§ Order for Second Beading read.
§ The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)
I beg to move, " That the Bill be now read a Second time."
After the Debates which have already taken place on the Resolutions in Committee and on the Report stage, it is not very easy to find anything new to say either on the general principles of this legislation or on the particular application of it in this case.
§ Sir P. CUNLIFFE-LISTER
The hon. Member will no doubt say something, but I doubt whether it will be new. The Bill imposes duties which have been recommended by the Committees of Inquiry and which have already been endorsed by this House in Committee of Ways and Means. I suggest that, on the Reports of those Committees, these duties are fully justified. That justification has been endorsed and confirmed in Debate by a number of speeches from Members who have shown an intimate knowledge of and acquaintance with the trades under discussion. The duties relate to three industries—cutlery, gloves and incandescent mantles. Each of these is an important industry, either by reason of the volume of employment it provides or by the character of the industry. Cutlery and gloves are among the oldest industries in this country. The fabric glove branch is a new branch of an old industry, but a branch which, established during the War, has made considerable progress in recent years in spite of great difficulties.
Unless one is to adopt an entirely non possumus altitude, I venture to submit that the case for these duties is fully established. In every case there has been a serious reduction in employment. In the case of cutlery there is a reduction, taking hours and numbers together, of no less than 42 per cent. There is a great reduction in employment in the leather glove industry. In recent years, although the consumption of gloves has doubled in 510 this country, the quantity made at home is as low as it was when that total consumption was only half what it is to-day.: We have discussed those aspects already at considerable length, and it has been found that, not only is employment reduced while import are steadily increasing, but that skilled men are thrown out of work and kept out of work. Whereas in days past lads came in to be apprenticed to the cutlery and glove industries, in many cases going into what was an historic family trade, apprentices are not now coming forward, not because the industries themselves are not efficient but because of the competition in wages and hours which they have to face from abroad. They are losing faith and losing hope in the industry- in which their families have worked for many years, in many cases for generations.
The gas mantle industry rests on a rather different footing. It is, if you will, a comparatively small industry, but it is vital to the security of this country as being—I do not think anybody can deny it—the one commercial outlet for thorium and cerium, which are essential to the security of this country. During the War we found out the vital need of these elements, these rare metals, in every Service—in the Air, in the Navy, in every branch of gunnery, for searchlights. It is essential to have the production of thorium and cerium, and the one chance of maintaining that production is to give to those engaged in the extraction of those rare metals the one commercial outlet which there is for them, and that is in the gas mantle industry. The Members of this House who, without distinction of party, supported' the Key Industry Duties under the old Safeguarding of Industries Act, because they regarded the maintenance and development of those industries as vital to national security, are bound, I submit, to support the present duty on gas mantles.
It was on the initiative of the right hon. Gentleman, the Member for West Swansea (Mr. Runciman) that we first discovered the great importance of these elements. It was he who said that never again must we be without them. I hope he is not going back upon the valuable work he did and the valuable experience he gained in the War. It is said by some hon. Gentlemen that to carry out these proposals is something 511 unduly martial. It is nothing of the kind. To be prepared with the essential elements of defence is not a militarist policy, it is the best and only insurance of peace. These, then, are the duties which are proposed.
We suggest as the term for which they should run a period of five years, a reasonable period. To propose a less term would be ineffective for the purpose that we seek and would be undesirable, as has often been pointed out from both sides of the House, from the fact that it would create a feeling of insecurity and uncertainty in these industries and in trade generally. When, on a previous occasion, we were discussing how this policy was to be carried out, we on this bench gave an undertaking to this House that the House would have a full opportunity of discussing any proposals upon their merits and of voting upon them. The House has had that opportunity, and Members have already voted for these duties by considerable majorities, and I ask them, in giving a Second Reading to this Bill, to confirm on their merits the proposals which have already been accepted. The duties are imposed by Sub-section (1) of Clause 1 of the Bill, and by the First Schedule, at the rates which were proposed by the Committees and which have already been approved in Committee of Ways and Means. Subsection (2) contains a provision giving preference to goods manufactured within the Empire. Sub-section (3) provides that double duty shall not be chargeable, but that if there is an article which could be subject to two rates of duty, only the higher duty shall be charged—the duties shall not be cumulative.
§ Captain WEDGWOOD BENN
In the case of gas mantles, will a duty of 33⅓ per cent. be charged on the value of the mantle, and also, under Part I of the Safeguarding of Industries Act, on the chemical constituents of the mantle?
§ Sir P. CUNLIFFE-LISTER
The hon. and gallant Member will sec that in Subsection (3) of Clause 1 it is provided that:Where any article chargeable with duty under this Act is also chargeable with any other duties of Customs, the highest duty only shall be charged.Sub-section (4) together with the Second Schedule applies to these duties all the 512 usual Customs provisions which have been discussed in this House and applied to other duties. The Second Schedule applies Section 13 of the Safeguarding of Industries Act, 1921, which exempts goods in transit and goods which are brought in in bond and shipped from bond. It also applies Sub-section. (5) of Section 13 of the Finance (No. 2) Act, 1915, which gives power to exclude from the operation of these duties goods of small value, and which is a very useful provision in administration. The next provision applied is Sub-section (2) of Section 6 of the Finance Act, 1925, which provides that goods which are exported to undergo a further process and are reimported into this country shall pay duty only on the added value. The Second Schedule also adopts Section 6 (3) of the Finance Act, 1925, which provides for the case of goods which have paid duty and not been used in this country, and Sub-section (1) of Section 10 of the Finance Act, 1925, which is the usual valuation Clause. Sub-section (2) of Section 10 of the same Act, which contains the usual provision for the reference of disputes to a referee, is also included. The last of these provisions which is made to apply is Section 11 of the Finance Act, 1925, which provides that goods shall not be dutiable if they are brought into this country a second time and have already paid duty, that duty not having been allowed as a drawback.
I think that this Bill not only confirms the decision of the House in Committee of Ways and Means, but provides by the Schedule all those facilities for the entrepot trade which this House approved of upon a previous occasion. The articles which are brought in for the imposition of duties have been subjected to a great deal of criticism in matters of detail. A good deal has been said in regard to the procedure we have adopted as well as the principles upon which we have proceeded. I should like to say a word or two about procedure and principles. The procedure which has been challenged is one which was fully explained to this House by the Prime Minister, the Chancellor of the Exchequer, and myself, and was approved by this House on a previous occasion. Surely the procedure which we are adopting now is that which a well-known purist in finance said was a proper procedure to adopt. I remember when the 513 old Safeguarding of Industries Act was introduced how the "Parfit Knight of Leith" plunged into the lists and said that this was an administrative outrage.
§ Sir P. CUNLIFFE-LISTER
And he also said that we were violating precedents of 250 years and tradition going back 700 years. The hon. and gallant Member further stated that, if this House was worthy of its precedents and tradition, it would adopt a proper procedure in this instance. That is exactly what we have done, and I am shocked to find that the hon. and gallant Member for Leith, when confronted with purity at much closer quarters, finds it much less attractive.
§ Captain BENN
I presume the right hon. Gentleman does not intend to address himself to the real issue, which is, that a taxing Bill should be under the direct control of the Treasury?
§ Sir P. CUNLIFFE-LISTER
He must not assume that all parties are as divided in their own ranks as his own. On this side and in this Government there is complete unity, and although the Chancellor of the Exchequer and I are not always present on the same occasion, that does not indicate any difference of opinion between us, but it indicates rather that we are busy with our work, and that we have complete confidence in one another on all the issues which are presented to this House. Therefore the hon. and gallant Member for Leith has really got what he asked for, and I am surprised that he is not more grateful to us for what we have done.
Exception has been taken to the form of inquiry by these Committees, but I observe it is only when a Committee recommends a duty that it comes in for criticism, and when it rejects a claim then the Committee is all right, although it may be the same members and the same personnel who reject a claim for a duty in one case and confirm a claim in another case. What the hon. and gallant Member wants is a very simple procedure. He wants a Committee constituted of people who believe that in any circumstances to impose a duty is to sin against the light. The hon. and gallant Member requires a Committee which will declare that none of these duties should be im- 514 posed, and which would accept all the evidence against those duties and no evidence in favour of them. I observe that the applicants before these Committees have been subjected to the most stringent cross-examination by able members of the Bar, and the fullest possible case has been made out against them.
§ Mr. MACKINDER
If that is so and these cross-examinations have taken place, how is it that hon. Members are not able to find out to what such cross-examination amount?
§ Sir P. CUNLIFFE-LISTER
In these matters we are following the precedent laid down on previous occasions}, and on one occasion by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). What the majority of this House desire is that these Committees shall be unprejudiced and shall sift all the facts, and I believe the Members of this House and industries generally are grateful to these Committees for what they have done. I am perfectly certain that if we had not set up such Committees at once, hon. Members opposite would have criticised us for not doing so.
§ Sir P. CUNLIFFE-LISTER
Yes, I will. I selected people with full qualifications to conduct a business-like inquiry, and I selected them without any regard for their political opinions. In regard to many of those who constitute these Committees, I do not know their politics, and they have been selected as they were under the old Safeguarding of Industries Acts, because they had every qualification for the task, and experience has proved that they have been quite competent to perform that task. The precedent we have followed is an old one, and it is one which was laid down by the right hon. Gentleman the Member for Carnarvon Boroughs when he was dealing with the Safeguarding of Industries Acts. These Committees have been selected just in the same way as they were by the President of the Board of Trade when the Balfour of Burleigh Committee was set up by Lord Oxford. We have followed all those precedents with regard to the setting up of these Committees.
§ Sir P. CUNLIFFE-LISTER
At any rate, I have followed the precedent set up by the Leader of the party of the hon. Member who has just interrupted me. In the matter of setting up these Committees and the financial procedure we have adopted, so far from treading the primrose path of bureaucracy we have followed the sacred principles of finance fortified by 700 years of practice and tradition. So much for procedure. Then we have been attacked in regard to the principles we have followed, and it has been said that we have violated the pledge which we gave at the last Election. I think the electors have shown at the last two bye-elections that they approved of these principles.
§ 5.0 P.M.
§ Sir P. CUNLIFFE-LISTER
One of the principles upon which we stood at the last Election was safeguarding, and there certainly was not a Minister who did not stand on that platform. I do not think there was a single candidate on our side who did not declare that he stood for the safeguarding of industry, and I remember that the Chancellor of the Exchequer made a most eloquent speech upon it, and therefore we are simply carrying out principles for which we stood at the last Election. Hon. Members opposite declare that what we are doing is not safeguarding, and they assert that we are adopting a general tariff. We are only proposing three duties to-day, and yet we are told that this is a general tariff. This kind of argument reminds me of the policeman who in moving on an unfortunate couple said " Two is a crowd if I say it is." Even when Lord Oxford was leading a party in this House and was the head of the Government he laid down this principle in his Paris Resolutions, which were the policy of his party when he had the responsibility of office, and he laid down the principles which we are carrying out to-day. As for the right hon. Gentleman the Member for Carnarvon Boroughs he actually put those principles into the Safeguarding of Industries Act, and with him at that time it was no unauthorised programme, but one on which the Liberal 516 leaders were united. The right hon. Member the Member for Carnarvon Boroughs and the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) were completely at one on this policy, and it was largely through their combined efforts that the policy of safeguarding was passed through this House in the original Safeguarding Act. Therefore we are in direct succession, both in precept and in practice.
§ Sir P. CUNLIFFE-LISTER
No. I am not slating him at all. I am showing how admirable were the principles which he inculcated into all his colleagues when he was leading the Government.
§ Sir P. CUNLIFFE-LISTER
The only other argument which can be advanced against this method of procedure is that there is some breach of our pledge, because instead of putting on discriminating duties we are putting on general duties. But there, again, it has been emphasised from the Socialist benches and the Liberal benches that the cardinal feature of British commercial policy ought to be most favoured-nation treatment and you cannot have that with differential duties. Therefore, if you are to carry out this policy of safeguarding, to which we are pledged, the only effective way of observing our traditional policy and our treaty obligations is by general duties and not by differential duties. One of the treaties which has been raised in Debate is our Commercial Treaty with Germany. If we did put on differential dirties we should be committing a breach of that Treaty. It is because the duties are general and not differential that they are not a breach of that or any other treaty. Moreover, as I have already pointed out, our right to impose duties for the purpose of safeguarding is not only implicit in our commercial treaties but it is explicitly asserted and re-affirmed in the Protocol of the Commercial Treaty with Germany.
The only other criticism which was advanced—and it was an argument which it was difficult to apply, I should think, 517 at the present time—was that by restricting our imparts of these limited classes of goods we were going to damage our trade. To anyone who has watched in recent years the course of our trade balance, the anxiety must be not how to increase our imports, but how we were to reduce our imports. Things are going better now in the balance of trade from one cause or another than they were a year ago, but we cannot be satisfied with our trade balance today. Before the War we we had on the whole balance of trade a great annual sum for investment overseas in the development of new markets and to create now trade. We want more money and ever more money saved on the trade balance in order to invest it in the development of new markets and mutual trade within the Empire, and the anxiety which I should have thought would have been felt in all quarters of the House would be to increase the balance available for that investment and not to diminish it.
It has been said that we are going outside our pledge and that the Prime Minister has been guilty of some breach of his pledge in pursuing this safeguarding policy. But what was his pledge? It was a two-fold pledge. It was a pledge, on the one hand, not to introduce a general tariff, and we have not the least intention of introducing such a tariff. But it was a positive pledge as well. It was a pledge, in proved cases, to safeguard our own industries, and he and we should be just as guilty of a breach, of faith if we failed to safeguard industries in proved and necessary cases as we would be if he were to introduce a general tariff. There are many Liberals who in the past have been pledged to this policy, but what about the Socialist party. Where do they stand?
§ Sir P. CUNLIFFE-LISTER
I want to follow that up. They are opposed to the Liberals or one section of the Liberals to-day, because, unlike the Liberals, they do demand action. We shall fight our battles as to whether Socialism is right or wrong, but their contention, or the contention of the majority of them, to-day is that even given a Socialist State and a Socialist basis of Society, action of some kind to safeguard againt unfair competition is going to be necessary. 518 They base that, as we base it, perfectly sincerely upon a determination 10 maintain and to raise the standard of living of our people. They recognise that in proved cases you must safeguard. How do they propose to do that? They propose to do it by what is a very stringent provision—namely, by prohibition. Prohibition is a policy far from the academic Free Trade principles, so dear to the heart of my hon. and gallant Friend the member for Leith (Captain Benn). Even the right hon. Gentleman the Member for Seaham (Mr. Webb), beats a hesitating retreat, and I think that the only one who is left on the burning? deck is the right hon. Member for Colne Valley (Mr. Snowden).
§ Sir P. CUNLIFFE-LISTER
He may have one or two companions, but I do not belive that is the sense of the majority of his party. If it were, they could not have produced their manifesto in favour of prohibition. But is their course practicable? It is one thing to set it out in a party manifesto, and it has great attractions, but would you be able to carry out that policy if you had the power in office, and were going to take, as you would be bound to take and, I am sure, honestly would take, the most effective way you could to safeguard the standard of living in our own country? You would find that that policy of prohibition, attractive as it appears, would, in practice, cut across practically every one of your commercial treaties, and you would therefore find that you would either have to denounce all your commercial treaties with all the advantages of most-favoured-nation treatment and the special tariff concessions and so on which those treaties give, or you would be driven back on some other alternative, and the only alternative you could be driven back on would be the alternative we are proposing today, that of a duty. As I have said, we shall always contend among ourselves as to what ought to be the ultimate economic basis of society, but meantime, having the common objective of maintaining our industry and the standard of life of our people, cannot we join in a practical measure to safeguard the trade by which we live and to ensure, maintain, and improve employment and the standard of living of our people?
§ Mr. SNOWDEN
I beg to move, to leave out from the word " That " to the end of the Question, and to add instead thereof the words:This House declines to give a Second Reading to a Bill which is designed, under the pretext of mitigating unemployment, to establish a system of tariffs on imports for which the Government has no mandate from the country; and this House declares that protective duties will not solve or mitigate the evil of unemployment but, on the-contrary, will inflict serious injury upon our vital export trades, and, realising the urgency of the unemployment problem, calls for the energetic development of the nation's productive powers on the lines of the public ownership and control of land and industry.The right hon. Gentleman ended his speech by appealing to Members of my own party to join with him in practical proposals for maintaining and improving the standard of living of our people. I can assure him and the Government that we shall always be ready to support any party which brings forward practical proposals which are likely to attain that purpose. But we oppose these duties because we not only believe but we know it has been proved beyond the shadow of a doubt by all practical experience, that the effect of these proposals in operation will be to degrade the standard of living, to increase the cost of living, to hamper industry and to inflict a very serious injury upon our great export trade. The President of the Board of Trade began his speech by saying that after the prolonged Debates during the Ways and Means Committee stage and Report stage it would be difficult to find anything new to say. I can quite sympathise with him in that feeling. It may be difficult for those who took part in the previous stages of the discussion upon these proposals to say anything new. But I am looking forward, and I am sure every Member on this side is looking forward, to the intervention of the Chancellor of the Exchequer in our Debate to-day, when I hope, with that remarkable originality which he possesses, the House will be treated to something new on these matters. We very much regretted the absence of the right hon. Gentleman during the previous Debates upon these proposals. We missed his good humour, his scintillating wit, his agility and his ability to slip out of every difficult situation, whatever the sacrifice involved might be, and I am quite sure that we shall have at the close of the 520 Debate this evening another example of these unique qualifications of the right hon. Gentleman.
This Bill is described as a Safeguarding of Industry (Customs Duties) Bill. It is a Bill which proposes to levy taxation on the people. A pledge was given by the Prime Minister, when we were discussing in the early part of this year the proposed procedure under the Safeguarding of Industries scheme, that these proposed duties would be introduced and embodied in a Finance Bill. That was a very definite statement by the Prime Minister and it was repeated so late as last Friday when the Prime Minister from his place said that to-day the Second Reading of the Finance (No. 2) Bill would be taken. But now this proposal to impose taxation is put before the House of Commons, not by the Chancellor of the Exchequer whose responsible duty that is, but by the President of the Board of Trade. We have heard a great deal during the last few days about the citation of century-old precedents. The President of the Board of Trade this afternoon based his case for these duties very largely upon precedents, which, he said, had been provided by other political parties. I am not in the least concerned with the controversy between the President of the Board of Trade and the members of the Liberal party. If some hon. and right hon. Gentlemen who are sitting below the Gangway care to deal with what the right hon. Gentleman has said, we shall listen with pleasure, but it is not a discussion in which we are taking part.
What is the position with which we are faced? This afternoon we have a Revenue Bill—a Bill to impose duties— and it is placed in charge not of the Chancellor of the Exchequer but of the President of the Board of Trade. And how have these proposals originated? All who have taken part in the previous discussions upon these proposals knew that all the argument, all the destructive criticism advanced on this side of the House, has been met by the President of the Board of Trade with one hackneyed statement, namely. " This is what the Committee recommended." He has never attempted by any serious argument to justify these proposals upon their merits. So the Committee say, and, therefore, the House of Commons must close its eyes, open its month, and swallow these 521 things because they are recommended by an outside Committee. I want to ask the House of Commons, is the House of Commons—the Chancellor of the Exchequer, of course, already has—going to surrender its right, its duty, to regulate taxation and to impose taxation, to a committee of three persons, usually unknown persons, who have been nominated by the President of the Board of Trade? That is practically what we are asked to do this afternoon.
Near the end of the right hon. Gentleman's speech he referred to a question which has often been raised in the course of our Debates on these safeguarding proposals, namely, whether the present Government have a mandate from the country for the imposition of these duties. It cannot be denied that the Prime Minister at the last General Election said that he would safeguard efficient industries, and would introduce proposals to that effect; but the Prime Minister said something more—he said that he would not use these safeguarding proposals as a stepping-stone towards a general tariff or a general system of Protection. On a later occasion he said he would not introduce Protection by a back door. Well, I think it would be impossible to invent a phrase which more accurately represented what these proposals are than the introduction of Pro-lection by a back door. I remember a speech, I believe the first speech that was made by the Chancellor of the Exchequer after he took office, upon these proposals, and in that speech he said that if these duties were applied—I am not quoting his exact words, but I am sure he will not say I am in any way unfairly representing what he said—if these duties were applied to more than a limited number of industries, then the Prime Minister's pledge would be seriously impaired—
§ Mr. SNOWDEN
Yes, seriously affected. May I put this question to the right hon. Gentleman? I hope he will answer it when he speaks later in the Debate. How many industries have to be protected before the pledge of the Prime Minister is seriously affected? We have had the McKenna Duties reimposed—duties on motor cars, cinema films, Jews' harps, and a number of other key industries in this country. 522 The right hon. Gentleman has protected the silk upon the whiskers of a cat doll, lace has been protected, and now we are asked to protect cutlery—a thousand different articles of cutlery—a great variety of gloves, gas mantles, and we were told by the Prime Minister yesterday that the Government intend next Session to proceed with the proposal to impose a duty upon innumerable varieties of paper. A number of other applications are before the Board of Trade, and I see in the paper this morning that Sir James Craig says it is likely that the linen industry may be protected. I want the Chancellor of the Exchequer to tell us whore we are going to stop, and at what point the pledge of the Prime Minister not to introduce Protection by a back door will be affected. We have had about 20 duties imposed this year—
§ Mr. SNOWDEN
Not far from 20. There were half-a-dozen under the MeKenna Duties. My hon. Friend the Member for Mosoley (Mr. Hannon) knows a great deal more about it than the hon. Baronet the Member for Bournemouth (Sir H. Croft). The hon. Member for Moseley is a practical business man, while the hon. Baronet is a mere theorist. I want to ask the Chancellor of the Exchequer how many trades have to be protected before the pledge of the Prime Minister will be affected. I hope that when he comes to speak this evening, he will deal with that question.
§ Mr. SNOWDEN
Many of these are protected under the McKenna Duties—Jews harps, for instance. What are of far more importance, however, are the views expressed by the supporters of the Government during the Debate on these proposals. Do they regard these proposals as the first steps on the road to a general tariff? They do. Nobody who has been present during the Debates of the last few days can deny that. Over and over again, from the benches on the Government side, hon. Members have risen and said that these duties were pettifogging, were piffling, were practically of no use at all except that they were an earnest of the Government's intentions. They were, in other words, the back door to a 523 universal system of Protection. Lord Birkenhead, whose remarks upon this matter I quoted in my speech last week, said the same thing in a public speech a few days ago.
The President of the Board of Trade said that the case for these duties had been established by the reports of the respective committees. I venture to state again that I have never seen the reports of any committees upon any question which so utterly failed to establish the case they recommended as all of these committees' reports do. They have not established, in the first instance, the fact that these industries are of substantial importance; they have, not established the fact that there is abnormal competition; they have not established the fact that there is abnormal unemployment; and the President of the Board of Trade was utterly wrong when he stated in his speech just now that the imports of these commodities from abroad are growing, and that unemployment is increasing. It is only necessary to refer to the figures embodied in the reports themselves to prove that that statement is utterly without foundation.
There is this difference, I may say, between the old safeguarding and the present safeguarding proposals. The President of the Board of Trade said that, so far as these particular duties are concerned, they must be of general application, because, if they were discriminatory, we should come up against the most-favoured-nation Clauses. But that is not in the White Paper. The terms of the "White Paper do not justify a tariff upon countries where the conditions are as good as or better than they are in this country. There is nothing in the terms of the White Paper to justify a duty upon goods which come from the United States of America. Therefore, to make these specific duties universal in their application is a violation of the conditions of the White Paper. In no case has one of these committees proved any one of the heads which are embodied in the White Paper.
The President of the Board of Trade advocated these proposals on the ground that they would improve employment and stimulate trade. I want once more to express my indebtedness to the hon. Member for Moseley for providing the 524 opponents of such duties with such effective material as is supplied by his questions addressed so the Minister of Labour. He addressed a question two or three weeks ago to the Minister of Labour in regard to employment in the motor industry and in the lace industry, and the figures given by the Minister of Labour prove that in both those cases there are more people out of work than there were before these duties were imposed. It is no use the hon. Member for Macclesfield (Mr. Remer) shaking his head; the figures are there. I rely also upon a question addressed by the hon. Member for Moseley to the Minister of Labour only two days ago, the answer to which appears in the OFFICIAL REPORT issued yesterday. The hon. Member for Moseley asked the Minister of Labour to give the figures in regard to employment and unemployment in Coventry, Wolver-hampton and Birmingham at different periods.
Let me give the House some of these figures. In July, 1924. the duties upon imported motor cars were taken off. On 1st July there were 23,860 persons in Coventry employed in the manufacture and repair of motor vehicles. After 12 months, during which there had been no duties in operation, the number had risen to 28,300. [An HON MEMBER: "Owing to dumped goods!"] I have listened to most ridiculous statements by advocates of Tariff Reform, but I really give the hon. Baronet the plum for having made the most ridiculous statement ever made. I beg pardon of the hon. Baronet the Member for Bournemouth (Sir H. Croft). I really am not surprised that that remark emanated from the corner in which be sits. If the contention of the advocates of Protection were right, five or six years after the protection of the motor industry there ought, to have been no unemployment, especially in an industry like the manufacture, of motor cars, which is an expanding industry, and however much Protection may injure a trade, it would be very difficult indeed ever to completely kill a rising industry.
§ Mr. HANNON
will the right hon. Gentleman give the House the figures for unemployment in these industries at the end of that period
§ Mr. SNOWDEN
At the end of five years or so of protection in the motor 525 car industry there were 9.4 per cent. unemployed in Coventry, 13.8 per cent. in Wolverhampton and 15 per cent. in Birmingham. Tariff Reform apparently does not mean work for all. Now I will answer the question of the hon. Member opposite. I think he will agree that we have not yet had sufficient experience since the duties were re-imposed to come to any very definite conclusion. We will see how the figures stand in 12 months' time. However, during the time the duties were off unemployment fell in Coventry to 5.3 per cent., in Wolverhampton to 10.5 per cent. and in Birmingham to 8.6 per cent., and the figures of unemployment to-day .stand just a little higher than when the duties were re-imposed. There you have, not from some prejudiced Cobdenite Free Trader, but hard and incontrovertible facts supplied by the Protectionist Minister of Labour. It is quite clear that you have no guarantee that the imposition of these duties will increase employment. No one knows better than the Chancellor of the Exchequer, no one has exposed more effectively and more eloquently (he fallacy of the argument that you can increase employment by making things dearer. [Interruption.] Does the right hon. Gentleman say that the re-imposition of these duties three or four months ago is the reason why motor cars are cheaper?
§ Mr. SNOWDEN
If they are, the Chancellor of the Exchequer is much wiser than irresponsible Members below the Gangway. As a matter of fact, the price of motor cars did come down when the duties were taken off 12 months ago, but one would expect, tariff or no tariff, in a new industry, an expanding industry, an industry where improvements in the method of construction are taking place every day to sec some progressive reduction. Therefore, so far as that is concerned, it is not of very great value.
However, the main case advanced in support of those duties is that they are going to curtail imports, and we are constantly hearing questions put by Members on that side of the House which seem to imply that they are under the illusion 526 that imports are bad for trade. The hon. Baronet the Member for Bournemouth, whenever a question is put as to imports of particular articles, gets up and says, " How many British workmen have these imports robbed of work? " Tariff Reformers can never see but one thing. They appear to be mentally incapable of taking an all-round view. Therefore, in the words of the Chancellor of the Exchequer, may I try to instruct them upon this question of the effect of imports upon the trade of the country. I am not going back to the days when the Chancellor of the Exchequer was a lonely Free Trader in the Unionist ranks. This extract is taken from a speech delivered quite recently. He asked the question,Is it really true that our present unemployment is caused by foreign imports and that it would be cured by shutting thorn out? I studied the trade of Britain, for more than 20 years and I have never heard such a doctrine seriously propounded by any high responsible authority.Again if hon. Members will take the trouble to go through the trade returns, say for the last 30 or 40 years, and make two parallel columns showing imports and unemployment, they will find that an increase of imports is almost invariably followed by a reduction in the volume of unemployment. Imports are very high at present, and yet the Government are taking credit to themselves for having considerably reduced the number of unemployed during the. last 12 months. I might quote from the speeches of the right hon. Gentleman quite a number of other extracts showing that he certainly does not fear imports coming into the country. He said on another occasion:I do not mind even if we do become dependent on foreign nations, because we know that by that means we are making foreign nations dependent on us.A very wise saying and I entirely agree with it. We say that every Englishman shall have the right to buy whatever he wants, wherever he chooses, at his own pleasure and without restriction or discouragement from the State.
The imposition of duties is bound, as our Amendment says, to seriously affect our export trade. I pointed out last week that it had already had that effect in the cotton and lace industry, and it is not difficult to understand. Take the case of cutlery. The export trade is pro- 527 bably more important to Sheffield than is the home trade. Sheffield exports more than twice as much cutlery as is imported into this country. What do we need most of all to increase employment and to stimulate trade? To increase our exports. The President of the Board of Trade referred to the adverse trade balance and said the way to deal with it was to reduce imports. That is not the way to deal with it at all. The way to deal with it is to increase exports, and when you put a duty upon imports from foreign countries upon articles in which this country has a large export trade, you are striking a destructive blow at the export trade of the country, because this is what happens. The aim of all tariff-mongers is to stop imports and thereby reduce unemployment. If you succeed in stopping imports you do not destroy the trade of the exporting country, but drive it into other markets, and therefore our exporters meet the competition of these foreign rivals in a much more severe form. It is our export trade that needs a stimulus to-day. Our home trade is prosperous. Our home trade never was so prosperous as it is to-day. It is employing more people to-day than it ever did. Therefore, it is our export trade that needs a stimulus.
What would be the effect of these duties upon prices? The Chancellor of the Exchequer made an interjection a moment ago when I was speaking about motor cars, and said the duties had not increased prices. Would the right hon. Gentleman say that the effect of the imposition of a duty upon an old industry, upon a stable industry, would not result in increasing prices in the home market? I am quite sure he would not say that. If he has the audacity to make that statement to-night he recants everything he has said in his past speeches and writings in defence of Free Trade. Of course, we know that import duties will raise prices. That is their intention. What advantage would Protection be to the trades in this country unless it secured the home market for them? That is the Prime Minister's own statement, that the purpose of these safeguarding Measures is to secure the home markets for the manufacturers in this country. There was a very interesting incident during the recent bye-election at Ripon. A statement was 528 made by the Conservative candidate, who, on personal grounds, all who knew him in the House of Commons in the past will be delighted to see back. Here is a quotation from a newspaper report.
Major Hills said:Now I want to say a word to the ladies. Silk stockings are dearer, I understand. Well, I am sure you will not mind paying a little more for your stockings if it is going to help the Empire.A later speaker at that meeting, evidently, was not altogether satisfied with the way in which the Tory candidate had handled this question of an increase in the price of silk stockings. He said:The price will not go up under the Safeguarding Act, because Mr. Baldwin will see to that.That statement rather rouses the imagination. One imagines the Prime Minister sitting like Canute and issuing his command that the tide of economic law shall turn back. The President of the Board of Trade claimed that they were returned at the last Election pledged to do these things.
§ Mr. SNOWDEN
I wonder if they secured support by making such appeals as this to the electors. The only real argument that I heard advanced from the other side during the Debates last-week was this—it was made by more than one speaker, but by no speaker more effectively than the hon. and gallant Member for Uxbridge (Lieut.-Commander Burney): " Our factories and workshops at the present time are not working their full capacity. Therefore, overhead charges bear an undue proportion of the cost of the finished article. Fill our workshops with orders so that they can work to their full capacity and they will be able to cheapen the cost of the articles they manufacture." Nobody would say that there is not a great amount of truth in that, but when it is a protected industry the consumer has no guarantee that he will get a reduced price. On the other hand, he has the assurance of all past experience that the advantage will go wholly to increase the profits of the manufacturer.
There is a much more effective and conclusive answer. We say that if these works have a capacity for production 529 which is not used now, the proper thing to do is to eliminate the most inefficient of these factories and workships and concentrate production in the most efficient factories. That is one of the main reasons why American production, even with high wages, is much cheaper than in this country.
§ Mr. SNOWDEN
I wonder how many times we shall have to tell the hon. and gallant Member for Bournemouth (Brigadier-General Sir H. Page Croft) that—
§ Mr. SNOWDEN
I apologise to the hon. and gallant Baronet. I always pay respect to interjections from the hon. and gallant Baronet, and if I had not thought that he had intervened I would have proceeded with my remarks. I was dealing with the question of the concentration of production in the most efficient factories. This point was made by the Prime Minister in a very admirable speech which he delivered during the summer. I hope. hon. Members will permit me to read one portion of that speech. It is well worth hearing. After having made an appeal for an increase of 10 per cent. efficiency in English production, a thing which he said English industry was quite capable of doing, he said:We are strongly individualistic, and we all like to have a day off. I like it as much as anyone, and I am having one to-day. But we cannot afford these luxuries to-day, and I should like to feel certain that all those who are directing industry have come to realise that we are in a different world from the world before the War; that we are up against the keenest competition that we have ever been up against, and that unless we can sell our goods to meet that competition, we shall not sell them at all. To do that in many ways we shall have to throw aside old methods and practices. Businesses in the same trade will have to come together, they will have to concentrate on modern plant, they will have to scrap the old. and nothing but the using of the best brains among them and the best endeavours on the part of all concerned will enable us to pull through these times.It is not by these piffling and pettifogging duties that you are going to restore prosperity to industry. It can only be done by bringing your inefficient workshops up-to-date, and by thoroughly 530 equipping them, in their management with the best brains and in the works with the most up-to-date machinery. A 10 per cent increase in the efficiency of British production would, I believe, restore our export trade to the pre-War percentage.
What do we find in these reports which have been presented in connection with this Bill? Take Sheffield. We were told a great deal about the 7,000 people employed in the cutlery trade in Sheffield. How many factories are there? Hundreds. Under modern conditions, if foreign competition is to be effectively met, it would not be too big a factory to have all the 7,000 cutlery workers of Sheffield in one factory. My hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) quoted reports showing the out-of-date, insanitary, badly-equipped factories in Sheffield. The hon. Member for Worcester (Mr. Greene), dealing with the glove trade, told us a good deal as to the reason why, in his opinion, there should be a duty on foreign gloves. He said he had gone into homes late at night in his constituency and found old women, spectacled old women, working by lamp and candle light, sewing gloves. He said the glove industry was established in Worcester about 700 years ago. There you have an industry being carried on to-day just as it must have been carried on 700 years ago. How can you expect an industry carried on under those conditions to be efficient? It cannot possibly compete against the well-equipped and modern factories on the Continent of Europe. We submit, as an alternative proposal to this Measure, the reorganisation of British industry, its better equipment and the better utilisation of our national resources.
These proposals are put forward as the Government's contribution towards solving the unemployment problem. Could there ever have been a more striking instance of disparity between the magnitude of a problem and the proposal for palliating it? After having been in office for 12 months the only thing the Government can suggest by way of mitigating unemployment is to put a duty on gas mantles, on cheap German cutlery and on gloves. What has become of the other proposals which from time to time the Government have mentioned in debates upon unemployment? The Prime 531 Minister has not honoured the House by his presence this afternoon. I wonder whether we should be justified in thinking that his interest in the unemployment question has weakened? [HON. MEMBERS: "No!"] I hope not. Ho spoke in a Debate on this question which was raised by my party a few months ago, and he told us what great schemes the Government were considering. He said that they were considering the question of land settlement. Are they still considering it?
Mr. DEPUTY-SPEAKER (Mr. Hope)
The right hon. Gentleman cannot deal with proposals in regard to land settlement on this Bill. That is quite out of the scope of the Bill.
§ Mr. SNOWDEN
I respectfully submit that these proposals are being put forward as a palliative for unemployment, and I further respectfully submit, that we are justified in suggesting other Measures which we feel would be more effective than the proposals which the Government are submitting.
I do not know how the right hon. Gentleman's argument will develop. We cannot have a debate on the whole subject of unemployment.
§ Mr. SNOWDEN
I certainly was not at that stage—whatever I may have intended to do later—arguing the whole question of unemployment. I was asking the Government about the Measures which they have from time to time suggested for dealing with unemployment. All that they are now submitting to the House of Commons are these pettifogging and piffling proposals for putting duties on these things. What has become of their pledge to deal with land settlement? What has become of their various relief schemes and with their electricity proposals? I submit that every one of these reforms, if carried out energetically and exhaustively, would do infinitely more than the present proposals will do, even if they realise the most sanguine expectations.
We are opposed to these proposals because they are ineffective and they will be ineffective. Instead of increasing employment, they will decrease, employment. Instead of stimulating our foreign trade, 532 they will hamper our foreign trade. If they aspire to be n remedy, they are no more than a mockery. The party opposite obtained a large majority in this House, but let it be noted it is not a majority of the country. I have on more than one occasion reminded the party opposite that although they are largely numbered in this House, they are in a minority among, the people of this country. There is nothing new about that. There is nothing at all new in the Tory party imposing its minority will upon the country. The Chancellor of the Exchequer smiles. He knows how true that is, because in a. speech, at a comparatively recent date, he said:The Tory party is always trying to rule the people by sumo minority plan. It has always been their method.
§ Mr. CHURCHILL
The right hon. Gentleman did not show any objection to ruling by a minority only a year ago.
§ Mr. SNOWDEN
There is no force in that argument, for we did not rule as a minority. For the passing into law of our Measures we relied upon the support and the votes of Members of this House who represented a majority in the country. For the reasons I have stated, we shall vote against the Second Reading of this Bill, and for those reasons I have moved the Amendment. I have just described the Government's proposals as a mockery of the sufferings of the unemployed, and I am going to conclude in the words of the present Chancellor of the Exchequer:I say to the party which is responsible for these proposals, let them take their discredited trash where they got it from— Brummagem.We say to our Tory friends the country is not prepared to accept your quackery.
§ Mr. LAWSON
Do I understand from your ruling, Mr. Deputy-Speaker, that we are not to be allowed to discuss the latter part of this Amendment? Does it not follow, if the Amendment is accepted and printed on the Paper, that we can follow the line of discussing what it contains?
I do not know yet how the argument will develop. All that I said was that the whole question of unemployment could hardly be raised on this Bill.
§ Mr. LAWSON
Are we precluded from discussing alternative methods to those proposed by the Government?
§ Lord HUGH CECIL
I will detain the House for only a brief period, and I intervene in the discussion as not precisely holding the position either of my right hon. Friend who moved the Second Heading of the Bill, or that of the right hon. Gentleman who moved the Amendment. Certainly, the Amendment is equally unacceptable to the Protectionist and the Free Trader, because the right hon. Gentleman proposed a solution which is anything but a solution of freedom. He intends not a limited control, but a much more far-reaching control—that all land and industry should be in the hands of the Government, and under official administration. That certainly is not Free Trade, whatever else it is. Personally, I am a Free Trader, and I look with great distrust alike on a system of administrative control such as the Amendment foreshadowed, and on the much more moderate restraint of free exchange which is effected by import duties. Nevertheless, the criticisms which I am about to make upon this Bill are not founded upon devotion to freedom, or the principles of laissez faire, however strongly may be the case made from experience in favour of that principle. I am rather inviting the House to view the controversy that is excited over these duties from the broad point of view of the alternative between abundance and restriction.
It is one of the misfortunes of economic debate that nearly all the things that are worth saying are so obvious that to recite them is to insult the intelligence of the audience which one is addressing. Still, if I may be pardoned for a few truisms which I hope will carry universal assent, let me say that the whole? economic process should be viewed together—that you can never really judge the wisdom of any particular proposal which relates to a part of the economic process unless you see the whole, unless you have at the back of your mind the whole process and the bearing of the particular proposal upon that. The whole economic process is, of course, making available the utilities of nature for the 534 benefit of man. Nature provides a vast number of utilities, and these are gradually worked up by human ingenuity, which does not at any time create, but arranges and manufactures and transports — sometimes merely transports, as in the case of coal—and so makes available the resources of nature. When the process is complete you have what you call wealth, that is natural products made available for human wealth. The term "wealth" really ought to be kept for that which is in the course of use and enjoyment. It then strictly administers to human welfare.
Unless that be in the mind always, you get the misleading influence of supposing that at some earlier stage of the economic process the process is complete, and that may easily cause many fallacies. Even saving, excellent as it is, necessary as it often is to the economic prosperity of the country, is not an ultimately good thing. The only ultimately good thing is to have the use and enjoyment of commodities which are furnished by the ingenuity of man operating upon the resources of nature. The wealth of a country at it given moment is, of course, the aggregate of what is produced in the country. prima facie, the great mass of foreign imports is a good thing; it is so much wealth coming into the country, so much of the resources of nature made available for consumption here. I confess that I do not at all understand why my right hon. Friend the President of the Board of Trade is anxious about, or disturbed, by what he calls the " adverse balance," using the phrase, which is an absurd one, in relation to a balance of imports over exports. There may be circumstances in which such a balance is alarming. If we paid for our imports out of the accumulations which we may have, that would no doubt be dangerous, but the danger would ultimately be that we should not have imports any more: when our accumulations were used up we should not be able to buy them. Therefore, an excess of imports would only be alarming because it foreshadowed a deficit of imports.
There are many people of various schools of economic thought who, it appears to me, do not keep vividly in their minds this conception of what you want to do, which is to increase the aggre- 535 gate wealth of the country, but in various ways suppose that you may benefit the country by diminishing and restricting that aggregate of wealth, that aggregate of all the production made at home and of wealth imported from abroad. For example, there is the person often mentioned in our discussions, the working man, who works less hard than he might, because he wishes to give, altruistically but with economic unsoundness, a job to his mate by not working to his full power. The "ca'canny" system it is called. He is not wrong about the immediate effect, but the ultimate effect is that there is less purchasing power, less demand for labour, and the working classes are worse off than they would otherwise be.
Similarly it was the case in the old days, and in some instances is the case even now, that opposition is excited by the use of labour-saving machinery. When such machinery was first introduced into this country, it did indeed cause prodigious mischief, and unemployment and distress. But in the end and on the whole it did enormously increase the wealth of the country, and ultimately raised the wages and the standard of living of the working classes. There are Tariff Reformers who hold to the argument stated by the right hon. Gentleman, which stands on another footing—the argument of stabilisation and increased production. But there are Tariff Reformers also who seem to fall into the very lamentable error of supposing that, if you restrict imports and thereby oblige the home consumer to purchase what he needs from home production, although he pays more for what he has to buy, and although the purchasing power of the country is reduced, yet that is a better thing to do than to let him have cheap imports. That is precisely the same fallacy as the fallacy of those who disliked labour-saving machinery, or the fallacy of those who work less hard than they might in order to make jobs for others. It. is all the recommendation of restriction.
All restriction, everything that is truly restrictive, can never be justified. So far, I think, we are all agreed. There is, of course, quite a different Tariff Reform argument, which depends on showing that, by giving special advantages in a market, you can increase cheap production, and that, therefore, in the end, you 536 have not restriction, but greater abundance. That is a different argument. You get rid once for all of the old-fashioned restrictive argument. There is never anything to be said for shutting out foreign imports merely in order to turn the purchasing power of the home consumer on to home production at increased cost. I think it could be shown in this particular case, that the argument of increased production by means of Protection is very unlikely to be fulfilled. In these particular instances, it seems to me that what the Government are proposing is to charge a subsidy on the purchasing power of the country for the purpose of benefiting these particular industries. There is nothing in the figures laid before us to suggest that the decay of these industries is so bad that it would be impossible for the manufacturers, without any duty, to carry out improvements in production, such as reforms, amalgamations and the like. I am not saying that a case might not arise in which you could get a plausible argument for an import duty on the grounds suggested, but there is nothing in the figures before us to suggest that that is the actual position of these industries, and I greatly doubt whether the Board of Trade itself would tell us that they anticipate that five years hence the articles produced in these different industries, by the operation of these duties, will be cheaper than they are at present.
I do not accuse the Government of breach of faith, neither do I accuse them of constitutional impropriety. And I listened to the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) with some surprise when he referred to that question. In the first place, I think he is mistaken in supposing that there is constitutional impropriety, and, in the second place, I am amazed that he should attach so much importance to the question. The constitutional principle relating to these matters is a perfectly simple one. It is that this House does not act proprio motv in the levying of any charge upon the people. Such a charge comes always and necessarily at the instance of the Crown, and therefore no proposal for a charge on the people can be brought forward except by the Ministers of the Crown, and they are responsible to the King on one side and to Parliament on the other. That is the 537 constitutional principle, and so long as it is fulfilled and conformed to, it does not matter which particular Minister recommends a, particular proposal to the acceptance of the House of Commons. I have not looked up the matter, but I have little doubt that one would find abundant precedents in the eighteenth century, when the "Lords of Trade," as they were called—I wish we could call the right hon. Gentleman (Sir P. Cunliffe-Lister) a "Lord of Trade"—brought forward particular proposals for taxation in Committee of Ways and Means, because it was convenient that a particular Minister should explain a particular proposal.
I therefore do not accuse the Government of any breach of faith, and I see no impropriety in their procedure. Of course, these White Papers, which they have very properly laid before us, are not supposed to be the justification of the proposal in itself. The Government make themselves responsible for the proposal in the first place. As I say, I do not suspect the Government of breach of faith or perfidy, but I do a little suspect them of confusion of thought, and that may lead them, step by step, into a position which will be not only injurious to the country and injurious to the economic stability of our industries and finance, but ruinous to the Conservative party which they lead. There is danger in all these cases of special exceptions. If a man become a total abstainer from alcohol except on exceptional occasions, experience shows, such is human nature, that the exceptional occasions become more and more frequent, until at last the exception of the abstainer becomes hardly distinguishable from the rule of the intoxicator. The only way you can avoid that drifting down the primrose path of Protection—which I should be sorry to see happen to the Government—is by having a clear distinction founded on principle between what is and what is not a Protectionist policy.
I can see that there might possibly be a case—not a common case—for safeguarding an industry, which would be strictly in accordance with the principle of abundance. Such a case could be made, not only on the ground of the prospect of enlisting more capital, which is the point relied upon by many hon. Members, and 538 making possible therefore a largo expansion of the industry, but on the more strictly defensive ground that the importation is purely dislocating in its effects, that it upsets and overthrows the normal mechanism of production here, and does not offer any security for an assured supply from foreign parts. That is what I have always understood to be meant by the expression "dumping.'' "Dumping " differs from normal importation not because of its cheapness or of "unfair competition."
It is most lamentably to find in a Government paper, purporting to deal seriously with economic questions, that dreadful phrase " unfair competition." No human being knows what it means, and it ought never to appear in a serious economic document. It is not because of the importation being of that character that it is "dumping," but because it is of a temporary character, because it dislocates production here, and gives no assured substitute for the production that is destroyed. What I complain of in the White Paper—and the fault lies with the Government rather than with the Committees—is that the wrong questions appear to have been asked. They do indeed ask the question whether imports are abnormal. But it is obvious that the Committees have not the least idea what they mean by that. I should have thought that abnormal importation was temporary importation, and I cannot understand why an importation is supposed to be abnormal simply because it is different from that which took place in the year of grace 1913. That seems to me a very strange definition of normality.
The real question, and the only question which, as I see it, should be asked in respect of the safeguarding of industries is: Is this temporary importation; does this importation arise out of some purely transitory conditions of foreign production; will the import coming into this country dislocate everything here, and throw out of gear the machinery of home production, and wilt it fail to furnish us with any assured source of supply? That question is not asked, and, although there are considerations in this White Paper which might be fitted into a sound argument for restricted importation, they are not arranged in that form. They are on 539 the basis of that very crude and unsound theory which I call restriction. They appear to be arranged—or most of them —on the theory that, somehow or other, a cheap import is an injury to this country, and is unfair competition, and should therefore be restrained. Of course, the only purpose of having a foreign trade is to have things sent here more cheaply than we can produce them ourselves. We do not want foreign trade for any other purpose. The idea that you can make everything just as easily yourself, apart from being practicably unattainable under the conditions of production, is not desirable. What we want from foreign countries are the cheap things which they make cheaply, in exchange for the cheap things which we make cheaply. A mutual exchange of cheapness is the purpose of foreign trade.
I view with considerable distrust the arguments put forward on behalf of this proposal, and the apparent lack of any grasp of economic principles in the speeches of the President of the Board of Trade and in the case put forward in these White Papers. I earnestly hope that the Government will be on their guard against, for the third time, ruining the Conservative party. Even if I were not sure that the policy was economically unsound, and entirely unsuited to the industrial and financial conditions of our country, I should, as a mere politician, earnestly deprecate starting once more the dreary fiscal controversy which has never brought to the Conservative party anything but disaster.
It was dreadful two years ago to see my right hon. Friend the Prime Minister and his then colleagues stumbling about like men who had lost their way on a heath, going from one bog into another, and falling into the old controversial snares and traps into which, 20 years before, much more distinguished people had fallen. The moment you start anything of that kind, you find that there are great masses of the people of this country who do not say much as long as they think nothing serious is intended. But who are violently opposed to anything like a general Protectionist policy. They are the preponderating body of those engaged in distribution, in sheltered trades, in trades like the cotton trade, which depends on export, and the body of people concerned 540 with directing financial matters. They are all against Protectionist theories and a Protectionist policy.
The truth is that our industrial and financial machinery has been developed in the tradition of free imports; and whatever may be said, in the abstract, of the theory of protected production becoming more prolific than production which is exposed to competition— which is the only argument worth considering on that side—it cannot apply in our country, because the general structure is so identified with free imports that to go back upon that policy would at once arouse opposition in all sorts of quarters, and would be fatal to the party which proposed it. Let us remember that the Conservative party never succeeds in attaining office except by the help of a certain number of left-centre votes. It is the great canon of Conservative tactics and strategy that they should lay themselves out to obtain the support of those who, if they called themselves by any name, would call themselves "Moderate Liberals."
It is more than ever necessary that the Conservative party should make no mistake because they are a dyke against a movement which must in the end be of a revolutionary character. I do not mean to say that I suspect the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) of shouldering a rifle and mounting a barricade—though I think there are some persons who would be willing to do that. But really and essentially the policy to which the Labour party will sooner or later be committed will be a revolutionary policy, and the Liberal party will not be able to stop them. The Liberal party are concerned with distributing their own party funds and other peoples' land.
The Conservative party, and the Conservative party alone, can protect us from a great Socialist movement. If you go to Holland, you will find there are very strict laws preventing anybody tampering with the great dykes which keep out the sea, and that is very proper. I do not want the Prime Minister to begin agricultural operations on the dykes which keep out Socialism. I do not want him to begin to dig and to mine and to apply Protectionist experiments. That would be a disaster. I earnestly hope, therefore, that this is the last Safeguarding of 541 Industries Bill which we shall see. If you go on along this path, I am sure you will get into a position that is controversially indistinguishable from Protection, not because the Government have the slightest intention of breaking their pledges, but because they do not really quite know to what their pledges economically amount. If you strictly keep yourselves to safeguarding industry from temporary inroads by imports of the continuance of which there is no assured prospect, then, indeed, there is little danger. But this present Bill does appear to be framed on no economic principles in particular, and to make, on the whole, not for abundance, but for restriction.
I cannot help recommending the President of the Board of Trade, the next time he goes to church, and hears a dull sermon, to read from the Prayer against Dearth and Famine. He will find there that the prayer supplicates that scarcity and dearth shall be turned into cheapness and plenty. That is the essence of sound economics. We want always cheapness and plenty, never scarcity and dearth. And it is because I am afraid that this Bill, on the whole, is one which will make more for scarcity than for plenty that I, for my part, cannot vote for it.
§ Captain LODER
I am very glad to be allowed to follow the right hon. Gentleman the Member for Oxford University (Lord H. Cecil), because so much that he has said, with all the lucidity and force of this learning and experience, is what: I had felt haltingly, I would like to say myself. Mine is also the point of view of a Government supporter, who proposes to support this Bill, and as one of those who is rather a Free Trader than a Tariff Reformer, if I must use terms which I feel refer rather to past controversies than to present actualities The word "tariff," indeed, still seems to arouse a violent spirit of partisanship, but I would submit, that, however great the difference between the two economic theories, this distinction does not correspond to any real division of political opinion in this country to-day. I was myself elected last year by as many Free Trade as Tariff Reform votes. Surely it is time we recognised in this House what I believe to be the general feeling in the country. Surely it is time we abandoned an attitude of extreme antithesis, and 542 ceased maintaining, on the one side, that every duty is good and, on the other side, that every duty is bad.
I believe that the country accepted the policy of the safeguarding of industries as a via media conceived in the truly traditional British spirit of compromise. The Conservative party, if I may put it so, having abandoned their former revolutionary proposals, now come and ask the parties opposite if they will not advance one step from the really reactionary standpoint which they have taken up. The great merit of the policy of safeguarding seems to me to be that, while if gives ample opportunity for imposing such duties as are necessary in the abnormal times in which we live, yet preserves intact the Free Trade basis of our fiscal system. Hon. and right hon. Gentlemen opposite continually hurl the word "Protection" in our teeth, but they must be aware that they are deliberately confusing two distinct senses in which that word "protection" can be used. Of course, a safeguarding duty is a protective duty in the broad sense, but I can hardly believe that either of the opposite parties have so little regard for British trade, industry, and commerce that they are unwilling to protect it in any way at all. Protection, in the sense of a General Tariff, seems to me a totally different thing. This Government does not stand for that. Its pledge is explicit, and I am confident that it will be honoured. It has retained the Free Trade basis of our fiscal system. It has kept the onus of proof on the person who wants the duty. A General Tariff, it seems to me, would imply exactly the opposite, and that, I think, is a vital point which is all too seldom remembered, that, while you keep the onus of proof on the man who wants the duty, you cannot be said to be introducing a General Tariff.
Let me remind the House that, according to figures which appeared in the "Times" a day or two ago, out of the 24 applications which have been made for safeguarding, 13, or more than half, were turned down because there was not a primâ facie case established, and, of the remainder, one has been turned down by a Committee, and only five have so far actually become substantive duties. I see, in the Motions for the rejection of this Bill, that the Liberal party emphasises the tonic which foreign competition 543 provides for our industry and that the Labour party once more trots out its panacea of State control. Whatever may be said for these ideas in moderation, I do not see that they justify either exposing British industry to a withering blast or smothering it beneath the dead hand of bureaucracy. I submit that the policy of safeguarding deserves more sympathetic attention from hon. Members opposite than it has so far received. They must at least adroit that its objects are praiseworthy, and that it is, after all, a conscientious attempt to see, by reference to specific industries, whether the imposition of import duties can do anything to relieve unemployment and the distress of both British workmen and British manufacturers.
I have argued that there is no departure from existing fiscal principles in this policy, but it is true that the procedure for giving effect to it involves new methods of administrative and legislative practice. This procedure must be experimental to start with, and I do not think anyone can cavil at the reasoned criticisms which have been provided from the two parties opposite. I have some sympathy with a large number of them myself, and particularly I think there is a good case to be made for the publication of the evidence before these Committees, because I do think that hearsay is a rather dangerous weapon to leave lying about, whether it be hearsay through oral rumour or whether it be abbreviated reports in the columns of the Press. Ambiguities which undoubtedly exist in the White Paper have been dealt with by my right hon. Friend who spoke just before me, but I do think it gives an unfortunate impression when Committees reach rather hesitating conclusions as to the. fulfilment of these conditions and recommend that, on the whole, they think a duty ought to be imposed. Those who, like myself, want to keep the Free Trade basis get rather anxious when the Reports of these Committees are accepted on what appears to us to be a very inconclusive series of arguments. I am not urging the Government to be pedantic or dogmatic, or to make the procedure absurdly rigid, but I feel that we ought to know exactly where we are, and what these phrases mean, and whether they are meant to be a general guidance or to be taken strictly, word for word and sentence by sentence.
544 Then, again, could not the Government take more consideration of the alternative methods for improving these industries which are revealed in these reports? Is it always necessary to go for a duty? I am not at all convinced, from what I have heard from the Minister and the Parliamentary Secretary, that it is impossible to get a sufficient supply of thorium and cerium without putting a duty on gas mantles. I am not saying that it may not be so—I am not an expert in the chemical industry—but I have not heard any convincing arguments from the President of the Board of Trade, nor are there such arguments in the Report of the Committee. I will take the case of cutlery. I cannot help thinking that it is by strengthening the Merchandise Marks Act and by trade propaganda that you are going to get the cutlery industry on its feet again, and that the duty, as has been pointed out, will really go a very little way in covering the enormous gap that there is between the British-made article and the cheap imported goods.
These criticisms are, after all, criticisms of comparative detail and not of principle, and I hope they will be taken in a friendly spirit, because they are certainly offered as such. I accept and welcome the policy of safeguarding, because it is an Election pledge, and because I do see In that policy a via media which may keep us out of this perpetual struggle between Free Trade and Tariff Reform, as if there was nothing between the one and the other. After all, even this present procedure has its merits, which I think hon. Members opposite might be good enough to realise. We ought to give some merit, I think, to a procedure which involves independent inquiries, which makes public a great deal of valuable information as to the conditions in various industries, though I think we might have more, which gives the House opportunities for discussing each specific case, and which only imposes a duty for a fixed period. The policy of safeguarding has yet to be tried out. and I shall support it until I hear better reasons than I have heard so far for opposing it, and I would ask hon. Members opposite to approach it in the same charitable spirit. If they are really so concerned with the improvement of trade and the relief of unemployment, I suggest that they are taking a dangerous course in offering such uncompromising and, its 545 they will allow me to say so, factious opposition to. an experiment which has no other aim and object in view than the improvement of trade and the relief of unemployment.
§ Mr. RUNCIMAN
The speech to which we have just listened does great credit to the hon. and gallant Gentleman, and I think the House must have welcomed the candour with which he affirmed his views on fiscal principles. That he is unable to find any obstacles to those principles in these proposals is a matter of no surprise to me, when I remember the statements on Free Trade which have been made from time to time by the Chancellor of the Exchequer, who has now undertaken part authorship of the scheme now laid before the House. The House listened, as it always does, with the greatest respect and enjoyment to the speech made by the Noble Lord the Member for Oxford University (Lord H. Cecil), and it did so, not only because of the intellectual skill, but because those who remember the events from 1903 to 1906 recognise once more in the doctrines he is preaching, and the way in which he presents them to the House, the accents of one of the best tutors in Free Trade we have ever known, and his most distinguished pupil was the Chancellor of the Exchequer. There is little doubt that the clearness of vision of the Chancellor of the Exchequer on Free Trade doctrines and problems is largely due to the teaching he received from the Noble Lord. The Noble Lord spoke with a clarity which was merciless, and no one suffered more from his castigation than the President of the Board of Trade who, he declared, introduced these proposals to the House guided by no principles whatever. It is comforting to hear that from the Noble Lord, because we have been saying that in Ways and Means, and, indeed, the discussions up to the present, and the speech made by the President of the Board of Trade to-day, still leave us in doubt as to what guiding rule possessed him when he recommended to the Government the adoption of these reports and the imposition of these duties. He applied different rules to different trades, different standards in different reports, different dates to different circumstances. There was no guiding principle whatever in the way in which he adopted these proposals.
546 These were points which were stressed in Committee of Ways and Means, and I need not refer to them now, but I do wish to direct the attention of the House to another aspect of the matter. It is this. The sole test—and it can be applied quite honestly by those in favour of these duties—is how far this can add to employment. That is the only honest and straightforward test I have heard applied with any consistency throughout these Debates. There is nothing inconsistent with the statement that if you put on an import duty on one trade only, you can quite easily add to the employment in that trade. There is nothing inconsistent in that. Indeed, a very distinguished member of the Chamberlain family, Mr. Arthur Chamberlain, who shared with his still more distinguished brother the power of incisive speech, used to repeat in letters and speeches in the old days of the fiscal controversy, the statement over and over again, that if only he could have an import duty on the commodities he produced and prevent anyone else from having it, ho would become a rich man with the greatest possible ease. It is as true to-day as it was then. An import duty put on for the benefit of one trade can easily give that advantage to any one individual trade, but that is qualified by the fact that if the import duty leads to a rise in price—and we know from experience it does, and is meant to do so— [HON. MEMBERS: "No."] If it is not meant to do so, thon these are going to be perfectly futile from the very first. The Report suggested it would do so. No one will admit more readily than the Chancellor of the Exchequer that import duties always add to prices. [HON. MEMBERS: "NO."] If he does not do so, he will be going back on everything he has said before. Anyone who knows anything about political economy knows perfectly well you do not cheapen things by putting on taxes. [An HON. MEMBER: "Prove that."] I proved it in Committee of Ways and Means, and if the hon. Member had been there then ho would have been converted.
The argument I was pursuing was that you can quite easily add to the amount of employment in a trade if you put on a duty for that trade and for none other, but that is always qualified by the fact that if you raise the price of commodities 547 you will, to some extent, reduce the demand for them. There is only a certain amount of money people can spend on goods that can be regarded as unnecessary. Take the case of gloves. If the price goes too high, large numbers of people will do without them. They could do without them with a certain amount of discomfort, but it would not injure their general health. If, however, you raise the price of food, it is quite obvious there is no escape from that. If you raise the price of cutlery, you probably make your own knives last longer, keeping them long after they have passed the state of efficiency. To that extent, therefore, it is qualified, and the statements which have been made by the right hon. Gentleman the late Chancellor of the Exchequer have always been made, I am quite sure, with that in his mind. But admitting that, we are then driven back to the one point which never seems to play a large part in the reasoning of those who represent the Government, that in order to secure that increased employment, consumers as a whole must pay. I am not at all sure that the Government have clearly in their minds in what direction they are going to add to employment in the glove industry, because we have not the whole of the evidence before us, and we certainly have never been told by the President of the Board of Trade. Indeed, in the Report on the glove industry, four of the witnesses gave their evidence in camera. I should like to know before this Debate ends whether any of those who gave evidence in camera were men who gave evidence against the imposition of the duties. Unless I am mistaken, some were. Why should there be withheld from the House the evidence of those who considered that the duties here proposed would do harm and not good? They did not believe that the increase in the price of gloves was going to do their trade any good. They believed the only thing that would add to their prosperity was the increased consumption of gloves, and the knew that with the rise in the price of gloves there would be pro tanto a diminution in the demand for them.
Let me take one or two examples to illustrate what I mean. Take the case of ordinary sheep leather gloves. Anyone can buy them in a shop in the Strand or elsewhere for about half a guinea. 548 Under the proposal of the right hon. Gentleman, that half-guinea will be translated in a very short, time into 14s. or more. That means that a. certain number of people will do without sheep leather gloves. In regard to fabric gloves, the case is still more pointed. Many people will do without them, because those people are very much poorer; they are people who find it very difficult to make ends meet, and the demand for these gloves will come down. That is no theory; we have seen it take place, and the Report shows it. The consumption of gloves in this country is very much less than in 1913, and it is entirely due to the fact that the price went up. Now the Government are going to push it up further, and so diminish the consumption, and to that extent prevent that increased employment which even they themselves hoped. A few days ago an hon. Member, who is closely associated with Abingdon, told the House that he knew of a factory in Oxford where a large number of people had been taken on in the making of gloves in the last two months. They were taken on, so far as I could understand, because there was a demand for the gloves of that factory, and it was not due .to these duties. Why he should have given that example of what happened two months before these duties were suggested, I cannot understand, unless the proprietors of those factories knew what was in these Reports long before this House was favoured with the information.
I need not repeat any of the arguments which have been applied with equal force to the cutlery trade, but there is an aspect in all these duties of greater importance to the employment of our people than the addition of a few score, hands in a cutlery factory or glove factory, and it is to that aspect I would wish to invite the attention of the House. One of the greatest advantages we have had in this country up to the present is that we have been able to conduct our trade with great ease and rapidity. All our ports have been free ports. Anyone who has any experience of the Continent, of Europe knows that in all the great competing ports, Hamburg, Copenhagen and Antwerp, there is a free port area. It is not there for the sake of the name, but because of its immense advantage to the entrepôt trade. Unless there were that enclave, the import duties they impose 549 would make it impossible for the goods which have to be transhipped in these great ports to be transhipped without the intervention of the Custom House officer. Otherwise the goods would have to go into bonded warehouses. You cannot have Customs House officials watching every road, the contents of every package examined, forms filled up, and so on. The whole of that procedure would have made that entrepot trade quite impossible. These great ports have boundaries round the free port areas, wire fences, corrugated iron walls, and the gates carefully guarded. The vessels which go in with goods for trans-shipment are there discharged. The goods are loaded again into other vessels for distribution over a wide area, generally to smaller ports, and the whole of it is done without any Custom House officer guarding the ships or goods. So long as the stuff does not come out through the gates, the trans-shipment goes on rapidly and freely, without any interruption. We have never bothered about free port areas in this country, for the simple reason that we have not been hampered with import duties, and we have not had a great long stretch of protective areas. All Liverpool is a free port and all London is a free port, and the result is that London and Liverpool between them have been the two greatest trans-shipment ports in the world.
The whole of their trade has been built up owing to the absence of this very impediment which the Government are step by step creating. This may seem somewhat strange to people who do not know much about the operation of our ports. Let me give a simple illustration of exactly what I mean in regard to this. When a cargo comes in and is discharged here in London, under some of these various duties, the McKenna Duties, the Silk Duties, and those which are now being imposed, the people who have cargoes coming in consigned to them have to deal with a large number of extra forms which they have to fill up. Things like this form, which has to be filled in in order to secure the payment of a two-penny duty. Here is another which covers an enormous range of figures. There is hardly an ordinary clearance clerk anywhere in the Port of London capable of understanding the form, the 550 figures of which it is impossible to check. This relates. I think, to the payment of a duty of 11s. 5d. There are no less than 35 entries in it. It has no less than six columns of figures to be cheeked off and inserted. The different weights have to be very carefully examined, the goods themselves have to be examined and the values all have to be checked, if you are bringing in a large cargo from the Continent or from the Antipodes to be dealt with in this country, the amount of literature that a single cargo requires is enough to fill a wheelbarrow.
§ Mr. RUNCIMAN
I was filling up these forms when the hon. Member was at school. The hon. Member will perhaps allow me to go on with the description of what he apparently does not understand.
I am dealing with serious business. I say that if you have the Port of London, or Liverpool, or Hull, or Bristol, impeded by a great accumulation of these things, you are bound to have delay in transhipment. What does transhipment mean, when it is translated in terms of employment? In the Port of London there are very large numbers of men who do not get work two days a week. If you are going to cut down the amount of traffic in the Port of London, you must diminish the amount of work that is available to the unemployed in London, and the same thing in Liverpool. The volume of traffic that is passing through Liverpool is less than it was. If you put further obstacles in the way, if you make it less of a free port, and if you are going to put on these restrictions you are going to make it difficult for the transport trade to be cultivated where the unemployment is at its worst. As you get free from restrictions, you are able to take on more men. You enable those who bring goods from the furthermost parts of the earth to use London as a very great distributing market.
I know there are some hon. Gentlemen who think these things will come to London anyhow. They are not coming to London even now. Already arrangements are being made by some of the merchants who will be affected by these 551 duties, cutlery and gloves, and so on. Instead of their taking the shipments which came here and were put into the Colonial lines and forwarded to the most distant borders of the British Empire, they are arranging to send the goods direct from the foreign port away to the uttermost parts of the earth without coming to London at all. They prefer to get rid of ail this extra trouble, which is new, and, being an obstacle to business, it is tending to restrict the volume of traffic in our ports.
Customs officials find it most difficult to operate these things, and the vexatious delays are piling up goods in our ports which ought to be distributed much more rapidly through our warehouses and shops throughout the country. Hon. Gentlemen who think that by these import duties you are going to add to your volume of employment in these separate trades, are overlooking the fact that by doing that you may be throwing out a large number of men in these heavier trades, covering a much greater volume of traffic and providing much more employment, than can be provided by the artificial stimulus given to a, few factories here and there. The amount of delay that goes on is perfectly well known by those who are practising in the ports. Let me give a few instances of the things that are bound to pile up, as you accumulate these duties on ill-defined articles, without any general ruling or principle applied.
We have had some examples of what happened to goods overseas. A certain amount of dolls, imported for the Christmas market, four guineas worth, were held up because they included six-pennyworth of lace, and the duty was 2d. There were some dolls which had little toy chimes dangling from their necks. The question as to whether the chimes were musical instruments or not had to require the decision of a Customs House official. These little chimes had a silk tassel attached to them, the weight of which was stated to be 8 lbs. The Customs officials refused to accept the statement that it was 8 lbs., and it was found on inquiry that the weight was .005 lbs. per chime. The total weight of the tassels in the whole consignment was found to be 5 lbs. and not 8 lbs. as calculated by the importer; and the warehouses were blocked and the 552 quays were crowded with a thousand cases because they wanted to collect five shillings worth of duty. That is the profit the country gets out of impeding the traffic of perhaps a whole quay. [An HON. MKMBER.: "Why not?"] The hon. Gentleman asks why not? Perhaps he is not in the toy trade. If he is merely asking for information I will tell him. The reason this is a bad thing is that you cannot have a thousand cases impeding our quays and warehouses without keeping out other things, stopping the traffic, and delaying the exit of the things that come in, and when that happens it means that the warehouses do not do their work as efficiently The amount of capital that has been used in these various businesses is absorbed so much in the, handling of the goods which lie idle until they may be turned over for a profit that it is impossible for the same amount of business to be carried on with £1,000 of capital as before the War.
I can go through list after list to show the sort of thing that is bound to go on under these duties with increasing volume, and with an increasingly mischievous effect upon the trade of our ports. First of all, if you are going to deal with all these commodities which come into the Port of London, whether they are for transhipment or for use here, a form has to be filled up. That, as I pointed out, is a very complicated and difficult operation. The second thing is that the money at the cash office in the city is paid over only after the clerk has waited for a long time in a. queue. If that is the way that clerks have their time wasted in the City of London it is no wonder that business is delayed. Then, after waiting for some time somewhere along the river side the case of goods is opened and if the Customs officer is available it is examined. If not, it has to wait until the case is checked, and then the Port of London fee charged is 1s. 8d. Then the local carrier charges a profit on the 1s. 8d. plus 2s. 6d. to 5s. for his trouble, and that is whether the article is dutiable or not. They want 50 find out whether it goes into this category or that, and in all this opening of cases and leaving them about, as you must., with the sometimes imperfect sealing of them, the amount of pilferage that goes on is greater than it has been at any time even during the 553 worst period of the War. Some improvement has happily taken place in the last few months. There are the people who think it is a very good tiling to have an unbought sample direct out of the cases for their own private use. There are people who have no right in the docks and great trouble is taken to keep them out. This risk of pilfering is added to the insurance which has to be paid by all these various undertakers.
I am not alone in taking this view. The chemical manufacturers have brought to the notice of the Government the amount of the delay from which they are suffering. The Government appears to pay very little attention to these points. Unless you are going to make these ports work smoothly and rapidly, the tendency to unemployment among our dockers and those who are engaged on our river side will be on the increase and not on the decrease. We ought to return in this country to the condition in which we were before the War, when all our ports were free ports, and when we attracted to our great free ports the goods which had to be distributed all over the world. It was that which tended to make our shipping add to the turnover of the country and add to the amount of work in commercial circles. All these are advantages far outweighing the little benefits which the President of the Board of Trade thinks he is likely to afford to a few industries which are not of major importance.
It may be said that I have taken the merchants' point of view this afternoon. Perhaps I have, because you have got to weigh the one against the other. I am not myself a merchant. The way to make this country prosperous is by the rapidity with which you remove the restrictions upon the handling of goods in our ports. If you examine the whole of these proposals and look along the line of employment you come to the same conclusion, that the Government have lost all sense of proportion. I do not know what the Chancellor of the Exchequer is going to say when he speaks to-night, but I can quite imagine that he will say, "Why are you making such a fuss about these duties? Have they not been regarded as merely trifling? Did not the ex-Chancellor of the Exchequer say that they were merely trifling?" As to the mere volume of these duties, they are 554 trifling, but I would remind the House that the number is very large and far larger than appears on the face of the duties. The other effects which come from transforming this country from a Free Trade country to a Protectionist country are against the interest of the larger industries upon which our national wellbeing has been built up. If the Chancellor of the Exchequer is going to take the widest possible view of his duty, I am sure he will not be misled by the doctrine that you are going to add to the wealth of the country as a whole by putting on these trifling duties, and that he will lend a ready ear to the complaint that I have been making, that these duties will do far more harm to the trade and commerce of this country as a whole, than they will do good to the individual industries that have asked for them.
§ Sir H. CROFT
The right hon. Gentleman who has just sat down who has spoken with his usual eloquence has, I fear, been a little less effective than usual in some of his arguments. He, for instance, laid great stress upon the difficulty which he has recently discovered in regard to goods entering this country. He, however, admitted that during the last few months there has been a great improvement in the Port of London. It would be interesting to know whether or not the McKenna Duties have had anything to do with this? Then he went on to tell us of the difficulties about filling up forms; he told the hon. Member for Macclesfield (Mr. Reiner) that he had been filling up forms before that hon. Member went to school. The fact is that various forms have to be filled up, forms have to be filled up before we come into this country, and in some of these matters we all do things that we would rather not do. We all, too, regret the delay in things coming into this country, but we also feel that this is not peculiar to this country. One more word with regard to the speech of the right hon. Gentleman the Member for West Swansea (Mr. Runciman). He spoke as if we had never had any duties in. this country at all. I have not got the figures with me, but I believe I am right in saying that we collected more duties under our Import Duty system during—it was not on the production of food—in the year 1913 than the United States of America did with its very large and flexible tariff.
555 I want, however, for one moment to refer to the speech of the Noble Lord the Member for Oxford University (Lord H. Cecil), who greatly delighted everybody with his examination of the present system, which, it would appear, is in almost as much danger as Oxford University. He laid great stress upon the point that what we want is abundance. If, he said, you have abundance you will have cheapness. I think that is correct. I want to say that I absolutely agree with him in that. But I ask him to quote me one single country amongst the great protected nations of the world which has not increased its internal and external trade to a greater extent than we have in the last 30 or 40 years! He will agree with me that it is possible you may get abundance by wisely regulating your imports, by not decreasing their total volume but changing their character in order to assist in the protection of your workers in your own country. I want to turn now from these rather smaller points to a wider consideration of the great principles which, it seems to me, we have to consider here this evening.
There are three great problems which, as I think, every hon. Member will agree are of more importance than any others at the present time. There is the question of unemployment. There is the question of the provision of revenue. This my right hon. Friend the Chancellor of the Exchequer is very anxiously considering at the present moment. There is also the question of the adverse balance of trade. If that adverse balance of trade is going on until you have no exports whatsoever it would become serious.
§ Sir H. CROFT
Not from the point of view of hon. Gentlemen opposite; I quite agree. But I will come to that point in a moment. Why? When the productive industry of this country ceases? So long as you can buy everything cheap and give employment to the middleman's clerks, that is sufficient for some hon. Members! It appears to me, however, that if you consider these three problems—Employment, Revenue and the Adverse Balance, safeguarding is, after all, the only possible remedy which can touch all three of these problems, and some think also that it is the only way in which it can touch any on of them.
556 These industries have been selected and we are considering them this evening. I must say, in passing, that the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) said, in opening, what an inequity it was that so big a protective Measure should be brought in dealing with 20 different duties, and when he sat down he spoke of the Measure as "a pettifogging small thing"—which made his position somewhat difficult to understand. These industries which have been selected have been selected by a refining process, I might almost call it by an inquisition of the Board of Trade. Some hon. and right hon. Gentlemen opposite seem to think that the President of the Board of Trade is going to safeguard every industry that has applied. It is a very small number of industries when you consider the number of industries that have applied, and it will be seen it has been a very strong refining process. The members of the Government are absolutely carrying out the Election pledges given by the party. They said that such industries as could prove their case would receive safeguarding. I think anyone who reads the words uttered during the Election must realise that that is true. If in any of these duties and those which have been carried earlier in the Session, we can hope, as I hope will be the case, to find employment provided ultimately for an extra 20,000 men, then, surely, we would be criminal if we did not do what we could to try to bring that about.
Let me come, secondly, to the provision of revenue. If we take the whole of the eight industries concerned in the McKenna Duties and the Safeguarding Duties which have been introduced during this year I think we a re not too optimistic if we hope that when they have been in operation a full year, so as to have their effect, they should range from anything from £5,000,000 to £10,000,000. I do not think that is an exaggeration. In addition to that you have n direct advantages the advantages of Income Tax and Super-tax on your industries in your own country which will undoubtedly relieve the rates, and help in the cessation of unemployment benefit so far as these workmen are concerned. It is not, I think, a very great exaggeration to say that this latter might amount to another 557 one million or two million pounds a year. If by the financial instrument of these duties—if I am right, and perhaps other hon. Members agree with that hope—if we can both give employment and secure revenue that is a thing which we all desire to see fulfilled.
I come now to what is more important, and which requires grave consideration— that is the question of our greatly increased importation of goods above our exports. I refer especially to the increased imports of manufactures. I think everybody will agree who is concerned with the manufacturing industries of this country that these are most alarming. In the first nine months of this year the imports of manufactures increased by 21 million pounds compared with the year 1924; by 54 million pounds compared with the year 1923, and by 17 million pounds compared with the year 1922. Whether Free Trader or Protectionist, one cannot but feel worried when you see figures of this description. In two years—and I am just taking the completed year—taking iron and steel alone, we find that for the completed year 1923 we imported 1,300,000 tons; in 1925 we imported 2,700,000 tons—that is to say that for the twelve months ending in September. These are figures which you cannot laugh at. It is no good saying; do not let us do anything that is going to keep down importations.
These figures concern the great vital industries of this country. They must cause us to think when we see an excess of imports in these industries—the iron and steel industry. Just take the one case. There has been a reduction from 2,955,412 tons excess of exports to 906,000 tons; by more than two-thirds between the years 1923 and 1925. When you see that process going on not only in that industry but in all the great manufacturing industries in this country—I have a complete list here which I will not weary the House with—anybody who is concerned with the workers of this country and with British industry must realise that these are things which cannot be laughed at. It seems to me, therefore, that it is imperative that we who are concerned about the fact as to the imports of manufactures going up and the exports of manufactures going down should realise that it is a dangerous process, and it is imperative to cut down 558 some of our purchases which we cannot afford. Obviously this cannot be food— which we must have; or raw material— which we want. I want to see abundance of imports maintained in this country as they are maintained in every protected country, but I want to see their character change so that we are not importing those articles in which we led the whole world, and which are the whole basis of our industrial prosperity.
We have heard in the Debate the old arguments from the right hon. Gentleman the Member for Colne Valley and the Noble Lord the Member for Oxford University, very ably stated. Everyone will agree with them so far, but it would look as if we had not advanced since 1913. Hon. Members opposite mentioned how imports were paid for by exports. We are always told that, but I think everybody must, in view of the difficulties of the last few years, think that so far is goods are concerned that is not true. The Chancellor may tell us something about our invisible exports increasing, and how we make up the difference, but up to the last day of June our excess of imports over exports for 12 months was £416,000,000. In the last few months the figure has gone down largely owing to the fact of imports from Australia and South Africa to a great extent being held up. I still believe, assuming that we can get over our present difficulties, that these figures are not going to lead to ruin: but I think the figures have become very serious.
§ Sir H. CROFT
I do not want for the moment to go into that part of the argument. Again, we have been told by the speeches to which we have listened by leading members of the Liberal and Socialist parties, that the effect of these duties will be to raise the cost of things. This assertion was made over and over again before the War, though it is an assertion which, I venture to say, has never been borne out by the facts. But it was a good election point, even if unworthy of the Liberal party, which is so well-informed on other questions. If we can produce an article equally well in this country, it is very doubtful whether the rise in price owing to the imposition of a duty will be anything like the amount 559 of the duty. As the Noble Lord the Member for Oxford University realises, there may be no rise at all; if we can get increased output at home and so reduce overhead charges, it may be possible to produce more cheaply than before. When this argument was used in the past we had no experience of our own, but now we have a certain amount of experience, and that experience shows that if security is given and an industry can increase its output and work its plant to full capacity, so far from increasing the cost of the article protected by a duty we may, in fact, reduce the price to a lower level.
I will give the House one or two figures on the subject which I think will be interesting. Take the case of the McKenna Duties and the prices at this year's motor show. It will be found that, despite the 33i per cent. duty, of 38 foreign makes of car offered for sale there, the price of only four was increased, and they were luxury cars of the most expensive description. Of the 40 British makes of car, not one had a penny added to its price. That is a very interesting commentary on the arguments which have been advanced by hon. Members opposite.
§ Sir H. CROFT
Yes, I think we can say that since the McKenna Duties were imposed there has been a steady decrease in prices; but I am now talking of this particular year. In this particular year the British makers of no less than 80,000 light ears actually reduced prices 5 per cent. to 10 per cent. I do not suggest that I am laying down any immutable law, but when hon. Members opposite make these assertions the facts which they ought to examine are those which apply to their own country.
Next, I want to say one or two words regarding the argument advanced in many speeches that if we have these duties exports will decline. I would like to have the attention of the right hon. Gentleman the Member for West Swansea (Mr. Runciman), who put this point so well from the Free Trade, aspect. I ask him to name any one of the great Protected countries of the world of which it cannot be said that its exports have in- 560 creased more rapidly than have the exports of this country. If he can quote me one, I will then admit that it is a point to be argued; but I think he will find that the total overseas trade of Germany, the United States, France and that of our Dominions which happen to be Protectionist has increased more rapidly—that is to say, both the exports and the imports—than the total volume of trade in this country, which has maintained a Free Trade policy. As far as the McKenna Duties are concerned, I can give actual proof. We were told that one of the greatest dangers of the McKenna Duties was that our exports of motor cars would go down.
§ Sir H. CROFT
Practically every speaker. [HON. MEMBERS: "NO!"] I do not think I will he corrected from the Liberal benches. Practically every speaker has said that by protecting a home industry we decrease the volume of exports of goods.
§ Sir H. CROFT
Yes, and that was said in every single Debate on motor cars, in which I took part. I think the hon. Member will find that is true. I am glad to inform the House that whereas in 1923 we exported 1,789 touring cars, in 1925 we exported 12,441, a very remarkable figure, which does not seem to bear out the argument that exports would be reduced. Another point advanced again and again is that the entrepot trade would be gravely affected. That seems to be a violation of the old Free Trade doctrine that it was only the nation which put on Protective duties which was really affected. The hon. Gentleman is now contending that foreign importers are going to suffer and not those who impose the tariff. That seems to be rather a twisting of the argument to suit the needs of the moment.
§ Mr. RUNCIMAN
I am afraid I did not explain my point clearly. I was not in the least dealing with the case of the foreign importer. I was only pointing out that by Protective duties you impede traffic, and that any impediment in the way of traffic does more harm than the good you hope for from these duties.
§ Sir H. CROFT
I was not referring to the right hon. Gentleman for West Swansea, but to the hon. Member for South-West Bethnal Green (Mr. Harris), who has made several speeches on this subject in the last few days. Mr. George Harvey, who is admitted to be a very great admirer of this country, made a remarkable speech a few days ago. He said:England's period of productivity is past. Her sole function henceforth can be none other than that of the middleman.I realise with what glee that statement must be received by some of the champions of middlemen we have listened to in the last two or three days in the party who draw their inspiration, if not their funds, from those who are largely engaged in importing and nothing else. Indeed, it may be said that it is the triumph of Free Trade—produce nothing, because we can buy everything cheaper from abroad—it is what is laid down in this gloomy prophecy. We are merely to handle the goods of foreign countries; that is to be our function in the future.
We on these benches absolutely refuse to say that that is the role to be allotted to this country. We believe that it is production which has made our great country, and it is production which alone will keep our country great. In this case there are two schools of thought. On the one hand, there are the prohibitionists. A Motion was carried, I think unanimously, at a meeting of the Parliamentary Labour party during the past year that we should impose prohibition upon the importation of goods which are produced under a lower wage level or lower social conditions than prevail here. On the other hand, the Liberal party see the vast increase of imported manufactures— so that while we have 1,100,000 men unemployed we are importing manufactured goods which have given employment to 1,300,000 foreigners—with the greatest satisfaction. The Government are somewhat between the Devil and the deep sea. [HON. MEMBERS: "Oh!"] I will not say that, but on the one hand they have to steer our course between the Charybdis of Prohibition and the Scylla of the remnant, the tattered remnant, of the once great army of laissez-faire.
Generally speaking, I think we can say that the Government in this House, and, apparently, in the constituencies as well, 562 judging by the events of the last few days, have the support of their party. Our only complaint is, perhaps, that they have not been going forward quite steadily enough. At any rate, this is a policy on which this party has been absolutely consistent. I would remind the Noble Lord the Member for Oxford University that when this country was the sole manufacturing country of the world, when we led the whole world, we were a highly protected country. I know that we cannot return to that state now. but when he suggests that this country is traditionally Free Trade, I suggest to him that we taught the whole world their fiscal business; and the extraordinary thing is that every country in the world drew its inspiration from our old historic policy, and that none of them has since attempted to change that policy. Because of that, I suggest that those industries which specially need our care and protection at the present moment should not he turned aside because they are only comparatively small, not great, industries, but that we should do something. This is the only contribution any party has made towards providing employment in this country. Let us give it a chance, and if it be found a wise policy at the end of a year or two, we can then consider whether it would not be desirable to go on and extend it to an even greater extent.
§ Mr. SEXTON
May I appeal to the House to bear with me to-night on account of the unfortunate handicap under which I am labouring in having a very severe cold? I would not have spoken but for the fact that some of the arguments used in this Debate apply to a section of what are known as "sheltered trades." I happen to be a representative of the workmen in what is officially known as a sheltered trade, the transport trade. Personally, I do not see that there is much shelter for the men engaged in it. The official definition of a sheltered trade means, I suppose, that the trade as a whole has an advantage over the other trades, but the men who are engaged in it do not receive themselves any advantage from the shelter. I have sat in this House in other Parliaments besides this, and I would say at the outset of my remarks that I am not enamoured of Free Trade, I saw the 563 weaknesses of Free Trade long ago, with respect to the condition of the workmen under Free Trade. I have also had some experience of Tariff Reform, and between the one and the other I came to the conclusion that the lesser of the two evils must commend itself to me. Both of them, in my opinion, and so far as the solution of our social problems is concerned, are economic evils. I am anxious, as anxious as any of the Gentlemen on the Government Bench or those on the Liberal Benches, to do all I can to relieve the problem of the unemployed, having myself suffered from want of employment. If there is anything in this new suggestion that, will help us a bit, it will not find me pledged to the policy of Free Trade or semi-Free Trade. I am quite prepared to accept the suggestion of my hon. Friend opposite if it will carry us even a little way: but while I am always listening anxiously for some proposal which will bring improvement the result, so far, has been "Nothing doing." Perhaps I may be allowed to argue from the mere sectional point of view, and if I do this I shall only be following the example of the supporters of these Resolutions, but I shall do it because they brought in sheltered trades. I will take my own particular industry as a basis on which to argue. We are told in these Resolutions that the reason for the application of the 33⅓ per cent. tariff is to help the home employer to compete more favourably with the foreign producer. The question is, do those goods come in now? Experience shows that they do, and if they do not come in after the tariff is placed upon these goods how will that help home industries? If these goods are cut out by the tariffs, what will become of the trade which I have the honour to represent?
The case was put very admirably from the employers' point of view by the right hon. Gentleman the Member for West Swansea (Mr. Runciman). with whose trade I have been associated for 35 years. I am one of those who handle the "oof," and who sends the goods off. We have to remember in these matters that we live on an island and our vital trade is on the sea, and our maritime supremacy is on the sea, and foreign countries have to take advantage of this state of affairs in order to send their goods across the sea. 564 We are the top dog in that direction, and any attempt to interfere with that position would mean that by these tariff proposals, even if you did find more employment for men in Sheffield, for every man you found employment for by these tariffs, you would put two or three men out of employment in the shipping industry. Consequently, what you hope to gain on the swings you will more than lose on the roundabouts.
1 am more concerned with what will happen if more of these taxes are imposed. I agree that these duties are the thin end of the wedge. We are told that the effect will be that more in the cutlery trade in Sheffield will find employment. This, however, is an old, old story, and this policy of Protection goes as far back as Joseph in Egypt who put not only the corn and the money in the sacks, but the cup in the sack of Benjamin. We have been told that in order to save the country we must go the whole hog and Protection must be adopted. In the past it has been my privilege to listen to many Tariff Reform lecturers, and I have heard them, argue that the importation of cheap German concertinas had killed the English concertina trade and ruined the Birmingham Jew's harp trade, and the electors were told that if tariffs were placed on those musical instruments those tariffs would be paid by the foreigner. Experience has since shown us that that is not the case, and we do know that the purchasers of these instruments in this country and the workmen who were supposed to be protected in those trades have been penalised by getting no employment and people have had to pay more for those instruments than they did before the tax was imposed. I will sum up the situation with the following verse:But will he pay? Ah! wait and see, And if he does, then all agree That his goods stilt come right merrilie, From fabric gloves to geysers. And though we make the tariff tough The German still remains to scoff, And so we cut our own nose off With Comrade Bosch's razors.
I have listened carefully to the speeches made in this Debate, and what I would like to get at is, who are the people who are against safeguarding? What are the vested interests which have been alluded to, and how does it all work out? Most of those who have 565 spoken have been with one or two exceptions doctrinaires. I think a little experience of the working in a factory or a workshop would do them no harm, because they would learn a good deal about what both employers and employed have to go through. We have heard a good deal about the quantity of goods brought into this country which are subjected to one or two processes and then exported again. Let us consider what has happened in the past, and then we may be able to make a shot, at what is likely to happen in the future. The foreign manufacturers command cheaper labour, and their employés work longer hours. The result of this will probably be that in the near future they will perform these processes themselves, and that even if our merchant retains the business in competition with the merchants in these countries, the goods will not even be shipped in British vessels. We have been told that the consumer is the person who is going to pay for these tariffs. I know that is not the experience I have had, because I have had to shut down many a loom simply on account of foreign competition. The goods I manufacture were being brought in by merchants at prices with which I was acquainted, and I also knew that the price paid for the goods by the consumer was generally 1 per cent. under the price which British manufacturers could possibly afford to take. This left a very fine profit for the merchant. Huge orders went from us in that way with the result that we had to turn our workpeople away. A good many of us hate to turn away workpeople who have been working for us for so many years, because they have to live on their savings.
Now I will come to the practical people and leave the doctrinaires alone. I will take first the working people. They are rather afraid of protection of any description because they think it will put the price up. But supposing these tariffs did put a little on the price, so long as the consumers had work and were not living on unemployment benefit and their savings they would not mind if they had a little more to pay with they would not mind paying an extra shilling for a pair of scissors made in Sheffield than have German scissors. In these matters the real opposition comes from the 566 merchants, and there is no question about that. The merchants are nearly all Liberals, and the Liberal party is largely recruited from the merchant class. A merchant will take an office and probably pay between £50 or £100 a year for an office and employ about four clerks. He certainly does pay Income Tax, and that is about all he does pay. On the other hand, the manufacturer employs probably 500 workers and he has to pay heavy rates and taxes, unfortunately he is not the man who is paying much Income Tax. I should like to see Revenue derived from Income Tax come out of flourishing industries. I know that might be a difficult task for the Chancellor of the Exchequer because as profits increase wages go up, but at any rate the money would be going round far more than it does now after it gets into the merchant's pocket. If you consider the question of the balances of these industrial companies, you will find, with a few exceptions, that the people who have monopolies are paying very big dividends. On the other hand, if you take the steel and iron trades, the manufacturers are not paying any dividends at all. Of course we should all like to see some of the revenue of the country coming from them, and we should like to see them making dividends. I know members of the Labour party would like to see the Chancellor of the Exchequer getting something out of those trades.
Let me consider for a moment some of the duties we have put on. We heard a great deal about the Silk Tax when it was being considered by this House, but you do not hear a word about it now in Lancashire; in fact, they are rather pleased with it: and I am sure that if the Chancellor of the Exchequer suggested taking it away there would be a row about, it. As a matter of fact, I believe that after the tax has been imposed on silk, stockings are about 2d. a pair cheaper. Those engaged in the fine cotton trade are monopolists, and they do not care about any tariff, because they are in the position of being able to climb over it. They are aware that nobody else makes the yarn, and the foreigner must have the yarn. Perhaps if we wait a little longer the foreigners will be able to spin these fine counts and then we shall see the difference. I have always been 567 taught that as circumstances about you change you must be pretty quick on your feet if you are going to keep your end up. If that is applicable to one firm it is applicable to the country, because the country is one colossal interest with one interest entirely for everyone.
§ 8.0 P.M.
Mr. SANDEMAN ALLAN
We have had the opportunity of listening this evening to a very interesting Debate on Free Trade and Protection, with occasional references to safeguarding. I would like to remind the House that, on this broad question of Free Trade and Protection, the whole commercial community is divided. There are a great many who hold neither the one nor the other. We cannot accept the view of the enthusiasts for a general tariff because we hold very strongly that, as regards the trade of this country in particular and of the world as a whole, the less impediments that are put in the way of trade the better. There are a great many of us who feel very strongly that a general tariff is not for the good of the trade of this country or of the world at large, and that we should work in the direction of removing general tariffs as far as possible. On the other hand, we cannot accept the theory of Free Trade which is being pressed upon us in its undiluted form. We realise that much has intervened of recent years. One of the very important matters which we should bear in mind is the fact that, during the War, when this country was unable to supply the world with a great many of the requirements needed by different countries, the industries necessary to produce those articles were established in those foreign countries. That alone is a very great factor of recent times which must be borne in mind. It should be borne in mind, too, that British industry is of some importance to this country. I only say that because we are rather apt, when hearing these discussions on one side, to hear British trade and goods pooh-poohed as long as we get the material from somewhere. It is our duty to consider, in the first instance, our industries and our trade, on which this country depends entirely for its livelihood. If our industries go down, our trade goes down, and this country is bankrupt. Therefore it behoves the 568 Government and every one of us to consider the industries of this country.
I speak for many inside and outside this House who feel inclined to say to the Free Trade theory and to the Protectionist theory, "A plague on both your houses! Let us consider this matter from a purely business point of view." It is a question entirely of what is the best business for this country. Everyone knows that a business firm that says that, because 50 years ago they had a certain system, it is the system that they are going to carry on to-day is heading for bankruptcy. We have got to take into consideration the changing factors of the age. That is why I hold the view that in the best interests of this country, although there should be no general tariffs on British trade, it is our duty at the present time to protect such British industries as may be threatened, and particularly the workmen and all concerned in those industries who may be threatened by what, for want of a. better word, we may call unfair foreign competition. I might put it to the hon. Gentlemen opposite as I put it in my platform in the election. The only pledge I made was that I would vote against a food tax and against a general tariff. I put it in my platform and I put it here in this House to-night that what we have to do is to protect the British working man and all engaged in industry in this country from blackleg foreign competition whether in wages, hours of work or conditions of life.
I am dealing with foreign countries. I want to point out that the only way for us to deal with that black-legging is gradually to raise the foreign working man and the standard abroad to the standard at home. That is the way to clear the whole question. Once we have got that there is no need for any safeguarding of industries, because the British workman can hold his own against any other workman in. the world and beat him every time, it will take a good five years and more before we can get that through. Consequently, I feel that this Bill, which puts forward a proposal to safeguard certain industries for a limited period of time, is one that everyone hold- 569 ing the views I have expressed on Free Trade can support. I maintain that it is a fulfilment of the election pledges and also that it is a Bill that is going to produce revenue to this country by relieving unemployment and by increasing the profit on business available for Income Tax.
The hon. Member for St. Helens (Mr. Sexton) referred to his trade. I, as a Member for Liverpool, appreciate a good deal what was said by the Member for West Swansea (Mr. Runciman), and it is important, but I do not agree that these particular duties, which are intended to develop and which are going to develop the industry of this country, are going to rob the transport trade of anything, because, if they do not carry foreign goods into this country, they will carry the raw material necessary for manufacturing the same goods in this country. We must not overlook either the one or the other. If, in addition, we develop and increase employment in times like this the whole Bill will be worth while. I have no desire to take up the time of the House, because I feel there are many better qualified to speak on these important subjects, but I think I can speak with a certain amount of authority for a large body of commercial men who hold the views that I have endeavoured to express.
§ Mr. MARCH
The hon. Member who has just sat down said he told the electors he would not vote for a tax on food or a general tariff. I take it that he knew exactly what he was telling the electors when he said he would not vote for a tax on food. Presumably he had in his mind the fact that if he voted for a tax on food and a tax on food was put on, it would mean an increase in the price of food to those who purchase that food. If that is his true meaning, then the theory which we have been hearing during the last three or four days with regard to this Safeguarding of Industries Bill, that it is not going to increase the price at all, but that it is going to give the manufacturer an opportunity of getting full production from his plant, and that the goods are going to be sold at the same price, does not hold good. You will have great difficulty in convincing the people who have to purchase the goods of the truth of that theory. If the Safeguarding of Industries Bill, which is now going through the House 570 with its imposition of tariffs on cutlery, gloves and mantles, is not intended to keep foreign goods out, then it is no good for the people in this country who are attempting to manufacture those goods. They will get no advantage if the goods come in as fast or even faster than they did before the duty was imposed. If the duty is to be imposed for the express purpose of keeping the goods out, then you do not get any revenue from them. The result of this Bill will be that you will have the manufacturers of this country going on in the same slip-shod way, as the Report we have had on cutlery says. It states definitely that the manufacturers have not brought their plant and machinery up to date. It is not efficient in any way. There are many hundreds of those very small factories, almost like cottages, still in existence doing the outside work. How are you going to make them efficient and make their competition as cheap as it ought to be in competition with the foreigner?
Your desire is to keep the imports out of the country in order to safeguard industries here and to find employment for those engaged in those industries. If you find employment for those in those industries what are you going to do with the people you cut off from imports and exports? I heard two hon. Members on the other side of the House speaking of the divisions which they represent. One of them said that the glove trade in his district was the best in the world. The other, speaking in the same why of his district, said that their work was well done, good and efficient, but these Members did not think about any other trade except the trade which was going on in their own localities. What is going to happen to the trade in the district which I represent, that of shipping? We have five docks in my division and over 25 per cent. of the inhabitants are dock workers, import and export workers. We have at the present time a very large number of those men unemployed. If you go on with this Bill and do as you are desirous of doing and stop the importation of goods into this country, that will not find any work for them; on the contrary, it will put a few more out of work. If, as has been said over and over again, imports into this country are paid by exports, then there will be no exports, because there will be no imports to be paid for 571 by exports, and another section of men will be thrown out. All that we can hear is of just a few thousand men who are likely to get employment if we get safeguarding in these three trades. We are very sceptical in this matter as to whether it is going to do any good or not. We rather fear it is going to do harm in the long run by keeping a number of men out of work; and, moreover, is it going to increase prices, not only to people working in the trade, but to other people who have to purchase the commodities?
We claim that this safeguarding of industries is not in the interest of the people at all. My hon. Friend the Member for St. Helens (Mr. Sexton) has said that he represents the workers in what is known as a sheltered trade. Presumably I also represent a body of men in a sheltered trade, but what we find is exactly what has been said by a great shipping magnate, who has made a report to his directors to the effect that shipping during the last 12 months has been worse than it has been for a number of years, and he does not see any signs of improvement in the immediate future. We have at the present time in my district 6,000 men signing on for what some people are pleased to call the dole. I do not call it by that name; I call it unemployment insurance benefit, because, if they do not pay it all themselves, it comes out of the labours of the workers generally. In my district, also, they make them sign on twice a day, because they are very douftful of them—they are dockers. To suit the convenience of the employers they are taken on twice a day, and, if a man works four hours on any one day in the week he has to pay his full quota towards insurance, as well as the man who works all the week. Therefore, we are not only hit in that direction, so far as casual employment is concerned, but we are very much hit in regard to the benefit that is supposed to be given from the Employment Exchange. We are not desirous of hampering any trade at all, but we do desire that the Government shall use their best endeavours to find work for the many and not for the few. We believe that bringing forward the Safeguarding of Industries Bill in this way, in regard to these three kinds of commodities, is only going to find work for a very few, and that it will put a 572 larger number of men out of work in other ways.
§ Mr. JACOB
I feel sure, Mr. Deputy-Speaker, that you will treat my maiden effort with your usual indulgence, and that, if I stray from the lines of Debate, you will not be too hard upon me.
It seems to me that a Debate on the Safeguarding of Industries can hardly be kept clear of our general fiscal system. Otherwise, it would be like the play of "Hamlet" with the Prince of Denmark left out. It has struck me that, owing to the limitations of Debate, there has been a certain unreality about the Debates in this House, both on unemployment and on the safeguarding of industries. For instance, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), speaking in the unemployment Debate the other day, demonstrated clearly that our export trade had diminished relatively to the trade of the United States, Germany, France, Italy, Japan, and Canada. I am sure, however, that his keen intellect must have seen that there was one factor common to all those countries, and that was that their home market was protected. They were, therefore, in a much better position than we are for mass production, and they were able on that account to undersell us, not only in foreign markets, but in our home market.
It seems to be constantly assumed by hon. Members on the other side that an import duty will necessarily cause an increase in the price of the home-manufactured article. I think the effect of the McKenna Duty on motor cars is the best answer to that proposition. The re-imposition of the McKenna Duty on motor cars has resulted in not only a reduction in price in the home market, but an increase in the export trade, especially to Australia. In Australia they formerly used American manufactured motor cars, but lately the demand there has been for English motor cars, and very large orders have been placed in this country. It would be a great advantage to us if we could only get the tariff question in this country out of the political arena, and decide it as it ought to be decided, on purely business, common-sense grounds. For instance, in America and the Dominions there is no party which can be described as anti-Tariff or Free Trade. 573 There may be differences of opinion between the representatives of the farming interest and the representatives of industrial centres as to whether the duties should be higher or lower, but there is no one who advocates or even discusses the question of doing without a tariff altogether.
The most striking feature in the development of the great English speaking Dominions overseas, from America—which was one of our first Colonies—to the very latest addition to the Dominions, the Irish Free State, has been their adoption of Protection for their industries. We have no monopoly of fiscal wisdom, and the fact that we are alone in a policy of so-called Free Trade should give us cause for reflection. The attitude taken up by the Rip Van Winkles of Cobdenism would be amusing if it were not so pathetic. Regardless of the anachronism of their situation, they parade before the House their mid-Victorian garments—rather threadbare now—and keep on repeating ancient shibboleths, which may have had some application in the past, but are considerably out of date at present. I have some sympathy with them, for I was brought up in the straightest sect of the Free Trade religion. I sat at the feet of Gamaliel, in the person of the professor of political economy at the University, and I was expected to know Adam Smith and John Stuart Mill from cover to cover—
§ Mr. JACOB
I am coming to Karl Marx presently. But my experience of practical business, and the trend of fiscal thought throughout the world, has convinced me that doctrinaire Free Trade can only be successful in an ideal world, where there are no rivalries of nations and no restrictions by trade unions. When Free Trade was introduced, this country had great initial advantages in its coal, iron and shipping, in its Colonies, in the skill of its workmen, and in the strength of its industries, which had been built up under a period of Protection. But since 1870 other countries have developed their manufactures behind high tariff walls, and our proportion of exports has been steadily diminishing as compared with foreign countries, although we have held our own 574 practically in the Dominion markets. The problem before us is how to retail. and add to those industries that still survive. I wish the House would look at the matter from a common-sense and business like point of view, instead of discussing impossible propositions such as that, on the one side, of a return to the mid-Victorian position, or, on the other side, the destruction of our whole industrial system before we attempt to build up a new one in the supposed interests of the proletariat. I am afraid the Liberal party is hopelessly Conservative in its attachment to obsolete theories. I have hope of the Labour party if it would only emancipate itself from the impossible doctrines of Marxian Socialism. The Labour party is strong and vigorous, and if it were to use its power as it has done in America and the Colonies, to secure high wages and a better standard of living for the population, there would be common ground between Labour and Conservatism. It is pathetic to see the Labour Samson, with his eyes blinded by the Delilahs of so-called Free Trade, actually engaged in pulling down the pillars of the temple of industry, the fall of which will result not only in the destruction of the employers, but even of Samson himself.
There is not, and there should not be, any real antagonism between Labour and Capital. Wherever Capital is most plentiful, the wages of Labour are highest. For instance, in the United States, where there is probably the greatest accumulation of capital in the world, you find most employment for labour; labour is more highly remunerated and the conditions are better, whereas in Eastern countries, such as China, where there is very little capital, the conditions of employment are very bad and the wages very low. I wonder that our Friends opposite cannot, or will not, see that it is impossible to maintain the best wages and conditions except in a sheltered market. You might as well try to grow hot house plants on a wind-swept heath. Democracy in America and the Dominions frankly recognises this fact, and, spite of the attitude of the British Socialist leaders, I have great faith in ultimately enlisting the help of the more up-to-date representatives of Labour in supporting safeguarding and Preference. 575 An ex-American Ambassador has just published a letter, stating that Great Britain's future is only that of a middleman. He may probably prove to be right if the policy of the Opposition, whether Socialist or Liberal, be adopted, but he is as certainly wrong if the manufacturers of the country be given a fair chance in competition with their foreign rivals. The British market is probably the greatest in the world, and the citizens of this country have to pay many millions a year for the service of the National Debt, for the upkeep of the Army, Navy, Air Force and Civil Service, which are necessary for the safeguarding of the Empire routes and for the protection of the Colonies and Dependencies, as well as the home market. It seems to me only logical that those who pay the piper should also call the tune, and that our own citizens and those of our Empire should have facilities and privileges in the home market over and above those which we give to foreigners.
§ Mr. NAYLOR
I have not so far taken part in these Debates, and only do so now in order to answer one or two points which have been made during this discussion. I do not regard the principle of Free Trade and Protection as having any vital connection with the problem of unemployment. With me it is rather a question of principle, and it is rather an economic than a fiscal principle. We have to go much deeper into the economic structure of society to get at the real causes of unemployment. Mention has been made by more than one speaker of the fact that we who represent the trade unions are, for that reason, actually Protectionist in principle. I want to answer that argument. We protect our labour because we are seeking to improve the standard of living of those who we represent. But that is not to say that we are inconsistent in opposing a system of fiscal Protection. Because I happen to take an umbrella out with me, and possibly a mackintosh, and to that extent protect myself against the weather, I am not necessarily inconsistent in opposing any system of fiscal Protection. What is true there is true in the illustration regarding protection for the standard of life. This is called the Safeguarding of Industries Bill. I am concerned with safeguarding the standard of living, and 576 even the safeguarding of industries. As a. trade unionist, my concern has been for many years to maintain wages, to maintain the value of the reward that men get for their labour, and the more money they earn the more we expect them to add to their standard of living. But when we have submitted to us a proposition which obviously must have the effect of increasing prices, that is economically a reduction of wages, because we do not measure our wages by the money we receive but by what we are able to purchase with it. Therefore, as trade unionists, we are justified in examining very closely indeed any proposition which would have as one of its results an increase in prices. Hon. Members on the other side have questioned the statement that there will be an increase of prices as a result of imposing tariffs such as those suggested in this Bill. I have not yet heard any statement made that would convince any honestly thinking man that the effect of the tariff will not have that result on prices. One hon. Member opposite reminded us that he pledged himself on his platform during the General Election to oppose any proposition for taxing food. Why did he take up that attitude? There are workers in the agricultural industry who want protecting just as much as men employed in the glove industry. If it is good for one industry, how, logically, can it be bad for another industry? The reason why the hon. Member gave that pledge was because he knew perfectly well that the cost of food would go up by the amount of the tariff, at least, that would be imposed on the article of produce. So it will be in the case of the articles to be taxed under this Bill.
If the Government are imposing the duty for the purpose of providing employment for men and women who otherwise would be disengaged in this country, they can only do so by keeping out the product which they say keeps these people out of employment. If they are successful in keeping the competing product out and enabling the British manufacturer to produce the same article on a much larger scale, he can only do that when the price of the article has increased to the point of making it economically possible for him to produce the extra article at a profit. It is because he cannot now produce the article 577 at a profit that the Government proposes to help him by imposing a tariff that will enable him to increase the price of the article to the consumer who at present buys the cheaper foreign article in preference to the dearer article produced at home. Hon. Members opposite cannot escape the conclusion that the imposition of a tariff must of necessity increase the cost of the article that is protected.
I could understand a policy of Protection if it were introduced with the full and complete intention of transforming the industrial conditions of this country into Protection all round. There was some talk a little while ago about a scientific tariff. America has shown how a scientific tariff can be imposed. The Government have not taken that course in the present instance. There is nothing scientific in selecting one or two articles of production and finding out in connection with those articles that there is a certain measure of unemployment in the industries concerned. They have discovered that there is unemployment in the glove industry, the gas-mantle making industry and the cutlery industry, and they have come to the conclusion to introduce this Measure of Protection by instalments. See where it is leading us. It begins in this way, and it is quite conceivable—here I am conceding a point to hon. Members opposite—that as far as the protected industries are concerned, it may increase employment in the glove-making and the gas-mantle making industries, but you are only protecting these sections of industry.
If you succeed in excluding the foreign importer as far as the manufacture of leather gloves is concerned, he will promptly use the machinery at his disposal for the manufacture of some article made of the same material as the gloves, whether it be leather or fabric. Therefore, although there may be a gain in the actual glove making employment in this country, we shall lose in some other sections of leather manufacture. Then the Government will come to the House and say, "We find that in saddlery work there has been a great diminishing of employment since the tariff was put on imported gloves. We find that the saddlery industry shows a considerable falling off, and it becomes necessary, having protected gloves, and given an incentive to the foreign 578 importer to manufacture saddlery, to follow the tariff on gloves with a tariff on saddlery and other articles of leather manufacture. "We have a series of tariffs laid down in this Hill, and we are rapidly coming to the time when we shall be a protected country, unless the opposition that we can put up in this House is effective in staying the hands of the Government in this respect.
What is the position of a working-class woman when she goes to market? Possibly she is wearing silk stockings, which are taxed. She may have lace upon her person which is also taxed. She goes to the shop wearing gloves, which are also taxed. She buys sugar which is taxed. The sugar is wrapped in paper which may shortly be taxed. Round the paper parcel is twine, shortly to be taxed. This is cut with a pair of scissors that is taxed. There will be little left for the working-class family that is not taxed, if the Government continues these Safeguarding proposals year after year. In all these cases the price of the article protected goes up.
Reference has been made by one hon. Member to the effect of the tariffs upon revenue. He assumed that as a result of these proposals there will be a certain increase in revenue, and for that reason he was glad to see the Chancellor of the Exchequer on the Front Bench. Are the Government really in earnest in seeking to keep out the foreign imports, in which case if they are successful they will derive no revenue whatever from the tariff, or are they playing up for the possibility of getting revenue from the tariff, in which event they will not succeed in keeping out the foreign product? You have to choose between those two points. I see that the hon. Member for Reading (Mr. H. Williams) is smiling rather loudly. I hope that he will follow me in this Debate. Perhaps he will now have an opportunity of being seen by Mr. Speaker that he would not otherwise have got. Let him take up the task of answering that argument. Is he anxious for this tariff in order to keep out the foreign product or does he desire to have the tariff in order to add to the revenue of the country? If fiscal proposals are made for protecting the industry of the country they must be made general and complete. Otherwise you do not protect the industry, and you merely give an addi- 579 tional incentive to the foreign importer to turn his machinery to the production of some other article of a similar character. Therefore, I suggest that the President of the Board of Trade, when reviewing the Reports of these Committees, should at least consider whether or not the tariff is sufficient for keeping out articles. Unless that be done, no good can ensue to the unemployment existing in that particular industry. If he is successful in getting revenue, to that extent he knows that he is not doing any good so far as employment is concerned.
§ Mr. H. WILLIAMS
It is a matter of considerable satisfaction to me that I am privileged to reply forthwith to the challenge which has been thrown: out. I have in my hand the accounts relating to the trade and employment of the United Kingdom for October last. The total imports of silk and silk manufactures during the month ended 31st October, were £2,230,000. At that time no tariff was imposed. The amount imported during the month ended 31st October, was £1,041,000. In respect of the latter, the Chancellor of the Exchequer will collect certain revenue duties, and if the last speaker wants particulars he will find them in the OFFICIAL REPORT which reached him this morning, in the form of a reply by the Chancellor of the Exchequer to a question put by myself. In respect to the difference between last year's imports and this year's, I think the probability is that increased employment will be afforded. Broadly speaking, what happens when you impose a duty is that you restrict but do not exclude the import. In respect of what comes in you secure revenue, and in respect of what you shut out, you secure employment.
I have listened to-day to most of the Debate. I have heard four Free Traders in succession, two belonging to parties to which I do not belong and two to the party to which I do belong. I am afraid that none of them is present now, and I do not want to be offensive, but, so far as my personal knowledge of them is concerned, three of them have never sold anything in their lives and the fourth has sold only foreign goods. I suggest that that kind of experience is not the best to enable us to arrive at a decision as to what is likely to be the 580 best fiscal policy in the interests of employment and the standard of living of the people. I have listened to many speeches by Free Traders. They always assume, whether they happen to be Conservatives, Liberals or Socialists, that an import duty is necessarily borne by the consumer. They are not entitled to make that assumption; they have to prove it. They make two other assumptions, neither of which they attempt to prove. One is based on an imperfect analysis of the balance of trade. They say that exports pay for imports, that if you restrict your imports you must restrict exports, and that whatever employment you give by restricting imports, you lose on account of the consequent restriction of your export. That is a very superficial examination of the balance of trade, which contains at least five major items on both sides. I am not going to attempt in the few minutes at my disposal to go into the whole complicated problem of the balance of trade.
§ Mr. WILLIAMS
I am satisfied that Bethnal Green would be wiser if it did hear me. I want to devote my remarks to one particular aspect of the question. There is a third fallacy of Free Traders and it is a psychological fallacy. The first is as to prices; the second as to balance of trade, and the third relates to security. If a man has no security at all, he becomes inefficient. If he has absolute security, as a rule he becomes inefficient. In between the two extremes there is some measure of security which leads to maximum efficiency. That is what I wish to secure, not only by means of tariffs but in every other direction. With profound respect to the Civil Service of this country and every other country—in this country civil servants are supremely honest—I do not think their efficiency is equal to that of persons who are exposed to some measure of competition. On the other hand, the absolutely casual worker is so demoralised by insecurity that he equally is inefficient. It is suggested that since Protection gives people security, it will make them inefficient. Our experience would lead us to believe that a moderate measure of protection which still exposes people to competition will in fact lead them to become more efficient.
581 Let me deal now with the problem of prices. The Free Trader tells us that an import duty is of necessity borne by the consumer. I am not surprised that they say that. The Customs duties to which we have been used in this country are Customs duties falling on commodities entirely drawn from abroad, or. alternatively, if produced in this country, are accompanied by an equivalent Excise Duty, so that the whole source of supply is taxed. In those cases it is obvious that the tax tends to be transferred to the consumer. But the case that we are considering is a different case. It is a case where one part of the supply is taxed and another part is untaxed. What will happen to prices will depend, first of all, on the ratio of the taxed supply to the untaxed supply, also upon the capacity of the producers of the untaxed supply to increase that supply and to compete more effectively with the taxed supply.
In other words it is not an absolute problem, but a relative problem. If I want a creative tariff to build up an industry which does not exist, the initial effect of that tariff will be to increase prices by at least its own amount and possibly more. If, on the other hand, I am imposing a preservative tariff to safeguard an industry which already exists, then I am faced with different circumstances. In some instances, if the internal competition is large, there will be no rise in prices at all, but possibly later on there may be a decrease in prices. If initially the home competition is only moderate, there may be a substantial rise in prices at first followed by a steady decline as the home production increases. I have endeavoured to investigate this question by a statistical analysis of the Trade and Navigation returns, and I have arrived at some rather interesting conclusions. The prices of imports as declared in these returns are c.i.f. prices—that is cost insurance and freight. They are the prices which the importer in this country has to pay, apart from any duty and apart from the cost of conveyance from the port to the place of sale. They are, broadly speaking, what the foreign seller will receive for these goods exclusive of the cost of conveying them from his country to ours.
Taking the eight months ended on 31st August of last year, I find that in the 582 case of fabric gloves which were dutiable up to 19th August, the average price per dozen pairs was 11s. 1d. There was then a duty of one-third of the value. It is true my figures cover a few days beyond the date on which the duty ended, but the Board of Trade return really covers only up to the 24th of the month, and so there is only a possible error of four or five days. In 1925, when there was no duty, the average price of fabric gloves was 13s. 3d. Why did the foreigner receive 2s, 2d. per dozen pairs more for his gloves when there was no duty than he received when there was a duty? Obviously, because when there was a duty he cut his price by that amount to maintain his sales, and to that extent he paid the import duty and the consumer did not. It may be suggested that it is an isolated case. Let me then go further and take the case of complete touring cars. It is difficult to illustrate this argument with all the cases, because in some cases only can one get units of quantity as well as units of value in the returns. For example, I cannot deal with lace because the Board of Trade return only gives value. In the case of complete touring cars in October, 1923, the average price per car was £203, and a duty was leviable on top of that price. In October, 1924, when there was no duty the average price per car rose to £253. and in October, 1925, when the duty had been re-imposed the average price dropped to £197.
§ Mr. WILLIAMS
I am only pointing out the facts that the dutiable car had a price of £203; the non-dutiable car had a price of £253, and coming again to the dutiable car in this year, the price was £197.
§ 9.0 P.M.
§ Mr. WILLIAMS
I am very glad the hon. Member has raised that point. I was going to point out the difficulty in connection with these statistics of being certain that you are always dealing with the same class of car. I agree that if you had an abnormal quantity of high priced cars one month and of low priced cars 583 in another your average might be upset. In order to be sure on that point I do not limit myself to one month. We will take September. The price in September, 1923, was £198; in September, 1924, £241, and in September, 1925, £183. Why is there a difference of £50 or £60 between the average price of imported cars when there is a tariff and the average price when there is no tariff? Solely because the foreign producer has cut his price to that extent in order to jump over our-tariff.
I move from motor cars to pianos, and here I can give the hon. Member who interrupted a rather interesting point. In October, 1923, when there was a duty on pianos the average price was £44 per piano. In October, 1924, when the duty-had been removed the price was £52, and in October, 1925, when the duty-was again imposed, the price rose to £54. I am certain that will gratify the Free Trade instincts of the hon. Gentleman. What is the explanation? The effect of the imposition of the duty was to cut the imports down to one-tenth. It is evident that it was the cheaper class of pianos which was eliminated, and only the more expensive pianos came in, whereas in the case of motor cars the importation in October, 1925, was greater in number than in 1924, despite the imposition of a tariff—the reason being that in that case the industry was constantly expanding. Let us take the case of clocks. I worked this analysis out for a period of six months, and I find that for the six months ended June, 1923, the average price per clock was 3s. 6d.; for the period ended June, 1924, the average price was 3s. 3d., and for the period ended June, 1925, it was 46. 1d.
Here, curiously enough, we get a case which appears to be against my argument, but the point I am trying to establish is that some of these cases show quite clearly that the duty is borne by the foreigner; others show that only part of the duty is borne by the foreigner, and a third class show that it is possible for the foreigner to cast the duty on the British consumer. What we have been trying to establish for years is that this is, as I have said, a relative and not an absolute question. It depends on a large number of variable factors, and the whole basis of a scientific tariff where you are 584 seeking to safeguard existing industries is that it should operate in such a way that you will in fact force the burden of the duty on the foreign producer. Some of the figures I have quoted prove conclusively that this is possible, and so long as that can be proved, those who hold Free Trade views are not entitled to say blindly and without argument that the consumer must pay.
§ Mr. MONTAGUE
I have been listening to the speech of the hon. Member for Reading (Mr. H. Williams), and I have admired its intricate analysis of certain aspects of the question under discussion, but after all that he has said and that others have said I am sure that the people who are living six to a room in my constituency, and living a life of grinding toil, will still be living six to a room, will still either be toiling in that grinding way or starving under unemployed conditions even after this Bill and other Bills of a similar nature have been passed into law. I am tired of what seems to me—and I say so with all deference to the House— the utter waste of time that has been in evidence during the discussion of these proposals. The people whom I represent and stand for are poor. They were poor when there was a Protectionist policy in this country. [An HON. MEMBER: "When was that?"] The hon. Member does not seem to have heard of the period that forced his own party to support the policy of the abolition of the Corn Laws. People under all conditions of fiscal policy are poor, and they are poor, not because of fiscal policy, but because of the capitalist system. The hon. Member opposite spoke about the fallacies of Karl Marx, but he does not seem to realise that it was Karl Marx who, in the heyday of industrial prosperity under Free Trade, prophesied the exact conditions which he describes as existing to-day as the inevitable outcome, not of Free Trade, nor of Protection, but of a system of society and of economics based upon private monopoly.
What I wanted to ask those Members of the Tory party who have been telling us that we have to protect ourselves— and they are very much concerned about the interests of the workers—against low paid labour and sweated conditions in foreign countries, is why they do not explain that those low paid conditions 585 and that sweating exist, not only in Protectionist America—[HON. MEMBERS: "No!"]—but in the Protectionist Continental countries. I meant to except from my argument the case of America for the moment, because America represents different economic conditions entirely, the condition of being a self-contained Continent, which makes a vast difference. Apart from America, I wanted to speak of the other countries. Why is it that you have to consider the question of the importation into this country of sweated goods from Protectionist Continental countries? If Protection is going to be of such advantage to the workers of this country, why is it that we have these underpaid goods coming into this country, against which we have to protect ourselves?
To me, it seems that Protection does not mean anything but poverty to the workers, and neither does Free Trade. If we take, for instance, the 19th century, which represents a period of Protection and a period of Free Trade, we find that the total income of this country was £174,000,000 in 1800, and in 1920 it was £4,000,000,000 a year; that is, an increase of 28 times during the century and a quarter since 1800. If you take it per head of the population, you find that in 1800 it was £16 14s., and in 1920 £85 per head, an increase of five times per head of population of wealth in this country under both Protection and Free Trade.
§ Mr. MONTAGUE
The hon. Member for Reading says, "Hear, hear," and thinks of the prosperity of the nation and this increase illustrating that prosperity as the last word on the subject. If the wealth of the nation has increased 28 times in that period, and per head of the population five times, why is it that the wages, the real purchasing power of the workers of this country, have not increased 100 per cent. during that period? The reason is because the present system is one of profit-making, a system of mad scrambling in the home and international markets for a trade—
§ Mr. MONTAGUE
If the hon. Member had to live under the conditions under 586 which the majority of my constituents live he would be able to talk about things being shameful.
§ Mr. MONTAGUE
From the point of view of the working classes of this country, and that is the point of view-about which I am concerned, the question of these little duties upon gas mantles and gloves and pocket knives is hardly worth considering, because the workers are bound to live under conditions of poverty and always have lived under those conditions of poverty, simply because they are a working and servile class, and while the system remains which keeps that class in subjection, all your fiscal changes will make not the slightest difference to their conditions. I said during the course of the previous Debate that the natural function of foreign trade is something very different from what the Free Traders and Tariff Reformers think it is. I want to emphasise that point once more in a slightly different way from that in which I endeavoured to emphasise it the other evening.
I said the natural, moral, normal function of foreign trade is the exchange of a surplus of produce of the kind that we can turn out better and more efficiently by virtue of special natural and other advantages, and that all foreign trade ought to be that of such surpluses being exchanged for the mutual advantage of all countries which are concerned in those transactions. During the heyday of Free Trade it was perfectly true that we had those natural advantages, and that other nations did not possess them, but to-day other nations do possess those advantages, and they have as much right to turn out commodities and endeavour to sell them as we have. The idea that we, as a nation, can expect to be always the 587 market of the world is altogether economically unsound, and it is morally unsound as well, and I say that we want to base the whole of our economic system, first of all, upon the development of our own country, upon the provision from our own resources of as much as we possibly can of the essential commodities of life for the sustenance of the people of this nation, which implies also fair distribution of the produce of industry, a thing that cannot be accomplished under a system of Capitalism.
What is the result? I say that we ought not to be concerned so much with foreign trade as we are. I do not believe we can get back our foreign trade to the relative degree that we had it in the past. I do not believe we ought to concern ourselves primarily with endeavouring to get it back under either Free Trade or Protection, at the expense of making the workers' conditions dependent upon the general economic conditions of the world. I find, from a pamphlet which has been sent to most Members of Parliament this morning by the Warrington Chamber of Commerce, that my idea expressed the other evening was not so fantastic after all. I find that this particular pamphlet says:It may be suggested that, rightly or wrongly, Great Britain has attributed too much importance to foreign trade and was prepared to sacrifice everything with the object of encouraging it. In view of the present position, it might be desirable that this general policy should be reviewed, and, while seeking as far as possible to do nothing which would directly prejudice the export trade of the country, should now regard the development of the home trade as the first consideration, and make the policy of the country towards foreign trade subservient to the latter rather than make the homo trade subservient to the former.
§ Mr. MONTAGUE
The hon. Member is rather too previous, because, although I was not going to read the last paragraph, I was going to admit that the purpose of this pamphlet is to support the policy of Protection.
§ HON. MEMBERS: Read it!
§ Mr. MONTAGUE
I have not the slightest objection to reading it, except that I promised Mr. Speaker I would not occupy much time. [HON. MEMBERS: "Read it."] The concluding paragraph simply supports the policy of Protection. I am not denying that. I am only saying this particular pamphlet does suggest, in spite of the remarks and laughter of some Members of the House when I made the suggestion, that it is not so fantastic as many Members imagine to suggest we are on the wrong tack when we make foreign trade our primary concern. That is the only point I wish to make with regard to that particular quotation. The right hon. Member for Colne Valley (Mr. Snowden), during the course of a very incisive speech, said that the home trade of this country was in a better position than it ever had been, and that the diminution of trade and employment was due to the reduction of our foreign trade. He regretted that, and said we required to get our export trade back. The suggestion was, not to concern ourselves so much with the question of the development of home trade.
§ Mr. SNOWDEN
If I conveyed that impression, it certainly was not in my mind. What I said was that the immediate problem in order to find work is the restoration of the export trade.
§ Mr. MONTAGUE
I accept that correction. It makes no real difference to the point I wish to bring out, and that is that I do not believe you will solve the problem of unemployment as a result of extending to any great degree your export trade, because the economic conditions are so vastly different from what they were in years past. The nations to which we supplied the products of our industries are to-day producing them themselves, and also producing for neutral markets, as they are perfectly 589 entitled to do. The right hon. Member for Colne Valley said, in the course of an article in the "Glasgow Herald," that his definition of Free Trade was not confined to its application to free imports, but that it involved the removal of all hindrances to free production, free exchange of commodities, and the destruction of monopolies. I represent a school of thought which is neither Free Trade nor Protection. As I said the other night, both are disadvantageous to the workers of this country, for the reason I gave, that Protection means high prices and Free Trade means low wages, and both high prices and low wages are one and the same thing to the working classes. As a Socialist, I have an alternative policy. My policy is the organisation of industry, and the ultimate co-ordination of the industries of the world, and I want to take advantage of a debate upon Free Trade and Protection in order to press on the House that point of view. The whole history of trade unionism, of Socialist thought and of social reform has been to get away from the mid-Victorian laissez-faire policy of Free Trade, and the removal of hindrances to free competition, and the rest of it. The policy of Free Trade has been a policy of cheapness, in order that you should be able to get cheap food and cheap necessaries, so that your labour also might be cheap, and therefore more profits might be made by the exploiters. That is the policy of Free Trade. I am not concerned with the elaborate doctrinnaire defence of the policy of Free Trade. At any rate, I believe the Free Traders, as between the two, make by far the better case, by far the more scientific case.
But what does it all amount to in the end? A mere question of manufacturer versus landlord in years past, then of one class of manufacturer against another class of manufacturer or middleman at the present time, and the workers suffer all the time, because the workers simply exist for the purpose of producing wealth, and not for the purpose of fairly enjoying the proceeds of industry. I want to say that with all the emphasis I can. I know points of view like that are rather unpopular in this House. [HON. MEMBERS: "No!"] I hope they are more popular than I think they are, but I do want to say we have got Free Trade to-day, and there is an appalling 590 amount of poverty and unemployment. What is the use of talking about gas mantles, pocket knives, and trivialities of that character, when I find the greatest poverty under conditions of Free Trade? I am perfectly sure duties upon gas mantles and pocket knives will not relieve that poverty.
§ Sir FRANK MEYER
I will not follow the hon. Gentleman who has just, sat down into a discussion of the relative merits of the capitalist system and the .Socialist system, which he would like to see introduced, nor will I endeavour to reconcile the very divergent point of view which he expressed and the point of view expressed earlier in the Debate by the right hon. Member for Colne Valley (Mr. Snowden). It is obvious that those points of view cannot be reconciled. The hon. Gentleman thinks that the export trade is not of the very greatest importance. If he can explain to the House on some other occasion how it would be possible to pay for the enormous quantities of food and raw material which this country will always have to import, without a large export trade, I am sure the House would be glad to hear it.
I approach this subject, I am bound to confess, with a very open mind. I do not, share the apostolic fervour of the hon. and gallant Member for Bournemouth (Sir H. Croft) for Protection. Nor can I feel the almost religious enthusiasm of the right hon. Member for Colne Valley or the hon. and gallant Member for Leith (Captain Benn) in their advocacy of free imports. It has always seemed to me to be a question entirely of expediency. On the facts of the case, I must say it impresses me very strongly that this country, which is a Free Trade country, has a larger proportion of unemployed than any other country of similar size or standing in the world, and that in America, which is a Protectionist country, higher wages are paid, and the general standard of life is higher than in any other country. That impresses me, looking at the present question as I do with an impartial mind, more than any Free Trade or Protectionist theory, but I am bound to say that I have listened to a great many speeches during the course of the Debates both on this Bill and on the Resolutions which led up 591 to it, and I am still somewhat in the position of one who is willing to be converted to either side on the main question of Protection against Free Trade.
I should like to put to advocates of Free Trade one or two questions, and I hope that either to-night or on a future occasion they may favour me with an answer. We are constantly being told that it does not matter how large your imports are, the larger they are the better, because they must be paid for by exports. I presume that means, of course, that the word "exports" includes what are usually known as invisible exports, as well as the export of goods. If it be true that, no matter how large your imports are, they will be paid for by exports, it seems to me that there can be no such thing as an adverse trade balance. Yet that is a theory in economics which we have always been led to believe is true, namely, that it is possible that there should be an adverse trade balance against a country. I put it to hon. Members in order that they may explain to me on some future occasion whether it is not possible that, if you have too large an excess of imports, you end by paying for them by living on your capital, and, as the Noble Lord the Member for Oxford University (Lord H. Cecil) said, the end of that is that your imports automatically decrease, because you have got nothing with which to pay for them. If that problem can be explained to me, I should be very grateful to any hon Member who can show me how the theory, that you may increase imports to an unlimited extent without damaging the country, is possible.
In the second place, the right hon. Gentleman the Member for Colne Valley, in both speeches which he has addressed to the House on the subject—and I always listen to his speeches with the greatest interest and pleasure, apart from any partisan feeling which he may put into his speeches—has laid emphasis on the fact that the imposition of a tariff on any class of goods will lead to fiercer competition in the neutral markets by the countries against whom the tariff is placed. Is it really thought that it needs any tariff on our part to cause, say, Germany or America to compete more fiercely with us in neutral markets? It 592 seems to me that that competition is as fierce as it can be. Whereas those countries have the advantage of starting with two certain markets, their own and this country's free market, whereby to reduce their overhead charges and then compete with us in neutral markets with great success, we have no assured market with which to increase our output and to reduce our overhead charges, and therefore it seems to me that to say that to put a tariff on, say, against Germany, will make her compete more fiercely with us in neutral countries, is fallacious. You may create a desire in Germany to compete more fiercely in neutral markets, but it will not create in Germany the capacity to compete more successfully in neutral markets than she does now,
§ Mr. SNOWDEN
I am afraid I did not make my point clear, or else the hon. Member has misunderstood me. What I said was that if this market be closed, then the country which has sent any particular import into this country will continue to produce, and therefore their competition in that particular article in other countries will become more intense.
§ Sir F. MEYER
I am grateful to the right hon. Gentleman. I do not think I did misunderstand him; my point is that though that country will endeavour to continue to produce, having one market hitherto open to her now closed she will find it more difficult to produce so cheaply as she did in the past. Therefore it will be rather an advantage to us than a disadvantage, however hard she may try to compete with us in the neutral markets. One other point I would like to bring out, that is the solicitude which the party opposite has on this occasion displayed for a class which I may describe as the merchant class. I have always understood from the speeches and the writings of hon. Members above the Gangway that the class they considered the most important in the community was the worker, who produced all the wealth; some also agree that the employer who directly employs that workman, and puts his capital into it, is until such a time as a Socialist State comes into being, performing a useful function and does some service to the State. I have always heard them contend that the man who merely buys as cheap as he can in one market and sells as dearly as he can in 593 another market is a mere excrescence on the country. He does no good to the country. Yet we have the right hon. Gentleman saying, and on previous occasions other hon. Members and right hon. Gentlemen opposite saying, that these proposed tariffs and other tariffs are going to injure seriously the merchant trade in this country. To me it is something new that there should be such solicitude for that, according to them, unnecessary class, as against the, worker and the employer whom we are hoping to protect even in a small way by these duties.
Finally, I do think that all supporters of the present system of free imports ought to be very grateful to us for bringing in this small measure of Protection I quite candidly admit that there is no distinction between safeguarding and Protection. I do think there is a difference between safeguarding and a general tariff, but to safeguard an industry is to protect the industry; to pretend anything else is mere juggling with words. I think the light hon. Gentleman ought to be very grateful. I hope all the hon. Gentlemen opposite are duly grateful. Hitherto they have preached theories; they have told the country that a tariff will raise prices, will not improve employment, and will diminish the general wealth of the country. They have told the country that, but, since 1846 they have never been able to prove it. Now they have got their opportunity. In five years' time they will be able to go to the country and say: Here are those duties that have been in existence for five years, and cutlery is dearer, and gas mantles are dearer, and there is no more employment. Look what Protection has done!" What a splendid argument against increasing it after the next General Election. So I do hope that the right hon. Gentleman for Colne Valley and the hon. and gallant Gentleman for Leith are grateful to us for the small Measure we are introducing. I do not profess to be optimistic enough to hope that, if prices do not rise in these industries, and if unemployment in these industries is partly removed, that he will be converted, because I look upon him as, shall I say, the Casabianca of free imports. Alone upon the burning deck he would stand deserted by the right hon. Gentlemen the Members for Carmarthen 594 (Sir A. Mond), Carnarvon Boroughs (Mr. Lloyd George), and West Swansea (Mr. Runciman). Alone he stands, alone like brave Horatius. Still, I hope that he and the right hon. Gentleman opposite, and all other supporters of free: imports, will be duly grateful to us for the opportunity we give to them that at the end of the five years they will have some solid ground of facts on which to found their theories.
§ Captain BENN
We are deeply grateful to the graceful and charming speech to which we have just listened and which has adorned the Debate. We are reminded that Horatius kept the bridge, but. I would also remind the hon. Baronet that the enemy did not get over the bridge. In the reference to Casabianca, too, hon. Gentlemen opposite perhaps need to be reminded that instead of standing on the deck, they propose to set the ship on fire! I would commend to the Chancellor of the Exchequer, whom we are glad to see on the benches, that the hon. Gentleman who has just sat down admitted that there was no distinction between safeguarding and Protection. Perhaps the Chancellor of the Exchequer in the remarks that he is going to make in winding up the Debate will deal with that aspect of the case— that there is no distinction between safeguarding and Protection.
§ Sir F. MEYER
I would explain for the benefit of the right hon. Gentleman that what I did say was that though there was no difference between safeguarding and Protection, there was a difference between safeguarding and a general tariff.
§ Captain BENN
Yes, but the speech of the hon. Gentleman was devoted to showing that Protection was an excellent thing. It would be interesting to know whether, if there were another secret Session, how hon. Members would subsequently report what had been stated, or what they had said on some of these points. It has been explained by some hon. Gentlemen opposite that this is not a step in the direction of Protection at all. That is exactly what we want to know. The question that we have put, and which we should like to see answered, is, if this 595 Measure of safeguarding is a good thing, why should it not be given to every industry in the country?
§ Captain BENN
That is what hon. Members opposite say. Let them frankly go to the country and put these things before the country. That is exactly what they dare not do. They did put their remedy before the country, and we know the result. Let me now take the method of procedure with which this thing has been done. Our objection has been slightly misunderstood. Our complaint of these proposed duties is that they are not, as they have been for many years ago put into one budget. This House has had, up to now, the opportunity of making an annual review of taxation. Our complaint is that we have not that opportunity in this case. This is the first of the Debates which has been attended by the Chancellor of the Exchequer who is alone responsible for proposing the scheme of taxation that is to be imposed upon the people of the country. It was not the intention of the Government to adopt this procedure. The Prime Minister said earlier that taxes should be put into the Budget. As lately as Friday we were told that to-day we would be considering Finance (No. 2) Bill. We protested, and were told that this Finance Bill would give us the chance that we desired. Then later we discovered that this Bill was not, in accordance with immemorial practice, brought: forward by a Minister representing the Treasury, for the right hon. Gentleman the President of the Board of Trade taking us all by surprise, produced another Bill, the Safeguarding of Industries (Customs Duties) Bill. This is the first Bill for imposing taxes that I have seen that has not the name of the Chairman of Ways and Means on the back of it. It all indicates that the intention is what we have stated it to be. The Chancellor of the Exchequer made his speech on the Budget in May; but does he know that the President of the Board of Trade has been telling the brush people and others to "hurry up"? Should not the Chancellor of the Exchequer, who is in control of the cash box, be really brought into it? Why should not the Office of Works introduce a Taxation Bill? Why should not the 596 Minister of Agriculture introduce a Taxation Bill? [An HON. MEMBER: "On hops and barley!"]
Let us recognise once and for all that what has been the excellent practice of this House, namely, that we should have one annual review of the expenditure, and one Minister primarily responsible for deciding on behalf of the Government what taxes it is intended to put on, seems to have been abandoned. The President of the Board of Trade gave us a picture of the harmony that exists on the Treasury Bench. The subject of harmony is one in which we on these benches are, of course, interested! I do not know, however, whether the President of the Board of Trade would indicate by some gesture assent or dissent to what I propose to ask. Is he a Protectionist? Of course, he is a Protectionist. He is a full-blooded, fully fledged, whole-hogger, if that is not an offensive expression. Is there agreement on this subject between him and the Chancellor of the Exchequer? If, for example, it were to be said by someone "that the Prime Minister is an unknown man asking for a blank cheque," would the President of the Board of Trade agree with that?
§ Captain BENN
Perhaps, however, we may take some consolation in this matter, that the general spread of harmony is not quite so universal as the President of the Board of Trade seems to make out. Of course, this Second Reading Debate is just a preliminary expression of the opposition we intend to offer against these duties when the Bill gets into Committee. But I would like to inquire, in view of the many speeches we have had, whether some of the old-time questions have been answered? For example, what is the objection to putting a tax on steel or on corn? Is there only prejudice? Would those who have the courage to stand up against prejudice, if they followed their natural bent, put a tax upon steel or corn? What about the foreigner paying? The hon. Member for Reading (Mr. H. Williams), who made, as I think, a very able speech, scouted "the idea that the foreigner does not pay all or part of the tax. The Chancellor of the Exchequer is going to reply, and I 597 will quote to the House what he thinks on this subject. This is what the Chancellor of the Exchequer, the leader of the hon. Member for Reading, said:If they really believe, as so many Protectionists assure us, that the foreigner pays the tax, why should they exempt bread and meat and bacon and all the rest of it from their taxes; for if the foreigner will pay a duty on steel, leather or wool or more highly-manufactured goods, why does he not pay the tax on meat and wheat? What a man this foreigner is.
§ Mr. WILLIAMS
May I point out that the figures I quoted relate to subsequent events with which, probably, the Chancellor of the Exchequer was not acquainted.
§ Captain BENN
The answer is that the nature of the foreigner has changed, and that the Chancellor of the Exchequer was nut familiar with the mass of information which the hon. Member for Reading possesses. Let me read on, because it is much more; pleasant to the House to hear quotations from this eloquence than it is to hear anything I can say:What a man this foreigner is! What a delightful fellow! He will pay the duty on steel all right, but when it comes to food he will have nothing to do." No doubt the Chancellor of the Exchequer will enlighten one of his followers, the hon. Member for Heading, when he makes his speech.I come to another point. We have constantly said that we regard the imposition of this duty as a breach of a pledge. Let us make it quite clear what pledge has been broken. We say that when the Prime Minister and the President of the Board of Trade came before the House with this scheme, they made certain definite pledges. They said: "If an industry is going to have the advantage of this tariff, it must be able to prove"—those were the words of the Prime Minister, and the operative word was "must"; and the President of the Board of Trade says: "It has to prove certain things." Then they put a number of conditions, which were joined together, not by the word "or," but by the conjunction "and." They said they must prove that wages and hours are low, that exchange is depreciated, and that the 598 industry is suffering from other circumstances. I do not want to go into these duties in detail, because we shall have many days in which to discuss the details when the Committee stage is reached, but will the President of the Board of Trade, who promised that no industry should have a tariff unless it proved these things, say now that these industries have proved these things? That is where we say the pledge has been broken. We object to a tariff in any case, on other grounds which we have submitted, but we object to it on the ground of a breach of pledge.
Let me take two simple instances of breach of faith—razor blades and shears, everyday articles which are in the schedule of the Bill. Will the Chancellor of the Exchequer say that the razors which have come over here from America are produced in a country with a depreciated exchange? Not at all. If anything, the American exchange is at a slight premium. Does the President of the Board of Trade say that wages paid in America are lower or that the hours are longer than here? He says nothing of the kind; and yet though he promised us he would not give a tariff unless those things were proved he now comes forward to propose a tariff. Then take the case of tailors' shears, the raw material, or lather the machinery, of a very large industry. A man came before one of these Committees and asked permission to give evidence about the production of these shears in America. He was refused a hearing. The Chairman said he represented one of those foreigners—a merchant—one of those people who brought so much destruction on the trade of the country—he was a merchant. He was turned away. What was the evidence he was going to give? It was that whereas wages in the cutlery trade in Sheffield are, I think I am right in saying, about 1s. 6d. an hour, men in America making these shears were getting 3s. 8d. to 4s. an hour.
§ Captain BENN
Let us try to see if we can meet the hon. Gentleman's argument. Let us first deal with the pledge. The pledge was that they should not have a duty unless wages are lower. In that case 599 the wages are treble the wages in this country, and yet they get a duty. Let me ask the hon. Member for Barnstaple (Mr. B. Peto) if that is a breach of the pledge? Of course, he cannot say.
§ Captain BENN
The same thing could be said of thousands of other articles. Are we going to bring in everything else?
§ Captain BENN
When I said just now, Why not bring in everything else? the hon. Member for Reading says "We shall."
§ Captain BENN
It is no good an hon. Member replying to me with an unintelligible phrase. We are dealing with the pledge given by the Prime Minister. The pledge has been cut by the shears. As regards the other question, the hon. Member knows quite well that the United States of America are the largest Free Trade area in the whole world. I do not want to occupy more than my share of time, but let me take another example, mantles. In the case of mantles, the Prime Minister and the President of the Board of Trade said these conditions as to wages and exchange must be fulfilled, and then the President comes to the Committee and says, "You have got to put a duty on mantles because I say they are necessary for our safety in the next war." That may or may not be a sound argument, but it is a breach of the pledge that certain conditions have to be fulfilled. There is no objection to the President of the Board of Trade having Committees. A Committee of Members is sitting now under the chairmanship of the hon. and gallant Member for Burton (Colonel Gretton) pressing upon the President of the Board of Trade, as I understand it, a steel duty. The status of that Committee is exactly the same as the status of these other Committees which the President has set up. Sometimes these Committees hear evi- 600 dence and reject it, but we have absolutely no status in this House on the matter, and it is the duty of the Chancellor of the Exchequer to defend these proposals. Even on the Advisory Committee they are told to examine into certain aspects of the case, and they are also informed that they are not permitted to receive evidence from the consumers, who, after all, are the most interested class of all. Every time we ask about the consumer we are told that the House of Commons represents the consumer. If that is so, then the case for the duty and the evidence upon which it is based should be met in the House of Commons. It is no use the President of the Board of Trade pushing into this House this effigy of the Committee, because the right hon. Gentleman has to make out his case to this House. I certainly think it is a great historic occasion to see the Chancellor of the Exchequer, representing a line of distinguished statesmen, starting to undo the work which was done 80 years ago by distinguished Conservative Ministers, who swept away hundreds of these twopenny-halfpenny duties in the interests of the people of this country. If we had seen the Chancellor of the Exchequer reintroducing the Paper Duty to-night that would certainly have completed the picture.
What are the Government promising the traders? They are promising them security. They say to them, "Do not bother about finding a market where you can sell your goods, and do not bother about efficiency, because we are going to give you something better: we are going to give you power to bleed the consumers in this country." What is the security? It is five years. Long before that time elapses the operation of the Quinquennial Act will have driven this Government to the country. There is a Free Trade majority at the present moment in this House, and if there is any cause for rejoicing there are two things to look forward to with pleasure. The first is that these duties will all be repealed by the ensuing Government, and the second is that by introducing these duties the Chancellor of the Exchequer and the President of the Board of Trade are signing the doom of their own party.
§ Mr. A. V. ALEXANDER
I have been reading a speech male by the Chancellor of the Exchequer many years ago. and I 601 am bound to say that he was something of a prophet at that time. This is what he said:The Tory party is the party of vested interests, banded together in a powerful combination, with corruption at home and aggression abroad to cover it up, with the trickery of tariff juggling and the tyranny of a party machine, with sentiment by the bucketful and patriotism by the Imperial pint, with the open hand at the Exchequer and the open door at the public-house, with dear food for the millions and cheap labour for the millionaire.10.0 P.M.
I think that was an excellent description of the special attributes of the Conservative party with which he is now associated. I believe almost every sentence of that splendid example of the phraseology of the Chancellor of the Exchequer can be applied to the policy which he is going to defend to-night. It is a policy in the interests of vested interests, it is a policy of corruption, and it is a breach of faith because the Government are taking industry after industry and introducing Protection by the back door. That is why we charge the party opposite with a breach of faith, and it is a splendid example of what has been described in America as specialised legislation to pick out an industry here and there and give them a special concession instead of a general policy for the whole community. That is corruption of the worst kind. It is rather remarkable to be returning to a demand of industry for Protection, at a time when trusts, combines, and price-fixing associations are growing so rapidly in this country. As a matter of fact the Chancellor of the Exchequer has said on more than one occasion that trusts and price-fixing associations can hardly hope to flourish unless they are bolstered up by tariffs. It is rather significant that the Parliamentary Secretary to the Board of Trade has told us that the President of the Board of Trade did not think it was a good policy to introduce at the same-time as this Bill a Measure to deal with trusts and combines and price-fixing associations. I am hoping that the Chancellor of the Exchequer will reply specifically to what was stated by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) as to how far he thinks the Government intend going on with this policy of imposing duties here and there before he considers that there will be an interference with the pledge given by the 602 Prime Minister. I also want to ask the Chancellor of the Exchequer whether in the Cabinet he objected to the application of the iron and steel trades?
§ Mr. ALEXANDER
Would it be right for me to suggest that it was owing to the opinion of the Chancellor of the Exchequer that the application of the iron and steel trades was sent to the Civil Research Committee as a way out of the difficulty?
§ Mr. CHURCHILL
There has never been any precedent in this House for putting a question about the interior discussions of the Cabinet. Certainly whatever precedents may exist in favour of asking such questions, there is no precedent in any decently organised Cabinet for giving an answer.
§ Mr. ALEXANDER
I judge from that answer that the right hon. Gentleman has fairly strong opinions about this matter which has been referred to a packed Committee—[HON. MEMBERS: "Withdraw!"] —to prevent the case of a great industry like the iron and steel trade being heard. I wonder whether the Chancellor has seen the case issued on behalf of the light steel industry in regard to that application. I have here a case submitted to us signed by 23 firms in the light steel industry. [HON. MEMBERS: "Who are they?"] Some Members of the House have expressed their surprise at a Member for Sheffield opposing a tariff on cutlery. Perhaps they will be surprised to learn at the same time that two of these firms are most important Sheffield firms, who are raising specific objections to the whole policy of safeguarding and Protection. One is the Sheffield Forge and Rolling Mills Company. The other is John Wood & Sons, Limited, actually with works in my own constituency.
The case put by the light steel industry answers completely most of the speeches from the other side of the House. They point out that they are absolutely certain from their experience that if duties of this kind are put on, then their export trade is going to be seriously interfered with. I suggest that those 23 firms—very important firms—know their own business best in this particular matter. I am perfectly certain that the case they put 603 up is a far sounder case than the case we have had put up by the hon. Member for Macclesfield. They say:The provision of selling products under the tariff would be in the hands of a limited number of firms, and it is quite obvious from the experience which the steel trade has of price maintenance associations that a semi-trust association would come into existence.And they would be hit accordingly. That is what is going to raise the prices. Members on the other side have continually said that a tariff of this kind would not raise the price and would not affect the export trade. All the evidence we get from people like the light steel industry is in exactly the opposite direction, and is also proved by actual experience.
On the same point I must point out some facts to hon. Members on the other side of the House, especially the hon. Member for Great Yarmouth (Sir F. Meyer). The fact of increasing imports does not necessarily mean worse trade or more unemployment. I have here the figures of the iron and steel trade of Sheffield between 1900 and 1913. Hon. Members should remember that in 1909 all the things were being said about the ruin of British industry by Free Trade that Members on the other side have been saying for the last 10 days. Well, from 1909 to 1913 the imports of iron and steel into this country increased from 1,250,000 to 2,343,000 tons. Did unemployment increase? The trade union records of unemployment show that it decreased from 7.7 per cent. to 2.2 per cent., although the actual import of iron and steel doubles. I do not think there could have been a finer illustration of the point made against his own party this evening by the right hon. Member for Oxford University (Lord H. Cecil))—
§ Mr. ALEXANDER
The other point is that in spite of those increasing imports of iron and steel we see that the export of iron and steel increased by 1,000,000 tons during that period. It seems to me that there is no case at all for the Government to ask for a tariff upon the industries included in this Bill on the Reports of the Committees. I want to 604 say one or two words about some of the points made by the President of the Board of Trade during the Debates on the Ways and Means Resolution. First of all, he said that what had been exercising his mind was how he could correct the enormously increasing adverse balance of trade.How can we export more than we are exporting at the present time?I cannot understand that point of view being put by him when we find that Schedule 2 of the Bill applies the provisions of the previous Finance Act. This allows merchants who import articles on re-export to reclaim the duty. Secondly, however, manufacturers here using raw material, as in the case of razor blades and gloves, have to pay the duty which they cannot reclaim on re-exporting. How is that going to affect the problem he spoke of, of righting the adverse trade balance? I believe it will have no effect at all.
I was attacked the other night for daring to suggest about the cutlery industry of my own city that it was inefficient. I gave actual extracts from the report of the medical officer of health and of the inspector of factories which I thought were conclusive, but one hon. Member, whose home is in Sheffield, said there were only 160 workers affected by the bad conditions in the factories to which I drew attention. I am reinforced by answers given to-day, which will appear in the OFFICIAL REPORT to-morrow in reply to questions put by my hon. Friend the Member for Attercliffe (Mr. Cecil Wilson). The inspector of factories, according to these answers, reports that the number of tenement factories in Sheffield is 99, and that there are approximately 2,500 persons employed in them. In other words, rather more than one-third of the total number of persons at present employed in the cutlery industry are employed in tenement factories. In another answer the Home Office say:Placard copies of the now Regulations for the grinding of cutlery and edged tools will be issued to 1,619 occupiers in Sheffield: 1,354 of these are engaged in cutlery work.Here is an industry employing, according to the President of the Board of Trade, between 7,000 and 8,000 people. The Home Secretary tells us to-day that there are over 1,300 using factories and work- 605 shops. Can it be said that that industry can be made efficient to meet competition from abroad? Surely, it cannot be argued from those figures. Then, if I may, I want to say a word or two about the general question, of hours and conditions. One of the conditions laid down in the White Paper is that the industries which succeed in getting a tariff under this procedure should be subject to unfair competition from abroad. When I quoted, the other night, an extract from the Report on the Economic Conditions in Germany, issued by the Board of Trade, the President of the Board of Trade rather doubted, as I thought from his answer, that the facts were being given. I have here a copy of a letter from the Chamber of Commerce at Solingen, in which they say:In reply to your inquiry, we beg to inform you that at the present time the workers in the Solingen cutlery industry are, as far as their working hours are con-corned, subject to the legal regulations in accordance with those set down on the 23rd December, 1923"—that is to say, the 48-hour week. That Is the view given to us by the Solingen Chamber of Commerce.
Another point that was made was that we were subject to very unfair competition from abroad because of the superior financial position in which German industry found itself because of the writing off of debentures and other liabilities at the time of inflation. Let us look at the position of these German industries which are giving us such unfair competition, according to hon. Members. Here is a record of bankruptcies—a very good indication, I suggest, of what the state of the country is. In June, 1925, there were 766 bankruptcies and 328 receiverships. In July there were 797 bankruptcies, in August 751, in September 914, while in November the number had increased to no fewer than 1,345. Who can suggest, therefore, that German industry is so flourishing, from the point of view of having got rid of its liabilities, that it is going to be capable of creating very unfair competition with our industries in this country? I suggest that the Government have not made out their case from that point of view either.
I now want to say a word or two about the effect of the attitude of the Government, in this policy of theirs, upon inter- 606 national relationships. The President of the Board of Trade, in replying the other night, did not, I thought, pay quite enough attention to what had gone before in this matter. It is true that I referred specifically to the spirit of the Locarno Pact; but, on this policy of increasing artificial barriers between this country and other countries. I would ask the House to give some attention to what happened at Geneva this year, and also to what was done at the Brussels International Conference some four or five years ago. The Chancellor of the Exchequer, in the financial policy of the Government this year, returned arbitrarily to the gold standard—
§ Mr. ALEXANDER
It may be called the gold exchange, but in any case what I am going to say will not make any difference, because at the Brussels Conference—and I rather fancy the President of the Board of Trade was present; I think he was then in charge of the Overseas Trade Department—a resolution was passed which stated that, if we were to get back to a proper position of international equilibrium and stability, every artificial barrier between nations, preventing the exchange of goods and services, should be removed. That was the resolution of the International Conference. This year that has been followed by, as I think, very important speeches by M. Loucheur and others at Geneva, to the effect that, instead of going about a plan of this kind to increase artificial barriers between the nations, this country, in common with others connected with the League, should unite in an International Economic Conference with a view to settling their differences, not on the basis of creating further economic strife by tariffs, but on a basis of world economic co-operation. I want to put it to the Government to-night that it would have been far better, having regard to what took place at Geneva this year, that they should have waited until at least the preparatory committee which is proposed as a result of this year's Geneva Conference had been set up, and that they might have been assisted towards laying a foundation of permanent peace.
I am anxious not to take too much time. [HON. MEMBERS: "Hear, hear!"] Those who have sat right through a 607 Debate dealing with an important financial matter of this kind have a right not to be shut up in that way. I am trying to get through, more hurriedly than I wanted to, in order to meet the convenience of the Chancellor of the Exchequer, and I am anxious to do that, but that is not the way to encourage it. I specially want to draw the right hon. Gentleman's attention, because he will be consulted on this at a later stage, to the kind of suggestion that is made for an International Economic Conference. M. Loudon said:The problem of security and disarmament was closely bound up with that of the world's economic relations. M. Loucheur had very rightly observed that the most frequent cause of wars seemed to be the economic struggle between nations. Nations must co-operate if they are to avert the economic anarchy which threatens us all.On top of that, the Belgian delegate said:It cannot be denied that the economic world to-day is evolving along lines quite opposed to disarmament, and the task of the League of Nations is not merely to readjust but to convert. As the representative of a small industrial State I venture to lay stress upon the dangers of Protection.There is one of our Allies, one of those moving along the new economic path, and yet at the very moment that is developing the Government, whilst giving verbal assent to that proposal at Geneva, are plotting to increase the number of artificial barriers between the nations of the earth. It is most unfortunate to embark on that policy. In our Amendment we suggest that there are other ways of dealing with unemployment than by introducing Protective tariffs. I am a convinced and unrelenting Free Trader. I expect some of my hon. Friends would not go all the way in that direction, but although the President of the Board of Trade tried to make a special appeal to them, he will find that there is no difference of opinion on our benches as to what is the real cause of unemployment. It has been said many and many a time in my hearing that to propose tariffs for the cure of unemployment is to apply a plaster to a wooden leg, and that is really the view of hon. Members on these benches.
We believe the whole problem of the world to-day is not a problem of produc- 608 tion. We believe that with modern inventions and developments, problems of production have been practically settled. The problem is how to relate consumption to the increasing powers of production. I am gad that M. Loucheur at Geneva suggested that that should be one of the problems to be considered in the world economic conference. How are you going to help to relate the problem of consumption to increased production by putting on tariffs? You are going to actually assist in reducing the consumption of the nation. We take the point of view—and there will be a day, I think, when we shall be able to bring our views to a proper fruition—when what the Noble Lord the Member for Oxford University (Lord H. Cecil) feared will come about when he warned the party opposite not to do anything which would prevent them from getting the votes of the moderate Liberals. He knows better perhaps than anyone that the policy the Government are embarking upon at present is the policy most likely to bring them down. He was associated with the present Chancellor of the Exchequer, 20 years ago, in opposition to the Government of the day pursuing a policy like this, when it did not know, whilst Birmingham was preaching its policy, whether the policy was to be whole-hogger or only retaliation. When that controversy was going on in their party, the Noble Lord and the Chancellor of the Exchequer were opposed to the fallacies of Protection, whether on the basis of retaliators or as whole-hoggers. The Noble Lord could speak in the brilliant way he spoke this afternoon, from the point of view of one who could say, "I told you so." He, with the present Chancellor of the Exchequer, warned the Government of the day that they would go down. He warned the Government on the occasion when the present Prime Minister went to Plymouth and said that unemployment would never be cured if they went on pottering about and came back and asked for a measure of Protection. The Noble Lord warned them of defeat at that time. He has warned them of defeat now. This thing is most likely to bring the Government down, and the Noble Lord knows that when that happens there is no alternative before the country except that the party on these benches should put their policy 609 into operation. That is why he spoke in the way he did this afternoon.
We have a remedy other than tariffs for dealing with the problems of relating consumption to the increased powers of production. Production outpaces consumption all the time for the reason that the workers are poor because they are robbed, and they are robbed because they are poor. When they have worked to produce wealth they get such a poor share of the wealth they produce that they are unable to buy even the goods which they produce by their own labour. The failure, in consequence, of their purchasing power, prevents consumption from keeping pace with production. Until we move to a state of society in which there is greater justice in the distribution of the products of industry, so that labour gets its fair reward and its purchasing power if properly maintained, we shall never have a cure for the problem of unemployment. There is coming a time when we shall have no longer to tinker about with tariffs of this kind, of which I believe the Chancellor of the Exchequer is thoroughly ashamed; but we shall be able to move to a real, sane, ordered system of society and industry in which the worker in the community will get a proper return for his labour, and his purchasing power will solve the problem of maintaining consumption with production.
§ Mr. CHURCHILL
We have been gradually getting some distance away from the Bill which is now under the consideration of the House. I shall not attempt to follow the hon. Member for Hillsborough (Mr. A. V. Alexander) in the extremely powerful, far-reaching and expansive peroration of his speech. If I have not been present at all the Debates that have taken place on this Bill and the Financial Resolutions which wore necessary before it was introduced, it certainly was not out of any want of respect to the House, nor, I trust, out of any want of diligence in the discharge of my duty. Nor was it out of any abrogation of responsibilities which are inherent with the position of the Chancellor of the Exchequer. I am responsible for every duty which is proposed in this House, in a peculiar degree, and as long as I have the honour to hold my present office no duty will be proposed in this House which I am not prepared wholeheartedly to 610 defend. But when the hon. Member for Bow and Bromley (Mr. Lansbury) charged me the other night with being guilty of ca' canny in leaving the Chamber, I really think that his definition was not accurate. There is no ca' canny about the proper division of labour. On the contrary, for two or three men to be sitting about looking on while another perfectly well qualified person discharges a job, is much nearer ca' canny.
I am not going to deal with the details of these duties, because they have been exhaustively discussed in the last few days and are going to be exhaustively discussed, I have no doubt, in the latter part of our proceedings. Neither am I going, except indirectly, to touch on the large general issues which arise on the well-worn and well-studied controversy of Free Trade or Protection. I am going to devote myself, in the main, to a far more specific issue, an issue stated by the hon. and gallant Member for Leith (Captain Benn) in his speech this evening, in his charge of a breach of faith —an issue stated in much more detail by my right hon. Friend the Member for Colne Valley (Mr. Snowden), who has been very mild to-day. As the controversy has extended on this Bill, his attitude has become modified, or, if his attitude has not become modified, the expression which he has given to his feelings has become considerably modified. But the right hon. Gentleman made a grave charge against the Government at the opening of these Debates. He said that the Government were engaged in a deliberate and carefully designed plan to use the huge majority behind them to upset the long-established fiscal system of the country and to impose upon this land, in violation of the wishes of the people, a system of Protection. That is not true.
I do not think that the House can do justice to this situation without looking back for a moment on the past- sequence of events. Let us look back, then, to 1918. In 1918 there was fought an election at which the principle of safeguarding, of anti-dumping as it was called, was affirmed, not only by the Conservative party, but by 140 members of the Liberal party, including at least half the present leaders of that party. The conditions which governed that safeguarding policy, 611 subsequently embodied in the Act, were, first of all, that the Duties should be exceptional; secondly, that they should be temporary; and, thirdly, that they should be Duties discriminating against particular countries and not large Duties of a general character. When the Labour Government was in power this Act lapsed —all except the anti-dumping provisions. The Government then in power approved its lapsing. That policy was strongly controverted by the Conservative party, who protested against the Act being allowed to lapse and declared that if they had power they would revive and new that Measure.
At the same time the Prime Minister —who was then Leader of the Conservative party and of the Opposition—made a most clear statement to the country that he would not institute a general tariff, that he accepted the verdict of the country at the Election of 1923, and that he would not utilise this safeguarding procedure as a means of introducing or creating a general tariff in this country. As a result of his appeal a very large majority was given to the right hon. Gentleman. I tried a year ago to state in a sentence as well as one could, the fiscal policy which we considered was sustained by that majority. It was: safeguarding without a general tariff and Imperial Preference without protective duties on food. It is no use partisans saying they will take half of that policy which they like and reject half which they do not like. That is the policy as it stands, as a whole, and it must be accepted and enforced so far as we have power, both in its positive and its negative side. No sooner had the Government come into office than they found themselves in the presence of a draft Treaty with Germany. The five years period in which Germany was bound by the Treaty of Versailles had expired and she was able to resent any discriminating duties imposed against her. It was, therefore, quite clear that irreconcilable antagonism existed between the discriminating duties which had hitherto constituted the safeguarding policy and the Most-Favoured-Nation Clause which was the foundation not only of our commercial policy but also the foundation of the Treaty which we signed with Germany.
612 That being so, when the Government signed that Treaty with Germany, they annihilated altogether the possibility of employing discriminating duties, and as a matter of fact, the state of the world was such and all our arrangements were such, that all our commercial treaties would have been vitiated by a continuance of that policy after the first five years which followed the War. We therefore adopted the principle of safeguarding by means of general duties. There is something anomalous about that because a country in which conditions may not be open to criticism is involved in a duty which is imposed because of competition arising from countries where the conditions are unfavourable. But there was no other alternative unless the whole policy of safeguarding was to be abandoned. Do not let us quarrel about terminology. What is a general duty? A general duty is a duty imposed in respect of a particular commodity from all countries whence it originates. What is a general tariff? A general tariff is an aggregation of general duties sufficiently large to constitute a general occupation of the whole field or the main part of the field of imports into any country. , Whereas, so long as safeguarding expressed itself in discriminating duties there might be no limit as to the number of duties, so long as the prescribed conditions were observed, a new situation supervened as soon as the general duty was adopted because it was quite clear that if a certain number of general duties had been imposed the pledge against a, general tariff would be affected. There-fore, when we decided to adopt general duties, or shortly after we came to that decision, we also thought it necessary to alter the procedure of safeguarding. The procedure had been to pass a Bill giving general powers, omnibus powers as it were, and then to carry the duties through by the shortened procedure of a simple Resolution, after it had been laid on the Table for so many days.
But when we decided to move into the general duties as against the discriminating duties, we thought it also right to revert to the old, traditional, Parliamentary procedure of inviting separate sanction, under all the elaborate restrictions of our financial procedure in each particular case. I think that both these decisions were right and straightforward.
613 I am sure that it would have been madness to wreck our most-favoured-nation policy by insisting upon discriminating duties, and I am certain that the presenting of each duty separately to the House, under all the forms of financial procedure, is not only a strict interpretation of our pledge, not only a respectful attitude toward the financial traditions of the House, but it is also a sure guarantee against our being drawn beyond our pledge in this Parliament. The Liberal party particularly, instead of welcoming this new procedure which we adopted— this old procedure, I should say, to which we reverted—broke into a most loud and angry outcry. The hon. and gallant Gentleman, for instance, was consumed with indignation because we had not proceeded with a Safeguarding of Industries Bill, but if we had proceeded with such a Bill, he would have had scarcely any opportunity of resisting the present taxes which are now passing through the House.
The procedure we adopted, at the cost of so much time and trouble, was adopted out of a sincere respect for the traditions and procedure of this House, and also with the scrupulous intention of avoiding any breach or pledge, and yet it is this very procedure which was the cause, on his part, of the most extreme, complaint. Why, one of the reasons why these charges of bad faith—which form so much of the stock-in-trade, I will not say of those who have spoken in this Debate, but which have formed so much of their arguments in other Debates, and form a large portion of the criticism we meet with in the Press—make so little impression upon these benches, awake no echo of self-reproach in our bosoms, is because we have had them all before, in regard to the dropping of the Safeguarding of Industries Act, which Act we dropped only out of a more scrupulous desire to observe our pledges.
From the moment that we decided to adopt the full financial procedure for safeguarding duties, the necessity for any formal public inquiry passed away. Who has ever questioned the right of a Government to propose, by the regular financial procedure, any tax that it might think fit? Who has ever questioned the right of a Chancellor of the Exchequer to do that? It is the duty of a Government 614 to make inquiries, private inquiries, official inquiries, secret inquiries, into every question which ultimately emerges in legislation. It is their duty to satisfy , the House that their proposals are sound, it is their duty to satisfy the House that there is no breach of pledge, and the Parliamentary procedure for dealing with financial Bills is specially and admirably adapted for that purpose, but so long as that financial procedure is in force there is absolutely no need for any White Paper or for any special or formal inquiries such as are being held.
Why, then, have we not only followed the traditional procedure, but, in addition, adhered to the system of public inquiries? It is because we consider our- selves limited in our safeguarding policy by exceptional conditions. That is an essential condition of our policy, and we have no intention of being placed in a position where it might be supposed in the country that anything like a general rule is to be established by industries who claim to come under the Safeguarding of Industries Act. Therefore we have gone out of our way, not only to adopt the financial procedure, but also to maintain the special procedure of inquiry. The old method was to abridge the procedure in this House. Now we have the full financial procedure, and, in addition, the inquiry. And yet, when we have adopted all These Measures, the Opposition complain of the procedure we have adopted, even although it is one which gives double, or even more than double, security against fiscal change I ask the hon. and gallant Gentleman and the right hon. Gentleman on the Front Bench opposite, Are they quite sure they are proceeding in the best interests of Free Trade in threatening to use this procedure in the most ruthless fashion?
I certainly agree that every financial proposal should undergo the most searching examination at the hands of the House; but when the right hon. Gentleman, speaking from the Front Opposition Bench, plainly indicates an intention—I will not say to obstruct, because that would not be Parliamentary—but an intention to use all resources, and to attempt to resist the will of the House other than by argument, and to carry his point by adding to the physical inconvenience of Members, to use these resources of procedure to the very utmost, 615 I am bound to say I think they run the risk of arousing a demand that the procedure should be simplified at some time or other. But, after all, what is the real position? The Liberal party—I hope they will permit me to say what I have to say; I do not wish to add by any words of mine to any pain which they may feel— but by their decision in January, 1924, to place the Socialist party in office, the Liberal party abdicated their position as the great defenders of the Free Trade system. Consequently they have deprived themselves of effectual power to defend Free Trade, and if His Majesty's Government were really rogues, if we were really engaged, in the words of the right hon. Gentleman, in a deliberate and carefully designed plan to upset the long-established fiscal system of the country, if we were really engaged in such a conspiracy, and such a treacherous and dishonourable proceeding, if we proposed to carry a general traiff, either at a stroke or in several instalments, nothing that the Liberal party could do, and nothing that the Free Trade members of the Labour party—of whom, I believe, there are a good many—could do- could prevent us carrying our fell purpose into effect. The Government could quite easily introduce a Bill next year, pass the Safeguarding of Industries Bill through the House, and thereafter they could set up as many inquiries as they liked, compose the committees of those inquiries as they chose, lay the results of those inquiries in shoals, in droves, and in batches on the Table of the House, and see them pass into law with extraordinary facility, almost by an automatic process.
§ Mr. CHURCHILL
That, or something like it, is what we have been urged to do quite recently. [HON. MEMBERS: "By whom?"] By Lord Rothermere. Lord Rothermere told us in a remarkable article which he wrote:What is this fustian about keeping pledges, why should any one man's declaration stand in the path of the wishes of the party?Everyone knows the vendetta in which these newspapers have been engaged, and I am sure that all the House, and every party, admires the Prime Minister for the contempt with which he treats it.
616 Lord Rothermere's policy is not the policy of the Conservative party. It would not receive the assent even of the strongest Tariff Reformers on this side of the House, and there is not the slightest intention of doing that sort of thing. I am sure that the right hon. Gentleman the Member for Colne Valley and hon. and right hon. Members below the Gangway know perfectly well that whatever they may say, whatever antics they may indulge in, they can trust to the honour of a historic political party. We know that in their hearts that is their feeling, and that is the reason why we treat with considerable composure all these charges of treachery.
I wonder whether my hon. and gallant Friend the Member for Leith, who is perched up there, is quite wise in exaggerating the consequences of this fiscal Measure in the way in which he and his friends have done. He no doubt, has in his mind the story of the little boy who shouted "Wolf!" with such disastrous results at the end. I would like to know what would have been his position if a real wolf or a whole-hogger appeared after he has fired all his ammunition? My hon. and gallant Friend contributes so much to our entertainment, and enlightens our Debates so often and so long, that there is not one of us who would not sympathise with him sincerely if he found himself in the terrible position of being confronted with a genuine fiscal outrage, and having nothing at his disposal but a bankrupt vocabulary!
It is suggested that my speeches in 1923 convict me of inconsistency. [HON. MEMBERS: "Oh, Oh!" and Interruption.] But who has not changed since 1923? Who fought the Election of 1923 on the capital levy? Who fought the Election of 1923 against Socialism, and put the Socialist Government into power? After all, I may be, pardoned for defending myself. The Conservative party fought the Election of 1923 on a general tariff. We fought the Election of 1924 on the—[HON. MEMBERS: "Red Letter!"]— safeguarding! I opposed Socialism in 1923. I opposed the general tariff in 1923. I oppose it equally tonight. Let us really see—I do not want to detain the House very long—what has happened in regard to this safeguarding policy. We have been in office for nearly a year with an overwhelming 617 majority. How many duties of a safeguarding character, or duties based in the fiscal sphere, have been proposed for the consideration of the House? There are those relating to silk, gas mantles, paper, and the McKenna Duties. Half of these duties already have been imposed during the Coalition, with the support of a very large number of Liberal Members and Liberal leaders. The principle had been conceded. There are three new safeguarding duties that are the survivors of 24 applications which have been made under the White Paper procedure. They represent, I am informed, approximately one-300th part of our imports.
We have been in office a year, one-fifth of our full period. During that year we have, I am credibly informed, lost one bye-election by a majority of 200, and but for the intervention of the Quinquennial Act we might look forward to 200 years in office. But that would not be nearly long enough to carry through a general tariff, at the rate we are going on. If 1-300th part of the ground were covered in the first year, 300 years would be required to achieve the full policy. The right hon. Gentleman asked me, and it is a pertinent question, "How far are you going? Where do you draw the line? When are you going to stop?" No such question as that is raised at the point to which this policy is developed at the present moment. The Government have in no way intruded into any sphere of argument in this matter which in the slightest degree raises the general issue or calls their pledges in question. That is not my opinion only. I will quote the opinion of Lord Oxford. Dealing with these questions in February, Lord Oxford said our policy was small, trumpery and pettifogging. I have heard the word "pettifogging" reinforced by the word "piffling."
§ Mr. CHURCHILL
I thought it was a little below the level of the right hon. Gentleman. In March Lord Oxford described our safeguarding of industries policy as "small beer," and as late as the 6th November he said the time had not come for the full Protectionist meal but the Government were giving their supporters such crumbs of comfort as 618 they could extract from the safeguarding of industries. Where do hon. and right hon. Gentlemen opposite stand? Do they wish to goad us into further action? Small beer—crumbs of comfort—pettifogging—trumpery—piffling; and then, almost without a break, there is a complete transition, and we are invited to contemplate a ghastly, shameful breach of pledges, a hurling of this country headlong into Protection. The language which is poured out about our conduct would really be extravagant if it were applied to the darker episodes in the Massacre of St. Bartholomew. I have no objection to a proper use of strong language, but a certain amount of art and a certain amount of selective power is needed, if the effect is to be produced. When all that the dictionary contains is poured out on the one hand to show the pettiness and triviality of the Government's policy it is not without a mental shock that we can trust ourselves to hear the most violent condemnations of our sweeping and momentous changes.
I only have one or two more words to say. From the moment that general duties are adopted, it is not only the number of the duties but the character of the duties and their consequences that come into question. All the duties we have imposed hitherto are either on luxury articles, or on finished articles, or articles which pass to the general consumer almost immediately without any further stage. They create, therefore, no dislocation in the higher ranges of industry. I am bound to say that I see no objection where a case is proved to our reducing our imports on finished and luxury articles, nor do I believe that our general Free Trade system will be affected thereby, nor do I believe that great industries like shipbuilding, distributing trades, the cotton trade and even agriculture will be injured or disturbed. Nobody can say that our export capacity will be weakened by these duties. No one can say that a diminution of unnecessary imports and luxury imports will be injurious. No one can say that the future is compromised by such duties or that the main industries of the country will be dependent on these industries, because they could be swept away in the same way as you swept away the McKenna Duties when you had the power. There are 619 industries which would like to make out a good case for these duties under the terms of the White Paper of safeguarding, but to put a duty on certain industries would cause a repercussion and would entail consequential duties so numerous as to constitute a section of a general tariff. There are industries which could prove their case, and which, on the basis of a scientific general tariff, and as part of such a tariff, could quite logically and consistently be passed into law. But to create such duties on these articles in isolation would be absurd, invidious, and impossible to reconcile with any view either of Free Trade or of Protection.
Duties on such industries would inevitably cut to the root of our fiscal policy if one great chunk of a national industry was to be protected from the bottom to the top, and we should be inevitably committed over the whole field. Then, indeed, the question of Free Trade or Protection would be raised, and it would become an important political factor in our political life and the life of the present Parliament, and these undertakings and pledges would have to be examined with scrupulous care. The White Papers which have been drawn up confirm our policy, and they provide explicitly, even if the case is proved, that the Government have full power reserved to them to reject it before or after inquiry if they consider the effect of the duty on other industries would carry them beyond the limits of their pledge, or out of the scope of a reasonable or harmonious treatment of the subject. There is no question of the Government being drawn, through the working of the Safeguarding of Industries Act. into any breach of their undertakings. The charge has been made in reference to the iron and steel trades. I am laying down general principles by which the Government are governed and in accordance with which they will continue to deal with all the cases which are presented. One would suppose that the parties opposite were persons specially concerned about the strict fulfilment of the Government undertakings and the faithful observance of the Prime Minister's pledge. Surely the Liberal and Labour Oppositions would have the least right to complain if that pledge were broken. If we were deceivers, they were never deceived. The 620 hon. and gallant Gentleman below the Gangway (Captain W. Benn) is longing for the moment when he will be able to say, "I told you so; this is what I knew would happen all along." But there were probably, I suppose, at least a million Free Trade votes which were given to the Constitutional cause at the last Election in consequence of the very clear declaration of the Prime Minister against a general system of Protection, and if these voters trusted to the word of the Prime Minister, and if we may judge by the result of recent electoral manifestations, they trust to his word now, they know perfectly well that if it were thought necessary by the Government in the interests of the country to make a sudden and urgent change in our fiscal system, that change would first of all have to be submitted in a simple and honourable fashion to the electors as a definite issue.
We have on these benches no sympathy with partisan, pedantic or doctrinaire views upon the fiscal question. There is a great desire, not confined to one side of the House, to examine on their merits, in an unprejudiced and businesslike spirit, some of the new points and new features which have arisen under the conditions of modern and post-War industry. There is a readiness to await the results of the minor and tentative experiment on which we are engaged. Why should the right hon. Gentleman opposite (Mr. Snowden) fear to await the results of this experiment? He has declared that every duty produces unemployment and increases the cost of the article protected, and if he has confidence in his opinion, why is he not prepared and glad to await and watch the development and the working of these duties in the next few years.
While we hold ourselves fully entitled to proceed as we are doing, this House of Commons has neither the intention nor the right to revolutionise the fiscal system of the country or to erect a general tariff either at one stroke or by calculated instalments nor the right to take legislative steps which would irrevocably compromise the decision of future Parliaments. The Noble Lord, the Member for Oxford University (Lord H. Cecil), in his brilliant speech, referred to the great responsibility which rests on this Government and this party at the present 621 moment. It is our duty to secure for the country a period of settled and stable government in which its energies may revive and its industries recover. That is what the country needs; that is what the country has demanded, that is what we promised to give it, and that is what we are determined, to the best of our ability, to give to the country, and we have no intention of raising rupturing issues which would divide friends and unite opponents. We stated most clearly the platform on which we stood. It was a platform on which
§ Free-traders and Protectionists could stand together as they did during the long years when that great statesman Lord Salisbury guided with success the gathering and growing fortunes of the State. From that platform no taunts will lure us; from that platform we will not be driven by abuse or denunciation, at once extravagant and undeserved,
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House divided: Ayes, 308; Noes, 142.625
|Division No. 475.]||AYES.||[11.15 p.m.|
|Acland-Troyte, Lieut.-Colonel||Clayton, G. C.||Hall, Vice-Admiral Sir R. (Eastbourne)|
|Agg-Gardner, Rt. Hon. Sir James T.||Cobb, Sir Cyril||Hall, Capt. W. D'A. (Brecon & Rad )|
|Ainsworth, Major Charles||Cockerill, Brigadier-General G. K.||Hanbury, C.|
|Albery, Irving James||Conway, Sir W. Martin||Hannon, Patrick Joseph Henry|
|Alexander, E. E. (Leyton)||Cope, Major William||Harland, A.|
|Alexander, Sir Win. (Glasgow, Cent'l)||Couper, J. B.||Harrison, G. J, C.|
|Allen, J. Sandeman (L'pool, W. Derby)||Courtauld, Major J. S.||Harvey, G. (Lambeth, Kennington)|
|Applin, Colonel R. V. K.||Courthope, Lieut.-Col. Sir George L.||Haslam, Henry C.|
|Apsley, Lord||Craig, Ernest (Chester, Crewe)||Hawke, John Anthony|
|Ashley. Lt.-Col. Rt. Hon. Wilfrid W.||Croft, Brigadier-General Sir H.||Headlam, Lieut.-Colonel C. M.|
|Ashmead Bartlett, E.||Crook, C. W.||Henderson, Capt. R. R. (Oxf'd, Henley)|
|Astbury, Lieut.-Commander F. W.||Crookshank, Col. C. de W. (Berwick)||Henderson, Lieut.-Col, V. L. (Bootie)|
|Astor, Viscountess||Crookshank, Cpt. H. (Lindsey, Gainsbro)||Heneage, Lieut.-Col. Arthur P.|
|Atholl, Duchess of||Cunliffe, Joseph Herbert||Hennessy, Major J. R. G.|
|Atkinson, C.||Curtis-Bennett, Sir Henry||Herbert, Dennis (Hertford, Watford)|
|Baldwin, Rt. Hon. Stanley||Curzon, Captain Viscount||Herbert, S. (York, N.R., Scar & Wh'by)|
|Banks, Reginald Mitchell||Dalkeith, Earl of||Hills, Major John Walter|
|Barclay-Harvey, C. M.||Dalziel, Sir Davison||Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.|
|Barnett, Major Sir Richard||Davidson, J. (Hertf'd, Hemel Hempst'd)||Hogg, Rt. Hon. Sir D.(St. Marylebone)|
|Benn, Sir A. S. (Plymouth, Drake)||Davies, Dr. Vernon||Hohler, Sir Gerald Fitzroy|
|Bennett, A. J.||Davies, Sir Thomas (Cirencester)||Holbrook, Sir Arthur Richard|
|Berry, Sir George||Dean, Arthur Wellesley||Holland, Sir Arthur|
|Bethell, A.||Drewe,||Holt, Captain H. P.|
|Betterton, Henry B.||Eden, Captain Anthony||Homan, C. W. J.|
|Birchall, Major J. Dearman||Edmondson, Major A. J.||Hope, Capt. A. O. J. (Warw'k, Nun.)|
|Bird, E. R. (Yorks, W. R., Skipton)||Elveden, Viscount||Hope, Sir Harry (Forfar)|
|Blades, Sir George Rowland||Erskine, Lord (Somerset, Westons.-M.)||Hopkins, J. W. W.|
|Blundell, F. N.||Erskine, James Malcolm Monteith||Horlick, Lieut.-Colonel J. N.|
|Boothby, R. J. G.||Everard, W. Lindsay||Howard, Captain Hon. Donald|
|Bourne, Captain Robert Croft||Fairfax, Captain J. G.||Hudson, Capt. A. U. M.(Hackney, N.)|
|Bowater, Sir T. Vansittart||Falle, Sir Bertram G.||Hudson, R. S. (Cumberl'nd, Whiteh'n)|
|Bowyer, Captain G. E. W.||Fanshawe, Commander G. D.||Hume, Sir G. H.|
|Brassey, Sir Leonard||Fielden, E. B.||Hume-Williams, Sir W. Ellis|
|Bridgeman, Rt. Hon. William Clive||Finburgh S.||Huntingfield, Lord|
|Briggs, J. Harold||Fleming, D. P.||Hurst, Gerald B.|
|Briscoe, Richard George||Ford, P. J.||Inskip, Sir Thomas Walker H.|
|Brocklebank, C. E. R.||Foster, Sir Harry S.||Jackson, Lieut.-Colonel Hon. F. S.|
|Brooke, Brigadier-General C. R. I.||Foxcroft, Captain C. T.||Jackson, Sir H. (Wandsworth, Cen'l)|
|Brown, Brig.-Gen H.C. (Berks, Newb'y)||Fraser, Captain Ian||Jacob, A. E.|
|Bull, Rt. Hon. Sir William James||Fremantle, Lieut. -Colonel Francis E.||Jephcott, A. R.|
|Bullock, Captain M.||Gadie, Lieut.-Col. Anthony||Jones. G. W. H. (Stoke Newington)|
|Burgoyne, Lieut.-Colonel Sir Alan||Galbraith, J. F. w.||Kennedy, A. R. (Preston)|
|Burman, J. B.||Ganzoni, Sir John||Kidd, J. (Linlithgow)|
|Butler, Sir Geoffrey||Gates, Percy||Kindersley, Major Guy M.|
|Butt, Sir Alfred||Gault, Lieut.-Col. Andrew Hamilton||King, Captain Henry Douglas|
|Cadogan, Major Hon. Edward||Gilmour, Lt.-Col. Rt. Hon. Sir John||Knox, Sir Alfred|
|Caine, Gordon Hall||Glyn, Major R. G. C.||Lamb, J. O.|
|Campbell, E. T.||Goff, Sir Park||Lane-Fox, Colonel George R.|
|Cassels, J. D.||Gower, Sir Robert||Lister, Cunliffe-, Rt. Hon. Sir Philip|
|Cayzer, Maj. Sir Herbt. R. (Prismth. S.)||Grace, John||Locker-Lampson, G. (Wood Green)|
|Cazalet, Captain Victor A.||Grant, J. A.||Locker-Lampson, Com. O. (Handsw'th)|
|Cecil, Rt. Hon. Sir Evelyn (Aston)||Grattan-Doyle, Sir N.||Loder, J. de V.|
|Chadwick, Sir Robert Burton||Greene, W. P. Crawford||Looker, Herbert William|
|Chamberlain, Rt. Hon. N. (Ladywood)||Greenwood, Rt. Hn. Sir H. (W'th's'w, E)||Lord, Walter Greaves-|
|Chapman, Sir S.||Gretton, Colonel John||Lucas-Tooth, Sir Hugh Vere|
|Charterls, Brigadier-General .J.||Grotrian, H. Brent||Luce, Major-Gen. Sir Richard Harman|
|Chilcott, Sir Warden||Guinness, Rt.. Hon. Walter E.||Lumley, L. R.|
|Christie, J. A.||Gunston, Captain D. W.||Mac Andrew, Charles Glen|
|Churchill, Rt. Hon. Winston Spencer||Hacking, Captain Douglas H.||Macdonald, R. (Glasgow, Cathcart)|
|Churchman, Sir Arthur C.||Hall, Lieut.-Col. Sir F. (Dulwich)||McDonnell, Colonel Hon. Angus|
|Macintyre, Ian||Preston, William||Sueter, Rear Admiral Murray Fraser|
|McLean, Major A.||Price, Major C. W. M.||Sugden, sir Wilfrid|
|Macmillan, Captain H.||Radford, E. A.||Sykes, Major-Gen. Sir Frederick H.|
|Macnaghten, Hon. Sir Malcolm||Ramsden, E.||Thompson, Luke (Sunderland)|
|McNeill, Rt. Hon. Ronald John||Rees, Sir Beddoe||Thomson, F. C. (Aberdeen, South)|
|Macquisten, F. A.||Reid, Capt. A. S. C. (Warrington)||Thomson, Rt. Hon. Sir W. Mitchell|
|Manningham-Buller, Sir Mervyn||Reid, D. D. (County Down)||Tinne, J. A.|
|Margesson, Captain D.||Renter, J. R.||Titchfield, Major the Marquess of|
|Marriott, Sir J. A. R.||Rentoul, G. S.||Tryon, Rt. Hon. George Clement|
|Mason, Lieut.-Col. Glyn K.||Rhys, Hon. C. A. U.||Vaughan-Morgan, Col. K. P.|
|Meller, R. J.||Rice, Sir Frederick||Waddington, R.|
|Merriman, F. B.||Roberts, E. H. G. (Flint)||Wallace, Captain D. E.|
|Meyer, Sir Frank||Roberts, Samuel (Hereford, Hereford)||Ward, Lt.-Col. A. L. (Kingston-on-Hall)|
|Mitchell, S. (Lanark, Lanark)||Ruggles-Brise, Major E. A.||Warner, Brigadier-General W, W.|
|Mitchell, Sir W. Lane (Streatham)||Russell, Alexander West (Tynemouth)||Waterhouse, Captain Charles|
|Monsell, Eyres, Com. Rt. Hon. B. M.||Rye, F. G.||Watson, Sir F. (Pudsey and Otley)|
|Moore, Lieut.-Colonel T. C. R. (Ayr)||Salmon, Major I.||Watson, Rt. Hon. W. (Carlisle)|
|Moore-Brabazon, Lieut.-Col. J. T. C.||Samuel, A. M. (Surrey, Farnham)||Watts, Dr. T.|
|Morden, Col. W. Grant||Samuel, Samuel (W'dsworth, Putney)||Wells, S. R.|
|Morrison, H. (Wilts, Salisbury)||Sandeman, A. Stewart||Wheler, Major Sir Granville C. H.|
|Murchison, C. K.||Sanderson, Sir Frank||White, Lieut.-Colonel G. Dairymple|
|Nall, Lieut.-Colonel Sir Joseph||Sandon, Lord||Williams, A. M. (Cornwall, Northern)|
|Nelson, Sir Frank||Sassoon, Sir Philip Albert Gustave D.||Williams, Com. C. (Devon, Torquay)|
|Neville, R. J.||Savery, S. S.||Williams, Herbert G. (Reading)|
|Newton, Sir D. G. C. (Cambridge)||Scott, Sir Leslie (Liverp'l, Exchange)||Wilson, Sir C. H. (Leeds, Central)|
|Nicholson, O. (Westminster)||Shaw, R. G. (Yorks, W.R., Sowerby)||Wilson, R. R. (Stafford, Lichfield)|
|Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)||Shaw, Lt.-Col. A. D. Mol. (Renfrew, W)||Winby, Colonel L. P.|
|Nield, Rt. Hon. Sir Herbert||Shaw, Capt. W. W. (Wilts, Westb'y)||Windsor-Clive, Lieut.-Colonel George|
|Nuttall, Ellis||Sheffield, Sir Berkeley||Winterton, Rt. Hon. Earl|
|Oakley, T.||Shepperson, E. W.||Wise, Sir Fredric|
|O'Connor, T. J. (Bedford, Luton)||Sinclair, Col. T.(Queen's Univ., Belfast)||Wolmer, Viscount|
|Oman, Sir Charles William C.||Slaney, Major P. Kenyon||Womersley, W. J.|
|Ormsby-Gore, Hon. William||Smith, R. W. (Aberd'n & Kinc'dine, C.)||Wood, B. C. (Somerset, Bridgwater)|
|Pennefather, Sir John||Smith-Carington, Neville W.||Wood, E. (Chest'r, Stalyb'dge & Hyde)|
|Penny, Frederick George||Smithers, Waldron||Wood, Sir Kingsley (Woolwich, W.)|
|Percy, Lord Eustace (Hastings)||Somerville, A. A. (Windsor)||Wood, Sir S. Hill- (High Peak)|
|Perring, William George||Sprot, Sir Alexander||Woodcock, Colonel H. C.|
|Peto, Basil E. (Devon, Barnstaple)||Stanley, Col. Hon. G. F. (Will'sden, E.)||Worthington-Evans, Rt. Hon. Sir L.|
|Peto, G. (Somerset, Frome)||Stanley, Lord (Fylde)||Wragg, Herbert|
|Philipson, Mabel||Stanley, Hon. O. F. G. (Westm'eland)||Yerburgh, Major Robert D. T.|
|Pielou, D. P.||Storry Deans, R.|
|Pilcher, G.||Streatfeild, Captain S. R.||TELLERS FOR THE AYES.—|
|Power, Sir John Cecil||Stuart, Crichton-, Lord C.||Colonel Gibbs and Major Sir Harry|
|Pownall, Lieut..-Colonel Assheton||Stuart, Hon. J. (Moray and Nairn)||Barnston.|
|Adamson, Rt. Hon. W. (Fife, West)||Fenby, T. D.||Lindley, F. W.|
|Alexander, A. V. (Sheffield, Hillsbro')||Fisher. Rt. Hon, Herbert A. L.||Livingstone, A. M.|
|Ammon, Charles George||Forrest, W.||Lunn, William|
|Attlee, Clement Richard||Gibbins, Joseph||Mackinder, W.|
|Baker, Walter||Gillett, George M.||Maclean, Neil (Glasgow, Govan)|
|Barker, G. (Monmouth, Abertillery)||Graham, D. M. (Lanark, Hamilton)||March, S.|
|Barnes, A.||Graham, Rt. Hon. Wm. (Edin., Cent.)||Mitchell, E. Rosslyn (Paisley)|
|Barr, J.||Greenwood, A. (Nelson and Colne)||Mond, Rt. Hon. Sir Alfred|
|Batey, Joseph||Grenfell, D. R. (Glamorgan)||Montague, Frederick|
|Benn, Captain Wedgwood (Leith)||Groves, T.||Morris, R. H.|
|Bowerman, Rt. Hon. Charles W.||Grundy, T. W.||Morrison, R. C. (Tottenham, N.)|
|Briant, Frank||Hall, F. (York, W.R., Normanton)||Murnin, H|
|Broad, F. A.||Hall, G. H. (Merthyr Tydvil)||Naylor, T. E.|
|Bromfield, William||Hamilton, Sir R. (Orkney & Shetland)||Oliver, George Harold|
|Bromley, J.||Hardie, George D.||Palin, John Henry|
|Brown, James (Ayr and Bute)||Harris, Percy A||Paling, W.|
|Buchanan, G.||Hartshorn, St. Hon. Vernon||Pethick-Lawrence, F. W.|
|Cape, Thomas||Hayes, John Henry||Ponsonby, Arthur|
|Charleton, H. C.||Henderson, Rt. Hon. A. (Burnley)||Potts, John S.|
|Cluse, W. S.||Henderson, T. (Glasgow)||Richardson, R. (Houghton-le-Spring)|
|Collins, Sir Godfrey (Greenock)||Henn, Sir Sydney H.||Riley, Ben|
|Compton, Joseph||Hirst, G. H.||Ritson, J.|
|Cove, W. G.||Hirst, W. (Bradford, South)||Robinson, W.C. (Yorks, W. R., Elland)|
|Cowan, D. M. (Scottish Universities)||Hopkinson, A. (Lancaster, Mossley)||Rose, Frank H.|
|Crawfurd, H. E.||Hudson, J. H. (Huddersfield)||Runciman, Rt. Hon. Walter|
|Dalton, Hugh||Hutchison, Sir Robert (Montrose)||Saklatvala, Shapurji|
|Davies, Evan (Ebbw Vale)||Jenkins, W. (Glamorgan, Neath)||Salter, Dr. Alfred|
|Davies, Rhys John (Westhoughton)||Jones, Henry Haydn (Merioneth)||Scrymgeous, E.|
|Day, Colonel Harry||Jones, Morgan (Caerphilly)||Scurr, John|
|Dennison, R.||Jones, T. I. Mardy (Pontypridd)||Sexton, James|
|Duckworth, John||Kelly, W. T.||Shaw, Rt. Hon, Thomas (Preston)|
|Duncan, C.||Kennedy, T.||Shiels, Dr Drummond|
|Dunnico, H.||Kenworthy, Lt.-Com. Hon. Joseph M.||Short, Alfred (Wedneshury)|
|Edwards, C. (Monmouth, Bedwellty)||Lansbury, George||Sinclair, Major Sir A. (Caithness)|
|Edwards, John H. (Accrington)||Lawson, John James||Smith, Ben (Bermondsey, Rotherhithe)|
|England, Colonel A.||Lee, F.||Smith, H. B. Lees- (Keighley)|
|Smith, Rennie (Penistone)||Thorne, G. R. (Wolverhampton, E.)||Williams, David (Swansea, E.)|
|Snell, Harry||Thurtle, E.||Williams, Dr. J. H. (Llanelly)|
|Snowden, Rt. Hon. Philip||Tinker, John Joseph||Williams, T. (York, Don Valley)|
|Spencer, G. A. (Broxtowe)||Trevelyan, Rt. Hon. C. P.||Wilson, C. H. (Sheffield, Attercliffe)|
|Spoor, Rt. Hon. Benjamin Charles||Viant, S. P.||Wilson, R. J. (Jarrow)|
|Stamford, T. W.||Wallhead, Richard C.||Windsor, Walter|
|Stephen, Campbell||Walsh, Rt. Hon. Stephen||Wright, W.|
|Stewart, J. (St. Rollox)||Watson, W. M. (Dunfermline)||Young, Robert (Lancaster, Newton)|
|Sutton, J. E.||Watts-Morgan, Lt. Col. D. (Rhondda)|
|Taylor, R. A.||Webb, Rt. Hon. Sidney||TELLERS FOR THE NOES.—|
|Thomas, Rt. Hon. James H. (Derby)||Wedgwood, Rt. Hon. Josiah||Mr. Allen Parkinson and Mr.|
|Thomas, Sir Robert John (Anglesey)||Welsh, J. C.||Warne.|
|Thomson, Trevelyan (Middlesbro. W.)||Whiteley, W.|
Question put, and agreed to.
§ Bill committed to a Committee of the Whole House, for Tomorrow.—[Commander Eyres Monsell.]