WAGES AND TARIFFS.

HC Deb 12 November 1930 vol 244 cc1751-817

Mr. MOND

I beg to move, That this House is of the opinion that the only means whereby the general reduction of wages in the immediate future can be avoided is the institution of a general-tariff system on foreign manufactured goods, in order to protect the Home market. This Motion raises the question of the level of wages in relation to tariffs in this country. I have taken the opportunity afforded by my good fortune in the ballot to raise a discussion upon a question which seems to me to be more urgent and more vital than any other which confronts us at the moment. Although this is one of the topics which commonly arouse a great deal of animosity and controversy when debated in this House, I hope that we shall this evening discuss the subject free from some of the prejudices which usually attend such discussions and with the object, not so much of hurling epithets at each other, as of finding some solution of the problem which will be of benefit to those people who are likely to suffer should no solution be found. The problem is simply this. At present there is a tendency for a reduction of all commodity prices, a reduction of wholesale prices, a reduction in the cost of living and a very strong tendency towards a reduction of wages. There is no doubt that, organised as we are in this country, with our industrial system, any reduction of this kind will be strenuously opposed and will be carried, if carried at all, with great difficulty and in all probability after a considerable period of strife.

The trade union movement in England has built up a strong position in which it is able to resist downward movements of wages with great vigour and success, and, in times such as these, when there is a world tendency in that particular direction, we are liable to get grave in- dustrial trouble and domestic strife just when we can least afford it. It is within the memory of all of us that in the past decade there has been a great deal of industrial strife—we have happily not had so much of it in the last few years —and it has had in its own way a most damaging effect on the industry of the country. If you are in the habit of manufacturing a particular form of merchandise and exporting it, and if as a result of industrial trouble—strikes or lock-outs it does not much matter which —the supply of that merchandise is arrested, every purchaser abroad turns round to see where he can obtain a supply of the goods not now available from the source formerly open to him. He tries experiments and makes attempts, and if the stoppage is sufficiently prolonged, he probably finds some form of goods somewhere or other which are, if not quite what he had before, at least good enough to satisfy his wants, and, although you may cut your prices and find some other market, you will always find that a certain amount of that market is gone irretrievably, and that the men who made those goods for that market in the past are not required to work again. Their jobs are gone for good.

In the case of the coal trade, it was particularly noticeable. The great dispute of 1926 had some very curious reactions. The coal mines of Poland were, comparatively speaking, undeveloped before then, but during that prolonged stoppage not only did they get an opportunity to get into markets which had previously been held almost exclusively by British coal, but they got the capital necessary to develop and equip their mines, and they also had plenty of time in which to teach people that it was quite a good thing to use Polish coal, that it might not be quite as good as British coal, but that, at a price, it was good enough. People who would perhaps never have dreamed of making the change in other circumstances, did in fact make it. Some have never gone back, and none of them have been prepared altogether to sever the connection which they formed at that time, and which is an insurance to them against future troubles of this kind, over which they have no control at all and of which they may get very little warning.

These dangers being present at a time when world trade is so bad, and our trade in particular is so bad, nothing would be more fatal than to see, as I said before, speaking in this House, a head-on crash between capital and labour to which all the signs and portents seem to lead us at the present time. Your markets would suffer irretrievably. British trade would suffer another blow, from which I am afraid it would probably never recover, and never wholly recover in any case; and surely it is our business here not to wait until the strife has begun, not to wait until loyalties have been formed and sides taken, until anybody who speaks with moderation is regarded as a traitor either to one side or the other, but now, before the strife commences, to attend to this matter carefully and, as far as we can with a judicial mind, to try to prevent the disaster which we see looming in front of us and to do those duties which we were sent here to do, namely, to carry out the government of the country in such a way that it suffers no damage and the people of this country are not prejudiced in their trade or their daily lives.

I do not think it can be argued that imminent reductions are not ahead of us. We have the case of foreign countries where reductions have been taking place, and, without wearying the House, there are one or two cases which I should like to put before them, so that it can be clearly understood what sort of tendency we are facing abroad. In Germany, as a result of an award made by the arbitration court, the present wage scale in the metal industry is to be reduced. A reduction of 5 per cent. will be applied in all grades until 18th January next year, and then a further reduction of 3 per cent. for workers under 18 and 5 per cent. for all other groups, and that is to last until 1st July, 1931. In the same industry salaries are to be reduced by 5 per cent. as from 1st April next, provided no agreement has by that time been come to in place of the existing agreement.

In the coal mining industry, the wages of all technical employés in the mining industry of West Germany have been reduced by 3 per cent. as from 1st October this year, and they are to be reduced by a further 3 per cent. on 1st January next. In France, the dockers of Dunkirk have accepted a reduction of wages in their daily rates from Fr. 43.50 to Fr. 42.50 from May this year. In Belgium, in the coal mining industry, the National Joint Commission for the Mining Industry has agreed on a reduction of 4 per cent. in the wages of miners in all districts of Belgium from 5th October of this year; and in the same country in the glass industry, after an examination of the position, the glass workers have agreed to accept a reduction of 5 per cent. in their wages. In Australia also certain reductions have taken place.

In the face of that, it cannot be denied that abroad reductions are slowly beginning, and it is exactly what one would expect in view of the tendency of world conditions. We have a report of a recent meeting of the Union of German Employers' Associations, where these questions were discussed, and they expressed a number of views, with which I will not weary the House except to give this quotation: The employers declared themselves opposed to the policy of short time, and in favour rather of reducing costs and ultimately increasing employment, by reductions in wages and in certain circumstances by extensions in working hours. Those are not ideas which would find any favour with me. I do not think the Union of German Employers' Associations were right in the way in which they proposed to handle the matter, but I merely quote that as an example of what is going on. In his book on unemployment, Sir William Beveridge says: Post-war Britain presents two novel features—unexampled unemployment and a rise in real wages almost equally without precedent. With this tendency going on around us, we have to look to the figures of this country to see where we stand, and the Ministry of Labour figures show that only too clearly. The cost of living index has fallen to 89, and the index of average weekly wages has fallen slightly from 100 to 98.25, but the index of real wages has gone up to 110.4. It is of no use denying that, if that tendency persists, we are bound to be faced with this question, and faced with it to a much greater degree than the figures which I have quoted indicate, because wholesale prices are very much lower than the cost of living index, and the cost of living index figure will come down materially from where it is now unless something happens to stop it.

When one deals with wages, one is faced by the even more difficult and more insoluble question of unemployment insurance relief. If you are going to reduce the payments made to men who are in work, what are you going to do about the payments made to men who are out of work? No one has less desire than I have to see either wages or salaries or doles cut down, but you will be forced inevitably, whatever Government may be on those benches, to take action in this matter, and whatever you may wish to do, whatever your hopes and desires may be, you will not be successful; you will be driven by relentless economic laws into adjusting these monetary conditions to a level which will enable this country to carry on.

There is an argument, which is usually raised in a discussion of this sort, about the distribution or the redistribution of wealth, and I should like to make one or two observations about that. This question of the redistribution of wealth is sometimes brought forward as an argument against any such tendency as I have just been describing towards a reduction. We have a great example of the redistribution of wealth in the world to-day, and the result of that amazing human experiment, carried out in Russia some years ago, when their wealth was in fact redistributed. As always in a case of this kind, force was necessary to obtain the redistribution, and a great deal of force was used, and a great deal of bloodshed and suffering ensued.

What has been the result? The people of Russia are a great deal worse off now than they were even when they started, and they started badly off enough. [HON. MEMBERS "Nonsense!"] That is indisputable. Anyone who knows the facts knows very well that the necessities of life are harder to come by in Russia than they have been probably for decades [HON. MEMBERS: "Nonsense!"]—in the history of that country, and in a great many cases they are not even to be obtained at any price at all. However, there is one thing that they have succeeded in doing. There are no wealthy people, there are no millionaires, in Russia. There are no rich men there, but the people have been reduced to a dead level of poverty, which is certainly unequalled among any other white race in the world. It comes down to the sort of basis of some of the coloured races and some of the less developed habitable parts of the globe.

As against that, we have another great country, with fewer people and a smaller territory, namely, the United States of America. There is no country in the world where there is a greater discrepancy in the matter of the possession of physical wealth than in the United States of America. There are men in that country who own as much as a thousand million dollars. There are enormously rich men, even after the Wall Street crash, in the United States. Nobody has made any attempt to redistribute wealth there, but the general standard of living of the people of America is higher than it is anywhere else in the world, and they have probably the highest standard of living that has been achieved by the human race at any time in its history for the general body of the people.

So, with those two great examples before us, I do not think it is of much use trying to adduce the redistribution of wealth as a means of solving this question, either now or in the future. It is, to put it at its very lowest, highly dangerous. It implies the use of force, bloodshed and disturbance of every kind that you can imagine, and I should not think that anyone who realises his responsibility would be prepared to get up and advocate that as a method of avoiding these reductions which we see staring us in the face.

The Motion which has been placed on the Paper falls naturally into two parts, the question of wages and the question of tariffs, and on the wages question I would like to say one or two things. First of all, wages in the United States are at 190 compared with wages at 100 in this country, and one of the reasons for that is that almost the biggest tariff that the United States has got is its labour tariff. The immigration restrictions in the United States maintain the price of labour in the labour market at a very high figure, and the Americans have for long refused to allow their country to be flooded by cheap labour, or by what you might now call, in the popular phrase, dumped labour, in order that they might regulate the standard of living of their people and maintain it at the level at which they wish to see it. Among all the other tariffs that the Americans use, their labour tariff is probably the most effective, because it amounts nearly to a prohibition, and only just so many are allowed to come in as to suit their particular need. As against that, we have in England stringent immigration restrictions, and the trade unions of this country have been very active at different times in seeing that they were carried out.

If we are to have Free Trade we shall be forced eventually back to the position, in a highly competitive world, of free trade in labour. If we are to have a Free Trade system with free trade in labour, with all the dumped Russian wheat that we can get, and all the cheapest raw materials and commodities wherever we can buy them and do every single thing we can to reduce the cost of manufacture, that is a feasible scheme, and one that we can work to quite well. We should inevitably be driven to a reduction of the social services at the same time, for we should not be able to keep them where they are, and certainly not increase them. We should go back to the old system that existed when Mr. Bright so vehemently, so eloquently and so powerfully defended the cause of Free Trade in this House, and with equal vehemence, eloquence and power resisted Lord Shaftesbury's Factory Act because it interfered with the working of the factories. The British manufacturers would be able to get their costs down lower perhaps than any other costs in the world, but, when they had done that, the country would be no better off. The working man would be certainly very much worse off, and the manufacturers would be no better off because they would have no exports. They would not be able to sell these very cheap goods, because they would be debarred from entering most of the countries to which we want to send our goods. They are now excluded by a series of tariff barriers from entering very cheap goods into any of the old export markets that we used to enjoy.

When the great Free Trade movement was started, it was a change in our fiscal system. It imposed considerable hardships to begin with on the working-class population, but the theory of the men who were working at it was a simple one. It was, "If we pursue this course, we shall become the dominant manufacturing country in the world, and in the long run people will be very much better off." That has proved true. We have become the dominant manufacturing country of the world, and the working classes are very much better off than they were. Has not the time come when another adaptation will have to be made, when we are faced with very different conditions and when those markets which were then open to us have been closed? Rave we not arrived at a point when we have made the British manufacturer the orphan of the storm? He can sit down at any conference table in Europe, and he will be faced by a German, an Italian, a Pole and a Frenchman, and they will say, "Yes, we have our own home markets; but there is the rest of the world, and we will talk about that." The British manufacturer has no home market; it is a free market for everybody. There are 60,000,000 people in Germany, which is a free market for the German manufacturers. There are 48,000,000 in this country, which means a free market of 108,000,000 people for the German manufacturer. What free market has the British manufacturer? He has no free market. We are handicapping him in a way which is abundantly proved by all the figures. Our export trade is going down continuously, and we shall never be able to get it right unless we have some weapon to use in bargaining with the other tariff countries.

The other side of the tariff question is that, if we at this stage bring in a general tariff, we will arrest the downward movement of domestic prices in this country and make unnecessary the wage changes which I have forecast. The whole of our troubles and difficulties will be at an end. There will be no strike in front of us, but there will be prosperity. There will be no clash between capital and labour, but there will be co-operation. We shall find that in our reserved home market manufacturers will be able to reduce their cost very considerably for the export market; they will be able to meet all the competition that arises, and at the same time they will have a weapon to use in dealing with foreign manufacturers when it comes to discussing the trade of the rest of the world.

There is yet another advantage in preserving the home market. We do not need any gold for our domestic trade. The foreign trade has always to have gold behind it at some stage. It uses gold very freely, but our domestic trade requires no gold backing. Therefore, the amount of gold available in this country, if we increase our domestic in proportion to our export trade, will be greater, and we shall get a very mild and sound gold inflation. That is another factor that will lead to a recovery of trade In this country and a return to prosperity. In arguments against tariffs, we are frequently asked what safeguards we have that British industry will be efficient, or that the workers will get higher wages or as good wages. People complain that British industry is inefficient. So it is. So is everything else in this world. I do not know one efficient thing. Is this House efficient? Are politics efficient? What is efficiency? If British industry is not efficient now, who is going to make it efficient?

Mr. MESSER

Socialism!

Mr. MOND

That is just the answer I wanted to get. I suppose that under Socialism the right hon. Lady the Minister of Labour will take over the organisation and management of Unilevers, that great and complicated organisation which requires so much study and training to understand. The right hon. Gentleman the Secretary of State for War might be chairman of Dorman Longs, and I have no doubt that he would be a great success. Then we might put the Secretary of State for the Dominions in charge of the Bank of England. The hon. Gentleman the Member for Silvertown (Mr. J. Jones) might manage Bass' Brewery, and we should undoubtedly have a great increase in efficiency. I have no doubt, if you take the case of Unilevers, where you have a combination with another firm which is a foreign firm, they would be delighted to welcome someone else, someone from those benches to join those who are managing the business in working this great world-wide concern. I do not think that we could seriously contemplate this as a method of finding a way out of our difficulties, or avoiding those reductions which we have looked at with such disfavour. I cannot see where all the wisdom and experience is to come from that will so overwhelm the rest of the commercial world, that England will stand high as a manufacturing country, if right hon. Gentlemen opposite come to manage our affairs and teach us how to run our businesses. That may go very well at some meetings, but I doubt that it would go well at many meetings nowadays; it cannot be seriously produced in this House as an argument in favour of Socialism.

On the contrary, efficiency is very much inclined in this world to follow profit, and where an industry is making money, people are very anxious to get in, particularly the clever ones. That is a very good thing for industry and makes it better managed. You do not find men driving ahead to get into coal or iron and steel to-day, because these are businesses which are very hard and difficult to manage, and in which little profit is to be made even after great effort. Under a tariff imposition, a great deal more ability will be concentrated on these industries than in the past. We shall also find that where there is a demand for labour wages will tend to rise. That is the safeguard we shall get under a system of tariffs. We are not faced with the question of high or low wages in this matter; we have to realise that it is a question whether we have a general tariff and wages or Free Trade and doles. These are the alternatives. We have 2,500,000 people on the dole now, and we are likely to have 3,000,000 before the winter is finished. What are we going to do? Arc we going to sit still and do nothing? Are we not prepared to make any change in order to try and do something for these people and put them again in the factories? Are we going to pay people to do nothing instead of giving them a chance to earn decent money? That is an impossible contention, and one that the country will never stand for.

If we try and hold up the national development of this great manufacturing country, which is responsible for 48,000,000 people, because of any of these outworn theories, we shall fail miserably and the whole land will rise against us. I hope that we shall be able by means of reorganisation to produce greater pros- perity in this country than it has ever seen before. We shall have to regulate our domestic industry by means of tariffs just as world industry will eventually be regulated. There has been a little rationalisation of industry in England, but the great problem that faces the human race at the present moment is not only rationalisation of domestic industry, but international rationalisation. Nobody understands how to work the industrial machine; it is not old enough, and it has not been in existence long enough. Nobody has found how to do it. It goes by jerks and fits and starts. People suffer very much under the process, and the people who suffer under it most in every country are the working classes. The more it is controlled and regulated by such systems as general tariff systems that preserve markets, the less dislocation of labour there will be.

8.0 p.m.

I know that hon. Members opposite will say that the regulation we want is not regulation by tariffs, but regulation by Socialism. I think, however, that the remarks I made on that point are a complete answer to that. We should do very much better, instead of adopting a Socialist policy, to adopt a policy of Imperial insulation, and to build up the self-contained unit of the whole Empire which will be to some extent insulated from the shocks which occur when the machine that we do not know how to work very well stops and starts rather suddenly. With the greatest raw material wealth in the world, with the greatest population and the greatest territories, we have an opportunity to build up a civilisation which is unequalled in world history; but we shall never do it as long as we stick to outworn theories and creeds, and as long as we have sitting inert and inactive before us this somnolent, this seedy this deplorable administration, which is not prepared to raise a finger to solve the difficulties of the country, which is not prepared to do anything to assist the unemployed, but which, sitting on the Treasury Bench, is rapidly becoming the curse of this country.

Mr. BOOTHBY

I beg to second the Motion.

I do so with the greatest pleasure. I will not attempt to go over the ground which my hon. Friend has covered so well, hut I wish to put to hon. Members opposite one or two arguments with regard to the world situation in which we find ourselves at this moment. I do not suppose that any bon. Member opposite will deny that the general world situation does differ fundamentally from that which prevailed before the War. Before the War production all over the world was, on the whole, inadequate, particularly the production of manufactured goods, to meet world demand. To-day there is a glut in almost every class of commodities, certainly in a very large number of manufactured commodities. In other words, production has outrun world demand, and we are in a glut period, and that does make a difference; but we are carrying on in this country as if it made no difference, as if there had been no fundamental change. Hon. Members opposite will not deny, also, that modern methods of mass production have made it very much easier for what we call sweated labour, in other words Oriental labour, to compete with our own; that is, sweated labour working for wages which our own trade unions, quite rightly, will not contemplate for a moment. We cannot get away from that fact. That is happening in Japan at the present time, it is happening to an increasing extent in India, and it will happen in China and in Russia. Modern methods of mass production make it possible for Oriental labour to work machines in the same way that our skilled labour can work them, no better, but no worse, and Oriental labour will work for warms such as our men cannot live upon. What can we do? We cannot get away from the position. It is a fact staring us in the face.

The third point is that in the modern world the very foreign countries to which we used to send our manufactured goods in pre-War days, the markets in which we commanded a virtual monopoly, are to-day manufacturing those goods for themselves under the protection of very high tariff walls. This situation is further aggravated by the international monetary situation, the international debt situation. We still have interest due to us from our pre-War investments in foreign countries all over the world, and how can they pay that interest, how can the defeated countries, from an international debt point of view, pay the money they owe to us—how can Germany pay the reparations she owes to us— unless they have a favourable trade balance It cannot be done. In order to pay the interest on the private foreign investments we hold and to pay these reparations, which I think are fantastic, and for which the right hon. Gentleman the Chancellor of the Exchequer made so noble and so Socialist a stand at The Hague, for which he was prepared to jeopardise the peace of Europe in order to get another couple of millions out of Germany. [Interruption.] Fine socialist principles those were! How is Germany to pay? By goods. Money is worth nothing unless it is backed by goods. The Chancellor was prepared to insult the Finance Minister of France and to jeopardise the peace of Europe simply in order to get another £2,000,000 worth of goods from Germany dumped into our markets. [HON. MEMBERS: "Your party applauded him!"] The Chancellor was rapturously cheered for his performance at The Hague by hon. Members of his own party.

Mr. TINKER

And he was cheered on your side, too.

Mr. BOOTHBY

I am merely pointing out that all this is not very helpful at the present time. This is another aggravation of the international situation, and makes it all the more necessary for European countries in particular and, indeed, for all foreign countries, to secure a favourable balance of trade. In order to do that they must cut down their imports from us and increase, at almost any cost, their exports, and that is exactly what they are doing. They are going to enormous length to do it. They are subsidising their exports to a great extent. I am not talking merely about definite and open subsidies, as in the case of the subsidised oats or barley which have been coming from Germany and smashing our markets in the agricultural districts. I am talking more or less about concealed subsidies to the export trade of Europe with this country in a vast number of commodities. My hon. and gallant Friend the Member for King's Norton (Major Thomas), in a speech this day last week, gave some very interesting figures about the steel trade. He pointed out that whereas the price of sheet bars in the home market in Belgium was £4, and in the home market in France £5, they were exported to this country for £3 9s., and that the price of sheet bars from Belgium or France was 13s. 6d. in South Wales at the present time, as against our own price of £4 17s. 6d. He went on to give figures about joists which are even more remark- able. They are coming into this country at £4 17s. 6d., whereas it cost us £8 2s. 6d. to produce them. Nobody on the other side can say that our iron and steel industry is as inefficient as all that. The difference in price is not due to our inefficiency. It is due to different standards, due to higher wages in this country, and, above all, it is due to the fact that foreign countries have definitely made up their minds to smash as many of our home industries as they possibly can by subsidising in one form or another their export trade in manufactured goods. We shall be faced with that competition, and an intensified competition from Oriental countries, where the workers accept conditions and wage standards which we should not tolerate. The competition is coming from Russia, also, to an ever increasing extent.

That is the vista before us. What are hon. Members opposite going to do? Something has got to be done. We no longer have a virtual monopoly in world markets for our manufactured goods. For the last 10 years we have gone on anæsthetising ourselves, deliberately blinding ourselves to the facts of the world situation: pretending that it is only a question of time before something will happen to enable us to recapture our old position of world monopoly. But that is not going to happen of itself. We shall not automatically get back to the old position. All the forces and all the facts are against us, and in the face of this situation, which to my mind is one of growing menace, what do we do? We leave our home market absolutely defenceless before the foreigner, who is free to dump here without let or hindrance his subsidised goods and his goods produced under conditions which we will never accept; and at the same time we deny our manufacturers the only weapon with which to fight our way back into the export markets. Unless we can use the weapon of protection in some form or another in order to bargain with foreign countries, we will never get a lowering of the tariff walls they have raised against us. I should have thought that the excursions of the President of the Board of Trade to Geneva, which have been barren, futile and sterile, would have proved that even to hon. Members opposite. On the top of all this our manufacturers have had to contend with a continuous and steady fall in the world level of commodity prices.

An unemployment figure of 2,500,000 is not really very surprising under these Circumstances. I cannot understand why so many people in this country and so many hon. Members opposite keep scratching their heads and saying, "It is a most, extraordinary thing, this world blizzard, and the fact that our unemployment figures keep rising. How unfortunate it is that the Government should be faced with this world blizzard." It is perfectly obvious why we have 2,500,000 unemployed, and why we shall have an unemployment figure of more than 3,000,000 before the winter is out. The facts are there, and the conclusions can he drawn from them. It is nonsense to talk about a world blizzard when we have such facts staring us in the face. The causes are there; but the Chancellor of the Exchequer will not apply the remedy. I hope hon. Members opposite will he gingered up to-night to bring some pressure to bear upon the right hon. Gentleman.

What have hon. Members opposite imposed upon British industry? [Interruption.] I agree that we on this side of the House have joined in the process. We have imposed upon British industry charges for social services infinitely higher than the charges in existence in any other industrial country. Nobody will deny that. At the same time, the trade union movement in this country has demanded, and on the whole has succeeded in its demand, that wages shall be kept at a very much higher level all over, and particularly in the sheltered industries, than the wages in any competitive country. That is the position. I do not like to quote statistics, but facts emerge from the situation, which, I think, are significant and which ought to be considered by the House. The first fact is that of our imports of wholly manufactured goods 90 per cent. are not from the Empire but from foreign countries, and they have been steadily and remorselessly rising during the last six years. Every year we import more. The second fact, which was quoted by the right hon. Gentleman the Leader of the Opposition in an interesting speech he made the other day, is that although the total export trade of the world has increased during the last few years our share of it has steadily decreased, in relation to pre-War days.

Those are two factors which ought to be seriously considered by the House. We hear a lot about rationalisation and I believe it to be essential, but I feel it to be impossible without some form of Protection. There are two aspects of rationalisation, and I wish hon. Members opposite would study with some care the observations of one of the very greatest industrial politicians of the post-War era, Herr Rathenau, who probably knows more about this subject, and has more interesting things to say on it, than any contemporary European statesman. He divided rationalisation into two parts, the first relating to the reorganisation of industry within a country, and the second to the international aspect of rationalisation. He laid it down that adequate supplies of fresh capital were necessary to carry out a policy of reconstruction and reorganisation. Certainly, we are not so badly off in this country as foreign countries are so far as the rationalisation movement is concerned, but there is not the slightest doubt that we should be a great deal better off if there was more confidence in the future of British industry.

That is one of the reasons why British industry fails to attract the capital which is necessary to place it in a better position. That is one of the fundamental difficulties of the present situation. What have the Government done to meet this position and to restore our industry? All that they have done is to pile up our taxation and spend large sums of money on what, after all, are purely unproductive purposes. Everything that has been done by the Government has tended to discourage British industry. If you consult business men either in the City or any other part of the country, you will hear the same story, and they will tell you that there is no confidence in the future of British industry, and that capital has ceased to flow into British industries as a consequence. What have the Soviet Government done to meet the industrial situation? They have done nothing but cry out for more capital. Capital is the petrol that makes the wheels of industry move. If you cut the petrol pipe of a motor car it stops at once. The present Government are choking the pipe which feeds British industry with capital and are then surprised when the wheels begin to slow down. One of the necessary things required to restore confidence in this country is a good sound substantial measure of Protection, and nothing else will do it.

Mr. PYBUS

Can the hon. Member say why, if the petrol pipe is cut in America and Germany, the unemployment figures are rising there every day, and those are the countries which have the highest protective tariffs of any countries in the world?

Mr. DEPUTY-SPEAKER (Mr. Robert Young)

hope hon. Members on both sides are not going to induce the hon. Member for East Aberdeen (Mr. Boothby) to enter into elaborate arguments because if he does the result will be that other hon. Members will want to answer them.

Mr. BOOTHBY

I will not pursue that argument any further. I do not believe that either Germany or America is in a healthier condition, from an industrial point of view, than we are; at any rate the standard of wages in Germany is very much lower. I would like to ask if the Government are satisfied with the standard of wages in this country? If hon. Members opposite are satisfied, I am not. So far as the international aspect of rationalisation is concerned, surely it is an argument which ought to appeal to hon. Members opposite, because, when it is boiled down, it means that if you have a limited demand, narrowing markets, and intense international competition, you must have some form of conscious control of production. That is a doctrine which Rathenau preached to his dying day. [HON. MEMBERS: "Hear, hear!"] I am pleased that hon. Members opposite agree with that argument but you cannot have conscious control of production without conscious control of imports. [HON. MEMBERS: "Hear, hear!"] There seems to be so much agreement with my argument and I seem to have converted so many hon. Members opposite that it looks as if the two dismal occupants of the Treasury Bench will be alone in one Lobby and we shall all be found in the other Lobby. Wages are controlled in this country by one of the most efficient systems of trade unions in the world, and we impose a higher standard of social services and a higher standard of life than any other country in the world. Notwithstanding these facts, we still refuse to control production and import. [An HON. MEMBER: "What did your party do?"] When the Conservative party were in office, they did something in this direction, and, when we come into office three or four months hence, we shall do more. There is on the Amendment Paper one of the silliest Amendments that I have ever seen.

Mr. DEPUTY-SPEAKER

I may inform the hon. Member that Mr. Speaker has not selected that Amendment.

Mr. BOOTHBY

The Amendment on the Paper suggests that we should utilise the machinery of the League of Nations for the lowering and eventual abolition of the tariff walls of other countries. The President of the Board of Trade has been to Geneva several times trying to establish a tariff truce, and what has he brought back? Absolutely nothing at all. When the right hon. Gentleman made his speech on the Address, we thought he had something important to say, but he was not able to inform the House that he had secured a single reduction of any tariffs. The right hon. Gentleman begged other countries to reduce their tariffs, but they all told him to go away. I am arguing in favour of the adoption of Protection for our home market. I want us to adopt a national policy instead of a policy of economic internationalism which when tried before has always landed us into a pretty mess.

The Amendment on the Paper urges the adoption of international standards of labour through the International Labour Organisation. What does that mean? Are you going to get foreign countries to pay the same wages as those which obtain in this country, and are you going to get them to observe the same conditions of labour? Do you think there is any chance of getting foreign manufacturers to pay the same wages as those which are paid to-day in the iron and steel industry? The short answer is that they will not do it, and they have told us so every time that we have asked them. Hon. Members opposite say, "Let us persuade the Poles and the Belgians to adopt the same standards of wages and conditions as we have in operation in this country." Those countries have been asked to do this, and they have refused, and I do not believe that you will ever get them to adopt those conditions.

The Government will have to do something in this matter before very long. The home market is about the only asset which is left to us, and I think we ought to use that market for the benefit of our own people instead of allowing it to be used for the benefit of every other country in the world. There are only two alternatives confronting the Government. One is a complete policy of laissez faire and the other is a policy of protecting the home markets. If you are going to adopt the first you will inevitably reduce the standard of living, you will reduce the social services and wages, and, more particularly, the wages in the sheltered industries. If we adopt the system of laissez faire, the workers will be faced by the employers with a general demand for a reduction of wages in the course of next year.

Mr. KELLY

How do you know that?

Mr. BOOTHBY

Wait and see, or rather, you will not have to see, because you will not be there. If that arises, and if these wage reductions are demanded by employers, as they assuredly will be if we go on on the present system, the result will be either a general lowering of the standard of living and a general lowering of wages, which nobody opposite wants, or a series of wage struggles conducted to no purpose up and down the country, which can only do illimitable harm to our industrial system. It is an essential condition of Free Trade in the modern world that you should compete on equal terms. You cannot, under a Free Trade system, impose social charges and wages upon an industry which make it wholly unable to compete with foreign industries in the markets of the world. Are hon. Gentlemen opposite going as far as that? If so, they abandon the only weapon that they have with which to fight these tariff walls which are being erected against us, and of which they complain so much, and they will have to submit to a wholesale reduction in the standard of life of the workers of this country. Is that in accordance with the trade union tradition? Is it in accordance with trade union practice? Is it Socialism? If such a policy of laissez faire is Socialism, it is a funny kind of Socialism. Or is it merely the application of an obsolete and outworn economic doctrine which fitted the conditions of 50 or 60 years ago, but which has no meaning at all in the modern world?

We hear from the opposite side of the House the theory and argument that tariffs in fact reduce wages. That is humbug and hypocrisy, especially coming from hon. Members opposite. I ask them, what about the Coal Mines Act? The avowed object of that Act was, firstly, to control and limit production, and, secondly, to raise the price of domestic coal to consumers in this country in order to subsidise the export coal trade.

Dr. MORGAN

That is the object of every combination. Every cartel does that.

Mr. BOOTHBY

In principle, I think that the Coal Mines Act was desirable, but do not go on with this canting hypocrisy about reducing wages by raising prices when you pass an Act for the deliberate protection of one of the basic commodities of this country in order to raise prices to the home consumer. According to the argument of hon. Members opposite, that Act was designed simply to lower wages; they cannot get away from it. I sit for an agricultural constituency. My agricultural workers are being charged more at the present moment for their coal, and, I think, rightly so; I think that they ought to share in bearing the burden of a revival of general national prosperity in the coal trade; but let us not use that argument of a tariff reducing wages. In any case it seems to me to be infinitely better that you should, by a system of Protection, at least maintain prices as against the consumer, than that you should accept the alternative, which is a definite and open reduction of existing wage standards. You cannot get away from that proposition so far as tariffs are concerned.

We on this side propose the method of Protection, because we believe it to be the most effective and efficient, and also the most lucrative in bringing in money, and we want money in this country in order to maintain our social services. I, for one, and many of my hon. Friends on this side, would not be at all averse to seeing put into operation methods, which could easily be devised for imposing on those industries which receive the benefit of Protection a certain standard of efficiency. It could easily be done. It would be possible, in conjunction with a tariff, to license the import of any particular article or commodity which was not being efficiently and cheaply manufactured in this country; there is no difficulty at all about it.

I would only say that, under present conditions in the world, we must have some form of Protection if our present standard of life and our present wage standards are to be maintained. The Government have nothing. This is probably the most inept and futile administration that was ever known in any country or in any age. It has absolutely nothing on any economic question—neither Socialism nor tariffs nor anything else. The Government just sit there helpless and futile, without a suggestion of any sort or kind. [Interruption.] What have they done? What practical proposition to deal with our economic problem has the present Government ever put forward. Absolutely none. There is no need at this stage to argue about the ineptitude of the present Government; no one in any quarter of the House disagrees in regard to that. Signs are not wanting, however, that, for the first time since 1918, our people are prepared to face up to the realities of the situation, and to fling this Government out at the very first opportunity.

Mr. JAMES HUDSON

The Resolution to which we are asked to agree to-night raises two principal issues, namely, tariffs and wages. In the first place, I should like to congratulate the hon. Member for East Toxteth (Mr. Mond) on the charming simplicity with which he revealed to us the real purpose of the Resolution. The Resolution on the Paper asks the House to declare that the only means whereby a general reduction of wages can be avoided is by doing certain things. The hon. Member immediately went on to prove the necessity of avoiding what he called a head-on crash between Labour and Capital, and he showed that by that he meant that monetary conditions in this country caused such wage levels that an adjustment of wages must be made in order to enable the country to carry on. Lest we should be in any doubt about what this adjustment of wages should be—and I would especially ask the hon. Member for East Aberdeen (Mr. Boothby) to observe this; I have no doubt that he did observe it, and that that is probably why he threw so much dust about in the speech which he has just delivered— the hon. Member for East Toxteth stated that in Belgium at the present time a reduction of wages is being proposed for miners and glass workers. That, by the way, is in a Protectionist country. In Germany, also, another Protectionist country, wage reductions and salary reductions are being put into effect, the hon. Member was careful to tell us, in the metal trades. In France, another Protectionist county, and in Australia, which is also Protectionist, reductions of wages are being proposed for other important bodies of workers; while, turning to the remarks of the hon. Member for East Aberdeen, in Poland and Belgium there are conditions of w ages which, in spite of Protection, will remain. The hon. Member says that the Poles and the Belgians will certainly keep to the lower levels of wages which are such a danger to this and other countries which are concerned.

Then the hon. Member for East Toxteth went on to say that the index of real wages in this country is now about 110.4 —from his point of view a very alarming situation, though from our point of view I am very glad that it is 110.4 instead of 100. The hon. Member suggests that it is going to get worse from his point of view—from my point of view better— because, he says, the cost of living will still continue to come down. Therefore, he says, something must be done, not, as the Resolution says, to avoid a reduction of wages, but something must be done in order to make effective the change whereby this head-on crash between Labour and Capital may be avoided.

I doubt whether I have ever heard so frank a confession of the aim of the Tory party as was contained in the speech of the hon. Member for East Aberdeen. I want to say, to Tory journalists like Mr. Garvin and others who doubted the bona fides of my right hon. Friend the Chancellor of the Exchequer when, in a speech in Manchester, he stated frankly that that was the aim of the Tory party —I want to say to Mr. Garvin and to others who assumed that the Chancellor of the Exchequer was casting unfair aspersions against the motives of the Conservative party, that we have had a very frank expression of opinion and confession from the Tory party itself as to what at the present moment it is intending to do. The Motion, it is true, says that we ought to have the institution of a general tariff system. It is not very clearly defined what that means, but I suppose we may adopt the point of view of the late Chancellor of the Exchequer when he said that the policy of the Tory party changes from day to day, and that a, general tariff system may mean a tax upon manufactured commodities, a tax upon half manufactured commodities, and indeed, as most of the raw materials that come into the country have some element of manufacture in them, a tax on raw materials as well, and very likely on food, too. In modern days, with the development of tinned foods, the element of manufacture becomes more prominent in the food that comes into the country. [An HON. MEMBER: "Hear, hear!"] We have it, then, that the Tory party is drifting rapidly to a tax upon practically every kind of article that comes into the country.

Having got clearly from the hon. Member for East Toxteth what is the aim, may I make a reply to one or two points raised by the hon. Member for East Aberdeenshire. (Mr. Boothby). He seemed to think that there are some extremely special circumstances in our conditions in these days which have never existed before, and which require in a way the introduction of a tariff, which in former days could never have been justified. He forgets that, in the past-, statesmen and politicians who belonged to that party were always discovering these very special circumstances. I will read a passage from a very famous speech delivered at Blackpool by Lord Randolph Churchill in 1884. I am sure the hon. Member will recognise the language used in that speech as having been imitated in another very distinguished quarter. This is what Lord Randolph Churchill said: Your cotton trade is seriously sick. We are suffering from a depression of trade extending as far back as 1874–10 years of depression. The most hopeful can discover no signs of revival. Foreign cotton is pouring into the country flooding you, drowning you, sinking you, swamping you. Your labour market is congested. Wages have sunk below the level of the land. The misery of our large towns is too frightful to contemplate. When Lord Randolph Churchill used those words, he confronted a condition in which a great slump existed, and at that time there started again a very serious propaganda in favour of Protection. The slump came to an end, and, when it was over, there occurred a very considerable advance in natural prosperity. It was the same in 1903 with regard to the predictions of Joseph Chamberlain, who again said something very similar to what Lord Randolph Churchill had said, and yet, following upon 1903, up to the period of the War, there was a very real revival after the period of slump that followed the South African war. The hon. Member is making an altogether fanciful case when he says that, because of the particularly bad situation in which we now find ourselves, we can never expect anything better by pursuing the policy that we have pursued. My view of the situation is this: We have in the world to-day a sufficient number of countries that have tried in its various forms the policy that hon. Members opposite ask us to try to enable us to judge of the value of the effects obtained, especially the effect upon wages, which is the particular subject under discussion.

Mr. MOND

How many have tried ours?

Mr. HUDSON

I thought the hon. Member who moved the Motion would have made some sort of reply to the remarkable challenge that was made by the right hon. Gentleman the Member for Darwen (Sir H. Samuel), who, last March, reminded members of the party opposite what was the real relation of tariffs in Europe to wages systems in Europe. He took for his guidance, as we can all take for our guidance, the report of the League of Nations. I agree that we must be a little careful in what we say about wage levels and different conditions in European countries. As the Balfour Committee pointed out, there are so many different causes affecting wages that it may be difficult to compare absolutely the wage levels that exist in various countries, but, after allowing as much as is possible to allow, the International Labour Office authorities have come to the view that the three countries in Europe whose wage levels are the best and highest are Great Britain, Holland and Denmark. Those three countries, if I may answer the question the hon. Member put to me, come nearer to the Free Trade system and to the system that hon. Members opposite are asking us to adopt. Italy, Czechoslovakia, Poland and Spain have the highest tariff barriers and the lowest level of real wages, while France and Germany make a sort of intermediate class with regard to wages, with barriers not so high as the others, but at least high enough to give a very real hindrance to trade. At least from the point of view of what is obtaining in Europe, where Protection has been tried, there is no case whatever for attempting to help the wage level of our workers by imposing a Protectionist system.

I agree that you may have something to say about countries like America, where, it is true, the wage system is a good deal higher than ours, but let us not forget about America, that 90 per cent. of her trade is done within her own boundaries and is done, therefore, by a Free Trade system. There are no barriers between the States of America. You have in the United States what some of us think ought to be in existence in Europe. One of the real factors that is assisting Americans to get a better wage level for their workers is the ease with which they have been able to adapt themselves by their Free Trade inter-State system, to all the changing situations of the time. If there really was anything in the hon. Member's contention that, for the purpose of protecting wages and reaching a higher wage level, you need tariffs, the Americans ought to be arguing that, in order to keep up the wage level of the cotton workers in the New England States, there should be imposed a tariff to keep out the production of the sweated workers in the Southern States.

The same thing applies to Australia where, it is true, for the moment there is a higher wage level, but I would point out to the hon. Gentleman that the specially constituted Tariff Board of Australia, which advises the Government year by year upon tariff conditions, warned the Government as far back as 1926 that they could not expect to keep the wage levels that they were trying to keep in Australia by the continuance of the tariff policy which was then in being. By 1927, the Tariff Board of Australia pointed out that the situation bad become extremely critical and that unless some new policy were devised it would not be possible to meet the situation which faced them. In fact, the board went on to say that the Protectionist system in those circumstances could be made a convenient shelter for obsolete plant and obsolete methods. Wherever you go, even taking the most favourable instances which hon. Gentlemen opposite would like to take, the whole case for improving the wage condition of our workers by interfering with our fiscal system is destroyed, at any rate, by such examples to which they are able to turn.

The real struggle in which we are engaged to-day is a struggle which was instituted by the right hon. Gentleman the Chancellor of the Exchequer in the Finance Bill. We are engaged in trying to shift from the shoulders of the workers burdens which in the past they have borne far too much, and hon. Gentlemen opposite are doing their best to protect the shoulders of their own friends from the burdens which ought to be borne by them. Ever since the Finance Bill attempts have been made by general tariff proposals, by proposals to raise revenue upon tariffs and so on, to throw back on to commodities the processes of taxation by which ultimately the workers would be made to pay. The right hon. Gentleman the Chancellor of the Exchequer said at Manchester—and his claim cannot be contested—that if the proposal to place a general tariff upon manufactured commodities coming into this country is carried out it will be as good as a raid of £150,000,000 upon the purses of the working class. As a matter of fact, in 1927 the Colwyn Committee said that the low-paid workers of this country, those who get 12 or less, have taken from their wages each year between 11 and 12 per cent. of their total income. Those with incomes of £500 a year, or who have an income of £10 per week, pay 6 per cent, of their wages in direct and indirect taxation, and it is only when you get up to the man with an income of 11,000 a year that that man pays at the same rate of percentage of his income as the poor man with a wage of £2 a week. It has been our object to shift the burden from the poorly-paid worker on to the shoulders of those who arc best able to bear it, and it is the object of hon. Gentlemen opposite to thug that burden back again. Here we have the hon. Gentleman the Member for East Toxteth telling us frankly that in order to stop a head-on crash between capital and labour we must devise a scheme whereby we can fleece the working class of their wages by the addition of a tax upon the goods which they must buy. Anyway, we have seen through it, and I believe that the people of this country will see through it. I shall be glad of the opportunity, which hon. Members say promises to come soon, when we may test the opinion of the country on this very question.

Mr. PHILIP OLIVER

I think that the hon. Gentleman the Member for Huddersfield (Mr. J. Hudson) has effectively answered the Mover and the Seconder of this Motion. I was a little mystified as to the position of the hon. Member for East Toxteth (Mr. Mond). I always listen to him with considerable interest and instruction. I gather that he says that the present condition is one very largely of glut from which the whole world is suffering. Of course, there is a glut. While there is a glut of wheat in Canada, 2,000,000 people have died of starvation in China. There is a glut of manufactured articles throughout the whole world, and, if I understand the hon. Gentleman aright, he envisages this glut as being drawn almost inevitably to this country by reason of reparations or of interest on foreign investments. If it does not come in the shape of reparations or interest on investments, obviously it comes in payment for services which we are rendering. I should like to know at some time from the hon. Gentleman or from one of his party whether they, at any rate, object to manufactured imports coming into this country in payment of interest on our foreign investments. [Interruption.] He does. Well, I want to know why it is that his party is so anxious for the recognition by the Soviet Government of the Russian bonds. Recognition is no use to us unless interest is paid on the bonds, and interest can only be paid on the bonds by a further influx of this glut of manufactured articles into this country.

Mr. BOOTHBY

There is a great difference between recognition of the Russian bonds and trade.

Mr. OLIVER

Am I to understand that the hon. Member's enthusiastic friends, when they put questions in this House, are not asking for payment of interest by Russia but simply for a theoretical recognition? I do not understand the tremendous enthusiasm which they show in the questions which they ask. All these things seem rather to be beside the point in considering this Motion, which is very broadly worded indeed. It is a Motion for which no one in this House can properly vote, because it lays down the astounding proposition that the only means whereby a general reduction of wages can be avoided is by a general tariff. It is obvious that there are other means, rationalisation being no of them, in which we can hope to effect better trade and higher wages. I am willing, as a Free Trader, to admit that you can take a specific industry and by protecting that specific industry you can give higher wages and get better prices. But it is au utter and complete fallacy to generalise and to make the general statements which are made in this Motion.

It is important, especially as the Motion is worded in its present form, that we should stress the fact that more than half of the insured workers in this country arc not in any way subject to foreign competition, and therefore cannot be benefited or harmed by a tariff so far as normal money wages are concerned. How is the suggestion of a tariff going to assist the wages of the coal miner or of those engaged in other forms of mining and quarrying? How is it going to assist the wages of those in Crewe and elsewhere who are engaged in the manufacture of our railway carriages and railway engines? How is it going to assist those engaged in shipbuilding where we have no foreign competition to face? How is it going to help those engaged in printing, publishing and book-binding? How is it going to assist those engaged in the building trade, and in public works construction? How is it going to help any of those engaged in our public utility services of gas, electricity and water? How is it going to help those engaged in internal transport, in distribution, those employed in commerce and banking, insurance and finance, the employés of national and local government, those employed in the professions, those who keep us amused by entertainment or sport, those' who keep us well fed in restaurants and hotels, and those who are engaged in doing our laundry work? Those are only a few but, according to the latest figures of the "Labour Gazette" for October, they account for 6,625,000 of the insured population out of a total insured population at that date of 12,094,000. Therefore, 55 per cent. of the total insured population arc not subject to foreign competition and their cash wages cannot be affected one way or the other. These are what are called the sheltered industries. As we are discussing wages, it is important to point out that the sheltered industries have suffered very much. If we take only the three principal trades, mining, building and transport, we find that in the years 1928–20 more than 1,230,000 of these workers suffered a diminution in their wages and in 1930 we find nearly 500,000 of these people unemployed. That does not seem to show or to prove that diminution in wages necessarily leads to good employment. So much for the sheltered trades.

I, coming from Lancashire, want to know how this policy is going to help us in the cotton textile trade. There are 554,000 insured persons in that industry. Last year, 1929, the ratio of imports to exports was 8.1 per cent. We may rightly say, therefore, that the ratio of imports to production in Lancashire was about 6 per cent. If we cut out the whole of that 6 per cent., that glut of imports coming into this country, it is not sufficient to affect one way or the other the cash wages which are paid in that industry. When we come to the uninsured population, what about the great mass of uninsured population amongst the agricultural workers. We have not heard of the agricultural worker. How is he going to be helped by a tax on manufactured articles? It is obvious that at least two-thirds of the whole population of this country cannot be affected in any way so far as their nominal wages are concerned. The only effect upon them will be to decrease their purchasing power and therefore to lead directly to reduction of wages so far as they are concerned.

I want to bring to the notice of the House the effect in our competitive industries of the proposal for a general tariff. The hon. Member for East Aberdeen (Mr. Boothby) said that it was only proposed to put a tax upon wholly manufactured goods. Those are almost identically the words that were used by the right hon. Member for Edgbaston (Mr. Chamberlain) last week. Those wholly manufactured articles are to be subject to rough and ready tariff. We are told that they amount in value to £330,000,000. Of these 43,000,000 worth are taxed already, which leaves £290,000,000 worth of taxable manufactured imports. It is important before we go any further in the discussion of this matter that we should understand perfectly clearly that of this £200,000,000 worth of so-called manufactured imports which come into this country, more than one-half are raw materials which are imported on the orders of our manufacturers in order that they may be subjected to further processes here. In this remaining balance of £290,000,000 worth of imports there are 42,000,000 worth of ails and fats.

9.0 p.m.

We are told that the United States of America is greatly increasing its exports of manufactured articles. If we turn to the figures of the United States exports we find that in recent years nearly the whole of that increase is made up by an increase of £100.000,000 in the export of motor spirit, which is regarded by them and by us in our statistics as manufactured exports and imports respectively. Again. included under the heading of manufactured goods we find £12,500,000 worth of copper bars, pig iron, iron alloys, unfinished steel; £3,600,000 worth of crude zinc, definitely set out as crude but coming in as a manufactured article. As we are talking about crude things, I find that included in the list is £1,600,000 worth of rabbit skins. Could we imagine anything more crude than a rabbit skin? In addition to rabbit skins, there are £11,000,000 worth of hides and skins, which are all raw materials.

I would suggest to the Board of Trade that they might in future when they publish these figures, if it can be done without undue labour or cost, divide these manufactured articles into certain categories, and let us know how many of them are really what we call raw materials and how many of them have had a considerable amount of labour put into them and are required for other processes here. They might also let us know, in a third category, which of these articles are really finished articles like bricks and slates, which are required as component parts for any constructive work in the building of houses, etc. Finally they might, in a fourth category, let us know what are the things which are actually imported here as being required by the ordinary members of the community. I trust that that will be done, because it is of great importance. I hope that it will cost nothing. If it costs a lot, I am afraid that in the present state of affairs we must sacrifice truth to cost.

I have had these figures analysed independently, and I hope accurately, and it is clear from them that 52 per cent. or £150,000,000 worth of the £290,000,000 worth of manufactured articles imported into this country, which are to be subjected to a rough and ready tariff, are required for other processes here, and of this 52 per cent. not less than 62 per cent. are really crude materials. The hon. Member for East Toxteth (Mr. Mond) and the right hon. Member for Edgbaston really propose something which will be putting a tax on raw materials. Out of the fund from which raw material is paid for we also pay our wages and if we increase the cost of our raw materials there will he less in that fund for wages, therefore, we run the grave risk of doing injury to the wage earners of this country. For these reasons, I hope that the Resolution will be rejected, as it deserves to be.

Mr. LOUIS SMITH

Listening to the speaker who has just resumed his seat one would not imagine that we had two and a-quarter millions of unemployed in the industries of this country and one would not realise that nothing has been put before the country to help to get those millions of people to work with the exception of the scheme put forward by the Conservative party, namely, protection of our home industries. I cannot see how we can preserve our present rate of wages in industry unless some form of Protection is adopted. A large body of opinion in this country which has the welfare of industry at heart, such as the Federation of British Industries and the Chambers of Commerce, realises the necessity for a change in our fiscal system, and I do not think that these men would do so if they felt that the employés in industry were going to suffer.

Free Traders say that Protection is not necessary because labour is protected by its own organisations, that labour if left alone can beat the industries in other countries. They also tell us that by cur example and precept rather than by a system of bargaining we should leave it to other countries to come down to the Free Trade system. Those of us who believe in Protection and honestly believe that protection of the home market is a necessity cannot see any hope of protectionist countries following our example and reducing their tariffs, but they would take notice if we adopted a tariff to protect our home market, and if we had a measure for Safeguarding all manufactured goods we should help to get freer trade throughout the world than obtains at the present time. We are told that tariffs will always result in raising prices. Where we have a tariff already we have not seen this result; and I should like to give the Committee what I think is the main reason why tariffs would certainly not advance prices.

I have some figures here of a branch of the iron and steel industry which certainly surprised me when I saw them. I know the iron and steel industry intimately. If you take a case, and this is an actual ease, of a firm with £100,000 as the normal output, take also the figures of the raw material purchased for the manufacture of goods and the productive wages, and all the items in the profit and loss account which have to be taken into consideration, and compare these figures with similar figures based on a 60 per cent. output it really gives you the reason why, if we get our factories working on a full output, there is no reason for advancing prices. In the case where the full output is obtained the raw materials purchased come to 35 per cent. of the total turnover, productive wages are 29 per cent. and items such as fuel, power, light, water, repairs to plant, stores, depreciation, insurance, rates, advertising and printing and, other items come to 31.1 per cent. What do we see when the turnover goes down to 60 per cent.; and there arc many firms in this country in the iron and steel trade which arc working on less than a 60 per cent. output. We find that on a percentage figure of 60 per cent. the cost of fuel, etc., advances to 40.7 per cent. That is 9.6 per cent. difference owing to the turnover being so much smaller. A firm with its normal output can, at the present time with the present costs of material and labour, make a margin of profit on a turnover of £100,000 of 51 per cent. which is just sufficient to pay 5 per cent. on the capital and a little to the good for reserve.

In the case of a firm working merely on a 60 per cent. output not only is there no margin at all but a 4.6 per cent. loss. Hon. Members opposite should realise that although firms can continue manufacturing for a year or two with a loss of 4.6 per cent. they certainly cannot continue in business for an unlimited period and sooner or later will have to shut down. If we could by protecting our home markets enable firms in the iron and steel trade to produce some of the millions of tons of stuff that are being imported into this country and thus get a full output of 100 per cent., many firms that are now in difficult circumstances would he able to carry on.

Mr. ARTHUR HENDERSON (Junr.)

Will the hon. Member tell us to what percentage of capacity the American Steel Corporation is working at the present time?

Mr. SMITH

It does not matter one little bit what percentage of capacity is being worked in any other country. We have to think of ourselves. The American standard of living is totally different to. ours, and American arrangements are totally different to ours. Their home market is much larger. I am sure the hon. Member will realise that a comparison between this country and America is quite unsuitable. It is difficult indeed for hon. Members on this side of the House to understand how hon. Members opposite, representing the workers in the industries of this country, who are having such a rough time at the moment, will not allow themselves to examine carefully a proposal which without doubt would help to keep the workers in full employment. How can a trade union protect the wages of their members if there is no trade being done. We must have trade: and the interests of the employés are interwoven with the interests of the employers. When we get that into our blood we shall understand the reason why 96.1 per cent. of the Federation of British Industries and nearly all the Chambers of Commerce, including the Free Trade Chambers of Commerce, have come around to the belief that a change in our fiscal system is necessary. I sympathise heartily with those men in this country who can see trade leaving these shores particularly for one reason, and that is that they are not better represented by trade union leaders in this House, who should study this question and certainly look at a change in the fiscal system without fear and without so much bias. I bone that we shall very soon sec a change on the other side of the House and that we shall have a tariff system for the protection of our home market.

Mr. MESSER

I feel sure that the House will forgive one who very rarely intrudes in the debates for doing so this evening. I am tempted to do so because of the easiness of the case. I have listened carefully to all that has been said but so far I have not been able to get the slightest evidence as to how tariffs will prevent a reduction in wages, and one is tempted to believe that this debate is really a smoke screen for the attack that is coming. In May of this year I read an article in one of our leading journals written by a right hon. Member on the Front Bench opposite. It was headed, "An Ostrich Policy," and the implication of the article was that wages must come down. Then in what is known as the "National Citizen," the official organ of the National Citizens' Union, a non-political body composed of Tories, we have had in large type a warning that wages must come down; and to-night it can almost be sensed in the atmosphere that the lesson which the workers have to learn is that unless wages come down we have to submit to a tariff.

I suggest that there is a great deal of truth in the statement that there are hon. Members on these benches who are not Free Traders in the sense in which the term was understood in the old Liberal days. There are many of us who believe in Protection, but are unable to see just why it should always be imagined that tariffs are Protection. If the object of tariffs is to keep out goods, we want to know why they do not do it. It is understandable that if a weapon can be used to reduce wages, those reduced wages lower the cost of production, and you can get under any tariff wall that is erected. We find that the German unemployed, at a time when they are embarking on wage reductions, increased in the month of October by 186,000, making the total of unemployed in Germany 3,250,000. If tariffs mean a reduction in unemployment, why have they not done it in a country with such vast natural resources as Germany? If they cannot do it there, why should they be expected to do it here? We want an answer to that question.

I oppose tariffs not merely from that economic standpoint. I want to follow out logically the working of these tariffs. It is said that we shall have a bargaining power. Where is that going to load? If we put on a tariff, the countries which are affected will retaliate. What is the logical conclusion of that retaliation? A tariff wall will end in a military war. It is because I believe there is a real danger to the peace of the world in tariffs that I am bitterly opposed to them. The hon. Gentleman who has introduced the Motion asked why we "cling to old, worn-out theories." But Protection is not new. We have heard instances dating from 1842. One could go back further than that. In the time of King James Protection was granted to the dyeing and woollen industry. As a con- sequence Germany and Holland refused to have the goods from England. Retaliation begat retaliation, with the result that trade began to decline. Then there was a great outcry on the part of the manufacturers and Protection and prohibition had to cease. That was in 1615. Protection has been tried right back from the beginning of the industrial history of this country.

The particular point I want to emphasise is the point of the home market, for the argument to which we have all listened from time to time is that if we arc able to prevent the importation of manufactured goods, the goods that are manufactured here will be consumed here. Does anyone believe that this country can live on the consumption of its own manufactured goods? It is fairly obvious that if we are going to develop the home markets it will not be along those lines. I am convinced that we have lost for good much of our overseas trade. I am convinced that we have to develop the home market. But the method by which we can do that is not by a system of tariffs, which can always be adjusted to meet the needs of the economic situation that may exist at any time. If we are going to develop the home market we have to start on the positive side of the question and not depend on the negative side. We have first of all to develop the land of this country so that it will maintain more people than it maintains now. We have to turn our attention to the purchasing power of the worker, to reducing rents and increasing wages. There is not any real mystery about unemployment. It is caused by the inability of the worker to consume the work that he produces. If we can erect a machine that will give to the worker a bigger share of the wealth he produce's, we shall not have to worry a great deal about unemployment.

In 1906 the Labour party introduced a Right to Work Bill. I think it was a mistake. What we want is a Right to Live Bill. In protecting the interests of the worker I want to come to the point that we are now prepared to admit that Protection is necessary. We have no right to encourage the manufacture of sweated goods abroad. But you do not touch that problem by putting on a tariff. What you do by putting on a tax is to compel the employer of the men who produce those sweated goods still further to lower the wages, if it is possible to do so. What we want is something in the nature of an import board that will examine the needs of the country and the nature of the goods being imported. Someone suggested that an import board was no new idea, that it had been tried 4,000 years ago by Joseph in Egypt. That is quite true. But it saved Egypt from seven years' famine. In referring to an import board two things are material. One is that we should discourage sweated goods, and the other is that we should not permit sweated conditions elsewhere to be used for the exploitation of the workers of this country.

As far as this Motion is concerned, subsequent speakers, perhaps, will explain how a decrease in the standard of living can be prevented by the imposition of a tariff. They have never made out their case yet, but I am quite prepared to be convinced. I am not one of those Socialists who believe we have got to a static position in society. Things are constantly moving, and we have got to adapt ourselves to the circumstances of life. My mind is fluid on that particular point, but it has not yet been made clear to me how wages are protected by the imposition of a tariff on goods imported into this country.

Brigadier-General Sir HENRY CROFT

The hon. Member for South Tottenham (Mr. Messer) made a rather startling admission when he said that tariffs would be no good at all, because if we were to impose tariffs the result would be that in foreign countries the employers of labour would merely have to depress the wages of the workers who were engaged in their industries. That is a very valuable admission, because it proves very conclusively why this country is suffering to such a terrible extent under the very process to which the hon. Member calls attention. It is a very good reason why hon. Gentlemen opposite should seriously consider the terms of the Motion which has been moved this evening. This question of a wage standard has been so eloquently considered by members of the party opposite that I should have thought we had almost reached a position where we found ourselves in general agreement, unless it be on the benches below me, because, after all, the speeches of the hon. Baronet the Member for Smethwick (Sir O. Mosley) have made perfectly clear what some of us have been saying for many years from these benches, namely, that as long as you believe it is right to protect the standard of living of the workers of this country, it is absolutely inconsistent to take no steps to protect your workers from the products of foreign labour while you are endeavouring to maintain the standard of your own people.

Everybody realises that for a great many years in this country we have, as a nation, been accepting the right of trade unions to say that, as far as the economic circumstances permit, the workers shall be paid what, in the opinion of those unions, is as fair a wage as they can possibly wring out of the economic situation. I think everybody will agree that the trade union movement in tins country has done very fine work. As long as they stood by that part of their policy, they were performing a very useful function, and it was only when they branched out and became politicians that the effect of trade unions was so disastrous in our midst. The fact remains that you have succeeded in raising the standard of living largely owing to the original action of the trade unions, and to the fact that the general consensus of opinion in the industrial world in this country is that you get better work if you can give a reasonable wage.

What is the situation at present The whole world is depressed. The depression may be greater in this country than in most other countries, but, still, we have got to realise the fact that the whole world is depressed. Every country is confronted with the same problem which we are having to meet, namely, where can we sell our surplus products? Every country looks round to find new markets to dispose of those surplus products, and everywhere they find the hand of the tariff policeman being held up against them. Only after they have looked all round do they say, "Oh, well, thank Heaven there is still dear old England where we can get rid of our surplus goods." That is why our position is being so much exploited at the present moment, because from the very nature of this world depression we are the one country where other countries can enlarge their free market. That being the case, I should have thought t hat the circumstances were such that all the economic ideas of a free interchange of commodities, the open door and so on, no longer good. The open door is no longer applicable; it only opens one way. The result is that we have the products of foreign countries pouring into our midst, and we arc unable to discharge our products in those countries which are so much damaging our industrial position at home.

I would point to the fact that in recent months we have seen an extraordinary increase in the imports of manufactured goods. It really is very serious, as these facts are not realised, because hon. Gentlemen opposite do not convert the value of the imports of manufactures to-day into the values of 1924. If they did so, they would see from the enormous figures that in the last 18 months alone the increase in the imports of manufactures—I am calculating these values on the lines of the altered values —represent a labour-giving value of 400,000 workers. That is one of the greatest contributory causes of the appalling unemployment figures with which we are faced. Every Member will realise that, unless you can find some new method of dealing with this great flood of imports, you are inevitably driven to the disastrous remedy of the old Manchester school, namely, a reduction of wages. I am not speaking in any controversial spirit. [HON. MEMBERS: "Oh!"] I am sorry if I have given that impression. If hon. Members opposite mean that I have spoken with conviction and, I hope, with sincerity, I make them a present of it, but I did not think that I had been controversial.

As one who has been in business from his earliest youth, I want to say this. I think that sometimes the Chancellor of the Exchequer has had a gibe at me, asking what right a soldier has to intervene in such a debate? If he were here, I would like to assure him that I was a soldier only in the same sense as every other citizen who took the trouble to defend his country in the Great War. I have been in a business for the last 30 years and in the last 16 years I have never employed fewer than 400 workers myself, either in this country or in the Empire overseas. I am abso- lutely convinced that the remedy for this state of affairs is not by the reduction of wages. It may seem for the moment that you are overtaking things, but, in the long run, it is absolutely certain that the idea which is generally accepted now in the United States, of increasing the purchasing power of the millions within that national system, is a more profitable means of increasing the prosperity of the country as a whole. How are you going to deal with it? Hon. Gentlemen opposite laugh when one makes any statement on this subject, but you are driven to the fact that you have got to close down half your industries unless, on the one hand, you reduce wages or, on the other, you do what I want to do, and what all my hon. Friends want to do, namely, give the British manufacturer that amount of security which will make it impossible for foreign countries to compete unfairly by means of goods which have been produced under labour conditions which no decent trade unionist in this country would stand for one moment

Dr. MORGAN

And so reduce real wages.

Sir H. CROFT

Hon. Gentlemen have asked me if it is tariff countries which pay low wages? When you arc considering this vital question you should compare like with like, and if you are making comparisons with the social ideas of the people of this country, I ask you to take those countries which most nearly approach your ideas as to how a workman ought to live. I ask hon. Members to consider the cases of Canada, the United States, New Zealand and Australia which happen to he the four Most highly protected countries in the world. They also happen to be the four highest wage-paying countries in the whole universe. The hon. Member's argument is hardly vital at this moment. It is rather in the nature of a red herring, but I think if he wishes to make comparisons regarding conditions of labour, he ought to go to his own kith and kin, to people who have his own ideas of a standard of living, in order to get a fair comparison.

Mr. HAYCOCK

The American tariff is now higher than it has ever been. Have American wages been raised since the tariff was raised or have American wages come down since then?

Sir H. CROFT

The answer is so simple that I should have thought that it was hardly worth while putting the question. While we have had the Free Trade system in this country during the last 50 years, our workers have been flying to the United States as fast as the United States would take them, and at this very moment, as the hon. Member knows, there are thousands of workers starving in this country who are ready to go to the United States if they could go there.

Mr. GOSSLING

How many are there starving in America?

Sir H. CROFT

I think if the hon. Member works it out he will find the rather interesting fact that, during the last 10 years, unemployment in this country has been constant, although since hon. Members opposite formed a Government the figure has been doubled. But while unemployment here has been constant, in the United States there have been only two periods of serious unemployment. There are no official figures as to unemployment in the United States. [110N. MEMBERS: "Hear, hear!"] Then why produce the argument? I do not know the figure which the hon. Member who interrupted me would place on unemployment in the United States, but let us suppose that it is 5,000,000—a very serious figure. I ask him to remember, however, that the population of the United States is 120,000,000, and I think he will find, if he goes into the question of unemployment in the United States, that it has never reached for any time anything like the disastrous proportions which we have in this country. I beg of hon. Members opposite to consider this proposition. You can give security to your market, in which case you can maintain the standard of living, and, I hope, improve it. If you are not going to give that security, you are forced to the position that you must, somehow, compete on equal terms with lower-paid labour in Continental countries.

It is sometimes said that tariffs lead to inefficiency. I have been at some pains to examine conditions in those industries in this country which have had tariff security during the last five or six years. Anyone who has made any study whatever of industrial conditions will confirm my statement that in the industries which have received the security of a tariff—Safeguarding Duties, or McKenna Duties, or the Silk Duty—there has been a greater advance in efficiency than in other industries. That view is borne out by the fact that in every safeguarded industry—until the Chancellor took his fatal step of a few months ago—employment has increased, and production has increased even more than employment, proving conclusively that the efficiency of those industries has been improved. As a business man, I put it to any hon. Member opposite who has ever been engaged in business that when a business is flourishing, when it has a secure market —then is the time to launch out, to scrap old machinery, to recondition factories and to enlarge premises. But, when you are fighting for your life you cannot do these things. If industry is given a secure market arid a breathing space in these terrible times of competition, there will be an enormous extension in the direction of reconditioning industries and helping forward the general efficiency of industries.

I hope that hon. Members will think twice before voting against this Motion. At least we on these benches have a remedy. Hon. Members opposite have. I understand, come to the definite conclusion that Socialism in our time is impossible and I think the country is be ginning to hope that it may be found impossible, not only in our time but at any time. We have a definite policy and I ask hon. Members to bear in mind that in every single industry which has been given tariff security the trade unions concerned and the trade union leaders, actively support that policy and desire to see it maintained.

If hon. Members for some old party reason, oppose this Motion they are placing themselves definitely in opposition to a great section of trade union thought in this country and in opposition to the remarkable resolution which was passed some time ago. They will be voting in favour of handing this country over to the competition of the Continent, to the competition of labour in some parts of Europe, where, as has been stated by the Prime Minister himself, bestial conditions exist. Are hon. Members going to keep out the products of these bestial conditions, the products of slave labour in Russia? [HON. MEMBERS:"Oh!"] Now we understand the enthusiasm of hon. Members for the Free Trade cause. But I venture to assert on behalf of my hon. Friends that we are absolutely determined that the standard of living of our people shall not be dictated to us by Soviet Russia, or by conditions of the kind which I have referred. Hon. Members may scoff. Let them laugh, let them jeer, but their time is short. This country is undoubtedly going to give an overwhelming mandate—[HON. MEMBERS: "For what?"]—a mandate to the British workers that they are to have the right to live, the right to fair wages and that they are not to be undersold by the products of the bestial labour conditions to which the Prime Minister referred.

Mr. RHYS DAVIES

I have listened with great interest to this debate, and my first duty is to congratulate the Mover of the Motion on having thrown aside the hypocrisy of the average Protectionist. He proposes quite definitely in his Resolution in favour of a general tariff system. Tariffs have been called by different names from time to time. Gentlemen who are concerned in bringing about a tariff system have termed it Safeguarding or a policy of import duties, and by other names, but this Resolution is definitely in favour of a general tariff system. I have been more interested in this debate because I wish to test, if I can, whether the claim is justified that a tariff system of any kind gives die working people a decent standard of livelihood. I was interested above all to hear the speech of the hon. Member for the Hallam Division of Sheffield (Mr. L. Smith), to which I will return in a moment. The two tests to apply as to whether tariffs provide a decent standard of life are these: What are the wages paid to the working people in those industries that are already safeguarded in our own country, and, secondly, what are the wages paid in those countries that have imposed high tariff walls? I think those two tests ought to be acceptable to hon. Members opposite.

With regard to the first test, I have taken the trouble to inquire into the conditions prevailing from the trade unions covering members who are employed in safeguarded trades in this country. I look at this subject as a trade unionist, and from the working man's point of view, because ultimately he has to face this important problem. The Motion before us shows great concern for the wages of the working people of this country; that is the pivot upon which the Motion turns. Let me therefore read the reports of the trade unions in some of our own safeguarded industries. Take the spring knife workers of Sheffield. The cutlery trade is safeguarded, and this is what the secretary of the men's union says: The conditions in this industry are so very had that we have made application for a trade board. We asked the employers to join in our application, and they agreed on condition that we submit to reductions of wages first. Let it be noted that this industry is safeguarded.

Sir H. CROFT

The hon. Member is surely aware that in that group a very small proportion comes under Safeguarding?

Mr. DAVIES

But this letter deals specifically with the working people employed in that portion of the Sheffield cutlery trade that is safeguarded. I will read on, because there is something more interesting to come: The employers also claim the right to make an immediate application for a further reduction of bonus when the trade hoard is formed. Trade boards in this country were, by the way, definitely established for sweated trades. This is what the secretary says further, which will, I think, impress the hon. and gallant Member opposite: Although we have Safeguarding in our industry, both wages and employment are worse than before. The following rates were agreed upon with the employers recently before negotiations broke down:—Women and girls, from 7s. per week at 14 years of age to 23s. at 21. The rate for men and boys was from 10s. per week at 14 to 51s. per week at 22. That is in a safeguarded industry in Sheffield, and their secretary goes on to say: There is nothing so low by way of wage rates under any of the present trade boards, and we are supposed to enjoy the benefits of Safeguarding.

Dr. VERNON DAVIES

Do they want it removed?

Mr. DAVIES

I will come to that later on. The secretary still goes on: "We have more unemployment to-day than we have ever known in the industry." Those are weekly wage rates not piece work rates, by the way. I will read later on something even more interesting. That is the real test of what Safeguarding has done for the wages and conditions of the workpeople in this country.

Mr. L. SMITH

Is it not a fact that practically every worker in that particular industry signed a petition for the retention of the Safeguarding Duties for a further period?

Mr. DAVIES

All I can do is to read the letter of the secretary of the workers to me.

Mr. SMITH

Then the hon. Member cannot answer my question?

Mr. DAVIES

No, I cannot, and I will not tell a lie, but I would ask the hon. Member at what date that application was made, because if it was two years ago, it does not meet my point at all.

Mr. SMITH

It was only during this summer.

Mr. DAVIES

Let me give the House another instance, covering the town of Leek. The Silk Duties were supposed to provide good employment and give decent wages for the workpeople in the silk trade. This is what an official of the trade union concerned states; it carries my test further still: Prior to the introduction of the duties in 1925, trade was good. There was only about 6 per cent. of unemployment. Now there is quite 15 per cent. There are 1,000 less workpeople employed now than before the imposition of the duties, and of those who are employed, 25 per cent. are working only four days per week, and wages have fallen during that period by 5 per cent. That is what the duties have done for the silk workers at Leek, but I have something much better than that as an argument against the Motion. I will take the Macclesfield area, where the Silk Duties have operated in order to safeguard the interests of the working people there, and this is what their secretary says: Trade is had in Macclesfield. It is certainly worse than before the duties were imposed. Wages have fallen by at least 5 per cent., and a strike is now in progress affecting 900 workers against a reduction of 15 per cent. in wages. In putting tariffs and Safeguarding duties to the test, without any bias at all, either in favour of Free Trade or of tariffs, the working man really cannot from those experiences see that tariffs will help him. A test of that kind must show that tariffs do not help the workpeople in the least.

I have the same story to tell with regard to the chemical trade in this country; and my own trade union had actually a strike in the optical glass industry about two years ago against the imposition of a reduction of wages in that safeguarded industry. Some of those men are still out on strike; they have never been able to get back. That is what Safeguarding has done so far as the working men in those industries are concerned.

Let me now put tariffs in relation to wages to the test in foreign countries. Hon. Members opposite have talked a great deal about America. I have been to America twice. I get papers, journals and information from America every week, and I will give one case to prove that according to this test it does not help hon. Members opposite in their argument in favour of tariffs. The actual wages of coal miners in certain parts of America to-day are not higher than the very low wages of coal miners in this country, and that in spite of the fact that the cost of living in the United States of America is 75 per cent. higher than here.

Let me come now to my own Parliamentary Division. We all represent Parliamentary Divisions here, or are supposed to, though some people represent certain other interests here apparently.

Dr. V. DAVIES

Trade unions, for instance.

Mr. DAVIES

I represent coal miners in the main, in my Division, railway shop employés and textile workers; and when I saw this Motion on the Paper I made inquiries as to how many industries in my Division could possibly benefit by tariffs. Not one. Not a single soul stands to gain anything by tariffs in my Division.

Mr. L. SMITH

Railway workers are fully protected now, surely.

Mr. DAVIES

Let me ask in which way tariffs will benefit the coal industry of this country? Coal cannot be protected anyhow. That is admitted by everybody. Hon. Members complain about sweated goods manufactured abroad being dumped into this country. I have said it before, and I will say it again, that if a comparison of the life of the average British miner is made with the life of the better-paid workers in our own country, every ounce of coal produced in this country, according to any decent standard of life, is undoubtedly sweated coal. I represent a Lancashire constituency. A gentleman came from Canada the other day to the Imperial Conference and said that Canadian manufacturers and buyers were complaining that Lancashire textile goods were dumped there as sweated goods. The argument, I suppose, is that we must not have any goods from anywhere that are produced under bad conditions, but that we can send throughout the world coal or any other commodities which are produced under abominable and even bestial conditions. I have two brothers who are mine workers and they may work a week and earn only £2 10s. each in wages. Such conditions are sweated judged by every decent standard of life. Hon. Gentlemen cannot have it both ways.

This Motion has two objects. The first is to torpedo the work done by the right hon. Gentleman the President of the Board of Trade at Geneva; and if hon. Gentlemen were honest, they would declare emphatically against the League of Nations and wipe it out of existence, for that is their attitude. The second object is to make our own working people understand clearly that a general reduction of wages is coming along soon. The fiscal policy of a country has not after all the close relationship to wages that hon. Gentlemen believe. If they look up the figures they will find that if we had the same proportion of men and women in gainful employment in this country from 1912–1930, we should have at present about 600,000 more men at work and 600,000 more women at home. That accounts for 600,000 men at any rate who would not be unemployed if the same proportion of men and women had been in gainful employment for the last 18 years. The employers of this country, because there is heavy unemployment, engage women on certain jobs because they are cheaper, and they have disturbed the whole economic situation by so doing. As I have stated, real wages are determined less by fiscal systems than by technical improvements in processes of production, by climatic conditions and natural wealth. These affect economic conditions more than anything else.

10.0 p.m.

We are entitled to ask those who believe so intensely in a tariff system what is the relationship between the index of the tariff wall in a country and the index of the real value of wages in that country? The International Labour Office in Geneva is composed of 52 Governments, and it is an impartial organisation which I hope will develop its good work. This is what they found after an investigation, and I hope that hon. Gentlemen will take note of it, because the organised labour movement of this country has already taken note of it to some effect. The tariff index In Spain is 41, and the real wage index is 52; in Denmark, on the other hand, the tariff index is 6 and the real wage index is 108; in the United Kingdom the tariff index is 5 and the real wage index is 100.

Sir H. CROFT

What are the figures for the United States?

Mr. DAVI ES

They do not give the information; it is a European comparison. It may interest the hon. and gallant Gentleman that my latest reports from the United States are that they have strikes as violent and as brutal there as anything that has happened in the industrial history of the world, in spite of their tariffs. If hon. Gentlemen want, to dwell on America, I will quote what a professor of economics said at a conference in Pennsylvania the other day. If he spoke in our debate to-night, he could not sum up our own position better. He said: No tariff can protect the coal miner, the railroad worker, the telephone and telegraph worker, the omnibus worker, the trolley worker, the building and engineering worker. All those who work in retail stores, wholesale houses, garages, and hotels get nothing from the tariff but higher prices for the goods they buy. Bankers, teachers, doctors, lawyers, ministers, artists, nurses, waiters, newspaper men and Government employés are all in the same position. There are some 42,000,000 persons in the United States who are listed as gainfully employed. Fully 34,000,000 of them are in trades which cannot conceivably gain by restrictive tariffs. These people are taxed by the Government in order to subsidise the 8,000,000 or less whom the tariff favours. That is the position throughout the world.

Hon. Gentlemen bring these proposals forward as if they were new. An hon. Gentleman behind me has informed the House that up to 1860 this was a tariff country. That is not generally understood. A Select Committee of this House inquired into the problem, and declared definitely that Protection did in our own land what it has done in several other countries, that it was bad for trade and that it conspired to intrigues between certain politicians and the traders of the country. That will always happen.

The hon. Gentleman who moved this Motion was much concerned about wages; I wish he were here now, because I want to say something on the general issue of tariffs apart from wages. The Imperial Chemicals, Limited, is protected to a great extent by the Dyestuffs Act, and it is even alleged—I think with some degree of truth—that that colossal industrial venture has been made possible by the protection of that Act. The people engaged in the dyeing industry in Lancashire are in touch with the Board of Trade now, and their complaint is that because of this monopoly in the hands of one company, the dyestuffs users cannot purchase the dyestuffs they require at home except at an exorbitant price. It is cheaper for the Lancashire manufacturer to send some of his goods to the Continent to be dyed and brought back to England rather than pay the charges of the monopolists of our country. That is their case, and it is a very good case, against a tariff system.

There are some friends of 'mine who are rather inclined to tariffs and Protection, only they prefer calling them by another name. I tell the House quite frankly that whenever I hear a Socialist beginning to doubt both Free Trade and tariffs as fiscal systems I invariably find him landing ultimately in the arms of the Protectionist party, as if to say there is no alternative but God or Mammon. There was a gentleman who was a Member of this House once upon a time, who sat on this side when the Tory party were in power, though once he sat as a Liberal. His name then was Sir Alfred Mond, but he is now the great Lord Melchett. I remember a speech of his in favour of Safeguarding in which he deliberately said that the intention of Safeguarding was to raise the price of the commodity to the community, and that it would be no use if it did not. Therefore, I say, we ought to oppose this Motion very definitely, and I feel sure the House will turn it down to-night.

Another hon. Member whom I respect for his tremendous intellectual capacity who very seldom addresses this House, and represents one of the universities, spoke, too, in the same strain. This is what he said—I think I was in the House when he made the statement: that it was the deliberate intention, when a Government imposed a tariff, to increase the price of the commodity, but although a Conservative he was opposed to the whole system.

Dr. V. DAVIES

How many years ago?

Mr. DAVIES

That was quite recently.

A great deal has been said to-night about America being a land of milk and honey. Although the standard of life of the man there who works in a factory, a mine or a workshop is undoubtedly higher than the workman's standard of life anywhere else, when he is at work, yet when he is unemployed or sick not even the Stars and Stripes will cover his nakedness. There is no unemployment insurance, there is no sickness insurance, there are none of the social services that we know here. If anyone could sum up the total value of the wages of the American workman and the total value of the social services and the wages in this country I very much doubt whether the American workman would he found to be, throughout his life, better off than is our own workman.

I oppose this tariff system not merely on economic grounds but because I have seen a few foreign countries in my life, and I have seen their tariffs creating so much friction and hatred. I have also seen that hatred making for wars and conflicts. I oppose tariffs because they breed war and enmity between nations.

Let us see what one of the leaders of that great tariff country of America says, a man who, I understand, was once upon a time Ambassador to this country: In my own country I have witnessed the insatiable growth of Protection which, I believe, has done more than any other cause to foster class legislation and create inequality of fortune; to corrupt public life; to banish men of independent mind and character from public councils, and to lower the tone of national representation. That, I think, is a fair picture of public life in the United States, which is a great country in many other ways. In my view tariffs have made public life a farce in some parts of that great country.

The workman knows full well that his best protection in a Free Trade country as in a tariff country is a strong trade union organisation. I trust, therefore, that everybody on this side of the House, and I feel sure everybody below the Gangway opposite, will turn this Motion down definitely, finally, and resolutely.

Sir ARTHUR CLIVE MORRISONBELL

I came here to-night to say a few words on the Amendment which the hon. Member for Westhoughton (Mr. R. Davies) has had too much sense to move.

Mr. DAVIES

No, I beg pardon. That is not the case.

Sir A. CLIVE MORRISON-BELL

I know the position; it was out of order, and it is a very good thing it was, for if there is one place where we have been disappointed on the tariff question it is Geneva. Geneva in 1927 summoned an economic conference of some 50 nations. It was attended by some 600 delegates, with their attendant secretaries and their stenographers, and it sat for three weeks to deal with the question of tariffs. We heard a great deal of eloquence during those three weeks, but the result was absolutely nil. In fact, since that conference tariffs have risen in nearly every country, and risen considerably. It has been the one complaint of every conference which has met since then that the results at Geneva were absolutely futile, that nothing was done at all: and yet the hon. Member put an Amendment on the Paper saying that the real answer to this Motion was to trust in Geneva and the Labour Bureau. One of his colleagues, Mr. Pugh, who, with Sir Arthur Balfour, was one of the official delegates of this country to the Economic Council, made it the whole burden of his speech at Geneva in 1928 that, in spite of the resolutions passed in 1927, nothing had been done to bring down tariffs. Mr. Pugh said, in fact, that the whole of the work at Geneva was—well, I forget the exact word he used, but it meant that it was practically a "wash-out."

Monsieur Theunis, who presided at the Economic Conference, in one of his speeches, said that the Economic Conference was a great disappointment and had done nothing. In the face of a statement like that it is useless to argue that anything can be expected from the deliberations of another Conference at Geneva. For the last five years I have closely watched the proceedings at Geneva in regard to economic questions, and it has long been obvious that its proceedings are a waste of time. Practically, every Cabinet in Europe during the last three years has turned down the recommendations of the 1927 Conference, and I am convinced that the only possible way to lower the tariffs of foreign countries is to have some kind of retaliation which would deny our wonderful British market to those gentlemen in other countries who put up tariffs against our country. I have a right to express these opinions, as I have worked very hard for them. In regard to this particular question, the more I see of it the more I am convinced that persuasion will never induce foreign countries to reduce their tariffs. As a matter of fact, even since the tariff truce some of those foreign countries have raised their tariffs against us.

One of the points mentioned in connection with this question, was the Labour Bureau. If there is anything more futile in connection with the work of the League of Nations from the tariff point of view, it is the Bureau Internationale du Travail. I will only make one short quotation which I think will convince the House that there is some justification for the remark which I have just made. The other day the League of Nations, having despaired of doing anything, or of producing any results on the question of tariffs or unemployment, turned the question over to the Bureau. They had meetings to deal with the question. I do not know how many representatives were sent from this country, but I saw in "The Times" report speeches of two Englishmen, one representing employers and the other the workmen. That conference may have lasted several days. and here is the result of deliberations to which we sent out a deputation from England to settle the question: The governing body resolved to proceed to a careful inquiry into unemployment, as if that has not been done before. That is perhaps the only resolution they could come to. Then they came to this second conclusion: (2) To entrust this inquiry to an Unemployment Committee. (3) To increase the number of the committee from three to 12. Here is the final Resolution. To authorise the committee to consult experts. That is the result of the work of the Committee to which we sent two noted speakers from this country. The League of Nations is being used like a cupboard into which statesmen put inconvenient questions, hoping that they will he forgotten. When the cupboard is opened and when the League is stirred up to do something, it hands the question over to the chest of drawers, and the only conclusion they come to is in which particular drawer, the top, middle or bottom, they shall put it. The hon. Member for Westhoughton was very lucky in the decision of the Chair that he was out of order, for, had he made his statement that that was the true remedy, I could have supplied him with a great many more facts which I hope would have undeceived him.

Mr. GILLETT (Secretary, Overseas Trade Department)

I do not intend to follow the hon. Baronet the Member for Honiton (Sir A. Clive Morrison-Bell) in his line of argument, because, like those of many other hon. Members, it was, perhaps, not very intimately connected with the matter which we have been discussing, but I should like to say to the House that my hon. Friend the Member for Coventry (Mr. Noel Baker), who has followed this question very closely, does not by any means agree with the statement which the hon. Baronet has made about the work which is done at Geneva.

Sir A. CLIVE MORRISON-BELL

Would the hon. Gentleman deny the statement of Mr. Pugh?

Mr. GILLETT

Perhaps the hon. Baronet will settle that matter with my hon. Friend, but I want to make it clear to my hon. Friends on this side of the House that we have a Member who is just as well acquainted with this problem as the hon. Member for Honiton, and that his view of the question is quite different from that which has been expressed from the benches opposite. I naturally speak with hesitation in view of the remarks that have been made about the Government which I represent "Inept," "inefficient," and other eloquent terms which I forget, were used by the hon. Member for East Aberdeen (Mr. Boothby). I can only speak of one Department, and that is a Department which is intimately connected with the question of trade. I do know that, when I arrived at that Department, I found that it was understaffed, and that more men were required overseas and at home for the efficient carrying out of its work; and it was the present Chancellor of the Exchequer, and not the late Chancellor of the Exchequer, who provided the funds which gave my Department the opportunity of increasing its usefulness. Indeed, the late Chancellor of the Exchequer proposed to abolish it altogether, and was only stopped by the chambers of commerce, which are not usually considered to be Socialist organisations. The hon. Member for East Aberdeen, if he were here, might consider whether the terms inept" and "inefficient" would not be better applied rather nearer home than to some of us on this side of the House.

The hon. Member raised one or two very interesting points. He stated, or quoted a statement in the newspapers supporting the party opposite, that there was no confidence on the London money market in this Government. The party opposite have certainly not gone out of their way to try to support the credit of this country so long as they could make party capital out of an insinuation that the securities of this country were not absolutely A.1, but, if anybody had been so foolish as to follow their advice, or, rather, what they might have thought, from some of the words used by hon. Members opposite, was their advice, and had transferred their investments from British Government stocks to, say, the stocks of the United States when this Government came into office, they would be rather regretting the change now. It is very interesting that this Government, in whom, according to the hon. Member for East Aberdeen, no one has any confidence, is witnessing this great rise in Government stocks. With my knowledge of the London money market, I am not suggesting that that is due to whatever Government is in office, because I know perfectly well that a rise in stocks of this kind takes place when you have bad trade and cheap money; but what is of interest is that, when the Chancellor of the Exchequer spoke about conversion of the War Loan, and a large number of people who had their money in that stock decided that they would prefer to put it into a fresh investment of a longer term, there was a golden opportunity, if there were no confidence in this Government, of placing it elsewhere. But we know perfectly well, from the financial papers and from the money articles in the Tory papers, that part of the rise in the gilt-edged market is ascribed to reinvestments deliberately being made by these people in British Government stocks, which are so closely connected with the Government now in office. The hon. Member had better reconsider a few of his points before he makes sweeping accusations against us.

Another point that he raised was that savings are being discouraged. I think the limitation of the amount of money available for savings is partly due to the great change that is going on in the ownership of wealth. I was attending a meeting connected with a saving institution in my constituency, and I found that the small owner of capital is investing his savings more rapidly than ever, in spite of the conditions under which we are living to-day. Many people still think of these questions in the terms of 50 years ago, when you had wealthy men who, under the system of that time, by the use of their money, undoubtedly gave initiative to industry, but the joint stock company is changing this to a very great extent, and you can gather to-day on the London money market from the small investor the money that 50 years ago was being supplied by two or three wealthy men. When you talk about confidence being lacking, it is Hatry and adventurers of that kind who have shaken confidence incomparably more than anything connected with the present Government I confess to a certain disappointment in the speeches that have been delivered from the benches opposite, because I should have been very glad to hear anything that would really have convinced me that they had a cure for the very serious industrial position in which the country finds itself. I do not look upon Free Trade or Protection as being white or black, as being necessarily a principle that we must ultimately adhere to. It is essential to decide which is the system that is going to be most beneficial to the country with which I am connected, and I can conceive that in some countries my views would make me a Protectionist. In this country, we live on supplies coming to a great extent from overseas. We are dependent for our raw materials on other countries. Under those conditions, I cannot see that any of the proposals that hon. Members opposite are making are going to improve our condition. No one has attempted to meet the figures supplied by my hon. Friend the Member for Huddersfield (Mr. J. Hudson). One or two Members laughed at them, but it is no use laughing at figures. You have to prove that they are incorrect. As a matter of fact, there is no need to try to prove them incorrect, because the very speeches of hon. Members opposite prove that they are correct. They told us of the condition of wages in the other countries of Europe which are being protected at the present time. They made no secret of it. My hon. Friend pointed out that the Mover of the Motion told us how wages a-re falling in those countries which are blessed with a Protectionist system.

Therefore, I think we may take it that there has been no case put up against his argument that under a Free Trade system, if we are comparing our conditions with the other countries of Europe, the working classes in this country to-day are better off than the working classes in any of the other European countries living under a Protectionist system. We are asked to change this system. Why should we change it if this is so? I have heard no reason ascribed to-night. I have heard the argument of the hon. and gallant Gentleman the Member for Bournemouth (Sir H. Croft), who told us that the imports coming into this. country have been increasing. If you take the figures of imports and the unemployed figures spread over a number of years, say 20 years, you do not find when the imports go up that your unemployed figures are also rising. Generally speaking, you will find that it is the reverse. You will find that when the imports go up, your unemployed figures go down. You may find exceptions probably explained by other reasons. This is one factor which has to be faced before you accept the argument of the hon. Baronet the Member for Bournemouth.

The hon. Baronet spoke as if the people of this country who are buying imports, are spending money in France or Spain or elsewhere which might be spent here. You cannot send money out of the country, or at least only a very limited amount, perhaps, through the money market. Broadly speaking, you pay for commodities in gold, services or exports. How does the hon. Baronet suggest these goods are paid for? Is it not by interest due to us? We receive annually a large sum of money in the form of interest. If the English owners insist on having their interest in some form or other, that interest comes into this country in the form of imports. If the hon. Baronet had been here the point I should have put to him is that this money could not be used for employing Englishmen in this country, because it is in the currency of other countries in all parts of the world, and in order to be used to give employment to the English working man, it has to be changed into British currency. Until this is done it is no use whatever. Supposing we have £100,000,000 interest due to us represented in the currencies overseas, until you can exchange that money into pounds, shillings and pence it is of no use in giving employment to British men in this country. Therefore, you can receive your imports without any effect being made on the industrial market in this country. That is the point I should have liked to have put to the hon. Baronet if I had had an opportunity of doing so before he left the Chamber.

There is another question which has been raised. We have heard from several speakers that they want to use this tariff for bargaining purposes. They talk about helping the British market, but our position to-day is that we have with the countries which count in an industrial sense in the world in all our treaties a most-favoured-nation Clause. How are you going to improve on a record of that kind? Has the experience of other countries proved that they are better off with their bargaining tariffs? This bargaining competition usually results in the tariffs of the countries concerned becoming higher and higher. If hon. Members opposite could prove to us that the countries with high tariffs are better placed than we are, that might be an argument that would persuade us that they had a cure, but I fail to find anything of the kind in the arguments that have been put before us. It seems to me that we should be worse placed. What about our great shipping industry. What effect would tariffs have upon that. What effect would they have upon our unemployed.

The hon. Member for Blackley (Mr. P. Oliver) laid his finger on one of the most crucial points of the whole matter which has never been answered by hon. Members opposite. A large number of our unemployed belong to trades that are our great export trades. If we have any large system of tariffs we are going to have a rise in prices or we shall neutralise any fall in prices that would have taken place. It is inconceivable to have it otherwise. We limit our market. The idea is to limit our market. We do not allow other countries to sell us goods. The idea is that we thus increase the demand, and hon. Members opposite say that an increased demand with a smaller supply is going to bring cheaper prices. Did hon. Members ever hear anything like that argument? They might possibly get a trade here and then to act so, but it is against the whole idea of business and industry in this country. We have been confronted this evening with a most extraordinary proposal made by the hon. Member who moved the Motion. Outside "Alice in Wonderland" I never heard such a proposal. He asks us to adopt Protection in order to compete with the low wages in the Protectionist countries of the world. Is that a proposal to be put before us solemnly to-day? "It has failed in the other countries," the hon. Member says, "but if you adopt it you will find that it will be a cure in this country." That is all that he has to put before us. I hope that none of my hon. Friends on this side will be deluded by such a proposal. None of the speeches we have heard to-day has in any way shaken my belief that so far as this country is concerned the best interests of the working classes and of the great industries are served by remaining on a Free Trade basis.

Mr. ARTHUR MICHAEL SAMUEL

I do not suppose that the Secretary for Overseas Trade expects us to accept the ipse dixit of the hon. Member for Coventry (Mr. Noel Baker) as conclusive on this debate. If so, we may have later on to accept three ipse, dixits from the hon. Member for Coventry, and it will then indeed be a chapter out of "Alice in Wonderland." If the hon. Member says a thing three times I suppose that we shall have to look upon that as the last word in wisdom in everything connected with the British Empire. We decline to accept any such ipse dixit. The Secretary for the Department of Overseas Trade—where I spent three happy years—would have us believe that under him the Department is doing much better than before. I would like the hon. Gentleman and his colleagues to look at the result of their work. We have 2,250,000 people out of employment. Look at the fall in our export trade. Is there anything to boast about in that result of his work at the Department of Overseas Trade? My view is that the Department of Overseas Trade is becoming nothing more than a Department for giving British Government guarantees to the Russian Soviet's credit.

I have listened to all the speeches on this Motion. They have been very good tempered, and we have enjoyed them. I should like to put the position as it seems to me. I will not deal with the variety of points raised on all sides. Hon. Members, like the hon. Member for Huddersfield (Mr. J. Hudson), seem to regard this question of Free Trade and tariffs almost as a religion. Nothing will save them when the world comes to an end if they should change their views about Free Trade. The right hon. Member for Darwen (Sir H. Samuel) also looks upon it as a matter of religion. Indeed, it appears to me that these hon. Members fear that they will lose their immortal souls if they budge one inch from the pure doctrine of Free Trade. But we have 2,250,000 people out of work at the moment. The hon. Member for Huddersfield referred to the League of Nations. This is the Report of the League of Nations Economic Intelligence Research Committee in the "Economist" on 25th October, 1930, that is only a few days ago. I beg the House to take what it says into consideration. It says: The trade of the world has increased, but the share of the United Kingdom has decreased, and is decreasing. It is decreasing in the world, it is decreasing in Europe; and as we examine one group of industries after another the same problem presents itself. That is a dreadful statement; but I fear a true statement. It is reflected in our 2,250,000 unemployed. The fact is established that the purchasing power per head of every person in the world is higher to-day than it was before the War. The general overseas trade of the world is 20 per cent. higher than it was before the War. We had 14 per cent. of the overseas trade of the world before the War; now we have 11 per cent. What is the reason? We see the result in the unemployment total. That is why this Motion has been put down. The hon. Member for Huddersfield boasts that the taxation policy implicit in the 1930 Budget is good; but it may be that this very policy is the cause of our loss of trade. It has made goods too dear for oversea people to buy. A few days ago, in reply to a question, the Secretary of State for India stated that the Government of India wished to place orders in this country under two contracts, one of which was for tubes and the other for a locomotive, and that in both cases our prices were too high. We lose the orders. The Secretary for Overseas Trade knows that we are losing orders day after day on account of our goods being too heavily priced. That may be owing to the heavy taxation upon production.

Then, again, look at the tariffs which keep us out of foreign markets. The President of the Board of Trade goes to Geneva. What does he get? All he gets is a proposal that tariffs should not be put up by Switzerland and Finland and the Republie of Monte Carlo. Of course, the great industrial countries of Europe and America will not give him the undertaking for which he asks. They will not come to any arrangement not to put up their tariffs in France, Germany and America. Why should they? They have the entry into our own markets and we have nothing to offer when we say they should put their tariffs down. The only thing is to get power to say that if they want to come into our markets we want something in return for it. Unless we do something like the proposal in this Motion, we shall never get hostile tariffs down, even if the President of the Board of Trade goes to Geneva every Saturday to Monday until the crack of doom. Neither will you get the nations to agree on a general scheme about hours of labour. The Secretary to the Department of Overseas Trade talked about the hon. Member for Coventry (Mr. N. Baker) being at Geneva. I was there, too, and I heard the discussions about an international agreement on hours of labour. The other countries simply laughed. I wish we could get other nations to come up to the standard of hours and wages which prevail in this country. We are mad to expect them to do such a thing.

Here is an example to the contrary. Only within the last few days I put a question to a Minister. In Manchester it was reported that the Soviet Government are dumping a. large amount of textiles in the Near East. The Russians do not care what we think about their hours of labour; they do not pay the slightest attention to our views about work, or whether it is done by serf or convict labour or labour that works nearly 24 hours a day. What is the good of asking them to change? They produce manufactured goods as they please and sell then in the export markets against us. I heard one hon. Gentleman opposite say quite truly that the position we have to face is kinetic and not static. I remember the effort that was made to get a change in the regulations of the London Coupnty Council so that it would be permissible to use steel and ferroconcrete for buildings. For years it was not permissible to use certain materials that would carry a strain greater than was possible a generation ago. The use of steel and ferro-concrete was prevented because the regulations of the London County Council were static; they had not moved with the times. Our views must alter as the conditions of the world change.

Here I will quote again from a document which was referred to in a debate a few days ago—the report of the Economic Intelligence Service of the League of Nations in the "Economist," 25th October, 1930: What is really important and significant in England is not the depression of the depressed industries, but the relatively small progress made by relatively prosperous industries. It is the growing and not the decaying which require watching. That is the case of the small and new industries which we are so anxious to build up and which my right hon. Friend who was President of the Board of Trade in the last Government spent a great deal of time in fostering. You cannot build up these new industries if they are to be bludgeoned by imported goods. Neither can you build them up if no attempt is made to encourage the putting of money into them. I remember the right hon. Gentleman who is now Secretary of State for the Dominions turning round to an hon. Member and saying that he was going to try to put new industries for the making of silk and chocolate into the district of Rhondda in order to relieve unemployment. I wish he would do so. But when you establish an industry in a distressed part of the country and it makes a profit, the Socialist party in that district soon begin to run down the employer because of their hatred of the capitalist. No one is encouraged to establish a new industry in this country. If there is the slightest chance of it doing well, the policy of the present Government is to allow cheaper foreign goods or slave-made goods to come in and so to kill the chance of the new industry ever reaching prosperity. If it makes a profit it is punished with vindictive taxation and the proprietor villified; if it loses money the proprietor has to bear the loss. Is this not a cause of un employment?

The hon. Gentleman made some references to imports and payment of interest with which T should like to deal. I hope that the Committee will extend a little patience, as I wish to deal with statistics. During 1929 we imported visible and invisible imports to the amount of £1,292,000,000, but we only exported visible and invisible exports amounting to £1,158,000,000. I want hon. Members to appreciate that the visible or merchandise portion was as nine is compared to five invisible and that in the year with which I am dealing one-third of all the exports was invisible. Invisibles do not give you very much employment, and they are increasing in ratio. Of what are they composed? Some of them are shipping receipts, some perhaps, earned by ships which carry foreign goods from San Francisco to Yokohama, or from Rio de Janeiro to Buenos Aires and very often they do not employ British crews, though it is true that we get the profit. I am all for having British crews. The shipping income of £130,000,000, as it was last year, is not as good for United Kingdom employment as if it had been money earned in the iron, or coal, or cotton industries. These invisible exports are good, but not as valuable for employment as the visible might be.

We were short in exports last year by £134,000,000 to meet our imports. What did we give to balance the amount? Hon. Gentlemen always say you must not reduce imports because you reduce exports. You can reduce the imports of manufactured goods by £134,000,000, and you will not reduce exports of goods, bullion or services by one penny. [Laughter.] Hon. Gentlemen may laugh, but that only shows their ignorance of facts. This £134,000,000 excess of imports did not create the export of a single farthing's worth of manufactured goods or services. All it did was to reduce the amount of interest out of £285,000,000 which we were due to receive, on funds invested abroad, by £134,000,000. The 134,000,000 was not invested abroad with the result that we had £151,000,000 to invest abroad last year, instead of £285,000,000. The Board of Trade nett credit figure for 1930 is £151,000,000. If you reduce your manufactured imports by 134,000,000 by saying you will either keep them out or put a heavy tariff on them, you are going to make those £134,000,000 worth of goods at home and provide employment for pretty well half the unemployed, and yet will not reduce exports by a single farthing. Then we would have power to invest abroad not £151,000,000, as last year, but the whole £285,000,000 due to us as interest on oversea investment. You might lose a little money on your shipping or your banking services, but the result would be that you would make at least £100,000,000 of extra employment here for goods made at home, without reducing exports.

Mr. G LLETT

Will the hon. Gentleman say how he proposes to bring home this money in order to make it available to buy goods in this country?

Mr. SA M U EL

I am extremely amazed that the hon. Gentleman says that. We had due to us £285,000,000 in 1929, for interest on investments overseas, and lie askes me how we bring it home. We do not bring it home, because we leave it invested abroad. We can bring home the credit for interest next year or perhaps leave it abroad for reinvestment. Instead of leaving the whole of the £285,000,000 in 1929, we had to surrender out of it enough to give to foreign sellers of goods to us a sum amounting to £134,000,000, leaving us for investment £151,000,000, abroad. I cannot understand what is in the hon. Gentleman's mind to put such a question.

Mr. GILLETT

If you have the money in francs in France, of course you can buy French goods, but how are you going to turn it into English money to buy English goods?

Mr. SAMUEL

That shows that the hon. Gentleman has not studied the point at all. We bad owing to us, as can be seen from the Board of Trade return published on 3rd March of last year, £285,000,000 of interest, which we did not bring home and the balance of it we have never yet brought home. We left it abroad to fructify. Instead of bringing home our credit of £285,000,000 we surrendered £134,000,000 of it, and we did not bring anything home, either in francs or in shillings as the hon. Member seems to imagine. We left abroad £151,000,000 out of the £285,000,000, and brought home paper security-documents. The point which I want to make is that the £124,000,000 which we used in the form of a surrender of dividend warrants to pay for excess of imports, could have been kept by us for re-investment if this Motion were put into operation and tariffs on manufactured goods imposed, subject to an adjustment for the loss of shipping profits and banking commissions; the relative goods could be produced here, and the change would enable us to employ half our unemployed without reducing our exports of goods by a single farthing. For that reason, if for that reason alone, I am in full accord with the Motion before the House which advocates the use of tariffs on foreign manufactured goods.

Question put, That this House is of the opinion that the only means whereby the general reduction of wages in the immediate future can be avoided is the institution of a general tariff system on foreign manufactured goods, in order to protect the Home market.

The House divided: Ayes, 95; Noes, 209.

Division No. 7.]	AYES.	[10.57 p.m.
Amery, Rt. Hon. Leopold C. M. S.	Erskine, Lord (Somerset, Weston-s.-M.)	Rentoul, Sir Gervals S.
Bellairs, Commander Cariyon	Forestler-Walker, Sir L.	Reynolds, Col. Sir James
Bevan, S. J. (Holborn)	Ganzoni, Sir John	Rodd, Rt. Hon. Sir James Rennell
Bourne, Captain Robert Croft	Gower, Sir Robert	Ross, Major Ronald D.
Bowyer, Captain Sir George E. W.	Graham, Fergus (Cumberland, N.)	Russell, Alexander West (Tynemouth)
Boyce, H. L.	Greene. W. P. Crawford	Salmon, Major I.
Bracken, B.	Hall, Lieut.-Col. Sir F. (Dulwich)	Samuel, A. M. (Surrey, Farnham)
Briscoe, Richard George	Hannon, Patrick Joseph Henry	Samuel. Samuel (W'dsworth, Putney)
Brown, Col. D. C. (N'th'l'd., Hexham)	Henderson, Capt. R. R.(Oxf'd, Henley)	Sandeman, Sir N. Stewart
Buchan, John	Heneage, Lieut.-Colonel Arthur P.	Savery, S. S.
Bullock, Captain Malcolm	Hills, Major Rt. Hon. John Waller	Simms, Major-General J.
Butler, R. A.	Horne, Rt. Hon. Sir Robert S.	Sinclair, Col. T. (Queen's U., Belfst)
Cadogan, Major Hon. Edward	Hudson, Capt. A. U. M. (Hackney, N.)	Skelton, A N.
Campbell, E. T.	Kindersley, Major G. M.	Smith, Louis W. (Sheffield, Hallam)
Carver. Major W. H.	Lamb, Sir J. O.	Smith, R.W.(Aberd'n & Kinc'dine, C.)
Castle Stewart, Earl of	Law, Sir Alfred (Derby, High Peak)	Smith-Carington, Neville W.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)	Leighton, Major B. E. P.	Smithers, Waldron
Cazalet, Captain Victor A.	Llewellin, Major J. J.	Southby, Commander A. R. J.
Cobb, Sir Cyril	Locker-Lampson, Rt. Hon. Godfrey	Thomson, Sir F.
Cockerill, Brig.-General Sir George	Lymington, Viscount	Tinne, J. A.
Conway, Sir W. Martin	Margesson, Captain H. D.	Titchfield, Major the Marquess of
Crichton-Stuart. Lord C.	Marjoribanks, Edward	Todd, Capt. A. J.
Croft, Brigadier-General Sir H.	Mason, Colonel Glyn K.	Tryon, Rt. Hon. George Clement
Crookshank, Capt. H. C.	Mitchell-Thomson, Rt. Hon. Sir W.	Vaughan-Morgan, Sir Kenyon
Croom-Johnson, R. P.	Monsen, Eyres, Com. Rt. Hon. Sir B.	Ward. Lieut.-Col. Sir A. Lambert
Cunliffe-Lister, Rt. Hon. Sir Philip	Morrison, W. S. (Glos., Cirencester)	Warrender, Sir Victor
Davidson. Major-General Sir J. H.	Nicholson, O. (Westminster)	Williams, Charles (Devon. Torquay)
Davies, Dr. Vernon	Oman, Sir Charles William C.	Windsor-Clive, Lieut.-Colonel George
Davies, Maj. Geo. F. (Somerset, Yeovil)	O'Neill, Sir H.	Womersley, W. J.
Duckworth. G. A. V.	Penny, Sir George
Dugdale, Capt. T. L.	Percy, Lord Eustace (Hastings)	TELLERS FOR THE AYES—
Edmondson, Major A. J.	Peto, Sir Basil E. (Devon, Barnstaple)	Mr. Mond and Mr. Boothby.
Elliot, Major Walter E.	Ramsbotham, H.
NOES.
Adamson, Rt. Hon. W. (Fife, West)	Charleton, H. C.	Hall, Capt. W. G. (Portsmouth, C.)
Aitchison, Rt. Hon. Craigie M.	Chater, Daniel	Hardie, George D.
Alexander, Rt. Hon. A. V. (Hillsbro')	Clarke, J. S.	Harris, Percy A.
Alpass, J. H	Cluse, W. S.	Hastings, Dr. Somerville
Ammon, Charles George	Cocks, Frederick Seymour	Haycock, A. W.
Arnott. John	Compton, Joseph	Hayday, Arthur
Asks, Sir Robert	Daggar, George	Hayes, John Henry
Ayles, Walter	Davies, Rhys John (Westhoughton)	Henderson, Thomas (Glasgow)
Baldwin, Oliver (Dudley)	Denman. Hon. R. D.	Hirst, G. H. (York W. R. Wentworth)
Barnes, Alfred John	Dukes, C.	Hoffman, P. C.
Barr, James	Duncan, Charles	Hollins, A.
Batey, Joseph	Ede, James Chuter	Hopkin, Daniel
Bellamy, Albert	Edmunds, J. E.	Hudson, James H. (Huddersfield)
Bennett, William (Battersea, South)	Edwards, C. (Monmouth, Bedwellty)	Jenkins, W. (Glamorgan, Neath)
Benson, G.	Egan. W. H.	John, William (Rhondda, West)
Bevan, Aneurin (Ebbw Vale)	Elmley, Viscount	Jones, F. Llewellyn- (Flint)
Birkett, W. Norman	Foot. Isaac	Jones, Henry Haydn (Merioneth)
Blindell, James	Gardner, B. W. (West Ham, Upton)	Jones, Rt. Hon. Leif (Camborne)
Bondfield, Rt. Hon. Margaret	Gibson. H. M. (Lancs. Mossley)	Jones, Morgan (Caerphilly)
Bowen, J. W.	Gill, T. H.	Jones, T. I. Mardy (Pontypridd)
Bromfield, William	Gillett, George M.	Jowett, Rt. Hon. F. W.
Bromley, J.	Glassey, A. E.	Jowitt, Sir W. A. (Preston)
Brothers, M.	Gossling, A. G.	Kedward, R. M. (Kent, Ashford)
Brown, C. W. E. (Notts. Mansfield)	Gould, F.	Kelly, W. T.
Brown, Rt. Hon. J. (South Ayrshire)	Graham, D. M. (Lanark, Hamilton)	Kennedy, Thomas
Brown, W. J. (Wolverhampton, West)	Grentell, D. R. (Glamorgan)	Kinley, J.
Buchanan, G.	Griffith, F. Kingsley (Middlesbro' W.)	Lang, Gordon
Burgess, F. G.	Griffiths, T. (Monmouth, Pontypool)	Lathan, G.
Buxton, C. R. (Yorks. W. R. Elland)	Groves. Thomas E.	Law, Albert (Bolton)
Caine, Derwent Hall-	Grundy, Thomas W.	Law, A. (Rosendale)
Cameron. A. G.	Hall, F. (York, W. R., Normanton)	Lawrence, Susan
Carter, W. (St. Pancras, S.W.)	Hall, G. H. (Merthyr Tydvil)	Lawrie, Hugh Hartley (Stalyoridge)
Lawson, John James	Newman, Sir R. H. S. D. L. (Exeter)	Smith, W. R. (Norwich)
Lawther, W. (Barnard Castle)	Noel Baker, P. J.	Snowden, Thomas (Accrington)
Leach, W.	Oliver, P. M. (Man., Blackley)	Sorensen, R.
Lee, Frank (Derby. N.E.)	Owen, Major G. (Carnarvon)	Stamford, Thomas W.
Lewis, T. (Southampton)	Owen, H. F. (Hereford)	Stephen, Campbell
Lindley, Fred W.	Paling, Wilfrid	Strachey, E. J. St. Loe
Lloyd, C. Ellis	Parkinson, John Allen (Wigan)	Strauss, G. R.
Longbottom, A. W.	Pethick-Lawrence, F. W.	Sutton, J. E.
Longden, F.	Potts, John S.	Taylor, R. A. (Lincoln)
Lowth, Thomas	Price, M. P.	Thurtle, Ernest
Macdonald, Gordon (Ince)	Pybus, Percy John	Tillett, Ben
MacDonald, Malcolm (Bassetlaw)	Quibell, D. J. K.	Tinker, John Joseph
McElwee, A.	Rathbone, Eleanor	Toole, Joseph
McEntee, V. L.	Raynes, W. R.	Tout, W. J.
McKinlay, A.	Richards, R.	Townend, A. E.
Maclean, Sir Donald (Cornwall, N.)	Richardson, R. (Houghton-le-Spring)	Turner, B.
Maclean, Nell (Glasgow, Govan)	Riley, Ben (Dewsbury)	Vaughan, D. J.
McShane, John James	Ritson, J.	Viant, S. P.
Mander, Geoffrey le M.	Roberts, Rt. Hon. F. O.(W. Bromwich)	Walkden, A. G.
Mansfield, W.	Romeril, H. G.	Walker, J.
Marley, J.	Rosbotham, D. S. T.	Wallace, H. W.
Marshall, Fred	Rawson, Guy	Watson, W. M. (Dunfermline)
Mathers, George	Satter, Dr. Alfred	Wellock, Wilfred
Maxton, James	Sanders, W. S.	Welsh, James (Paisley)
Messer, Fred	Sawyer, G. F.	Welsh, James C. (Coatbridge)
Middleton, G.	Scott, James	West, F. R.
Millar, J. D.	Scrymgeour, E.	Westwood, Joseph
Milner, Major J.	Sexton, James	Whiteley, Wilfrid (Birm., Ladywood)
Montague, Frederick	Sherwood, G. H.	Whiteley, William (Blaydon)
Morgan, Dr. H. B.	Shield, George William	Williams, T. (York, Don Valley)
Morley, Ralph	Shillaker, J. F.	Wilson, C. H. (Sheffield, Attercliffe)
Morris-Jones, Dr. J. H. (Denbigh)	Short, Alfred (Wednesbury)	Wilson, J. (Oldham)
Morrison, Herbert (Hackney, South)	Simmons, C. J.	Wilson. R. J. (Jarrow)
Mort, D. L.	Sinkinson, George	Winterton, G. E. (Leicester, Loughb'gh)
Moses, J. J. H.	Sitch, Charles H.	Wood, Major McKenzie (Banff)
Muff, G.	Smith, Alfred (Sunderland)	Young, R. S. (Islington, North)
Murnin, Hugh	Smith, Frank (Nuneaton)	TELLERS FOR THE NOES.—
Nathan, Major H. L.	Smith, Rennie (Penistone)	Mr. W. B. Taylor and Mr. Shepherd.

Question put, and agreed to.

The Orders of the Day were read, and postponed.