I beg to move,That the Resolution be recommitted to the Committee of Ways and Means.I wish it had been in order to move to recommit this Resolution in a reasoned Motion, because that would have set out in the Journal of the House the precise grounds on which I make this Motion, but, as that is impossible, I make the plain Motion to recommit. This is an unconstitutional proceeding, and perhaps hon. Members will wish me to put the point which I addressed to you, Mr. Speaker, yesterday. It is a very ancient rule of this House that more than one subject may not be united in one question. For instance, when the Ballot for Notices of Motion is taken, an hon. Member is not entitled to get up and say: "I propose to call attention to the fishing industry, to the mining industry and to widows' pensions," but he has to specify the subject on which he is asking the House to decide, and that ancient and well established practice of the House, which is set out quite clearly in "Parliamentary Practice," by Erskine May, is founded upon the commonsense ground that you can only consider one thing at a time. You cannot be expected to decide two questions of a different nature in one vote. If that be important as a rule of procedure in reference to an ordinary topic, how much more important it is when we are going through the solemn procedure which we do in Committee of Ways and Means and on Report for the imposition of taxation upon the people whom we represent in this House. It is of much greater necessity that the rules of propriety should be observed with the strictest precision on such an occasion than it is in ordinary Debates.
1016 There has been a little latitude allowed in reference to what I should prefer to call the "New Churchill Duties." They were imposed during the War, and made annual taxes, and were continued year by year by a continuing Resolution. Some financial purists, such as Mr. Lough, who was a great expert in the practice of this House, raised the matter and called the attention of the Chair to the fact that four duties were being continued in one Resolution, and the view taken by the Chair—it was during the War, when the main thing was to get business quickly dispatched—was that there was nothing improper in continuing duties by one Resolution, even if the one Resolution covered a diverse collection of duties. But, Sir, your predecessor in the Chair, Mr. Speaker Lowther, made it perfectly clear that, whereas one omnibus Resolution covering four diverse taxes for continuance might be granted, did the same Resolution propose four new taxes, the matter would certainly not be allowed. He said:I quite agree, speaking on the general subject, that it would be extremely undesirable to put into a Resolution a combined number of new duties, but I would point out that this does not contain any new duties.He repeated the ruling shortly after, when he said:I quite agree that it would be extremely undesirable to introduce a Resolution into Committee which combined a number of new duties." —[OFFICIAL REPORT, 26th June, 1916; col. 561, Vol. 83.]It may be said that the watchfulness of hon. Members was at fault in not challenging this in Committee of Ways and Means. I admit that it was a lack of watchfulness on the part of Members of this House, but I would plead in extenuation that Resolutions in Committee of Ways and Means are very peculiar in character. Whereas other Government Resolutions are put on the Order Paper, so that we may examine them and see whether they conform to Parliamentary practice, these Resolutions are secret, and nobody knows what they will be until the Chancellor of the Exchequer opens his Budget. Nobody has any authoritative information as to what he is going to propose, and, therefore, the only opportunity we had, if we had not been lacking in watchfulness, was, when we got the Resolutions read out from the Table, 1017 there and then to detect that there was a breach of practice, and to protest, and there is no doubt that had we done so the Chair would have ruled that the Resolution was out of order, and the Chancellor would have been compelled—there is no doubt about it—to withdraw it and introduce a new Resolution in Committee. But there was a further safeguard, and I hope I shall not be guilty of any impropriety in referring to it. On that same occasion, in June, 1916, you, Sir, made use of some words for which, I venture to think, every Member of the House who is determined to defend its privileges and rights should be very grateful. You said, being then Chairman of Ways and Means:If it had been proposed in the originating Resolution in the Committee of Ways and Means to bring in new taxes of widely different character in a single Resolution, I should have deemed it my duty to refuse." —[OFFICIAL REPORT, 27th June, 1916; col. 771, Vol. 83.]Therefore, if we had been guilty of a lack of watchfulness, there was the double safeguard in the Chairman of Ways and Means. This is not a small point. It is true we are opposing the Budget by every legitimate Parliamentary means, but this is not a point that is concerned with this Budget or with its merits. It is not a pasty point. It has nothing to do as between ourselves and hon. Members of the Conservative party or of the Labour party. It is a Parliamentary point. If we looked at it purely from the party point of view, I do not know about the party to which I belong, but certainly hon. Members of the Labour party might find it to their advantage to see this new power in the hands of the Executive. How easy it would be, when they come into office in the years to come, to combine a new Super-tax, new Death Duties, and a Capital Levy all in one Resolution, and put it to the House, founding themselves on the precedent established, or attempted to be established, to-day. It is a much bigger thing than a party point. It is a House of Commons point and a people's point.
Far above the advantage of any party is the right and privilege of this House, because it is not the privilege of a class but the privilege of the people. This House, through its Members, for five centuries has fought the power of taxation from above without its assent. From 1018 the 15th century onwards it has fought for the power over money against the Crown, and later on it fought for the control of finance against the other place. I do not see why this House should have won battles against the Crown and against the other place merely in order to cede the power to the right hon. Gentleman the Chancellor of the Exchequer. He appears to me to have, if I may say so, a contempt for the House of Commons. He is like a true prototype of his. He wants everything in one Resolution; he would like the people to have one neck, so that the whole job could be done its one blow. He has not only embodied all the Resolutions in one, but he is snaking the taxes perennial instead of annual, and he announced to-day that he was proposing, if necessary, to take power to make retrospective taxation. I do not say this to make any party appeal, because I hope this Motion will be supported by Members in all parts of the House—true Parliamentary men. I say that it is time that the House of Commons reasserted its control over the trust that has been given to it solemnly by those who send the Members here.
§ Sir J. SIMON
I beg to second the Motion.
My hon. and gallant Friend the Member for Leith (Captain Benn) has moved the Motion, I think everybody will agree, at once so succinctly and so admirably that only a very few words from me will be required. But I do ask leave to add a word or two, among other things, because I was associated with my hon. and gallant Friend in putting down, no doubt in a less correct form, the proposition to which we were anxious to draw the attention of the House of Commons. Hon. Members will see that on the Order Paper appears a Motion in this form:That this House declines to consider a composite Resolution which is a breach of established constitutional and Parliamentary usage, and groups together under a single head disconnected proposals for the imposition of a series of duties from which the country is at present exempt.I quite appreciate the ruling that that is not the proper form in which to raise the question, but I submit that the proposition contained in that Resolution is an absolutely well-founded proposition. Let me point out in a few sentences to the 1019 House of Commons the application of it here. It was in 1915 that the duties with which we are here concerned first came to be imposed. How were they imposed? They were imposed by carrying through Committee of Ways and Means, on the proposition of the then Chancellor of the Exchequer, a series of quite separate Resolutions. There was one Resolution about motor cars. There was a second, and quite separate Resolution, about cinematograph films. There was a Resolution about musical instruments, and another Resolution about clocks and watches. Indeed, there were two more carried in Committee of that day, one which the right hon. Gentleman has not thought a proper subject for revival—namely, a Resolution for a tax upon hats, and he has gone to the other end of the human frame to find a new duty. There was also a sixth, which did not, in the end, develop into an actual Duty, to tax plate glass.
Therefore, as these things first emerged in 1915, they emerged, as they ought in Committee of Ways and Means, quite separately, by six separate propositions, each of them duly Reported to the House, and, as my hon. and gallant Friend has pointed out, that is not only technically right, but it is right as a matter of good sense, because it is most important that when the Government of the day are proposing to impose upon the people of this country burdens which they are not bearing at the present moment, they should propose those burdens in Committee of Ways and Means one at a time. What the Chancellor of the Exchequer has done, really, is to come to the Committee of Ways and Means and say, "I have got a lot of duties in this bag, and now I propose to pass a Resolution under which we impose the duties in this bag." I submit that that is totally contrary to constitutional practice. It is a wholly different thing if the people of this country at the moment are paying certain duties, and the proposal is to continue them for a further period. Then, I am aware, that by the practice of this House, it has been thought permissible to have a single Resolution in Committee which continues existing duties. But here we are dealing with new duties. They are none the less new because they were imposed once before in the history of Parliament They are called by the 1020 Chancellor of the Exchequer in his Resolution, new duties. Indeed, I think, in answer to a private notice question to-day, he himself again described them as new duties, and quite accurately so. My right hon. Friend, I think, will, on reflection, be disposed to agree that they must be regarded here as new duties, and, therefore, ought to be proposed separately.
There is only one other feature which makes the present case most remarkable. Not only does the Chancellor of the Exchequer see fit to throw these four perfectly separate duties into one Resolution—because there is no more connection between taxing motor-cars and taxing cinema films than there is between taxing films and taxing hops—but, in considering the Cinema Film Duty, what he wants to do is not to reimpose the duty as it used to be, but to alter it, and, in addition to having a single Resolution for these four perfectly disconnected and separate imposts, he, in the same Resolution, proceeds to announce his desire to amend one of them. We are all of us concerned to see that the established usage of the House of Commons is preserved, and I have not the slightest doubt the right hon. Gentleman is as much concerned as anyone. I invite him, therefore, on reflection to tell the House whether lie does not take the view that there was, in fact, a departure, and, I think, serious departure, from established practice, and to say how he would suggest that we should put ourselves right.
§ The CHANCELLOR of the EXCHEQUER (Mr. Churchill)
I myself am, to a certain extent, in sympathy with some of the arguments which have been used by the Mover and Seconder of this Motion, and I am also in sympathy with the position in which they find themselves in regard to it. My attention was not drawn, at the time of the Budget Resolutions were being framed, to the rulings which Mr. Speaker Lowther gave in 1916. Certainly I think those rulings are all of very direct relevance to the present position, but, however that may be, the hon. and gallant Member and the right hon. and learned Member have missed their opportunity. Their opportunity for protesting against any procedure of which they disapprove was when the 1021 Resolutions were first presented to the Committee. A similar case has occurred, and if the hon. and gallant Member had read further, or quoted further from the Debates of 1916, to which he referred, he would have seen that Mr. Speaker Lowther made the following further observations in exactly similar circumstances. He pointed out the precedents, and said:I cannot now intervene. Both the right hon. Gentlemen should have intervened when the Motion was first put from the Chair in Committee if they wished to raise the point. The House has received the Resolution as agreed to in Committee, and it is impossible for me to divide the Report which the House has made. The House has ordered the Resolution to be reported."— [OFFICIAL REPORT, 26th June, 1916; col. 501, Vol. 83.]And so, although I readily admit that there may be some question as to the original procedure, there is no doubt the House has regularised that procedure, and the Resolution is now a good Resolution.
Is this not an invasion of the prerogatives of the Chair? You yourself, Mr. Speaker, put from the Chair "That the Resolution be recommitted." The House may consider that on its merits, but I submit that the right hon. Gentleman has no right whatever to tell us that it is out of order to discuss a Motion to recommit the Resolution.
§ Mr. SNOWDEN
In the event of the Motion to recommit being carried, would it not then be within the right of the Committee to amend the original Ways and Means Resolution?
§ Mr. CHURCHILL
I really cannot see in what way I have transgressed, in merely reading a quotation from the ruling of Mr. Speaker Lowther, following directly after the two rulings which the hon. and gallant Member (Captain Benn) himself read. It does seem to be not an exaggerated request for a Minister to put forward, that he should be permitted to read what is an essential part of the ruling of a Speaker that has already been quoted. I was proceeding to say, when the hon. and gallant Member leapt, I will 1022 not say into the air, but to his feet with such agility, that I think his opportunity, unless he can persuade the House to reverse its decision, has gone, and that the Resolution is a good one. It has been endorsed by the House, and no objection taken. So that, unless he can reverse the decision, his opportunity has gone. Nevertheless, I think there is sufficient justice and substance in the argument which he has unfolded to make it necessary for the Government to reconsider their procedure in the later stages of this long discussion on which we are now embarking. After all, these Resolutions are only the preliminary skirmish in the long campaign of the Budget. They are only the permission given for us to introduce the Finance Bill of the year, and after the Finance Bill has been introduced, the whole of this procedure, Clause by Clause—every proposal, every duty—is gone over, fought out to the utmost detail and the utmost length, both in Committee and on the Report of the Bill.
This particular stage in which we are now is only a preliminary skirmish that, the House, in its great and justifiable care for financial procedure, has introduced in regard to Money Bills, and particularly in the Finance Bill of the year. Therefore, while I should certainly resist any attempt to go back at this stage on the decision of the House taken in Committee of Ways and Means, to the effect that these are good Resolutions—and I should resist it by going to a Division if a Division were called—I will take steps to divide these duties into their proper component parts in the drafting of the Finance Bill, so that every one can be debated and divided upon in detail separately, without being mixed up in any way with the others. And, generally speaking, I should like to say at the outset of these long discussions which are promised to be so very fierce and controversial, that the whole policy of the Government, and of the Minister in charge of the Bill, and the only wish I have is, that the controversial issues of the Budget shall be brought to the clearest point of collision, fought out in the best circumstances, so that not only will Parliament. be able to thrash out all these matters, but the country, which follows our discussions, will be able to form its own judgment on the issues on one side or the other.
1023 That is the spirit in which we shall embark upon these proceedings, and it is as an example of that, that I undertake to present the Finance Bill in the form which the hon. and gallant Member and the right hon. and learned Member (Sir J. Simon) have both considered to be desirable. I think it would be a great pity if we wasted the full opportunities of Parliamentary discussion which are open; for instance, we want to have the crucial questions debated in such a way and at such times as the debates are reported, so that the country can follow the discussions. That is our only wish, and it is the only wish of those who want the House of Commons to discharge its functions in finance with reality and efficiency. If, for instance, we were able to come to a decision on what are called the McKenna Duties this evening, we should then be able to take the Silk Duties discussion tomorrow in the full light of day. The whole afternoon could be given to that, and there would still be time before we got to the late hours to deal with other matters at a time when they would be reported. I only throw that out, because it makes no real difference to the Government. We shall have to press on with the discussion, and, of course, we shall have to sit very late tomorrow night, if necessary. But it is worth considering whether more will not be gained by the opponents of the Budget, if they have confidence in their case, in bringing the crucial matters to the test in the best circumstances, and not concentrating attention on the other matters. Under these circumstances, I am quite ready to undertake in this Finance Bill that these duties—the so-called McKenna Duties—shall be divided up as has been suggested and wished. If that he satisfactory to hon. Members opposite, we might perhaps bring this particular phase of our discussion, which deals with procedure, to a close, and get on to other more important matters.
§ Mr. SNOWDEN
There has been a great deal in the speech of the right hon. Gentleman which has served no other purpose than of confusing the real issue. The right hon. Gentleman protested more than once in the course of his observations that it was desirable that the issues 1024 should be presented to the House of Commons in a way in which they could be properly debated. I take it that the root of the objection which has been brought forward by the hon. and gallant Member for Leith (Captain Benn) is as to the form in which the Resolution was placed on the Paper. I think the point put forward is most important, because I quite agree with the hon. and gallant Member for Leith and the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon) that there is a great controversial issue here to be decided, and it should be placed upon record that the House of Commons recognises that, so that it can be referred to in future if similar circumstances arise. I do not know whether my hon. Friends are prepared to go to a Division or not. I do not know what may be the effect of the present discussion. It is a matter difficult to decide upon the spur of the moment. However, if we may assume that the Chancellor of the Exchequer has apologised —[HON. MEMBERS: "What for? "] For the unconstitutional methods that ha has adopted. It is one of the gravest things that could be done. However, I would simply say that the Chancellor of the Exchequer has made an abject and humble apology to the House for the form in which this Resolution in Committee of Ways and Means has been put forward, and that he is prepared to make all the amendment within his power to see that the mistake is rectified in the Finance Bill. It seems to me that under those circumstances, perhaps, it may not be necessary to go to a Division. [HON. MEMBERS: "Hear, hear."] I would reply to those cheers by saying that we are not on this side of the House here to oblige hon. Members on the other side in regard to matters of this sort.
I have another objection to the form in which this Resolution appears, which has not been touched upon. We heard a great deal in days gone by about legislation by reference. Who, reading this Resolution as it appears on the Paper, would know what we propose to do? Who would know that it is proposed to put duties on motor-cars, films, and a number of other things? It has no meaning at all in this respect. Reference has been made to a certain section, eight I think, of the Finance Act of 1924. The only explanation that I can 1025 offer for the form in which this Resolution appears is that it is a piece of vindictiveness on the part of the Chancellor of the Exchequer, in re-imposing duties which had been repealed by us. However, in view of the humble apology that he has made for the terms of this Motion, I think, perhaps, we might proceed to other business.
§ Mr. HARNEY
I am afraid I cannot accept the attitude taken by the Chancellor of the Exchequer as a sufficient apology. I regard his answer as coming to this: He says, I admit I was quite wrong in lumping these four Resolutions together: had I know more I would have treated them separately." He says further that these Resolutions are a preliminary canter to the Bill, and that this practice has been adopted because the security of the money resolutions is so unquestioned in the House of Commons, and such caution is provided, that we have a double-barrelled means of debating each of them—first as Resolutions, and afterwards on Report. If that be the constitutional way in which the right hon. Gentleman admits that he was wrong, it is no answer to say: "I will right matters by giving you one Debate instead of two Debates to which constitutionally you are entitled." I would submit, therefore, that, having regard to his admission, the only proper thing to do is to accept the Motion, have the Resolution recommitted, and put right when it comes up again in Committee of Ways and Means. It certainly is an important thing to note the position taken up now by the Chancellor of the Exchequer, because it is a declaration that the old established practice of debating these matters, first in the form of Resolutions, and, secondly, in the form of a Bill, are wholly unnecessary, and that in future, therefore, we may regard a Debate upon the Resolutions as a matter of just adherence to precedent, and that the real point is the Bill. I think we ought to insist upon the sacredness of the old practice and the double form of Debate. I cannot, for my part, reconcile the admission that has been made by the Chancellor of the Exchequer with his refusal to give us that full constitutional right to which, I submit, we are entitled.
§ Sir HERBERT NIELD
I hope the Chancellor of the Exchequer will stick to 1026 his guns. Might I point out to the House, and to hon. and right hon. Gentlemen opposite—and especially to the last speaker, and to the ex-Chancellor of the Exchequer—that the time has gone by for this House to talk about great constitutional principles being observed! The present Government, the last Government and the penultimate Government, all supported a Bill which violated the rights and the traditions which have just been spoken of with such affection on the other side. The War Charges Validity Bill went to the bottom of the whole of it, and a more reactionary Measure was never presented, because this House had never discussed the matter at all. We have had to limit discussion on this question: therefore, it, is all moonshine that is talked about the constitution, and such discussion had better be left to one side. It is not creditable to the intelligence of the average Member of this House. The sooner we drop it and get to business the better.
§ Sir J. SIMON
By leave of the House, may I just address one question to you, Mr. Speaker? What between the suggestions of moonshine on the one hand, and the talk about abject apology on the other side, there may not be put on record what is the impartial view of the, Chair on this matter. Speaking for myself—and, I think, for my hon. Friends—we should not desire to go to a Division merely for the sake of keeping up a controversy. when really the important thing is to get on the records of Parliament what is the true constitutional rule in this matter. If I might, I would ask you whether you would clearly state to the House what is the rule, so that it may be recorded impartially as to what is the correct procedure in Committee of Ways and Means?
§ Mr. SPEAKER
I entirely adhere to the ruling given by my predecessor in 1916. I think that the proposal made by the Chancellor of the Exchequer will safeguard the position in future, taken with the discussion which has just concluded. As far as I am concerned, I certainly shall be satisfied that the decision of my predecessor should become recognised as a matter of the practice of the House.
May I put this question? Does your ruling amount to this: that a mistake has been made, and that 1027 amends possibly are being made, and that the rule is as laid down by Mr. Speaker Lowther, namely, that one tax must have one Resolution originating in Committee of Ways and Means?
§ Mr. SPEAKER
It was that ruling of my predecessor to which I referred. Does the hon. and gallant Gentleman desire to press his Motion?
§ Motion, by leave, withdrawn.
§ Mr. PETHICK-LAWRENCE
I beg to move, in line 1, after the word "duties," to insert the wordsother than the duty on motor cars, including motor bicycles and motor tricycles.In accordance with your instruction, Sir, I understand it is relevant to the discussion at the moment to range over all the Amendments standing in my name. During the War many people sought to change their surname in order to disguise their identity. The abuse of that practice was prevented in a way that we know of, but no law has been made to prevent politicians from changing the names of some of the commonly understood items of political discussion. Before the War, when a duty was imposed by the Customs and a corresponding duty was not imposed on home manufactures by Excise, that operation of imposing that protective tariff was described as Protection. To-day we are told that that is not true. We are told that there can be other cases in which there is this differentiation between the Custom Duty and the Excise Duty, but that it does not amount to a protective duty, or to Protection. We are told that this differentiation may be made under the Safeguarding of Industries Act. We are told that it can be introduced because the articles with which it is concerned may be described as luxuries. We are told also that reimposition to-day of certain specific duties, which were imposed at the instigation of Mr. McKenna—just because they are imposed at this time and in this way—do not amount to Protection or to a protective tariff. It may be asked why I trouble merely about names, and what does it matter by what name the operation is 1028 called? The name does matter, because the word "Protection" has a history, in many different ways. In the first place, there is the historic utterance of Lord Beaconsfield, that Protection was "not only dead but damned.".
Coming to more modern times, we have had certain statements made with regard to Protection when using that specific word, and which are, therefore, vital to the consideration of this question to-day. At the time of the Election the Prime Minister bound himself by a self-denying ordinance with regard to this matter, and as recently as December last, in this House of Commons, he declared there would not be an avenue open to Protection except through the method of the safeguarding of industries. In this House all of us, not only Members on that side, but here on this side above the Gangway, and I am quite sure I can say the same of hon. Members who sit below the Gangway, have a very high respect for the Prime Minister, and we are anxious to know how he reconciles this very specific statement with the introduction of these duties, which were originally brought forward by Mr. McKenna. One possible explanation has occurred to me, and it is this. It may conceivably be said that during the Debate last year something was said from the Conservative benches to the effect that if the Conservatives came into power they would reimpose these duties. I cannot remember whether or not anything specific was said along those lines, but it may be that some such indication was given. If that be indeed the excuse to be offered to-day, I can only say to those who have reminded us that we are becoming accustomed in this House to "legislation by reference" that this would be "pledges by reference," and if there be anything worse than legislation by reference surely it would be pledges by reference. I cannot believe that the Prime Minister, whose honour we all hold so high, would be guilty of a sophistry of that kind.
When we come to the right hon. Gentleman the Chancellor of the Exchequer, the case is somewhat different. It is putting it mildly to say that he has never been, up to recently at any rate, an enthusiastic supporter of Protection. In days gone by he has not viewed it in a very kindly light! On the contrary, he has always regarded it as a very dark and dangerous experiment. I cannot 1029 help thinking that when he contemplates the new object of his worship, and the star to which he pins his faith, he must sometimes be tempted to murmur the words of the hymn:—I was not ever thus; nor prayed that Thou,Shouldst lead me on.I loved to choose and see my path, but now,Remember not past years.
§ Mr. PETHICK-LAWRENCE
Because of these three things, the historic utterance of Lord Beaconsfield, the pledge of the Prime Minister, and the past attitude of the Chancellor of the Exchequer to Protection, we are being told to-day, it seems to me, that these duties are not protective tariffs and do not amount to Protection. In this way it was possible for the Chancellor of the Exchequer, while holding open the front door of the financial system of this country, holding it open, not with modesty, but proudly, and even defiantly, in order to allow the entrance of one little duty definitely named by him as Protection, that is the duty on hops, at the same time quite frankly to open the back door, three back doors in fact, to allow duties of a really protective character to come in. I refer, first, to what is done under the safeguarding of industries; secondly, to his statement about luxuries; and thirdly, to these proposals which we have come to know by the name of the McKenna Duties.
I have no intention of going in any great detail into the particulars of these duties. The statement made by Mr. Bonar Law about them was repeated in a very clear and lucid speech by the right hon. Gentleman the Member for Swansea (Mr. Runciman) on 30th April, when he gave particulars of these duties to Members of the House of Commons who are not acquainted with them as fully as some of us who have been in earlier Parliaments I would recount briefly some of the main facts. These duties were introduced originally, during the War, by Mr. McKenna. They were introduced for this specific reason, that it was desired to prevent cargo space in ships being taken up by articles for private and what was then, to some extent, luxurious consumption, when that space was desired by the Government for purposes connected with the 1030 War. Definite pledges, definite and precise pledges, were given at that time, not only by the Liberal party but by the other members of the Coalition, that these duties were not to be regarded as protective duties, and that they would not be retained after the war; and in fact, it was said it was almost inconceivable that anyone should retain them after the War as part of the fiscal system of the country. When the War came to an end it was arranged that these duties should be continued for the space of three years only. When, however, the three years came to an end, successive Chancellors found themselves pushed to retain these duties year by year, until the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), having more courage, perhaps, than the Chancellors who had preceded him, decided not to reimpose them, and they accordingly dropped.
Members of the House who were present last year will remember that not only were serious prophecies of disaster made, but that there were fantastic prophecies about millions of men who might be thrown out of work by the withdrawal of these duties. We were told that everyone of these industries would be ruined, and that in the motor industry, in particular, we were bringing about a cessation of the great prosperity it was enjoying. We were told almost at one and the same time that the industry was in a state of great prosperity, and that we would bring that prosperity to an end, and that the motor industry was in such a bad condition that any further blow would fell it to the ground. Those fantastic prophecies have not been justified to the smallest extent.
I will give the House a few figures relating to the motor industry, which is, after all, the principal one of them. In 1922 the number of motor cars made in this country was in the neighbour hood of 40,000, worth £20,000,000. In 1923 the 40,000 had grown to 67,000, and the value was £24,000,000, an increase but not a very large increase. In the year 1924, the year in which the duties were removed. the 67,000 had grown to 107,000, and the £24,000,000 had grown to £36,000,000. It may be thought that this was solely due to the export trade, and that we in this country suffered by 1031 the remission of the protective tariffs that we should naturally have a very much smaller proportion of the home trade. As a matter of fact, that was not the case. Whereas in 1923 only 62 per cent. of the home consumption was supplied by home manufacture, in 1924 as high a proportion as 70 per cent. of the total home consumption was supplied by home manufacture. Finally, and this is the last figure I propose to inflict on the House, in the first quarter of this year the motor industry as a whole made 41 per cent. greater profits than was made in the first quarter of last year.
Reported in the first quarter of this year—the year in which ruin was predicted, and the direst consequences were prophesied.
§ Brigadier General Sir HENRY CROFT
Will the right hon. Gentleman say when the duties were taken off?
§ Mr PETHICK-LAWRENCE
1st July, half-way through the year. [HON. MEMBERS: "August! "] Well, 1st August—broadly speaking, the middle of the calendar year 1924; the duties were taken off a little bit after the middle of the year. The profits shown in the first quarter of this year, having been made during the year 1924, were not reduced, as would obviously be the natural consequence if the prophesies of disaster had been fulfilled, but were increased by 41 per cent. That is complete proof that the anticipations of those who held that this course was going to be injurious were entirely unfulfilled. Speaking for myself, I do not think it was desirable even in war time to impose what were, even then, duties of the character of protective duties, and I think some of my hon. Friends below the Gangway must rather regret the essays in Protection. to which their party committed themselves during the War.
Will the hon. Gentleman permit me to interrupt him? Will he distinguish between the party and some members of our party?
§ Mr. PETHICK-LAWRENCE
I do distinguish, most certainly. What I say is that some Members sitting below the 1032 Gangway must regret the policy which some of their leaders did carry through.
§ Mr. PETHICK-LAWRENCE
Well, I will not press that point. But I will say that during the War there was certainly a case to be made out for 7.0 P.M. some form of exclusion, whether it should take that form or not, during the peculiar circumstances of the War. But that argument certainly does not apply to-day. What excuse can there be to-day for putting these duties, and, further still, for calling them anything else but what they are, namely, Protection? It may be said that they are duties upon luxuries. I do not think that it would make any difference if they were, but to what extent is that true? The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) pointed out that the main burden of this duty fell on the cheaper car. His statement was questioned by the Financial Secretary to the Treasury, and it is usual on these occasions for the representative of the Treasury to be present.
§ Mr. SPEAKER
I understand that the representatives of the Treasury are absent for only a few moments.
§ Mr. PETHICK-LAWRENCE
I was pointing out that the right hon. Member for Colne Valley suggested, and, I think, with the greatest truth with regard to this motor taxation, that the motors to which the differential duty applied were mostly cheaper cars. The Financial Secretary to the Treasury with considerable ability mentioned the Spanish names of two cars, of which not one in ten, and I doubt whether one in fifty Members had ever heard before, to suggest that these duties applied to the more expensive cars. I think there is no doubt that, as a matter of fact, it does apply mainly to the cheaper car, and that farmers using cars for their business are those particularly concerned by this duty. But it does not apply only to motor cars, but also to motor cycles. They are not luxuries. They are produced partly for business. Then there is the question of clocks and watches. No one can say that they are articles of luxury, though many of them come from foreign countries. As a matter of fact, it is not possible to argue that this duty solely affects items of luxury.
1033 Is it further suggested that these duties are of the nature of the safeguarding of industries, and could be introduced through the safeguarding of industries procedure? I think it must be perfectly clear that, not only have they not been brought through that machinery, but they could not have successfully navigated the waters of that channel. They would have been caught in the meshes of the net which that procedure has to stop those which are not suitable to be dealt with in that way. The defence which the Chancellor of the Exchequer himself put forward was somewhat jejune. He said that the object of this duty was for the purpose of revenue. There is a very simple answer to that. If these duties are simply for the purpose of revenue, why do not they put on a corresponding excise? If these duties are not Protection, what in heaven's name are they, and what justification is there for them?
Now I have come to the end, except for one question that I put to the Prime Minister. The Prime Minister has told us that he has no intention of allowing a general tariff to come into operation in this country as the result of the safeguarding of industries. Does he not realise that a general tariff is ultimately made up of the aggregation of small tariffs, and, while it is perfectly true that one swallow does not make a summer, and while it is perfectly true that one drop of water does not make a flood, nevertheless it is also true that the little springs, when united together, form a great river. It is well known that tariffs always begin in a small way; but they gather force as they go on until at last the little tariffs swell themselves until they become a great Protective system. I want to know at what point will the Prime Minister consider it necessary to put a stop, at what point will he take the steps which will be required to stem the rising tide of Protection, of which we see the beginnings coming from every side.
§ Mr. MORRIS
I beg to second the Amendment.
There is one fact to be remembered. The Chancellor of the Exchequer was very anxious, nay, he welcomed a fight. He was eager for it, eager for the subject to be taken up. Immediately the first Resolution came forward search had to be made for the Chancellor of the 1034 Exchequer, because he was not in his place on the Treasury Bench. Although the Chancellor of the Exchequer has been a great champion of Free Trade policy, he appears in his Budget speech as the first Protectionist Chancellor this country has seen for the last hundred years. This is the first Protectionist Budget that has been introduced for the last 100 years. It will be interesting to recall what the Chancellor has thought about these Resolutions. I am not going into the history of these particular Resolutions. That history is well known. The arguments for and against these tariffs is perfectly well known, but I should like to quote to the House the opinions entertained, at any rate at one time, by the Chancellor of the Exchequer, of the members of the party of which he is now such a distinguished ornament, and of such Resolutions as have now been put forward. He said, describing both the Tory party and the tariff policy:It is a party of vested interest, corruption at home, aggression to cover it up abroad, trickery by tariff jugglery."—and he is now taking part in that jugglery himself, and, if I may say so, he is a very accomplished juggler—the tyranny of the party machine sentiment by the bucketful, patriotism by the imperial pint, an open hand in the public Exchequer and the open door to the public-house, dear food for the million and cheap labour for the millionaire.Well, the Chancellor has had a splendid opportunity, not of condemning the Tory party for taking up that stand, but of giving that party a very distinguished lead in bringing "dear food for the million," because all these duties he is proposing are going to make the lot of the workmen of this country a good deal harder.
Sometime at the beginning of this year, at the beginning of this Parliament, his right hon. Friend the Minister of Agriculture (Mr. Wood) was looking round for a policy to support the cause of agriculture in this country. He proposed setting up a Conference. That Conference did not come about. He has not yet found a policy to suit agriculture. But these duties which the Chancellor proposes, instead of doing something to assist agriculturists, are going to be a handicap to them. A farmer will have to pay more for his machinery because of these duties and for the motor car he will buy, for the 1035 farmer, let me say, is a very large user of motor cars. I represent a Division where districts are from seven to 10 miles from the nearest railway station, and the farmers are only able to take their goods there by the use of a motor car. But I am not very much concerned to-night with that position. I am concerned with what is a very much more serious position, and that is the pledge given by the Government, and given by Government supporters. These duties, frankly, are Protective duties. It is not denied. A pledge was given by the Prime Minister in this House on the 17th December last, when he said: "We have no mandate for Protection." That was clearly true. There was no mandate for Protection at the last election. The number of votes cast for the party above the Gangway and for the party of which I have the honour to be a member was larger than the votes that were cast for the party opposite. There was no mandate for protective duties. The Prime Minister clearly recognised that fact, for he said:As far as the Protection of any industry goes in this Parliament, the only avenue open to us is the avenue opened through the new Safeguarding of Industries Act.These protective duties are being introduced quite independently of that Act. Is that how pledges, given by the Prime Minister in this House, are going to be honoured by his Chancellor of the Exchequer, or is the Chancellor of the Exchequer going to say he did not know that pledge was given by the Prime Minister? When the head of the Government gives a pledge, not only in this House but through this House to the country, that he is not going to impose any new protective duties except through the Safeguarding of Industries Act, how is it we find that three months after the Chancellor of the Exchequer introducing those duties under another heading? The whole position is misleading, and is practically a fraud upon the electorate from the point of view of the responsibility of public life. A pledge given by a responsible Minister in a public position should be honoured, and the country is entitled to be told that that pledge is going to be observed.
§ Mr. KIDD
The hon. Member who introduced this Amendment and the hon. Member who seconded it seemed to be 1036 under the impression that the decision of the Chancellor to re-impose the McKenna Duties is contradictory of this general attitude adopted by him in the Free Trade and Protection controversy. I think they fail to distinguish between protection given to an established industry and a security which is legitimately given in order to stimulate a new industry more than likely to be of scientific origin, and therefore affording employment of an improved character. We have an example of affording security to stimulate new industry in the law of patents. There it is recognised that patents not only increase employment, but also tend to improve its quality. That is the national interest in giving security to a patent, namely, to stimulate invention which adds to employment—the security is not merely to reward the inventor. Take the case of motor-cars. I heard in the earlier stages of this discussion the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) make great play of the fact that there had been no diminution of employment in the motor-car trade after the duties were taken off. May I submit this argument. It is common ground that the motor industry was in a very depressed condition before the McKenna Duties were imposed. It is also common ground that after the imposition of those duties the motor industry received a stimulus the direct effect of which was to give increased employment. When those duties were taken off by the Labour Government what is the explanation for the apparent non-diminution of employment. It is simply that the momentum given by the security afforded by the imposition of the McKenna Duties had not exhausted itself. Anyone associated with industry will fully appreciate the fairness of that proposition. With regard to the reimposition of these duties, I think there are Members sitting on the Labour benches who would like to see in this country more and more security of this kind given in order to stimulate new industries of improved character. I am aware that members of the Labour party take the deepest interest in education. In raising the general standard of education surely I am right in saying that it should follow as a corollary that we should seek to improve, not only the quantity, but also the quality of employment. We want 1037 to see employment of a better quality in order that it may more and more satisfy the mind which comes with better education We can do something towards this end by giving such security as the Chancellor of the Exchequer seeks to give. Many of us are quite stubborn in our opposition to Protection, but we recognise the distinction between security which brings new trade and trade of a better quality and Protection which may more tend to encourage idleness than stimulate enterprise. It is thus we regard the Chancellor's action at this time and we hope the experiment may be repeated in other directions.
§ Sir H. CROFT
The Mover of this Amendment, like the hon. Member for Cardigan (Mr. Morris) seemed to take grave offence at the reimposition of the McKenna Duties which, they contend, is in some way a violation of the pledge of the Conservative party given at the last election. I submit that in regard to every one of the Members of the party to which I belong on every single platform at the last election we condemned the abandonment of the McKenna Duties, and I do not suppose that there is a single one of us who did not put in the forefront of his programme a determination to see that those duties were reimposed. I would also ask hon. Members opposite to recollect the actual occasion when the final decision was arrived at to get rid of those duties, because quite apart from the fiscal controversy, the whole tone of every speech delivered by the Members of the Conservative party was that on the first possible occasion we should reintroduce those duties if returned to power.
The hon. Member for Cardigan quoted a very eloquent speech made by the Chancellor of the Exchequer which almost made me regret that he could not find words equally poetic and effective with which to attack my party, but the fact remains that the Chancellor of the Exchequer, unlike some others who supported these fiscal proposals during the War, has not found it consistent with his duty to abandon the workers of this country, and he is raising such revenue as he can by this duty under the policy which has been laid down. Has it been forgotten that the Paris resolution with which Mr. McKenna was largely associated as well as the right hon. 1038 Gentleman the Member for West Swansea (Mr. Runciman) laid down that it was not only to cover the period of the War but for a world-wide settlement after the War.
Another reason given was that we should do everything in our power to help the exchange because it was realised that our imports were very largely exceeding our exports, and they have continued to do so. Is it reasonable now to maintain our exchange in that state? At the present time we see announced in the newspapers that very large numbers of foreign articles such as motor-cars and musical instruments are being poured into this country in order to get in before the duties are imposed, and can anyone who realises what our fellow-countrymen are now suffering through unemployment be so soaked in pedantry as not to be aware that everyone of those articles which are now being imported into this country in such large quantities would give additional employment to the people of this country if the McKenna Duties had been in force. One hon. Member asserted that the profits in the motor industry had gone up 40 per cent. I am aware that that industry has enjoyed five or six years of settled trade under the McKenna. Duties and in spite of the injury done by the abolition of those duties, the late Chancellor of the Exchequer was not able to destroy the splendid effect which those duties had had on the motor industry during the past five or six years.
§ Sir H. CROFT
I say that every additional car which comes into this country as a result of the policy adopted by the abolition of the McKenna Duties means the deprivation of work which would otherwise be given to the workers in this country. When the hon. Member for Cardigan gets up and says that he represents a Liberal constituency in which cheap motor-cars are necessary for the farmers, I entirely agree with him, but I would like to point out to him that the price of motor-cars continued to come down in this country under the McKenna Duties. The hon. Member is anxious that the farmers should be supplied with Ford cars, but why should not those cars be manufac- 1039 tured at Manchester or Dagenham in this country? In spite of this question being referred to as a large protective measure, speaking as one who really believes in Protection, I say that this policy, if it is Protection, is only a niggling thing. I do not thank the Chancellor of the Exchequer for it, except that it is an indication of the right direction.
If the policy of the McKenna Duties had been extended to all manufactured imports coming into this country, my opinion is that you would have had factories springing up all over this country, and you would have had an immediate and substantial decrease in the number of unemployed, which would have done much to relieve this appalling unemployment problem which we see in our midst. I thank the Chancellor of the Exchequer for a small thing, which is not a new thing, because the re-imposition of these duties has been carried out by successive Governments, and I would like to point out that even the right hon. Gentleman the Member for Colne Valley had not unanimity in his own party when he decided to dispense with those duties. The Socialist Government was driven to take that action owing to the fact that they depended upon the votes of Liberals below the Gangway. Now that that unholy alliance has once and for all been finished, I think we shall find that there will be far more support for these duties, and more hon. Members will come to hold the view that we are not now so much concerned with Protection or Free Trade, but we are all animated with a desire to provide more employment for the people of this country.
§ Major CRAWFURD
It is a matter of keen regret to me and to my Friends that the hon. Baronet who has just resumed his seat did not detain the House a little longer, because I think that the longer he went on the more admirable would the object-lesson have been which he was giving to the Chancellor of the Exchequer, and the more clearly would that right hon. Gentleman have realised the kind of company that he is now keeping. I do not propose to go in any detail into the arguments of the hon. Baronet, but only to mention two. In the first place, when he talks, as he did towards the conclusion of his remarks, about the 1040 importations into this country which are depriving men of work, may I put to him once again the very elementary question which I put to members of his party some weeks ago on another occasion—How does he think that those things are being paid for? If he really believes that motor-cars or any other commodities are sent to this country without due payment being made for them, what more desirable state of affairs could he wish for? If the foreign manufacturer is going to continue to send to us articles that we require, without asking or wishing for any payment, that seems to me to be a most desirable state of things. All that we have to do is to sit down, close our factories, and enjoy ourselves on the multitude of good things that are sent to us from abroad by the philanthropic foreign manufacturer.
Surely, the hon. Baronet can see that, as the right hon. Gentleman knows perfectly well, considerations of that kind reduce to nonsense the theory that, if you import articles into this country, you deprive people in this country of employment. If hon. Members opposite will re-read the admirable speech, in many ways, of the right hon. Gentleman two afternoons ago on the gold standard, they will see that some passages in it show that he still retains enough of his former beliefs to realise that the prosperity of other countries means, in the long run, prosperity for this country also. The hon. Baronet told the House what he and other Members of his party said on the platform during the last General Election, but, with all due respect to him and his colleagues, we are not really concerned with what they said, but we are concerned with what the head of the Government said. The Prime Minister laid it down perfectly clearly in this House that the only avenue by which industries would obtain protection in this Parliament—not only this year, but in this Parliament—would be through the machinery of the Safeguarding of Industries legislation, and, if I am not out of order, I want to recall the fact that another pledge was made by the Prime Minister with regard to the taxation of food. That pledge, as I tried to point out to the right hon. Gentleman's colleagues before the House rose for the Easter Recess, is already by way of being broken, and here is a second pledge on fiscal matters that is being broken The Prime Minister's 1041 reputation for impeccability is being exploited to the breaking-point by his colleagues.
I now want to put one or two points to the Chancellor of the Exchequer himself. Without going into any detail in regard to what has happened since these duties were taken off, I say that, even if the principles held by hon. Members opposite be admitted, even if one believes in the principles of Protection and in safeguarding industries by that method, these are the very last industries that ought to be selected for the purpose. All these industries have been prosperous since the duties were taken off. The hon. Member for Linlithgow (Mr. Kidd), who is not now in the House, talked about stimulating industry by giving it security. I make bold to say that there is no better example in our industrial history of the stimulating effect of competition upon industry than has been afforded by the motor car trade during the last year, and we on these benches, who believe that the protection now being given to that industry is illegitimate, ought to acknowledge fully the efforts that the motor car trade has made during the last year to meet competition and to make itself more efficient. There are other methods, of course, of helping the motor car industry apart from these protective duties, and I hope, before the discussion on the Budget comes to an end, to indicate to the right hon. Gentleman some of the ways in which he has missed his opportunities in that respect.
While admitting, however, that this particular industry has during these last few months made enormous progress, I still contend that there is nothing in its condition to justify these protective duties, even if it be admitted that protective duties in any circumstances are warranted; and it is not only the evidence of Free Traders that I would adduce in support of this contention. For instance, in November last, the "Morning Post," which I suppose the right hon. Gentleman now reads, in its account of the Motor Exhibition, said:To-day"—that was last November—motoring has been brought within the close range of a public far wider than that to which its appeal has been made hitherto.
§ Major CRAWFURD
I am interested to hear the hon. Baronet's cheer. Let me point out that this has been chiefly secured since those duties were removed.
§ Major CRAWFURD
The hon. Baronet and, I may remark in passing, others also who make interventions during the course of other people's speeches, are not very ready to answer arguments in support of those interventions. The hon. Baronet points out that November was only two months after these duties had been removed, but what the "Morning Post" said in November has become increasingly true ever since, and during the last eight or nine months motor cars have been increasingly brought within the range of people with more modest purses than those who used to be able to enjoy them. At any rate, the removal of these duties has been a large contributory cause of that effect. Let me point out to the hon. Member for Linlithgow, who talked about stimulating industry by giving it security, that, in the Government's White Paper regarding the Safeguarding of Industries, it is stated that they require an industry, before it gets the protection of their proposals, to show that it is run with reasonable economy and efficiency. I venture to suggest that since the removal of these duties the motor-car industry has been run with more economy and more efficiencey than ever before. The Chancellor of the Exchequer, in his first Budget statement, referred, I think, to these taxes as luxury taxes, or at any rate, if he did not so refer to them in his Budget statement, he referred to them in those terms when, on the 17th December, he was criticising the action of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden).
§ Major CRAWFURD
I am dealing with the right hon. Gentleman's proposals, and not with Mr. McKenna, but let me point cut that at the time when Mr. McKenna spoke they were much more essentially luxury taxes than they are now, because that was in the War period, and no one knows better than the right hon. Gentle man the special considerations that applied then, so that his remark is really irrelevant to the point. The right hon. 1043 Gentleman, last December, speaking of the removal of these duties, said thatIt was a wanton act to deprive the State of that revenue… Here were duties which nobody objected to. Here were taxes on luxuries, here were taxes paid by the well-to-do."—[OFFICIAL REPORT, 17th December, 1924; col. 1158, Vol. 179.]
§ Major CRAWFURD
The right hon. Gentleman finds considerable support for those words. May I quote an authority which even the right hon. Gentleman himself will treat with some respect? We are sometimes told that we on these benches, in defending the principles of Free Trade, are doctrinaires, that we are out of date, that we are soaked in pedantry, that we are the utterers of shibboleths. If that be true, it is equally true that the arguments advanced by hon. and right hon. Gentlemen opposite are antiquated and out of date, because they are the very arguments that were advanced in 1860, in 1853, in 1846, in 1845, and in 1842—in each of the years when the great Free Trade Budgets were brought in.
I am going particularly to commend to the right hon. Gentleman, in view of the words he used on the 17th December, the remarks made by the late Mr. Gladstone in introducing the last of his great Free Trade Budgets in 1860, because what he said then is particularly and peculiarly relevant to what is going on now. Mr. Gladstone was then making the last large series of reductions in the import duties in this country, and he quoted the remarks made to him by interested people, which were exactly the remarks that we hear, and have heard, in this present Session of Parliament. The very remark which the Chancellor of the Exchequer himself made on the 17th December, Mr. Gladstone quoted as having been made to him. He pointed out that manufacturers and their friends came to him and said that these taxes were luxury taxes—he was referring in particular to some of the duties reduced under the Commercial Treaty with France; and he said, "Yes, these are luxury taxes. These are taxes paid by the well-to-do, but only because you keep the taxes on. Take the taxes off, and these articles will come within the reach of people who are less well-to-do." That is exactly what has happened with the 1044 motor car industry in the case of the McKenna Duties.
There are only one or two other small points to which I desire to refer, but one in particular I wish to commend to the right hon. Gentleman. One day last week he made use of a phrase which was received with some resentment on the benches above the Gangway on this side of the House. He said people were qualifying to receive the dole. Does he not realise that what he is doing now is to teach other people to qualify for another dole? What is a protective duty but a dole to manufacturers, just as unemployment relief may be called a dole to unemployed men? Why then does the right hon. Gentleman object to unemployed or partially employed people qualifying to receive a dole? Because, he says, it has a bad effect on character. People who do not desire to work or who have not the ability to work are confirmed in their desire not to work, and are perhaps eventually deprived of the incentive to work because they can get something for nothing. It cannot be salvation to industry if it is damnation to the unemployed man. The right hon. Gentleman is doing to other people exactly what he was condemning the other night. It is not more than 18 months ago that the right hon. Gentleman, not then a Conservative Chancellor of the Exchequer, appeared on a Liberal platform in support, of two Liberal candidates. I remember the meeting well, and the speech made by the right hon. Gentleman, because it was made on my behalf. I have not the slightest doubt that he will recall the meeting, because there were certain circumstances connected with his departure from it which made it somewhat unusual. Speaking for the Liberal party, in one of those dramatic phrases which he sometimes employs to the exclusion perhaps of more serious argument, he said, "We are threatened "— we, then being the Liberal party—" on one side by Moscow, and on the other by the ' Morning Post.' "Of those two menacing alternatives, as they appeared to him then, he has chosen the "Morning Post." We say that the offices of the" Morning Post" are half-way along the road to Moscow, and we propose for our part to fight the right hon. Gentleman's proposals at every phase and at every turn.
§ Mr. RHYS
In listening to the speeches which have been made on the other side of the House, I am reminded of the New Testament. We have all read how Paul describes the City of Ephesus, and how the inhabitants went about shouting, "Great is Diana of the Ephesians." I cannot help feeling, when we are told what Gladstone said in 1863 or 1883 or whatever it may be, that we are looking back to the past and not looking to the future to see what are the new and more complicated questions that face us to-day. I should like to congratulate the Chancellor of the Exchequer on re-introducing the McKenna Duties. Some have greatness thrust upon them, some are born great, and some achieve greatness. I would not insult him by suggesting that he has had greatness thrust upon him, but I think we may say that perhaps he was born great, and is now about to crown his career by admitting that he was wrong before. When I say he was wrong before, I mean that he was right in his early days, but after an excursion to the enemy country he has come back to the right side. I welcome these tariffs, such as they are, because I fought the last Election, and the one before it, on the question of the Safeguarding of Industry. I did not make a single speech without putting right in the forefront of it the necessity for helping industries which require help. The most interesting part of the speeches which have been made on the other side is that not one single person, as far as I could make out, suggested that these duties ever did any harm. We have bad the old Free Trade and Protectionist arguments, but no one suggested that these duties did any harm. I represent a division on the outskirts of London, on the East side, and we are looking for great benefits accruing to us under these proposals. If it is of any interest to hon. Members opposite, one or two have told me how glad they are that these duties are being put back because we are looking for great benefits and we hope that large motor works will start as soon as they are put back. Therefore I most heartily welcome the proposal to restore the McKenna Duties because I feel it is the least we can do to help our unemployed, of whom there are any number in London, and I sincerely hope they will come into operation as soon as may be and that the Chancellor will find it necessary to take the action which he stated 1046 to-day might have to be taken in order to stop dumping in the next two or three months. That is a very important point which should not be lost sight of, or we may find that the effect of his proposals will take longer in coming into operation than was expected. I am sure anyone who studies the question must come to the conclusion that they will be most effective.
The hon. Member who has just sat down suggested that from this side of the House criticism of these proposals comes only from those of us who have very fixed and antediluvian Free Trade principles, and that we do not suggest that they will do any particular harm to the industries concerned. I have no fixed Free Trade principles of any kind. If you can convince me that private enterprise will keep the enterprise once you protect it, I am quite willing to consider very carefully the case for protecting any industry. Sixteen months ago I visited Coventry, which at that time was a hotbed of unemployment. The "Morning Post." was coming out with scare headlines about the terrible ringleaders of the unemployed that Coventry was throwing up and the way Bolshevists and Bolshevist gold were exploiting the unemployed of Coventry, and they were marching on the guardians. Even, those hon. Members who are rather clogged by continually reading the Morning Post "will not believe that you can get up a scare of that sort, however much Bolshevist gold you spend, unless there are a large number of unemployed for that gold to be used among. That was the position under the McKenna Duties which the hon. Member for Romford (Mr. Rhys) is so very grateful to the prodigal son for restoring to them. In Coventry to-day there are hardly any unemployed. The percentage of unemployed per head of the population is one of the smallest in the country. The Chancellor of the Exchequer has appeared to resent the suggestion that this is a rich man's Budget. It is certainly a Budget that is in many instances directed at the middle class, and these are duties which are going to hit the 'middle class very hard. The small, light cars and motor cycles and side-cars which people of small means wish to get are the things 1047 which are going to be principally hit and raised in price. If you go out into Palace Yard and look at the cars waiting outside the House, you will find very few whose price is materially affected by foreign competition. It is not the rich man whom the Chancellor of the Exchequer has budgeted for who is going to be hit by this. This is not a luxury tax. It is a tax on what is becoming more and more a necessity for many small business people, for travellers, and for the smaller middle-class people.
Reference was made by an hon. Member opposite the other day to the fact that, although 33⅓ per cent. was taken off by the late Chancellor of the Exchequer, the prices of foreign cars imported into this country did not fall by the same figure. That is due to the fact that tyres, lamps, and in many cases actual component parts of the cars and motor cycles were already being made in this country and were not affected by the remission of the duties last year, and will not be affected in the slightest by their reimposition this year. The facts of the case are these, and the House has to face up to them whether they are palatable or not, that when private enterprise is protected, when it can sit back comfortably, charge high prices, and draw substantial profits, it is only too glad to be able to do so, and that is the complaint that many of us have against Protection. If you come to us and say "We have tried to revive industry, we are prepared to accept restriction of our profits, we are prepared to make concessions where our industries are over capitalised as well as scream and howl because the workers will not work an unreasonable number of hours a week," if you are prepared to come to us with proposals and to say that you are prepared to give something, as well as hitting at the under-dog all the time, I think you can expect to get your safeguarding proposals, as you choose to call them, considered much more favourably on this side of the House, for while you come and ask to be safeguarded and give us no guarantee that you will not allow the public to be fleeced as they were before the right hon. Gentleman took the duties off, and as they will be again when the right hon. Gentleman has had his way, if you will not give us any of these 1048 guarantees, you may call it the safeguarding of industry, but I call it sending industry to sleep.
The result of the remission of these duties was to make the motor industry go in for mass production. It employed more and more labour and turned out cheaper cars. Those are good things. The cheaper the ultimate price of the goods, and the more workmen paid at a reasonable rate for making the goods, the better for the industry. Unlike many hon. Members opposite, the Chancellor knows very much better. He is deliberately sending Coventry and other centres of the country back to the state from which the last Chancellor rescued them, and he is doing it solely and simply in order to gratify the desire of Members of his own party who do not know any better, and who would, perhaps, resent his knowing better.
§ 8.0 P.M.
§ Mr. BANKS
It seemed to me as I listened to the speeches from hon. Gentlemen opposite, and in particular to the speech of the hon. Member who moved the Amendment, that whereas in all these disputes about Free Trade and Protection we are constantly encountering the fallacy of post hoc, propter hoc, it was preeminently so in regard to his speech. He seemed to labour under what I believe to be a delusion, namely, that both the imposition and the removal of a tax operate immediately. By way of illustrating that, he compared certain figures relating to the motor industry for 1924 and for the subsequent period. Surely, when some protective duty is introduced the manufacturer of the particular articles to which it refers is encouraged to embark upon that business, to open a factory or to extend a factory, but it takes him some time before he reaps the advantage which that modicum of Protection gives him. When you take the tax off suddenly you no more stop the impetus which his business has received than a locomotive can be stopped in three or four yards.
In the constituency which I have the honour to represent there is that very wonderful organisation the locomotive works of the Great Western Railway Company. That is the principal source of employment in the constituency, and other industries there are unimportant 1049 by comparison. There is one small industry which, although it does not employ more than 500 or 600 hands, affords, I submit with respect, a very clear illustration of the principles to which I have been alluding. The Garraud Engineering Works make a little clockwork mechanism, commonly known as the motor of a gramophone. I have been informed by the manager of those works that it was the introduction of the McKenna Duties which encouraged this firm to commence this class of trade in Swindon. [HON. MEMBERS: "During the War? "] After the imposition of the McKenna Duties and in consequence, so he tells me, of the imposition of the McKenna Duties, his firm were encouraged to embark upon this particular manufacture, and I think he is a witness whose evidence ought to be believed. Those engaged in a business probably know a great deal better than hon. Members opposite what induced them to embark upon it.
He tells me that it was the influence of these duties which enabled him, beginning in a very small way, first of all to get his foot into the home market, and when he had got his foot into the home market to be able, as he does, to export considerable quantities to the Dominions and abroad. I went over the factory, because I was much interested in this local illustration of the principle. There can be no question to a layman as to the enormous superiority, in solidity and workmanship, of the English article over the Swiss and German articles which he showed me, and which we compared. He was obliged to charge for the English article something like 14s., whereas the Swiss article, with the duty, came to about 10s. 6d. He found that his customers in this country were ready and willing to pay that difference between the price of the two articles in return both for the better workmanship and the more durable qualities which no doubt, in turn, were due to the fact that his workpeople were better paid and looked after than the worker in Germany or Switzerland.
If you took off the duties the effect would be that the Swiss price would drop from 10s. 6d. to 7s. 6d., so that his mechanism would cost twice as much as the Swiss article, and his customers were not prepared to pay that. He antici- 1050 pated, with great trepidation, the removal of the duties, and this was one of those cases where every workman in the factory met and telegraphed to me on the occasion when the late Chancellor of the Exchequer was discussing this matter in the House of Commons. They telegraphed to me a unanimous resolution imploring me to appeal to the late Chancellor of the Exchequer to keep on these duties. Of the bona fides of that particular resolution I have no doubt whatever. When the last General Election supervened, I was cross-examined by my constituents as to why it was that the Garraud Engineering Works were still apparently going strongly ahead, that they had actually engaged more hands, and that they were working overtime. The answer was due to the cause which I have already indicated, that you do not stop a locomotive when it is going at full speed.
It is true that the works had as much work as they could do, that extra men had been taken on and that overtime was being worked, but it was in the execution of orders and contracts which had been obtained before the duties were taken off. The real test is whether since those duties were abandoned orders have been coming in from home and abroad as freely as before. The answer of the manager of these works is a distinct negative. With regard to future contracts, those who formerly dealt with him said that they no longer desired to do so, and persons who gave him orders before did not propose to repeat their orders now that they could buy the Swiss and German gramophone motors for half the price of the English article.
What conceivable harm can there be in the imposition of a duty upon such a thing as the mechanism of a, gramophone? What good there is seen in the case of this industry in my constituency of this little factory which employs 500 hands, all local people from Swindon. We are fortunate in having only something like 400 unemployed in the constituency. Therefore, the collapse of these particular works would double the unemployment in the constituency. No conceivable case has been made out against the imposition of these duties, whereas we have tangible evidence in favour of them from people whose interest it is to tell us the truth. Any 1051 lawyer knows that the witness whose interest it is to tell the truth is the most reliable witness. There is substantial evidence that this industry was created, fostered and maintained simply and solely because of these duties to which the right hon. Gentleman opposite so strongly objects. These works, trifling as they are in comparison with the Great Western Railway works, afford an admirable illustration in practice and before one's eyes of the merits of these duties, and I congratulate the Chancellor of the Exchequer upon having the courage to reintroduce them.
§ Mr. HARRIS
We have had a very interesting speech from the hon. and learned Member who has just sat down. The education of the Chancellor of the Exchequer is now being completed. We are led to understand that these duties were put on merely in order to balance the Budget, but we have heard quite frankly from Member after Member that the duties are received with enthusiasm by hon. Members opposite because of their protective character. We have had a very honest and frank speech from one hon. Member opposite. He was under no delusion. He was enthusiastic about these duties, not because they were revenue duties—on the contrary, he hoped that they would not bring in any revenue, and that they would keep foreign cars out, thereby finding more employment in this country—but because they were protective. What the country will not be able to understand is the pretence that these duties have been reimposed purely for revenue. A duty of 33⅓ per cent. cannot by any pretence or any twisting be described as a revenue duty. It is meant to be protective. It was originally protective. It was put on for protective purposes by Mr. McKenna. He put on the duty for the purposes of the State during the War in order to save tonnage and to keep out the articles on which the duties were imposed.
If the motor industry requires protection, and if it is a sound policy to protect it, the right lines would be to bring it not under the Budget but to carry out the pledge of the Prime Minister and to refer the industry to the machinery of the Safeguarding of Industries Act. That machinery is in existence and in operation. We are led to understand that it 1052 is already functioning in regard to one or two trades, notably the lace trade. It would have been fairer for the Prime Minister instead of making pretence of reimposing these duties for revenue purposes to use the machinery that is provided under the Safeguarding of Industries Act. I object to these duties because I believe they are unfair and that they will unfairly handicap the use of what is becoming more and more a necessity for cheap and rapid transit.
When the bicycle industry, before the War, was threatened by competition, there was an outcry about the importation of cheap American bicycles, and a demand was made that there should be a tariff in order to save this dying industry. Better counsel prevailed, and Free Trade principles were adhered to, with the result that the American and German bicycle is almost unknown in this country. The British bicycle manufacturers were stimulated in their methods by the healthy atmosphere of Free Trade and they turned out the cheapest and most satisfactory bicycle in the world. The British bicycle, in spite of tariffs, is seen all over Europe and all over the world and is the most efficient and most satisfactory bicycle that can be produced. The manfacturers having to face competition with the world improved their methods and standardised their parts, with the results that we see to-day. We have had that process in regard to motor cars. We have seen it at work in regard to the Morris car. It was announced that the dropping of the McKenna Duties would mean disaster to those particulars works, but stimulated by the fear of competition from abroad the able and competent proprietors lowered their prices and improved their methods, and the result is that all over the country we see more Morris cars than ever before.
That is the object to be aimed at. We must make the motor car not an article of luxury for the privileged few, causing jealously and bad feeling and class consciousness, but an article so cheap that before long it will be as common as the bicycle, and as common as it is to-day in the United States of America. In America every workman, in places like Chicago, instead of travelling by motor omnibus or electric tram has his cheap Ford.
§ Motion made, and Question proposed, "That the Debate be now adjourned."—[Mr. Churchill.]
§ Mr. CHURCHILL
We are not continuing to-night. We shall probably have to sit late to-morrow night. Tomorrow we shall begin with this topic, and go on until we have finished.
§ Debate to be resumed Tomorrow.
§ Fourth and subsequent Resolutions to be considered Tomorrow.