than is the mess in which we find ourselves to-day. No wonder that, not only in other countries but in this country, everything, as the President of the Board of Trade has said, is cracking and quaking. More things are cracking and quaking, and more people are cracking and quaking than we know of.
I wish to emphasise this point, that whether we agree or disagree, the sooner 1581 we get back to fundamental principles the better. The President of the Board of Trade paid very little attention to the speech of the hon. Member for Central Edinburgh (Mr. W. Graham). I thought that that speech was fundamentally right, as was also the hon. Member's previous speech on the Ways and Means Resolution. I entirely agree with what he said. But the President of the Board of Trade appeared to think that he was merely a professor, and that this was a business House and a business world, and, therefore, it was better perhaps to pin one's views down on business lines. If I am anything, in a poor way, I am a business man. My life has been spent in business. I have had some business experience, and I wish to speak within the boundaries of what I know and within the boundaries of that experience. The President of the Board of Trade made a rather halting apology for the measures against dumping. I think his simile as to an umbrella was too far off perfection. He spoke of the umbrella which very early in the storm blew inside out. But that was quite beside the mark. Let me give my own experience of dumping for which this Bill affords no relief. Let me take, first of all, dumping as I see it going on in the business with which I am acquainted. My business is in connection with the timber trade. Like the paper people, we have to hold stocks—and large stocks, owing to a seasonal trade, and to-day we are caught with heavy stocks on our hands. We are feeling it very severely. We see stocks coming in from the Baltic at 30, 40, and 50 per cent. lower rates than the stocks we hold. I do not see any provision in the Bill that will help us there, and I do not think we ought to be helped. My view is a rough one, but it is that capital should be left alone. If capital walks away with the profits, it ought to be able to tackle the losses, and it would be infinitely better not to meddle with these things than to try and shelter behind any arrangement made by the Board of Trade.
The Government themselves are dumpers in a large way. Let me give an instance of it in my own town, the port of Grimsby. When I go down the yard while I am at home, I see a large flotilla of German trawlers. They are not there by reason of the coal strike, they are out of commission, and you can 1582 have these trawlers for probably half the price it would cost to build an English trawler. In addition to these German trawlers you have out of commission and on your own hands about 150 more trawlers which have come into the port of Grimsby, the largest fishing port in the world, and all these boats, whether German or English, can be bought at about half the price it would cost to build them. What happens is that the trawler owner finds that he has difficulties with his boats apart from the coal strike, because they are only worth half as much as formerly, and the accommodation he can obtain from the banks on the value of the boats has to be written down by a very serious amount. That has aspects and features of dumping, and it injures and impedes the recovery of a most enterprising trade. In a lesser degree, all the surplus stuff that you are selling you are selling at less than it could be made for, whether it be huts, chemicals, wire, or anything else. Are you going to give relief to these people whom you yourselves are injuring? Is not that dumping? I do not see that they ought to have relief, and I cannot conceive that you are going to do any good by the relief that you offer. The President of the Board of Trade is much too good a man to have the large number of importunate visitors that he will have at the Board of Trade very soon after this measure is passed. He does not know who is coming; he does not know how large his audience will be. I know a good many people who are coming, and he will be uncommonly astonished to see people there who ought never to dream of coming to him. He is whetting the appetite of nearly every manufacturer and merchant who is holding stock. They are embarrassed, and I wish to say nothing against them. I belong to them, and know that they are in for most trying times; but if they think they can come to the Board of Trade for shelter, it will hinder the recovery that they ought to face.
The fact that this is going to be dealt with by a Committee sitting occasionally is, I will not say most improper, but most unusual for a vast business of this sort. I can only echo the views of the right hon. Gentleman the Member for Paisley and others when they say that the House of Commons ought to be the authority for settling this business, and 1583 not any Committee appointed by the Board of Trade. I wish to meet fairly the arguments of the ordinary manufacturer or merchant who finds that, from one cause or another, it is very difficult indeed to trade. In view of the present economic collapse, I would ask, is any manufacturer or merchant sure that he can trade even if he gets from abroad dumped goods at a lower price? I do not think he can. The difficulty at the moment is absence of markets. The coming in of dumped goods makes it more difficult, but it is not by any means sure that you can get a sale for what you have. I should like to put a case which might be put by the hon. Member for Chippenham (Mr. Terrell). He might easily say that what I have said does not apply, but I think it does. Let me take the case of gloves. I know that gloves do trouble hon. Members who are nominally of my political faith, but in whose constituencies the manufacture of gloves goes on. I have exactly the same trouble myself, though not in regard to gloves. I have faced it by saying that Government relief is no proper remedy, and that people will be better off without it. Whether they agree or disagree with me is another matter.
The competition which you are getting in gloves is chiefly not from enemy countries, but from places like Czechoslovakia and, I believe, Italy. Assuming that to be right, and that owing to competition these foreign gloves oust the home gloves, and assuming the consequent unemployment, that case is on all fours with several others. It is a case which, I think, requires some answer, and is more difficult to meet than those cases which I have cited; but I am quite impenitent, even then, in my view. I say that the manufacturer of gloves is only helping to impede the recovery of Europe if he leans on the State for aid. He must exercise his wits and ingenuity, as I have had to do more than once in my own business, to see what alternative can be found. If there is no other alternative to ensure the employment of his workpeople, he must, at the worst, be content for a time to buy the foreign article, if it comes in at such an enormous reduction below his, and sell it in the market as a merchant. I question whether he will have a market even on those terms, but I have known merchants and manufac- 1584 turers to be compelled to adopt that course for a period. It is better than permanently keeping prices up, and then going, when bad weather comes, to the Board of Trade.
I deprecate and deplore the fact that the Government are going to interfere with trade again. I am sure they will make a mess of it. I am sure that the people who will be coming to the Board of Trade will know much better what they want than the Board of Trade will know what they ought to have. If the Government, instead of saying, "Come to us in your troubles," will keep them at arm's length and tell them to be self-reliant and stand on their own feet, recovery will be quicker. I look at the Government Benches and see the great array of Ministers, and behind them I see Under Secretaries, and behind them again I see, probably, Private Secretaries. Being a rather new Member, I am not sure how many there are, but the number seems to me to be enormous. Despite all that, never was a day's work of the Government so hard, and never was criticism so easy. You have only to fire into the brown, and you can easily by your criticism hit some Member of the Government. I say that they had better get on with what they ought to do—with their proper function as a Government—than once more begin toying with trade. I should like to ask the President of the Board of Trade if he can give this House some return of the money invested by the Government in different trading enterprises in the country, and if he would tell us if there is a single instance where there is the least prospect of getting repaid at any remote time 20s. in the £? I say that that is not the function of Government. If you keep the peace, if you protect us, see that we do not kick over the traces, see that there is no sweated labour, keep our health, tax us—not so inordinately as you are doing, but see that we pay out proper taxes—then, I think, the functions of Government, even to-day, are pretty well exhausted. They ought to be.
This everlasting trying to please everyone, this everlasting interference, these everlasting promises and dreams, only lead to disappointment. You will have an enormous number at the doors of the Board of Trade; then you will have a great demand for a higher tariff than 33⅓ per cent.; then you will have disappoint- 1585 ment, and you will find it very difficult to get out of the business in five years. The President of the Board of Trade is very sanguine if he thinks he can get out of it in five years. I have never known any State which imposed a tariff get out of it in five, or 25, years. It is creating a Frankenstein that will be round the Government's neck and the country's neck for years, and it will be difficult to kill it when an alternative Government comes in. My conclusions are that dumping is going on in many trades that you are not going to relieve; that the Government are dumping; and that this measure will give no relief to the recovery of Europe. The pace of our recovery from our economic collapse is the pace of the recovery of Europe from its economic collapse. You cannot alter or accelerate it, and the only way is to adopt the sound line, not of bringing in these rather, if I may say so, stupid proposals, but of letting the ordinary economic influences have their way.
§ Sir PHILIP SASSOON
Many of the criticisms that have been made against this Bill, both to-day and during the other Debates which we have had on the general subject, remind one irresistibly, if I may say so without disrespect, of the old couplet:—When the devil was ill, the devil a monk would be;When the devil was well, the devil a monk was he.This is not a war measure, as has been said to-day, but it is an attempt to learn the lessons rudely taught us during the War, and I should have thought that with that principle no one would have quarrelled. If these proposals had been put forward in this House some two years ago, when the memory of the War and all that it meant was still fresh in our minds, I do not think there would have been so much opposition to them as there is in some quarters to-day. I am sure that if it had been feasible and practical politics to introduce a measure of this sort into the House in the full flood-tide of war, there would not have been one voice raised against it in any responsible quarter. During the War all were Protectionists, because there was nothing else for them to be; but one would have thought that even the most full-blooded Free Trader would have realised why they were Protectionists, and all that it means 1586 to a nation struggling for its existence to be dependent, and to have been dependent for decades, upon the workshops of its principal enemy for all the essential necessities for carrying on a great war. One would have imagined that a Free Trader, converted for the moment into an artillery officer, who had had to pay an exorbitant price for a pair of German field glasses, and thought himself lucky to get them at any price when many others had to content themselves with what at that time was a vastly inferior British article—one would have imagined that man saying to himself with the deepest conviction, "Never again!" But within a few years, when the sound of the guns has been forgotten, the lure of Free Trade theory and cheap glass is too much for us. Let us glance down the list of articles mentioned in the Schedule. Everything contained in that list is directly or indirectly an article which in these days of scientific warfare no nation that hopes to be free can dare to be dependent for upon a neighbouring State. As a nation we had a wonderful escape during the War. We were caught utterly unprepared. It is the fashion to say that our unpreparedness was due to military reasons—to the size of our Army and things of that sort—but I think it went further than that, and one of the most important causes of our unpreparedness was that we had permitted Germany to get such a tremendous stride owing to no industrial competition in all these essential manufactures which she was able in a moment to turn from peace manufactures into those most deadly and essential for war. There is no doubt we were caught napping. We were sick, and we have got over our sickness. Now that we have got over our sickness, do not let us go back into our evil ways.
The proposals involved in this Bill have nothing to do with either Free Trade or Protection. One need not rely on Free Trade arguments at all. It is a bare question of national insurance. The most ardent Protectionist may hug himself legitimately and harmlessly with the thought that in this Bill he will be able to get his own back a little on the foreign producer. The most stalwart Free Trader may see in this that for every insurance a premium must be paid, and the insurance that is suggested is surely well worth any premium. To be sure the War aspect of this question is complicated to-day by the question of the exchanges. Inter- 1587 national values lend themselves to manipulation, and it is a good argument that we must in any case protect ourselves against exaggeration, to our disadvantage, of the War's effect upon exchange. That is another strong reason why the House should support this Bill, and particularly the anti-dumping Clauses of it. But I should like to take a broader view of it. If in this Bill we find specific protection for potential war industries, coupled with general protection against anti-dumping, I should like to draw no distinction between them. They are, I think, complementary to each other, and both have the same object in view, namely, that we should never again be in the terrible position we were in in the early days of the War. I say the early stages of the War, but one might say during almost the whole of the War we were straining every nerve to try to make up the ground which we had lost in our industries before the War, and it was only towards the close of the War that we were able to make up the enormous handicap with which we started. My object in taking part in this Debate is to try to get back a little into the atmosphere of those old days of strain when one never knew what chemical surprise the enemy was going to spring upon us, or how soon it would be before our chemists would be able to cope with the enemy's latest device. I wonder if anyone can fully realise the effect that mustard gas had on the Flanders campaign in 191V, or realise what would have been the effect if it had been a British chemist who had discovered it first, and it had been the British Army that used it first. As it was, for at least a year, month after month, the British Army had to wait while their positions were drenched with this gas, and they were unable to retort in any way unless by chance they happened to have captured some of the enemy's own shells, and that was not because our chemists did not know this gas, but because the industry itself was not properly equipped to produce it.
I feel that no one who carries his mind back to those days can possibly vote against this Bill. The only danger is that we should sink into that frame of mind when a past peril narrowly averted is an excellent reason for omitting all precautions for the future. Everything points to industrially developed science playing a more and more important part 1588 in war. Highly developed science in industry, quite apart from the chemical industry, not only means prosperity and wealth in peace but also spells more and more plainly the difference between victory and defeat in war. The substance of the whole matter is put in the introduction to the Report of the British Mission appointed to visit German chemical factories in the occupied zone, which I am sure has been read by all those who are taking part in this Debate. The Report says:In the future it is clear that every chemical factory must be regarded as a potential arsenal. Other nations cannot submit to the domination in certain sections of chemical industry that Germany exercised before the War. For military security it is essential that each country should have its chemical industry firmly established, and this must be secured as one of the conditions of peace, as otherwise we are leaving Germany in possession of a weapon which will be a permanent menace to the peace of the world. At the time of the Armistice Germany is left with a chemical industry which has a greater productive capacity than it had before the War.Possibly foreign domination of the chemical industry is one of the dangers, but there are many others which are scarcely less insistent, and it is for that reason that I support the Bill, deeming that it is a national insurance which we cannot afford to disregard.
§ Sir F. BANBURY
I am, and I hope I shall always remain a Tariff Reformer, and therefore I shall support the Second Reading of this Bill, although I do not think it goes as far as I should like to see it go. But I rise, in order that there may be no misunderstanding about my vote, to say that, though I shall support the Second Reading, I shall strongly resist Part 2 of the Bill. I was extremely sorry to hear the explanation given by my right hon. Friend of Part 2. I understand it is intended to be permanent, and it gives the Board of Trade power to impose taxation.
§ Sir P. LLOYD-GREAME (Secretary, Overseas Trade Department)
I am sure the right hon. Baronet does not wish to state the purpose of Part 2 incorrectly. As regards dumping, the provisions are permanent in character. As regards exchange they are expressly stated not to be permanent but only to operate for three years.
§ Sir F. BANBURY
I am not sure whether that is or is not in the Bill, but 1589 we will deal with the question of dumping. As I understand it, that is to be a permanent part of the legislation of this country and the Board of Trade, if we pass the Bill, will permanently have power to impose taxation under certain circumstances. I do not think that can be denied. I wish it could. This House in the old days fought to prevent the King imposing taxation. I am not going to submit to a Department doing that which we have always refused to allow the kings of this country to do. If there is to be taxation it should be imposed by this House alone. The Parliament Act makes it doubly necessary that this should be so, because the other House of Parliament unfortunately had the power of dealing with taxation taken away from it. It is against the whole principles which have governed this country that this House, which is at the present moment the sole body which has the power of dealing with taxation, should assign that power to any Government Department, however eminent or however well conducted, and therefore I thought the House would excuse me if I rose to make these few observations.
With regard to the speech we have just heard, as to what was done in the War, we did a great many foolish things in the War, and I really cannot see what connection there is between a Bill of this sort, which imposes a tariff upon certain articles, and the want of chemicals in the War. We do not know that this is going to make firms in this country produce chemicals. If it is necessary that chemicals should be produced and the country does not do it, I think the Government ought to do it. That seems to me to be the simple solution of the matter. But that of course does not prevent me, as an old Tariff Reformer, holding the view, which I still hold, that the industries of this country should be protected. I am going to support the Second Reading because the Bill goes a little in my direction, but it does not alter my opinion that what we ought to do now is to extend it so as to include all industries. You ought to do one of two things. If you hold that it is necessary to protect the industries of the country, as I do, you ought to protect all of them by a moderate tariff. If you hold that that is wrong, and that the country will be more prosperous without a tariff, then you ought to have no tariff, but I do not like this sort of half- 1590 hearted proposal. It is a sort of thing that goes off at half-cock. I presume certain Members of the Government are Free Traders and others are Tariff Reformers, and there is a sort of compromise between them. "If you will allow me to put a duty upon certain articles we will say nothing." That is the Tariff Reformer. The Free Trade part of the Government says, "We will sacrifice our principles by allowing you to put some duties on provided you do not put duties on everything." I do not think that is a businesslike proposal, and I regret very much that the Government have not taken their courage in both hands and brought in a simple Bill which would impose a moderate tariff—I do not want a prohibitive tariff—upon everything, including food, and do away with the subsidy to the agricultural industry. That, I believe, would be an intelligent and a businesslike proposal. I receive every day letters from people pointing out—I cannot contradict them; I am not in their trade—that their trade is a key industry and is not included in this Bill. I do not know whether they are right or wrong, but that shows the difficulty of bringing forward a Bill of this description.
§ Mr. MOSLEY
I agree with my right hon. Friend the President of the Board of Trade, that it is unnecessary to delve far into history to discover arguments to apply to this Measure. I would dwell rather on the pragmatic absurdity than the theoretic heresy which is embodied in the proposal now before the House. He referred to this proposal as an umbrella, and expressed a fear that the umbrella would be blown inside out; a fear that is always liable to be realised when you erect a small and very feeble umbrella in the force of a cyclone. I should like, however, to reinforce, as far as I am able, the appeal which has been constantly addressed to the Government during this discussion on the rather more theoretic ground of the extreme inexpediency, at this moment of all moments, of erecting within the European economic system fresh barriers against the free intercourse of trade, which alone can result in the removal of all the evils under which we are labouring to-day, evils which this particular measure is designed to remedy. For months past now, almost daily in this House, the Government have declared that all the ills under which we labour 1591 —the unemployment, widespread misery, etc., that prevail in the country, are due, primarily, to the collapse of the European exchanges, and yet to-day they come to the House with a Bill that is designed to erect fresh barriers against the trade of a country suffering from collapsed exchange, and, consequently, to aggravate and perpetuate the very evils to which they ascribe our troubles. On these grounds I think we may legitimately offer opposition to this measure.
It is contended by the Government that it is incumbent upon them, in view of their election pledges, and in view of the manifesto signed by the Prime Minister and the late Leader of the House, to bring forward some measure of this kind. Circumstances alter cases, and no one at the General Election could have conceivably foreshadowed, and nobody did in fact adumbrate in any way the conditions that prevail to-day. Those pledges, as I understood them, were designed to apply to a world under normal conditions. No man then foreshadowed the utter economic collapse of the Central European Empire. The ablest City judges did not foreshadow the complete exchange collapse that has taken place. Many able judges, men who started with nothing and have made millions of money, were actually buying marks when they stood at 60 to the £. They could not have conceived the subsequent economic collapse. I say, without fear of contradiction, that there were very few men, if any, in the City of London, even after the cessation of hostilities, when economic conditions were making themselves felt, who foresaw the utter degeneration of the European exchanges. I have said that circumstances alter cases, and at the time of the General Election no one foresaw the complete collapse of to-day.
What were the Government pledges? The Government pledged themselves, and everybody in this House who supported them in their General Election manifesto were pledged, to prevent dumping. By dumping, as I understood it, we then meant an organised and subsidised attack by a foreign country upon a specific British industry. That was how we then defined dumping. That was how I defined dumping, and I still stand by that pledge. I think there is universal agreement in the House that an attack of that sort 1592 should be met by force, by some drastic remedy; but in asking the House to pass a measure to protect us against dumping of that kind, surely it is incumbent upon the Government to bring forward some proof that this dumping is actually in existence or is feared in the very near future. The onus of proof in that matter is upon the Government. In this Bill the President of the Board of Trade introduces a new definition of dumping. We are now to understand that included in this Bill under the definition of "dumping" is a condition where cheap goods are imported into this country, owing to the collapsed exchange, at a lower rate than they can be profitably manufactured in this country. That is a new provision which was never foreshadowed, which was never contemplated at the time of the General Election, and we are, therefore, free to consider that provision with the a priori mind.
Then there is the question of key industries. At the General Election it was said that certain industries which were vital to our position in time of war, as we had been taught by the experience of the last War, should be saved from decline and relapse in time of peace. The method by which those industries were to be protected was left open, to subsidy or tariff, as I understood it. We are still free to choose which it shall be. I agree with many of the arguments; in fact with all the arguments advanced by the President of the Board of Trade against any subsidy whatsoever, under any conditions. It is always a vicious system. It lends itself to the introduction of a very great measure of corruption. I agree that subsidies are undesirable. The only advantage of subsidies, intrinsically, in this particular respect is that the country is so sick to death of them that the power to grant a subsidy will not be abused, and that no industry will be subsidised which is not entirely necessary to the safety of the country under the conditions of war foreshadowed so frequently by right hon. Gentlemen opposite. There is, however, a greater argument than that in favour of subsidy, and this brings me to what I may term, and what appears to me to be, the pragmatic absurdity of this Measure, the impracticability—whatever our pre-War convictions, whether Tariff Reformers, Free Traders, or anything else, may be—of fixing an effective tariff under present conditions. It passes the wit of man to fix a tariff to-day that is effective.
1593 What are the conditions to-day, if I may apply a pragmatic test to German goods entering this country? The German mark internally is worth a shilling, and externally it is worth one penny, or thereabouts. It has stood about 240 to the £ for a long time. With an exchange in that condition, where the raw materials component in the exports are indigenous, where they are self-contained in Germany, it is obvious that Germany has a complete bounty on exports which it would require a tariff of something like 1,000 per cent. or more to remedy, when the raw materials component are indigenous. Conversely, when the raw materials have to be purchased externally the exchange operates adversely against Germany, and the prohibitive tariff against her exports is, in fact, already created. The proposed tariff is a fixed and arbitrary tariff. You propose to put on a tariff of 33⅓ per cent., which, in addition to the Reparation Act, would amount, cumulatively, to something like 60 per cent. You propose to put an arbitrary and fixed tariff on German goods entering this country. It never appears to have occurred to the Government that during the next few years the German exchange may suffer some degree of change. The exchange may fluctuate. The mark is worth a penny now, but in six months' time it may be worth sixpence. If this arbitrary tariff is correct to-day, then when the mark is trebled or quadrupled in value it is quite evident that it can be no longer correct. If the raw materials in these exported articles are indigenous it is obvious that a far greater tariff would be demanded than 33⅓ per cent. if it is to do any good. If the raw materials are not indigenous it is obvious that the German goods are already prohibited from entering. In the case of a fluctuating exchange—and conditions to-day are fluctuating, the position is changing from day to day—how can you deal with it by a fixed tariff?
This Bill is not even an intelligent attempt to impose a tariff. It is conceivable that you might have devised something analogous to the old Corn Law system of a sliding scale tariff, varied in accordance with the rate of exchange. That would, at any rate, have been an intelligent attempt to fix a tariff; but here you have an arbitrarily fixed, stationary standard to meet a fluctuating condition. I am not urging the Government to adopt the old Corn Law method 1594 of meeting the situation, because, although it would be a more intelligent attempt than this Bill, it is in itself entirely impracticable, because you could not really fix a tariff on a sliding scale in proportion to the rate of exchange. Your Board of Trade official would have to calculate the exact proportion of raw material component in every exported article that was indigenous in Germany, for the reason that if any proportion of these articles is purchased outside Germany the exchange operates adversely against Germany, and so your whole calculation and your sliding scale would be upset. Once you launch into a proposition of this sort you are involved in such a mass of calculations and enmeshed in so interminable a labyrinth of red tape that there is no escape for the country or the industry concerned. With the proposed fixed arbitrary tariff of 33⅓ per cent., however, it is quite obvious, pragmatically, that if the raw materials are indigenous in Germany your tariff is entirely ineffective, but if the raw material has to be purchased outside, that in itself is a prohibitive tariff, and any fluctuation in exchange, which is inevitable from day to day, upsets the whole incidence of the protection which you are affording to your industries.
The right hon. Gentleman the Minister of Health, when he defended the Resolution which preceded the introduction of this Measure, described the attitude of those who sit on these Benches as analogous to that of people standing by the bedside of a fevered patient and doing nothing. I submit that the right hon. Gentleman, strange as it may seem in one of his profound knowledge and economic experience, was in danger of falling into the common error of mistaking our exchange difficulties for the complaint itself, rather than the instrument which registers the course of the disease. The exchange, after all, is not the fever. The exchange is the thermometer which registers the fever. The attitude of the Government in this matter seems to be completely analogous to that of a doctor who fakes the thermometer in order to reassure the relatives. That is really the only effect of these proposals. If there is any other effect it is equivalent to emptying a pail of cold water over the patient who, by due care, proper nutrition and active guidance, could be nursed back to 1595 health to play a healthy part in the European economic system. We really should go rather deeper into this matter if indeed we are to do anything than the investigation which is proposed in this Bill. We are merely tinkering with the external facts, we are doing nothing with the internal condition. Three years after the cessation of hostilities we find that the European economic system is still in a state of complete dislocation and collapse, and that no steps at all are being taken by the collective wisdom of European statesmanship to remedy the situation as a whole and thus to contribute to the prosperity of its individuals. Surely it is a ludicrous anomaly, when the whole world is crying out for goods that this country should be suffering from excessive unemployment because we can find no market for our commodities. It is due entirely to the fact that throughout the past three years, despite all the economic teaching of the past, we have ignored the fundamental and basic fact that the economic prosperity of one nation is entirely dependent upon the economic prosperity of another. Measures such as this are merely tinkering with your machine. They are equivalent to scratching at the light soil of current finance rather than digging down to the bed-rock of economic factors and then building up your new economic structure.
We are all enmeshed in the traditions and financial customs and prejudices of the past. The whole European credit system is an artificial system created by man for his own convenience. It is true, in a certain degree, that it reflects the economic condition, but it is not in itself a reality or entity before which statesmanship should stand powerless and defeated as it does to-day. One artificial system, if the necessity and ingenuity of the times is sufficient, can be replaced by another system. Personally, I should like to see some system of international load, such as has been foreshadowed in the meetings of the League of Nations and the Brussels Conference. That might possibly do something, if not there might have to be a return to the elementary system of barter—a step back into the dark ages—to remedy conditions emanating from an event which was worthy of the Dark Ages. That might possibly be necessary. In any case, you must deal radically with the disease as a disease. 1596 You must give your patient the means requisite to his recovery. It is no use merely tinkering with the external evidence of the disease; we must get down to the bed-rock of the economic situation. We can recover from these difficulties only by supplying these broken countries with the raw material and the machinery requisite to their recovery, by starting again the wheels of European industry, and slowly, with the assistance and mutual co-operation of all countries, working back to a normal condition. Measures such as this are merely fresh obstacles set in the path of the recovery of European trade.
§ Mr. FORD
I am not going to be pragmatic, but, although it is sometimes very tiresome and painful, I am going to be practical. For that reason I still propose to support the Second Reading of this measure. I was rather struck by the remarks of two speakers, who, I have no doubt, are great purists in Free Trade, and by the cool assumption which the Member for Batley (Mr. France) made that only the country which practices Free Trade—that is, free imports—can survive the international struggle. That is rather reflected on by the fact that the country in the world which has us financially in the hollow of its hand to-day is the United States of America, which is one of the highest Protectionist countries the world has ever known. Another assumption which was made by that hon. Member, which I do not think will bear investigation, was that the right hon. Gentleman the Minister of Health has been converted to some belief in Protection at the same time. If my memory does not fail me, this is no new conversion, but merely the application to public matters of what has long been his practice in private affairs. If I am not mistaken, those very eminently and successfully conducted concerns with which he was connected were protected by a system of international agreements. I am, therefore, very glad to find that the right hon. Gentleman, feeling himself no longer trammelled by the claims of party and party shibboleths, has been able to come over and give us the benefit of what he finds in private practice to be so useful.
Then the hon. Member who sits for Louth (Mr. Wintringham) revealed to my shuddering mind the pure Free Trader's idea of where the working men of the 1597 country come in. He said, "Well, if the manufacturer of gloves is going to be hard hit let him use, as I do, industry and brains. If he finds he has to give up making gloves then, at any rate, he can sell gloves made by other people." I hope if he has operatives, either men or women, employed in the making of gloves in his constituency, that the hon. Gentleman will go down and give them that cold Capitalist comfort. Another assumption the hon. Member made, which was, I think, very characteristic of the Free Trade purist, was that if you could not have everything you would take nothing at all. I am afraid the right hon. Baronet the Member for the City of London (Sir. F. Banbury), on the Tariff side, was a little inclined to take that attitude. He, however, had the saving grace to say, "If I cannot get the whole loaf I will take half the loaf, because it is better than no bread." That is one thing that I want to say in regard to this whole measure and in regard to the whole trend of the argument about it. I admit that in those old and dark days, when there were very strong party divisions, and economic issues got too much bound up with party cries, I was an unrepentant Tariff Reformer. I have, however, never maintained that any particular kind of tariff or even any tariff at all must, under all possible conditions of national and international economics, be a necessity; whereas, in spite of all the lessons of history, and the proportionately increasing unemployment and the lowering scale of wages in our country during the last 50 years, and of the tremendous growth in high production of the industries of Germany and America, your purist of Free Trade maintains his belief. One old gentleman, whom I remember in a former constituency which, I admit, I did not quite succeed in winning, said to me, "Freedom is the gift of God, and there fore Free Trade is the gift of God." I said to this old gentleman, who was of a religious cast of mind, "I am afraid you are getting confused in your connotations." Being a Scot, he did not like to admit that he was baffled by a word. He did not quite understand, and said, "Oh, no; how is that?" I said, "You think that everything free is a gift of God, and therefore must be right." "Free Trade, yes." I pursued the subject. I said "Free thought?" That rather angered him, and I made the part- 1598 ing shot, "Free love," and left him almost fainting on the floor.
That is the attitude, that there is something divine and inspired and the gift of God about this process of opening our markets free to any sort of goods dumped in on us, to the detriment of our people for whom we want to find employment. I can never quite understand how the hon. Gentlemen on the benches opposite, who represent the Labour party, have been so politically led astray as to miss that sound economic point that an ounce of employment, at good wages—and employment to day at good wages—is worth tons of theory as to the ultimate working out of what free imports and dumping into this country may, under happier conditions which may never arise, bring to our people. We have had far too much of this talking of the wheel going round and that in the end this or that will happen. What we have had in the past has been increasingly in proportion to all other nations, our people walking the streets looking for a job while their more happily placed neighbours, under a reasonable system of tariffs, were getting increasing employment and proportionately increasing wages as well.
§ Mr. FORD
That remark applies to practically every country that has had a tariff in the past. In these countries before the War the employment and standard of living was proportionately and increasingly going up compared with ours, while ours was going down. That has never been controverted. I have not spent ten years studying this without knowing that that is the absolute fact. To-day we get all these great theorists, these purist theorists, who tell us that all the nations of the world are a family, and not only that, but that every kind of manufacturer is one of a family. Family ties, they say, are so close that you cannot discriminate and say, "We will try and put on duties in such a way as to see that what we are taking in return and exchange are the kind of things that suit us, and that we cannot make. If we do make them, we will try and prevent that kind of things coming in that will hinder and dislocate our trade, while we will encourage all that is going to benefit our people by letting it come in." All this idea that you 1599 cannot discriminate is just the same as if you said that all the children in a family were so bound up together and living in a common home that you could not spank little Willie because, if you did, you would hurt little Gertrude, who did not steal the jam. It is perfect nonsense. You have to take a practical line. This Bill does endeavour to remedy things that are injurious to us and to prevent things being sent in at a price at which we cannot compete and to build up the industries that are essential industries. I would like to see more things included, but, at any rate, it is an honest endeavour and we will give it a trial, and when the Bill is passed and we have had a few years' experience of it I have no doubt that there will be no occasion to get up and make speeches in support of such legislation. Our friends opposite will be convinced by the irrefutable logic of facts and we shall then be, not only a coalition, but, so far as this goes, we shall be a body of legislators who will be at one in saying that we are not the only repositories of the wisdom of the ages and that we can take a leaf even from our enemy's book and do something to set our industrial house in order.
§ Sir R. THOMAS
Having listened to the speeches of those hon. Members who are in favour of the Second Reading of this Bill with profound interest, I have come to the conclusion that all these hon. Members are Tariff Reformers, like my hon. Friend (Mr. Ford), who would like a little bit more than they have already got, and that will be the tendency of this Bill. It will always be a little bit more until we become a fully fledged Protectionist country. But if this Bill could accomplish the purposes which hon. Members predict, there might be something to be said for it. But it cannot do so. Take, for instance, scientific instruments. We all know that there are scientific instruments required by our universities of such a quality that they cannot be obtained in this country at any price. It is suggested that our universities and laboratories are to be deprived of these special instruments, which have been manufactured in Germany, to which the Germans have paid special attention for years, for which we have been depending on Germany for years, and from the absence of which we suffered during the War. Are we to wait while we train 1600 men in this country to manufacture these articles? That is what it really means.
Meantime, we still would have to import these things from Germany. The result will be that we shall put up the price to consumers in this country. The consumer will pay the 33⅓ per cent., and the taxpayer of this country will get no benefit from the 33⅓ per cent. collected from the consumer, because it will go to pay the horde of officials who will be required to control this vast work. For instance, take nautical instruments. Sextants and barometers are usually required for ships. Is it to be assumed that from patriotic motives shipowners are going to buy these things in this country if they can get them cheaper in Germany when their ships call there? It would be absurd to suppose anything of the kind. I am a shipowner. I am bound as a shipowner to buy my things in the very cheapest market, otherwise I shall find myself in a very peculiar position. Therefore I will buy my sextants and barometers when my ships go abroad. Will that give employment to people in this country? The thing is absurd. And anybody who buys these instruments in this country will have the pleasure of paying 33⅓ per cent. more than he was in the habit of paying. The fact is that the trade will be killed in this country, for the simple reason that shipowners will purchase these things abroad.
The second part of this Bill deals with dumping. Can you imagine anything more unfair to the other classes of the community who are excluded from this Bill? They see all classes of goods coming under the formula "other than articles of food or drink." Is farming in this country not a key industry? If you speak of key industries, can you exclude farming? And can you not imagine articles of food being dumped into the country to the prejudice of the English farmer? Take, for instance, condensed milk. There is a brand called, I think, "Ideal Milk" which is manufactured in America on a huge scale. Can you not imagine "Ideal Milk" being dumped into this country to the prejudice of the dairy industry of this country? Therefore, why should farming be excluded?
Then what about shipping? Is shipping not a key industry? Is it not one of the most important industries in this country? And has my right hon. Friend not read what has happened in America during the 1601 last few days? The Shipping Control Board there has decided to sell its scores of wooden ships. Are the shipowners of this country not to be protected from the dumping of these ships in this country? What is going to happen to our premier industry—shipping—unless we get some protection? I do not want a preference for shipping. It has never done the shipping industry any good. If my hon. Friend opposite will only take the trouble to inquire he will find what happened to French shipping in the years preceding the War. British shipowners had to compete with Frenchmen who had a heavy subsidy from the French Government on the mileage system. The result was that French ships went careering round the world half empty to earn the mileage subsidy. This did not hurt British shipowners. The French shipowners became lax and negligent, whereas British shipowners had to pay more attention than ever to their business. My hon. Friend must not think that I am justifying subsidies.
§ Sir R. THOMAS
They were as high as those of the French; otherwise we should not have been able to get the men. I am not trying to justify the imposition of a preference tariff, but I am pointing out that shipping is one of our key industries, and that if you are going to protect anything at all under the second part of the Bill you ought to protect the shipping industry, which is one of the most important of all our industries. Then this House ought to have something to say in the matter of appointing the panel. The Board of Trade are to appoint a panel. From that panel are to be appointed three Committee men to deal with these tariffs. Is it right that any Government Department should have the appointment of these gentlemen? They may be estimable gentlemen, but they may be Tariff Reformers for all we know. In justice to this House this part of the Bill should be altered and the names of the gentlemen contained on this panel ought to be submitted for the approval of the House. It may be said, "It is all very well to criticise, but what is your remedy?" There is only one remedy. Instead of imposing this 33⅓ per cent. upon the consumers of this country for the benefit of any special 1602 industry in the country, let that money be spent on education. What we want to do is to give our young men an opportunity of qualifying and becoming experts in every branch of industry so as to compete on equal terms with foreign countries. That is what we lack. Meantime there is no remedy. Your tariffs will not prevent goods abroad that are better than ours from coming into this country. No tariff will prevent goods coming in if we can get those goods better and cheaper from abroad, particularly if they are better. Therefore, the only remedy is for us to give money subsidies, if you like, to our universities and to assist our manufacturers to develop laboratories in connection with their industries as they do in America. There is hardly an industry in America that has not got its laboratory, and the remedy for us is to give the money for the education of the brains of this country, which, after all, is the best asset that we have got.
§ Mr. DENNIS HERBERT
When the Debates took place on the Resolutions on which this Bill is founded I listened to them almost the whole time. Every possible argument against the Bill was not only brought forward, but was repeated over and over again, and I have not heard anything new this afternoon. But so much was said by the opponents of the Bill in those Debates that there are still some points left which I think should be answered by those who support the Bill as I do, in regard at any rate to its objects and main principles, though I may have some criticism to make on points of detail at a later stage. The opposition to this Bill seems to be based almost entirely upon those old so-called sacred principles of Free Trade.
§ Mr. HERBERT
I shall have a word to say on that in a moment or two. The opposition to this Bill is not based on the principles of Protection, but on the old, sacred principles of Free Trade. What I want to suggest to hon. Members is that in the circumstances of the present time, with the devastated condition of the whole economic world, and the extraordinary condition with regard to exchanges, those old so-called sacred principles of Free Trade are about 1603 as useful and practical and as well able to deal with present circumstances as the old-fashioned hansom cab that used to be about in the streets of London 15 years ago. The Gentlemen who still are so bound, hand and foot, by those principles that they cannot get a little way outside them, are not very much more use for practical purposes now than the jarvey who drove a hansom cab and is now unable to drive anything else. In the same way, if anyone is so bound to the old extreme principles of Protection under the present circumstances, he and his principles are as little applicable to present circumstances as is the Free Trader. I hesitate to compare my right hon. Friend the Member for the City of London (Sir F. Banbury) with the driver of a four-wheeler or a hansom cab. Perhaps it would be more in place to compare him with the driver of a four-in-hand in the park, driving, not for any utilitarian purpose, but merely for amusement and show.
Opponents of this Bill, basing their opposition to it on the principles of Free Trade, seem to have generally, if not unanimously, admitted, perhaps grudgingly, that there was something in our contention that essential key industries must be preserved or protected in soma way for the purpose of the safety of the country, but they are so blinded by the brilliant light of Free Trade that they fail to see the rough edges and corners of the facts of the present time, and they suggest to us, not that we are not to help these industries at all, but that they have a more excellent way. There are two alternatives to the Bill put forward. One of them is that the Government should manufacture stocks of these articles and keep them in reserve against the next war. Can anything show greater ignorance of these industries and of the articles wanted? Does my hon. Friend opposite, who is so anxious about optical glass of various kinds, think it would be sufficient for the Government to undertake the manufacture of all those kinds of glass that were required in the late War and to lay up great stocks of them?
That argument, as far as I remember, came from his own side, in reply to a speech by me, and was used by the hon. Gentleman the Member for the University of London (Sir P. Magnus), 1604 who said that the Germans stocked 80,000 field glasses, which were available when the War broke out. We could do that here too.
§ Mr. HERBERT
The Germans were storing those, not as the product of a Government factory but as the product of enterprising concerns which were live businesses in Germany and were going on and making improvements every day. The German Government were always buying the best of their products. If you are merely to have these things made by a Government and stored up, what on earth is to be the use of them in another war ten or twenty years hence? What you want is not stocks of these things but a live industry which will be able to improve such articles and go on manufacturing them in future. The Debate on the Resolutions was somewhat remarkable for a number of extraordinary misstatements and mistakes in regard to the facts relating to key industries. I wish to refer to one or two things said by the hon. Member for the Eye Division (Mr. Lyle-Samuel), in regard to the chemical and scientific glassware industry. In a speech which he made on 11th May he repeated no fewer than eleven times, or it may have been ten, that in this country there were no firms which were capable of producing scientific and chemical glassware which was anything like as good as that produced in Germany. Later in that speech he quoted as an authority, and in response to an interjection from me, Sir Joseph Petavel, of the National Physical Laboratory. It is, perhaps, unfortunate for his contention that this particular gentleman should only a short time before have published a Report of some tests carried out by the National Physical Laboratory, one or two lines from which I will quote:From our experience at the National Physical Laboratory we are in a position to know that apparatus of British manufacture which has passed our tests is at least as good as any similar standard apparatus of German origin.Sir Joseph Petavel gives particulars of the tests carried out by the Laboratory to ascertain the comparative accuracy of British and German glass apparatus, showing that out of twenty cases possibly there were only five in which the British was at all behind the German product, while generally the results of the tests 1605 were largely in favour of the British apparatus. The Report goes on:The ordinary grade German apparatus has no claim to superior accuracy as compared with ordinary grade British apparatus. In cases where untested apparatus is to be used the safest procedure is to obtain apparatus bearing the trade mark of British firms.I might ask the hon. Member for Eye Division, following on what he said to another hon. Member who interrupted him, to withdraw the statement that he made, but I foresee that he might continue to hold his own opinion, even though he does not agree with the great authority whom he quoted; but there are one or two other statements made by the hon. Member which with great confidence I ask him to withdraw, for they are not in accordance with the facts, and that statement is capable of definite proof. These statements are calculated to be somewhat harmful to those to whom they refer. The hon. Member stated that there was only one firm at the present time in this country, a firm in Yorkshire, which was producing chemical and scientific glassware in any appreciable quantity. There are undoubtedly three firms which at the present time are producing this glass in considerable quantities, and I think I am right in saying that the hon. Member has had an invitation from one of those firms, situated not a great many miles from this House, to go and see what they are doing. Not only are there those three firms actually producing this glass in considerable quantities, but not very many years ago there were several other firms which were doing the same thing, firms which owing to the condition of affairs since the War have been obliged to abandon the manufacture of this particular glass. That is an indication of the necessity of something like this Bill in order to keep this very essential industry going. If the hon. Member wants proof of the facts I have stated there are the works at Walthamstow, to which he has been invited, and there are the works of Messrs. Moncrieff, at Perth, which produce large quantities of this glass.
§ Mr. LYLE-SAMUEL
How many firms does the hon. Member say are now engaged in the manufacture of this glass?
§ Mr. HERBERT
I said three, because I wanted to be absolutely certain that I was correct. Those three are known to me, and I know the facts in regard to them. The hon. Member can ascertain the 1606 position by going, as I have done, to some of these works.
§ Mr. HERBERT
Yes. I also know there are others who were manufacturing this glass a short time ago, but they have been obliged to shut down, although they did most useful and excellent work during the War. There is another statement made by the hon. Member for Eye which I ask him to be good enough to withdraw. If he is accepting the invitation to see some of these works, he should be careful to withdraw publicly the statement made by him that the persons employed by these works were mainly foreigners. I am prepared to give the hon. Member £10 for every foreigner that he can find employed at any of these three works if he will give me £1 for every Britisher employed there now. I think I am right in saying that he will not find a single foreigner. On the contrary, he will find a large number of ex-service men, who will give him a response that would scarcely be friendly unless he withdraws an accusation which they consider to reflect very seriously on their nationality.
I pass from that to a point in reference to the second part of this Bill. Here, again, we are met with the old principles of Free Trade, and we are supposed to be damaging the whole future trade of this country by supporting a Bill of this kind. Hon. Members repeat over and over again the argument that you cannot rectify the exchange by methods of this kind, but they make no attempt whatever to answer what has been said over and over again from these Benches, that the Bill is not intended as an attempt to correct the exchanges. It is even admitted here that it may delay the correction of the exchanges. But it is urged as a necessity in order to mitigate some of the hardship which will result from allowing these exchange difficulties to be rectified in the ordinary course of nature. The result of the War has been a tremendous upheaval in the old complicated machinery. We are told our methods will not get it back into its place, but that if it is left alone it will come back quickly. If you allow anything like that to right itself by its own natural force and gravity as by the swing of the pendulum you will find a great 1607 deal of damage done unless you endeavour to make it right itself gently. That is the position with regard to exchanges. You have a position where, let us say Germany—for she is the principal offender concerned—has got a tremendous advantage as the result of her depreciated exchange. It may be said the only way we can get back to what is desirable is by allowing Germany to have that benefit until things naturally return to the normal. In theory that is all right, but it may be a little more expensive for us if in the course of coming back to the normal condition of exchanges these industries which we are economically justified in carrying on are so ruined that all their machinery, all the capital employed in them, and all the trained and skilled labour employed in them will be thrown out of use and become rusty, involving tremendous cost if they are to be replaced. Surely it is better, even if we are going to delay the rectification of the exchange to some extent by doing so, to see first that our own industries are preserved instead of being smashed up, leaving us in the position of having to start again as a new country with hardly any industries at all.
I have said I am as definitely opposed to extreme Protectionist principles as I am to extreme Free Trade principles in considering the position at the present time. I may quote one case as an example of the impossibility of trying to deal with this question from either of these extreme points of view. It is an instance from my own constituency, and I am sure similar instances could be quoted from many other constituencies. There is in my division a large printing firm next door to a large papermaker. The papermakers want a certain amount of assistance—or protection if you like, to use the word—against the unfair competition of the foreigner through the depreciated exchange, which is enabling the foreigner to compete successfully with the British papermaker, not only in the cheap lines of paper which he had competed in successfully before the War, but also in the higher class paper in which he was utterly unable to compete successfully before the War. Now he is taking his part in ruining this paper-making business. The printers next door say, "You must not make paper more 1608 expensive; it is our raw material." In theory that is perfectly right. I am strongly opposed at the present time to increasing the cost of any raw material in this country unless there is some very necessary reason for it. Here you have a case where the English papermaker can still supply to the printer those higher class papers at no greater expense than before the War, taking into account, of course, the general rise which has taken place—at no greater expense proportionately. If you are not going to assist the paper maker at all, you are going to knock him out of business altogether, and the printer will have to get his raw material, this higher class paper, from abroad, more or less, for all time, because the papermaker will have been knocked out. Surely, without doing any injury to the printer, you can give such assistance to the papermaker as will preserve, at any rate, that portion of his industry which he is economically justified in carrying on, and which he was able to carry on successfully before the War. There may be points to be raised upon this in Committee. There is the danger of extreme Protectionist principles. If you allow that protection to be carried so far that you make the cheaper classes of paper, which before the War may have been obtained from abroad, permanently more expensive, you will produce in this country a forced industry which would not have the right to live in normal circumstances, and could not live without some kind of protection. Although there may be points of criticism from both sides on this Bill in Committee, I urge, both with regard to the essential key industries and with regard to the second part of the Bill, that it is a case in which both the old Free Traders and the old Protectionists should try for once to recognise that there are hard facts existing in abnormal times which must make them qualify, at least temporarily, their arguments and theories in order to make them meet the practical needs of the present time.
§ Mr. LYLE-SAMUEL
Before proceeding to address myself more directly to the consideration of this Bill on the Second Reading, I may be permitted to deal with the points raised by the hon. Member who has just spoken. I should begin by saying, with reference to the statement I made regarding foreigners 1609 in the employment of British firms, that I was misled. I have written to the head of one of the firms, who communicated with me on the matter, to express my regret that I put into the words which I used a meaning I really did not intend to convey. I should like to say, here and now, I do not believe the majority of the workers in our glass factories in this country are foreigners, and in so far as my words seemed to convey that meaning, I withdraw them and express regret for having used them. This question arose on the general discussion and I was trying to convey what I think is a fact, that particular kinds of glass, and particularly those scheduled in the Resolutions, and embodied in the Bill, are practically indigenous to Germany. The general argument I wished to use was that at the present time we are very far off being capable of producing chemical glass in British factories of a quality equal to that produced in Germany. One of the most important arguments used in the course of these discussions has been that if we wish to see British chemical glass used, not merely in this country but abroad, the proper course is not to depend upon tariffs but to depend upon technical education, and to seek by making sacrifices in other directions to promote technical education throughout the entire country; to make ourselves not merely efficient in the manufacture of chemical glass, not merely equal to our competitors, but to see to it, that we are so advanced in the conduct and process of this business that we can confidently claim the British product as the finest in the world. With reference to the other statement of mine quoted by the hon. Member for Watford (Mr. Herbert), which he thought was in conflict with the facts, I have nothing to withdraw. I said there were three firms in this country, and as there has been a great deal of correspondence in the glass trade in regard to this, I may be permitted to quote what I said:I can assure the President of the Board of Trade, if he is not already aware of the fact, that there are only three firms in this country, despite nearly seven years' advantage of practical protection, who have attempted to produce these things in any serious quantity, and only one firm, and that is a firm in Yorkshire, has entered into serious competition in the production of these things."—[OFFICIAL REPORT, 11th May, 1921; col. 1953, Vol. 141.]1610 It is admitted by the hon. Member for Watford that there are only three firms engaged.
§ Mr. D. HERBERT
No. If the hon. Member will forgive me for interrupting, I did not admit anything of the kind. I referred to three firms which I knew of myself. I expressly said when the hon. Member opposite (Mr. A. M. Samuel) mentioned another one that I was only mentioning three which existed to my own knowledge, and I did not for a moment mean to say there were only three.
§ Mr. LYLE-SAMUEL
The hon. Member will allow me to say my information is that there are only three, and that information has not been questioned by the three firms who have written to me. With reference to the one firm in particular to which I referred, the firm in Yorkshire, the managing director or Chairman of that company has written to me, and after objecting to my statement about the foreigners he goes on to point out that it takes several years to train glass blowers for work of this description, and that they must commence their work at an early age when their fingers are nimble. He also points out that during the War when these boys reached military age they had to join the army which made it exceedingly difficult to procure skilled workers. Then he goes on to say:Given a period of years in which to develop and train our men we feel quite sure, and we say this without any hesitation, that we can at least equal the German material in every respect.Given a period of years. Given a period of protection. They had seven years of protection owing to the War, yet this gentleman—in a most courteous letter, for which I am very much obliged, and in answer to which I withdrew the statement about the foreign workers—tells us on his authority as the managing director of a large firm that they must be given a period of years in which to produce glass equal in quality to the German glass. Does the hon. Member for Watford (Mr. Herbert) object to the statement made from these benches that at the present time the quality of the British chemical glass is not equal to the quality of the German chemical glass?
§ 8.0. P.M.
§ Mr. LYLE-SAMUEL
In the first place, the hon. Member is aware that there is no single firm in this country devoting itself entirely to the production of chemical glass.
§ Mr. HERBERT
Yes, Duroglass, Limited. I think the hon. Member will find that Duroglass, Limited, was started for the express purpose of scientific and chemical glassware and that it does nothing else.
§ Mr. LYLE-SAMUEL
I am obliged to the hon. Member. I do not know whether this company are in a position to compete with German chemical glassware.
§ Mr. LYLE-SAMUEL
I do not know whether they would say that whatever the price, the quality of their glassware is equal to that of the Germans.
§ Mr. LYLE-SAMUEL
I am very glad to hear it. It must be distinctly understood by hon. Members opposite that we are not trying to depreciate efforts which are being made by British firms to produce the finest quality goods. We want British firms employing British workmen to produce British goods which shall be the best in the world, but we say that that is done as a result of years of experience, experiments, and great sacrifices of sums in order to promote technical education in these subjects, and we say that it is not done by tariffs, that it never has been done, and never can be done, by tariffs, and we say that the whole history of any industry which is protected by tariffs is the history of an industry which, far from progressing and building up a better business than it would have had without them, lacks that initiative by which alone an industry can progress. There is another fact with reference to the British factories, and that is, that we on this side have not been informed by anyone who has spoken for any single trade scheduled in this Bill that by the aid of a 33⅓ per cent. tariff they will be able to 1612 defy all competition. Suppose the Parliamentary Secretary to the Board of Trade could stand up and say, "I know of a firm which, given the advantage of 33⅓ per cent., assure me that they will be able to produce the finest quality of chemical glassware and defy all competition." Not only is it not true of this particular industry, but there is no industry from the representatives of which assurances have come that by the aid of 33⅓ per cent. they will be able to carry on successfully. Suppose 33⅓ per cent. is not enough, and suppose they want 40 per cent., or 50 per cent., or 100 per cent., is the Board of Trade going to rely upon the arguments which are being advanced in support of this Bill, namely, that these industries must be kept here, and British workmen employed in them, and whatever the cost, and whatever the difficulty of protection, it shall be offered by the Government? Which position is the Board of Trade going to take up? Is it arbitrarily to determine that no more than 33⅓ per cent. shall be granted, and if it proves insufficient the industry will then go to the wall, or is the Board of Trade trying to carry out the wishes of the hon. Member for Chippenham (Mr. G. Terrell), who is a full and frank Protectionist?
If the Board of Trade say, "We are grateful for the speeches of our supporters behind us who tell us of British workmen unemployed, and the hon. Member for North Edinburgh (Mr. Ford), who talked about British workmen walking about with their hands in their pockets,' I might say, parenthetically, that in the highest Protectionist countries, and particularly in America, not merely is unemployment a recurring evil, but in America they have unemployment on a scale and to a degree which we have never known in Free Trade England. There has never been here such a degree of unemployment as that from which they suffer periodically in the United States, and not merely is that so, but when world trade conditions are unpropitious, when there is an overstocking for the time being, a plethora of goods, it is the Protectionist countries that the wave of industrial depression first reaches, and the wave of prosperity comes last to them. Unemployment and trade stagnation come earlier to tariff countries than to Free Trade countries, and they stay longer in tariff countries than in Free Trade countries, and the whole history of the indus- 1613 trial condition of the world shows that Free Trade England has always been the last to suffer from international world trade depression and the first to recover from it. What we ought to have is some assurance from the Government that by these means they are satisfied that they will be able to deal to some considerable extent with the problem of unemployment, that they have by a tariff of 33⅓ per cent. given an adequacy of protection, not merely to maintain industries which are at present running, but also to encourage new industries to start. The hon. Member for Watford (Mr. D. Herbert) said that some firms had gone out of business and that some firms manufacturing chemical glass had had to cease manufacturing it. I should like to know whether, had there been a tariff of 33⅓ per cent., those firms would have been able to remain in business. If we are asked to make this great departure, we ought to have some degree of assurance, and no assurance has been given us.
§ Mr. LYLE-SAMUEL
That I can well believe, but suppose these firms find that 33⅓ per cent. is not enough, can they come to the Government and reproduce the arguments which have been used from the Treasury Box that these industries must remain in this country? Suppose they find that with 33⅓ per cent. these industries cannot remain here, will they be justified by the arguments of the Government in saying, "Give us 50 per cent., 60 per cent., or 100 per cent."? This particular glass trade represents a total importation of about £1,000,000 a year, so it is not an enormous matter, but it is a serious matter to the firms in question. These firms, we are told, will produce chemical glassware equal to at least, and in some cases exceeding, the quality of chemical glassware produced in any other country in the world, and they can do it now because this Bill is going to give them a preference of 33⅓ per cent. I would like the Parliamentary Secretary to tell me if these industries are to receive 33⅓ per cent., not because the Government is committed to Protection, but because these industries must remain in this country and their products must be produced here. Then will these firms receive 40 per cent., or 50 per cent., or 100 per cent., if need be? What is the position? 1614 Is it that irrespective of cost these industries must remain in this country? When the next war comes, we are told, these things must be manufactured within our own borders. If I held that view I should oppose this Bill, because 33⅓ per cent. is not enough. It will be found in practice that no British manufacturer will be able to compete in chemical glassware of the like quality because of a tariff of 33⅓ per cent. Then what will the Government do?
We have had a speech from the hon. Member for Hythe (Sir P. Sassoon), and he made what I should call very frankly a speech arising from his continuing in a state of war mind. He dealt with the question of poison gases and of optical glasses, and he said that these things ought to be produced in this country, and that we ought not again to be in the position in which we found ourselves in Flanders in 1914–15. That argument is common to every quarter of the House. We are perfectly prepared, and have said so again and again, to support the Government policy if the Government will say, "We will see these things produced here because they are vital to the preservation and protection of the life of this country. We shall conduct these industries, and we shall do our best to conduct them as economically as possible." That might give us very little hope, because no industry with which the Government is connected is profitable, and the more the Government interfere with trade the worse is it for that trade, but if the Government will say, "We will conduct it as economically as possible and see to it that in this country we have chemical plant adequate to make all poison gases and optical glass so that we shall be able to equip an Army at any given moment with anything it might need to take into the field, and we shall ask the taxpayer to foot the bill," that is a perfectly legitimate argument. Why it is, however, that we on this side oppose this Bill is that every evil which has been referred to is to be remedied by a tariff. We do not believe that any single industry is ultimately benefited by tariffs, and we know enough of industry in this country to believe that it cannot survive unless it survives in a Free Trade country. When one reflects on the influence of this Bill upon that vast quantity of business which I will call extra-territorial, which we had in this country under Free Trade principles, the 1615 contemplation is anything but a happy one. We conducted businesses in this country with which we had no direct concern. We bought and sold things manufactured in other countries. We bought semi-manufactured things, we found work for our workpeople in completing them and we sold them to every part of the world, shipping them in British ships.
This Bill, whether its object is to secure that we have all things within our own borders necessary for the prosecution and waging of a war, or whether its object be to support certain industries which, it may be, apart from that, ought to be supported by the aid of a tariff, in order to do either of these two things, we are changing the whole fiscal basis of this country. We are ceasing to be a Free Trade country, and we are becoming a Protectionist country. It is all very well for the Government to say these are old-fashioned, Free Trade views. I have heard to-night some old-fashioned Protectionist views. It is all very well for supporters of the Government to say, "We are not giving away anything of real substance or denying the first principles which are precious to us. This is a little matter where surely you can step with us." As a matter of fact, every Protectionist Member of this House ought to rejoice in this Bill and support this Bill, but it is no matter of rejoicing to those of us who still retain a belief in Free Trade principles. What, I would like to ask, is the meaning of these words in Subsection (2) of Clause 3?Where goods are manufactured partly in one country and partly in another, or undergo different processes in different countries, and any one or more of those countries are countries in relation to which an Order applying to the goods in question has been made under this Part of this Act.What really is to be the definition of "goods manufactured partly in one country and partly in another"? Who is to decide? Here is a matter which is best decided, and, in fact, ultimately, from the point of view of the successful conduct of business, can only be decided, by the business men who deal in these matters. Here is a case where some official, I assume, from the Board of Trade is going to determine in what degree goods are manufactured partly in one country and partly in another. May I point out that the process of turning partly manufactured goods into fully manufactured goods 1616 is a process which gives employment, and has done so for many years, to an enormous number of people in this country. It is a process which finds useful employment for vast sums of capital. I notice the preamble of this Bill says that the two objects arewith a view to the safeguarding of certain special industries and the safeguarding of employment in the United Kingdom.There we come right up against the old Protectionist argument that if your tariff is high enough to keep out foreign goods you give employment to your own workpeople. That argument has been answered again and again, as to which we have evidence going back now for three generations. We have always contended, not because we are academic Free Traders, but we have always contended, and have been supported by the facts and figures of British industry, that you do not secure employment, and you cannot, in the conditions of this island, secure employment, for your workpeople by a high tariff system with which you prohibit the importation of foreign goods. When we come to this question of employment let us consider also that, during the period of the War, when there was a very high degree of protection for the glass trade, working-men who were in employment were called upon to pay fantastic prices for every necessity of life, including the products of glass-making. I think I am right in saying that an ordinary drinking-glass, such as a working man's wife would buy to put on her table, came to be sold for over 1s. during the period that the manufacturers were fortunate enough to enjoy the blessings of the protection which the War naturally afforded. What I ask is, when we are dealing with this question of providing employment, let us consider not only those who are employed in one or two special trades, but we must consider the consequences of this general tariff, with its increase of prices, upon the wages of those who are in employment in various other industries.
I cannot for the life of me see why, if we are to adopt this principle, we do not increase the number of those things which are included in the Schedule. I can quite understand that the right hon. Gentleman opposite has had letters from representatives of various firms asking why they are included. I think it is a very natural question. Why are they not included? Thirty-three and one-third per cent. is 1617 not going to put up the price to the consumer here, we are told. I should not be surprised if, with a little encouragement, the representative of the Board of Trade would not say it was going to lower it. This, it is said, is not inflicting hardship upon the consumer. Then, why not extend it? As my hon. Friend the Member for Harrow (Mr. Mosley) said, above all, why not extend it to food? The great experience we have had in 70 years is nothing. We will wash it out, because we are academic Free Traders, and, therefore, are speaking from mere theory, and are supposed to have no practical knowledge or experience; but the representatives of the Board of Trade have a profound knowledge, and from some quarter they have derived a most extraordinary experience, which is that tariffs do not increase the cost of goods to the consumer. Then let us have a tariff on food. One of the best arguments advanced by the hon. Member for Harrow was that if you are going to safeguard this nation by tariffs on those things which are vital in time of war, since you cannot live without food, surely food should be put first in the Schedule. My hon. Friend went further, and said it is less objectionable to do it, perhaps, by way of a tariff than in the particular way we are doing it. The right hon. Member for the City of London (Sir F. Banbury) said he strongly objected to the present subsidy to the agricultural industry, and he himself would prefer it were done by way of tariff.
Does the Government really ask the House to believe that this is not a Protectionist policy? That this Bill is not introduced in order to prosper and promote Protectionist industries under Protective tariffs? That it is merely for the safeguarding of those necessities of the nation's life about which we may be particularly concerned in times of war? That is mere rubbish. We are told that it is good business and is going to bring in a large revenue. The revenue to be so derived is not comparable to the revenue that might be derived from the taxation of food. Everybody has to use food. There are more workers in this country who use bread than any other class of the community. You have only to tax the food of the people and you will derive from it an enormous revenue. Of course you will also to be able to console the workers what time they pay these in- 1618 creased prices—if they do—that if Protection has increased prices they will be able to see by the opening phrases of the Bill that the Bill has been introduced—with a view to the safeguarding of certain special industries and the safeguarding of employment in the United Kingdom.These tariffs exist at this moment. They are in actual practice. There are all sorts of restrictions imposed by the Board of Trade. May I ask why, if this Bill is to be as successful as it says in safeguarding the employment of the people, how is it we have at this moment such an inordinate number of unemployed? It is very easy to answer: "Oh, that is on account of the coal strike." As a matter of fact long before this coal strike started our unemployment was on a scale unknown, I think, in the history of this country. It was getting steadily worse, and would inevitably have become worse because of the lack of orders from overseas. The demands for British goods had fallen off. "Oh," says the Government, "that is dealt with in the second part of this Bill—the prevention of dumping, and collapsed exchanges. This is all surely due to collapsed exchanges." Not at all! The fact is that until we promote again the healthy flow of trade from this country to all parts of the world on the only basis with which England ever has been able to promote trade, namely, on a Free Trade basis, so that there is a healthy commercial exchange of goods—because we are freely receiving and freely exporting—you will neither improve the condition of the collapsed exchanges nor promote employment.
The conditions, while getting worse even if the Government had not interfered, will get steadily worse so long as the Government takes to interfering with trade. I say without any hesitation that you cannot find a group of responsible business men in this country advocating, apart altogether from party, other than a policy, on behalf of any Government, of non-interference with trade. We should be infinitely better off to-day if we had no Board of Trade with all the good work that it does. We are to have a Board of Trade engaged in work of this sort, if this is to represent the idea of the duties and responsibilities of the Board of Trade towards the masses of the people of this country engaged in business—if so we should be infinitely better off 1619 with the Board of Trade shut up altogether.
This Bill is going to give power to the Board of Trade that no Government Department ever should ask for, or even, with a due sense of modesty and proportion, should think itself competent to exercise. Trade is not done because of such reasons as set out in this Bill. Trade is done because trade is profitable, and can be conducted with profit between two parties, each of whom wishes to trade. Here is the Board of Trade instead of meeting our manufacturers alone, safeguarding what they call key industries. They have let them go on for two and a half years or more. The curious thing is that if they were key industries that they should wait all that time. I should have thought that they would have died or learnt to depend upon themselves. We have, I say, waited two and a half years before reasons are given why they should receive this safeguard. The Board of Trade is going to prevent dumping. The Board of Trade is going to deal with trade. They use a phrase on which I honestly and sincerely congratulate them—that is the word "general." Here it is where they will really be most happy. They are not going to be limited to key industries, nor confined in their microscopical and yet universal mission to the special business of dumping. They also have authority to rove about under the title of "general" in Part 3 of the Bill. Take Clause 10 (1)—The value of any imported goods for the purpose of this Act shall be taken to be the price an importer would give for the goods if the goods were delivered to him freight and insurance paid, in bond at the port of importation, and the duty shall be paid on that value as fixed by the Commissioners.Just imagine the nuisance that is going to be to our business men in this country. May I ask the Parliamentary Secretary to consider this—to imagine the cost that is likely to be involved in the payment an maintenance of these Commissioners who evidently will pay the most careful attention to their duties, but for which the country will not be one penny the better?
§ Sir P. LLOYD-GREAME
I would like the hon. Gentleman to know that what he has quoted precisely follows the wording and practice of the duties introduced by Mr. McKenna.
§ Mr. LYLE-SAMUEL
Mr. McKenna introduced these things in the year 1915, when Chancellor of the Exchequer. This is the year 1921. We are all aware that there has been a war. May I also remind the hon. Gentleman that we have been blessed with a period of two-and-a-half years of peace, at least it has been said that peace has broken out! I do not know whether the Government really consider we are in a state of peace. Personally, I think that peace is very difficult to find in any part of the world. I also think that the introduction of tariffs by this country will not help to promote peaceful relations between our-selves and any other country any more than they will help to promote trade. The very best way in which to secure happy and peaceful relations between the peoples of this and other countries is to follow the course he suggests. These things were introduced by Mr. McKenna in 1915, obviously because of the condition of war. They do not apply in 1921. Where are the requests from the business men of this country that in 1921 these things should be re-imposed? Take the next Sub-section. These Commissioners, I do not know who they will be, but I hope they will have more wisdom, wit, and knowledge than belongs to ordinary mortals, or ultimately they will develop a system of working by the card until a great deal of inconvenience and annoyance will be caused. The Sub-section says:If in ascertaining the proper rate of duty chargeable on any goods under this Act any dispute arises as to the value of the goods, that question shall be referred to a referee appointed by the Treasury, and the decision of the referee with respect to the matter in dispute shall be final and conclusive.You are to have your Commissioners interfering with employment. They are going to fix the value of the duty that shall be paid. Then if there is a dispute, these Commissioners and those dependent upon them—these permanent officials—you will still have a referee, who will be appointed by the Treasury, and, of course, he will have to be paid by the Treasury. The Treasury have an indefinite sum of money to pay for these officials of all sorts! These gentlemen will be appointed and will be paid by the Treasury. They will not bring a penny of value or business to this country. They will not bring an order where no order 1621 would be given, nor enable us to transact business, even by way of barter, which could not have been done in the ordinary way. They will be a charge upon the Exchequer, which is a charge upon the community—what to do? To hamper trade and to hinder our business men in doing their overseas business. This is a Bill which is supported by the Government which has a larger number of business supporters than any other Government, I should think, of recent times, and also has, I think it is also fair to say—I do not think they would object to me saying so—an overwhelming majority of supporters who are Tariff Reformers They are very happy about this Bill, not because it is any use or means much to any particular industry, but it is a very good beginning, because as soon as it becomes the law of the land, argue as one may, call us old-fashioned lovers of shibboleths and Free Traders who have not heard that there has been a war, the day this Bill becomes an Act England has ceased to be a Free Trade country.
Inevitably we are drifting towards that. One might imagine we were in some high degree of prosperity which justified us in making experiments of this kind. If we had an overflowing Exchequer, and the Chancellor was able to say we were having a bumping year, and because of the bountiful state of trade we are going to try this new system, that would be one thing. To-day, however, we have no margin for experiments. It would be cheaper actually to make a grant from the Exchequer and publish history books of the industrial progress of England since Free Trade was instituted and compare it with other countries, and then you would realise for the expenditure of what, comparatively speaking, would be a paltry sum, the real state of things. Under this Bill you have to appoint Commissioners, and when they disagree you have to have a Referee appointed by the Treasury, and they are all going to be appointed without regard to cost.
If business men, instead of considering a Bill like this, will only read the story of the history of Free Trade in England since Free Trade was introduced, that would result in a much happier condition of things than this Bill is likely to achieve. We have been told that there are 4,000,000 unemployed in this country, and that we are spending £2,000,000 a 1622 week in doles. That is an appalling and a lamentable state of things. We know by the experience of our own industries that unless we export goods we must export our men. Here is a Bill to hamper foreign trade because we know that unless we are freely receiving foreign goods we cannot export our British goods, and this is the moment and the hour and the occasion which the Government seek to introduce a Bill which is going to make it still more difficult for British manufacturers to deal with the situation in which they find themselves.
Let me give an example. The finest electrical measuring instrument in use is known as the Weston electrical instrument, which is the product of 30 years of research by Dr. Weston of America. It is an article of the greatest importance. During the regime of import restrictions the Department gave directions for some tons of this instrument to be imported, because we needed them for our best work. Several British firms are trying to make a rival article, but they are still very far from succeeding. It costs considerably more to buy here than the British article. The selling house on this side now declares that its repairs laboratories will have to shut up and the instrument will be most difficult to obtain in the future. This will penalise our indusries, because they are dependent a good deal upon this particular electrical instrument.
Take, as another example, gauges. There was an agitation from the British Gauges Manufacturers' Association, which includes about 20 firms who make gauges, asking for protection. Since 1919 this Gauge Association has been dissolved, because not more than three of its members have continued to make gauges. Therefore the case for this duty, from the point of view of protecting industry, has surely gone to pieces altogether. To succeed really we ought to be told that this industry should be protected at any cost, in which case why say a 33⅓ per cent. duty? If these things are vital for our trade, why not let them in free and allow our manufacturers to get them at the cheapest possible price, so that our industries may be revivified and inspired by the fact that they can obtain the very best known instrument of the finest quality and type necessary to produce the finest goods.
1623 The Parliamentary Secretary to the Board of Trade says that electric lamps are not included in the schedule. One hon. Member referred to the General Electric Company and claimed that they had a monopoly in the electric arc lamps, but we have been told that this does not apply to electric lamps. May I point out that lamp blown glassware is on the list. If there is any dispute on these points I take it they will arise between eminent commissioners who will refer them to an eminent referee nominated by the Treasury, and the not sufficiently harassed British taxpayer will have to bear the cost, whereas if a common-sense policy had been attempted of letting things alone such disputes would never have arisen. This Bill is most discouraging to consider, because ever since the beginning of this Parliament the Government has been definitely warned on matters relating to our British trade, and they have turned a deaf ear to every warning. Not a single one of those prophecies have failed to be fulfilled. This Bill is going to be a miserable failure from the point of view of stimulating employment.
We know that this Bill cannot touch the problem of the exchanges, and we are putting up this opposition because we believe that in so doing we are putting forward the views and opinions of the overwhelming mass of the people of this country. Their voice is silent now, it will be heard at no distant date, but the tragedy of it is that nothing said in this House will in the slightest degree affect the policy of the Government. That policy is settled. The Government are not open to argument. They are not anxious to reason. We know there has been barking and snapping ever since the Government took office by the angry, disappointed group of Protectionists, who will be more angry and more disappointed because this Bill does not promise further concessions will be given to them. We cannot believe that the Government expects very much from this Bill. We know it has no real relation to the promises made at the General Election. It has been extended because of the force majeure brought to bear upon the Government by its Protectionist supporters who frankly used absolutely Protectionist arguments. They often begin by saying that they are, or were, Free 1624 Traders. They always make reference to those who are still Free Traders by dwelling upon what they call their ancient views. They use, everyone of them, frankly Protectionist arguments in support of this Bill, and I know of none that could be used in support of it other than Protectionist arguments. If I were a Protectionist, no doubt I should think it a good Bill. It is a beginning, and it will make smooth the path for the Protectionists to the Board of Trade. It will lead straight away from their factories to the doors of the Board of Trade, and once they have got there we shall be told that the Bill is inadequate, and the Board of Trade will take control of British industry under the splendid head "General." There will be extentions, alterations, changes, and improvements.
§ Sir P. LLOYD-GREAME
I am sure the hon. Member does not wish to mislead the House, but there is no power in Part 3 (General) to impose any duty whatever, other than that which is dealt with under Parts 1 and 2.
§ Mr. LYLE-SAMUEL
I am only saying what is going to happen when disputes arise as to how industry is to be conducted under the provisions of the Bill. I say that, under this Bill we are going to be led up to a condition of things when there must be under the heading "General" an extension of the Measure.
§ Sir P. LLOYD-GREAME
I understood the hon. Member to say that certain powers under Part 3 could be exercised by the Board, and I wanted to make it clear that there are no such powers under Part 3.
§ Mr. LYLE-SAMUEL
That is exactly what I am saying. Under Part 3 the Government intends to suggest that they have power to increase the powers imposed in Parts 1 and 2. What will happen is that when the Board of Trade has become the brain centre—the distributing agent of the commercial men of this country, when they will be teaching people engaged in business how to conduct that business, and when disputes arise, which nullify certain parts of the Act and embarrass them in the conduct of business, it must inevitably follow that for the sake of a smooth path from the manufacturer's office to the Board of Trade, the Government will come to the House 1625 and the country and ask for extended powers. I assert with confidence that there is no evidence that this Bill will be a protection in the sense of insuring success to any single industry which is vital to the prosecution of war. It does not really deal with the disadvantages we are suffering from at this moment owing to the collapsed exchanges. It does not deal with the problem of dumping. It is under various names and by various titles cancelling the financial and commercial conditions which have obtained in this country for 75 years, and it is introducing Protection into this country. It is a Bill fraught with mischief and danger to British industry. It will do no good. It will do infinite harm, and there is nothing which those of us who have taken part in the discussions on the Bill will look back to with more pleasure in our Parliamentary life than our assertion that it is a bad Bill, which it truly is.
§ Mr. WISE
An hon. Member said just now that this Bill would be desired by nobody. I do not agree with him. Only to-day I received a letter from a large manufacturing firm stating that, owing to the German Reparation export duty, he is now able to employ more men in his works. I cannot understand why the Labour party are against this Bill. The justification for dealing with these key industries in this Bill is apparent on many points. One great point to be made is that it is a Bill for the security of these islands. It is clear that these manufactured goods are necessary to us to protect this country in case of war. It is very difficult to define what a key industry is, but perhaps I may be allowed to refer to what the Prime Minister said in the House on 18th August, 1919. The right hon. Gentleman asked, "What does an unstable key industry mean?" He continued:I will give four tests, not one of which hon. Members will challenge. The first is this, whether the industry was revealed to be essential for war or the maintenance of the country during the War…. The second is whether during the War it was discovered that the industry had been so neglected that there was an inadequate supply of goods produced in the industry for the purpose of equipping ourselves for the essential task of war…. The third test is whether it was found necessary for the Government to take special steps to promote and foster that industry during the War. The fourth is this, whether if that special Government support were withdrawn, these industries could maintain themselves at the level of 1626 production which war has shown to be essential to the national life.—[OFFICIAL REPORT, 18th August, 1919; col. 2012, Vol. 119.]I cannot help thinking that these four Clauses explain the position of the manufacturer in regard to what are called key industries. My hon. Friend the Member for Eye (Mr. Lyle-Samuel) asked, "Why not extend it to food?" If there is one thing that is not necessary at the present time it is the extension of this to food, because of the extra bounties which are being given to various food commodities. I should like to refer to the Committee on Commercial and Industrial Policy, which was appointed in 1917. In its Report it explains fully why certain ways of dealing with these manufactured goods should not be by Government manufacture, and it states thatPivotal or key industries should be maintained by this country at all hazards and at any expense. They must be kept alive either by loan, by subsidy, by tariff, by Government contracts, or in the last event, by Government manufacture.The Chairman of that Committee was Lord Balfour of Burleigh, who was a great Cobdenite, and I believe still is a Cobdenite. This is not a question of Protection and Free Trade; it is a question of the security that we want. It is vital to this country that we should have these manufactured goods, and that we should manufacture them ourselves. Let me take the case of optical glass. Before the War we only manufactured one-tenth of our peace requirements. Of the remainder, one-third came from France and two-thirds from Germany. All hon. Members will agree that that is an absolute necessity for us. Again, with regard to scientific glassware. It was all imported in pre-War times, and our researches for naval and military purposes cannot proceed without that scientific glassware. Again, gauges in pre-War days were manufactured by very few firms in this country. Almost all our gauges came from America, Switzerland, and Germany, and when our intense munition work set in we had great difficulty in finding technical people to make those gauges. Magnetos, too, were all made in Germany, and we only got through the first few months of the War owing to there being a large stock of magnetos in this country. Tungsten has already been mentioned in the Debate. The Germans had absolute control of the tungsten of the world, 1627 although some of the richest mines were in British territory. We have also heard a great deal about chemicals. The hon. Member for Hythe (Sir P. Sassoon) gave a full description of the necessity for chemicals. I am sorry that the hon. Member for Oldham is not in his place, because I rather gather that in his election address he stated that:The chemical industry is essential to many other industries, particularly the cotton industry. In colour-making Germany largely controlled the world. Serious steps have been taken to put this right, and on this subject I claim to speak with special knowledge.I wonder what he would have to say to that argument to-day. How would he "put it right"? After two years of war, the War became a great chemical war, and in any future war we shall be absolutely dependent on our chemicals. Dr. Herty, of New York, goes so far as to say:For military security it is essential that each country should have its chemical industry firmly established, and this must be secured as one of the conditions of peace, as otherwise we are leaving Germany in possession of a weapon which will be a permanent menace to the peace of the world.9.0 P.M.
That was said by a chemist. I quote him because I am not a chemist myself. With regard to dumping, I consider that dumping is unfair trading, and if there is one thing that we Britishers want it is fair trade. What is happening in other countries? I notice in the Press only to-day that Spain is bringing in new regulations imposing an increased Customs duty varying from 10 to 70 per cent. What is America doing? I think that that is almost more important to us than what any other country is doing. She has brought in the Emergency Tariff Bill, from which, perhaps, I might quote one or two sentences. In dealing with dumping and anti-dumping investigations it says:That whenever the Secretary of the Treasury, after such investigation as he deems necessary, finds that an industry in the United States is being or is likely to be injured, or is prevented from being established, by reason of the importation into the United States of a class or kind of foreign merchandise, and that that merchandise of such class or kind is being sold or is likely to be sold in the United States or elsewhere at less than its fair value, then he shall make such finding public to the extent he deems necessary, together with a description of the 1628 class or kind of merchandise to which it applies in such detail as may be necessary for the guidance of the appraising officers.Another Clause states:If the purchase price or the exporter's sales price is less than the foreign market value … there shall be levied, collected and paid, in addition to the duties imposed thereon by law, a special dumping duty in an amount equal to such difference.The financial side is also dealt with, and in dealing with the conversion of currency—a very important point—the Clause states:That the value of foreign coin as expressed in the money of account of the United States shall be that of the pure metal of such coin of standard value, and the values of the standard coins in circulation of the various nations of the world shall be estimated quarterly by the Director of the Mint.I cannot help thinking that that Clause is indeed important. It shows that other countries besides ours are dealing with dumping, as it is necessary for them to do. With regard to exchange, that is really supply and demand. The Brussels Conference, which met at the end of September, 1920, dealt with the finances of the different countries, and the finding of that Conference was in favour of international as against independent action. The experience gained by the Brussels Conference was that countries should not work out their finance in a watertight compartment. The problems are indeed critical, but I think with co-operation those difficulties might be got over. The great object of the Conference was to show a picture of the various Budgets of the different countries so that the countries could see the state of finance of Europe, and it might be dealt with accordingly. With the present financial state of Europe and with the immense amount of currency, Germany alone having 70 milliard of paper marks, it shows that her rate of exchange, unless something abnormal occurs, must be against her for many years to come, and with that in view it is essential that we protect these industries from any unfair competition which may arise owing to the rate of exchange. You can put the British workman against any workman in the world, but this rate of exchange does not deal with him fairly. In war sometimes victories prove more disastrous than peace. We must be most careful of this. We must safeguard our employers and employed and our nation as a whole.
§ Mr. JOHNSTONE
My hon. Friend the Member for Morley (Mr. France) said this foundling that the President of the Board of Trade had discovered on his doorstep was not a living child, but a wax figure—a doll. I do not think my hon Friend is quite right in that. I think this foundling is rather a vigorous infant, and by-and-by it will develop into a very ugly adult. I oppose the Bill as a Free Trader. I am afraid the Coalition Free Traders who are going into the Lobby against the Bill will be a very small number, and many of them will find discretion the better part of valour. But there is a small remnant still left in Israel, and those of us who have some regard to our past traditions and our love for Free Trade will not be ashamed to be found voting against the Bill. Those who support the Bill commend it to the House as a very little thing. Bight hon. Gentlemen who were formerly distinguished Liberal Free Traders have stood at the Treasury Box and said they are still as strong Free Traders as ever they were, and that this Bill is neither Free Trade nor Protection. I have no doubt that when the term of the Bill has expired, whether it be three years or five, we shall have Liberal Coalition Ministers pronouncing that, in the interests of the country and of our great Empire, it must be extended for a further period. The serious view to us who are still loyal to our Free Trade traditions is that this is not a frontal attack. It is an insidious advance upon the citadel, and it is part of an insidious attempt to fasten on the neck of this country Protection once more, and that is what we are in for in regard to this measure. It is undoubtedly a sop to the Tariff Reformers, and we have heard how dissatisfied they are because it is not thorough-going enough. The right hon. Baronet the Member for the City of London (Sir F. Banbury) says he is a Tariff Reformer, and the Bill does not satisfy him, because he thinks there should be a tariff set up against every importation, and I think I remember hearing the hon. Member for Chippenham (Mr. Terrell) say some time ago that he would regard every industry in this country as a key industry that ought to be protected. By the process of import duties and this device for erecting tariff walls we are, whether we recognise it or not, in the reactionary process of fastening again upon this country the ill effects of Protection, from which it suffered so much 70 or 80 years ago.
1630 The Bill professes in its Preamble that it is to safeguard, not only industries, but employment. Does any representative of the Labour party—and they, surely, are qualified to speak on questions affecting their class and affecting employment—think that processes of this kind will safeguard employment? I think not. There may be isolated instances where some more or less inefficient manufacturer may, under a Protective tariff, benefit his own trade and be encouraged to continue along slipshod, inefficient ways. He may give a little more employment and, under the Protective system, be able to do better than he did under the old competitive system. But taking the country as a whole, taking the whole influences of Protection upon the whole of the industries of the country, will it, on the whole, help employment? Will it not have the effect of restricting the flow of imports and, of necessity, exports from this country, and will not that do more to cause unemployment than any artificial Protection that is afforded by the Bill? Then the Bill is said to safeguard key industries. I have been in the House nearly the whole of the day, and I have listened very carefully, and I listened when the Financial Resolutions were discussed as to the pleas which were put up by supporters of the Bill, and the impression which was given was that those who were opposing the Bill, and were, therefore, held to be opposed to the protection of key industries, are unpatriotic. I do not suppose that any of us have a monopoly of patriotism, but it is a gross slander to impute to any hon. Member that because he is not thoroughly convinced on the fundamental principles of a measure of this kind for the protection of key industries, because he is not) thoroughly convinced by the arguments in favour of the protection of key industries, therefore, he is less patriotic than those who support the Bill. A more ugly feature of a proposal of this kind is, that there are not wanting persons who are quite ready to exploit patriotic sentiment for the sake of filthy lucre and the advancement of their own interests. It has been said that key industries ought to be safeguarded by a subsidy or by the Government undertaking the manufacture. If ever again we should be involved in a war, I would favour the Government taking over the manufacture 1631 of these essential key industries which are necessary for the safety of the country. It would be far better for the Government, inefficient as they have proved themselves in the past in managing anything, to establish national workshops or take over the key industries and run them for the benefit of the country instead of playing into the hands of, what an Irish Member once called, the hard-faced profiteers, by allowing them to exploit the difficulties of the country and to benefit from the exploitation of key industries.
In regard to dumping, if the definition given to us some time ago is the true one, there is not a man in this country but would be opposed to dumping. If there was an organised attempt by any other nation to subsidise and help manufacturers in a foreign country in an effort to strangle any British industry by dumping here goods at less than the cost of production, every one would assist the Government to resist any attempt of that kind. We as a nation are dumpers. We dump in all parts of the world. There is scarcely a manufacturer in connection with our export trade who at one period or another, and very frequently, has not dumped goods, and has been obliged to dump them. It will be a very difficult thing to apply the definition of an organised attempt by any foreign manufacturer to dump goods upon this country with a view to strangle British trade, and that that attempt is subsidised by a foreign Government. If in the ordinary process of business a foreign manufacturer sends goods here, although he is dumping his surplus goods at less than the cost of production, why should we refuse them? In many cases those goods which are sent over are the raw materials of other trades, and if we interfere with the free flow of trade and the free flow of imports into this country, depend upon it we are taking a great step forward to destroy our own export trade.
Reference has been made to the important manifesto issued by the bankers. That manifesto has been far too flippantly dealt with. Here is a body of impartial men, not concerned with politics, not concerned with the wangling of parties, but concerned with the stability of credit, finance, and trade in this country, and they say that the policy of trying to exclude the productions of other countries 1632 in a well-meant design to encourage our own cannot increase the volume of commerce or the total volume of employment here. That is the verdict of our own bankers, and that is what we are up against to-day. If we attempt by artificial means to restrict the flow of imports into this country, with a view of attempting to encourage employment and to protect the home manufacturer, we shall strike a blow not so much at the import trade, but a deadly blow at our own export trade. It has been said that we have a precedent established by the Paris Resolutions. I am not, and never have been, fond of the Paris Resolutions, and I do not think that a free trader is bound to defend the Paris Resolutions. In connection with the Paris Resolutions I think that some free traders were taken advantage of, that they were led into a bog over the Paris Resolutions, and had the Resolutions imposed upon them under a patriotic appeal, and with a desire to get a blow in at the enemy. Many a good, honest free trader was imposed upon. These Paris Resolutions were directed against the enemies of this country. The enemies had made a declaration against us, and—and this is the only defence that could be offered for the Resolutions—we thought it would be a good thing at that time to carry the commercial war into their camp; but the Resolutions have never, so far as I know, been effectual. We have never proceeded against Germany under the Paris Resolutions; but we have proceeded to use them against our own people in this country. That is the use which is being made of the Paris Resolutions, in order to establish a protective system.
I do not think that this House, looking to our past experience gained during the War, should give power to the Board of Trade to apply Part 2 of the Bill to certain goods. It is bound to lead to a good deal of corruption. You are going to give power for the establishment of an Advisory Committee under these Board of Trade Regulations. You are going to give power to the Board of Trade to impose taxation; a power that should be reserved for this House alone. We are entering upon a course that will be fraught with difficulty and trouble in the future. I quite agree with my right hon. Friend the Member for the City (Sir F. Banbury) who, Tariff Reformer and strong Protectionist that he is, stands up for the 1633 rights of this House, and against our giving deliberately to the Board of Trade the powers that are conferred upon them in this Bill. I believe that this Bill will inflict infinite harm upon the trade and the best interests of this country. It is a reactionary and retrograde step, and it is a sad reflection that after all the struggles and trials of the War, and after our experience of the soundness of our Free Trade system, which enabled us to carry through that great struggle better than any other nation, in these later days we should find ourselves discussing proposals by a responsible Ministry that we should turn our backs upon our past, that we should cease to be a Free Trade country, and that should follow the way of deluded nations in the course of tariffs, protections, tariff walls, preference, etc., into the midst of shallows and sands which will spell disaster to this country, situated as we are, disaster to the trade of this country, and which will carry us along the downward course.
§ Mr. T. LEWIS
The hon. Member who has just spoken, in the earlier part of his speech, uttered a lament over what he supposed was the fate awaiting certain Coalition Liberals who are rash enough to vote for the Second Reading of this Bill. He also took the opportunity of making an appeal to them to reconsider their position, and particularly he asked them to remember past days and traditions. As a young Member of this House I should like to respond to that plea by remembering some of my traditions which have any reference at all to this matter, and those are certain pledges which I gave at the last General Election. I do not know what my hon. Friend did then, but I put in my election address, and I cannot get away from it if I wished, and I would not wish to do if I could, that I was prepared to vote for the protection of certain key industries, and that I was prepared to vote for the prevention of the unfair dumping of foreign goods into this country. I am going in a brief speech to justify the vote which I shall give on this Bill. I have listened carefully to the whole of the Debate on the Second Reading and equally carefully to the lengthy discussion on the Financial Resolutions. There are two lines of criticism, so far as I can make out, running through the whole of the Debate, and particularly in the speeches coming from the Liberal side of the House. There is, for instance, the 1634 criticism which comes from the Free Trader who regards this Bill as an infringement of the fundamental doctrines of Free Trade. This obsession—I cannot call it by any other name—is so powerful and strong in the minds of certain of my hon. Friends that they have been unable to collect their minds sufficiently to give this Bill and the Resolutions which preceded it a fair hearing and examination on their merits. On the other hand, there are Free Traders in the House who, like myself, regarding this measure as limited in time and circumscribed in scope, at the same time are not exceedingly happy about all its provisions. I am, however, perfectly convinced that this Bill as it stands to-day does not raise as such the question of Free Trade and Tariff Reform. It is not meant to do that. In some ways it is not so much a fiscal or trade measure as it is a part of our war legislation. I have heard it stated to-night, indeed you cannot sit in this House for a week without hearing it mentioned, that this measure is but a beginning. Our old metaphor, "the thin edge of the wedge," has been doing duty all through the Debate. I do not know whether that metaphor is applicable or not. If it is, then this Bill in my opinion is not the thin edge of the wedge, but the thick end of the wedge, because that part of the legislation dealing with the protection of key industries is definitely limited in time, and that dealing with the collapsed exchanges is also definitely limited. Therefore, whatever the measure is, be it good or bad, this is the worst of it.
I have no great sympathy with that kind of politician, who has so little faith in his own convictions that he is afraid to do the right thing to-day for fear that some dire consequence may follow later on. The great thing is, can we do the right thing by these extraordinary circumstances which surround us to-day? If we can, we shall be all the more clear-headed and strong when the day comes to reconsider these questions in the light of the new facts of that future day. Again, speaking as a new Member, but remembering the old controversy, I would deprecate most earnestly any attempts at the political exhumation of those fiscal controversies so familiar some years ago. I do not think it is at all necessary. Speaking for myself, and for a large number of others, I believe the lessons of the "War have reinforced and confirmed the 1635 repeated decisions which the electorate of this country gave on this great question before the War. Those who were Free Traders before the War are more than ever Free Traders to-day, and those who stood at the cross roads before the War on this question have now made up their minds and are travelling on the Free Trade road. Indeed, I hear every day of men who had, in the old days, travelled far on the other road, who have now retraced their steps and have become convinced that Free Trade is the only permanent fiscal policy for this country. I may be wrong, but I think this Bill is intended to deal with the situation which has arisen out of the War. An hon. Member who scoffed at the idea this afternoon said we had left the War behind two and a half years ago. Is anyone prepared to say that we are not living to-day in a condition of affairs which could not possibly have arisen except for the War? It is not war-time, but we are under the shadow of the Great War, and a very black shadow it is, getting blacker almost every day, at any rate, from the industrial point of view.
I am not sure that all this controversy would have arisen but for the fact that the Opposition requires, and has been feeling for some time that it requires, some sort of whip wherewith to beat the Government. They have a multiplicity of leaders, an embarrassing multiplicity of them, divided and contrary counsels, and depleted arsenals, and they rush at this question in the hope that they may be able to convince, at any rate, a section of the country that Free Trade is in danger. I have respect and admiration for their instinct. They are perfectly right. If they could only persuade the electorate of this country that the great cause of Free Trade was in danger, then, indeed, their political fortune would be made for a considerable time. This is not the first time we have had this outcry against Protection. I remember the hon. and gallant Member for Newcastle (Major Barnes) making the other day, as he always does, a very well-informed and powerful speech against the Dyestuffs Bill. Like a Rupert of debate, he rushed in, without troubling to find out whether the commander-in-chief wanted him to do so. A little later on in the Debate the right hon. Member for Paisley 1636 (Mr. Asquith) got up and went entirely against the hon. and gallant Gentleman, declaring in round terms that the Dyestuffs Bill had nothing whatever to do with the controversy of Free Trade and Protection. That, however, does not prevent my hon. and gallant Friend and his friends issuing a leaflet against the Government in which they say that the Dyestuffs. Bill is part of a great sinister campaign against Free Trade. All that is despite the fact that the right hon. Member for Paisley said that there was no question of Free Trade or Protection about the measure. An hon. Friend who sits on the other side of the House, as has everybody else in this Debate who dislikes facing the matter, just touched on the Paris Resolutions and glided away. The right hon. Member for Paisley the other day, in a speech we all admired as a very brilliant performance, also touched lightly on the Paris Resolutions. The truth is that he and his friends have guilty consciences in the matter.
I question very much whether we should ever have been troubled with this Bill at all had it not been for the Paris Resolutions. At that time they were never suspected of being Protectionist in their intentions or tendency, but since this Bill and the Resolutions which preceded it have been brought in we have it on the right hon. Gentleman's authority that he meant nothing of the kind when he drew up the Paris Resolutions. That is all very well, but the Paris Resolutions were drawn up, and they are on record, and I have some of them here to-night. The Paris Resolutions dealt with the period of the War, that immediately following the War, and with the permanent possibilities of legislation. My hon. Friend opposite says that they dealt exclusively with the period of the War. Nothing of the kind. Take, for instance, Resolution (b), which dealt with the period immediately following the War, the period of reconstruction. What does it say about that? It says:In order to defend their commerce, their industry, their agriculture, and their navigation against economic aggression resulting from dumping or any other mode of unfair competition, the Allies decide to fix by agreement a period of time during which the commerce of the enemy powers shall be subjected to special treatment, and the goods originating in these countries shall be subjected to prohibitions or to a special regime of an effective character.1637 That is for the period of reconstruction. Then, in regard to the permanent period, it says:The Allies decided to take the necessary steps without delay to render themselves independent of the enemy countries in so far as regards raw materials and manufactured articles essential to the normal development of their economic activities.This is to be done, but "by Customs duties or prohibitions of a temporary or permanent character."
§ Mr. LEWIS
I have not heard any hon. Gentleman or right hon. Gentleman yet say that he is prepared to accept this Bill if it is confined to those countries. You cannot have it all ways. Those are the Paris Resolutions. Whatever their letter is, their spirit is clear. Can anybody who views the matter with an unprejudiced mind deny that there is a close connection between those Resolutions and the Bill? To carry the matter a little further, this is a question of tendency, bias, or spirit. Mr. Runciman said at that time in regard to this question of trade:At any rate, we must see to it that having ended this War victoriously we do not give Germany a chance of reconstructing her commercial position. The real trouble is when the War comes to an end and she is beaten at sea, and I hope beaten ashore, she may wish to embark on a new economic campaign. It is connection with that second economic campaign it will he necessary for us to see to it that she does not raise her head.Did anybody complain against the spirit of those speeches? Did anybody suspect Mr. Runciman of any disloyalty towards Free Trade? This Bill is the very milk of human kindness as compared with the potent medicine which Mr. Runciman was prepared to administer. For my hon. Friends it is very fortunate that he is not in this House now. If he were he would be compelled by the letter and spirit of these declarations to bring in measures infinitely more obnoxious to them than the Bill of the Government. I am prepared to support, without regard to the great question of Free Trade or Tariff Reform, the protection of key industries for a definite period, and to support legislation to prevent dumping, properly defined and safeguarded; but I have the gravest doubts about the efficacy of those provisions that deal with collapsed exchanges. These are matters for Committee, where I 1638 hope to have an opportunity of dealing with these points.
We are faced to-day with an industrial situation such as the country has never known. Unemployment is rife, ships are lying idle, exchanges have collapsed, the movement of goods to and fro in many cases has been brought almost entirely to a standstill. During the War we were faced with conditions similar in their nature. Many of our generals on the field of battle were faced with conditions which were not provided for in any military text books which they ever read, but they faced them courageously. This is not a party question. It is not entirely a trade question. It does not raise a fiscal issue, but it does raise very serious considerations for this House. I ask the House to put aside all pre-War prejudice and their doctrinaire preoccupations and to face these conditions with new eyes and fresh minds, remembering the War, and if they possibly can to grapple with them with that unity of purpose and of action which were of such powerful assistance in winning the War.
§ Mr. G. BARKER
I have listened to the discussion with considerable attention. The Labour party have been challenged frequently in this Debate as to why they opposed this Bill. The other side assert that this legislation will increase employment and Safeguard industries. We are not taken in with these phrases. We believe that this legislation will restrict trade and, in restricting trade, will restrict employment. It seems to me an obsession with this Government to pursue a Protectionist policy. During the Session we have had the 11 o'clock rule suspended, and we have been dealing with what is termed reparations. 50 per cent. is put upon imports, and now the Government have had to reduce that 50 per cent. to 26 per cent., which shows that the policy they are pursuing is an absolute failure. The reasons given for this legislation are of a military character. Many times during the last two hours reference has been made to the possibility of a future war. I believe that it will shock the moral sense of the country to learn that this House is actually at this time legislating for a future war. Let us recover from the last war before we think about preparing for the next war. The worst of all possible reasons that can be given for this measure is that it is a 1639 preparation for the next war. It is the most immoral reason that can possibly be given for this Bill. Some of us are very old-fashioned in our opinions with reference to this great question of Free Trade. We do not believe that if you refuse to buy from a nation you can sell to that nation. We believe the trade is interchange of commodities, and that anything that interferes with interchange of commodities interferes with the trade of the country. We believe that this Bill is putting the Government stamp upon inferiority—that the Government are trying to protect inferior technique in the production of these things which they have scheduled in this Bill. Therefore we believe that it is an evil thing to introduce legislation of this character.
A great deal has been said about dumping and definitions have been given of dumping. Dumping is a very costly experiment. If a nation sends goods into this country below cost it is a very costly experiment, and especially when the other nation has its eyes open and is on the watch for attempts of that kind. The proper way to deal with an evil of that kind, if it exists—personally I do not think it does exist in this country—is not to put a tariff upon the article coming in but to cheapen the article in this country, so as to prevent the foreign article from entering. Suppose that this tariff of 33⅓ per cent. was put on. It simply means that the manufacturers of articles in this country can raise the price of those articles by 33⅓ per cent. That increases the cost of living in this country. The tendency of all the legislation of the Government is to increase the cost of living. There is nothing done, no legislation brought in, to deal with the lowering of the cost of living. The putting on of these tariffs is going right into the teeth of the economic difficulties of this country, and is aggravating them rather than removing them. As occupants of the Labour Benches we are bound to confess that neither Free Trade nor Protection prevents unemployment. That is our difficulty in this Debate. We remember the period between 1874 and 1879, when unemployment was rife, when the position was as bad as ever it has been. But there was one redeeming feature about that period; it was a Free Trade period and the cost of living was 1640 extremely low. Therefore the evils resulting from unemployment were very much alleviated. If this had been a Protectionist country the working classes would have had to contend with unemployment and dear food at the same time. At present that is what we are doing.
The trouble has been brought about largely through the interference of the Government. The Government has done its level best to destroy the trade of the country. Everything in which it has interfered has been inimical to the trade of the country. It has, without a doubt, destroyed the coal trade of the country. I do not suppose it would be relevant to deal with that matter now, but it could easily be proved that the Government, in the notorious Peace Treaty, has destroyed the coal trade. In destroying the coal trade of the country the Government has struck a fatal blow at all the other industries. The Labour party knows very well that neither Free Trade nor Protection is a remedy for unemployment. We believe that there should be set up a system different from the present system. The economic system under which we are living is responsible for the evils we are experiencing to-day. Those who uphold the present system are being challenged very severely. As a party we believe in the establishment of an international commonwealth, an industrial commonwealth. We do not believe in producing things for profit, but in producing them for use, and that producing them for profit is at the root of the evil of the present system. [HON. MEMBERS: "What is the difference?"] There is a greal deal of difference between producing for use and producing for profit. You may have your granaries full of food and your warehouses bulging with goods, but unless the manufacturers can part with the goods at a profit, they will let them rot. If you were producing those things for use they would be distributed to the people for use, to the people who produced the goods.
§ Mr. BARKER
The present system is responsible for the economic con- 1641 ditions of the world to-day. As a Labour party we say that there should be a free interchange of commodities established between the various countries of Europe. In this Debate a great deal has been said with reference to the exchange. It is not beyond the wisdom of Governments to stabilise the exchange. The commodities that are produced are of the same economic value and use now as they were before the War. It is the system we are condemning, and it has broken down. That is the reason why there is this great disparity in the exchanges between the various countries. It is the financial system that has broken down, and that system must be changed before you can have any improvement in the conditions of the world. I do not know how many lessons will be wanted to teach hon. Members this very salient and very startling and important fact. What we see all over the world should convince anyone that the present system needs reorganisation and that there should be the substitution of a saner system. The time has come when we shall have to depend far more upon our own resources. That is a difficulty we find in every country. Every country to-day is trying to manufacture for itself, is trying to maintain and sustain itself.
This House and the Government would be more usefully employed if they were utilising to the fullest extent the natural resources of this country instead of tinkering with tariff proposals. We have land rapidly going out of cultivation; 500,000 acres of wheat land has gone out of cultivation during the last two years. If the Government had been in earnest in finding employment, they could have found it for large masses of men unemployed to-day. If they had retained the Government factories, those factories could have been used for the employment of people to-day. What do we find in Germany, of which we have been hearing so much? We find that Krupps have turned their gunmaking factory into a factory for producing instruments of peace and commerce. They are making ploughshares and all kinds of steel implements, and finding employment for their people. A great deal has been said with reference to the War. It is very doubtful if winning the War has proved of any benefit. This country has won the War, but economically our working people are to-day infinitely worse off than 1642 those of Germany. The cost of living more approximates to wages in the mines of Germany than in those of this country. You can get that fact out of the "Labour Gazette" if you look it up. It seems to me doubtful if the nation which wins the War does not eventually lose the peace. The great principles which Normal Angell told us of in "The Great Illusion" are being realised to-day by all the nations of Europe. This House is engaged in a fruitless effort in seeking to establish trade by means of this paltry measure. The remedy lies much deeper than the Government has penetrated, and it will eventually be found that the only salvation for Europe is the establishment of an industrial co-operative commonwealth.
§ 10.0 P.M.
§ Lieut.-Colonel HURST
We have heard a large number of generalisations directed against this Bill all very vague and very abstract. We have also heard a large number of denunciations equally vague and much more abstract. Indeed some of the speeches made against the Bill seem to me to have been extraordinarily wide of the mark. The hon. Member for Eye (Mr. Lyle-Samuel) in the course of his speech of 57 minutes prophesied this country could not survive at all if the Bill became law. Then the hon. Member for Harrow (Mr. Mosley), having got hold of the word "pragmatical," applied it with what he thought was damaging effect against the Government. He said he bad applied certain pragmatical tests to this Bill and found it was pragmatically absurd. What he meant, I am sure nobody who heard him had any idea, and perhaps the next time he addresses the House he will explain to hon. Members which of his observations are absurd and which pragmatically absurd. The truth is it is quite vain in the temper of the present time to attempt to relight the old fires of pre-War controversies on the questions of Free Trade and Tariff Reform for two reasons. The first is that the present juncture of affairs is extraordinary and abnormal. Conditions have changed entirely since 1914. There never was a time when foreign exchanges were in anything like the same state as they are in at the present moment. There never was a time when the modern world was so tottering and the economic condition of every nation so precarious and so difficult. That is one reason why 1643 we cannot relight the fires of the old controversies, and the other is that people are realising more and more that there is no such thing as absolute truth on either side in all these economic controversies. You cannot judge any question which affects the trade and well-being of a country by abstract doctrines alone. You cannot decide such a question as a mere abstract proposition. This view has made tremendous headway in the minds of the great mass of the population. A quarter of a century ago in the industrial north, where I have spent most of my life, a question like that of free trade was regarded as almost beyond argument. People thought the doctrines of free trade were as well established as some gospel, and they would not question it because their grandparents had regarded it as beyond question, just as they would not think of voting anything else than "yellow" because their fathers always voted "yellow." Times have changed. We know we cannot judge these questions by first principles alone. We have to view them in the light of reason and common sense and taking into account the conditions of the present time. If we apply reasoning of that type to the first part of this Bill dealing with key industries, I think it is very difficult indeed to quarrel with its main conclusions. I, personally, am quite prepared to admit and deplore that some side effects of this part of the Bill may impede the free interchange of goods between England and foreign countries, which is undoubtedly a thing to be guarded against wherever possible, because we do wish to see the freest possible interchange of goods between England and her foreign markets. I am also prepared to admit and to deplore that the imposition of 33⅓ per cent. duty in connection with these key products may have the effect in some cases of raising prices. These are evils, but they are obviously more than counterbalanced by the greater evils which would flow from being deficient in these articles in time of war. The hon. Gentleman who spoke last did not seem to be quite certain whether he should be pleased or sorry that we won the War. It seems to me that is a very short-sighted view to take.
§ Mr. BARKER
I beg the hon. Member's pardon, but I did not say any such thing. I said it was very doubtful whether those who won the War would benefit by the victory.
§ Lieut.-Colonel HURST
I do not wish to misrepresent the hon. Member at all, but most of us hold no such theory, and I am very much surprised that it entered into his head. He also said it was absurd to legislate in reference to wars of the future, because war shocked the moral sense of mankind. Of course it did in 1914, but we had the War all the same. The hon. Member for Morley (Mr. France) said the origin of this Bill was in a Manifesto issued by the leaders of the Coalition on the eve of the last General Election. The origin of the Bill really dates further back. It goes back to the War, because everybody realised in the course of the War that if you wanted to kill and to heal and to preserve your people in some sort of comfort and security during war tremendous scientific apparatus was essential, and in normal times the precautions taken in our country were insufficient to meet that danger.
§ Mr. FRANCE
The hon. Member will allow me to say that I was referring to the concrete proposals of the Bill and not to the abstract idea of the Bill.
§ Lieut.-Colonel HURST
I quite agree. The point I am trying to make is, that the real bedrock on which the Bill is built up is the bedrock of experience gained during the War. Surely, all parties in this House will support any measure likely to increase the supply of these key articles if the increase of that supply is likely to shorten the duration of any war, make victory easier, and lighten the suffering which war brings with it. We have had only two alternative suggestions made by critics of the Government to-day. The first is that the Government should subsidise these industries. Surely, the sense of the community is entirely against the policy of subsidy. We object to voting subsidies to the miners and to the farmers. Why on earth should we accept the idea of subsidies in connection with these particular manufacturers? If the Government had come forward with some proposal to subsidise the manufacture of these key articles, it would have met with a storm of opposition from the people who now criticise the Government because they 1645 have not subsidised them. We are told that a far better alternative would be for the Government to manufacture these articles themselves in national workshops. Not a day passes, on the other hand, when these very critics are not assailing the Government for their mismanagement of these great public concerns. The Government are assailed for their alleged mismanagement of the Post Office, for their obvious mismanagement of the telephones, and for engaging in manufactures of all sorts. These very hon. Members who have so criticised the Government for taking shares in British Dyes, Limited, and other companies, now come forward and suggest that the Government should run these industries themselves. That is not practical politics at all.
With regard to the second portion of the Bill, as a Lancashire Unionist I feel very much less enthusiasm for it than I do for the first part, because I cannot help recognising that the effect of these duties may very well tend to be to make the disparity in the exchanges worse than it is at the present time. I also personally do not agree at all with an observation that I heard the Minister of Health make the other day to the effect that foreign trade was comparatively unimportant. Of course, the very life-blood of English industry is the maintenance of our trade overseas, and if we did not export a large proportion of our goods to the markets overseas, we could not pay for imported raw materials and foodstuffs from those countries, so I must admit that I entertain very considerable doubt in regard to the second part of the Bill. At the same time, one has to recognise that in these industries which are affected by foreign competition the demand for some sort of protection is most clamant. This Bill has been compared to everything from a baby to an umbrella. I should like to compare this portion of it to a breakwater, and any breakwater which will do something to alleviate the distress in these industries which are likely to suffer most from foreign competition at the present time ought to be supported. The right hon. Member for Peebles (Sir D. Maclean) said that this portion of the Bill was framed in a war spirit, but I do not see that at all. It seems to me that it is no hostile motive whatever at work to desire to do the best for these great industries which are attacked by foreign countries. 1646 I do not regard this Bill in any way as a surrender to the extremists. In fact, I think those who are very keen on Tariff Reform are to be congratulated on the great moderation and temperance which they have shown all through these Debates in accepting what the Government have brought forward as a good, workable compromise. It is not a Bill which has been run in any way by the wild men of any particular school of thought.
I should like to ask one or two questions about the Bill. I take it that the Committee which is going to watch the effect of these duties is very different from the Committee from which the panels are going to be chosen. Are the sittings of the Committee which is going to decide on the fate of the different applications for protection to be held in public, and are those who apply for this relief and those who wish to oppose it going to have the opportunity of being represented by counsel? I should like to ask something about Clause 7, which defines the constitution of the Committee. It says they are to be mainly men of commercial or industrial experience. They have to decide very difficult and complicated questions of fact, whether or not there is a case for protection, whether or not there is dumping within the meaning of the Bill, and whether or not an effect of such dumping or of the rates of exchange is going to be a very marked diminution in employment in these particular industries. It seems to me, therefore, that on a panel of this sort it would be very useful to have Members who have judicial or legal experience. I have faith in business men of long and skilled experience in these particular trades, but after all, business men are apt to have pre-dispositions in favour of one or other cast of thought on these great fiscal questions, and it would be as well also to have men of judicial or legal experience.
In conclusion, I should like to congratulate the Government on this. It has been complained by the critics of the Government that the Government have not come forward with a root and branch Bill destined to bring about peace and prosperity. We know there is no short cut to this New Jerusalem, and I think it shows the honesty and sincerity of the promoters of the Bill that they make no pretensions of that sort at the present time. The only way to have the prosperity which we all desire is to have 1647 peace in our industry and men working hard. I think it is a good sign that we no longer hear these promises of work and prosperity for all in relation to any particular Bill dealing with trade and industry. The truth is that we have moved from a period when people believed in panaceas to a period when they believe in palliatives. I hope the next step will be that we shall move into the still more delectable era when people will realise that the best way of all is for the men and women of the country to work out their own salvation unassisted by the State.
§ Mr. CLYNES
With all respect to the House, I cannot help saying that Members throughout the Debate have appeared to take but a languid and detached interest in the Bill which is now before us. That frame of mind was assisted if not created somewhat by the terms and the tone of the speech in which the Bill was submitted to the House earlier in the day. The President of the Board of Trade, not only showed no enthusiasm for this Measure, but I thought he did not show even that ordinary measure of respect which official position requires that any Minister should show in relation to a Bill which he is supporting. The right hon. Gentleman has so far evaded the questions which have been put to him in earlier Debates on this subject, as to who has asked for this Bill. Who, in relation to the industrial and economic interests of the country, viewed upon a national scale, can be said to have asked for legislation of this kind? Workmen's organisations have not asked for anything of the kind. Even the millions of workmen who are suffering the privations of unemployment have passed no resolutions demanding a remedy of this character. Employers' organisations have not been silent, but, so far as they have spoken—again, I say spoken as representing the interests of trade nationally—have condemned this Bill, and declared that it is no remedy either for unemployment or as assistance to industry.
In short, this is a Bill presented to us now as the result of a political commitment publicly made during the course of the last election. It is still an unredeemed item in a very thin party political programme, and it is to be presented for the purpose of keeping together certain sections and certain interests who have demanded a remedy on these lines in relation to cer- 1648 tain of our handicapped industries, or to maintain some trades not able to maintain themselves in the ordinary way. The President of the Board of Trade said that it was impossible to say what should be the principles which should guide us in relation to existing conditions of unemployment, and he further said that we cannot say what may be the course of trade in the next few years. I submit that this legislation is not the result of any well-matured and considered plan to deal with ever-increasing difficulties. The case of the President of the Board of Trade is that we cannot afford to do nothing; therefore we must do something, even if that something be the wrong thing. I suggest that a Bill upon these lines is no remedy at all for the state of things existing outside these walls.
Like many other hon. Members, I approach this question, if from a different angle, yet, I suppose, for somewhat the same reason, that of trying to deal with the problem of unemployment. I heard one hon. Gentleman, speaking in support of this Bill, say that countries which consistently do practise some degree of protection in relation to their industries had uniformly suffered less in the way of unemployment that we had suffered in this country. That is not correct. I cannot accept that conclusion. It is not based upon results or facts. Take our position at this moment. It is very, very bad indeed as the result of exceptional, but, as we know, passing circumstances, which may very soon entirely disappear. Our position is very bad indeed, but when, a few weeks ago, the Prime Minister met the miners' leaders, and was discussing with them this same question of unemployment, he incidentally mentioned, as showing that unemployment was not a national circumstance, but was world wide as an after-effect of the War, that at that moment America had not less than 4,000,000 of her workers unemployed. How, then, can it be said that if a country to any degree pursues this plan of restrictions on trade it can thereby secure continuity or guarantee of employment for its general body of manual workers? I am only a Free Trader in the sense that whenever I see an obstacle in the way, I want to remove it, to get it out of the way. I, therefore, would no more think of impeding, or trying to obstruct, the flow of trade by tariffs, than, for instance, I would think 1649 of putting some import duty upon the incoming of Australian cricketers to this country, merely because they beat us in fair competition. Just as in our sports and our physical encounters no obstacle is put in the way of free encounter so long as we play cricket, just as every instinct in men is towards playing freely and fairly with each other, so should it be to those engaged in trade and business—they should have the fullest possible opportunity freely to engage in their ordinary business pursuits.
I submit seriously, that such a plan in the end ensures a greater degree of trade and success in business than any degree of trade obstruction that can be raised by tariff walls. This Bill bears no relation to the outside picture. We have now, I suppose, between 4,000,000 and 5,000,000 workers unemployed. I do not know how many are recorded officially as unemployed. But the State, apart from the trade unions, is paying more than £2,000,000 a week benefit. If the Government has to deal with this problem, surely it ought to turn its mind to something different—and better than this proposal of a 33⅓ per cent. tariff on special articles. The problem should be dealt with thoroughly, and in combination with all the interests, and after sustained consultation—and I believe in agreement—thereby being dealt with on a scale which will secure this large number of workers against those privations which conditions of unemployment impose upon them.
It was in the speech from the Throne at the beginning of this Session that the House was solemnly told that unemployment as a problem could not be dealt with by legislation. What are we to make of a Bill that now purports to be a cure? I am glad to have the assent of the Leader of the House that this Bill does not purport to be a cure for unemployment; but I have not heard of any speaker yet who has addressed himself to this subject, and in support of this Bill, who did not use the argument that it would materially reduce unemployment and secure our workers against its privations. I believe now more than any other time is the moment for the freest possible conditions of trade that can be arranged between one country and another. Trade is not local. It does not even belong to the Empire, broad and far-flung as is that Empire. It is worldwide. Ill conditions of trade, no matter what 1650 their cause in any one part of the world, slowly express themselves later in other parts of the world, and instead of at the moment putting forward these proposals, certain, as I think they are, to intensify unemployment, it would be better for the Government to work on lines that would produce among the countries, particularly in the Parliaments of the countries, the spirit of absolute freedom of trade, the greater to increase the opportunities for providing work. If this country could be self-supporting; if we could absolutely shut out all the commodities which come to our shores day by day our problem of unemployment would not be better but worse for us to face. It is in the free export and import of commodities produced and exchanged in abundance under the freest possible conditions that the widest opportunities of employment can be found. Those of us who look at this question from that point of view must see that every restriction imposed whether financial or otherwise is something tending not to enlarge but to diminish the chances of employment and make unemployment worse that it was before. The real reason why this Bill is certain to operate in that direction is that it is certain to have the effect of increasing prices.
What is the fundamental cause of trade dislocation to-day, of short time and less than short time in the Lancashire textile trade and the engineering trade and other trades apart from the coal industry? High prices are the chief cause. It is the inability to buy of those who in different parts of the world want our commodities. If you add to this inability and increase the evil of high prices, you increase the very cause which is the fundamental spring out of which you get unemployment to-day. You diminish the power to purchase in the same degree in which you increase the price of the article you want to obtain. We had some little experience of this, of which I was a personal witness, during the course of the War in regard to food. War conditions restricted our food supplies. The food was no better in quality. It did not cost more to produce, and it was no more sustaining. It was not a better article but it merely became scarce. It did not cost any more to produce, but it cost us more because the supply was diminished. Those restrictions during the War, imposed against our will and without legislation, so restricted our food 1651 supplies that we actually had to pass legislation calling into being a Food Ministry to fix the price of food.
§ Mr. CLYNES
I submit that the popular and natural verdict on this point is against the right hon. Baronet. There you have an instance where the importation of food was restricted and we were driven to the device of reducing prices by means of legislation. This is a Bill which really does not discriminate between those who fought side by side with us in the War, in fact, they are our competitors in trade, and I can scarcely think that will tend to improve the relations between those who constituted the Allied nations. The Prime Minister, referring to our former foe, the chief of the nations which finally we had to defeat on the field of battle—Germany—said that the world needs a free and prosperous Germany That is the central fact which we should keep in mind when dealing with these questions of economics and trade. If you can possibly manage to economically cripple Germany and completely destroy her trade you will only have gone one step further towards your own destruction. You cannot hope to improve your trade conditions, your rates of wages, or your conditions of employment until the more remote parts of the world have become more healthy and have been placed on a trade and economic footing with something like pre-War conditions. Their greater prosperity is the first means of escape from our adverse conditions of to-day, and until they are more prosperous and more successful in their business, until we are able to buy from or sell to them, and to exchange commodities with them, we shall not really have mastered our present unemployment difficulty.
I have heard it alleged, and indeed I gather from the speech of the President of the Board of Trade, that this is not a War measure. I think the right hon. Gentleman referred to it—and I liked his figure of speech very much indeed—as an umbrella to be used in days of storm for shelter, and he was good enough to add that probably the storm would turn it inside out. A Minister who has nothing more to say of the principal Measure of the Session than that scarcely encourages the average Member of the House fer- 1652 vently to believe that this Bill will deal effectively with the problem of unemployment. If it is not brought forward as a Bill to deal with key industries—and in using that term one connotes all relation to conditions of war—what is it for? I have said it is a Bill which comes to us as the result of pre-War commitments. I believe we should seek national safety, not in petty restrictions on trade, or even in warlike preparation against other nations, but in the establishment and in the maturing of world-wide Peace machinery which would instil a spirit of peace, not only into Parliaments, but into peoples, and which would produce that degree of healthy co-operation amongst countries without which peace in the world cannot be maintained. No one, not even the greatest soldier, admiral, scientist, or inventor, can say what kind of warlike instrument will in relation to the war of the future, whenever it may take place, become the deciding mechanical factor in the conduct of that war. Immediately following on war, at a time when it is declared we are strengthening the bonds of peace and good relations between ourselves and the other great Powers, at such a time as this to talk about nursing key industries as war instruments is to talk in a way which indicates that nothing has been learned from the War by the Government of the day.
Lastly, let me say a word on the administrative side of this particular Bill. I heard it said very often, in years gone by, when I used to try and explain what Socialism was, that one certain result of Socialism would be to create an army of state officials. What does this Bill do? The Board of Trade is, I suppose, to be still further enlarged. How much further its walls may be pushed out, what additional number of officials of all kinds will be needed to keep their eye on every line of this measure, and upon every article affected by it—needed for the purpose, indeed, of imposing taxes, a quite new and, as I think, wholly unconstitutional proceeding—how many will be required I do not know. Certain it is that you will have a further development of the bureaucratic idea, the tendency of officials to set themselves up as their country's governors. And, perhaps, you cannot have them absolutely free from some of the influences of favouritism, of acting in the interests of particular 1653 businesses or firms or industries—the thing against which it has always been the ambition of this Parliament to shelter its permanent officials. I would not like to be the official or the Minister who had to undertake the responsibility of determining, upon the evidence before him, what particular commodities were and what were not to be subject to the general provisions of this measure. Where are all the Members of this House who, when there is no such Bill before it, are up in arms against multiplying officials, who protest against any increase in the cost of State management, who want minutely to examine the bill that must be paid for all work of this kind—where is their protest against this assured addition to the army of officials who now have to look after what are called the national interests? Neither in its administration nor in its terms or principle can this Bill be accepted as at all touching the groundwork of our economic and unemployment difficulties, and if this House were free, as hope it may feel free to-morrow night, it would show that we cannot hope for any kind of relief from our difficulties by pursuing such a path as this. It is unworthy of the Government at such a moment as this, when we have outside these walls millions of workers suffering from the worst of the economic conditions which have oppressed them in this country in recent years. They are suffering with a very great degree of submission, and we not only see them doing that, but we desire that these troubles—which, we hope, are temporary—will be endured to the end under peace-like conditions. But if that is to be the case, they have the right to turn to this Government and expect that some more effective and more certain remedy for their sufferings will be found than can be found in the Bill now before the House.
§ Sir P. LLOYD-GREAME
The right hon. Gentleman (Mr. Clynes) challenged the Government because they have not offered a more effective remedy than the measure which is now before the House; but, in the whole course of his speech, what remedy did he himself propose? Nothing. He has not a single remedy to propose, and yet he challenges ours. In the course of the rather humorous and very appropriate metaphor which he adopted, he said: "In matters of trade, why cannot we behave as in matters of sport?" and he pointed out that we do 1654 not stop eminent cricketers from coming to this country. That is so, but they observe the rules of the game, and, even when we play that game, we do not deny to the wicket-keeper the use of a pair of pads. The right hon. Gentleman asked on what authority this Bill was being introduced? He asked who were the people who were asking for it? I think his investigations have not gone very far back. I venture to say that there has never been an economic measure introduced into this House which has had a greater weight of considered opinion behind it. It is based upon the Paris Resolutions, and it is not a case of here one manufacturer and there another coming and asking for the Bill. The last Government but one, faced as they were with the position which they knew would arise, appointed the most representative Committee, as the right hon. Gentleman (Mr. Asquith) said, that ever looked into a case of this kind, and that Committee unanimously reported in favour of such proposals as are now before the House. I do not ask the right hon. Gentleman to accept that on my responsibility, but we have in the House a member of that Committee who, speaking on the financial Resolutions, said that every proposal that is made in this Bill comes clearly within the four corners—
§ Sir A. WILLIAMSON
I think the hon. Gentleman is in error in that statement. I was a member of the Committee, and declined to sign the report.
§ Sir P. LLOYD-GREAME
Only two out of that great and representative Committee could be found. With regard to the Paris Resolutions, I am glad to say we have advanced one step to-day. The right hon. Gentleman the Member for Peebles (Sir D. Maclean) at least told us that those Resolutions were designed for a permanent purpose, and were to come in force against our ex-enemies. The hon. Member for East Renfrew (Mr. Johnstone), who attacked the Government, appeared to disagree with the right hon. Gentleman on that point. He suggested that the Free Traders in the late Government had somehow been seduced from their former principles, and had 1655 been induced to subscribe to the Paris Resolutions. I hardly think they can be heard to say that now. It was not the case, made when the Paris Resolutions were introduced to this House, of right hon. Gentlemen opposite having been seduced from their allegiance. They made it their boast that not only had they agreed on these Resolutions, but that the very permanent Resolutions which are given effect to by this Bill had been designed and framed and carried by Mr. Runciman.
§ Sir P. LLOYD-GREAME
War propaganda of a permanent character? So all the things that were said in this House were intended to deceive. To deceive Germany and the people of this country as well, or both? How was it war propaganda? That Resolution was not a Resolution of a temporary character. It was a Resolution of a permanent character. Anti-dumping! Dumping from Germany in the middle of the War when nothing was coming in from Germany? Was that the time when the dumping was to come? It is perfectly absurd to say those Paris Resolutions were ever designed for a temporary purpose. Of course they were not, nor for any other circumstances than these which now exist. It is said that the whole of the circumstances are different. Then what did hon. Members opposite expect? Did they expect at that time that we were going to lose the War against Germany? If not, the position to-day must be the position which hon. Members were contemplating when the Paris Resolutions were framed. Another authority has been thrown in our teeth to-day. We are told that we are doing something here which is contrary to the recommendations of Lord Cunliffe's Committee. Any recommendations of Lord Cunliffe and his colleagues must command the greatest respect. What were the recommendations which they made? They were that it was essential that we should try to arrive at a gold standard, that we should not go on inflating our currency, and that we ought to have a definite ratio of gold to our currency issues. All that policy is being pursued by this country at present. The people who are not carrying out Lord Cunliffe's recommendations are those 1656 countries that are deliberately depreciating their exchanges. There is not a word in Lord Cunliffe's report that suggests that if you find that other countries deliberately pursue a policy of that kind against us we are not to take measures to protect ourselves. So far from doing anything contrary to Lord Cunliffe's recommendations, we are acting in the spirit of them, and by protecting ourselves against the people who deliberaely depreciate their exchanges, we are taking away from them the adventitious bounty which they get by that action. We are acting fully within the recommendations of Lord Cunliffe's Report. Another authority quoted against us is that of the Brussels Conference, and it is suggested that by these proposals we are doing something against either the spirit or the letter of those Resolutions. Hon. Members who make that charge forget that we were the only country which is not a Protectionist country that was represented at the Brussels Conference, and that a number of the countries that were represented at Brussels have taken measures to protect themselves against the effect of the collapsed exchanges in the neighbouring countries.
Another argument used was the bogey of prices. Assuming that the effect of this legislation is going in certain cases somewhat to raise prices, is it not possible that you can buy cheapness too dearly? Is it not possible that even if prices are raised and you keep your employment that that would be cheaper than paying out unemployment doles day by day and week by week? I do not for a moment accept the general contention put forward that this Bill is going to raise prices all round. I do not accept that on two grounds. In the first place, where goods are coming in at a low price to-day, who is getting the benefit? Not the consumer who goes to the retail shop to buy them. So far as they are coming in at low prices the man who is getting the benefit to-day is the middleman. Neither the employer nor labour has had the benefit. The middleman, who has had the benefit, employs next to no labour, and he is not passing the goods to the consumer to give them the benefit of the low prices. Therefore it is no good to say to the man in the street, "Your goods are going to cost you more." The middleman knows that the advantage is residing comfortably in his 1657 own pocket, and he will not pass it on to the consumer.
Nor will the middleman always score. What happened in the case of chemical glass? I can quote the authority of one of the Committees on Trusts in connection with this matter. They found there an interesting example. They found in cases where we were not producing the goods in this country and that where, consequently, the Germans were able to import without any competition from us, the prices that were being charged by them were five or six times greater than were being charged before the War in this country. It was only where there was keen competition that the price was lowered. That is going to happen every time when you allow them to knock you out of a market. This alleged cheapness can go too far.
I come now to the question of the exchanges. No one doubts that the exchange offers very difficult problems, but because the problem of the exchange is difficult I deprecate hon. Members dealing with it in the way that has been presented to us in several speeches made by hon. Members opposite, namely, on the basis that, because it is difficult, you must find a conclusion, and then try to find some premise on which to justify that conclusion. I would say that the more difficult the problem was, and the more novel—and it is entirely novel—the more desirable it was to approach it with an open mind as a new problem, try to get the full facts, and then endeavour to arrive at a fair conclusion.
A good many hon. Members who criticise our proposals have suggested that there was something immoral in the representation which has been made by many Members with very good knowledge of what is happening in industries in their own constituencies, owing to the depreciated exchange. Why should they not give that information? Surely it is perfectly reasonable. I do deprecate the suggestion that if an hon. Member represents an industrial constituency which is suffering by reason of the collapsed exchanges, and if he speaks of it in perfectly disinterested language, therefore he should be corrupt and log-rolling, but that if an hon. Gentleman opposite says, "My business will be greatly assisted if I am still allowed free imports," that that is purely disinterested economics. There is not the least 1658 doubt that the bounty is there, and that in several other countries the collapse of the exchange creates two values, the external value and the internal value. It is not the collapse of the exchange itself which causes the trouble; if the exchange were stabilised it would not matter. The hon. Member for Harrow informed us that if we knew anything about exchanges we should know that the exchange fluctuates. If he will carry his researches a little further he will find that it is not the fall in exchange that counts, but it is the measure between the two values that matters. Where two values exist there is undoubtedly a bounty which operates in favour of the importer. Perfectly unprejudiced observers in other countries have had to face this matter, and I noticed an article by Dr. Alonzo Taylor in the "Times" the other day. Mr. Hoover, whom hon. Members on both sides will be willing to accept as a great and unprejudiced authority on economics, has given it as his considered opinion (speaking as one who, in a country where there is serious unemployment, has had to advise his Government as to the policy to be pursued) that there undoubtedly is this bounty in Germany. He said that undoubtedly it is operating as a great bounty on the export trade and that it is the deliberate policy of the German Government to keep the bounty in existence, not merely by the depreciation of the exchange, but also to emphasise and increase it by the deliberate subsidies on raw material, food and wages which are going on at the present moment.
When you find a case like that, surely it is idle to assert that we should do nothing until the exchanges get right. Here you have a country which is determined not to allow its exchange to get right and which believes it is good business not to allow it to get right. It is enabled to pay much lower wages by reason of these subsidies. It is perfectly idle to tell us in that case that all we have to do is to sit and wait for the exchanges to come right. Their policy may be bad policy economically. I think it is. I think in the long run it will be a very difficult policy for them to reverse. It may be suicidal. It very often happens that a person who commits suicide, murders somebody else first and it is poor 1659 consolation to the person who is murdered—which is the position many of our industries are likely to be in to-day—to be informed that the suicide will come to a bad end some time, after the murder has been committed. The direct effect of this process in Germany comes first to us. It has another effect upon a country where there is a depreciated exchange and which is also a competitor with ourselves—that is Belgium. Belgian competition is also assisted by collapsed exchange but it is assisted and stimulated against this country by another fact, and that is the very large importation of German goods into Belgium. The result is that where the Belgians buy German goods they are further stimulated to export to us. Do hon. Members really suggest that it pays every time to be driven out of this market and out of that market, and that there are always fresh worlds to be conquered if we have sufficient initiative? The hon. Member for the Louth Division (Mr. Wintringham) made a speech to which I listened with great interest, because it was a perfectly honest speech and carried the thing the whole way. He said, "I believe that employment will suffer, but what is to happen? Manufacturers will find that they can no longer employ their men. What should they do?" His answer was that the manufacturer ought then to go into the merchanting business, buy the goods from the foreign country, and sell them. That may be all right for the manufacturer. He may be able to make as much money as before, but is that going to be the appeal which he makes to the right hon. Gentleman the Member for 1660 Miles Platting (Mr. Clynes) to solve the question of unemployment?
Not a single suggestion of a practical kind has been made as an alternative to this Bill. The right hon. Gentleman said that you cannot legislate against unemployment. I agree that you cannot abolish unemployment altogether by legislation, but it would be criminal if in facing the conditions to-day you did not consider all the relevant questions, and consider the state in which manufactures, industries, and employment find themselves; and if you are driven to the conclusion that unemployment is being seriously increased by the effect of this depreciation, you would not only be negligent but criminal if you did not make provision to meet that state of affairs.
§ Motion made and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. G. Terrell.]
§ Debate to be resumed To-morrow.