DEPRESSED HEAVY INDUSTRIES.

HC Deb 05 February 1930 vol 234 cc2026-48

Major COLVILLE

I beg to move, That this House views with grave apprehension the present condition of the depressed heavy industries and the failure of His Majesty's Government to take effective measures to assist them, and urges His Majesty's Government to give this question immediate attention and to afford those industries, which are suffering from unfair foreign competition, the opportunity of substantiating their claim to such a measure of safeguarding as would secure their revival and provide an important contribution towards the solution of the unemployment problem. This is a Resolution which deplores the present depressed condition of certain of the heavy industries of the country, and the fact that His Majesty's Government have not taken effective measures to assist them. It calls upon the Government to give the matter immediate attention, and particularly to afford to these industries an opportunity of substantiating their claim to a measure of safeguarding. When a young and inexperienced Member hears his name read out as successful in the ballot, and realises that he has the privilege of addressing the House, his heart generally rises to his mouth. I am no exception to the rule. Yet I am very grateful for the chance that has been given to me to speak on the subject of the depressed heavy industries. We have heard a lot to-night about the depressed atmosphere of Queen Street Tunnel and such matters. There are 70,000 men out of employment now in the iron and steel trade. I believe that most of those men could be given employment by safeguarding. Before coming to that industry in particular, I want to speak of the heavy trades in general. I do not think we can do good by any exaggeration of the depression which exists in this country. On the contrary by exaggeration we may even do harm in the eyes of our foreign competitors.

We are still a great manufacturing nation. We succeed in maintaining a higher standard of living generally than other countries. We have what the Prime Minister referred to as an unequalled system of industrial insurance. Yet with all these things we are able to some extent to compete in the open markets for the world. But only to some extent. What are the heavy industries? Shipbuilding, engineering and the group comprising iron, steel and coal. There "are others, but of these I shall speak to-night. The shipbuilding industry in this country is of enormous importance. We still lead the world easily. In 1929 we outbuilt the whole of the rest of the world's tonnage by 300,000 tons. Yet shipbuilding generally may be classed as depressed to this extent: That while we built that huge tonnage many of our slips are empty. Our capacity for shipbuilding was greatly increased during the War. During last year there were never more than 55 or 60 per cent. of our slips occupied at one time, and even then work has often been taken at any unremunerative level. A point to be noticed is this: We speak of disarmament and we all believe in the wise reduction of armaments with due regard for the safety of the country. But let us recognise, in the first instance, what this means. Twenty-five per cent. of ship building in pre-War days was Admiralty work. Let us bear that in mind.

Then take engineering. One branch of engineering, electrical engineering, cannot be said to be depressed. That industry is in a better condition, and I am glad to say that the party with which I am associated has had a good deal to do with the better condition of that industry, because of its great schemes of electrical development throughout the country. Some other branches of engineering are not so fortunate, but I am going to come down to the foundation—iron, steel and coal. This group of industries employs a very large proportion of wage-earners. I take coal first. The coal industry is very much in the public eye on account of the Coal Bill—that remarkable Measure to which the Government gave birth at the end of last year, and which nearly cost the life of its parent. It has since been altered to some extent and it will give rise to very much discussion in the House. I class that Measure under my Motion. I do not regard it as an effectual step to assist the coal industry. It is simply a statutory increase in price to cover a statutory increase in cost. As far as the great consumers are concerned, such as the iron and steel industry, I see in it a real menace. I see a. risk of the number of unemployed in that industry being largely increased as a result of the higher costs which the passing of the Coal Bill in its present state will cause. What is the position of the coal industry at the present time? The position is that it is improving, and that export markets are being recovered. It is improving for two reasons—first because it has had a respite from political interference for some time, and second because de-rating is helping us to get back our export markets.

Mr. KIRKWOOD

That was political interference.

Major COLVILLE

That was interference of the right sort. It was lifting a burden off the industry and not adding a burden on to it, and the result, as the hon. Member knows, is that more men are employed to-day in the mines in Scotland than formerly. De-rating has assisted very largely in the getting back of export markets and that fact ought to be widely known. Coming to the iron and steel industry, I should at the outset state that I personally am connected with that industry, but I do not feel that I owe the House any apology for raising the question of an industry with which I am connected. It is the livelihood of many thousands of men in this country, directly, and it affects, indirectly, many other industries. In the iron and steel trade in this country there are 250,000 registered employés, and, of these, at present, no fewer than 70,000 are either unemployed or temporarily stopped. That is a very high percentage, and this House is entitled to examine carefully what it is possible to do to help a great industry in such circumstances. Iron and steel enter largely into the daily life of every civilised race.

10.0 p.m.

We trust our lives to iron and steel, almost every minute of the day. Except for those few Members who walk to the House, no Member would be here to-night if he did not trust his life to iron and steel in some form. We are standing on iron and steel at this moment. If it gave way, and we were precipitated into the heating chamber below, it would only be a proof that the steel was not as true as it ought to be. I only want to demonstrate the importance of iron and steel. Yet in every country except this, the iron and steel industry is flourishing. When iron and steel production is increasing in all the other great producing countries of the world, this is the only one where the industry is not flourishing, and that note ought to be sounded in the House to-night. The world production of iron and steel has gone up 40 per cent. since pre-War days. In Great Britain it has not gone up at all. That is a significant fact. In Great Britain we increased our capacity by almost 50 per cent. during the War. We had to do so. Now we have this great key industry, this vital industry, working at something like 60 per cent. of capacity at the present time. It is fair to ask then what is wrong with the industry. Is it inefficient? Have the workers lost their skill? Have the employers lost their business ability? The workers had skill, and the employers had business ability at one time, that, I think, we may assume, in view of the reputation of our nation in regard to this and other basic industries. Have our scientists been asleep? Is our plant obsolete? Are the working relations between master and man bad? I would like to answer each one of these questions, and I hope that my replies to them will go outside this House and to those countries where it is said that we have an inefficient iron and steel trade. I answer that charge by saying that it is not inefficient, and the best proof of its efficiency is that the average price of steel is only 14 per cent. above pre-War prices to-day, while, as shown by the Board of Trade index figures, wholesale prices generally are up 33 per cent. That is one of the best answers to the charge of inefficiency against either the workers or the employers.

To give a practical instance. A steel ship plate made to-day is £8 17s. In 1914 it was £7 17s. 9d. An angle is £8 7s. 6d. to-day; it was £7 9s. in 1914. It is to be recognised that almost everything which goes to the making of this commodity has gone up enormously in price. I would particularly draw attention to the fact that we are bearing a very much increased weight of insurances; that social services are up 200 per cent. since the days of which I am speaking, and that, while de-rating has to some extent put matters right in connection with local rates, yet local rates, railway rates. Imperial taxation and debt charges are all burdens which this industry has to bear. Yet with it all, in 1929 we were able to produce 9,750,000 tons of steel—almost a record for this country—and to export over 4,000,000 tons of steel. We are doing our best in most difficult circumstances when we are able to show that production and that amount of exports, to foreign countries and Empire markets.

I shall say something further about the skill of the workmen. I have travelled in America, and have visited the big steel works there, and I have found as the heads of departments, and as foremen in the various shops, men who have gone over there from this side. I say deliberately as an employer that I regard with great apprehension what is taking place at the present time in this country. At present, a "killed class of workmen in this country stand in danger of losing their jobs. We have been talking to-night about filling up Queen Street tunnel, making roads and matters of that kind, and yet skilled workmen in this country are in danger of losing their job. I say deliberately that we cannot do without them. I claim that, so far as that trade is concerned, neither have the employers lost their business ability, nor have the scientists been asleep, nor has the man lost his skill.

One word about relationships between master and man. I think we can claim, and that hon. Members opposite who know the trade will agree, that in that respect this trade has shown a good example to other trades. Relationships have throughout a long period been satisfactory and the machinery for conciliation and arbitration has been a model as compared with some industries; and over a long period, I might say almost half a century, there has never been really a national crisis in the iron and steel industry, which is due, I believe, largely to the good relationships that have existed generally between master and man. That has not been the cause of our falling back in the iron and steel trade.

Then what is wrong? In the first place, the industry is overburdened with taxation. The Chancellor of the Exchequer, speaking at Leeds, I think, the other day, said that a reduction in Imperial taxation would only come consequent on a revival in trade, but I feel that the converse must be true, and that a revival in trade can only come after a reduction in the load of taxation, because I know as far as the iron and steel industry is concerned, that the effect of heavy Imperial taxation is to drain it of those reserves which it requires for development. Then there are transport costs. We have been speaking about the railway companies to-night. They have their difficulties, I know—their costs have been put up too—but the fact remains that we have a 65 per cent. increase in railway charges now, as compared with before the War, and we only have a 14 or 15 per cent. increase in the selling price of steel. I could send a ton of steel to Canada by water from the Clyde cheaper than I could bring it up from Sheffield at the present time. These are significant facts, and anything which we could do to bring down the heavy rates of transport charges would help us greatly in the iron and steel trade.

What else? The home market is entirely open to foreign competition, thereby producing an instability which has affected the whole trade. But the two greatest reasons of all are these: In the first place, that we can only work to about 60 per cent. of our present capacity, and therefore we cannot get our costs down sufficiently; and the second is that we have not got the capital available for development, that is, modernising and keeping our plants up-to-date, and plant that ought to be rendered obsolete and replaced is still kept in operation simply because we have not got the reserves and the capital to put it into order.

These are our difficulties. What can be done to help them? What are the remedies for the ills from which this industry is suffering? I take them in order, and I take first one that I do not believe in at all, and yet it is one that has been trumpeted throughout the land by hon. Members opposite. I mean nationalisation. It is as dead as Queen Anne. There is not a Member on the other side who seriously believes that if he took over the iron and steel trade now, and ran it as a Government Department, freely open to the competition of the world, at present wage levels, he could make a success of it. Therefore, do not let us waste any more time over that. As far as hon. Members opposite are concerned, their opinions on nationalisation seem to be undergoing a considerable change.

HON. MEMBERS

No!

Major COLVILLE

Yes, and I will give proof of it. The proof is this. Up and down the land we heard that the coal royalties would be nationalised. Does that come into the Coal Bill? No, it was left to hon. Members below the Gangway on this side to bring in an Amendment about that. That is a proof that they are changing their mind on the subject. They may say they are a minority Government, and therefore cannot force it through the House, but if that is the reason, we find 290 Members, sitting there, knowing in their hearts that they have an absolute policy to cure all the troubles that industry is heir to, and they have not the courage to try and do a deal and put it through. It is as dead as Queen Anne, and the ghost of it may walk for some years yet to haunt them.

Mr. MUGGERIDGE

One reason why nationalisation is not mentioned is that both the parties opposite have said that the moment we touch nationalisation, that will be the end of our existence as a Government.

Major COLVILLE

The proof of what I say is that it fell to the party below the Gangway here to put the nationalisation of mineral royalties into the Coal Bill. Now for rationalisation. That is taking place in the industry at the present time, and the immediate results of it, as hon. Members opposite know, are the displacement of men—1,000 men at Penistone, 600 men at Parkhead, and I could name other places. Great mergers have taken place on Tees-side, and all over the country that is happening, and it is bound to happen. Yet, if you cannot increase your market, rationalisation is more rationing; than rationalising, simply parceling out existing work. But rationalisation is coming and is bound to come. You cannot stand in the way of it any more than you can go back to the days of the spinning jenny, but let us recognise that rationalisation alone is not an "Open Sesame" to work for all. Amalgamations alone are not an "Open Sesame" to work for all. Yet rationalisation will come, and rationalisation, wisely carried out, meaning a concentration in certain plants of certain valuable lines of business, will result in increased trade and in more men being taken on later on. Hon. Members know that I could speak with knowledge on this matter if I had more time.

I mentioned just now de-rating, which is a great step in the right direction. I have seen idle plants taxed out of existence by local rates and done away with, rather than keep on paying rates with the plant standing still, and yet that plant might have been retained and put into operation again. I have seen new industries frightened away. I have seen employers come up to places that I could name in Scotland, looking for a site for works, and being frightened off by the enormous burden of the local rates and taxes. I have seen orders lost in the iron and steel trade for less than the accumulated cost of local rates on a ton of steel. And who is it that suffers most? Yet hon. Members opposite and below the Gangway withstood the De-rating Act.

I know the value of de-rating, and that there is plant being put into works to-day directly as the result of the relief from taxation that de-rating has given. I know of places where long-overdue renewals are taking place, and it is on account of the money made available by the lightening of the burden of local taxation by derating. I claim that de-rating is a big step in the right direction, because it is the realisation at last—and Governments have been slow to realise it—that industry in this country cannot continue to stagger along under these huge taxation burdens and yet compete with the world. I do not merely think that it has been of value; I know that it has been of value. Regarding export trade, a British Steel Export Association has been formed to deal with this question. It includes practically all the manufacturers of plates and sections. This association can speak with one voice for the export trade of Great Britain in that respect, and it is proved of value, and will prove of greater value.

We are making a real bid to increase our export trade. As an indication of it, the Canadian shipments went up by three times in 1929, and though the arrangements were made before the Lord Privy Seal's visit to that country. I do not grudge him any assistance he may have been; he is right to look to the Empire customer for our markets, but the credit is due in other directions in this particular case. The Canadian shipments have increased, and we are making a strong effort to increase our export trade by this means. I realise the enormous importance of our Empire markets for British goods. We cannot over-stress that point. If I may be permitted a personal reference, over three-quarters of the steel which the firm, with which I am connected, sold for export last year went to Empire countries, and in every case a preference was given by those countries. Yet this Government are proposing to abolish preferences. If they had had practical experience of the difficulties of selling steel "broad, and how much we value the preference from these Empire countries, they would be slower to make such disastrous arrangements.

In this country, we are also trying to develop the use of steel. The British Steelwork Association is at work. We speak of rationalisation, and here is a matter to which I should like to draw the attention of the Government. There is need for rationalisation and standardisation in building in order to make room for more use of steel. In America there is a tremendous market for steel in composite building. In this country there would also be a considerable market, but our building laws are antiquated. I hope, therefore, that the Government will take notice of the need of the rationalisation of the building laws in order to keep in line with modern development, and to provide employment for many of our steel workers. The British Steelwork Association have been in communication with the Government on the question, and I hope that the Government will give it early attention. What else can we do? Other important consumers of steel are the motor car manufacturers in this country. If the Government abolish the McKenna Duties, and let in a flood of foreign cars, each one of these cars will mean about 30 cwts. of steel, and over four tons of coal. Let the Government think twice before they abolish the McKenna Duties. The works in this country, which have been employed on the special steel required for motor cars, have had good times during the last few years, as compared with the steel trade generally, but now they are in doubt and uncertainty as to what is going to happen. I have no doubt what will happen if the Government take off the McKenna Duties. I warn them to have a care before they do it.

What else can we do for the trade? There is capital re-organisation. Hon. Members below the Gangway talk about letting water run out of capital as well as out of the pits in the coal trade, and they will say that we should do the same thing in the steel trade. The difficulty in the steel trade is to get new capital, because we have not a secure home market. Fresh free capital is far better than Government loans. If you get a bank loan or trade facility money, you have to pay back the interest and the capital in a certain time, and that is a burden to which any steel maker under present conditions will hesitate to commit himself. Let us try rather and get capital into the industry by the ordinary free flow of capital, and I know a way in which we can do it, namely, Safeguarding. But we have been skirmishing so far. The imports into this country in 1929 were 2,790,000 tons, the exports were over 4,000,000 tons.

Mr. SULLIVAN

Can you give us the exports compared with pre-War?

Major COLVILLE

The exports last year were over 4,000,000 tons, and in 1913 were 5,000,000 tons, a drop of 1,000,000 tons from pre-War. The imports this year amounted almost to 3,000,000 tons. I believe almost all of it could have been made here. If only 2,000,000 tons had been made here that would have used 7,000,000 tons of coal, providing work for 25,000 miners for a year. That is a consideration which ought to be taken into account. Further, one ton of steel made in this country represents seven tons of traffic. There would have been 14,000,000 tons of traffic if that steel had been made in this country. I have calculated that if it had been made in this country no less than 80,000 men would have been given employment. I earnestly believe that the biggest attack that can be made on the unemployment problem is by safeguarding the iron and steel industry for a definite period. I have spoken about Canada and the Lord Privy Seal's visit. I do not minimise the importance of that great market, but Canada took under 100,000 tons from us last year. We might treble that, making it 300,000 tons, and that would be a valuable contribution; but 3,000,000 tons is being imported into our own country under our eyes. Our home market is being assailed by 3,000,000 tons of foreign material. What are we competing against? Let us take the wage levels in France, Belgium and Luxembourg. The average wages of steel workers in Belgium are 27s. per week.

Miss WILKINSON

Under Protection!

Major COLVILLE

—and the average wages of steel workers in this country are £3 1s. If we want to set a standard of living in this country, if we want our workers to be the best looted after in the world, it seems to me madness to undermine the position here by admitting goods made under conditions which we should not tolerate. The Civil Research Committee is sitting at the present time examining the whole question of the iron and steel trade, and we hope a report may be out in a month or soon afterwards. It is conducting a most exhaustive examination. No doubt the hon. Member who replies for the Government will say they are taking every necessary step because they are carrying out this examination into the iron and steel trade. If I believed that the President of the Board of Trade and the Chancellor of the Exchequer had an open mind on this subject, so that if the Committee, after their examination, found that the industry was entitled to a certain measure of safeguarding, they would receive that recommendation with a fair mind, I would not move this Motion. But the Chancellor has said repeatedly that the Government's policy in regard to safeguarding is well known, and therefore I feel bound to move this Motion. Support for this claim is coming not alone from representatives of the employers. I want to read a resolution passed by the No. 3 Divisional Committee of the Iron and Steel Trade Federation at Sheffield in April, 1928: That this Divisional Committee views with alarm the increasing unemployment and under-employment in the steel trade. We are convinced that a large measure of this is due to the importation into this country of steel made under low wages and non-trade union conditions in Continental countries. We maintain that, given equal wages and conditions of employment, the British worker can produce as good and as cheaply as his foreign competitor, and that it is altogether false economy to pay unemployment benefits and Poor Law relief under what amounts to a subsidy of our competitors' low standard of living. The realisation is in the mind not only of the employers but also of the work people. Here we set up a certain standard of wages and at the same time we are allowing the free importation of those articles which are made under a much lower standard of wages, in fact it is a standard which we should not tolerate at all in this country. That is a question of prime importance, and one with which the Government must deal. Questions have been asked about the consumers of this raw material. Who are they? They include shipbuilders and construction workers, and they are dependent on the raw material of the steel trade as one of their prime necessities. With regard to the shipbuilding industry, I have no fear whatever about the effect of safeguarding the iron and steel trade. It is a well-known fact that many of the great shipbuilding firms of this country never use any foreign material at all because, as far as that is concerned, they know that British steel is the best.

What about the sheet trade? This trade depends to some extent on foreign material, but it is being supplied by the foreigner who is putting down his own finishing plant, and the time will come when there will be great difficulty in obtaining that material. Consequently they are not on sure ground, and the manufacturers in this country would be on much surer ground if we produced in this country all the necessary semifinished material for sheet-rolling. With regard to constructional work a large part of it is made of foreign steel by those who could afford to pay for British material. I do not believe that that market would be adversely affected by Safeguarding.

In negotiating agreements with Continental countries to secure export markets, we are placed at a very serious disadvantage in having nothing to bargain with, and the result is that it has always been difficult for us to succeed in developing our export trade for that very reason. The position is going to be made a great deal more difficult by the suggested tariff truce. I look upon that proposal with much concern, because I feel sure that instead of being any advantage to this country it is going to make Great Britain fight with her hands behind her. It suggests the Millenium when the lion is supposed to lie down with the lamb, but by a curious reversal of the usual process, it is the British lion that loses its fleece, and not the lamb. On this question of tariffs, we are entitled to ask ourselves if we are the only sane country in a mad world, or whether it is, perhaps, the other way round, and that we are the only mad country in a sane world, attempting to keep up a certain standard of living and at the same time admit these goods. I appeal to the party opposite, who claim to represent British labour, to go right ahead and give this great industry fair play, to receive the Report of the Committee with an open mind, and, if it needs a measure of safeguarding, to accord it safeguarding for a definite period. I may be asked, "Why did not your party do it?" I say that, if they had they would be on the other side of the House to-day. They had a pledge, and it is the custom for this party to regard pledges as sacred and to fulfil them, in sharp distinction to other pledges that we have come across recently. For that reason, this party did not carry out safeguarding for the heavy industries when they were in office, but their hands were free at the last election, and to-day we had a pronouncement from our Leader on this matter. We can carry it out next time if the party opposite do not. I want to appeal to the party opposite. The real thing that matters is that these men are unable to earn a livelihood, and this great industry is suffering. When a man is drowning, it is not who goes to his rescue that matters; what matters is that he should be rescued. That the game is more than the players of the game, and the ship is more than the crew. Let them go right ahead and afford safeguarding now, should the Report of this Committee point in that direction. By that means they will restore this industry, and earn the gratitude of the country. In that spirit I appeal to all sections of the House for fair play for a great industry.

Miss WILKINSON

I hope the hon. and gallant Member will forgive me for interrupting him, but may I ask him whether he really meant that the view of the Tory party is that the ship is more important than the crew? We have a different view.

Major COLVILLE

I do not think that that intervention calls for a reply. I appeal to the House to regard this question, not in any spirit of frivolity—

Miss WILKINSON

I was not being frivolous.

Major COLVILLE

—but seriously, and to remember that what is said in this House carries weight outside. I am appealing on behalf of an industry which represents the livelihood of many people, and which is a key industry for this country, because, if it fails, we can no longer continue to be a first-class Power in the world. In that spirit I appeal to the House to give this industry fair play.

Sir H. CROFT

I beg to second the Motion.

I am sure the House will agree that my hon. and gallant Friend had no reason to apologise at the commencement of his speech, for it was a most interesting speech, and I am sure everyone, to whatever party he may belong, will agree that we hope that my hon. and gallant Friend may be frequently heard again in our Debates. If the times had been normal, I might to-day have felt occasion for rejoicing, because I have seen indications from every part of the country that trade unionists are endeavouring to see that safeguarding is maintained, and in many eases extended to other industries; and I have also seen, within the last day or two, that the very foundations of the Liberal faith, as far as Free Trade is concerned, are cracking, while only this very day I have heard my Leader espouse the policy of Safeguarding along the lines to which, I think I may say, I have given the best of my energies for the last 25 years.

It is not easy, however, for any man to rejoice at anything which might look like a tactical or political victory when so many of his countrymen are suffering at the present time in these great heavy industries of this country, our great staple industries. We are engaged in a race against time, a race against disaster, and I feel that all of us, no matter what our previous opinions on economics may have been, ought to get together and see if we cannot do something to prevent our country from going further down the slope in this great race with our foreign competitors. I think it will be agreed in every quarter of the House that employment is really the supreme issue, and today this question of employment is the test of statesmanship. You cannot aid employment merely by widening the basis of pensions or by extending relief or benefits in this direction or another, or even by making roads, however necessary they may be, although I admit that that is probably better than paying doles. We have heard from a previous speaker this evening that this policy of creating work only shows the bankruptcy that is one of the features of our modern civilisation.

These policies have been tried, but I submit that no dog can live on repeated meals from its own tail, and we have now to realise that we are up against a huge difficulty. I am convinced that the Lord Privy Seal has studied every possibility, every expedient under our present economic system, for helping this country out of its troubles. I have no doubt of his sincerity, and I think the House owes him a debt of gratitude for the courageous way in which he faced facts and told us the other day not that he was going to give us homes for heroes but that we had got to tighten our belts. As a nation it is our duty to see what we can possibly do to prevent a worse position still, realising as we do that 97,000 more workers are out of employment to-day than at this time last year, and realising, as I believe is the fact, that there were more persona out of work on 1st February than has been the case for the last seven years.

I believe the only path to prosperity is through the creation of new industries and the expansion of our existing industries, selling more overseas and, what is still far more important, selling more in our own great home market. I submit also that all the old staple industries of the country are in a parlous condition and that the only prosperous industries at present are those that are protected. What witness shall I call? It is no good calling trade union leaders any longer, because most of them are with us on this subject, as far as I can see, in all the industries where the matter has been put to the test. It is no good my calling representatives of the Liberal party, because they are already tainted. They have come a very long way in our direction in the last 10 days.

Mr. PYBUS

So it is a definite taint, is it?

Sir H. CROFT

I do not mind by what name the hon. Member calls it, I am only glad that he does not deny the fact. The one man in the House who has learnt nothing and who stands rigid with this head in the sand where he buried it 40 years ago—I refer to the Chancellor of the Exchequer—is the only impeccable witness to whom I can now turn. I think he is a witness whose views are worth recording. On 3rd February, 1929, he wrote an article in the "Sunday Sun" under the headlines, "This ghastly mess of Unemployment." He said: The present industrial situation in England affords a good illustration of this aspect of the employment problem. The great bulk of unemployment in England is confined to about four of the old heavy industries, coal, iron and steel, textiles and shipbuilding. The newer industries, like chemicals, electrical appliances, wireless, motors, gramophones and artificial silk are prosperous and hundreds of thousands of persons are employed in these trades, which were small or practically non-existent 25 years ago. Every one of these trades to which the right hon. Gentleman refers is a protected industry with the exception of electrical appliances. [An HON. MEMBER: "And chemicals."] The hon. Member has only to go into the matter very briefly and he will discover that an enormous section of the chemical trade is actually protected. Dyes and fine chemicals are not things that can be ignored. The only industry referred to which was prosperous and which was not protected, was that of electrical appliances, and everyone who has studied the question will agree that that is a sheltered industry, because under the late Government's scheme the whole of those great orders were given to British firms.

I want to point out this fact. The Chancellor of the Exchequer, after telling us that these industries were also prosperous, said, I would suggest, "This will not do or they will be quoted against me, and the bubble on which I climbed to fame will be burst. We must take this protection from these industries, every one of them, and open the flood gates of foreign competition once more." What is the result? We have a Minister specially appointed to find employment for the people of this country, and for every 5,000 persons the Lord Privy Seal has put into a job the Chancellor of the Exchequer has driven that number out of the jobs on which they are working at the present time. Already, as a result of the Chancellor of the Exchequer's war on industry and upon the trade unions of the country, the most disastrous effects are being felt. Only last week Messrs. Courtaulds mentioned that they would have to dispense at once with 4,000 workers. Three foreign artificial silk companies which had decided to come into this country have now cancelled that decision, and I am sorry to say that the whole of that great industry is in a serious condition.

You have only to look at the Stock Exchange quotations to see a depreciation of millions in value since the Chancellor of the Exchequer made these threats against the success of that industry. Here is a letter from the chairman of a successful industry in the North of England which I must read. I hope that I may not be pressed to give his name, though I shall be very glad to give it to the Minister if he so desires. The chairman of this company wrote the letter two days ago as follows: Just as we are getting established we have to face the possibility of the silk duties being removed. The present effect of this uncertainty is that the buyers will not add to their stocks, and instead of a brisk trade as is usual at this time of the year, demand has died down almost to nothing, as the market reports from the buying centres of Manchester, Leicester, Nottingham, etc., indicate. But if the rumours are true and the tax is actually taken off, the effect will be worse still, and I have no hesitation in saying that on the same date that the tax is taken off we will be compelled to shut down our factory. That is only one of a score of cases. The masters of the great cotton industry, only yesterday in Manchester, met together and carried a resolution urging His Majesty's Government to put an end to this uncertainty and not to remove these duties. The steel trade is crying aloud for the help of the party opposite and the help of this House. What are you doing? You say, "We are going to make your coal dearer, and we are going to make the coal of your foreign competitors cheaper." The textile industry in Lancashire and Yorkshire says, "Help us!" and what do you do? You say, "Well, there is the artificial silk industry which has kept you afloat during the last three years." In scores of mills in this country it would not have been possible to carry on but for the fact of the artificial silk duty. What happens? The Government come along and say, "We are going to take the security away from the artificial silk industry, and that is our answer to Yorkshire and Lancashire."

Mr. R. RICHARDSON

May I ask what effect your policy will have on the coal trade? What will the miners get out of it?

Sir H. CROFT

I am glad the hon. Member has asked this question, because it shows that he has not studied the question up to date. My answer is a brief one, and it is that I agree with my hon. and gallant Friend that if you import 3,000,000 tons of steel into this country it means that you are depriving your workers of 9,000,000 tons of coal. It is not an exaggeration to say three tons for every ton of steel.

Mr. R. RICHARDSON

We are exporting far more than three million tons of coal.

Sir H. CROFT

The hon. Member may perhaps like to realise this fact, because it is important that he should make himself acquainted with the needs of his industry, that since the War 100,000,000 tons of coal are represented in the amount of iron and steel which we have imported from foreign countries. If that. 100,000,000 tons of coal had been gotten in this country, I think it will be agreed that there would have been a very different state of things in the coal industry to-day. As the Commission of the right hon. Member for Darwen (Sir II. Samuel) said, the only hope for increased consumption of domestic coal lies in the recovery of the heavy industries. Our answer is this: let us get together at the earliest possible date and safeguard iron and steel, glass, earthenware, paper and all those industries which give employment to our great coal industry. Then only are we going to turn the tide. Only last week the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George;, the right hon. Member for Darwen and the right hon. Member for St. Ives (Mr. Runciman), for the first time, were ready to support an Amendment, on a Private Member's Motion, which would have given power to the whole of the British Empire to levy duties on everything entering into our markets, with the exception of food and raw materials.

Sir HERBERT SAMUEL

Nothing of the kind.

Sir H. CROFT

If it was nothing of the kind, then all that I can say is that their Amendment was a piece of gross hypocrisy. The "Nation and Athenaeum," which represents those right hon. Gentlemen, has said that it would be deplorable to remove these duties, because of the unemployment that would be caused. Professor Keynes, who is the boon companion of the right hon. Gentlemen, writing in a newspaper we or three days ago, said that he did not write these articles himself, as he had been accused of doing, but that he agreed with them. He said: It is no part of orthodox Free Trade theory that duties are injurious to the protected industry, or that established tariffs can be suddenly removed without doing any harm If Mr. Snowden were to take off the existing protectionist duties, I assume that his object in doing this would be to increase the amount of unemployment for the time being, in order to bring further pressure to bear for the reduction of wages, and so enable our other industries to compete more successfully in world markets. But, personally, I feel that this medicine is too severe for our present circumstances. The cat is out of the bag. The Free Traders want to do away with these duties in order to cause more unemployment and to get back to the original idea of the Lancashire school of depressing wages in order that they may be able to compete more successfully abroad.

Mr. PYBUS

The hon. Members who proposed and seconded the Resolution have spoken as though they were speaking for the whole of the steel trade. I suggest that if they are claiming to speak for the shipbuilding trade they had better bring their proxies with them. Where are their proxies from the Clyde? What will Clydebank say, what will Fairfield say when you propose to increase the price of their raw material? Where are their proxies from the Tyne?

Major COLVILLE rose—

Mr. SPEAKER

It is the hon. Member's maiden speech effort, and he ought to be allowed to proceed without interruption.

Major COLVILLE

I beg pardon.

Mr. PYBUS

Where are the proxies from the Tyne, where the last figures show that 27 per cent. of the people engaged in the shipbuilding industry were out of work and totally unemployed? Where are the proxies from the Mersey? If you are claiming to impose Safeguarding upon a great industry I think you should be careful to describe exactly whom you represent and by what authority you speak. Will increasing the price of steel plates and castings lift the shipbuilding industry out of its dilemma? I do not think so. It is merely a case of robbing Peter to pay Paul. It is useless to bolster up inefficient industries at the expense of efficient ones. Some of the shipyards I have seen on the Clyde and the Tyne compare favourably, from the point of view of efficiency, with many of the steel works which I have also seen.

We have heard many doleful tales about the depression in the heavy industries. The only one which is described by the hon. Gentleman as not being protected—I think he said it was about the only one—has a somewhat remarkable record, because since 1913 its exports have risen from £7,500,000 to £19,500,000. That is an unprotected industry, and where do its exports go? Over 60 per cent. of its exports last year went to the Dominions and even that arch-sinner, Australia, took £4,000,000 worth. If we are to charge more for our steel, will that have no effect on this industry which is sufficiently efficient, with the same wages conditions as in foreign countries and with the same handicap and which has doubled its export business? Is it fair to land an increasing price on that industry, and is it reasonable to expect that that kind of export trade would be continued? This beggar-my-neighbour business in industry is a very poor remedy. You say, "We will safeguard your trade too." The heavy electrical trade suffered from imports of exactly £800,000 last year and exported £20,000,000, so I do not think it is in need of assistance. May I call attention to the fact that when a man is a seller of goods he has a very different view about prices from that which he has when he becomes a buyer. The hon. and gallant Gentleman who proposed this Motion had a few words to say on the Coal Bill about the outrage of raising the price of coal. He was arguing that an increase of hours would have a very serious effect on the steel industries, and while he has no anxiety whatever about an increase in the price of steel and its effect on the shipbuilding industry, listen to what he says when the question arises of raising the price of coal to the steel industry: There is another market. That is the home market…I speak with some direct knowledge as being connected with those heavy industries. They have had a hard struggle. The price of steel is very much affected by the price of coal, and there is no doubt that orders would have been lost and men would have been put out of employment if it had not been possible to keep down the cost of coal."—[OFFICIAL REPORT, 19th December, 1929; col. 1717, Vol. 233.] What would be the effect of the legislation in extra cost? Twenty per cent. of the output, the hon. Member says, goes to iron and steel, and the chances of getting an increase or being able to sell our steel in present conditions would be smaller still. When Dr. Jekyll the seller becomes Mr. Hyde the buyer then the difference is plain. I beg to oppose the Motion.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith)

It is impossible in the time available to give anything in the nature of a reply to the arguments which have been presented by the Mover and Seconder of this Motion, but it is quite evident from their observations that they are enthusiasts for the policy they advocate and also that they are confident that the Government will not do much to assist them in the course they wish to travel. That is not surprising having regard to the fact that the Government have made a declaration of their policy in this respect. But the best answer I can give is the answer which the late Prime Minister gave when he was asked a question on this subject a few years ago. On 21st December, 1925, he was asked a question as to his policy in regard to steel and iron by two of his own supporters, not by Members of the Opposition, and he replied: The application of the iron and steel trades to the Board of Trade for the appointment of a Committee under the Safeguarding of Industries procedure was referred to the Committee of Civil Research, and its report has been received by the Cabinet. The Civil Research Committee has given the subject prolonged and detailed consideration, and has heard a large number of witnesses, representing employers and employed, engaged in the iron and steel industries and in allied trades. The evidence revealed a serious situation. The pressure of foreign competition, aided by long hours, low wages and depreciated currencies, is being severely felt by our manufacturers, and had His Majesty's Government been able to deal with the iron and steel industries in isolation we might have regarded the case for the inquiry as complete. It became clear, however, in the course of our investigations, that the safeguarding of a basic industry of this magnitude would have repercussions of a far wider character which might be held to be in conflict with our declaration in regard to a general tariff."—[OFFICIAL REPORT. 21st December, 1925; col. 1945, Vol. 189.] We have been told by the mover of the Motion that his party, when they become the government of the country again, will certainly introduce the policy of safeguarding iron and steel. In the light of the statement I have read that means that they are now committed to the full policy of tariffs and protection for all industries in this country. No other interpretation can be put upon it. The reason why Safeguarding was not applied to iron and steel in 1925 was because it would have cut across the general declaration in regard to tariffs in general, and, therefore, if it is now to be imposed when an opportunity presents itself it means that the declaration of the Conservative party in regard to tariffs in general has been cancelled and withdrawn, and that they are now once again a full-blooded Protectionist party. If this Debate has made that particular point clear it is worth the time that has been spent upon it. At the time that declaration was made the state of the iron and steel industry was much worse than it is to-day. The average monthly production of pig iron in 1925 was 521,000 tons. Last year it was 631,000 tons. The average production of steel ingots in 1925 was 615,000 tons. In 1929 it was 804,000 tons. Therefore if the Conservative party could not put their policy of safeguarding into operation in 1925, when conditions were much worse than they are to-day, it is not reasonable to expect that this Government can adopt the policy when conditions are much better than they were in 1925. It is impossible for me to go further into the matter. If there is this improvement surely that is an argument against the policy advocated by hon. Members opposite.

Sir NEWTON MOORE rose—

It being Eleven of the Clock, the Debate stood adjourned.

The remaining Orders were read, and postponed.

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1. ADJOURNMENT. 16 words