HC Deb 02 June 1927 vol 207 cc622-44

3.0 p.m.

Brigadier-General Sir HENRY CROFT

I make no apology for asking the House to turn to the vital question of the nation's trade. Although on an occasion like this there is always a thin House, I think it is rather an advantage to discuss this subject without going to a Division upon it and I wish to speak to any hon. Member who may disagree with my views, as man to man, and without any unnecessary political bias. The question of the adverse trade balance has not received the attention which it deserves during the last three or four months on account of the many other problems which we have had to discuss. In the first, quarter of 1925 the adverse balance was £140,000,000, but in the same period of 1927 that adverse balance was 2155,060,000. A progressive adverse trade balance is something which should be considered immediately. In 1926 the adverse balance of trade for the whole year reached the very serious figure of £477,000,000, and in the past year there was actually a deficit, even allowing for invisible exports. In the first four months of this year, as I have shown, the adverse balance is far more serious and if the present rate continues throughout the year we may have to contemplate an adverse balance for the whole year of £620,000,000 with an actual deficit which may be a very serious figure.

That position is serious enough, but we have to consider also the striking change in the character of our trade in recent times. Everyone, whatever his economic beliefs, must be deeply concerned when we find that the imports of raw materials in the first quarter of this year as compared with 1925 have declined by £24,750,000, and when we realise that it is on our imports of raw material that our future production depends. While imports of raw materials decline to that great extent, our imports of manufactures during the same four months increased by £6,000,000 and turning to exports in the same period we find a very large decrease in manufactured exports compared with 1925—no less than £38,000,000. This is a question which must be put to the House and to the country. In addressing hon. Members upon it, I take no account of the particular schools of economic faith to which they may belong. This subject vitally affects everyone in the country and, in the long run, affects above everyone else the workers of the community. We cannot ignore these startling facts. We were told by leading bankers in January that we might hope for better times but whatever the prospect in international finance may he, if we study these figures we shall be most unwise in anticipating any great or immediate recovery. In fact the situation seems to be so serious as to warrant consideration by the House and the country.

We have been consoled for many years by some of those who hold fiscal beliefs differing from mine that we need not worry, because goods are paid for by goods and it does not matter if you are importing a great value of goods and produce, because they must be paid for by other goods and produce. Recent trade returns show that contention to be progressively false or at any rate they prove that we must adopt a very Micawber-like attitude in order to see that arithmetical calculation brought to fulfilment. In recent years we find that while the majority of our imports are goods paid for by goods, yet an ever-increasing proportion is being paid for by invisible exports. The result is that to-day we are buying approximately £500,000,000 more of goods and produce than we are selling—truly an astounding figure from this country which led the world in production not so long ago. Even if we were still balancing our total account, which we did not do last year, no financial pundit is going to convince me that you can compensate for the loss of wage-producing exports by invisible exports which are not wage-producing. I am convinced that every party is anxious that we should not follow the course of Holland and become a nation of financiers, merchants and moneylenders and neglect our national production until it perishes. The destiny of this country will be settled in the next ten years on the field of economics and it will he decided whether we are to hold our own as one of the greatest if not the greatest industrial country in the world.

I hope it will not be imagined that I am asking for some unreasonable policy of total prohibiton such as the right hon. Gentleman the Member for Shettleston (Mr. Wheatley) told us he would adopt. I believe that policy is supported by the majority of the Socialist party and although I admit it is better than a policy of drift, most of us in this party who are keen to see an alteration in the nation's fiscal system, do not believe the right hon. Gentleman's policy would be efficacious. It would maintain the which were dangers about we warned by those who say that if you eliminate all competition you will not in the long run help the country. What we ask for is a scientific extension of safeguarding which will give our industries at least an equal chance with their foreign competitors who are bearing nothing like the same amount of taxation, who are producing goods on a lower wage basis, who are working longer hours and are frequently assisted by the exchange. I believe the true Free Trader desires to see equal conditions of trade. Those we have not got and I ask that we should at least have them. Why have we not taken action sooner? It is because we have had in this country a school of doctrinaires who have maintained that any form of Protection would restrict our total overseas trade. I challenge them to deny that our overseas trade, since we adopted the policy of free imports, has not progressed as rapidly as that of our great protected rivals. If that be correct the whole basis of their case falls to the ground and in view of the world facts before us I ask for a reconsideration of the whole position. The three great problems confronting us are first, how can we employ our people; second, how can we economise; and, third, how can we raise the additional revenue which is necessary if we are to advance and to relieve burdens in other directions without harming our people. In regard to the first, no one will deny that we are importing manufactured goods which if made in this country would give employment to the whole of our unemployed.


You cannot give the miners employment.


I do not want to be deflected from my argument, but I may tell the hon. Member that in the Coal Commission Report it is distinctly laid down that the only hope of an increased consumption of coal in this country lies in a revival of the iron and steel trade. Is it not better to try to revive the iron and steel trade and in that way to help the miners? In regard to woollens and worsted materials, which are made in Yorkshire better than in any other country in the world, we are importing sufficient to absorb all the unemployed in the West Riding. Everybody knows how Lancashire products have been kept out of foreign markets and the difficulties which Lancashire trade is having to meet. There need be no unemployed in Lancashire if we would only insist that, instead of importing cotton goods into this home of cotton production the goods should be produced in Lancashire. No one who knows the hosiery trade will deny that we could employ all the out-of work hosiery hands in Nottingham and Leicestershire—in the Bosworth Division—if we preserved our home markets for our own people. [An HON. MEMBER: "Bosworth did not think so."] It is no use holding up a sock to the electors of Bosworth unless we show that we are determined to safeguard their industry. It is because they have been waiting for that, that they feel disgruntled, and I do not wonder at it. In regard to iron and steel there is nothing more deplorable than to see our steel workers, who are absolutely the finest in the world, waiting for work year after year while we are having increasing quantities of iron and steel imports coming into the country. We could absorb the whole of our unemployed steel workers if we had a national policy and were not prepared to sacrifice the workers on the altar of cheapness.

I will refer for a second to the question of agriculture, which I cannot go into at any length just now. I wonder whether hon. Members realise that the pig products and milk products we are importing would give employment to 150,000 men in agriculture if produced at home; and that is only a side issue of the industry as a whole. We ought to begin to think about these things and to look ahead, because no one can believe that, it is desirable to see our people leaving our agricultural districts at the present rate. We shall not improve the situation by creating a new hoard of officials and appointing committees. We have to get back to the principle that agriculture has a right to live in this country is it not a fact that there is no single country in the world which counts which does not promote an active system for the safeguarding of its industries The two latest entrants into economic freedom, India and the Free State of Ireland, have both adopted an extensive policy of safeguarding. It is not liked by some of those who were most anxious to give them self-Government, but there it is. I ask, further, whether any country which has ever adopted a full policy of safeguarding has ever abandoned it? These are facts which we cannot ignore. What other policy is there which holds the field Even the Socialist party are divided as to whether we are going to have "Socialism in our time"; I think it will be agreed that the majority of them are praying that it will not come in their time, or in any time whatever. I imagine, though I do not know, that the Liberal party will tell us that their remedy is Free Trade. They are like a drug fiend who through that vice is rapidly approaching death but who, for the sake of one moment's further imagined happiness, calls for one final dose of that which inevitably will lead to death.

Every spokesman of the Government in recent times has told us they believe that the policy which I am advocating is the only one which can really solve the problem of unemployment. They have discovered a remedy, and I think the whole of our party are pleased, and I am not sure that many hon. Members of the party above the Gangway are not also pleased, in their silent and discreet moments, that the Government have given relief to certain industries. They have applied their remedy in small doses with great success; but the right hon. Gentleman the President of the Board of Trade is rather like a woman who is bashful on account of her great beauty, who is so modest that she hides away even though she knows she is a very good thing. What I and some of my hon. Friends cannot understand is why the Government, having proved the success of their policy, do not extend it to other industries, as far as they can do so within the terms of the pledge of the Prime Minister at the last General Election. Sometimes we wonder whether the Government are really whole-hearted in their views. [An HON. MEMBER: "They are not whole-hearted about anything."] They are the best Government we ever had. The Socialist party say that our greatest problems are housing and unemployment. After all, under this Government we have built more houses than any other country has ever built; and we have done what the Socialists did not succeed in doing, we have got unemployment figures below a million.

Having proved that their policy is successful, why do not the Government go further with it? Some of us have wondered why it is that when economic discussions take place at Geneva all the representatives of the British Government happen to be gentlemen—I do not suppose they are sent there by the Government, and I do not know whether the Government have anything to do with their selection—who are either ardently opposed to their economic policy or, at any rate, have only recently been converted to it. Are hon. Members content to see this country buying £500,000,000 worth more goods and produce than it is selling Cannot we retrieve the position? Even if we cannot go in for a large policy, cannot we at least do something for some of the industries which could be mentioned, so that we shall not have to say that our industries have perished because we were too late?


Those of us who believe that a safeguarding policy can be of great value to our trade and industry have followed with very great interest the fortunes of those few industries which have received the benefits of safeguarding. The only conclusion we can draw is that safeguarding has definitely been of great value to them. That is so not only so far as the home trade is concerned for it is only natural that if an import duty is imposed more goods will be manufactured in the country itself; but safeguarding has also helped in a direction which is equal important and that is in the export trade. I have been glad to learn from the figures given in the Trade and Navigation Returns that although there has been an unfortunate general reduction of the exports of manufactured goods, yet in those industries to which safeguarding has been applied, there has actually been an increase. And this in spite of the very difficult times through which we have been passing. I think this increase in the export of safeguarded goods is only the logical sequence to the imposition of a duty. Manufacturers have been able to increase their production and in that way to decrease the overhead costs per unit of production and consequently the prices. As one who knows something about the export trade, I can assure the House that the production of goods at a lower price is a very important factor when we are trying to sell goods abroad. To my mind the unfortunate thing is that so few industries have been brought under a Safeguarding of Industries Act. If the number of industries had been greater I am convinced that the number of our unemployed would have been materially lessened.

The difficulty lies in the steps that have to be taken by an industry in order to obtain the benefits of safeguarding. I realise that the bands of the Govern- ment are tied as the outcome of the Election of 1923, when safeguarding was distinctly an issue and by the pledges made by the Prime Minister at the Election of 1924. Although we have carried out to the letter the pledge that there should be no protection, I do not think we have gone quite as far as was promised so far as safeguarding is concerned. If one studies the "Safeguarding of Industries (Procedure and Inquiries) Command Paper 237" we find that any industry which applies for safeguarding has to prove a considerable number of facts before the Board of Trade will order an inquiry into the state of the industry. I think the conditions laid down in that White Paper are much too cumbrous and make it far too difficult for an industry to obtain the benefit of safeguarding. In the first place, the importance of the industry has to be proved, and, amongst other things, it has to be shown that exceptional foreign competition adversely affects employment here. I do not wish to go through all the different factors which have to be taken into consideration, but even after an industry has managed to surmount the very difficult barrier set up by the Board of Trade it has to go before a committee and prove all those things all over again, and a considerable number of others in addition. The conditions are much too strict and severe an interpretation of the pledge at the 1924 Election.

To my mind there are two real tests which ought to be complied with before an industry can be safeguarded. The first question should be, "Would the imposition of a duty provide more employment in the industry?" and the second should be, "Could an import duty be applied without adversely affecting any other industry in the country?" If those were made the two essential tests, a considerably larger number of industries would be able to secure the advantages of safeguarding. I am sure there is a growing desire amongst the people in this country for some form of, shall we call it protection, against the large quantities of foreign goods that are imported annually and which take away the livelihood of our people' Coming into contact as I do with many different people in the West Biding of Yorkshire, I know that that view has grown considerably during the last two or three years. Even trade unionists, although their view is not frequently represented in this House, feel that their occupation should not be taken away from them by the importation of goods which they could make. Looking through the monthly journal of the Amalamated Society of Woodworkers the other day I was interested to find that the Motherwell Branch had passed the following resolution: That we strongly protest against the importation of doors and manufactured joinery as being against the best interests of the members on our hooks. These doors and finished joinery are allowed into this country at prices which cat, only have been produced by sweated labour and non-union rates in the country of origin and we pledge ourselves to resist to the utmost the attempts of the E.C. That is the Executive Committee, I suppose. to compel our members in the west of Scotland district to hang these doors and fix the finished joinery. It is quite evident that the members of this trade union have themselves a very much better understanding of the situation than have many of the trade union leaders. If I happened to be a trade union leader, the first thing I should want to do would be to keep out those foreign goods that are made under unfair conditions and were taking away the occupation of my own people.

I want now to refer to the worsted industry, which occupies such an important position in Bradford and the West Riding of Yorkshire. First, however, I wish to make it clear that I have no interests at stake, nor could I in any way receive any benefit if Safeguarding were applied to the worsted industry. Although I am not a manufacturer nor concerned in manufacturing, I am in very close touch with the industry of the district, and I know that they have been suffering considerably for a number of years because of enormous foreign imports. To give an idea of the state of the industry, according to the Report of the Registrar-General, in 1921, in Bradford alone, there were employed somewhere about 55,000 textile operatives, including 19,000 in the weaving section alone, and in 1927 there were less than half that number adequately employed in the industry. Various calculations have recently been made to arrive at a true indication of conditions in the industry, and it has been estimated that there are about 30 to 40 per cent. of the looms which are riot working. I have with me a list of about 20 firms which have quite recently gone out of existence and which at one time had over 3,000 looms in their factories. One refers to looms in this connection because, to anyone with a knowledge of the textile trade it gives an idea of the importance of the industry concerned.

This, unfortunately, still by no means represents a true picture of the very difficult position in which this trade finds itself at the present time. The unfortunate fact is that the imports have increased year by year from 1923 to 1926, and where in the year 1923 we imported 20,984,784 square yards of woollen and worsted goods, in the year 1926 we imported 34,632,268 square yards of similar kinds of cloth, an increase of about 65 per cent. The manufacturers are, and have been, with a few exceptions, far from fully occupied. This has resulted in the fact that, although for many long years the West Riding of Yorkshire has been the great manufacturing centre of the whole world, the English manufacturers, owing to these very difficult times and shortage of employment, have lost to a certain extent what one might describe as the initiative; and I can say from my own experience that initiative in business, the power to move and to act, is just as important to manufacturers as it is to the leader of an army in time of war. They have been faced by the fact that while their mills have only been working part time, the foreign manufacturer, whether in France, Czechoslovakia, Italy, or any of the other countries with whom they are competing, has been fully occupied and in many cases working day and night. This has given the foreigner a very great advantage, because he has been able to base his sale price on full production and not, as the unfortunate English manufacturer has, on part-time production.

With my knowledge of the textile trade, I am convinced that if Safeguarding were applied to it it would quickly regain this initiative; it would be just as beneficial to it as, and on a much larger scale than, it has been to the other industries which have been safe- guarded. I believe it would certainly help us very materially in regaining the export trade that we have lost to a large extent. In conclusion, there are two things that I would like to urge upon the Government and upon the President of the Board of Trade in particular. In the first place, I would desire him to consider once more the question of the textile trade and to find out whether it is not possible to help it in some way or other. The industry made application for Safeguarding some 18 months or so ago, but, owing to the very difficult conditions laid down in the White Paper to which I have referred, they were unfortunately turned down by the Committee. If there had been the tests which I suggested would be useful, I do not think there is any doubt that the textile industry would have been safeguarded and would by now have been prosperous. I would ask the right hon. Gentleman if he cannot seriously consider whether it is possible to help it in some way or other, and also whether, if it is not possible to alter the terms which govern the granting of Safeguarding, he will consider the question very seriously, so that when the country does return another Government—and I am certain it will be a Conservative Government—they shall have the necessary power to deal with this question—


May I make a correction? I spoke just now of quarters, when I meant to say four months.


We have had two interesting speeches, and I am rather glad that we have had them. We have had an interesting Session, now rapidly drawing to a close, end we are beginning to realise what is the policy of the Tory party. We very often hear it better from the Back Benches than from the Front Bench, and it is obvious now that the Tory programme before the country is the Trade Unions Bill, Clear out the Reds, and Protection, naked and unashamed. We may now take it that in due course the Government, egged on by the hon. and gallant Member for Bournemouth (Sir H. Croft), will go to the country so that they can carry out their full programme. They are now handicapped by their pledges. We have had a miniature General Election; we have had three by-elections, and the Tory party's programme to some extent, has been put before the country. At Bosworth, great appeals were made for the Safeguarding of industry, and one of the best examples was that of socks, cotton socks, but the electors were not having any.


Can the hon. Member say why the new Member hedged on that subject?


I know that the new Member is a very strong Free Trader, and I do not think there has been much hedging on that question. My hon. and gallant Friend, if he will allow me so to call him, the Member for Bournemouth, who is a good sportsman and always puts his case clearly and fairly, is worried about the excess of imports over exports and the constant pouring of goods into this country untaxed or not sufficiently taxed. But that has been going on for a great number of years. For 20, 30, 40, 50, 60 years our imports have exceeded our exports, and somehow or other we are not bankrupt yet. We managed to weather the War under the old-fashioned Free Trade system, and we managed to carry an immense load of debt, not only our own, but that of a great part of Europe and a great number of our Allies. The hon. and gallant Member is concerned about those debts. How are they paid? He says, very rightly, they are paid by invisible exports. We are proud and are not ashamed of doing the carrying trade of the world. The Union Jack is to be seen in every port in the world. In spite of everything, we are still the largest owners of ships in the world. You have to pay for that somehow. The advantage of being a seafaring people has to be paid for by imports exceeding our exports. That is the only way that the benighted foreigners can pay for the services of carrying their goods and raw materials. Undoubtedly if you put on a high tariff you will keep out a great number of imports, and as soon as you succeed in that, so soon will our mercantile marine suffer and our ships will go in and out of our ports empty, and the great shipping trade which has been our pride and glory in the foundation of the Empire will suffer accordingly.

The hon. and gallant Member for Bournemouth is naturally obsessed with the large increase in the first four months of the year. I do not say we ought not to study these things, and I think it quite right that the President of the Board of Trade should examine them closely to see what articles are increasing and what are decreasing. I have taken the trouble to examine them rather closely, and it may interest the House to know that the principal increase in the importation of manufactured goods has been in oil, fats and resins. Manufactures of this kind have gone up to no less than £14,750,000. These are things very near to raw materials. The other big item is iron and steel imports. I agree with the hon. and gallant Gentleman that these are very important industries, deserving of attention, but when you examine them quietly, you find the largest items of increases are really in the nature of semi raw materials which undergo a process of manufacture here, such as pig-iron, ingots, steel plates and bars, steel girders required for the building trade and items of that character.

I notice for instance, that in steel rails, a very important industry, imports are down. If you were to analyse that carefully, you would find that if you were to attempt to put a tax on these articles, you might be giving some advantage to certain big and important industries, but, on the other hand, there would he an increase in the cost of the raw material of very important industries like the packing trade and the shipbuilding trade which depend for their very existence on free imports, and being able to buy their raw materials, or semi-raw materials, unhindered by tariffs. If you put on a tax, I am still old-fashioned enough to believe that someone has to pay the tax, and that it is paid ultimately by the consumer. It is a very significant thing that in this industry there was a special inquiry by a Cabinet Committee as to whether they should put it through the machinery of the Safeguarding of Industries Act. That Committee came to the conclusion that it would not be in the public interest to do so. I assume they were afraid it would seriously handicap some of our most important industries.

Of course, there is an even stronger case than that. I happened to notice in the "Times" a very interesting little note in reference to the town of Don-caster. They wanted some low pressure cables that were important for their elec- trical industry. They believed in buying in the home market, but owing to the high prices charged by the electrical combine, they decided to place the contract in the Netherlands. If we had had our safeguarding machinery, the municipality would have been in the hands of the trust, and would not have been able to break it by going abroad because of the duty of 20 per cent, or 30 per cent. That is not an isolated instance. There have been three or four other cases, not only of municipalities but of great corporations like the Southern Railway which found it necessary, owing to an attempt to form combines and rings, to keep up prices, to go abroad for their essential articles, and owing to the fact that the safeguarding machinery had not been applied they were able to do it untrammelled by tariffs, and now they are on the highroad to breaking those trusts.

Hon. Members opposite are very pleased with the success of Safeguarding. I am quite prepared to give them a present of the fact that if you single out one or two industries for special favours, and protect their produce, they will be able to prosper at the expense of the general community. To give an example, take the case of gas mantles. I remember the controversy not so very long ago about that. They asked for protection. There was a long inquiry, and after it they got a protection of 6s. per gross. We are now reaping the advantage. The wholesale price before the safeguarding duty was put on was 26s. per gross, and the present English price of English gas mantles is 37s. 6d. per gross. That is very nice for gas mantle manufacturers, but they still cannot compete with the foreigner, in spite of the duty. They say that in spite of it the Germans can still undercut. So what have they done? They have made an arrangement with the Germans and are paying them 4s. per gross in order to keep out their stuff, and meanwhile the consumer pays. The retail price of gas mantles before the safeguarding machinery operated was 4½d., and it has now gone up to 6d. or 6¼d. You may say that does not matter, and it may not matter to the well-to-do, because every person who can afford it has electricity, but in the working-class districts they have to put up with gas, and mantles are very expensive articles, especially when you have a large family in a two-roomed tenement, and where gas mantles have a habit of getting broken and have constantly to be replaced. Here you have a practical example of what will happen when the hon. and gallant Member for Bournemouth brings his machinery of Safeguarding to its logical conclusion. You will have arrangements of this kind between trusts and combines, and the public will suffer, and a very few people will gain as against the community as a whole.

I want to refer to the very interesting speech made by the hon. Member for North Bradford (Mr. Ramsden). He was naturally anxious to look after the interests of his own particular district Small blame to him, but I would remind him that, if we really had a general tariff, where we used to be Members for districts, we should become Members for industries and trades, and each one would have to fight on his own little cabbage-patch to get protection for his industry. I would remind him there was an inquiry into the state of the woollen industry. It was a very long inquiry presided aver by one of those impartial committees which are the boast and pride of the President of the Board of Trade. They came to the conclusion that the woollen and worsted trade was in a very healthy position, and did not want protection. I am not surprised, because while we import, taking an average year, some £15,000,000 worth of woollen and worsteds, we export something like £51,000,000. Not only that, hut our imports are c.i.f., while, of course, our exports are free on board without the cost of freight and insurance being added; so our export trade is on a very much larger scale than our import trade.

I know the position in Yorkshire, but have we not all experienced the vagaries of trade—the fact that ladies will wear short skirts, and the fact that women economise in the material they use? Are they not spending more on stockings, and less on dress materials? Are they not spending more on knitted goods instead of on woven goods? Is not that the cause of the depression in Yorkshire much more than the fact of a certain amount of imports coming into this country? They always come in. [HON. MEMBERS: "No!"] Oh, yes, they have always done so; they did so before the War. Before the War, Germany was a large competitor. Germany is now getting back some of her industry, and will be a competitor again. I think the efforts of the hon. Member would be far better devoted looking for other remedies, It is generally admitted in Yorkshire that the time has come for a general reorganisation and for the co-ordination of mills; for more specialisation and for a reorganisation of the u hole system and of the general method of production.


I do not want to interrupt the hon. Member, but I think he will find that that is not a generally accepted fact.


It is the opinion that in industry what is needed is standardisation, mass production and specialisation. The industry in Yorkshire is a fine old industry, dating back many years, and it is time that it was reorganised to meet new conditions. In America there is the great factor of mass production, and I am inclined to think that the remedy lies there. I do not want to detain the House, but I do want the President of the Board of Trade to say a few words on one subject. The hon. and gallant Member for Bournemouth (Sir H. Croft) referred to the Conference at Geneva. It was a very interesting Conference. There were representatives from all parts of the world, and I understand there was general agreement that the time had come for the lowering of economic values. Our representatives, whether they were official or not, supported that view, and it received general acceptance. I believe the only country that was a little doubtful about accepting the resolution was France. Be that as it may, it was accepted. I believe it is becoming largely accepted that economic barriers are bad for trade, for civilisation and for peace; they are also bad for the general improvement of mankind. I think it is unfortunate that, at a time when these views are gaining ground, the leader of the nations of the world should go in for the policy of experiments in tariff and of singling out three or four industries for special treatment. I think it is unfortunate, and it will not help the general trend towards a general freer exchange of goods. I admit there are one or two unfortunate examples to discourage us. and one of the worst offenders is our own Dominion, Australia, which is more and more going in for high tariff wails. I understand that they are actually talking about putting 200 per cent. on woollens. Would not my hon. Friend from Yorkshire do better to go out to Australia and try to persuade Mr. Bruce to be more reasonable, and that a lower tariff would help Yorkshire?


Is the hon. Member aware that Australia, with all the Dominions, happen to be the very best markets we have for woollen goods?


Yes; and that is why I am sorry to see that in Australia they are raising their tariff walls. The other offender is France. But I believe these high tariffs are going to defeat their purpose. They are raising the cost of living in France. There is a great: outcry at the present moment. They are also raising the cost of living in Australia. The agricultural population of Australia, almost to a man, are free traders and free importers, because they have very staple industries and they are being handicapped by the high cost of manufactured goods for use on the farm and for their personal use. The same thing is happening in France. It has been common knowledge that there have been Communist victories in one or two important by-elections in France and I am informed that that is due to the high cost of living and to the high prices which have to be paid for everything in France. That is bound to lead sooner or later to a change in the attitude of the French people towards these high tariffs. Therefore I think this Economic Conference could do far more to help trade than by going in for all these little silly attempts at tariffs. If you are going to do it, do it fairly all round; be logical, but do not single out one or two favoured industries. If you are going to get a trade revival in this country, I think a far better remedy would be to obtain peace in industry, either by co-operation or other methods, than by trying to increase the cost of living.


Repeal the Trade Disputes Bill!


The Trade Unions Bill will not help peace in industry; it will only lead to bad blood between employers and employés. I hope we shall have some statement from the President of the Board of Trade and that he will tell us what the attitude of the Government is towards any such conference at Geneva. If the Government are going in for tariffs, let it be made clear to the country, and if we can know what their policy is, then the speech of the hon. and gallant Member for Bournemouth will not have been wasted.

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)

The hon. Member who has just sat down has asked me to state what the policy of the Government is. It is the policy on which the Government went to the country at the last election, and which they are at present carrying out. It would be ridiculous to suggest that because of the very limited step which we have taken within the strict limits of our pledges, we are neglecting to give the world a lead in a general reduction of tariffs. If there is any country in the world that has set an example which might have been followed during past years in the matter of Free Trade it is this country. I am quite certain, however, that by reasonable measures in certain exceptional cases to safeguard certain industries in cases of proved necessity, we shall certainly not deter other people from coming to reasonable arrangements which would lead to the diminutions of tariffs or to the breaking down of tariffs.

4.0 p.m.

Indeed, the well known economist, Mr. Layton, said at the conference at which he was presiding that if other countries did not bring their tariffs down they would probably see opinion generally throughout the whole of the United Kingdom change, so that if other countries would not bring their tariffs down this country would think about retaliating. That was a very remarkable statement, coming from one of the strongest Free Trade economists in this country. I do not think I should be reproved for having invited to Geneva representatives who are Free Trade in their sympathies. If the idea is to persuade the world to adopt a policy of Free Trade, I am not sure that they were not more persuasive advocates than my hon. and gallant Friend. I sincerely hope that other countries which have raised their tariffs generally far beyond those of other countries will reduce them. What is more important even than that is the restriction of imports, and I hope the policy of prohibitions and restrictions will not. be unreasonably followed in other countries.

The hon. Member for South-West, Bethnal Green (Mr. Harris) rebuked the hon. Member for North Bradford (Mr. Ramsden) because he ventured to raise the case of a particular industry which is of great importance in the West Riding of Yorkshire. I have never been able to see why it is more immoral to advance the cause of one great industry than to advance the cause of the merchant, and if it is proper for the hon. Gentleman to put forward the point of view of the merchants, it is not out of place to put forward the point of view of the manufacturers engaged in this particular trade. I am not going over the whole of the long controversy as to whether the woollen and the worsted trade ought: to have a duty to protect it at the present time. Hon. Members are acquainted with the Report which has been issued on this subject. One of the great difficulties in forming a correct opinion in regard to the state of this particular industry is that it is one which includes several branches, some of which may be in a prosperous condition when others are depressed. I think it was stated that in regard to this industry unemployment had rather gone down.


I referred to the worsted industry which was the question before the Committee, and in that trade, I am afraid, employment is by no means good.


I know that on this question come people support one view and others support the other view. One thing which, to my mind, seems more hopeful is a suggestion which has come from both the employers and a leader of the union that they should come tog-ether within the industry, and sec what is the real position of each section of the trade in order to find out whether some agreement cannot be arrived at between them in regard to the facts. Obviously, that is a very excellent thing for the industry to do, and that would carry a good deal of weight. I trust that in the case of the worsted trade a suggestion like that, coming from a distinguished leader of labour in that industry, will be promptly considered.


If this inquiry takes place and new facts are disclosed, will the right hon. Gentleman set up another Committee to consider safeguarding for the worsted industry?


If new facts emerge which were not present to the mind of the former Committee, quite clearly a new case is made out which ought to be heard. The situation might so change as to make it desirable for a duty to be imposed. Certainly it would be absurd to say that if two years ago imports were not excessive and there was no unemployment and then circumstances changed and the industry was subject to a flood of imports, because a case had not been made out two years ago a case could not be made out at present. There would be a new position which would deserve fresh consideration.

But that was a reference to one particular industry. As regards the broad policy of the Government I have nothing to add or subtract from what has been said on many occasions. My hon. and gallant Friend would be the last to expect me in this Debate to make an announcement of any departure of policy. We gave our pledges and by them we abide on the positive as well as the negative side. It is not enough for hon. Members who criticise to rely only on the negative side of what we are not to do. We gave positive pledges of what we would do, and we propose to implement them up to the full. [Interruption.] We are not going to change our pledges. That would be improper and unwise. I am sure the House is grateful to the hon. and gallant Member for bringing to its notice once again the position of the balance of trade. It is a subject that cannot be dismissed as lightly as the hon. Member for Bethnal Green was inclined to dismiss it, and I was entirely unable to follow his argument that if the apparent balance of trade became more favourable to us we should lose a great deal of our world shipping trade. If it is true, or in the least relation to the truth, would he explain why it is that before the War, when we had a favourable balance of trade of something like—was it £200,000,000? a year, we had a larger share of the carrying trade of the world than we have now? It is fantastic in face of that to argue that if we redress the adverse balance that confronts us, which it behoves all of us to do our best to redress, we are going to suffer in our carrying trade. That is plain nonsense. My hon. and gallant Friend painted the picture a little too black in one or two respects, because he quoted pound for pound in successive years without allowing fully for the movement of prices. For example, he said our imports of raw material had fallen very gravely as compared with 1925, but the price of cotton was relatively high in that year and it is extraordinarily low to-day, and if he takes into account the fall in prices I do not think he will find the position is very different from what it was in 1925.


The same must apply also to the very alarming decrease in the export of manufactures.


Yes, it does apply to them but it applies in the opposite way, because w hat my hon. and gallant Friend wants is more imports of raw material, which is quite right, and he says we have got terrible losses. As a matter of fact, we have not got a loss in volume since prices have fallen. It is a converse argument which applies when you come to deal with exports, because the value of textile piece goods exported has fallen, and, therefore, the lower money value of textile exports to-day as compared with 1925 does not necessarily mean a lower exportation. Even making allowances for that, the figures of the trade balance are serious. I have taken what I think is, perhaps, the fairest estimate that can be, made, that is taking 1913 as the basic year and trying, as far as it is possible to do so, to bring all the figures down to a common standard of value. I have taken the comparative exports and imports of manufactured articles in this country. The figures are extremely interesting. Taking the figure of net imports of manufactures for 1913 as 100, the figure for 1924 was 105.4; 1925, 117.9; 1926, 129.2, and in the first quarter of 1927, 143.3. That last figure is not one that I would myself take as a standard of comparison, because it includes a very large importation, particularly of iron and steel, the contracts for which were placed during the coal strike. Take the exports of manufactures—in 1913, 100; 1924, 75˙3 1925, 76.8; 1926, 71˙7, and 1927, the first, quarter, 74˙2. That discloses a position with which I do not think even the hon. Member for South-West Bethnal Green (Mr. Harris) can be wholly satisfied, and, without entering upon any fiscal controversy, I believe that anyone who looks at the financial position of this country, who looks at the balance of trade, who realises that for the development of overseas trade—even the keenest Free Traders in the world, and they are people who are as alive to the importance of the development of our export market as we are—will agree with the most recalcitrant Protectionist that you must have money to develop your export market, and in the long run you can only have that money available if you have a large available trade balance. When you face an apparent adverse balance of the magnitude I have indicated, and when as it takes as it took last year, the whole of our invisible exports to redress that balance, nobody can be content with that as the constant trade position. That all points to the importance—and this is a matter which must appeal to all of us, whatever may be our fiscal views—of buying within our own country whatever we can, in order to redress the adverse balance of our imports. That is an action in which everybody can play a part, whether as a private individual or as a member of local authorities. There is that plain obligation upon us to do all we can in that way, and there is also the obligation, which is hardly less apparent, despite all that the hon. Member for South-West Bethnal Green (Mr. Harris) has said, to buy within the Empire, in preference to buying in foreign countries which take less from us. The Empire to-day, if we exclude the Irish Free State, takes 44 per cent. of whatever this country has to export.


Is it not a fact that the interest upon the accumulated investments in foreign countries is much greater than the amount of investments year by year?


I have already pointed out to the hon. Member that the interest on our accumulated investments abroad is a very large part of what we call our invisible exports. Last year, it took the whole of the invisible exports, shipping earnings, insurance overseas, and the whole of the interest on the overseas investment that we got—and we have enormous investments Overseas—


Who has?


Great Britain. The national wealth of Great Britain.


Has it?


Those investments were made because in the past years we had favourable and not adverse trade balances from which to invest money there. It behoves us to use all our efforts to develop the markets across the seas in which we have interests. There is one market which I may mention in view of the fact that a new state of relationship has opened with that great country, the Argentine Republic, a country with which we have enormous trade relations, a country with enormous resources, from which we buy very greatly, and a country which, in spite of foolish articles written by some publicists who ought to know better has, on its own initiative, started out there the comforting slogan, "Buy from those who buy from you." By that they mean, "Buy from Britain."

Mr. DEPUTY-SPEAKER (Captain FitzRoy)

Mr. Whiteley.


On a point of Order. You, Sir, have not been in the Chair during the whole course of the Debate, and I want to mention what has taken place in this Debate. This is a matter in which many Members on this side are keenly interested, and on which some of us have very strong views. There have been three spokesmen from the party opposite and one from below the Gangway on this side of the House and not one from this bench. I make my protest.

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