HC Deb 11 May 1931 vol 252 cc833-96

Motion made, and Question proposed, That a sum, not exceeding £280,507, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1932, for the Salaries and Expenses of the Department of Overseas Trade, including Grante-in-Aid of the Imperial Institute and the Travel Association of Great Britain."—[Note: £144,000 has been voted on account.]


We are inviting the Committee to consider the work of the Department of Overseas Trade and the report upon its operations because this is the only Department of State which is trying to foster and direct our export overseas trade. This is a matter which at all times is of great importance but it is particularly urgent and important at this moment. It is manifest that the work of the Overseas Trade Department is the direct complement of every effort that is being made at home to aid employment by the reorganisation of our industry and the equipment of our factories. It is clear that, from the growth of many of our industries based upon small units, the processes of organisation are difficult and will take a long time to carry out. Another object that we have in initiating this Debate is that Parliament may have an opportunity of discussing the reports which have been issued by many of those important overseas trade missions which owe their origin very largely to the initiative of the Department of Overseas Trade. Some of the recommendations which have come from these bodies are indeed authoritative, because they are composed of men representing all branches of industry, are intimately acquainted with the work and the manufactures in which they are engaged and are able to speak with responsibility and with no small measure of authority. It cannot be denied that the reports which are being made now are very serious. In some aspects they are very alarming. Although there are some encouraging features in them, it is clear that, unless they are taken to heart by those to whom they are addressed, we are not likely to be able to retain even the share of overseas trade which we have held up to the present. It appears to my mind that the work of the Department should occupy a foremost part in the programme of any Government which is professing to deal with the subject of unemployment.

It is a little unfortunate that there seems to be some evidence at least that the value of the work of the Department is not fully appreciated by those for whose benefit it was primarily instituted. The hon. Gentleman who is in charge of the Department, speaking at Oxford in the latter end of last year, referred to the remarkable fact that the services of his Department, and the valuable records which have been collected there, were taken advantage of more by the large commercial enterprises, whose resources for obtaining information were themselves very great and, indeed, highly efficient, than by those smaller firms up and down the country whose resources for investigation overseas and for acquiring information are not nearly so great as those of many of the larger and more important bodies. There is also considerable evidence that Parliament itself is not sufficiently seized of the importance of the work of the Department. Within the last few years the right hon. Gentleman the Member for Epping (Mr. Churchill) in a fitful and evanescent moment of enthusiasm for economy came to the House with a recommendation—I am not sure that it was not an edict—that the Department should be abolished. Within the last few weeks an hon. Member in one of our Debates on economy returned to that subject and suggested that, if it was not abolished, at all events its identity should be merged in some other Department of State. When we contrast the activities of our own Department of Overseas Trade with the activities of the Department of Commerce, for example, of the United States or the corresponding body in Japan, one cannot but realise what a disaster it would have been if this advice tendered to the House on various occasions had been acted upon.

The Committee would like to be assured that it is the intention of the Government that the Department of Overseas Trade shall be at least as efficient and effective, and its operations at least as widespread, as those of its counterparts in the countries of our trade rivals. We ought to have some assurance on that point. In particular, I notice that the Department of Commerce in America appears to undertake, and to have the means of undertaking, a very much wider publicity with regard to its work and the information it collects than we seem up to the present to have been able to exercise at home. When one comes to look for a moment at the operations of the corresponding body in Japan, one cannot but be amazed at the activities of the Government in assisting its traders. The report of a commission made some very interesting revelations in that respect. It may be that the methods which the Japanese Government and the Department of Commerce have adopted in fostering trade are such that we may not wish to follow. I think that they would probably be regarded as being unheard of in this country. We may remind ourselves that many things which are now commonplace and which are accepted as everyday occurrences were in their time unheard of, and we cannot afford to shut our eyes to the developments which are taking place, and the direct assistance of Governments to the transactions of manufacturers who are endeavouring to develop overseas trade. I should like in this connection, expressing the hope that our own Department of Overseas Trade is not to be cramped or handicapped by any niggardly policy, to quote from the British Economic Mission to the Far East some very significant sentences. Speaking of the Department of Commerce and Industry, that is, of Japan, they said: The Department of Commerce and Industry last year, despite a wave of economy, succeeded in obtaining funds for the establishment of a Bureau of Foreign Trade, and this bureau quickly got to work, for with its encouragement trade commissions were immediately despatched abroad under the auspices of the leading chambers of commerce or municipalities for the purpose of finding trade openings in the countries in which Japan had not previously broken satisfactory ground. They went on: In addition the Ministry of Commerce and Industry allotted last year £7,000 as travelling expenses to 13 inspectors with either technical or business experience to visit various countries to find trade openings, and of these, five were for the cotton textile trade. I am not aware of any comparable effort having been made by ourselves in this country. If I were asked to express my opinion about the Department of Overseas Trade, I should say that I am quite convinced that within the scope of its operations and within the means at its disposal, it is carrying on a work which is as efficient and as valuable to the nation as any other Department which is concerned with our trade at the present time. In particular,? welcome the setting up of the Advisory Council which is now attached to the Department of Overseas Trade. One is glad to think they have been able to gather round them the personnel of that Advisory Council many distinguished members drawn from all kinds of industry and representing all the elements which go to make up the efficient working of industry. I believe that a very valuable piece of constructive work has been undertaken, and I hope that the Secretary will be able to give us this afternoon some information as to the progress which is being made.

I pass now to what has perhaps been the most sensational, and certainly not the least useful, part of the work which has been initiated by the Department of Overseas Trade. I refer to the large number of expert trade missions which have been despatched to a large number of countries throughout the world. It is impossible to estimate the services which have been rendered by those representatives of industry, trade unions, and specialists of one sort and another who have given up their time and their energy in carrying out those arduous and exacting investigations. I also feel that any reference to this important and national work of reawakening the spirit of enterprise in our foreign trade would not be complete without a reference to the very great services which have been rendered by the Heir to the Throne. He has with an enthusiasm and an energy, I think I might say, of self-sacrifice, thrown himself into this work and has rendered a service which perhaps only he had it in his power to render.

On reviewing the subject of foreign trade missions, there are features which are not altogether reassuring. While we welcome the fact that they have been despatched, and while we appreciate the importance and the gravity of the recommendations that they have made, we cannot disguise from ourselves the fact that they are a reflection of our own shortcomings in the past. If the industries of this country had kept themselves fully acquainted, by direct representation on the spot, with the requirements of foreign markets, if all had done that which some few of the greater industries of the country have done in keeping themselves well posted as to the needs of overseas trade, we should not have had the necessity of appointing those missions. A point which we should bear in mind is, that there is only one other country beside ourselves which finds it necessary to organise those missions. It is not necessary for Czechoslovakia, for example, to send a mission to investigate the cotton trade of Cairo and Egypt. It is quite unnecessary for them to do it, because year after year a greater share of the cotton industry of Egypt is being transferred to Czechoslovakia, and the conditions therefore are highly satisfactory from their point of view. One might multiply instances of that kind. The one country which is following our example, or acting on the initiative of its own trade, which, I think, is the case, and is equipping and sending out a large number of foreign missions, in fact more than we have done, is Japan. There are—either in process or have taken place or are in prospect—no less than 26 commercial missions being sent out by the country of Japan. That is indeed a significant fact. Their case is somewhat different from ours, because they are on the look out, with a great national determination, to establish themselves in every market where they have not already a satisfactory footing.

4.0 p.m.

We shall be glad this afternoon to hear some account of what is being done and what steps are being taken by industry itself, either independently or with the assistance and direction of the Department of Overseas Trade, to follow up the recommendations which have been made by those missions which have so far re- ported the results of their journeys. In particular, one would like to know whether there are any general defects in our overseas trade technique which are reported by all those missions. From my observations, I am inclined to think that there are. From the reports which I have read, there appears to be one item which runs through every single report, and that is the item of price. It has been particularly enforced with regard to the mission which has investigated the cotton trade in the Far East. The mission reports that the Japanese cotton industry has a small advantage in every single operation of the trade, from the purchase of the cotton itself to the spinning, the weaving and everything in the factory, which, although small in itself, is in the aggregate very substantial, and is a very important matter, as it is injurious to ourselves in trying to maintain our export trade in the Far East. There, again, I would refer once more to the Japanese Chamber of Commerce, the Department of Trade. They have found there, as we have here, that there are small groups of manufacturers who are unable themselves to maintain an adequate service for developing then-overseas trade, and they have, with direct Government assistance, given foundation grants to those industries to establish overseas selling guilds. That is, indeed, a very important thing.

I am aware of the fact that our trade mission which reported on the conditions in Northern Europe for the leather trade, indicated, at all events, that a similar step on behalf of an export co-operative guild, or whatever it might be designated, to advance trade, would be very valuable to that industry, namely, the light leather trade. If we find that our competitors are establishing these methods, if we find that they are actually subsidising them from grants from the public Exchequer, we may not like it, but there is nothing to be gained by adopting a policy like that of the ostrich burying its head in the sand.

On the subject of price, it is an unfortunate fact, as I gather, that whereas the reputation of our goods overseas for quality is still unchallenged, we have an unfortunate reputation for dearness, with the result that in many places where people are looking round to buy goods, they do not even trouble to ask us to quote, because they say, "Oh, England is a dear country." Many of the recommendations and many of the grave statements which have been made by our missions which have gone overseas, are matters which are really not suitable for discussion in Parliament. It is difficult to see how Parliament can set these matters right. I think that that is particularly applicable to the question of price. On that subject, I have already quoted the statement made by the Eastern mission with regard to the case of the Japanese mills. That is a matter which can only be set right by the industry itself, and I am glad to think that the mission which made this grave report with regard to our cotton trade in the Far East was fully representative of the trade and every section of it. It is now up to them to see what is necessary to be done in order that they may at least maintain the trade, and endeavour to regain that which has been lost.

On the whole, perhaps the most serious accusation is that the traders of this country have shown a lack of adaptability and initiative, and a complete failure to keep in touch with their customers overseas. There has been brought to light, I think by every mission which has set forth from these shores, the fact that in South America, Northern Europe and South Africa we have in this country most valuable good will as traders, but that that good will is being steadily dissipated, simply because we will not take the trouble to keep it up. The very weighty report which was issued by Lord D'Abernon on his return from South America is of such importance, and crystallises this matter so effectively, that if I may be allowed to do so, I will quote one or two sentences from the report: The principal criticism of British commercial practice in the countries we have visited is our apparent incapacity to accommodate ourselves to local circumstances; we are reproached with inadaptability and with persistent adherence to what Great Britain thinks good, to the exclusion of what South America wants. Typical examples of this, to take only those of major importance, are the motor trade agricultural machinery—harvesters, ploughs, tractors, wind-mills— road-making plant.…. Our failure to capture even a small proportion of these trades may be attributed to inability to produce on a sufficiently large scale, insufficient finance, high prices, unsuitability, to South American needs, defective salesmanship—including inadequate advertisement, inadequate service, inadequate show-rooms, inadequate range of choice. Moreover, South America is not one market but several, and each requires separate study and a special organisation for sales. It is difficult to imagine a more devastating condemnation of the apathy of British traders at a time of the very greatest need, when everyone, in the interest of national financial stability and employment, should be putting forward every conceivable effort he can make in order to bring about a more satisfactory state of affairs. A few days ago I made a few passing remarks on this subject in the House, and I was taken to task by the right hon. Member for Sevenoaks (Sir H. Young) on the ground that I did not appreciate the spirit and enterprise of British traders. I did not on that occasion, nor do I on this, express any opinion which has not been expressed about the traders of this country by their representatives who have gone abroad to see for themselves what the condition of things is. One could multiply cases from one's own personal experience of this deplorable "Take it or leave it" attitude.

I notice that Lord Kerkley's Trade Mission, in reporting on the state of trade in South Africa, complain particularly of the lack of enterprise of British manufacturers in supplying anything like the necessary service to maintain continuous business connections in relation to trades such as the motor car trade, tractors, motor vehicles, radio and the like, which require a continuous after-service. They go so far as to say that no motor car or tractor should be shipped from this country to South Africa in future unless and until manufacturers are prepared to maintain an adequate service, because it condemns not merely that particular machine, but gives a bad name to the whole series of British exports to that country. It is no good buying a British tractor, or whatever it may be, if you want a spare part and cannot get it. Only the day before yesterday I had a few words, quite by chance, with an acquaintance, an Englishman, who happened to own an English motor car in Cape Town. He had a breakdown, and wanted some spare part. It took him a great deal of time, trouble and research to find out where it was possible to obtain a spare part in South Africa. Eventually, he found someone in Durban who was alleged to be an agent of this particular firm, and, after three weeks, he succeeded in getting a spare part, which turned out to be second-hand and would not work at all.

These are the things, small in themselves, which, in the aggregate, are of very great importance in the establishment of our British trade. Take the oft-quoted incident of the Peruvian spades. An Englishman there saw a very large programme of public works being carried out by Indian workmen, who came down from their camps and engaged in this work for three months, and, as part of their contract, were entitled to take away at the end of that period the spades with which they had been working on the job. In these circumstances, the contractor out there did not want a spade which would last for three years, but one which would last for the three months and just a little longer, so that it might be of some service to the man who was taking it away. The Englishman seeing the possibility of doing trade in this particular article, wrote home for quotations, and, in due course, he received a magnificent spade, far better than anything that was being used in Peru, and very much more costly. He, therefore, obtained a specimen of the spade that was required and sent it back to Sheffield, or wherever it was, and waited for the reply, which came in due course to this effect: "We are sorry; we do not make spades of this kind." In every country you will find accumulating evidence of lack of energy and lack of desire to find out what our customers want.

Then there was the almost incredible statement made by the Master Cutler after the very valuable tour of investigation which he and some of his friends made into the conditions of the cutlery trade in South America—a very important mission, and one which will bear important fruit in increased business for Sheffield. The Master Cutler, however, is reported to have said, without contradiction—the statement sounds almost incredible—that from the end of the War down to the time his mission went out, some 10 or 11 years—[An HON. MEMBER: "16!"]—there had not been one representative of the Sheffield trade to investigate the condition of things in South America.

These are some of the salient matters which have been reported by the trade missions which, under the direction of my hon. Friend's Department have been doing such exceedingly valuable service. If I were asked to state what was probably the most abiding benefit which has been derived by the institution of the League of Nations, I would say, not that it lay in the fact that it has prevented this or that problem from landing countries in war, but that, in place of the long-range correspondence between countries, the old formal exchange of compliments and correspondence through the embassies and diplomatic channels, it has substituted direct and personal contact, which is the only means by which complete confidence can be engendered between nations.

Exactly the same is true of trade. No spectacular trade missions can in any way replace the active participation of the principals of our businesses, their constant visits, and so forth, to the actual customers they are seeking to supply. Some of the points raised by missions oversea are of such grave and serious importance that they can he solved only by the industries themselves, and it is necessary that they should act—and act quickly—because they are still losing ground. They should also act quickly for another reason. If on the return of a mission it is announced that steps are to be taken to produce cheaper goods, the reaction, in the mind of an overseas trader, is this: "If these people are going to produce cheaper goods in weeks or months, I am not going to send my orders now." On every ground, it is important that the recommendations should be acted upon with all possible speed. I hope the Secretary for the Department of Overseas Trade will be able to give us an account of what is being done by the industries to tackle these problems, and if they are not doing it, perhaps he will say what further steps the House can take to help in that direction. There are some things which concern industry alone which we cannot discuss adequately here, and there are some disadvantages, geographical and otherwise, which we cannot overcome, but in the majority of the instances that I have brought before the House there is no reason why they should not be overcome fairly speedily, and that is clearly the opinion of the commissions which have reported.


May I associate myself with the gracious words that were used by the hon. Member for East Birkenhead (Mr. White) in connection with the magnificent services which were rendered to our export trade by His Royal Highness the Prince of Wales? Truly may he be described as the greatest commercial traveller and the most powerful advertising medium that the world has ever known. We are grateful to him for the splendid assistance he so repeatedly gives to the trade and industry of this country.

We are not always pleased with hon. Members who sit below the Gangway on this side of the House, but to-day we may all agree that they have opened up a very useful discussion. The occasions are far too rare when we have an opportunity of discussing in this House the export trade of the country, which is such a vital part of the total trade of the country so far as the welfare of our people is concerned. As one who has occupied the position at the Department of Overseas Trade which is now occupied by my hon. Friend opposite, I hope that I shall be able to appreciate the difficulties which daily confront not only my hon. Friend but the members of his staff. I do not desire to add to those difficulties in any way, and I hope that anything that I say this afternoon will be constructive rather than destructive in character. The hon. Member for East Birkenhead has spoken about certain missions which have left this country to carry out investigations in other parts of the world. He mentioned briefly the British Economic Mission which recently visited the Far East to investigate trade conditions there. The chairman of that commission was Sir Ernest Thompson, and certain other members of the mission were well known to me when I was at the Department of Overseas Trade. They all possess great qualifications, fitting them eminently for the important work which they undertook. Not a single member of that commission can be described as a pessimist or an alarmist. They all realised their responsibilities to the country. Not one member of that com- mission could ever be found guilty of exaggeration in any way, yet in spite of those qualifications, which I have mentioned deliberately, they have reported in a very alarming way on what they found in the Far East. What was the main conclusion which the commission reached? They say: Should the decline in the export trade of Great Britain continue much longer at its present alarming rate, the result must soon be evident in bankruptcy and disaster at home. That is a very serious statement. What are the suggestions contained in the report for avoiding disaster at home? Very few of the suggestions are novel in character, but coming from a commission of that kind, they will undoubtedly carry much weight. One of the first observations to which I would refer in the report of the commission is this: The production and all other costs must be reduced until the prices of British goods reach once more a competitive level. They go on to say: That such a policy will require sacrifices by all classes of the community in Great Britain, there is no doubt. Almost every Member of this House has heard that sort of thing before. We have all to make our sacrifice, but what are we doing to assist that policy? What is industry doing at the present time to reduce prices? I know what industry is doing, and I know what every individual in the country is doing—waiting for somebody else to make the first sacrifice. Cannot the Government and the various local authorities in the country set an example? Cannot the first step be Governmental economy and local economy? Rates and taxes must be reduced if we are to compete in the overseas markets of the world: Taxation hangs like a millstone round the neck of industry. Who was it who used those words nearly two years ago? The Chancellor of the Exchequer. What has he done since? He has increased taxation and made it still more difficult for industry to hold its head above water. Let the Government and the local authorities give a lead. What about the employers? The hon. Member for East Birkenhead has told us of the many ways in which employers could help to improve the existing conditions. I would suggest a great deal closer co-operation between employers. I would suggest combined selling agencies overseas. The hon. Member has told us of some of the difficulties in connection with the purchase of spare parts overseas. I would suggest that there should be combined selling agencies where an individual firm cannot afford to set up an agency of its own. I would also suggest that business people should be a little less secretive than they have been in the past about their own business. In these days of fierce competition it would be much more helpful if each manufacturer did something to acquaint even his competitors with certain methods of trading overseas, in order that all could reap the benefit of the information so supplied. There ought also to be greater effort to adopt rationalisation in industry.

All have to make their sacrifice. What about the trade unions? We have to face facts. There is no good shirking an issue of this kind. The trade unions must move with the times. Their rules and regulations are far too rigid. If you take the cotton industry alone—with which, thank goodness, I am not directly associated, and therefore I can speak more frankly than otherwise would be the case—does anyone imagine that we can go on for ever working only four looms with one weaver, when in other countries one weaver is working 10 times as many looms?


A different type of loom.


Why cannot we go over to the same type of loom? One of the difficulties with the trade unions to-day is that they are too rigid. Their regulations are much too rigid. The same sort of fight took place—of course, I do not remember it myself, but I have read about it—when we changed over from the hand loom to the power loom. Courage was required in those days to make the change, and we must have courage to-day, otherwise the country will never be able to compete with foreign countries in the production of goods which we ought to produce and are anxious to produce in Lancashire just as economically as in other parts of the world.

The report of the Economic Mission to the Far East also said that we have too little publicity. That was referred to by the hon. Member for East Birkenhead. This is what the Commission say about publicity: It is a common complaint that British manufacturers do not give attention to proper advertisement. The report further says: British publicity is stated to be far behind the times, and ineffective in comparison with that of our competitors. The hon. Member for East Birkenhead told us what is contained in the D'Abernon Report with regard to publicity. In that report it is stated that there was inadequate advertisement. The Secretary for the Department of Overseas Trade is also chairman of the executive committee of the Travel Association of Great Britain and Ireland, and he knows what can be done by co-operative effort to attract more visitors from overseas. Films, broadcasting, co-operative newspaper advertising and many other methods have succeeded, by co-operative means, in attracting more visitors to this country, thereby increasing our invisible export trade. I suggest to the Minister that there is no reason to suppose that such co-operative efforts could not be extended to other industries in addition to the travel industry. There is no reason to suppose that if such co-operative effort took place, orders could not be secured, thereby increasing our visible export trade.

The Travel Association is in a position to extend its co-operative efforts to include other industries, in addition to the travel industry. The Articles of Association lay it down as our duty to stimulate abroad the demand for British goods, in addition to stimulating the demand for British services. I hope the Minister will advise our traders to consider this co-operative method of advertising to make their wares better known abroad than they are at the present time. They will be able to obtain advice and assistance from the association I have mentioned. Co-operative advertising is much more attractive because it is bolder; it is more successful because it is more attractive; and further it is much cheaper than advertising which is obtained by individual effort.

I must say a few words in connection with our export trade to India, and probably it will be more opportune to do so now than during the Debate on India which is to take place on Wednesday. May I say at once how much I regret the illness of our chief Trade Commissioner in India. I know Mr. Ainscough to be an exceedingly able and conscientious man, and it is a great pity that he should be stricken down with illness at this moment when his services are so much required. I hope the Secretary of the Overseas Trade Department will convey to him the wishes of this House for a complete and speedy recovery of health. The Trade Commissioner has four assistants in India, two at Calcutta and two at Bombay. It is reasonable to suppose that the Secretary of the Overseas Trade Department is frequently receiving report" from these assistants as to how the condition of affairs in India affect our export trade, and especially our Lancashire trade. May I ask whether the hon. Member can give us any news this afterooon in regard to the effect of the boycott of our goods and the result of picketing in India?

Many hon. Members on this side of the House, including myself, have asked frequent questions not only of the Secretary of State for India but also of the Overseas Trade Department, but neither of these Ministers appear to desire to give us much information. The Secretary of the Overseas Trade Department has told us nothing in reply to our questions. Is it because he knows nothing, or is this another example of the secrecy to which the House has become accustomed to receive from this Government? Open diplomacy was once the faith and creed of hon. Members opposite but it was only their faith and creed when they were sitting on this side of the House. Now they have got into a padded room and appear to be muttering to themselves. Not one word gets out of that padded room to the outside world, and not a soul on this side of the House is qualified to enter. Has the Secretary of the Overseas Trade Department taken any action to combat the boycott in India in the interests of our export trade? Surely the boycott of British goods, even if it is only economic in character, which I doubt, does not mean that we are no longer to advertise our own goods in India. Has the hon. Member thought of instituting a Press campaign or a widespread distribution of leaflets to the people of India pointing out the value of our manufactures? Has he thought of the dissemination of information in any form to prove to the masses in India that the boycott is not in their own interests, because its effect means that they will have to pay more for the goods they wish to buy? Has he thought of these things?

Surely, if the boycott is really economic in character, surely, if quiet and peaceful persuasion is the only method to be used to influence the purchase of Indian goods in India, we too should be able to persuade in the same way. It may be difficult, no doubt it is, for one single individual to advertise in that part of the world, but I suggest that a combined effort under the auspices of the Department of Overseas Trade would be of great assistance. I submit that there is great value in that part of the world in cooperative advertising. It is quite clear that if Mr. Gandhi gets has own way Lancashire will not suffer alone. He has already told us plainly and clearly that all British capital and vested interests in India are to be sacrificed. Foreign traders are in future to confine their activities to the ports. Is the Government going to capitulate completely to Mr. Gandhi without any struggle at all on behalf of the export trade of this country? The Secretary of State for India may claim that his chief concern is India. May I point out that the Secretary for Overseas Trade cannot make that excuse?


On a point of Order. Is it in order to discuss the position of Mr. Gandhi on this Vote?


I have followed the argument of the right hon. Member, and, if I had thought that he was discussing the political position of Mr. Gandhi, I should certainly have called him to order. He was getting near the border line, but I understand he is urging the Overseas Trade Department to use its powers to advertise British goods in India.


The right hon. Member for Chorley (Mr. Hacking) has already dealt with taxation. Would it be possible for you Mr. Deputy-Chairman, to give us an idea as to the scope within which we may discuss this matter?


I do not quite understand what the hon. Member means about taxation, but, so far as India is concerned, I could not allow anything of a political character to be discussed under this Vote. The only things that can be discussed upon this Vote are matters for which the Overseas Trade Department are administratively responsible. I could not allow any discussion on the general question of taxation.


I am glad to know that so far I have not transgressed. I do not intend to pursue that question at the moment, but I thought I was entitled to point out the very serious effect of the situation in India on the export trade of this country. The Secretary of the Overseas Trade Department, as he knows very well, is responsible for the export trade of this country, it is his responsibility alone. He, at any rate, cannot claim that he is responsible for looking after the interests of India. We look to him to justify his position in regard to our export trade not only to that country but to every country in the world. "We expect him to fight to the last ditch in the defence of our trade to overseas countries. If he is feeble in his efforts, if he is vacillating and inconstant in his endeavours on behalf of the export trade, if he does not use every ounce of energy to get every kind of business, then not only will the Members of this House as individuals but the country as a whole will rise up and in no uncertain voice tell him and the Government, of which he is so important a member, that they are no longer worth their salt.


I should like, in the first place, to associate myself with the remarks of the hon. Member for East Birkenhead (Mr. White) and the right hon. Member for Chorley (Mr. Hacking) in regard to the great work that has been done by His Royal Highness the Prince of Wales. I can only say, in my position as Secretary of the Overseas Trade Department, that the speeches His Royal Highness is going to deliver to-night in Birmingham and to-morrow in Manchester will be of the greatest interest to the whole of our industries, whether they are specially connected with the export trade or whether they are only interested in the home market. I hope that what His Royal Highness has to say may be noted because the times through which we are passing are so critical and so important that if so valuable a contribution as that which I have no doubt will be the speeches of His Royal High-ness is disregarded it would indeed be a misfortune.

I must thank the right hon. Member for Chorley for what he has so kindly said about Mr. Ainscough, our representative in India, and I will certainly convey to him the message which the right hon. Member has sent. The right hon. Member may be interested to know that I have had the advantage of seeing Mr. Ainscough since he came to this country and so far as the policy of this Government is concerned which is specially related to overseas trade I can assure the right hon. Member that we know Mr. Ainscough's views on the policy which he thinks is worth following. So far as India is concerned the India Vote is down for Wednesday afternoon and my right hon. Friend the Secretary of State for India will then deal with that question. I only propose this afternoon to give a little information to the Committee on the India question which may satisfy the right hon. Gentleman and prove that for once we have opened to some extent the closed door. I did not quite understand his reference to himself and his colleagues, but it would appear from what he said that those who sit on the benches opposite are, in the right hon. Gentleman's opinion, quite incapable of taking office. Indeed, his remarks were such that I began to wonder whether he was holding the views of the supporters of the Government in regard to Members of his own party.


I was talking of a padded room, and I said that hon. Members on this side of the House have no right to enter a padded room.


I am glad the misunderstanding has been removed, because I have always understood that one advantage of having an Opposition is that it should be able to take office in case the Government were defeated. I have had the advantage of having received from India a despatch giving the latest information in regard to the position in that country. I would first of all read a brief resume which I have had prepared. According to telegraphic reports received this morning from the offices of the trade commissioners at Calcutta and Bombay, the stocks of British piece goods, etc., in Eastern India are low, but only small clearances have been effected during the past month. Owing to her low prices Japan is able to compete but sales are reported to be below normal. Attention is also drawn to the serious fall in the purchasing power due to the low prices obtained for Indian produce. In Western India there seems to be but little movement of stocks, and here again there is inquiry for Japanese piece goods, due, it is reported, to their cheapness, the general economic depression being reported as the greatest retarding factor. I would like to draw attention to those last few words. It has often been overlooked that the general trade depression is having a profound effect in India. Those who listen to the arguments sometimes adduced by hon. Members opposite about the position of trade in India might imagine that it was entirely due to the boycott. As a matter of fact, as this telegram shows, the greatest retarding factor is the trade depression through which India has been passing, quite apart from political considerations. When there is a trade depression, then it is that the chief Japanese goods have an advantage over the more highly priced Manchester goods. I am also in possession of a detailed report received on Saturday morning by air mail concerning the Indian Export Agency scheme. It is understood that the proposed company has not yet been registered, and so far as can be ascertained little or no progress has been made with this project. In fact the view seems to be held in some quarters that it is doubtful whether anything will come of the scheme. I am glad to be able to state that an advance copy of the report on Japanese bleached cotton piece goods in India has just been received by air mail, and that the samples are due to arrive some time next week, after which steps will be taken to advise the trade of the position in regard to competition in this line. One or two figures which may interest the House. Since December, 1930, the exports to India from the United Kingdom have shown some tendency to increase, though the March figures are below those of February. In December the exports to India of cotton piece goods of all kinds had fallen to 20.3 million square yards. In January this figure had increased to 28.9 million square yards, and in February to 36.7 million square yards. Exports during March amounted to 34.7 million square yards, and during April to 39.2 million square yards. The figures, of course, are not very large, but on the other hand it, is satisfactory to notice that in December the figure was 20.3, and that last month it was 39.2 million square yards.


Has the hon. Gentleman the figures for the corresponding months of last year?


I have not them by me, but if the hon. Member will put a question on the Paper no doubt I can supply them. I want to turn from the question of India to say a few words, first of all, in regard to the work of my Department. I am not sure whether this is not the first time that the Vote for the Overseas Trade Department has ever been asked for in the history of the House. I am not sure that that is not a reflection on hon. Members opposite, and on those who sit on this side of the Committee who have recently been in opposition. I am taking the opportunity of saying a few words, not only about the work of the last 12 months, but of going back to the time when I first became Secretary of the Department. In the figures that we are placing before the Committee this year the total expenditure is £567,000. Apart from the expenditure incurred on our behalf by other Departments the figure is £519,000. We received Appropriations-in-Aid of £95,000, so that the net cost is £424,000—a decrease of £78,000 upon last year. That decrease is really mainly explained by one factor. Our estimates for exhibitions this year amount to only £20,000, compared with £82,000 last year. Last year, of course, we had to bear the main cost of the Antwerp Exhibition—£72,000 in that year. That explains £62,000 out of the £72,000 reduction. £10,000 is also accounted for by a reduction mainly due to drop in bonus of the staff. In closely considering the figures it is also to be noted that the reductions in staff are explained by the fact that the work which we have undertaken for the Empire Marketing Board in the past will not be undertaken to such a large extent this year, because the Empire Marketing Board are reducing by £15,000 the amount of money which they are contributing to the Overseas Trade Department for special work done on their behalf.

I now turn to the question of our representation overseas. When the present Government took office in June, 1929, we had 30 commercial diplomatic officers. In May of this year the number had been increased to 40. There were 14 trade commissioners in June, 1929; in 1931 they had been increased to 19. A special commissioner has also been appointed in connection with the new development council which I formed for overseas trade. British commercial officers have therefore together increased from 44 to 60. At the same time we have increased the number of assistants to trade commissioners and assistants to commercial diplomatic officers. In many places it was the custom to have a chief clerk who, in the absence of the head of the office, naturally had to take his place. The appointment of these chief clerks at a large number of posts was made by the officer in charge of the posts.

It has been felt that it was essential, in order to get the full benefit of their services, that these chief clerks should be put on the established staff and the appointments made by the head office in London. In view of the fact that the period during which an officer might be away from his post, after allowing time for him to come to England and to return, is considerable, it is most important that those left in charge should be fully able to undertake the duties. That reorganisation has been going on and accounts for the fact that to-day we have 16 established assistants to trade commissioners instead of 12, and that established assistants to commercial diplomatic officers are nine, whereas previously there was none. When I say that the total of our representatives overseas is 85 compared with 56, allowance has to be made for the fact that in the case of about 14 of them it is a mere change in name and status.


Do we understand that this is largely in the nature of a promotion of chief clerks?


Largely in the nature of placing the chief clerks permanently on the staff of the Department, and it is understood that in future the appointments will be made from London. In that way a closer connection will be established between them and the Government at home.


Do we understand that chief clerks are to be commercial diplomatic officers?


They are chief clerks either to commercial diplomatic officers or to trade commissioners—commercial diplomatic officers in the case of foreign countries and trade commissioners in the case of our own Dominions. I would like to refer to a matter that was mentioned by the hon. Member for East Birkenhead in his speech. He mentioned the number of officers in the United States service. As a matter of fact, the number of officials, compared with the 85, would be in the nature of 162, because the posts in the overseas service of the United States are much more largely staffed than those that we have; but if we take the different cities all over the world where the representatives of the United States Government are to be found, and compare the posts with our own and those of the Canadian Government, we find that in 1931 the Canadian Government had 35 posts, the United States Government had 59 and the United Kingdom had 1S. We, therefore, are 11 below the United States and 13 above the Canadian Government.

Sometimes possibly the amount of representation may be criticised by those who know least about it. I am not referring to Members of this Committee, but to critics outside. There is a very interesting illustration in regard to one of the new posts, showing the useful work that can be accomplished by an overseas afficer. I refer to the appointment of Mr. Jerram to Helsingfors, in Finland. He had been there only a very short time when in March the Finnish Government decided to order some 15 aero engines. Only one British engine was under consideration. Owing to strong competitive price-cutting by United States makers, it seemed practically certain that the order would be placed for an American engine. At this stage Mr. Jerram, the Commercial Secretary, took up the matter personally with the Finnish Minister for Foreign Affairs and the Minister for Trade and Industry. I need not go into particulars, but the result was that in the case of this order, which it had been expected would go entirely to the representatives of industry in the United States, for 13 of the engines the order was given to Britain, for five engines of British type although being made abroad were to be supplied, and in four cases the order went to the United States. That is an illustration of a kind which, perhaps, it is not always easy to give so completely—an illustration of what our overseas representatives are so constantly doing for us. When you consider what an order of that kind means in pounds, shillings and pence, you begin to appreciate how very well justified the Department is in this expenditure.

5.0 p.m.

The next point I want to mention is about the Overseas Trade Development Council. In order to assuage the feelings of hon. Members opposite, who are always alarmed by the mention of a new committee or council, I want to assure them at once that though I appointed this new Council I at the same time exterminated an old one. It seemed to me that one of the things specially needed in a Department like the Overseas Trade Department was that we should have a small nucleus of highly qualified men, constantly thinking out the whole problem of our export trade, and that we should combine the official knowledge which was in the Department and also in the Board of Trade and other Government Departments, with the knowledge of a number of business men. In April last year I formed the new Overseas Trade Development Council, and I was fortunate enough to secure the assistance of a number of business men who kindly agreed to serve either upon the council, or upon a panel of members willing to attend when subjects of special interest to them were being considered. I also secured the support of some of my hon. Friends connected with the trade union movement, and representatives were also found from the co-operative movement, and it is under the guidance of that council and with their assistance that a number of the missions already referred to have been sent out to different parts of the world.

I wish to make one exception to that remark, and to remind the Committee that the D'Abernon mission had already been appointed by the right hon. Gentleman who was my predecessor in office. That mission was just leaving this country at the time when the change of Government took place, so that the credit for the formation and appointment of the D'Abernon mission belongs to the right hon. Gentleman, although the subsequent work connected with the report of the mission, on its return, came to the Department during my period of office. However, we followed the example so set by our predecessors with the appointment of the three missions already referred to. I should mention that the British Economic Mission to the Far East was composed of two sections—one, which I may call the main section, was representative of various industries, and the other was composed entirely of representatives of the cotton industry and was practically financed by the cotton industry in this country. Two members served on both, thus forming a link between them. The report from which the hon. Member for Birkenhead was quoting was, I think, the report of the cotton section. The main report is only in print, and will be published in the next few days, and, while the cotton report is of special interest to those connected with that industry, I think the main report will be of profound interest to Members in all quarters of the Committee who are interested in trade in any form. I hope that it will shortly be in their hands.

There is one thing which I would like to say at this stage with regard to these missions and investigations. It may sometimes be questioned whether it is advisable or not to send out so many of them, and it may also be asked what is their value. We have approached other industries besides those which have sent out missions and investigations, and we have been told by them that they know practically all about certain countries with which they are concerned. I am now convinced, however, that nobody knows everything about any country, from the fact that some of those who have been out on these missions and investigations have returned, amazed to find how much there had been to learn even about countries which they had visited many times before. I think that it is partly due to the fact that the business man, visiting a country in the ordinary course of his business, usually has a number of his own clients to see and also possibly a number of new people on whom he wishes to call, and his time is so fully occupied in his own special work that he has no opportunity of making a broad survey of the conditions and needs of the country. On the other hand, when such a man is sent out with two or three others on a mission of this kind, they are not definitely out for orders. They are it is true, thinking of how orders are to be procured, but not in the sense of asking for orders at that time. They are making a broad survey of the conditions, and it is very interesting to find that when they go out in that way, they discover the existence of fundamental principles which they did not realise previously.

I believe it is correct to say that the Scottish Woollen Mission which went out to the United States and returned only a few days ago, discovered that they had entirely failed to appreciate the fact that the approach to some of the great markets of the West should be made in quite a different way from that adopted by the industry at the present time. I think if it is only to realise the importance of a factor of that kind, it is worth while to undertake the small expenditure of money involved in these investigations. There is one other fact which is often overlooked, namely, the advertising value of missions of this kind. Mr. Wilson, who was Master Cutler of Sheffield, said he thought that the cutlery industry of Sheffield would have had to spend something like £20,000 in South America to procure an advertising benefit equal to that which had been gained by the visit of the mission, the total cost of which was only about £3,000 or £4,000 altogether.

I need not weary the Committee with details of other investigations which have taken place, but I would like to point out to hon. Members that representatives of my Department have gone to Scandinavia with representatives of the boot and shoe industry, as well as with representatives of the leather industry. These small investigations, carried out by one or two members of an industry accompanied by a representative of my Department, have been most satisfactory, and the representatives of industry have told me on their return how much they appre- ciated the help which their industry received in this way from the Department. They had never realised the help that could be given by the Department until they had had the experience of travelling on one of these investigations, with a representative of the Department. It meant that time was saved, and that, when they reached certain places, the representative of the British Government there was aware that they were coming, and that in many quarters they were received in a different way from the way in which they would have been received had they been travelling in a private capacity. The fact that they were travelling with a representative of a Government Department opened many doors to them which would otherwise have been closed. The only wonder to me at the present time is that in view of the success of these small investigations I have not received many more requests from other industries for similar investigations.

The hon. Member for Birkenhead has already quoted some of the criticisms made in the reports of these missions. We are always bound to be told, as the hon. Member said, that if we repeat these criticisms we are in some way running down British trade. I do not feel that it is any advantage to be deterred from criticism by fears of that kind. I believe it is far better that we should recognise on the one hand the great qualities of British industry—later on I shall have something to say upon our complete failure to let the world know the greatness and excellence of our industries—and that on the other hand we should realise in view of world conditions how imperative it is that we should appreciate where our weakness lies in order that we may rectify it, and take advantage of the great change which must inevitably take place as soon as the present depression has expended itself. I do not want to repeat what the hon. Member for Birkenhead has said but I wish to read to the Committee a few lines from the report of the South African Mission: If we are critical of many of our manufacturers and exporters, we would emphasise that we are so because we have received much evidence which was freely critical of the methods which they adopt. We are, of course, aware of the fact that there are many United Kingdom firms trading with South Africa to whom such criticism does not apply and who are, in every way, highly efficient. The large proportion of the trade which we hold affords ample proof of this fact. Bearing that statement in mind, I should like now to read two or three of the other criticisms offered by these missions. I shall not read the passage from the report of the D'Abernon Mission which has already been quoted by the hon. Member for Birkenhead, but I would like to give the Committee this statement which is also from the report of the South African Mission: Again, we met with criticism as regards the type of goods (as distinct from their quality) which we endeavour to sell. We were told that many United Kingdom exporters continue to attempt to sell their standard lines instead of selling what the market wants. In the export trade adaptability meets with a generous reward. The same report also says: Much evidence was submitted to us to the effect that our failure to increase our hold upon this market is because we do not know enough about the markets in Southern Africa, we do not send enough skilled men out to study the conditions, we do not sufficiently support our local representatives, and we fail to advertise upon the scale required. I am now going to read an extract from the report of the mission to Egypt which will, I hope, be available in a week or two. Hon. Members will recall that this mission was led by Sir Arthur Balfour, and therefore I should like to quote something of what they have to say in reference to the position in Egypt: As a nation Great Britain does not appear to realise the need for general advertisement, except by constantly advertising that our trade declines and that our men are out of work. We can with equal truth advertise that we are by far the greatest manufacturers for export in the world, that our people, by the excellence of their work, maintain themselves on a very high standard, that our education is the best for boys and girls, that our women show the world what women can do, in peace and war, that our cloth, our machinery, our locomotives and our ships are the best, and that we hold the world's speed records on land, on water and in the air. It seems to us that we are more likely to recommend British wares and to create the right commercial atmosphere by telling the world how efficient we are than by groaning. There is also another remark made by the Egyptian Mission evidently when in a more critical frame of mind, but, before passing to that I should like to read these few lines from the Sheffield Mission report: It is, however, in our opinion more to our serious neglect of the South American market than to any other cause that our formerly very strong position has been so largely lost. It seems to me a most extraordinary thing that a man who has been selected by the cutlery industry of Sheffield to be the Master Cutler, and who may, therefore, be presumed to be recognised as one of their leading business men, should have come back from that tour of South America and made such a criticism of his own industry. It indicates that at any rate there are fields which we have to explore. I do not wish to follow the right hon. Gentleman, as time would not allow, in reference to some of the remarks which he made regarding the question of price, but the Egyptian Mission, like all the other missions and investigations, have referred to it as a question of supreme importance. The Egyptian Mission says: A complete overhaul of our cost of production is more than due. We feel strongly that there is no time to be lost. This can only be done by the co-operation of the State, financiers, employers, trade unions and the workers. The other heading under which criticism of our methods is to be found in almost every report is that of marketing and salesmanship, and I may mention a few special cases in this connection. They make reference to the fact that, although the Government are spending something approaching £400,000 to £500,000 on the Department of Overseas Trade, and it is therefore to the benefit of industry in this country, it is amazing to what a limited extent it is made use of by business firms. As I have said constantly in speeches that I have delivered in the country, it is one of the most extraordinary things that the big combines and the big business concerns use us almost more than the smaller men, though one would naturally have expected that the smaller firms would have been more in need of our information than the large business concerns, which have great sources of information available to them.

The hon. Member for Birkenhead referred to the question of the need of expert representatives of industry oversea. That is a question that has been before the Development Council. Our feeling is that this is a thing that ought to be done by the different trades. I believe that in the United States the custom is for the Government Department to engage, it might be, a man in the cotton or textile industry, take him out of that industry for four or five years, and ask him to make investigations in certain lands in regard to the industry in which he is specially an expert; and, at the end of that time, he will return again to his industry, but meanwhile he has been a representative of the Government. I am not sure that in this country that method would be an easy one to follow, but it seems to me that many of the great trades might very carefully consider whether it would not be advisable at any rate to make an attempt in some countries to have a special representative who would be travelling on their behalf and watching over the interests of their trade.

The right hon. Gentleman also referred to the question of group selling. I believe that industry in Britain will have to realise that if we are going to attack the different markets of the world, we shall have to have our traders represented, not by what I might almost call a disorganised horde of representatives in some cases and few in others. They are never going to secure the best terms for this country unless in some way they organise for co-operative selling overseas. I remember the case of one deputation which came to our council and seemed to suggest that it was an act of God that there were about 200 of them in certain parts of the world and only about five American firms in competition with them. I can only hope that by now they have discovered that acts of God of that kind can be cured by human agency.

There is another matter which is referred to constantly, and that is the need for publicity. As a matter of fact, although it may be thought, in these days of newspaper propaganda that no country suffers from bashfulness and modesty, I am convinced that this country is far too modest. One of the representatives of the mission that went to Egypt informs me that the fact that Great Britain holds the speed records in the air, on land, and on water was quite unknown to the Egyptian people. He said that if these records had been held by any other country, they would have taken good care to see that it was widely known in the Press of the country concerned, because while it may be looked upon partly as a sporting event everybody fully realises that it is a great testimonial to our industry and to the skill of our workers, and that, however able the man who steers the machine may be, if at the crucial moment the machine failed, there would be no record at all. Publicity will have to be faced by this country if we wish to assure our position in the world, and publicity connected with trade is a most essential matter for consideration to-day.

Then there is, I am convinced, the need for finance and trade to be linked together. I have referred to the matter in speeches in the House and in the country. It is a very difficult problem, but the complaints made are so constant that I believe there is something that seriously needs investigation. It may be due to the fact that in the past our great industries were so successful and wealthy that naturally they were able to count upon themselves for the necessary financial support that they required, but to-day disaster has fallen upon those industries, especially those connected with iron and steel, textiles, and coal, and we see that industry, if it is once again to be reorganised and placed upon a sound footing, will in all probability have to have financial assistance. It is an interesting fact—and I do not know whether hon. Members have noted it—that the reorganisation of industry in Germany was largely carried out on the initiative of finance, and that indicates how very close together in Germany finance and trade are. I believe that if finance and trade took up these problems and thought out the difficulties, it would be a good thing. It is certainly mentioned in some of our reports.

I want to say a few words in reply to the hon. Member for Birkenhead about what has been done with regard to the recommendations of these missions. I think it must be realised by all of us that with regard to many of the things which are recommended, no Government of course, could possibly do anything beyond making them known to the industries concerned. We always attempt, and we are attempting to-day as soon as the members of a mission come back, to see that they have meetings in different parts of the country, and I have, with representatives of the missions, visited a number of centres where they have kindly invited representatives to address Chambers of Commerce and other gatherings of that kind.

If I may take an illustration of the way in which work ought to be followed up, it is that of the D'Abernon Mission, sent out on the initiative of the late Government. We find there the realisation of a need. When we were sending the mission, business men in the Argentine were moving in the direction of the exhibition which has now been so successfully held and to which the Government of this country contributed by putting up an exhibit of their own at a cost of about £22,000. We also realised the great opportunity for the promotion of aircraft in South America and it was for that reason that the "Eagle" was sent from this country, costing the Department £8,000. The Development Council interviewed some of those specially connected with South America, and it was while representatives of the Sheffield cutlery industry were talking to us about the prospects of the cutlery industry in Sheffield that one of our members made the proposal to the Master Cutler that he himself should go to South America, so that the decision of the Master Cutler to go there was the direct outcome of our follow up methods in regard to the D'Abernon Mission.

A smaller point was that the cable rates, which were criticised by Lord D'Abernon and his colleagues, have been considerably reduced. They also made representations in regard to our representatives in that part of the world, and since then three additional posts in the commercial diplomatic service have been filled, being one at Bogota, one at Rio, and one at Buenos Ayres. Then, in regard to the other missions, we have, as I say, in all cases either had or are going to have meetings with the members so that the trades may be informed of what the delegations have found. We have also had meetings with the chambers of commerce in various parts of the country.

One of the results has been that the boot and shoe industry have already, I think, taken action in regard to group selling in Europe; the formation in the leather industry of an oversea trade com- mittee to consider the same point is another result; in Sheffield a special section of the Chamber of Commerce has been formed to consider the South American question and the problem of group salesmanship; and exhibitions have been held in Manchester and Sheffield. I may say to the hon. Member for Birkenhead that I entirely agree with what he said that the important thing is as to how far we are going to follow up and try to see that the recommendations of the missions are carried out; and everything that my Department can do to help we shall attempt to do, but I think he will agree with me that finally the result really must rest in the hands of industry. These criticisms have been made not by representatives of the Civil Service, but by business men, and in most cases men who are the leaders in the various sections of industry that they represent. If industry ignores what they say, the responsibility must rest upon industry. I can only myself take this opportunity of expressing my thanks to those representatives of industry who have given up a great deal of time in going on these missions, and to the business men who have helped on the Oversea Trade Development Council and to my hon. Friends who represent Labour and who have also given me invaluable assistance at the council's meetings.

There is only one other thing that I would like to say in conclusion. As I have said before, we are passing through a great industrial crisis. We see the changes that are needed, if industry at home is to be reorganised. I think it was the right hon. Gentleman who said that what was needed was that these changes should take place as speedily as possible. That is the view of Sir Ernest Thompson and those who have been investigating the position in China. We cannot forever be discussing the action to be taken with regard to the reorganisation of these industries and in the same way, with regard to oversea trade, we have to recognise to-day that we are facing quite a different problem from that which those who represented industry had to face in the days before the War. We are facing a world competition such as our fathers never thought of and never knew. Large numbers of countries are competing with us for trade which once we so easily held. We can only hold it to-day by adopting new methods and by being constantly ready to change as we see the changing needs around us. What is equally essential as to be absolutely informed upon those markets in which we wish to make headway.

I think too that these missions have shown us that the export trade of this country is not coming to an end. I believe that the world will find an expanding market as the years go on. I think the South African Mission has shown us—and that perhaps is a thing that we do not realise—that the great coloured races will increasingly be demanding more and more of our goods. At first they are wanting something which may not be quite of the quality that this country has usually given, but we have to consider whether we can supply something which we may think is cheap and may even rather contemptuously look at to-day. When hon. Members see the report of the Far Eastern Mission, I think that it will satisfy them that one day the great eastern nations will become large purchasers of the goods of this nation. China will ultimately desire to be developed, and the nation that will develop China is the nation that will be prepared to enter into that vast field, when, under more stable government and with some of their internal difficulties removed, the people of China are able to express their desire for a greater measure of comfort with many of those necessities of life that the people of this country take it for granted are essential for them. So there is no need to despair of our export trade. So long as we are prepared and equipped, when the change in the great world tide takes place, with a machine that is absolutely up-to-date, there need be no fear of the final result.


I want to say a little on the subject of trade between this country and Russia. If any hon. Member, from whatever part of the House he speaks, mentions Russia, the subsequent proceedings are liable to be somewhat stormy, and reason is liable to give way to prejudice. I (hasten to assure the Committee that I do not propose to touch upon controversial matters, which would be better discussed under the Foreign Office Vote; I merely want to call attention to certain interesting facts in connection with our trade with Russia, and to ask the Secretary of the Overseas Trade Department if he can throw a little further light upon them. The first point to which I want to call attention is a comparison of the balance of trade existing between this country and Russia and that between the United States of America and Russia. In answer to a question in the House on the 20th April, the Secretary of the Overseas Trade Department stated that, whereas the imports from this country to Russia exceeded the exports to Russia by £95,000,000, the exports from the United States to Russia exceeded imports by some £81,000,000—a very striking contrast. This was for the period from 1924 to 1930. I was struck with these figures, and I thought that it would be interesting to take a shorter period and the most recent available, and to study the figures in a little more detail. I therefore took the year 1930. I found that, taking the returns from the British customs, the exports from Russia to this country amounted in round figures to £34,250,000, whereas the exports from this country to Russia amounted to only £6,750,000. If you correct that figure by adding re-exports from this country to Russia, it brings the total figure to £9,250,000, against the £34,250,000 which we imported from Russia.


What about shipping?


I am coming to that in a moment. The figures I have given show that there was a clear balance of trade in favour of Russia of £25,000,000 in 1930. The hon. Member mentions shipping. In order to study these figures a little further, I thought it desirable to work out not merely the actual balance of trade which I have just given, but the balance of payments. To do that, it is necessary to make allowance for the fact that in this trade Russia makes use of our shipping, insurance and banking facilities, but it is a little difficult to give an exact figure for the value of those services. I have seen them authoritatively estimated at anything between £6,000,000 and £8,000,000 for 1930. I propose for the purpose of my calculation to take the mean figure of £7,000,000. Another point that has to be considered, if we take that figure into consideration, is the fact that during that year there was increased indebtedness to British firms and banks on the part of Russia. There again it is hard to give an exact figure, but I do not think that the Secretary of the Overseas Trade Department will challenge a figure of somewhere about £10,000,000. Summing up these figures, we come to the following result: British exports and re-exports to Russia were £9,250,000, plus payments for services rendered by shipping, insurance and banking, £7,000,000, making a total of £16,250,000 on the one side; on the other side, we have Russian exports to this country £34,250,000, an increased indebtedness of £10,000,000, making a total of £44,250,000. The balance of payments in favour of Russia during 1930 was, therefore, somewhere about £28,000,000.

No Member of the Committee will deny that, from the point of view of this country, that is a most unfortunate state of affairs. It is, of course, desirable that we should, where we buy goods in large quantities, sell our own goods in exchange for them, and an unfavourable trade balance of this kind is bad for the trade of this country. You will probably consider, Mr. Dunnico, that this is not the moment to discuss in detail the question of export credits, which are referred to in the next Vote. Therefore, on that point I will only say that in considering this very heavy adverse balance of trade payments, we have to remember that it occurs after we have applied an artificial stimulus to our trade with Russia in the form of export credits on a scale unparalleled in any part of the world. As the hon. Gentleman explained to the House a short time ago in answer to a question, the amount of export credits in respect of transactions with Russia since the present Government took office is roughly equal to the amount of export credit allowed to the whole of the rest of the world in the same time.

I want to put this to the Secretary of the Overseas Trade Department: First, is he satisfied with the present trade balance of payments as between this country and Russia: and secondly, having regard to the fact that Russia's trading is done through the Government, and therefore that one transaction can be much more easily set off against another than where it is done by two independent private firms in another country, can he tell the Committee why it is necessary, with an adverse balance of payments of something like £28,000,000 in one year, to provide export credits to foster the trade at all?


Order! The Minister would not be allowed to answer that question on this Vote.


I listened with a great deal of interest to the speech by the hon. Member for East Birkenhead (Mr. White); I have never heard a speech in this House more condemnatory of those who are in key positions to conduct the trade and industry of this country. Every word of the speech was justified. I agree with the hon. Member in his last remarks in which he welcomed the opportunity of discussing the work of the Overseas Trade Department because, as he said, this was the first time that the activities of this Department had been discussed in the House. We on these benches have always believed that the best kind of economy is wise spending; and that every penny spent on this Department has been of that character. The Department has been booming and advertising this country and its trade. Previously we have been inclined to advertise our woes instead of our wares. This Department has gone out of its way to see that once in a way we advertised our wares in a splendid way, as they did at the British Industrial Exhibition at the Olympia, which directed the attention of the world to British trade, and as they did in the splendid display at the cotton exhibition at the White City. These were two admirable actions that did credit to the Department and gave a fillip to British trade which has never before been equalled. That is the first reason why I wish to congratulate the Minister upon the admirable work of the Department.

That work has been concerned with our export trade, and as I am particularly interested in the cotton industry, 80 per cent. of which is for the export trade, I have been interested in this work. The Committee will be interested to hear one or two figures with regard to the cotton export trade. The world export trade has increased very considerably, but our proportionate share of it has fallen off. The export of manufactured goods from this country in 1913 was £413,000,000. In 1930 it was £439,000,000, an increase of only £26,000,000 in 17 years, despite the marked rise in prices. That is a figure to be noted and pondered over. Our cotton exports for 1913 totalled 7,075,252,000 linear yards. In 1930 they had dropped to 2,490,450,000 linear yards—a terrible drop.

We sent out two missions to investigate why we have lost this great trade and what steps we can take to regain it, one going to Egpyt, led by Sir Arthur Balfour, and the other to the Far East, led by Sir Ernest Thompson. These two missions have stressed several points which it behoves Lancashire, particularly, to notice if she wishes to increase her export trade in cotton yarns and goods. One of the chief points stressed, that of costs, has been referred to by a right hon. Gentleman from the Opposition Benches. These missions say that we have lost our trade because of our high costs, and they go on to say that sacrifices must be made. In Lancashire we are getting very familiar with the observations "The cost of production is too high" and "Sacrifices must be made." The latter sentence invariably means one thing—that wages must be reduced. The only thing the workers are asked to share in are the sacrifices. No workers have made more sacrifices on behalf of their trade than the cotton operatives of Lancashire. They should not be asked to make any more.

I believe there are costs in Lancashire's trade which can be reduced. There is one heavy item in the costs of Lancashire cotton goods which could be immediately done away with without affecting the efficiency of the industry. I refer to the thousands of unnecessary middlemen who are clinging to the cotton industry like leeches and taking an unnecessary toll, which goes to increase the price of the article. Another way of reducing costs would be to bring the four sections of the cotton industry together and to treat the industry as one unit. Another would be by the bulk purchase of the raw cotton. It might also be advisable to have one trade union for all cotton operatives in Lancashire. Further, we ought to establish efficient selling agencies abroad, so that we might know with certainty that we had in foreign countries people specially interested in pushing the sale of British cotton goods. A member of one of the missions to which I have referred told me that he went to the representative of one British house who was supposed to be interested in the sale of cotton goods and asked "How is it that you are not pushing British cotton goods, as you are a British house?" The answer came quite pat: "If we can make more profit by selling Chinese goods, then, although we are a British house, we shall certainly push Chinese goods, and your cotton goods will have to look after themselves." We ought to have selling agencies abroad definitely interested in pushing the sale of British cotton goods.

High shipping freights, also, are an unnecessary burden upon British trade, and I suggest to the Secretary of the Overseas Trade Department that he should get into touch with the Imperial Shipping Committee to see whether steps cannot be taken to reduce the present high shipping freights. I would recommend, further, that we should take a leaf out of Japan's book and go in for national propaganda. One of the engineering members of the mission which went out to the Far East said that in the many engineering shops out there which he visited he found on the office table leaflets and propaganda from every country except Britain. Every other country was alive to the advantage of pushing their goods by advertisement, but in none of the offices into which he went did he find any illustrated catalogues, or any catalogues at all, pushing British machinery goods. A third suggestion I would like to make is that we should look into the question of the education of Chinese and Japanese students. The mission found when they were in Japan that the heads of some of the firms were young Japanese who had been educated in American universities, and that when they returned to Japan they were influenced with American ideas, and had a bias towards America when it came to placing orders. The same thing was found in China. It would be a good thing if we could encourage Chinese and Japanese students to come over here to our English universities and could impress them with our ideas, as the Americans have impressed them with their ideas. Then, when those young men went back to their own countries to occupy key positions they would have a bias in our favour instead of in favour of America. In Egypt the French people are teaching 24,000 Egyptians the French language—that is the number being taught at any given time; and the Italians are teaching 3,500 Egyptians the Italian language; whereas the English are teaching only 3,200 Egyptians the English language. That state of affairs is having a marked effect on the trade of this country in Egypt, and it calls for our earnest consideration.

I should not like to feel that we are going to stint this Department for money in the splendid work they are doing. It would be a fatal mistake. We ought to give them every encouragement to send out missions and deputations to get into personal touch with traders in foreign countries and bring back information for the benefit of the whole industry and to the offices of the Department, and afterwards industrialists in this country ought to be able to go to the Department and avail themselves of that information which has been collected for their benefit. If we do that we shall have taken a big step in the right direction. The need for introducing efficiency is a note which is struck by all these missions. In my humble opinion the "captains of industry" in this country are not sufficiently quick in the uptake, they are not adaptable to changing circumstances, they have far too much political bias. A member of a deputation from the light leather industries which went to Norway, Sweden, Denmark, Finland and Holland told me that in those countries the British manufacturer was spoken of as being biased and as still adopting the attitude of "take it or leave it"; and, unlike foreigners, he does not keep buyers informed of what he has to sell. In short, those markets are very much neglected. It is up to us to see that the attitude of "take it or leave it" is altered. There are far too many countries ready to supply the needs of foreign markets, and if we in this country do not adapt ourselves and are not ready to meet the wants of foreign customers we cannot grumble if we lose trade.

My last point is that the various missions have emphasised the fact that we are lacking in directing capacity, that we have too many men in key positions—and I know that this applies to the cotton trade—whose only qualification for being there is that they happen to be the sons of their fathers, they have no other qualifications. We are definitely lacking in good guidance in industry. I am supported in that statement by the Leader of the Conservative party in the House of Lords, who said just recently, referring to the Beaverbrook-Rothermere campaign: If Lord Beaverbrook wants to know why we cannot compete in the markets of the world, let him read the Balfour report, and he will find that the essential cause is the out-of-date equipment and organisation of our factories and, more important still, the low standard in their higher control. That fact cannot be too much emphasised. I close by saying that I am pleased to have had this opportunity to pay my tribute to a Department which I believe is doing wonderful work.

6.0 p.m.


The Committee have had the advantage of an important and interesting statement from the Minister as to the activities of his Department and its lay-out. As the Minister mentioned, this is the first occasion on which there has been a Debate of such length and diversity upon the Department, although it is one of the most important in the service of the State, and, in my belief, one of the most competent and efficient. There is no Department whose operations have a greater hearing upon finding a permanent remedy for unemployment by the absorption of our people into productive industry. Stress has been laid by other speakers and by the Minister himself upon the importance of advertisement and publicity. It is vital that that publicity and advertisement should be of the right kind, and upon the right kind of subject. We are rather too apt to allow it to be thought abroad that we are in the last throes of a struggle to retain any trade at all, and that all our industries are incompetent and on the verge of being put out of action. Nothing is further from the truth, and, although I am unable to find figures later than 1929 for this purpose—I take them from the statistics of British trade and foreign industry published last year. I draw the attention of the Committee to the fact that, in spite of all the buffeting misfortunes which this country has endured since the War, the proportion of the world's export trade that this country possesses is down by only 2½ per cent. since 1913. Our proportion was 13.11. per cent. in 1913, including Ireland, and it is 10.86 per cent. to-day. It is true that the proportion is down, but the remarkable thing is how little it is down. There is this further fact that, in comparison with other countries, we are down by that very small percentage, and yet if the figures relating to the quantity of our exports are taken, as compared with 1924, our export trade in terms of quantity has increased from 100 in 1924 to 108 in 1929. Surely those are facts to which we should give publicity, and it is only just to our people that we should draw attention to the extraordinary resiliency of our industries in face of every kind of competition and difficulty. I should like to draw the attention of the Committee to the fact that, if you take the exports on a per capita basis, our exports are nearly £16 per head of the population, and we are first compared with Germany, France, Japan and the United States on a per capita basis. We give place only to Belgium and Holland, and I think this may be due to the fact that these two last countries have relatively Free Trade. I would urge that every step should be taken within the orbit of possibility to make it clear to the world at large, and to our own people, that the British export trade is not on its last legs; on the contrary, we ought to point out that during the change in the general situation, it needs only a spirit of determination and a vigorous and aggressive initiative both in our productive work at home and in our trading arrangements abroad to restore us once again to the high position we held not long ago.

The Minister to-day drew attention to the relationship of the Overseas Department in this country and the American Department of Commerce. I am interested in the figures given by the Minister for the purpose of considering whether the staff here is adequate and whether the arrangements for their distribution are suitable for the purpose of maintaining our trade abroad and increasing it as time goes by. I was not able to follow the figures given by the Minister; perhaps it is my fault, and no doubt he will correct me if I have misunderstood him in any particular. A comparison has been made with the staff of the American Department of Commerce, and it shows that whereas we have some 85 Diplomatic representatives and trade commissioners, the foreign trade officers of the American Department of Commerce number no fewer than 188, although the American foreign trade is nothing like so important to them as ours to us. The number of consular officials who come under the Department of the Overseas Trade number rather under 250, as compared with, approximately, 700 in the American service.

I have taken these two services as far as possible on a comparable basis, making the necessary exclusions, but it does appear from the figures, as far as they are available to an ordinary Member of this House, that, in view of the immense importance of our export trade, and having regard to the figures in relation to the volume of American trade, we are somewhat under-staffed. It is noticeable that, apart from the trade commissioners in the British Commonwealth of Nations, of the remaining 50 trade representatives some 44 are confined to Europe, and only some 19 are representatives in countries outside Europe and outside the British Commonwealth of Nations. It seems to me very remarkable that so small a number of officials, however competent, should be called on to perform the difficult and responsible functions entrusted to them, even with the assistance of the Consular service.

As regards the Consular service, it must be borne in mind that it is really underpaid and over-worked, and although an extraordinary variety of functions and duties devolve upon a consul—he has political duties to perform in connection with the diplomatic service, in connection with passport visas and civil duties in connection with marriages of British subjects abroad, and all the rest of it—and his time is largely absorbed in functions which have no relation at all to industry, yet on the top of his political functions, his legal functions and his social functions, which are of some importance in the case of a British consul-general abroad, he is expected to perform a vast amount of commercial work, meet commercial agents and exporters, supply detailed reports concerning particular firms, industries, and areas, and compile trade lists, commodity reports, and fulfil all the duties of a commercial representative. In face of all this, the consul abroad is apt to be looked down upon by the other branches of the service and by his colleagues at the Foreign Office.


I am not sure whether this Vote is concerned with the consular service. It refers to certain commercial diplomatic services, which are a different branch from the consular service.


If I have fallen into error I regret it, but I will ask for your Ruling, Mr. Dunnico, on this point. I believe that the consular service is under the jurisdiction of the Department of Overseas Trade, and am I to understand from your Ruling that it is out of order to refer to the relations of the consular service with the Department of Overseas Trade?


We are dealing with Vote 4 of Class 6. So far as Vote 4 is concerned, I see that it does raise matters concerning commercial diplomatic services, particulars of which are given on page 51, but I see no reference to the consular service as such. This arises on another Vote.


I was anxious to put in a word for the Consular service, but I must leave that to another occasion. With regard to the allocation of the officers at the disposal of the Minister, they should be sent to specific areas, and there should be no country with which England carries on trade where there is no official allocated, and no country should be left to look after itself in this respect. If we look through the list of British representatives abroad, and diplomatic commercial attachés and trade commissioners, it will be found that a considerable number of the smaller countries are without any representative of the Overseas Trade Department at all. It seems to me that that is a grave mistake, and that there should be no country in which there is not someone with an office and a position of authority and responsibility acting on behalf of the Department of Overseas Trade.

I observe, too, that there is often a considerable discrepancy between the salaries paid to those occupying positions in important countries from the trade point of view, and whom one would naturally expect to be paid on a scale commensurate with the importance of their posts, and the salaries of those in posts which are less important from the trade point of view. I will give an instance. In Colombia, there is a commercial secretary, Grade II, with a salary of £1,728, including a local allowance of £300. In Denmark, there is only an assistant to a commercial diplomatic attaché, who is in complete charge, with a salary of £550, including £300 local allowance. Nevertheless, looking at the trade and the potentialities of trade with Denmark as compared with Colombia, one finds that our exports to Denmark were over £10,500,000, and our imports from, Denmark £56,000,000; whereas our total trade with Colombia, import and export, was only just over £5,000,000. There seems to me to be something irrational about this discrepancy.

The American Department of Commerce has developed a system to which I would ask the Minister to give consideration. It arranges, in various places, annual regional conferences. In 1930 four such conferences were held, one in Buenos Aires one in Ottawa, one in Stockholm, and one in Panama City. To these conferences the trade commissioners, or those who correspond with them in position, and the commercial attaches are invited, together with representatives of trade likely to be concerned with the industries of the areas in question, and programmes, marketing facilities and marketing arrangements are discussed. From regional conferences of this kind, a coherent programme and a new technique is apt to arise, and I would suggest to the hon. Gentleman that he should consider the holding of regional annual conferences of this kind in various parts of the world. Of course, the agenda would have to be carefully planned, and British firms and trade associations interested in the trade of the areas in question might well be asked to send competent and authoritative representatives to these conferences. I would suggest that for Latin America meetings might be held annually in rotation at Buenos Aires, Rio de Janeiro, Valparaiso and Panama, and that in the case of North America, including the West Indies, meetings might be held, also in rotation, in Montreal, New York, Jamaica, Vancouver and New Orleans, while for the Baltic and Scandinavian countries regional conferences might be held in Stockholm, Oslo and Copenhagen. Naturally, there are other places and other areas that might be considered, such as the Far East, Africa, and so forth. I suggest to the Minister that conferences of that kind might be of very great value to our industry at home, and would also do much to attract interest to it, to advertise it and to give it publicity in the regions where the conferences are held.

The American Department of Commerce has another arrangement which, as it seems to me, might well be considered here. The Department has a district office in every State. The Department of Overseas Trade has, I understand, merely its one office in London. Why should not the Department set up branch offices at industrial centres like Birmingham, Manchester, Cardiff, Glasgow, Leeds and so on? These need not be actual replicas of the London office, but at least they would be able to bring the Department far more closely into contact with industry at the exact spot where industry is" and where executive action is needed. That would make the task of the Minister himself rather that of a national co-ordinating authority than that of one who is himself responsible for maintaining all the contacts with industry.

The great advantage of regional offices at home, just as it would he in the case of regional conferences abroad, would he that they would attract publicity and attention to the work of the Department. The Minister said, and I do not think it can be too strongly emphasised, that the Value of the work of the Department depends, as largely as upon anything else, upon an efficient publicity and advertising campaign, and I suggest to him that these offices would have advantages in that direction as well as in the direction of simplifying procedure and bringing manufacturers into direct and easier touch with the Department. One of the difficulties with which the Minister has to contend at the present time is the apathy of the manufacturer. If the manufacturer will not go to him, let the Minister, by means of district offices, go to the manufacturer. With regard to the Department, I do not think it is an exaggeration to say that there is a tendency towards apoplexy at the centre and atrophy at the circumference. I should like to consider, if time permitted, the desirability of merging with the Department of Overseas Trade the Empire Marketing Board, for already the functions of these two bodies are closely intermingled. Each performs services for the other, and I believe that economy and efficiency would result if they were merged into one.

I asked a question a year ago, when this Vote was before the Committee, and I have repeated it on various occasions since, as to the position of the Special List to which the Minister distributes information that he may receive from abroad. It is a matter for the greatest regret that, as far as my information goes, there are only 2,600 firms who are on the Special List. The subscription is only a small one, and for that subscription they are entitled to be kept by the Minister in touch with every movement. It is a very feeble proportion, considering the importance of our export trade. The American figures are noteworthy. In 1930, the American Foreign Commerce Service Department had 450,000 detailed reports of foreign firms on its books, and 161,000 specific requests for them. It had details of 675,000 foreign importers, wholesalers and commission agents, 185,000 foreign manufacturers, and 135,000 foreign professional men; and—this is the point that I wish to make—no fewer than 741,000 of these lists were sent out in the year 1929–30 as the result of specific requests from manufacturers in the United States. I should welcome an intimation from the Minister that, I will not say 740,000, but even 250,000 lists were sent out to British manufacturers in response to specific requests. I am afraid that in this direction, as in so many others, the apathy of our manufacturers shows itself.

The Department, of course, will have considered more than once the suggestion that it should itself organise exhibitions, and I do not propose to enter upon a discussion of that suggestion now, but I should like to know what the Department has done with regard to following up the recent exhibition in South America. Has it arranged for articles in the newspapers? Has it arranged with manufacturers for co-operative advertising campaigns, so as to seize the opportunity, while the momentum is still active, of encashing the results of that exhibition, the success of which has been so much due, as previous speakers have said, to the untiring efforts and energies of the Prince of Wales? I would also ask whether the Ministry feels that it is possible to take more active steps to advertise abroad, and also in this country, the advantages and benefits of the Export Credits Scheme. I trust that the Minister will recognise that, as is the fact, the suggestions that I have made have been inspired by the desire to be helpful to the Department in the pursuit of encouragement of the export trade, which is now, as ever, a prime interest of this country.


The hon. and gallant Member for North-East Bethnal Green (Major Nathan) concluded by saying that his remarks were inspired by a desire to help the country. I am perfectly certain that such was the case, and, in all the discussions that we have had from time to time regarding the activities of the Department of Overseas Trade, Members in all quarters of the House have welcomed the opportunity of trying to do what they could, without any partisan spirit, to add something to the store of general knowledge which will be helpful in the reduction of unemployment and the increase of our trade. That has been entirely the case to-day, and in no speech was it more outstanding than in the very excellent and helpful speech with which the hon. Member for East Birkenhead (Mr. Graham White) opened the Debate. I was very sorry to hear the Secretary of the Department of Overseas Trade say what I know was only too true in my time, namely, that the Department cannot yet get enough firms to come and consult with them, not for the benefit of the Department, but for their own benefit. I found that difficulty during the three years I was at the Department, and I am sorry to hear from the hon. Gentleman that it still exists. Further, what saddened me very much in my time—I hope that the hon. Gentleman may have been able to alter the position—was that I could never get the leaders of the trade unions to come to the Department to consult with its very able and eager officers, so that they might learn from the various heads of the Department where the weaknesses were in our goods or our methods, in the way in which we were producing our goods, or in their prices, and could go back to their members and say, "We have been consulting with the Department of Overseas Trade"—


And down with your wages!


If the hon. Member likes to make a speech, I am sure we shall all be delighted to listen to his very interesting and erudite remarks in due course. The leaders of the trade unions could then go back to their members and say, "We have been consulting with the Department of Overseas Trade and the reasons why we cannot get orders for our goods in this or that part of the world are as follows." It would be helpful for them to see the difficulties eye to eye with the Department, for they know that the Department is a non-political institution. They would then see what the conditions are that cause us to lose orders. Reference has been made to the missions which have gone abroad to seek out openings for our trade, and the Minister referred to the order we got for aeroplanes from Helsingfors. The reports of those missions and the experience of Helsingfors give proof over and over again that our manufacturers will not grasp the fact that goods do not sell themselves, and that they must get on their legs and go out to fight for orders. The trouble with our trade—I have been in trade all my life—has been that in many cases our manufacturers have not taken the physical trouble to get into personal touch with their markets. Goods do not sell themselves.

I want to deal with two points with regard to which I gave notice to the hon. Gentleman. A mission recently returned from China and told us about Chinese trade. When people tell us that Chinese trade is bad, they make a great mistake. Notwithstanding the stupendous upset in China and the state of chaos in which the country now is, there is 23 per cent. in volume more business done with China than before the War, but we are not getting our share of it. We are only getting two-thirds of the trade that we got in 1913. The trade has not disappeared. It has gone to Japan and Germany. I hope hon. Members will not throw back the word "wages." I am not going to deal with that. The reason why our trade has gone from us, as shown by the report of this mission is that our goods are too dear. One of the reasons why they are too dear was lightly touched upon by the Minister, who said he had not time to deal with it—the question of freights. This question of freights operates very considerably to the disadvantage of our export trade with the East. It was dealt with in the Balfour Mission's report, although I have not yet seen the printed copy of it. Statements have been made by exporting houses in the North that one of the reasons why our Eastern trade has left us is the high rate of dues on freights of shipping going through the Suez Canal.

The CHAIRMAN (Sir Robert Young)

I am not sure that this arises on the Vote. I should like to know from the Minister whether he has any control over freights in the Suez Canal.


May I submit that the Government own 44 per cent. of the shares in the Canal? We have three British Government directors upon the Board. We put questions to the Minister a few days ago about the Suez Canal. We are now talking about the missions to the East. They are reporting upon the losses of our cotton trade owing to the goods being too dear. They talk about freights. There has been the report of a mission to Egypt through which the Suez Canal runs. The Government is part owner of the Suez Canal, and the hon. Gentleman says he is looking into the practices of the Suez Canal.


As I understand it, there are three directors merely nominated by the Prime Minister to' the company. There is no control over the company. If it arises at all, I think it should arise on the Mercantile Marine Vote, but I should like to hear from the Secretary to the Overseas Trade Department whether he has any responsibility.


I think the hon. Gentleman must have misunderstood me. I never said I was looking into the question of freights in the Suez Canal, but the general question of freights has been raised in one or two reports of missions. If I said anything which gave the hon. Gentleman to think so, it is not a fact. I am not looking into the Suez Canal freights. If they were going to be looked into, it would be by the Board of Trade which is responsible.


I will not contest your Ruling, Sir Robert, but here it is in black and white: Steps are being taken to obtain full information of the present practice of the Suez Canal Company.


The hon. Gentle-man must read on.


"in regard to the placing of orders for stores and the like, and the position will then be duly considered."—[OFFICIAL REPORT, 4th May, 1931; col. 32, Vol. 252.] I am going to deal with that position.


I am afraid the hon. Gentleman cannot.


Then I will deal with it when the Mercantile Marine Vote comes up.

The other point I want to deal with is this: A few days ago we were told that there would be some rearrangement of the Anglo-French commercial agreement. We are very glad to know that we have extremely competent commercial diplomatic service officers who come under this Vote. I have every reason to know how helpful they are. I should like to hear what they are doing about arrangements for the new Anglo-French commercial agreement. I am given to understand that the commercial attaches under the Department of Overseas Trade have been in conference with Mr. Elbel, Director of French Commercial Agreements, and with Mr. Arnal, a representative of the French Foreign Office, who have been studying the outlines of a new Anglo-French commercial agreement. I hope the hon. Gentleman will give us what information he can. The present Anglo-French agreement was made in 1882. There, has been considerable discussion for some time upon the use to us of the most-favoured-nation clause. What arrangements have been made to reconstruct that clause? If France gives us any favouritism under that clause, she has to give it to other countries who do not give to the French what we give them. We give a free market to French goods coming here. Under the most-favoured-nation clause, other nations who tax French goods get the same benefit from France as we get. That is to say the most-favoured-nation clause is entirely sterile so far as we are concerned. The French Government have issued this communique: The French Government cannot remain indifferent to the Protectionist tendencies which are clearly shown in Great Britain and which, should they triumph, would seriously damage our interests in a country which, up to now, has been France's best customer. I think when our commercial counsellors consult with the French representatives about the most-favoured-nation clause, they should construct two types of the most-favoured-nation clause, one for those who give free markets, like we do to the French, and one for those who do not. At present there is nothing in the most-favoured-nation clause of the slightest help to our goods. I think the French, if they have it in view that we are tending towards a Protectionist policy, should bear in mind that if they do not treat Britain generously in 1931, when we have no remedy except persuasion, they cannot expect us to treat them over generously when the change comes in our economic policy.


This is not criticism of the policy of this Government. It is really criticism of the French Government.


I make this request or criticism that the Government should settle on a policy when arranging about these new commercial agreements with France so that we get a treaty with a most-favoured-nation clause of the type which will be of some use to us.


It is not often that I find myself in agreement with the hon. and gallant Member for North-East Bethnal Green (Major Nathan), but I certainly welcomed his opening remarks with regard to the future of British trade. He pointed out that England is still the greatest exporting nation in the world. This Debate gives one a contrary impression. Everyone is as melancholy as he can possibly be, and everyone is trying to be cheerful because he thinks it would be good for trade if he could succeed in being cheerful. The various reports that the Department of Overseas Trade has issued do not depress me as much as they seem to have depressed other Members. There is a certain amount of shade in them, but there is a great deal of light and relief. One of the things that should give us ground for congratulation is that they appear to have diagnosed one of the main causes of our trouble, and once you have a correct diagnosis you are half way towards a cure. There is unanimity amongst the reports that defective selling organisation—one might almost say the complete absence of selling organisation—is very largely responsible for the condition in which British industry finds itself to-day. The hon. Member for East Birkenhead (Mr. Graham White) referred to the fact that price is also mentioned as a factor in our difficulties. Price cannot be the supreme factor in our difficulties, otherwise we should not be the largest exporting nation in the world. The fact that we export more than any other nation shows that our prices in the bulk of cases are not too high and where we are up in price it is generally because an inferior article is undercutting our superior article which necessarily must find a higher price.

There is one criticism which I should like to make of the very interesting speech of the hon. Member for East Birkenhead. He quoted a tale about shovels. I find it very difficult, with the best will in the world, to believe that that really did happen in Peru, because shovels are the one particular thing in which we stand supreme in the world-spades and shovels—and particularly so in South America. If he had applied it to another article or to another country, I could have believed it, but in the circumstances I cannot do so. I think that the question of our selling organisation is really far more important than the question of price. I was sorry to see the right hon. Gentleman the Member for Chorley (Mr. Hacking) seize on the question of price and suggest that our troubles were due to taxation, by which, I assume, he meant social legislation, and to trade union regulations. Various industries are succeeding despite social legislation and taxation, and despite trade union conditions and restrictions, and where they are succeeding, it is very largely due to the fact that they have energetic captains of industry who are supplying the initiative. I will quote on this point from the speech of Sir Harry McGowan, the chairman of the Imperial Chemical Industries, at the last annual meeting. Speaking of the foreign trade of the Imperial Chemical Industries, he said: For the past four or five years the companies' export trade has shown marked expansion. Marked expansion in spite of high taxation and trade union regulations! The strength had lain in the establishment of their own widespread selling organisations in the respective markets. Provided the manufacturers of this country can put a selling organisation into the overseas markets as efficient as that of foreign countries, they have nothing to fear from the cost of production, even if it is largely due to social legislation, taxation and the like. Largely, I believe, our trouble is due to our extraordinary inefficiency in selling organisation. We have had every advantage in the past. We have a reputation for quality and we have a good will, but our manufacturers have, undoubtedly, rested upon their oars. One finds that fact referred to repeatedly in the reports of the Department of Overseas Trade. Just as there is a general consensus of opinion upon the diagnosis of our trouble, so there is an extraordinary unanimity in the suggestions which are made in the various reports of a remedy. These reports, written by the various trade commissioners and trade secretaries in different countries, written on the spot, almost invariably recommend the same thing—joint selling organisations and cooperation. When it is a question of a report, not from a Government official or a commercial secretary, but a special economic mission like the D'Abernon mission in South America, and the coal mission which went to investigate the Scandinavian coal trade, every one of the economic missions which have inquired into the various markets—those missions come back with the same reports and make the same strong recommendation of co-operative selling. I do not want to weary the Committee with quotations, but there is one from the D'Abernon report which is so apposite that I feel that I must quote it. In page 49, it says: Forms of combined selling in the South American markets have been tried by British traders in a small number of trades with shining success, but there is not enough of it. That is the tenor of a very large number of suggestions of not only the D'Abernon Report, but of every one of the economic reports which have been issued. Cooperative selling, of course, is by no means a new system and it has been tried out. We have had one or two examples of important co-operative selling organisations working very successfully in this country. There is the British Steel Exports' Association, and there is the Association of Machine Tool Manufacturers, both of which are thoroughly successful. There is an extraordinary organisation in Japan dealing with the export of British motor cycles, the British Motor Cycle Traders' Association of Japan, an association of competing agents formed for the definite purpose of pushing British motor cycles in the Japanese market, but these are the exceptions out of a vast amount of disorganised and chaotic selling.

What is the value of pious expressions? It is not the first time that the suggestion of co-operation has been made. The year 1930–31 is not the first year in which these suggestions have appeared in the reports of the Department of Overseas Trade. It is not the first time it has been suggested in this House. But what value is to be attached merely to pious expressions of opinion? If we are to judge by the past, very little indeed. There was a remark made by the Secretary to the Overseas Trade Department which I did not quite understand. I think he was referring to a comment made by the hon. Member for East Birkenhead on the subsidising of Japanese exports. I have his words here—" No Government can do anything." I am not sure whether he was referring to the suggestion that the Government should take a leaf out of the book of Japan and seriously tackle the question of joint selling abroad. If I misunderstood him, I hope that he will correct me.

Frankly, we have to tackle the question of overseas co-operation and organised selling in a more direct and effective manner than by merely expressing opinions. It is not an easy matter to achieve. There are many very big stumbling blocks. It is possible for an organisation of the capacity and size of the Imperial Chemical Industries to establish its own selling organisation, but what about the small firms with a capital, say, of £10,000, £20,000 or £30,000, selling a small proportion of their output to South America, another small proportion to Central America and other proportions, say, to South Africa or India? How can they attempt to establish a selling organisation? They cannot. They have to depend (upon agents who are just as willing to sell German goods as they are to sell English goods. The only hope of getting a really efficient selling organisation there, is by joining up with other firms in a similar or allied industry and forming a joint selling organisation.

Against that one has to contend with these difficulties. You have, first of all, the extraordinary conservatism, the suspicion and the lack of initiative which ties down a firm to the old methods. That, in itself, is a psychological bar of very great importance. But there is an even more important thing than the psychological inadaptability; there is the very important matter of financial risk. It is a big matter to establish an efficient sales organisation in a market which is only touching a small fraction of one's manufactures. There is bound to be a loss for a short time, for two or three years after the establishment of a selling organisation. It is here that the Department of Overseas Trade should step in. They can perform two very important functions. They can supply the initiative. They can practically take firms by the scruff of the neck and say, "You have to consider this problem." They must not merely depend upon pious opinions, but can go to the traders. They have their staff. The hon. Gentleman himself goes up and down the country delivering speeches. Surely it is possible to bring the question of joint selling organisations right up against the trades so that they cannot neglect or ignore it.

7.0 p.m.

I think we should be justified entirely in realising that money spent in a guarantee against loss for a period of years—two, three or five years—on the part of a joint selling organisation would be money well spent. Co-operative societies should be formed. The Department of Overseas Trade should take the initiative and should form a co-operative association for, let us say, the cutlery trade for the Argentine, and should be prepared to guarantee a very considerable proportion of the cost over a period of several years until the organisation really got going. If some steps such as those were taken, if instead of merely expressing pious opinions, the Department were enabled to take the initiative and, what is more important still, to back up that initiative by guaranteeing a proportion of the cost, considerable progress could be made. I am certain that if we compared the results we are getting in respect of the financing of various unemployment schemes with the results that could be obtained by the financing of joint selling organisations through the Department of Overseas Trade, the results from the latter would be infinitely the better. We should get an infinitely better result upon our unemployment figures, and, at the same time, we should be establishing upon a sound and a practical basis the overseas trade, which at the present moment is suffering so severely from the competition of countries, which have been wiser in that they have realised that not only manufacturing at home but selling abroad are equally important.

Commander BELLAIRS

The hon. and gallant Member for North-East Bethnal Green (Major Nathan) has opened up a very fascinating discussion, and if I had not risen for one definite purpose I should like to have followed him but I will deal with two points he made. He spoke of the alarm felt about the position of this country not being fully justified because our exports had increased in volume since 1924, but I would point out that the exports of the world have risen very much in volume and our exports only a little. I should be out of order if I enlarged on the question of Protection, but, if he took the protected countries, Germany, the United States and France, he would have found that the volume of their imports had risen very considerably indeed. As to his second point, that our exports per head lead the world, it would be an astonishing fact if they did not, considering that we have sacrificed nearly the whole of our agriculture in order to get exports and get our food from abroad. Other countries have an enormous market in their agricultural districts. If he would consult Dr. Snow's paper recently read at the Royal Statistical Society, he would find that the lecturer proved that, if we take the wages of the country, we find that only little over 13 per cent. enter into exports, showing how very much more important is the home trade even in our own country than the export trade.

I rose, however, for a definite purpose, which is not always appreciated on the other side of the House, of dealing with Russia. The hon. Member who introduced this Debate did it on the ground that he wished to discuss the reports that had been issued. I might almost say I wished to raise this question on the reports that have not been issued. The Government have pursued a hush-hush policy in regard to Russia. We get nothing from our trade commissioners in Russia, we get nothing from the Secretary to the Overseas Trade Department in a long speech. Contrast that with the period before the election, when we were told that Russia was the cure for all our evils. We do not hear that now. If I go to the Board of Trade Journal for information, I get nothing whatever about Russia. If one goes back on the whole history of this question, the main genesis of our Russian trade policy came when the leader of the Liberal party was Prime Minister and induced us once more to trade with Russia. That policy was initiated with a speech, which is famous throughout the world as the "bursting corn-bins" speech. We were told of the bursting corn-bins of Russia and how we could clothe the Russians with cotton shirts and woollen garments in exchange. That was all a fairy tale. [Interruption.] There were no bursting corn-bins. There may be now, but that was 10 years ago.

Another point, which ought to be explained in the reports of the Government, is this: The Communist Government in Russia dictates the whole of the trade with Russia. All the organisations over here, like Arcos and Centrosujus, are provided with capital by the Government of Russia. The Government decree that nothing else shall go into Russia but machines except when they want cotton, and they will not be importing cotton next year. I doubt whether they will import it this year except from Egypt. The whole object is to wage economic war on the rest of the world with the object of promoting world revolution. The same policy is still going on. We see the same fallacy about Russian trade in the speech of the Prime Minister just before he took office when, speaking at Leicester on 28th April, 1929, he said: There was nothing that would have been better for this country than a continued diplomatic contact with Russia; our trade with Russia would have been very much larger, our unemployed would have been reduced by some thousands, and our prospects would have been brighter. By hook or by crook diplomatic relations should be established with Russia. He made that speech—and it was probably the basis of that speech—23 days after the industrial delegation—one of those delegations so much lauded—had arrived in Moscow. It shows the value of Soviet promises that they were told that, if we resumed relations with them, we could get £150,000,000 of orders, with the option of extending it to £200,000,000, and, in addition, valuable concessions. The value of the concessions was shown by the Ogpu raid nine months later on the Lena Goldfields concession, for which the Secretary of State for Foreign Affairs and others are now trying to get compensation. We are getting a mere bagatelle of orders compared with the £5,500,000 of Government credits and the many other private credits in addition. To show the trade treaty has not benefited us, compare the figures for the three months, October to December, 1929, before the trade treaty, when we received £4,700,000 in orders, with the period October to December, 1930, after the trade treaty, when we received £1,700,000 worth of orders—a fall of £3,000,000. Germany at the same time is getting orders five times as great, and America, which has not recognised Russia, is getting far more extensive orders. In fact, we got the highest figures for orders from Russia prior to the trade agreement, showing that her object was to get the agreement.

They have been violating other agreements since then. There is the agreement with the Central Softwood Buying Corporation for timber. I do not know whether the hon. Member is taking any action upon it, but they agreed to sell 600,000 standards of timber in this country, and not to sell any more, and to sell them to the Central Softwood Buying Corporation. They straightaway tried to get out of it by selling timber to Germany, Holland and Latvia, and from those countries it is sent over to us. It is the same with the pledge that has been given to the President of the Manchester Chamber of Commerce. I am glad it has been broken, because it is a most immoral bargain for Lancashire to try to keep cotton out of the British Empire with the result that many other articles are imported into this country to the ruin of smaller traders. It seems to be the settled policy of the Soviet Government not to touch at present those trades that have great political influence like the cotton trade and the coal trade. They will ruin agriculture, which has always been the Cinderella, the fruit industry, the soap industry, the matches industry, and so on, but at present they do not touch those trades with the greatest political influence. I omitted to say how they have broken the agreement with Lancashire. They sent cotton goods on to other countries, which sent them on to India, as the Secretary of State for India knows. At the present moment there are two ships laden with cargoes of cotton going direct to India from Russia.

Now what do we get out of it? Allowing for the re-export of Russian produce from Germany, Holland and Latvia, a Russian expert in the "Statist "—and very important articles they are—has shown that 30 per cent. of the exports of Russia come to this country—not to the British Empire, but to this country alone—although the Board of Trade figures show only 23.6 per cent., because the exports that go through Germany, Holland and Latvia are credited to those countries. He shows that 76 per cent. of Russian barley finds a market here, that 33½ to 39½ per cent. of other cereals find their market in this country, that 80i per cent. of the Russian butter which is exported finds its market here, together with 55 per cent. of her sawn timber and 44½ per cent. of her tinned goods, Surely with those great imports coming here we ought to be able to make a better bargain than we do at the present moment, no doubt because Soviet Russia has declared over and over again that she has no money to pay for her machines except the money she makes out of her exports. We could drive a better bargain, although I am hotly opposed to the whole trade, and would like to see every other country agree to boycott Russian trade till they give up their political policy of world revolution.

In addition to the official recognition of Russia, we have done other things. According to the official Russian figures for 1929, 60 per cent. of the credits Russia gets are British, 10 per cent. are German, and 30 per cent. come from the rest of the world. All I can say is that the net results of all this killing Russia by kindness are simply ludicrous. The President of the Board of Trade, replying on Russia recently, said: Nothing is to be achieved by excluding goods. What is the good then of all these efforts of the League of Nations with regard to the exclusion of sweated goods 2 We have been waiting for the result of these efforts, but the President of the Board of Trade says nothing is to be gained by this policy. In the "Sunday Times" on 16th December, 1928, he made an interesting announcement in an article headed "Party's General Policy" when he wrote: The great majority of its members will continue to believe that Free Trade is, as regards the aggregate volume of commerce, substantially in the national interest but "—


I must warn the hon. and gallant Member that he must not discuss Free Trade and Protection on this Vote.

Commander BELLAIRS

I am only quoting a policy for the exclusion of imports produced under certain conditions. If I may finish the quotation, you will see my point.


On a point of Order. Is it possible to pursue the policy of excluding imports without legislation, and is the hon. Member therefore in order?


I am warning the hon. Member that he must deal with the general policy of trade with Russia, and not with exclusion of imports.

Commander BELLAIRS

I understand that. If it is the declared policy to keep out sweated goods, we want information from Russia as to whether we have not got sweated goods from there, or something worse than sweated goods. It is up to the hon. Member's Department to tell us in their reports whether the conditions of labour in that country call for such a policy. Stalin has said in regard to the industrial crisis which is occurring throughout the world: The industrial crisis will intensify the agricultural, and the agricultural crisis will protract the industrial, which cannot but lead to the deepening of the economic crisis as a whole. I invite the Minister to issue a Blue Book telling us about the policy of the Government with which we are trading, and how they are intensifying both the industrial and agricultural crisis in pursuance of what I cannot but regard otherwise than as an economic war to bring about revolution.


The hon. and gallant Member for Maidstone (Commander Bellairs) devoted the whole of his speech to Russia, but as far as I can gather the only constructive suggestion he made was that our trade with that country, and (indeed with the rest of the world, would be helped if we were to take the course of ostracising Russia altogether. That is a very simple plan, and I should like to know whether he was speaking for his party? Are we to understand that that is now the official policy of the Opposition and that when they are in office they will cancel the commercial agreement which was entered into with Russia after the last General Election? I do not propose to follow the hon. and gallant Member into the question of trade with Russia, although what I have to say relates to Russia. It is natural that in a discussion of this nature large questions of policy and large industries should be the subject of debate. I am going to deal with a small industry, the herring fishing industry of Scotland. It may be a smaller industry but it is more of an exporting industry than any of the larger industries which have been mentioned. It will probably be news to many hon. Members that even if the large consumption of herrings in this country was entirely stopped it would make no appreciable difference to the industry as a whole, so large is the herring fishing industry a question of export.

It is an industry which has suffered very much from the War and since the War. After the War it looked forward to a resumption of trading relations with Russia in the hope that it would bring back a great deal of the prosperity it had lost. It has not been entirely disappointed; and perhaps the hon. and gallant Member for Maidstone will take a note of it. In the first year after the last General Election Russia bought herrings very substantially from this country and it made all the difference between the prosperity and failure of the herring fishing industry in that year. But during last year the hopes which had been entertained were not realised and the position at the present moment is very difficult indeed. It has been said that if British industries would only reorganise themselves and go in for cooperative marketing and selling they would get over a great deal of their troubles. This particular industry has reorganised itself in a way it has never been organised before. It has also set up a selling agency, which has done some good; but it has not enabled the industry to overcome its difficulties. It set up this selling agency and reorganised itself particularly with the Russian market in view.

Before the War Russia was one of its great customers, probably half of its produce was taken by Russia, and if Russia is not going to continue to be one of its great customers in the future the industry will have to be cut down and a great amount of work will thus be lost. The industry is quite prepared to adjust itself to changed conditions, but it wants to know whether the conditions have really changed or not. The very worst possible position for this or any other industry is a position of doubt and uncertainty. Members of the industry have made many applications to the Russian trade representatives in this country with a view of seeing whether more trade could be done between this country and Russia. The hon. Member in charge of the Overseas Department has done a great deal for the industry in that direction and they are much obliged to him for what he has done. Many delegations have gone to the Russian representatives. It has been suggested over and over again that the Russian Government will be quite prepared to deal with the industry as a whole, and to some extent it was because of that suggestion that the industry set up a selling agency.

It was suggested by the Russian representatives that they might be able to buy in bulk. The industry has not been accustomed to deal in that way, but at the suggestion, largely of the Russian representatives, it has organised itself and put itself in a position to be able to deal with the Russian Government as an industry. The result so far has been disappointing, and the representatives of the industry are in some difficulty. It is felt that if they go to the Russian Government or to the trade delegation in this country and appear to be in a helpless condition they may not be able to do themselves any good. They are afraid that they may give the Russian Government the appearance of being at their mercy and that the Russian Government would be able to get what they want at any price they might wish to pay. If we can believe the Press reports Russia has been dealing in the last few years in large quantities of Norwegian herrings. An hon. Member opposite has emphasised the need of selling agencies, and he seemed to think that such a cooperative agency would do all that is required. In this industry you have cooperative effort, and a selling agency, but it has failed to do what he says it is capable of doing; and it has failed in this case because the Scottish herring fishing industry, and the English herring fishing industry, is at a disadvantage.

If the Russians, or any other people who consume herrings, were given a free choice of the herrings they want, that is to say, if they were allowed to buy Scottish or Norwegian herrings, there is no doubt whatever what they would buy. No one who knows the different types of herrings would ever dream of buying Norwegian herrings, although they are a great deal cheaper, because they are coarse and bad. But, unfortunately, the people who are responsible for ordering herrings are the people at Moscow, and they are not the people who eat them. They buy the bad cheap article, and foist it on their people at home. The representatives of the herring fishing industry in this country have done all that they have been asked to do in the way of reorganising their industry in order to be in a position to deal with the Russian market. They have sent deputations to the Russian representatives in this country, who have made suggestions of various kinds.

It has now come to a position when they must ask, and I think they are entitled to ask, the Overseas Trade Department to take this matter up for them and get an authoritative answer as to what may be expected in the future. It has been stated that Russia has suggested the possibility of buying large quantities of herrings in advance. If that could be done it would make a great difference to this industry. We are just beginning a new season, and the prospect as to the Russian market will have the greatest effect in determining the success or otherwise of the season. It will be of the greatest advantage to the industry as a whole if the hon. Member could get into touch with the "Russian Trade Delegation and get from them a definite indication as to what their intentions are in the future. If the industry can know definitely the prospects of the Russian market, it would make a great deal of difference; but otherwise they will be left in a state of great uncertainty which will cause, a great deal of harm to them and to the country at large.


I do not intend—

It being half-past Seven of the Clock, and there being Private Business set down by direction of the Chairman of Ways and Means under Standing Order No. 8, further Proceeding was postponed, without Question put.