HC Deb 16 November 1931 vol 259 cc515-639


Order read for resuming Adjourned Debate on Question [10th November], That an humble Address be presented to His Majesty, as followeth: MOST GRACIOUS SOVEREIGN, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. G. Lloyd.]

Question again proposed.


My task is to bring back our discussion from the somewhat discursive irrelevance of the official Amendment to the brevity and simplicity of the King's Speech. I think, for my part, that the Government were very wise not to parade any ambitious programme of what they hoped to achieve, but simply to state in general terms the character of the problems which confront them and to pledge themselves to their immediate examination and to action "with the least possible delay." That is the one sentence in the King's Speech to which all of us attach the very greatest importance. There is one other feature in the Speech which has attracted comment, because it is somewhat unusual, and that is the reference to the mandate given at the late election. But the circumstances of that election were also unusual. Never, in our time at any rate, has the country given any Government so unqualified, so unchallengeable, and so unfettered ah authority. More than that, never, I think, have any Government started upon their work—and in this case upon immensely difficult work—with so great a fund of good will from every section of the unprecedented majority which envelopes them in this House.

The majority in this House are, of course, profoundly conscious of the immense difficulty and complexity of the tasks which confront the Government at home and abroad. They realise how much the action of this country means both to the peace of the world and to the restoration of its economic balance, and they are, I believe, prepared to give to the Government a very wide discretion and a very patient confidence in dealing with these tasks. The House has been reminded in the last few minutes of the momentous consequences which may follow upon any decision which they take with regard to India in the next few weeks. With regard to all these questions, I believe the House approaches them with its mind not prejudging anything, but prepared to support the Government with good will and loyalty, not from a party, but from a national and Imperial point of view.

If on one subject the minds of many of us in this House, and of most of the country outside, are definitely made up, and if we press for prompt action with regard to that matter, there too I can assure the Government that our insistence owes nothing to party prejudice or party feeling, but that it owes everything to our sense of the urgency of the national situation. Nor do those of us who are urging Protection regard it for one moment as a panacea for all the ills that afflict us, or as the be-all and end-all of policy. We are insistent upon it because we regard it as an essential step, without which the work beyond cannot be effectively carried out. We know perfectly well that tariffs alone are not going to dispense us from a great task of reorganisation in both agriculture and industry. We are not so devoid of imagination as to suppose that the problem of Imperial co-operation will be over and done with when we have secured the first scheme of mutual Imperial preference.

We know, too, that here at home there are problems of social reform, problems of health, problems of industrial security, problems of education, which have still to be handled, though possibly in a different spirit from the past, but which have still to be dealt with, tariffs or no tariffs; and neither the need for economy nor an improving economic position can absolve us from dealing with those problems. I believe this House wishes the Government to face this new Parliament with something of the spirit of a Five-Years Plan, with a scheme of construction. If we press for the foundation first, it is only because we know that the superstructure cannot be built until we have a foundation of economic stability.

From that matter I should like to turn to the terms upon which the country gave this unprecedented mandate to the Government of the day. What was that mandate? For what purpose was it given? Was it to carry out the policy of "Labour and the Nation"? Clearly not. Still more clearly it was not a mandate for the policy of "We can conquer unemployment". Was it a mandate to mantain Free Trade and free imports in any shape? The only party that ventured to ask for a mandate in that sense is now thinly spread over three of the benches opposite. Even they only asked for that policy during the period of the election, and they have not thought it worth while to put it into an Amendment to the Address. Then, too, I think that we are bound to consider some things in regard to the circumstances of the election. The Government went to the country to ask for a free hand. For what? Before the election they had a free hand and a majority to carry out any policy which did not change our fiscal system. It might have been desirable to show to the world at large how great was the volume of support for the Government, but the only purpose for which the election was necessary was to secure a free hand to embark upon a new fiscal policy.

In his election manifesto, the Prime Minister put tariffs into the forefront of the proposals which he meant to consider as being likely to help the situation. Chat was, indeed, the only specific proposal that he mentioned, because such other proposals as mutual arrangements with the Dominions and commercial treaties were obviously consequential upon that. Surely the Prime Minister did not mean to suggest that we should approach the Dominions with the same limitations as we did a year ago, or that we should approach foreign countries for commercial treaties under the conditions under which the late President of the Board of Trade endeavoured to secure his tariff truce. It is clear and obvious that the one specific weapon that the Prime Minister asked to be allowed to consider was a change in our fiscal policy. By "consider" no one supposed that he meant to consider that question as the astronomer considers the courses of the stars. He meant to consider it with a view to action. That was certainly his view, and if there were any ambiguity in his manifesto, there was certainly none in that of his chief lieutenant, the Lord President of the Council, who made it clear that he regarded "devaluation as no substitute for tariffs", and that he would continue to press—and is no doubt pressing—for"tariffs as the quickest and the most effective weapon to secure our purpose"; for prohibitions, quotas or duties in order to protect agriculture and to secure mutual arrangements with our Dominions.

That was the sense in which the country has taken the mandate. Some people have taken, possibly, an almost extreme view. I received a letter a day or two ago from a constituent, unknown to me, who apparently thinks me somewhat of a laggard in this matter and wants to hasten on my faltering footsteps. His letter is this: Dear Sir, On the 27th October, 23,517 electors told you that we must have Protection now. Whatever the precise terms of the mandate, there can be no doubt that it was a mandate for prompt action, for business and not so much talk, if I may use the vernacular of the Secretary of State for Dominion Affairs. If the nation has given to this Government and this Parliament an unprecedented power, it is because the nation was told, and was persuaded, that we are confronted by a grave national emergency, an emergency which requires all the best abilities of the nation, and all the promptitude, vigour, and resolution which we employed in dealing with the emergency of the Great War. If there is one thing and one thing only that the nation will not forgive the Government or Parliament, it is if it comes to think it has been misled, if it begins to find out that Ministers, once the election is over, show by their conduct that they are after all not convinced that there is a grave and urgent crisis.

We of the rank and file are profoundly conscious of this aspect of the mandate which we have received, and of our own personal responsibility to our constituents in this matter. I have certainly never felt that sense of responsibility so keenly as I felt it at the last election. It was my privilege to address not a few open-air meetings of unemployed working-men. I can see now the faces of those men, the look of suspicion gradually changing to interest, of hostility to confidence, and of despair to hope. How can we go back to these men in this hard winter and tell them that, after all, whatever their urgency may be, we do not ourselves consider things so urgent; and that while we may have told them a great deal about the critical state of the balance of trade in the election, we are to-day more concerned with the balance of the Cabinet?

4.0 p.m.

Serious as these considerations are, they are not so serious as the actual economic situation itself. The pound, which slipped so unexpectedly off the gold standard two months ago, has maintained a very precarious stability since. It is on a very slippery slope. How long can it hold up against an ever-growing adverse balance of trade, against an ever-increasing volume of sterling paper hawked about the world which the acceptors are not in a position to change into either notes or gold? I do not wish to weary the House with figures, but there are one or two which will suffice to emphasise the seriousness of the situation. Our net adverse balance of visible trade was £102,000,000 in 1913; £135,000,000 in 1923, and £281,000,000; in each case I am quoting the first nine months of the year. To put it somewhat differently, in 1913 our exports covered something like 83 per cent. of our imports. In 1923 they still covered 75 per cent. of our imports. In 1930 they covered less than 66 per cent. of our imports. In the first nine months of this year they covered very little more than 50 per cent. of our imports. The adverse balance is rising from month to month. The net adverse balance of October was £7,000,000 worse than that of September, and £6,000,000 worse than that of October the previous year. Nor can we consider our own precarious situation by itself. The Prime Minister reminded us of the thundercloud lowering over Central Europe. Who can tell whether the bursting of the cloud will be delayed until after February? Who can tell how gravely our position may be affected if it does burst? My right hon. Friend the Minister of Health, no mean authority on financial questions, speaking the other night, gave us at most six months in which to save our bacon. I should like to ask him, if he were here, whether he could guarantee us six weeks? If the pound breaks, what is to become not only of our trade position but of our revenue position. If sterling goes, if the internal value of sterling is changed, the whole foundation upon which this year's Budget is balanced, and next year's Budget is supposed to be balanced, is gone. There are, indeed, unpleasant signs of the inadequacy of the fiscal measures taken only last September.

How much time can we really afford? I cannot help remembering what the late Government did at the end of July last. They, too, saw the cracks and rifts in the fabric. They, too, thought that, after all, nothing very serious might happen in two or three months. They, too, thought they could adjourn without balancing the Budget until October or November, and let the matter be considered by a Cabinet Committee in the meantime. If we now suspend all effective action until February, and if the crash comes—I trust it will not come, and very possibly it may not come, but also very possibly it may come—what will the country then say of all of us who asked for this mandate, which they have given us, on the ground of emergency?

From that general consideration I should like to turn to the actual programme of the Government in so far as we have been given any indication of what it is to he. As I understand it, that programme is to consist of three parts —an Imperial Conference to be held, at any rate, not earlier than July; a tariff, I presume, in February, and, pending that tariff, emergency powers to deal with dumping or forestalling, which, I am glad to know, we shall hear about in a very short time. With every good will towards the Government, and every desire not to put too unpleasant a face upon the situation, I must confess to grave doubts as to whether such a programme is either what the nation expects or what the national emergency demands.

I think that all of us regret the postponement of the date of the Imperial Conference. At the same time, no one knows better than myself how difficult it is to arrange a date suitable to every Government in the Empire, and I am not prepared to quarrel with the decision of the Government in the matter, pro- vided that that Conference is to be what it ought to be, not the opening of negotiations with the Dominions but the winding up. There are two ways of dealing with this matter. One is to prepare, more or less in vacuo, Board of Trade figures and so on, to enter upon general touring discussions, and then to approach a Conference which can pass general resolutions, which are only the starting point of detailed negotiations. If that is the method then, even if the Conference is held in July next year, there will be no concrete proposals ready for this House until the beginning of 1933 at the earliest, and, dealing, as we shall be, mainly with agricultural matters, that will be no use to the farmer in the Empire or here at home before 1934. I do not believe that the Empire can afford to wait so long. I know, at any rate, one Dominion which cannot afford to wait, not the least populous of the Dominions, if I may call it so, the richest market for our purpose of any of them—I mean the dominion of agricultural Britain. That dominion requires dealing with now, in time for the spring sowing,, and you cannot deal with it without at once bringing into consideration the indissolubly linked-up issue of Imperial Preference. There are many articles which we can protect for ourselves alone. There are many others where only combined Imperial and home production can supply our needs, where we are bound to give preference at once in our own interest apart from any other consideration.

It seems to me that there is only one satisfactory way in which we can deal with an Imperial Conference which is to take place in July, and that is, first of all, to decide here and now what Protection we are going to give to our own agriculture for its own sake and in the interest of the balance of trade, and what Preference we shall automatically give as far as the matter depends upon ourselves alone; secondly, to make up our mind, broadly, what further concessions we are prepared to make to the Dominions in return for valuable equivalent, and then to begin negotiating at once with the Dominions individually the terms of mutual trade agreements. I have seen enough of these documents prepared in the air in Government Departments for Imperial Conferences. They are mostly worthless. If you want to come to grips with this question, you have got to ask yourselves, not what Preference does Great Britain want from the Empire at large, or give to the Empire, but what does she want from New Zealand, and what can New Zealand give her, and the negotiations should begin here and now in London, with the High Commissioners, and such business men as the Government here and each Government overseas can appoint, before the end of this year, upon principles agreed within the Cabinet. If so, then you will have a series of agreements completed which want only the Imperial Conference to link them up and to confirm them.

I understand that the Secretary of State for Dominion Affairs is going to tour the Empire again in connection with the forthcoming Conference. Well, I have been in the Empire touring business myself. I spent seven months as Secretary of State travelling round the Dominions, and I would mention incidentally that it takes two months of sea voyage alone to get round. I went to follow up a Conference which had come to very important and far-reaching constitutional conclusions. I went with the definite object of settling with Governments and Governors-General certain details of procedure which arose out of the conclusions of that Conference. I also went with the perfectly definite object of explaining to a wider public in each Dominion that the Government and people of this country had consented to those far-reaching constitutional changes not out of fear or under coercion, or in indifference to Imperial unity, but because they believed that we were establishing in equal freedom a new and a more effective basis for co-operation. I went, after the essential foundations were laid, with the full authority of the Cabinet behind me, to follow up in detail and to make clear what had been achieved.

I should like to ask exactly what the Secretary of State is going to do, and what kind of reception he will meet with? The first question they will ask him is, "Do you mean business this time?" and he will say, with the wealth of language which he commands, "Most certainly I do." Then they will say, "Yes, but we cannot help remembering that you said a good deal to the same effect in Canada two years ago, and that then there was a certain gentleman called Snowden who vetoed all that as nonsense. "The Secretary of. State will reply, "Oh, yes, but he is a back number now. He is a mere Privy Seal—the sort of thing I used to be. We have relegated him to cold store in an Upper Chamber." Then they will say, "Well, if he is in store, we seem to have heard of one Maclean, who expressed himself as opposed to Imperial Preference." No doubt the Secretary of State will reply, "Never mind him, he is undergoing education." Then they say, "There is a still more influential gentleman, in the Home Office, who declared that the party which he leads, and which is still closely associated with him, is entirely opposed to food taxes. [HON. MEMBERS:" Hear, hear!"] There we have a confirmation interesting to the Dominions. I know quite well what the Secretary of State will say. He will say, "Oh, you leave him to me. I will have no humbug from him. I will teach him to play the game." And if they are persuaded that he really does mean business, they will then say, "How much a pound are you prepared to give us on butter?" Is he then going to say, "Oh, the Government did not get as far as that when I left home"? They will reply, "Then it is no good your coming as far as this, either." Believe me, if the Government have made up their mind that they know now what they are going to do, then the main negotiations should take place here, and if the Secretary of State cares to travel about creating a favourable atmosphere simultaneously, there is no harm in that, but if he is simply going to do what has been done so often before, to talk hot air with no definite policy behind him, then he can only prejudice the prospects of the forthcoming Conference.

So much for the Imperial issue. Now I wish to say a word about the emergency powers, of which we shall learn something in a few minutes. I think the whole House will welcome the decision of the Government to let us know at once what is intended in that respect, and is, I hope, to be carried into effect within not too many days. We all know that with a tariff in prospect there is a grave risk, not so much of dumping in the ordinary sense but of forestalling. With many kinds of articles it may not amount to very much, and in some cases it may even be a good thing to the extent that there is a cushion of supply in the first month or two while our own factories are expanding their production. But in other industries it is possible, as the dyestuffs industry showed, and as the pottery case also showed, to send in within two or three months enough stuff to destroy the whole effect of a tariff for months and even for years. Therefore, we welcome these proposals; we hope they will deal with forestalling, and deal simultaneously with dumping in the sense of goods sent here below the cost of sale in their own country. We also hope that if the Government make abnormal importation their test they will take into account the fact that a great deal of our so-called normal importation in recent years has been very abnormal—excessively abnormal if we also take into account the state of our export trade and the absorbing power of our home market. It is quite true, for instance, that our imports of iron and steel for the first nine months of 1931 stand at about the same figure of 2,000,000 tons as they did in 1925, and at slightly below the figure of the last three years; but when we remember that in 1925 our exports amounted to 2,700,000 tons, 700,000 tons more than our imports, and that in 1931 our exports amounted to only 1,450,000 tons, barely half that figure, and were 550,000 tons less than our imports, surely there is a great element of abnormality there.

At the same time I am bound to say that, valuable as these proposals no doubt will be, they can only touch the fringe of the really critical situation with regard to the pound, to employment and to the revenue of the country. They cannot effect any very substantial reduction in the total gross volume of our imports or in the total adverse balance of trade. There are no other conceivable means of dealing with that than by some broad tariff extending to the whole range of our imports and applied without delay. In fact, it is not emergency powers that are required, but an emergency tariff. I know it will be said, and said truly, that there must be some inquiry. Inquiry into what? Surely not into the principle of the question. If there are minds that after 30 years of discussion have not yet been made up on the question of principle, and are not, on that question of principle, prepared to act together, then the only place for those minds is either the philosopher's chamber or the Opposition Front Bench. Nor, to my mind, is it really conceivable that the Prime Minister should have formed his Cabinet, at any rate that the members of the triumvirate should have got together, without a perfectly clear and explicit agreement on principle before they formed the Government. Any other course would hardly have been honest.

But even if a principle is agreed to, there are, no doubt, those who say that there must be sufficient inquiry to ensure us a scientific tariff. I am not sure that that word "scientific" is not a good deal misused. The principles of a scientific tariff are very simple; the real difficulty is to secure a tariff that will be adapted to its purpose, that will be closely harmonised in practice with all the infinitely varied conditions of our industry. We are not going to get that kind of tariff by any amount of reflection in an office, even if we spend two years over it. The only way to secure a scientific and properly adjusted tariff is to begin with an emergency tariff based on a few simple rates, worked out on a broad and intelligible principle and after such consultation as you can easily secure, and then, with the help of an impartial tariff commission, gradually to adjust, to modify and to adapt that tariff; to change the ad valorem rates, where necessary, to specific rates, or to mixed specific and ad valorem rates, and in every way, by negotiation and by discussion with the interests affected, convert over a space of months or years the necessary emergency tariff that you must have into the scientific tariff you hope eventually to secure.

When it comes to the question of an emergency tariff, while one may be somewhat better than another I know at any rate one distinction between emergency tariffs which is more important to-day, though it might not be in normal circumstances, than any other, and that is that a February emergency tariff is not so good as a December emergency tariff. Moreover, is it the case that in this question there has been no investigation and no consultation? There has been a good deal of investigation at the Board of Trade in the past. An hon. Friend of mine who was once a Member of this House, Mr. Hewins, has, I believe, worked out a very elaborate tariff. More than that, it is a matter of common knowledge that a committee presided over by a former President of the Board of Trade, and including a former Parliamentary Secretary and other Members of this House and people from outside with no small experience in these matters, spent six months and more working out in the closest detail an emergency tariff, in close consultation, I may add, with leading men in every great industry. Of course, that tariff was based on the assumption that we were in favour of Protection, but that holds good of the Government to-day, and surely it would be a good thing if work originally conceived for a party end should now prove to be of real assistance to the nation in an emergency. I would add one further thing. The experience of conscription in the War taught, me that when you have to carry out a policy it is more effectively carried out by those who believe in it, and who, in the course of defending it, know its dangers and pitfalls from having studied its application in other countries. They are far more likely to produce something reasonable and workable than those who grudgingly do something which they half hope will fail.

It may be said further, that all this is altered by the depreciation in the pound. I have already quoted the President of the Council on that point. Of course it is altered and does require reconsideration, but a reconsideration based on one or two very elementary points. It may be said that the depreciation of the pound already acts as a tariff in some measure, and that therefore any tariff prepared beforehand will want a general scaling-down, particularly, perhaps, in the case of certain articles of consumption. It may be said, also, that a tariff framed before the question of the balance of trade arose, framed purely from the point of view of helping industry and employment, and without any immediate desire to restrict importation, will need to be increased to meet the present emergency, and that, therefore, the natural thing would be to superadd that tariff, framed before the present emergency, to whatever restrictive effect your depreciated pound produces to-day. Any work that was done before will, of course, have to be reconsidered and weighed again by the Board of Trade, but unless the Cabinet has not yet made up its mind in principle I see no reason why, with good will and resolute work, a sufficiently good emergency tariff could not be produced in a month's time. We are here at the 16th November. I believe the House would be only too willing to be adjourned at the end of the month and to reassemble on the 16th December in order to pass financial resolutions and to set up a tariff commission. The House is willing enough to do any work it is asked to do. If, on the other hand, the Government dismiss this House at the end of the month for more than two critical months ahead without doing anything more than arming the President of the Board of Trade with emergency powers to handle the fringe of the situation—not to take the load off the camel's back, but to keep an anxious watch upon any additional straws that may be put upon it—-if that is their purpose, then I say they may incur a risk no less serious than the risk which the late Government incurred when they adjourned in July last, and take upon themselves a responsibility which I, at any rate, would be sorry to share.

I have voiced, I hope, in a reasonable and not unfriendly spirit the grave anxieties which affect most of us in this House. We hope the President of the Board of Trade will to-day reassure us, not only on the relatively minor matter of dumping or forestalling, but also that on the whole question the Government mean to act, both in the scope of their action and in the date of their action, in a sense corresponding to the gravity and urgency of the situation. The other night I listened to the Prime Minister's speech in the Guildhall, where, in a somewhat different connection, but in phrases at least as applicable to this issue he said that "a series of piecemeal and ephemeral compromises will not meet the circumstances" and that "temporising means ruin." May I quote from another authority, a fellow poet, shall I say, who said once: Had we but world enough and time This coyness, lady, were no crime. But at my back I always hear Time's winged chariot hurrying near. For far too many years this country has remained poised in indecision and inaction. For far too many years it has been sinking deeper and deeper into a veritable economic Slough of Despond, borne down by self-imposed and unnecessary burdens and handicaps, floundering helplessly in a futile and dangerous effort to get back to the old pre-War world which has gone beyond recall. Surely the time has come, before our strength is utterly spent, for us to take fresh heart and strike out boldly for the solid ground in front of us, and to set our feet firmly on the path that leads to our House Beautiful—a new England and a new Empire rebuilt on the crumbling fragments of the old.

4.30 p.m.


Not many days ago I expressed the opinion that the National Government might last six months, but after the speech of the right hon. Gentleman the Member for Spark-brook (Mr. Amery) I doubt whether it will be in existence six weeks hence. I have been watching the effect of the right hon. Gentleman's speech upon the Home Secretary, a Liberal, who represents the Darwen Division of Lancashire, and upon the President of the Board of Trade who now represents a Radical and Nonconformist division of Cornwall. I shall be glad to hear what the President of the Board of Trade has to say on behalf of the Government as to what they intend to do with regard to dumping. But before the right hon. Gentleman replies to his Tory friends on that question I would like to ask him if he will be good enough to tell us on this side what he actually meant when he caused that scare throughout the country by his statement about the Post Office Savings. I do not want to go into details on that question. All I wish to say is that in my own division we conducted our campaign with good grace, and naturally the best man won. It is a fact, however, that Mr. Philip Snowden in a broadcast speech about the deposits in the Post Office Savings Bank was fortified in that speech by a statement made by the President of the Board of Trade in the North of England. I think it is important therefore that the right hon. Gentleman should now explain what he actually meant by that extraordinary statement.

It has been my privilege to be in this House on six successive occasions to listen to the Debate on the King's Speech, and I have heard every King's Speech presented by every Government in succession during the whole of that period. I have no hesitation in saying that the King's Speech we are now considering is the most uninspiring and unintelligible of them all; and I cannot understand what comfort the right hon. Gentleman the Member for Sparkbrook can get from its contents. But before I deal with the Address might I call the attention of the Lord President of the Council to what he said last Friday. On that occasion the right hon. Gentleman was trying to cover up the indiscretions of the Secretary of State for Dominion Affairs by saying that he fell into error because he could not explain himself clearly owing to his Celtic temperament. The right hon. Gentleman the Member for Derby (Mr. Thomas) cannot be regarded as a Welshman. He cannot speak that language, and I do not know that he can speak any other language very much better. [HON. MEMBERS: "Shame!"] Welsh people take pride in one thing, and it is that when they go into battle they do not put their wives and children in the front line. I want to inform the right hon. Gentleman on that issue that Newport where he was born is not regarded as being in Wales except for criminal purposes.

As I have already stated, the King's Speech is not very inspiring. I wish I could comment on the speech the Home Secretary made elsewhere in which he referred to what he called the pontifical admonition administered to him by the right hon. Member for West Birmingham (Sir A. Chamberlain). This is the most wonderful Government I have ever seen since I have been sitting on this side of the House. They have cannons to the right of them, cannons to the left of them, and now there are cannons in front of them, and they all roar and thunder in turn at the Government. How right hon. and hon. Gentlemen opposite who have proclaimed themselves Liberals and Free Traders in the past can stand up at that Box and pronounce themselves in favour of tariffs, prohibition, and safeguarding, passes my comprehension. I am aware that times change, but there is one thing that I would like to say here and now. The one issue which I always thought divided the Liberal and the Tory parties was that of Protection and Free Trade. If the day has now come when the Liberal party once and for all has said good-bye to Free Trade, then somebody else must champion those principles. For my part, I make no hesitation, in spite of the fact that I am a Socialist, to declare that I am a Free Trader all the time, and I have been elected six times in succession for a constituency that fully agrees with my policy. I represent a county that is watching the Government closely to see what they are going to do with regard to dumping, prohibition and tariffs.

I cannot understand one point in the speech of the right hon. Gentleman the Member for Sparkbrook, although I do not question his sincerity. I would like to ask him how he reconciles his proposals for preventing sweated goods coming into this country with the fact that practically every ounce of coal produced in Great Britain to-day may easily be regarded as falling into that category. The wages paid to the men employed in coal mining are terribly low and the conditions under which they work are deplorable. Anyone who understands the conditions under which coal (miners work in this country would be warranted in saying that every ounce of coal used for export to foreign countries may be regarded in those countries as sweated goods. When the right hon. Gentleman the Member for Sparkbrook talks about preventing certain goods from another country coming into this country, he must remember that we are exporting very much more of those goods into foreign countries than they are exporting to us. [HON. MEMBERS: "No!"] We are predominantly an exporting country. The tariffist can never see what may happen behind the tariff walls which it is proposed to erect in this country. What the foreigner is going to do on the other side matters a great deal, too.

When I was in Iceland a short time ago I discovered that it was a very tiny trading country, but I think it is worth while stating what happened to the trade there. The Iceland people decided, by an overwhelming majority that they would prohibit the importation of all alcoholic drinks, and the Government decided to translate that decision into law. As soon as they proceeded to do that they received official communications from France, Italy, Spain and Portugal to the effect that if the Government prohibited the importation of their wines into Iceland those four Governments would prevent fish from Iceland entering their ports. The result was that the Government of Iceland had to drop their prohibition proposals. They did the next best thing; they decided to nationalise the liquor trade. That is a very sharp lesson in trading relations. The right hon. Gentleman the Member for Sparkbrook seems to forget that all the time, Great Britain, with all its power, wealth and production, cannot do what it likes in the teeth of other nations.

I will come a little nearer home and deal with the workman's attitude towards Protection. What will tariffs bring to the working classes? Will the working classes be better off under tariffs than under Free Trade?[HON. MEMBERS: "Yes!"] Let me put it to the test. [An HON. MEMBER: "We have done!"] I will test the problem from the workman's point of view, and I will take, as an example, the cutlery trade of Sheffield, which has been safeguarded for five years. After five years of Safeguarding the wages of women and girls in that trade are lower than any rates paid under any Trade Board in the land. Trade Boards were established in this country to prevent sweating in our industries. The actual rate paid to women and girls employed in the cutlery trade in Sheffield is 7s. per week to a girl of 14 years of age and 23s. to a young woman of 21 years of age and over. That is what Safeguarding has done for the workers in the cutlery trade of Sheffield.

I will now pass on to another consideration. I have no hesitation in admitting that tariffs will benefit certain industries. Tariffs might benefit the larger proportion of the industries of Birmingham. But tariffs would only help at the expense of creating monopolies in Birmingham, and of calling upon 40,000,000 people outside Birmingham to pay enhanced prices for goods manufactured in that city. Let me ask a question here. What is going to become of the treaties that have been entered into in the past between Great Britain and foreign countries? I con- fess that I am a novice in these matters. There are, I understand, treaties which have been in existence since 1660, without any variation at all, between Great Britain and Norway and Sweden. I understand that, if we introduce any variation in our fiscal policy by imposing tariffs or Protection of any kind, we could not consistently continue those treaties. Each one of those treaties includes what is called the Most Favoured Nation Clause, and it would be very interesting to hear what the right hon. Gentleman has to say this afternoon with regard to that Clause in those commercial treaties.

I have never been able to understand why right hon. Gentlemen opposite do not refer on occasions to the report of that very important committee over which Sir Arthur Balfour presided. Those of us who study these questions as novices like to find out what experts have to say with regard to tariffs, and, if the right hon. Gentleman will pardon me, I will read a paragraph or two from the report of that committee of men who understand the problem, I think, without offence to him, quite as well as he does, and who, probably, get much nearer to the problem of commerce and industry, banking and finance, than he himself does. This is what the committee say in their report: It is frequently urged that Great Britain, by its commercial policy, has put it beyond its power to conduct successful negotiations or to take its place on a footing of equality among other negotiating countries which today have something to offer in the way of tariff reduction in exchange for a corresponding advantage. That is the argument of the right hon. Gentleman and his friends. They say that we cannot possibly balance our trade unless we have tariffs in this country as a bargaining instrument in negotiation with those countries which have tariffs against us. This is what the Committee say in reply to that argument: This argument appears to derive little support from the Report of the Economic Conference of 1927, which, by clearly exposing the successive steps of the tariff bargaining process by which the tariffs of the principal countries of continental Europe are normally settled, shows conclusively that it cannot in the long run lead, and that as a matter of historical fact it has not led, to a reduction of the general level of tariffs. That is the Report of a committee of experts, and throughout the whole of the report the main arguments, recommendations and decisions are definitely against the point of view of the right hon. Gentleman and his friends.

Let me pass to another aspect of this problem. As I have said, nearly the whole of this Debate has turned upon tariffs. Demands have been made upon the Government to stop dumping at once; hon. Members would not even give the Government a single day. The President of the Board of Trade will find in his pigeon-holes at the Board of Trade some correspondence of mine relating to the fur industry, and, if he and other Members of the House who are interested in the subject of dumping will follow me for a few moments, I will put to them a specific case in which I personally was interested, and they will see at once from the details the fallacy of the argument against dumping. I happen to be a member of a trade union—[Interruption.] I suppose that that is news to some hon. Gentlemen. My trade union has about 2,000 members employed in the fur trade in London, and as a consequence I was asked to intervene on behalf of the fur industry with the Board of Trade —with successive Presidents, by the way, of all political colours. This is what happened. The newspaper Press of London would have it that the Russians were dumping furs into this country in thousands of tons, and destroying the fur business here. The facts were these. Russia produces 50 per cent. of the whole of the furs of the world. We cannot produce any fur in this country at all—[HON. MEMBERS: 'Rabbits!"] Hon. Gentlemen really must bring these arguments down from the lofty plane on which the right hon. Gentleman tried to put them. If tariffs are to be of any use, they must be installed to meet specific cases. As I have said, nearly the whole of the London newspaper Press for about six months was advocating Protection and arguing in favour of preventing the dumping of these Russian goods. A scandalous campaign in favour of Protection was conducted on that occasion, but it was found when inquiries were made into the case, that there was absolutely no foundation for the propaganda, which was conducted merely because newspapers at the time were anti-Russian. Anything that came from Russia into this country was abhorrent to them.

Duchess of ATHOLL

Is it not the fact that recently furs have been coming into this country from Russia in such quantities that they have had to be sold by weight instead of being classified into different kinds; and are not the Russians doing a great deal more of their own curing and treatment of the furs before they reach this country?


Nobody can object to that. If 50 per cent. of the furs of the world come from Russia, no power on earth can prevent the Russian Government, if they can find the machinery and the skill from doing the whole of the curing on the spot. That is only one point that can be brought to rebut the arguments of those hon. and right hon. Gentlemen who are always arguing about Protection. The strange thing about this propaganda is that, as imports into this country go down, so the argument against dumping goes up. The right hon. Gentleman himself has told us this afternoon that the amount of imports into this country is declining. Of course, the exports are declining as well. I approach the fiscal question not only from the point of view of the wages of the workpeople, but from another angle, also. In my view, tariffs and protective duties are based in the main on jealousy and spite and spleen. Nothing irritates the several nations of Europe at the present time more than these protective duties, and if Great Britain, which in the past has been a Free Trade country, alters its policy, there will be nothing to prevent this irritation increasing throughout the whole of Europe.

We shall probably be told this afternoon that something has got to be done to balance our imports and exports. I do not think that there is any Member on this side of the House who will not agree with that proposal; all that we are troubled about is the method of achieving the object. Those who argue in favour of Protection in order to balance our trade always forget one or two important facts. They forget that our fiscal system has nothing at all to do with some of the fundamental changes that have been taking place in this and other European countries during the last few years. Let me mention one or two of them. The tariffist approaches the subject from the point of view that unemployment is rife in this country. It may interest some hon. Members to know that a few scientists and engineers have contributed more to upset the balance of trade and the production of commodities than all the Governments in the world. I was informed some time ago by a statesman in Switzerland that it was the deliberate policy of the Swiss Government to prevent an ounce of coal from entering that country at all. They intend to use their great water power in order to produce electricity, and, of course, they are perfectly right in doing so. I repeat, therefore, that there are elements in the situation with which neither Free Trade nor tariffs have anything to do.

Again, take the question of unemployment. I went into the figures the other day, and found, to my astonishment, that, if the same proportions of men and women were employed in industry in this country to-day as in 1913, there would be 600,000 more men at work to-day, and 600,000 more women at home. Tariffs have nothing to do with problems of that kind. Further, there are in this country to-day about 3,000,000 people over 70 years of age. There has been an extension of the average life of the individual, and society has to maintain the old people by old age pensions and social services. I would ask the right hon. Gentleman, therefore, to remember that tariffs and protective duties have nothing whatsoever to do with some of the fundamental problems that trouble society to-day.

I should now like to say a word or two with regard to the speeches that have been delivered in this Debate. I thought that the speech of the Prime Minister on the first day was a very miserable attempt to explain the policy of the Government. Up to the present we have not heard anything from the Front Government Bench that would indicate to us that the Government are proposing to do anything at all, except, perhaps, one thing. We are informed, and we shall be pleased if the right hon. Gentleman will clear up the point when he speaks to-day, that the Government propose to ask for Orders in Council, so that, administratively, the Board of Trade may put into operation a new fiscal system in this country. I hope the right hon. Gentleman will tell us what it is all about, and it will be very interesting to learn how he can square a proposal of this kind with all that he said when he sat on these benches in the last Parliament. Also, if I might say so without offence, it will be very interesting indeed, when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) returns to his seat, to find the right hon. Gentleman sitting there at all.

5.0 p.m.

Perhaps I may be permitted to say a word or two on the result of the General Election. I am rather inclined to agree with the speech of the Lord President of the Council on Friday, but one thing has made me sad. I have no complaint to make so far as my own Parliamentary Division is concerned, but my view is that the result of the last election will be regarded on the Continent of Europe as a very serious blow to the good relationships of this country with other nations. The questions that have come from hon. Members to-day, the way they treat every question and answer about the League of Nations, and the attacks that have been made from time to time from the Tory benches on the International Labour organisation are sufficient to prove that a predominant Tory majority is a very serious blow to the League of Nations. A very sad feature of the General Election among the organised working classes is that the Prime Minister is sitting now among those people who have never had a single good word to say about the work of the League. Hon. Members think that, when they have defeated us at the polls and left us with only 52 on these benches, they have delivered a death blow to the Labour movement. They must remember that the trade union movement was in existence before the Labour party was born and that it still exists. The Prime Minister seems very much annoyed that the Trades Union Congress came into the picture just before the General Election. He does not like the intervention of the Trades Union Congress in politics at all. I feel sure I am right in saying that most of the occupants of the Government benches are very evenly divided between membership of the Farmers' Union and the Federation of British Industries. Strange as it may seem, while the Prime Minister dislikes the Trades Union Congress, he has nothing at all to say about other cliques. Finally, I trust that the right hon. Gentleman will tell us about his dumping and tariff proposals and not forget to tell us what was the reason for the statement he made about the Post Office Savings being in jeopardy.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

My hon. Friend has addressed to me an invitation to which I shall at once make response. He wishes to know what I have to say here with regard to the Post Office Savings Bank. He knows, as we all know, the anxiety that was felt during the election with regard, not only to investments in the Post Office Savings Bank, but to all securities, and, in particular on the invitation of leading members of the Labour party, the anxiety that was felt with regard to our banks and our banking system. There is nothing more delicate in the world, and certainly nothing more important for the English people, than that our banking system should remain intact and unshaken. It was in the course of a discussion of this subject that Mr. Arthur Henderson in a broadcast speech referred to the Post Office Savings Bank. I think he used it as an illustration of the way in which the State could embark in banking operations. The next day I pointed out at public meetings in the North of England that there was no parallel between the joint stock banking system and the Post Office Savings Bank. I also pointed out that the Post Office Savings Bank depended for its security and its strength upon the credit of the United Kingdom. I am not responsible for any gloss that may have been put on that in the newspapers. I am fortunate in being able to read in manuscript exactly what I said, for I was very careful about the drafting of what I had to say. I said: A substantial part of the assets of the Post Office Savings Bank had already"— I was referring to the period in August— been lent to the Insurance Fund. This brought home to the Cabinet the difficulties with which they would be faced if serious distrust of the British Government's credit set in. I found on the following day that there had been a rather broadcast apprehen- sion with regard to the Post Office Savings Bank, so I chose early that forenoon to say to a well-known newspaper correspondent, who had the same columns open to him that printed my statement, that I did not think there was anything to fear in regard to the safety of the Post Office Savings Bank and those who had money in the bank might rest assured that they were not in danger of losing it. I added at the same time: Let it be clearly understood that this is because the bank has the backing of the entire and enormous resources of the British Government and not because of the manner in which its funds have been operated.


The Press did not give it the same way as you give it.


The right hon. Gentleman has read his notes. In the report that I saw he said definitely that the Government were disturbed in April and in August, not because of any question of the general financial situation of the country, but because of the investment of so much from the Savings Bank in the Unemployment Fund. If he says that was not so, I shall be very glad to have the correction, but that is what was said in the Press.


I do not dispute the general meaning of that. I said the security for the Post Office Savings Bank is really the Consolidated Fund of the United Kingdom. There is no doubt about that. But it is equally true that in the month of August—I believe it is probably true of April as well, but in August certainly—the Government of the day was apprehensive about the enormous increase in the loans made from the Post Office Savings Bank to the Unemployment Insurance Fund.




I do not want to trouble the right hon. Gentleman unduly. I have an extract from a statement by him that very morning. He said the matter was never mentioned to the Cabinet and never did any question arise directly or indirectly as to any difficulty in meeting liabilities. I find that the late Postmaster-General also said that this alleged anxiety was never mentioned or suggested to him, and he had heard nothing whatever inside the Post Office about any difficulty. If those are the final words of the two right hon. Gentlemen with regard to the Post Office Savings Bank, I have nothing more to say.


First of all, in any statement made by myself I have been extremely careful to say that Post Office Savings, War Savings Certificates, and all Government securities would go down if currency and the credit of the country went down. I have said that here, and I have said it outside. But what was understood from the right hon. Gentleman's statement, which he has now corrected, was that, because the Government of the day had borrowed the savings for Unemployment Insurance, those savings were in danger. I see the Secretary of State for Dominion Affairs is here. I attended every meeting of the Cabinet, and I have ordinary intelligence. My colleagues will agree that I attended regularly and sat through the meetings. I never heard a single statement in April, June, July or August that the savings in the Post Office were in danger. I am not saying we were not told in August that perhaps the pound would slump to nothing. We were. I did not believe it, but we were told that. But that is not what I am saying. What I am saying is that there never was any question that, because we were borrowing money for the Unemployment Fund from the Post Office savings, those savings were jeopardised in any way.


The right hon. Gentleman has mentioned me as having been present. So far as April is concerned, I entirely agree with him. His statement absolutely confirms my own view. We were not only told, as he rightly said, though he never believed it, that the pound with an unbalanced Budget, might go to nothing, but was he not told with me clearly and definitely in August by the Prime Minister and the Chancellor of the Exchequer that they had received an official intimation that not another copper could be borrowed for the Unemployment Fund, that the security had gone, and that the Post Office Savings Bank was in precisely the same position as other British securities? He was told that in my presence.


There is only one answer to that. It has nothing whatever to do with the question. We can only leave this matter to those who wish to judge between us. I have said from this Box to-day that I do not dispute that, if the pound went, Post Office savings would go with everything else. The statement we complain of—it was absolutely untrue although it did its dirty work—is that the borrowing from the Post Office savings was a special thing and, because it was borrowed for unemployment purposes, it was liable to be lost. That was a lie, and a putrid lie at that.


My right hon. Friend has repudiated with great vigour what was not said by any responsible person. Let me come to the subject that was lying behind the minds of people who deserted by tens of thousands their labour representatives at the election. Their anxiety was lest their securities of one kind or another should depreciate with the general fall in the sovereign, and nothing alarmed them more than the attempt of right hon. Gentlemen opposite to make the banks one item in their election programme. If the banks played a very prominent part in their defeat, they must not blame us for it. They raised the subject. They raised the apprehension, and the apprehension caused by their statements accounts for their numbers here to-day. This is one of the incidents of the election.

I am glad to think that the election is well behind us, but we have not got behind the crisis. The crisis remains active even at the present time, and those who realise its gravity are those who have seen it from within, both commercially and officially, during the last three or four months. There were a good many people who at; the beginning of last year were full of apprehension. The late Chancellor of the Exchequer was one of them. But, serious as the crisis was, there is no one who is now charged with responsibility who is going to declare that he is afraid of it. We are determined to tackle it in all its aspects, and to do so with as much vigour as is open to us.

May I point out that, in so far as the Budget is concerned, we have not come to the end of our anxieties. We hope, and we have every reason to hope, that the revenue will be realised. But unless British trade is supported and remains wholly active it will be impossible for Budget estimates to be realised. Indeed, the strength of our financial position depends upon the strength of our industrial position. We cannot separate the one from the other. We do not get lid of our troubles by adding to the number of our taxes. The amount of our taxes to be borne, especially at the beginning of the coming year, is going to be a most serious preoccupation of immense numbers of our people. Undoubtedly, the collection of those taxes is going to lead to embarrassments in many quarters, and anything that can be done to reduce the taxes which are drawn from our people as a whole will not be only of advantage to the individual, but will lead to the advantage of the industries and the trades upon which he depends, and to the capital with which to embark upon expansion.

May I, in passing, express the hope that in discussing all these problems we shall not allow the cause of economy to slip into the background? The real truth is that the best way of balancing a Budget is by cutting down the expenditure, and not by increasing the revenue. It is a commonplace but it is a very sound one, and there is no doubt about it; if economy slips into the background, we shall find our financial embarrassment next year will not be less but greater. I beg, therefore, that hon. Members in this House will be fair to Ministers who find that they must begin cutting down the grants which they wish to distribute from their Departments. I have been at the head of several Departments myself, and I know what a pleasure it is to dispense national money for the benefit of the interests with which one is charged. [Interruption.] Very pleasant, and moreover it is one of the ways in which many industries have in the past been helped. We must now find better and more, economical ways of achieving the same ambition.

We are, unfortunately, at the present time standing in a position of greater embarrassment and complexity than has been known in the lifetime of any Member of this House. Our financial and industrial problems are mixed up with high taxation and the effect of high taxation on business. The currency problem is one of the problems which must occupy the minds not only of statesmen here but throughout the world for the next few years. Foreign trade depends to a large extent upon foreign exchanges, and, let me add, upon the wealth or poverty of OUT foreign customers. Finally, foreign exchanges are bound to have a very large effect upon the means and comfort of our people themselves. If we make anything like even a rapid survey of the world conditions which now dominate the state of our people here, we realise at once that our interests, stretching to almost every country and to every people, are to be dominated by big international problems to which we can make contributions, but for which we are not so placed or so competent as to provide the sole solution.

The trouble at present between China and Japan is having a direct effect upon some of our industries. There is no doubt about the effect of the boycott of Japanese goods in China leading to slightly increased demands in China for our textile goods manufactured in England. It is equally true that the cessation of civil hostilities in India has done something to add to the demand for British produce in India. The settlement, or rather the progress which is being made in the settlement, of Australian finances is once more opening the doors of Australia to us. One country after another is having a great influence for good or for ill upon the trade of the United Kingdom.

We cannot allow a survey of our industry and commerce to pass without taking into consideration the effect the payment of reparations has had upon British industry during the last few years. If reparation had to be paid it was patent that at some time after the War was over adjustments would have to be made. The amounts have been the subject of many adjustments. The method by which payment has been made has changed again and again, and in some respects we in this country have been the sufferers for the payments that have been made to us. I need only remind the House of what happened in regard to German shipping. The transfer of German ships to the British flag—-I think some 350 of them—was practically the first blow struck at British shipping. There were errors made then for which, unfortunately, we are having to pay now-after a very long period. [An HON. MEMBER: "This is a confessional!"] The hon. Gentleman said something about confession. [An HON. MEMBER:"I say, that that is a confessional!"] The hon. Gentleman is taking about confession. May I tell him that I have nothing whatever to confess. I was not in the House when the transaction went through, but from outside the House I have denounced it from that day to this as far as I am concerned.

Let me go on. In the payment of reparations and War debts in Europe this country has been used as a clearing-house. It is very simple. If the House will forgive me for going through some of the A.B.C. of economics, let me explain how in my own mind we have reached the present position. The payments which had to be made to this country from our late enemy could only be made in goods or services, or in kind. We had very few wants in kind which were transferable. Goods and services remained the only other way of doing it. There was no gold available, for when gold went out of Germany her whole economic structure collapsed. The goods and services were provided to some extent for this country. They were welcomed by some people; they were not so welcomed by others. Then there were payments to be made to America also by the other countries. They found it very difficult to get their goods into America owing to America's high tariff walls, and America would not accept services from them. She has, for instance, safeguarded the whole of her coastal traffic for the trade between her coastal ports. Even trade between the Eastern and Western States of North America has come within the coastal area. Payment had to be made in goods and services. It was made in the first instance by Germany to this country, and then we had the onus placed upon us of trying to transfer the credit in one form or another to America. Our goods were not acceptable. Our services to a large extent were rejected. We handed over to America vast sums of gold which led ultimately to the crisis of August of this year.

As we look back over that, the reflection that we are bound to make is that wherever you have a traffic, a one-way traffic of that kind, without a return trade you are losing in the international transaction. It is the fault of all plans of reparations that they are one-way transactions. They have had their own direct effect upon currency. That the pound should be now somewhere in the region of 17s. is very largely the result of the international financial relations of the last few years. Our trade, as well as our finances, is affected by the German financial situation. As the House well knows, the short-term bills which are held by the Germans tome to something like £300,000,000. It is very difficult to estimate the exact amount, but certainly well over £70.000,000 is owed to this country. Under the standstill order we are not receiving cash for them as they fall due. All that we can say is that since September bills held against moving goods have been repaid. But there still remain very large amounts which we have to regain from Germany when the standstill order expires. That, in itself, is having a very grave effect not only upon British finance but indirectly upon British industry and commerce.

My hon. Friend when speaking just now asked how I can account for the fact that I am not speaking from the corner of the bench opposite as a Liberal, but from the bench here. The explanation is very simple. In the summer when I occasionally turned up at my seat over there, we were not faced, so far as we could tell, with a crisis. We had our apprehensions, but there was no announcement that we were faced with a crisis. Since then a crisis has arrived, which has led to an entire reconstruction of parties in this House. It is not only a question of the change of our seats, but men have had to adapt their views to the changed conditions. What is the good of telling us here and now that we should proceed as though our pound had not fallen? What is the good of asking us to look forward to the future as though our trade was not being so unbalanced that the present value of the pound can barely be maintained? What is the good of asking us to take the same views as we found amply sufficient when there was no crisis and when we were living very largely upon hope? What is the good of asking us to retain those views when we know that unless great efforts are made both inside industry and outside industry, by capitalism in industry, as well as by Cabinet Ministers, we shall find that next year will be one of the worst years in all the history of British industry?

If my hon. Friend asks me to retain the same views that I had before the crisis in August, I say I do retain the same views, but I have to deal with new conditions, and, still holding those views, I believe that the only way we can face up to our new anxieties is by adapting ourselves to every practical problem as it arises. I daresay what he would have liked me to have done would be to come and sit beside his right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) when he comes back. He would have liked me to sit beside him and stand at that Box and once more affirm my cherished theories. I am not going to affirm any theories this afternoon. If I may say so, with great respect to my right hon. Friend who opened this discussion, I think that the time for that has passed. We have now to sit down to every problem as it arises, dealing with it as a practical problem and allowing no preconceptions to influence us.

5.30 p.m.

Let me take one by one some of these various subjects as they arise. The first practical question I ask myself as a business man is: How can our currency retain its value? The first steps have been taken, but not all steps. The only way in which our currency can retain its value is by seeing to it that our adverse trade balance does not increase. If we purchase, and attempt to pay for, an unlimited amount of things abroad, we shall certainly not be able to correct the value of our pound. In the past, in normal times, there have been many ways in international trade and through foreign exchanges of correcting these disabilities. The exchanges have wavered a little one way or another and trade has come in and counteracted them, but no one can say that those forces either act rapidly enough to-day to save us from disaster or that they can meet a situation where so much of the transfer of wealth between country and country is in the form of capital. These capital transactions have passed the whole of the former regulation of currency. What we must do now, is to go behind the mere currency machinery and see how we can so restore the balance in our foreign trade and in our foreign payments as to save us from the anxiety of a further depreciated sovereign.

I had the honour of speaking from below the Gangway just before the Dissolution and in what I said then I led up to what I regarded then, and I still regard, as one of the most important points with which we had to deal. I said then, and I say now, that we have abroad only a limited amount of purchasing capacity and, speaking for myself, I expressed the hope then that we would reserve our purchasing capacity abroad for the essentials and would discard the luxuries. There are difficulties about that which I knew at the time, and which I fully understand now, but that might be a short cut to what we want to get at, and I hope that before I sit down I shall be able to persuade the House that, at all events, as a preliminary first step we are acting wisely in inviting them to authorise some proposals which will enable us to reserve a certain amount of our purchasing capacity for that which is most essential. Let us be careful that we start in a tentative way. That does not necessarily mean loss of time. There are a great many matters of prime business concern, which make us all nervous as we handle some of them in the City and in the great business centres of the country, which cannot be ignored, and if the Government of the day were to be rushed into action which would injure some industries, while helping others, I would point out that the effect on those injured industries might be of immense importance.

I can assure my right hon. Friend from what I have seen of my colleagues in the last 10 days, although I have had very short experience of them, that they mean to deal with these practical questions, as and when they come up, with the greatest rapidity. Let me take an example. My right hon. Friend referred to the Ottawa Conference, and asked why that should wait. He need not be at all apprehensive. There is sitting, or there ought to have been sitting, the Ottawa Committee of the Cabinet, dealing with this very problem, sitting at the very moment at which he was making bis speech. I turn to some of the things about which it is only reasonable that we should be careful. What is to be the effect of total prohibition or of import duties upon a number of our industries? Are those industries so impregnable that a little adjustment here or there may not do them harm?Let us see. You must give us time to get into touch with the right people to deal with these problems in the right way. What hon. Member would suggest that the Chancellor of the Exchequer should not have time to consider with the interests concerned the new taxation, for instance, which he has to impose from time to time In the ordinary process of financial business in this House it has always been regarded as perfectly reasonable, as sensible and prudent, that the Chancellor of the Exchequer should have time to consult the interests concerned, to realise how far the influence of his taxation would extend, what harm would be done here or there and what adjustments were necessary.

I would particularly point out that in this respect we must not ignore that great and most characteristic of all industries, the industry of shipping. I happen to know something about shipping, but it is not for that reason that I am pressing the point this afternoon. We are the greatest carriers in the world, and we must bear in mind when we are dealing with these great fiscal problems that we cannot ignore a great industry of that kind without depressing, perhaps, 100 more industries. We have also to bear in mind that we have very large remittances coming to this country from abroad, and we must not altogether close down the means by which these remittances reach us here. I am expressing my own opinion, and others may express theirs, if they like, but I think we should be foolish to copy exactly the fiscal policy of the United States of America, having regard to the fact that it would do us grave injury. In America that policy may not do them so much harm; that is for them to decide and not for us. Do not let us do here that which would impede the payments which we must receive from abroad, if we are to receive in full the invisible exports which play such a large part in our trade balance.

We have also to remember, although this may be a secondary consideration, the purchasing capacity of our foreign customers. If they buy from us, we want to be quite sure that they can pay. We must not, therefore, imagine that we can do these things entirely in a one-sided way. I might also mention, in passing, that the only permanent way of restoring our trade balance without imposing any sacrifice upon our people is by expanding exports rather than curtailing imports. The two things are not incompatible. Both can be achieved. When I am asked what is to be done with foreign trade, I say that there is no section of Government activity which cannot bring its contribution towards the strengthening and recovery of our industry and commerce. The Prime Minister, the Cabinet, and the Foreign Office have their parts to play in international transactions. Much can be done by people outside who, in the long run, are those who can make industry or mar it more completely than even the House of Commons. I have long held the view that one useful inventor is worth 70 Acts of Parliament. The fact is that the man who can make a great improvement in our scientific processes in reorganising our business with greater skill, might do far more for the rehabilitation of this country's industry and commerce than could any of us by Act of Parliament or the contribution even of our valuable opinions in this House itself. Let us, therefore, not ignore what can be done by them.

We might well remember that in a great many industries the margin by which they live is very small. I have had my attention drawn only this week to the fact that in the cotton industry, where quotations for piece goods, as is well known in this House, are made in one thirty-seconds of a penny, it has been repeatedly stated—and I have had is confirmed on the highest authority— that the difference of one thirty-second of a penny in the price quoted for cloth worth only a few pence, is frequently sufficient to settle the destination of an order. That shows the delicacy of one of the greatest industries that we have in this country, and that delicacy is sometimes impaired by bad financial organisation. There are very few hon. Members, whether they are old Members or new Members, who do not realise the infinite harm which was done in Lancashire by some of the financial contrivances of the boom period. They have imposed burdens here and there, some large and some small, but they are all large enough to interfere with these delicate means by which bargains are made, and to swallow up the little profits made in that vital industry.

When we come to deal with the general policy of the country as a whole, whether we are to do it by means of the machinery which has been described to some extent by my right hon. Friend this afternoon as being already in a very ripe form, or by means which are now under consideration in official and business circles, we must consider what is to be the classification? What drawbacks, if any, are to be given? What exemptions are to be granted? The answer to every one of these questions is not as simple as it looks. Great effects are brought about by wrong decisions in any one of them. Is it unfair to ask that the Government, which is full of energy, should be allowed time to deal with these matters fully? I know that prudence is not a very popular virtue, but in dealing with these trade matters we had far better be careful about the steps we take, and while proceeding in one direction and with one object before us, namely, the saving of British industry and commerce, not rush into anything prematurely, before Christmas, when what is most necessary at the moment is that we should deal with the immediate emergency.

Now I come to the immediate emergency. There has been during the last few weeks anticipation abroad, as far as we can gather, that the imposition of Customs Duties might be part of the policy of the present Government at an early date, and the result has been that clever folk abroad, and I have no doubt some clever men here, have been doing what everybody else has been doing—trying to get their goods into the country before they became subject to duty. In our opinion they have been doing that to an excessive extent. I take Class III, the most important of the categories in our trade and navigation returns. Two years ago, when trade was pretty active, before the shadow of coming crises had fallen over it, the importations in Class III ran up to £28,000,000 in a month. During the 10 days of November, now just closed, they have run up to imports at the rate of £35,000,000. They have gone up since the month of October from £27,000,000 to £35,000,000. If you go down the list of articles affected in this way, you see some very remarkable increases, sometimes as much as 80, 90 and 100 per cent. The hon. and gallant Member for Bournemouth (Sir H. Croft) asked a question to-day in regard to some of those early importations. There is only one comment that I can make on the figures that are being sent to him, and that is that 10 days may be a very short time from which to draw a general conclusion. I would not attempt to draw a general conclusion on only 10 days if it were not for the fact that the tendency has gone on during October with increasing rapidity up to now.

I might easily have attempted, from past experience, to enter into a discussion of what is called dumping. Dumping means at least four or five different things. I will not waste the time of the House by declaring what is or what is not dumping. All I will say is that these goods have been coming here in abnormal quantities. If the Chancellor of the Exchequer were about to impose taxation, there would be no surer way of defeating his end and depriving us of revenue, than by allowing these things to come in continuously during the next few weeks or months, without let or hindrance. They are not things that are likely to add to the cost of living of the people of this country—plate and sheet glass, knives, surgical instruments, vacuum cleaners, washing machines, typewriters, coloured cottons, carpets, boxcalf leather, tanned leather, cobalt oxide; none of them at all startling, but when you add them up they become a very serious drain upon our purchasing capacity abroad, which is the very thing to which I drew the attention of the House at the beginning of my remarks.

I would like to tell the House at once what are the powers which the Executive ask shall be placed in their hands. The Board of Trade is probably the best equipped of all Government Departments for knowing how far the influence of prohibitions or heavy duties will be likely to spread. The Board of Trade has been entrusted by the Cabinet with the task of drawing up these schemes and operating them when they come into force. The Chancellor of the Exchequer has been giving us the value of his assistance and advice in these matters, and we have come to the conclusion that the best way of dealing with those abnormal importations, and dealing with them at once, is by giving to the Board of Trade the power to issue an order, which must come up within four weeks for the sanction of the House if it is in Session, and if it is not in Session within four weeks after the re-assembly of Parliament—the House will thus be able to keep its grip on what is proposed—which would impose upon articles to which the Act applies a duty not exceeding 100 per cent. of the value of the article. There is no use in doing things by half. You must do it so effectively as to reduce the strain upon our purchasing capacity and without injury to any of our people or industries.

I know that in the course of the discussion I shall be asked what is to be the case with regard to agriculture. May I remind hon. Members that the powers we are going to ask for this week are emergency powers, and if our proposals go through they will expire in six months? They must come up again for consideration within six months or some thing else must take their place. That gives the House full power. As this is a forestalling Bill aiming for a comparatively short period at keeping the field clear for future action, we have not included agriculture, because forestalling in agricultural produce from its nature is scarcely practicable to any serious extent, and while agriculture has its own grave problems which must be dealt with —and no one knows that better than I do myself—this Bill deals with a special case for which we are asking for powers for six months. The Minister of Agriculture is already at work on solutions, for which this Bill cannot be a substitute, and his proposals will be laid before Parliament in due course, and without undue loss of time.


Before the House rises?


I am afraid I cannot say.


Are these powers confined entirely to articles in Class III?


At this stage we are asking the House to give us powers with regard to Class III, which consists of manufactured and mainly manufactured articles. We do that for a special reason. As far as we can see, we shall be able to make a large and effective selection without any detriment to either industry or the cost of living in this country.


Does Class III include iron and steel?


In some form, but, of course, the hon. and learned Member knows that there are many forms in which iron and steel are imported into this country.


Pig iron.


Pig iron to the blast-furnace man is the finished product; I do not say what it is with regard to other people. I have only one word to say in conclusion, and it is this: We are faced with more difficult industrial problems than have ever come before the House of Commons. We have a far greater mass of people dependent on the wisdom of our judgment, and all I beg of this House is that at this stage, and at all other stages of this little Measure and in the larger considerations by which it must be followed, they will always place before them one object, and one object only, and that is that British industry and commerce shall be maintained at their maximum, that every chance shall be given to those who are engaged in these innumerable trades to have full value for the brains and energy imported into them, and that we ourselves should rise above some of the theories by which we may have been embarrassed in the past and deal with every problem as a practical problem as it arises for the benefit of our people and the enrichment of the State. It is with these objects that we propose to proceed by exceptional means during the next few days. The Ways and Means Resolution will be introduced to-morrow, and will, we hope, be passed before the House rises. We shall circulate the Bill as soon as possible after that, and we hope it will be passed through all its stages by Thursday. We believe that it is necessary it should receive the Royal Assent on Friday.


I desire to congratulate the right hon. Gentleman upon his appointment to his very important and high office. I do not think we can congratulate him upon being the whole-hogger, as is apparent from his speech this afternoon, and I wonder what some of my Free Trade friends will think of the speech to which we have just listened. The right hon. Gentleman is not going to deal with dumping or with tariffs in any half-hearted way; he is going to take powers for the total exclusion of certain articles. It is certainly surprising that the right hon. Gentleman, so early after his conversion, is thus prepared to go the whole hog.

I am not going to deal with the question of the Post Office Savings Bank deposits other than to say this. The right hon. Gentleman is a very old Parliamentary hand, and has had considerable experience in fighting elections, in some of which he has been successful and in some of which he has been unsuccessful. He must have known what was likely to be the effect of the statement he made once it was issued. While he may have given an explanation to the representative of the newspaper, he must have known that 99 per cent. of the newspapers of the country were supporting his policy and only 1 per cent. opposing it. The 99 per cent. of the newspapers were quite prepared to take full advantage of the statement which the hon. Gentleman made, and this also applies to the Prime Minister, who should have known better, and to the Secretary of State for the Dominions. The statement served its purpose. In 1918 those who opposed the proposal of the capital levy said that if it was agreed to it would mean that the wicked Labour people would dip into the money-boxes of the little children. On this occasion it was the savings of the poor people. I am not going into the methods adopted during the election. I was one of the fortunate ones; I had an unopposed return. But I visited several constituencies, and never were more despicable methods adopted for the purpose of winning an election.

We were very interested in the statement of the Tight hon. Gentleman with regard to the question of dumping, and I want on behalf of hon. Members on this side to protest most strongly against this system of legislation. It might be justi- fied in a state of emergency and when Parliament is not sitting, but if this legislation is necessary, there is no reason why Parliament should not continue to sit and pass it. Why the urgency for the House to rise on 27th November? Why, if we are faced with a crisis such as had been described by the right hon. Gentleman, should the House rise? The House of Commons is the place where matters dealing with this crisis should be discussed. I am inclined to think that the crisis is not so urgent as some hon. Members pretend. Can anyone imagine this country being faced with a crisis and the right hon. Gentleman the Secretary of State for the Dominions projecting a tour round the world which is going to take six months? I should have thought that he was the one man who would be required to remain in the country during a period of crisis. But it is quite evident that the country can go on without the Secretary of State for the Dominions.

6.0 p.m.

The House must also remember that in dealing with these matters we are taxing the subject, and it is grossly unconstitutional to allow a Minister without the sanction of Parliament to impose fresh taxation. I am told that there are over 100 lawyers in the new Parliament, and I wonder what their attitude is going to be towards the various powers suggested by the right hon. Gentleman? We on this side will expect them all to protest most strongly against such powers being obtained.


Does the hon. Member understand that the President of the Board of Trade proposes to take any power without the authority of Parliament?


I should have expected my hon. Friend, who is a lawyer, to put that question to the President of the Board of Trade himself. This procedure which has been outlined is putting a premium on lobbying and on all the forms of corruption which must follow the imposition of a duty of this kind. Before applying the Safeguarding Duties the House insisted on a public inquiry, and that was done in order to get rid of the clangers to which I have referred. Why is it that these important matters cannot be considered by the House of Commons itself? Is it because the House is not competent? Here is a Government blessed with an unprecedented majority, with large numbers of supporters of all kinds. Or is it, as we think it is, that the Cabinet have so many disagreements among themselves that they cannot come before the House and manifest those disagreements? The powers which are asked for are an insult to Parliamentary government. Unless the proposal is a bit of window-dressing to placate the tariffists, the mere fact of the Government having the large majority referred to makes it more necessary than ever that these important matters should be discussed on the Floor of the House.

I would ask the President of the Board of Trade himself how his opinion coincides with the opinion expressed by the Lord President of the Council in this House only on Friday last. The Lord President of the Council was referring to a fellow-countryman of mine and to his Celtic temperament, and suggested that the fact that he, the Lord President of the Council, was an Englishman, meant that he was not blessed with the imagination of the Secretary of State for the Dominions. The Lord President had to explain away a statement which the Secretary of State for the Dominions had made, and this is how he did it: There was in his democratic mind no intention at all to derogate from the power of this House by one iota, and had there been he would have had to reckon with a solid Englishman in myself, for I would never allow the House of Commons to be ridden roughshod over in such a fashion. Hon. Members may dismiss that completely from their minds, and should try to remember, next time they read a speech or hear a speech spoken by a gifted Celt, that we do not always employ quite the same language to convey the same ideas."—[OFFICIAL REPORT, 13th November, 1931; col. 458, Vol. 259.] I do not know whether the President of the Board of Trade, seeing that he for some time represented a Welsh division, would regard himself as having in any way inbibed some of the qualities of the Celt, but I think there is a considerable difference between the powers which he has asked the House of Commons to give him to-day and the statement which the Lord President of the Council made in this House on Friday last—another manifestation of disagreement in the Cabinet. That is the view which we take regarding these powers. If the powers are granted, will any pro- vision be made to prevent profiteering? What protection is to be given to the people who are going to use the articles which have been described? I should have thought that that was one of the first things to which the Board of Trade would have given its attention. I hope that before the Debate closes we shall hear something from the right hon. Gentleman regarding that matter.

During the Debate we have heard a lot regarding finance. In his opening remarks the right hon. Gentleman said that notwithstanding the fact that we have balanced the Budget there was still a good deal of difficulty, and that we would have to be very careful regarding expenditure during the coming year. He indicated that there was just a possibility of the Departments being asked further to economise, and that there was a possibility of some interference with the grants that were being made to the Departments. I hope I have stated the position correctly. I should have thought that the time had arrived for directing our attention to the real cause of the financial difficulty with which the country is threatened. I was very interested in a speech made by Mr. Snow-den, the ex-Chancellor of the Exchequer, over the wireless during the Election. I do not quarrel with some of the things which the ex-Chancellor said, but I think there was a complete misunderstanding of the financial position of the country as outlined in that speech. The ex-Chancellor referred to the increase of the sums spent upon social services and put it in this way: In 1906, 25 years ago, the whole cost of the social services was only £18,000,000. This year it is £237,000,000, or 13 times the amount that the social services cost us in 1906. One would imagine from that statement that it was the increased cost of social services which was responsible for the financial difficulties of the country. During that same speech the ex-Chancellor entirely ignored the cost of the War. He did not tell the country that in 1913 the National Debt was £649,000,000, and that in 1930 it was £7,537,000,000, or 12 times the amount of 1913. The right hon. Gentleman did not explain that nearly three-quarters of the expenditure of £800,000,000 which the country had to raise in taxation every year went to pay for past wars and to prepare for future wars. I was not only interested in the ex-Chancellor's speech during the election, but in the speech which he broadcast to America almost immediately after his acceptance of the Chancellor-ship during the late Labour Government. In his speech to America Mr. Snowden said that of the £800,000,000 raised in taxation that year no less than £520,000,000 went in payment of interest, sinking fund, war pensions and the fighting services, and that all that went to meet the social services and other expenditure of this country was £280,000,000.

The protest which we make is that since the end of the War until the present time every commission and committee that has been set up to inquire into the expenditure of this country has attacked the £280,000,000 spent upon the social services, and not the £520,000,000 which is spent in paying for the last War and preparing for the next war. I hope that the House and the country will realise that the production of 2,000,000 men year in and year out is needed to pay interest on our War debt, or three times the amount of money paid to the miners in this country every year. I and my friends say without hesitation that until some measures are adopted to deal with that huge burden, which hangs like a millstone round the necks of the people of this country, the country will be faced with these recurring financial crises. I remember a late colleague of mine, Mr. Vernon Hartshorn, said that he was one of those who sat upon a commission to inquire into War wealth, and that he discovered that at the end of the War there were a few thousand people in this country better off than they were before the War by a sum of not less than £4,000,000,000 to £5,000,000,000. The Labour party then advocated a capital levy, but the country would not have it, and the country has had to pay ever since. It is interesting here to read part of another statement by Mr. Snowden. It is very apt. This is what he said: I do not want to give offence to anyone when I make this statement, but when the history of the War in which the debt was incurred, its recklessness, its extravagance, commitments being made which were altogether unnecessary in the circumstances at the time—when that comes to be known I am afraid posterity will curse those who are responsible. In the same way posterity will curse those who are responsible for the continued payment of this colossal amount of interest on the War Debt. An hon. Member tells me that it is too late now. Let us hope that it is not. I would follow the advice given by the present Minister of Health. He made a speech in this House on 11th February of this year, in which he said: The greatest hope that there is of a direct and practical national economy is in the reduction of the interest on our National Debt. He also said: If we reduced the interest on that debt by one per cent. it would save the country £75,000,000. That is the greatest hope of reduction of expenditure without injury to the country."—[OFFICIAL REFORT, 11th February, 1931; col. 4G0, Vol. 248.] I think the Government ought to direct their attention to that aspect of the matter instead of continually attacking the social services.

Much can be said on this question of dumping, and we shall have an opportunity when the Bill is presented of dealing with certain aspects of it. I am connected with an industry which has contributed more to the balance of trade over the last generation than any other industry in the country. I refer to the coal industry. No one knows better than the right hon. Gentleman how great are the difficulties in the coal industry at the present time. Nothing should be done to aggravate those difficulties. In South Wales, 60 per cent. of the output of coal is exported. Already there are rumblings as to what is going to happen in the countries which are out best customers and by the setting up of artificial barriers, which must inevitably mean an interference with trade, we are afraid that some of our great export industries are going to suffer considerably.

One would imagine that we had lost all our export trade. Yet I think it is the case that, up to the end of last year, the export trade in this country was higher per head of the population than that of any other country in the world. Even to-day, if you measure the import of manufactured goods with the export of manufactured goods, you will find that there is a surplus in the actual amounts of manufactured goods exported. I hope that those matters will receive the atten- tion of the right hon. Gentleman and his Department and that in the legislation which is suggested by them, a good deal of thought and consideration will be given, not only to the exclusion of goods from this country but to the extension of the export of goods from this country which plays such an important part in the industrial lives of many of our people. We shall offer to the legislation suggested by the right hon. Gentleman all the opposition of which we are capable. We think that they are taking away from Parliament powers which Parliament itself ought to have, and we hope that in this matter other Members in all parts of the House will join us in the protest that we intend to make.


It is customary for a new Member addressing the House for the first time to ask for the indulgence of the House and that indulgence is specially necessary in my case, since I have to speak only a few minutes after a statement of the highest importance by the President of the Board of Trade. A great deal has been heard in the last few day6 of the younger generation in this House. May I attempt, briefly, to express what I believe to be the view and the attitude of a number of the younger Members on the Liberal benches. We listened with admiration to the speech of the President of the Board of Trade and, though he raised a number of highly controversial matters, we could wish that every speaker who has dealt with the question of tariffs or of limiting imports in this Debate, had done so in the same temper as the right hon. Gentleman. It would have been a great gain if that had been done.

It would be idle to pretend that we on these benches have been able to listen to the whole of this Debate of the last few days with anything like unalloyed pleasure because the question of tariffs, and not of tariffs after an inquiry but of tariffs for their own sake, has played a much larger part in this Debate than it played in the General Election. During the General Election tariffs were a secondary issue and the question of saving the pound and saving the purchasing power of wages, salaries, and benefits, was of a great deal more importance than the question of tariffs and Free Trade. If hon. Members wish to see the difference between the part played by tariffs in this Debate and the part played by them in the election they have only to remember the speech delivered from this bench last week by the right hon. Gentleman the Member for Epping (Mr. Churchill) on this subject and compare it with some of his utterances during the General Election. I have here a letter which was sent out, I believe, by the Anti-Socialist Union and was signed by the right hon. Gentleman the Member for Epping. It is called "The Issue before the Nation," and it says: Now that we know that there is to be a General Election one supreme object will stand out above all others, namely the shattering defeat of the Socialist party at the polls. Nothing can compare with that. I will not weary the House by reading the whole of this document, but throughout it there is not a single mention of tariffs or the fiscal issue. Then the right hon. Gentleman comes to this House and says: This Parliament has the fullest mandate to apply any measure of Protection which it deems wise."—[OFFICIAL REPORT, 11th November, 1931; col. 136, Vol. 259.] I will not stop at the letter I have just mentioned. I have also here a report of a speech delivered by the right hon. Gentleman in the Drake Division of Plymouth during this election. In that Division there were some 6,000 Liberal voters whose votes were going a-begging and had to be won. It was thought that their votes would decide the issue in that Division. The right hon. Gentleman went there and dealt with the question of Protection and Free Trade, and this is what he said: Is it not really time that we took these great economic issues out of party? Is it not time that the question, whether we should have a tariff or whether and how a tariff is to be fitted in with our devalued pound sterling, or how it could be imposed so as not to be a burden which would do more harm than good, how it could be made to fit in with the stimulus of our export trade and the maintenance of our great shipping interests, was considered by experts and business men trying sincerely to find the best way of improving British housekeeping and making a better livelihood for all our people? That was an appeal for referring the question to experts and business men, but as soon as the right hon. Gentleman "gets through" as he puts it, and comes back into this House, the experts and business men are elbowed on one side. There is not a single reference to them in his speech here and the hon. and gallant Member for Bournemouth (Sir H. Croft) and his friends come upon the stage in their place. The House will notice the difference between the language used by the right hon. Gentleman in this House and the language which he employed when he was wooing the Liberal electors of Plymouth. Naturally we realise that there is generally some difference between the hours of courtship and the years of possession, but all that we Liberals are asking is that the terms of the marriage settlement should be observed.

The right hon. Gentleman in his speech last week did not stop there, but went on to deal with the question of an inquiry and said that he could not see the need for an inquiry into the principles of Protection and Free Trade. We know that the right hon. Gentleman has a great and deserved reputation for open-mindedness but this was rather surprising from him because in the past he has been an advocate of an inquiry. Only eight years ago, in the election of 1923—the only election that has taken place since the War in which the fiscal issue was the primary issue before the electorate—the right hon. Gentleman made a speech at Manchester in which he complained that under the proposals of the Conservative Government there was to be no fair hearing of the case, no judicial examination of the facts and he went on to say: Free Trade is to be tried by drum-head court martial and shot at dawn. Now, only a few years later, the right hon. Gentleman is himself a member of the firing squad and his own finger is on the trigger. Surely the only possible basis for a National Government or national unity is that each side should be ready to make some concessions. Unless you have that spirit it is impossible to have national unity. You cannot carry on a National Government, you cannot keep a united front, if one side is going to say to the other: "You must accept all our proposals and the whole of our programme and we are not going to move an inch to meet you." That attitude makes a National Government impossible. There was a very wise statement on constitutional usage by Walter Bagehot who said: The air of Downing Street brings certain ideas with it and the hard, compact, prejudices of Opposition are soon melted and mitigated in the great gulf stream of affairs. May I express the hope that the Ministers of the National Government will prove peculiarly susceptible to that process of melting and mitigation and that they will not pay overmuch attention to some of their followers on the back benches who still retain the hard, compact prejudices of Opposition. I have said that there have to be concessions on each side. The National Government has to be conducted in a spirit of give and take on all sides. The only thing that we are afraid of, having heard some of the speeches from the back benches opposite, is that there are certain hon. Gentlemen who have been elected as supporters of the National Government and who stand less for a policy of give and take than for a policy of smash and grab. If that line is pursued it is a very ominous sign indeed for the National Government and all those who were elected to support it.

The National Government was founded on a contract. It is remarkable, after that contract had been endorsed by the electors, that so few hon. Members have referred to the terms of the contract in this Debate. The terms of the contract are contained in the Prime Minister's manifesto and they are amplified in the Prime Minister's broadcast to the nation. In that contract we Liberals have to agree to certain things. I think we have shown ourselves ready to make certain concessions. I do not think that there will be very much difficulty from these benches when the Government comes to deal with the question of forestalling. I think we shall probably agree, at any rate in principle, that while the Government is making up its mind upon the balance of trade, while it is reaching its final judgment, it ought not to have that judgment prejudiced in advance by abnormal importations brought here in anticipation of a possible tariff. I think that is a perfectly reasonable concession. We have always been ready in the Liberal party to deal with the question of dumping on its merits.

6.30 p.m.

As regards the question of the balance of trade, if there is a fair, impartial inquiry and if that inquiry finds, first that there is an adverse balance of trade—and there is a great deal of conflict of testimony upon that point—and, secondly, that the only way or the best way of dealing with it is by means of a tariff on some selected classes of goods, then I do not think that Members on these benches would be prepared to stand in the way. I think that is part of the contract into which we entered, the terms of which, as I have said, are stated in the Prime Minister's manifesto and broadcast, but there is nothing in either the manifesto or the broadcast to commit us or any of us to a general tariff for its own sake or to any form of food taxes.

We were told in the speech of the right hon. Member for Sparkbrook (Mr. Amery) that he would shortly have to go back and face the 23,000 voters who supported him. We all have constituents to face, some of us in big industrial constituencies, and it would be a terrible thing if we had to go back and tell them that in the winter that is coming there is to be the imposition of food taxes in this country, and food taxes, which are the same thing as the phrase "Protection for agriculture," are no part of the bargain into which we have been asked to enter. We have made large concessions. On the question of forestalling, I do not think the Government will find very much fractious opposition on these benches, and on the question of the balance of trade. Surely we have every right to ask that the other parties to the contract should also be ready to make some similar concessions, because it is only on that basis that the National Government can be carried on.

May I come to a slightly different point in relation to the question of tariffs? I suppose it is still possible to divide the younger generation of politicians into two categories, roughly, of Protectionists and Free Traders, but in spite of that I think that the younger generation, whether they call themselves Protectionists or Free Traders, look at this matter through very different eyes from the older generation, such as is represented by, shall I say, the hon. and gallant Member for Bournemouth. I think that this proposition would be generally agreed to, anyhow by the younger Members of this House, that whether tariffs in themselves are good or bad, there is all the difference in the world between a tariff applied indiscriminately, and for its own sake, and a tariff which is used as one instrument among many for national planning and national reconstruction.

May I give an example of the kind of thing I have in mind? In the last Parliament a very interesting Bill was introduced by a Mr. Allen, who then represented, I think, an Ulster constituency, but who has sunk his political fortunes in that courageous, if misguided, venture known as the New party. Mr. Allen's Bill was something on these lines, that where there was a safeguarded industry, that is to say, an industry which by Government action had been given an artificial measure of prosperity, that industry should be compelled in return to introduce some scheme of co-partnership and profit-sharing, so as to guarantee to the workers a fair share of the additional prosperity which it had been given.

I do not know whether a Measure along those lines is immediately practicable or not, but I believe it was the right idea, and I suggest that, if we have an inquiry, if as a result of that inquiry it is found that there is, first of all, an adverse balance of trade in spite of our having gone off the Gold Standard, and, secondly, that tariffs are the only or the best way of dealing with it, and if then the Government have to perform the rather invidious task of selecting certain industries for a tariff, in order to rectify the trade balance, then I suggest that the Government should only proceed with tariffs, should only proceed to give this artificial measure of prosperity, where they could be certain that the State was going to get something in return. I think that would make a very big difference to any tariff policy that could be introduced.

Tariffs might be used as a sort of lever or instrument in order to gain profit-sharing and co-partnership and some real industrial enfranchisement. They might be used as an instrument for compelling rationalisation and reorganisation in those industries where they are needed, but I suggest that if a tariff is to be applied to any selected number of industries, only those industries should be chosen which are able and ready to make some return for the additional prosperity given to them.

All of us in this House, whether we sit on the Conservative benches or on the Liberal benches, were elected on exactly the same cry. We were all elected on the cry of national unity, and we are all conscious that the Government whose supporters we are have received a greater and more implicit confidence than any party has ever dared to ask before in our political history. That being so, surely this is no time for political buccaneering, and surely this is not a time when we ought to fritter away the tremendous mandate which the Government have received by unnecessary bickerings among ourselves. A very heavy responsibility will rest on any supporter of the Government, however distinguished he may be, who raises unnecessary difficulties and problems.

May I take one example of what I mean? Last week there was the extraordinary attack that was made on my loader, the right hon. Gentleman the Home Secretary, by the right hon. Member for West Birmingham (Sir A. Chamberlain). Why was it necessary? Even if the right hon. Gentleman the Home Secretary had been guilty of some breach of Parliamentary etiquette or constitutional usage—and it is difficult to imagine him being guilty in that way—why was it necessary to air that grievance in open debate, with the certainty that it would be broadcast through the Press? Why could it not have been done by correspondence, or by private notice, or in some way like that? Surely that would have been possible. Why the right hon. Member for West Birmingham should have thought it necessary to go out of his way to give an appearance of disunity and discordance, I do not know. I have said that we were all elected on the cry of national unity. The Government have a greater responsibility probably than any Government before in time of peace, and there is the responsibility upon every Member of this House who is a supporter of the Government to see, as far as in him lies, that that unity is maintained, and that the Government shall be able to go forward, unhampered and undivided, to the* great tasks that lie ahead.


I hope it will not be thought presumptuous on my part if I venture to offer to the hon. Member for Dundee (Mr. D. Foot), who has just sat down, the congratulations of myself and, I believe, of the whole House on his speech. I am sure we shall listen in future Debates with great pleasure to what he has to say, and I am confident that his father, who sits on the Government Front Bench, must have been proud indeed to hear him. I only hope that, as time passes, if he remains a Member of this House, he will not forsake the clear fiscal principles that he has enunciated to us this evening, and that experience of this House will not make him place mere opportunism above rigid adherence to his Free Trade principles, of which he has spoken so eloquently.

Before I come to the speech which the President of the Board of Trade has delivered this afternoon, I would like to offer one or two reflections on the election that has just taken place. I accept the advice and the exhortation of the right hon. Member for Bewdley (Mr. Baldwin), who, so far as I understood him, said to us, "Now that you have been beaten, accept that beating in a sportsmanlike spirit, and regard it as the judgment of democracy in this election. For my own part, I shed no tears over the result of the election, and for this reason, that while the Labour party as a party has been defeated at the election, it is none the less true that in securing that defeat the party opposite, the supporters of the National Government, had constantly to point out the continual crisis existing in capitalist organisations in this country. Crisis was in the air, and it was by using the real crisis that existed that they were able to frighten a large number of the electors of this country.

The historic fact that, I think, this election shows is that for a period of 10 years after the War a policy has been pursued which has ended in bankruptcy and in the flight from the pound. That flight from the pound, as it has been popularly called, is only the expression of the crisis that is inherent in capitalist society, and therefore I say that while there may have been a victory at the polls, it has not signified a victory for the cause of capitalism and has not secured that stability which they have all been seeking. Crisis was there, crisis will be there, and crisis will continue, so long as the present system of society, based upon private ownership and con- trol, exists in this country. The National Government have already failed. They failed in the primary object, as I understood it, with which they set out. They started, as far as I could gather, to see that there was no flight from the pound, and yet while they were in office that flight took place, and there is no one on the benches opposite, not even the financial expert who now sits there, who will get up and give us any confident prophecy either of a return to parity or of stability as far as the capitalist system is concerned.

I am not depressed from a party point of view by the results of the election. It has purged the Labour party, I admit, of men who had a philosophy, who had an outlook upon life, whose political views were partly responsible for leading this party into the débacle at the last election. Nor do I agree with the charges against the Prime Minister that he is a traitor. I do not regard the incident with reference to the Post Office Savings Bank as anything but a passing incident. People have asked me "How does the Prime Minister look?" Old friends of his have asked me that. I happen to represent his old constituency, and men and women who worked hard for him in the days of his unpopularity and who sacrificed everything for him to be returned here when he was out in the wilderness, have said to me "How does he look? Is he happy? How is his -conscience? "My reply has been that the Prime Minister looks perfectly happy because he is absolutely at home. My reply has been, too, that I do not regard him as a traitor, for the simple reason that during the whole time that I have been able to watch him and to study his actions and words, his philosophy and his outlook have inevitably led him to exactly the place which he now occupies. The Prime Minister always was a Tory. He always had no conception of Socialism; he denied its very basic principle in regard to the class distinctions and privileges that run right through our modern British society. He has always been, and is still, more at home in the drawing-room of the aristocrat than in the cottage of the working-man. He has landed where he inevitably was to land.

The election has given us the opportunity of reviewing the situation, and I am firmly convinced that if the Labour party is to regain the confidence of the working classes, it must go left rather than right. It must stick to its working-class basis and fight the working-class problem, and refuse to be led along the barren road of social and industrial reconstruction under a capitalist form of organisation. That has proved to be of no use; indeed it is one of the factors that helped to bring about the result of the last election. As far as I am concerned, this party will not go along the line of a nebulous Liberalism in future, but will go back to the old Socialist working-class basis in order to get victory at the next election.

We now have a National Government in office, and, as far as I can see, if it has a positive policy at all, it can be summed up in the word "tariffs." There is no doubt that the President of the Board of Trade went a very long way this afternoon in appeasing the hunger of the tariffists, but I was very curious in listening to his speech. I thought that he was very unhappy in some respects, and I wrote down some of the phrases that he used. He used such words as these—"prudent," "delicacy," "carefulness," "no premature steps," all of which seemed to indicate that behind his proposals were the mental reservations of the man who is going to administer the legislation after it is put on the Statute Book. It struck me that there will be probably more satisfaction in the fact that this is just an initial step, than there will accrue when the President of the Board of Trade comes to administer the powers that will be given to him.

I cannot understand the President of the Board of Trade, as an old Free Trader now forsaking in the slightest degree his principles as a Free Trader. We as Socialists take the view that neither under Free Trade nor under a system of tariffs will there result any good to the working classes, that neither will cure unemployment, and that under neither can you maintain a high standard of wages. I would infinitely prefer, and I shall remain loyal to Free Trade, but a solution of our economic difficulties will not be found under either Free Trade or Protection. I cannot understand the President of the Board of Trade at this moment bringing forward any sort of tariff, because if ever tariffs were irrelevant to the economic and commercel system of this country, they are irrelevant to-day. Tariffs have no relation at all to the problem of the balancing of trade. The departure of sterling from the Gold Standard has provided an automatic adjustment for the balance of trade. It is generally agreed that the exchanges are now free and that exports and imports naturally balance themselves. If that be true—and there is abundant authority to prove that it is true—I want to ask what relevance at all a tariff has to the rectification of any adverse balance of trade?

I am supported in this by a large number of economists. I have taken the trouble to read all the opinions of economists that I can afford the time to read, and even those who, prior to our leaving the Gold Standard, were in favour of tariffs, now say that the situation is entirely altered. Even in the case of Mr. Arthur Henderson, the conditions since he was prepared to accept a 10 per cent. tariff have wholly altered. Therefore, the tariff has no relevance at all to the situation as it exists now. I have support for this in what is regarded as the national organ. I read in the City columns of the "Times" the following: Domestic prices will rise, while exports will increase…Depreciation of the pound will operate like a varying tariff on imports and a bounty on exports …Provided wages are not allowed to rise, the adverse balance of trade will be reduced and should gradually disappear. As soon as that is achieved, this country will return to the Gold Standard…With a balance of payments in her favour and Great Britain will be in a position to make foreign loans again, and to resume her old place as the world's monetary centre. I am not subscribing to the return to the Gold Standard. The point I want to emphasise is that the "Times" City editor recognises that the depreciation of the pound has operated like a varying tariff on imports and a bounty on exports. If you put on tariffs at this moment it will inevitably result in the appreciation of the pound, and that will inevitably lead to a restriction of exports; and for every man that you seem to put in work by restricting imports, you will probably knock two out by restricting exports. As far as I can gather from the authorities I have been able to con- sult, a tariff under the conditions which exist at the moment will very greatly harm our export trade. I see the President of the Board of Education in his place. I wonder how far he has been led up the garden. I wonder how far he has been gradually dosed. The policy that is now being adopted seems to be to give a small dose of narcotic at a time so that eventually the Liberal party will be able to swallow the whole phial; little by little, bit by bit, to lead the Liberal party away from Free Trade into full-blown Protection.

I would like the right hon. Gentleman, or whoever is going to reply, to tell me whether for any tariff that is put on there will be a consequential increase of employment? Not a great knowledge of theory is needed to make one doubt whether tariffs will help in this direction. All the evidence is in the opposite direction. [HON. MEMBERS: "No!"] Well, what about America? Tariff America is rampant with unemployment. What about Australia, with a large problem of unemployment? There is Germany, too, and even France. I used to think that what the popular Press used to tell us about France was correct. According to an analysis in the "Economist" a short time ago, even in France, apart from the couple of million of idle men in the French army, there are at least 1,250,000 unemployed men.

Brigadier-General Sir HENRY CROFT

Is it not a fact that more than 1,000,000 people have been imported into France since the War?


If they have been imported, they are unemployed. France and America have unemployment problems, and if tariffs can cure unemployment, I want to ask why they have this gigantic problem? [An HON. MEMBER: "It is only temporary!"] I thought that tariffs would stop even temporary unemployment and give stability and security to employment. As a matter of fact, wherever you look in countries that have tariffs, you will find exactly the same problem that we have and in as gigantic proportions. It is not a smaller problem at all. In America and the other countries it is equally as great as in this country. Protection is being advocated from the benches opposite, not in order to help the employers to make profits, but, I understand, for the good of the working man. I ask, therefore, has Protection saved the workers in protected countries from cuts in their wages? We are often told that America is the land of high wages and stability of wages, but what has been happening there? Again I turn to "The Times." The New York correspondent of that paper says: The movement towards a drastic reduction in the basic wages of American industry is spreading with the expected rapidity. In many cases, notably in the coal industry and the railways, it is beginning with a reduction in the pay of white collar workers. Most of the leading copper companies have now announced wage cuts. Independent steel companies have been quick to follow the lead of the bigger corporations. It is estimated that in Pittsburgh alone the loss in wages will amount to about 50,000 dollars for every working day. 7.0 p.m.

There have been large cuts in wages in America in all the big industries, and Mr. Green, the President of the American Federation of Labour, has been uttering a protest. He said that the organised workers in America agreed to and supported Protection because they believed it would give high wages. Now that the workers were receiving cuts in wages, the American Federation of Labour were no longer able to support Protection in that country. Wherever we turn, where Protection has been in existence, there has been a movement for Free Trade. If we look at Australia—well, only in the "Times" Engineering Supplement last week there was a report of a strong movement in that country towards Free Trade. [Interruption.] I hear an hon. Member laugh. Let me quote from the "Times" Engineering Supplement of 14th November. I do not wish to weary the House with too many quotations, but as someone seems to dispute what I say, I had better refer to my authority. The Minister for Customs is being kept continually on the defence by the various organisations which are pressing the tariff issue. A year or two ago no notice would have been taken of such criticisms. Now it is considered impolitic to ignore them in view of the marked change of public opinion in the country. The joint committee for tariff revision, sponsored by the Chamber of Commerce in a fresh statement, accuses the Customs authorities of carefully evading all sources of information likely to oppose logically the maintenance of prohibitive duties. 'Every investigation,' it is announced, has shown the absurdity of many of the duties imposed. Yet the Minister continues to im- pose duties without a moment's notice. This tends to dislocate industry, has destroyed businesses which have taken generations to build up, and has put an army of wharf labourers, transport workers, customs clerks and business executives out of work…The effects of the tariff proposals are so complicated and far-reaching that no one can, even with a well-equipped department, hope to obtain the true facts.' There is the evidence for the movement against tariffs in Australia. There is the assertion that in large industries men have been thrown out of work, and that, in the transport and other industries, large armies of workless people have been caused by the imposition of tariffs in Australia.

I do not, as I have said, wish to weary the House with quotations, but I would like to refer to the Board of Trade Journal, in which there is the annual report of the tariff board for Australia. Anyone reading that report will observe that there is very great doubt about the effect of tariffs in Australia, because it employs words of very great caution as to the effect of tariffs upon unemployment. There is no more security for the workers' employment or for their general standard of wages under a protective tariff, than there is under the free-trade system of capitalist society.

This afternoon we have been told that we are to have Measures designed to deal with dumping. I have one or two problems, questions, and difficulties about this, which I would like to put before the President of the Board of Trade. He says, as I understand him, that the action the Government are to take is intended to deal with abnormal dumping. How is he to separate what is normal from what is abnormal? Is he going to cut a particular trade into two, and say that one part is normal and the other part abnormal? There lies a particularly difficult administrative problem. The next question is—I do not know whether I can make him see it clearly, but I would like a reply—how is it more difficult to dump into a Free Trade country than into a tariff country? Is it any more difficult? Anybody who considers the question will be driven to the conclusion that it is as easy to dump into a tariff country as into a Free Trade country, because the general tendency of tariffs is to raise prices and the dumper has merely to get under the level of prices that may be ruling. The level of prices in a tariff country is higher than in a Free Trade country, generally speaking, and since the dumper has to get under that level it is surely easier to dump into a tariff country than it is into a Free Trade country. If there is any sacrifice of price on the part of the dumper, the sacrifice that he has to make by dumping into a tariff country is less than it is by dumping into a Free Trade country.

I am afraid that the solutions that have been offered will provide no exit from the crisis of capitalism under which we are now living, a crisis which, we have been told, has been with us for some considerable time. The crisis will continue. Neither Free Trade nor tariffs will get us out of our difficulty. Neither on nor off the Gold Standard will lead us into a better state of society. We have still to deal with the basic problem that the scientist, by the application of science to industry, and the technologist, by the application of his technology, have made the productive power of our country immeasurably greater than the consumptive power allows, under the system of private ownership. There is the antagonism that counts, in a nation that has the power to produce in abundance, but has no power to consume. The eventual crisis is the poverty of your people, which means their lack of ability to consume. There is no solution to the problem of purchasing power under capitalist society. It cannot be done. The basic problem before our party, and the basic problem that society will have to solve, is the ownership and control of the means of production. We cannot plan production to meet the needs of consumers until we own the means of production. It is useless for me to say how I shall manage the affairs of the person next door, because his business is not my concern, and I have no power there. I have no right of ownership. I cannot do what I like. At the basis of the problem of planning lies the problem of ownership, just as it was in Russia.


How are we to increase the purchasing power of the consumer? Show us how to do that.


Yes, I am prepared to do that. It may take me a long time to do it adequately. There has come into industry the greater use of the machine, and less and less of the use of human labour power, relative to the unit of production. Through the machine, you have increased the unit power of production of each individual worker, but it does not necessarily follow that you have thereby increased the total production of society, for the reason that society will not allow the full power of production being employed. The fact that the machine more and more comes into production does not mean that it creates new value, or new surplus value out of which profits are obtained. The factor that creates surplus value is the human labour that is there, and the problem of the capitalist is that as he employs more and more his machine and less and less his workers, he is thereby continually narowing his field of profit. To take out that element, of profit arising out of investment and out of private ownership, is to take out the disturbing factor that prevents the machine going on to the full power of its quota of production. I hold the view, to put it briefly, that there is no need under collective ownership for profit. There is need under collective ownership for the accumulation of capital, but only such capital as is necessary in order to produce the things necessary to life.

What is happening now? The President of the Board of Trade this afternoon very significantly mentioned that he was concerned about foreign investments of a capital nature. This is a problem that cannot be solved under tariffs or Free Trade. Capital has been exported abroad, and that very capital has destroyed our home trade to a certain degree, and is certainly making a very damaging attack on the export trade. [Interruption.] An hon. Member says "No." Let me give him an illustration. J was speaking in my constituency in the open-air during the recent General Election. I was standing on a chair. We are more respectable in these days than to have a soap-box. I happened to look up, and I saw that the name of the street was "Toronto Avenue." I discovered that the name of every street was where an industry had been placed by a company. I inquired who had placed the name there, and I was told that it was the company of Messrs. Baldwin, Dorman and Long. I discovered that a steelworks in my constituency, one of the most up-to-date steelworks in the country, had been lifted bodily abroad to Canada, the Argentine, to Australia and other centres, and that the steel plant put down in those countries was now producing goods that were cutting this country's export trade to pieces.

I read an article by an employer in Lancashire, analysing the cause of the trouble in the Lancashire cotton industry. One of the big causes was, he said, that, prior to the War, we had sent to India and China no less than £100,000,000 worth of cotton machinery, which was now undercutting our own operatives in Lancashire, and causing them to be unemployed. Whether under tariffs or Free Trade, you are up against the fact that it is your capital accumulations and your foreign investments that are causing you so much trouble in the matter of unemployment. I know it is the inevitable law of capital to accumulate, that if it did not do so it would starve and wither away, but in accumulating it has produced 3,000,000 unemployed in this country, 8,000,000 or 10,000,000 in America, and millions more in Australia and the other capitalist countries. Unemployment, low wages, instability, crises, decline are the characteristics of every capitalist country, whether Protectionist or Free Trade. We as a Socialist party see no solution in either Free Trade or Protection. As the lesser of two evils we will fight for Free Trade. We will not give Protection unless we have State ownership and State control. I am not prepared to give Protection for private interests and private profit. Where is the guarantee for the wages of the workers in any of the industries concerned in anything that was said here this afternoon? There is no guarantee.

We are told that shoddy stuff is coming into the country. We are being told that we must exclude new potatoes and skim milk. The exclusion of new potatoes and skim milk is offered as a solution, or a part solution, of the gigantic problems of unemployment! It is to this that the capitalists of this country are reduced! In the "Sunday Times" yesterday there was a great outcry about shoddy suits. When I read it I thought to myself that these shoddy suits— trousers at 2s. 11d. a pair and so on— were coming in from abroad in order to meet the demands of a shoddy wage. The ultimate cause of our troubles is that under capitalism millions of our workers are steadily being reduced below the poverty line. No man or woman in this House dare tell me that 15s. 3d. provides a civilised standard of life for the workers. If a new saucepan or a new kettle is needed, where is the money to be found out of that miserable unemployment allowance? Come to my constituency, and go up the valleys which the Prime Minister has travelled time after time. You will see there men and women getting warmth abed from newspapers. They have no money to buy a frying-pan; there are collective frying-pans in use from house to house. There are children without stockings and without boots in this inclement weather. [Interruption.] This is not sentiment. The right hon. Gentleman knows nothing about it. What does he know about the tragedy of the terrible unemployment existing there? We are not providing even a physical standard of life, let alone a chance for the cultivation of the mind. You have robbed these men of their independence. [Interruption.] It is said that we of the Labour patry agreed to the "cuts." I never knew before that it was an excuse for murder that somebody else had agreed to manslaughter. The responsibility rests not upon those who would have done it but upon those who have done it, and it is the National Government who have cut the unemployment allowances and are throwing the people on to the public assistance committees.

I will fight against the National Government, and for me, and I hope increasingly for the party, it will be not merely a party political fight but a fight for the radical transformation of a grasping, cruel, inhuman, capitalist, Imperialist society into a decent society based upon social ownership and social control, where human values will be placed in a category higher than the value of profits or foreign investments abroad. I hope that in this Parliament our party will not merely fly the flag of a wishy-washy Lib-Lab policy, but fly the pure red flag of Socialism, because only under that flag shall we achieve emancipation for the working classes in this country.


I hope the House will not expect me to follow the last speaker into a number of the subjects with which he has dealt, such as the general question of Socialism and the question of Free Trade and Protection. Such discussions were quite familiar to us in the last House of Commons, and the way in which he has dealt with those topics now makes it perfectly clear why the country rejected his party at the General Election. Listening to that speech, which is comparable to some of the other speeches from that side during the last few days, we realise that if that is the policy the party opposite would produce to meet the crisis of the moment the pound sterling would be depreciating not merely by 25 per cent. but would follow the franc until it would be worth, before long, only one-fifth of its former value. He believes, apparently, that the tariff in the United States is responsible for the unemployment there. Everyone who has given the most superficial study to the subject knows that the debacle in the United States, the existence of which no one denies, is due primarily to the fact that they had a more superlative bout of speculation than any other country under the sun has ever known, and that the reaction from it dislocated their industry. Further, the great strength of the United States lay in the fact that it is about the foremost producer of raw materials in the world, and the falling value of raw materials also played its part in creating a critical situation.

I wish to bring the House back to the immediate problems in front of us as outlined in the King's Speech, and more particularly the problem dealt with this afternoon by the President of the Board of Trade—the trade balance here and now and in the weeks to come. Probably everyone will admit that the trade balance is the most pressing question. The late Government restored Budget equilibrium so far as possible, though even the equilibrium of the most recent Budget is in danger at this moment, but the longer task of restoring the trade balance was left to this Government. We can restore the trade balance in either one of two ways, or both. The best way —it is not the prescriptive belief of any particular party—is, of course, to increase exports. Every practical person, however, every practical statesman, knows that to do that is a long and slow task of building up. My own conviction is that it is not possible to restore the trade balance without, in the long run, a tariff on imports.


What is the trade balance?


The adverse trade balance at this moment is the excess of imports over exports, both visible and invisible.


In a creditor country like ours is it not a good thing to have an excess of imports?


If the hon. Member had attended to what I said he would have noticed that I said it was an excess of imports over exports, both visible and invisible.


Will the right hon. Gentleman give the figures?


I would merely say to the hon. Member that included in the invisible exports is the value of the interest on foreign investments, together with profits on shipping, and I am sure he is perfectly well aware that if in a country like this there is an excess of imports over all those exports the position is both unstable and dangerous.


I asked for the figures.


The present estimate of the excess is that it is likely to be between £80,000,000 and £100,000,000—probably more likely to be £100,000,000. I myself believe that in order to restore the balance a tariff is needed. I say that not merely from the point of view of a Tariff Reformer but on consideration of the trade balance itself. I agree that to introduce a tariff for this object would probably take some weeks, that is, if we are to have a tariff that pays regard to the needs of the different industries and interests which ought to be consulted and cared for, and that it is necessary to be patient and to give time for the administration to work out a tariff. Meanwhile, it is absolutely necessary that the position should not be prejudiced by an abnormal importation of goods during the intervening weeks. That was the position about which many of us were exceedingly anxious. We were ready to credit the Government with good intentions and to believe that they were ready to go ahead. Supposing, however, that the imposition of a tariff were delayed by the necessity of working out its details, we were anxious lest the position might be prejudiced by abnormal imports between now and, shall we say, the end of January. It was for that reason that we wanted some reassurance from the Government. More than that it would have been wrong to require of them at this juncture, and less than that it would have been wrong not to ask of them. For that reason we all listened with great interest to the speech of the President of the Board of Trade. I listened to the speech with great interest at the beginning, but, I must confess, with a feeling of apprehension as he went on to elaborate all the difficulties that exist, because an elaboration of the difficulties in the way of action is sometimes made a reason for not taking action.

7.30 p.m.

I say quite frankly that it was with a feeling of great relief and approval that I learned of the steps which the right hon. Gentleman enunciated at the end of his speech and which he said that he, as representing the Government, was ready to take. I think that shows an earnest of rapid action, and something which is peculiarly necessary, that is a readiness to deal with this subject from the point of view of the actual problem before us, without being hampered too much by prejudices or the bias of old controversies which have raged so long under different conditions. From that point of view, I am sure that I am speaking for a number of hon. Members who hold similar beliefs to my own when I say that we welcome the speech of the President of the Board of Trade because it gives us confidence, not only in the way which the Government propose to deal with this subject, but also with the way it is proposed to deal with other subjects like agriculture in the future.

The hon. Member for Aberdare (Mr. G. Hall) criticised the Government's scheme of action on the ground that the crisis was not urgent. It is interesting at this time of day to hear that kind of criticism from the Opposition benches. It means that a crisis is not con- sidered to be urgent by hon. Members opposite until the catastrophe has occurred. Hon. Members opposite did not recognise that the crisis was urgent during last July and all through the summer. It was because they took no steps in that direction that drastic action had to be taken at the end of August. One wonders sometimes whether the Opposition will ever learn anything from experience, when they fail to realise the urgency of the crisis which still exists. Another hon. Member opposite has told us that -what the Government now propose is another step in the destruction of Parliamentary Government. If there is anyone who is really apprehensive about Parliamentary Government let him consider the realities of the situation. We have to meet the possibility of abnormal imports between now and the end of January. How could the position possibly be dealt with in any other way than that which has been suggested in the speech of the President of the Board of Trade. You could not conceivably have all the tariff-schedules and necessary provisions discussed without the danger of forestalments in the meantime, which would stultify the tariff for months after it had been put into force. These things must be done by governmental action in the first instance, and I trust that when we are told that the Orders taking this action will deal only with articles contained in the Bill to be brought before us, and which will be laid on the Table of the House, it means, as I assume to be the case, that the duty will take effect immediately the Order is made, and that discussions upon such proposals will take place afterwards. I understand that the Government will take power in the Bill itself to extend the working of it to any article in Class III as may seem to them fit. In these circumstances, I sincerely trust that the position between now and the end of January will be safeguarded, and as one who was apprehensive I have no hesitation in saying that what has been suggested removes my fears on the subject.

With regard to other difficulties which lie before the Government, we have asked for action, but I think some discrimination in those cases must be maintained. We only need to recall the list of those difficulties to realise their perplexities—I refer to such questions as disarma- merit, debts and reparations, commercial debts, and the extremely difficult question of currencies. Half the countries of the world are on a Gold Standard which has broken in their hands, and the other half of the countries of the world are on a Silver basis, which has crumbled beneath them. The position is still further complicated by two facts. Anyone who reads the discussions which have taken place, and the papers which have been written on the present position of currency and the Gold Standard must realise that the question is an entirely new one. There is no developed technique discovered and no rules of accepted treatment with regard to a currency situation like the present. Secondly, the economic and political difficulties which affect the world internationally are so intermixed that it makes each problem more difficult to deal with. If we take the domestic situation in any country which is faced with political difficulties, as often as not we find that those difficulties have their root in economic troubles. In countries which differ as much as Germany differs from India, or as either of those countries differs from Brazil, we find political difficulties are largely caused by the economic misery which prevails in those countries. The difficulties which exist in Franco-German relations are largely due to the mixture of political and economic considerations. When one has to face questions of that kind my own feeling is that we ought to consider when the time for action is going to arise. It seems to me no good plunging prematurely in dealing with international difficulties like these. If we do so, we only prejudice the future or at best create a fiasco like the conference about the tariff truce, which made us the laughing stock of all the countries of the world. To climb steep hills requires slow pace at first, and while this House is very anxious that the present Government should be a Government of action, we must realise that in these matters we have to have the ground properly explored first. Then when time has been given for exploration and the hour for action arrives, we shall have the right—and the duty—to demand that it should be resolute and unhesitating.


This is tht second occasion on which I have had the honour of addressing the House of Commons, and I thank the party opposite for giving me this opportunity of addressing the House from this box so early, because in the ordinary way it would have taken a long time for me to achieve that distinction. At the outset I wish to say that I profoundly regret that the Labour party is not in a position to put forward its beneficent policy, although I derive some satisfaction from the fact that the Government are here in overwhelming numbers to carry out their policy. The country is In a very difficult position, and in a very depressed state. If I am to believe the speeches which have been made by right hon. Gentlemen opposite, the country is in grave danger and on the brink of economic disaster. It is with some satisfaction that I feel that the supporters of the Government are present in such large numbers, because they will be able to put forward their own system, and deal with the problems which their systems will throw up. They will have power in their hands to apply their remedies to the difficulties with which they are faced at the moment. Among the party opposite we have owners of factories and mills, bankers, and representatives of industries are here in great numbers, and certainly we are entitled to expect that they will be able to bring forward certain remedies in order to avert that disaster which overshadows the country, and with which they have so often told us we are faced.

The right hon. Gentleman the Member for Epping (Mr. Churchill), when referring to our leader, the right hon. Member for Bow and Bromley (Mr. Lansbury), said that he was a man who believed in the policy of "the dole, the whole dole, and nothing but the dole." We thank the right hon. Gentleman the Member for Epping for making that statement. I would like to remind the right hon. Gentleman that it was not the Labour party that made doles and soup kitchens so urgently necessary, but those who mismanaged society. Doles and soup kitchens were very pitiful, and inadequate measures to repair the damage and the human wreckage that the present system has created. I think doles and soup kitchens were very inadequate and puny measures, and I believe that the Government will have reason to regret the action that they have taken in regard to the dole. We want someone to interpose between the people on the one hand and the reckless abuse of economic power by industrialists and bankers on the other hand. It is not difficult to see the way in which the new system is working, and I think there are those in this House who can be held responsible for the necessity for this salvaging. This is not a Government of trade unionists, but of employers, industrialists and bankers, and I would like to press upon them the importance of pushing forward with their policy to the greatest possible extent, and the quicker the better. The Government have fashioned their policy very largely upon the declarations made from time to time by the employers' organisations in this country.

As a trade unionist, and as one who took part in the whole of the negotiations with the Cabinet Committee with regard to the findings of the May Committee, I would like to refer to statements which have been made by the Prime Minister and the Chancellor of the Exchequer in regard to that subject. I would like, perhaps for the first time, to inform some of the Members of the House of Commons exactly what took place. We were invited by the Prime Minister to come to a conference. We attended this conference—representatives of the General Council of the Trades Union Congress and representatives of the national Labour party—and we were told by the Prime Minister, and later by the Chancellor, what were the things that were in their minds. Certainly they did not reveal too much. They told us that the country was in a- very bad state. The findings of the May Committee had prompted the Government to appoint a Cabinet Committee to examine what they were to do with the joint findings, but there were two points which they particularly desired to discuss with the representatives of the organised Labour movement in this country. One was the question of unemployment, and the other the question of wage alteration.

As regards unemployment, the Prime Minister first of all made general references to it, but he gave us no details. We asked whether there were any details available, and he said he was afraid he would be unable to communicate any details to us. We then asked if there was anyone else in possession of any figures in regard to their proposals for dealing with the situation, and the Prime Minister then had to inform us that there were others who had the figures; he informed us that they were the representatives of the Conservative party and of the Liberal party. They were the only two persons, apart from the members of the Cabinet themselves or this Cabinet Committee, who had any figures dealing with the situation. We asked that, if we were expected to pronounce an opinion in regard to the situation, we might be supplied with the figures. The Prime Minister then said that he was unable to grant our request. We replied that, so far as we were concerned with the matter, it was an insult to our representative capacity to expect us to pronounce an opinion in the absence of the facts and the proposals which the Government had for dealing with the matter.

The Chancellor then said he thought the conference was entitled to a little more information than had been given to it, and he proceeded to deal with the matter on two main lines. One was in regard to the question of the Unemployment Insurance Fund. He told us definitely that it was not the intention of the Government to reduce the weekly amount of unemployment benefit, but that they were considering the raising of revenue for the Unemployment Insurance Fund. It was to be raised through three different channels. A contribution was to be levied upon those people who were in insurable employment, to bring in a revenue of £5,000,000 per year; the employers were to pay an additional £5,000,000, and the State would provide another £5,000,000, making a total of £15,000,000 of increased contributions to the Unemployment Insurance Fund. There was to be no reduction in standard benefit, but the condition was to be laid down that at the end of 26 weeks a means test would be applied. I am in favour of a means test, but I would apply it, not at the end of the social scale where the workers unfortunately are in a position of such desperation, but at the other end of the social scale, and see what the people at that end of the scale had left after providing what was necessary to maintain the standard of life. The state- ment was made to us very definitely on these Hues.

The other question raised by the Chancellor was that of reducing wages. He referred particularly to the wages of the teachers—or the salaries of the teachers, if you like to call them salaries rather than wages—the salaries of the soldiers, sailors, policemen and so on, the reduction in the amounts which Cabinet Ministers would receive and the proposal, perhaps, to deal with reductions of pay so far as Members of Parliament were concerned. We asked the Chancellor if there were any definite figures upon this matter, and he said he was unable to give us any definite figures; they were matters on which they had had some general talk, but about which they had come to no conclusion. I want those who have made references to this terrible trade union caucus as the people who are supposed to have attempted to dominate the policy of the Government, to take particular notice of these two or three facts which I am mentioning—first, the statement of the Prime Minister, and, secondly, the statement of the Chancellor that there was to be no reduction in unemployment pay, but that there was to be an increase of contributions to bring in an additional revenue of £15,000,000. Dealing with the question of alterations in wages, we asked whether they had arrived at any decision so far as teachers' salaries were concerned and they said, "No, the matter at present is an open one; the majority of the Committee recommended a reduction of 20 per cent., while the Minority Report suggested 12½ per cent. as a basis on which negotiations should be started." When the Cabinet Committee left the representatives of the Trades Union Congress and the Labour party, there were no further facts than those which I have given, and, in the absence of any statement apart from that, the Trades Union Congress representatives had to go back and try to formulate an answer to the representations which the Prime Minister and the Cabinet Committee had made to the representatives of the Labour movement of this country on the question of economy.

The Trades Union Congress reported upon two things. In the first place, they did not agree that it was desirable to reduce unemployment pay at all—a posi- tion by which they still stand, and which I think could be very adequately and properly argued here, and would, I believe, be generally understood if people would approach it with the sympathy with which they should approach these subjects. We were not willing to agree to reduce the unemployment pay. On the question of wages, our answer was that, it there was to be any economic variation or adjustment as between workmen and employers, it was obviously the duty of the employers to call into conference the representatives of the workpeople and discuss the matter with them and see how far accommodation was possible—the ordinary and perfectly legitimate method, which people would expect them to follow. The Prime Minister said to us, "I thank you very much for your answers; although they are not particularly helpful, you have treated us like colleagues." There was no question of the Prime Minister suggesting that there was any attempt by any of the representatives to employ any dictation on the matter at all.

I now want those who have followed the industrial development and the representations that have been made from industry in regard to political matters to follow four pamphlets that have been issued within the past year, the first by the Associated Chambers of Commerce, and the others by the National Confederation of Employers' Organisations—with which the hon. Member for West Bromwich (Mr. A. Ramsay), who spoke the other day, is very well acquainted—the Federation of British Industries, and the Allied Engineering Employers' Association. In these pamphlets several points are urged in regard to industry. First of all, it is urged that there should be a reduction of unemployment pay, and this National Government has agreed with that representation. Secondly, it is urged that there should be a limit on the amount of benefit which a workman should receive, and the National Government has agreed in that respect also. Thirdly, a means test is asked for, and the National Government has agreed; and it is also asked that there should be a reduction of the wages of people in public employ where any financial grant is made from the National Government to assist in meeting their wages. That position has been adequately met by the National Government. Finally, it is urged that there should be tariffs in this country, and the National Government went to the country to get permission to introduce tariffs. Certainly, there has been trade union representation, and effective trade union representation—there is not the slightest doubt about that; but it is not the workmen's trade union organisations that have decided what should be the policy of this country, but the trade union organisations of the employers, and each and every one of the requests of the employers' organisations has been met.

I know something about them. I was President of the Trades Union Congress when I made the proposal that the representatives of the employers and workmen as a whole should meet to discuss these matters, and see how far they were able to understand and propose remedies for dealing with the difficult situation. There were some very scanty conversations at an early stage, but there were no con-versations upon any of these proposals to which I am now referring, although the constitutions of the two representative bodies were quite equal to affording the opportunity for discussion of these matters. There was no consultation upon them. I, as President of the Trades Union Congress, on coming back from America, went to see the right hon. Gentleman the Member for Tamworth (Sir A. Steel-Maitland), to discuss with him the possibility of placing on the Statute Book of this country the Washington Hours Convention, in accordance with the declared desire of the Government and of the country. The trade unionists were perfectly willing at that time to agree, and I am sure that the right hon. Gentleman, who was then Minister of Labour, would also have been quite willing, but he was not able to get the employers' organisations to agree to the placing on the Statute Book of the 48-Hours Convention. I went out of my way to meet representatives of the employers' organisations on that matter—


The hon. Member must not take that for granted. I have always said that I was in favour of it provided that it could be revised so as to be a workable instrument.


I am sure that that was the right hon. Gentleman's intention, but the point I desire to make is that we were unable to effect any accommodation with the employers' organisations in regard to it—not because it was not the declared national policy, not because this House had approved of it in its earlier stages, not because the workmen were not willing, but because the trade union organisations of the employers were not willing to agree to it, and therefore it was not placed on the Statute Book. We have had a trade union caucus dictating and deciding, but it has been the trades union congress of the other side, and not that of the workmen.

I make no apology for the trade union movement. It is a perfectly legitimate organisation. It has grown up under our Constitution. It has the right to organise, and I hope it will go on. It understands the lives and the needs of our people, and from time to time it has urged the importance of all kinds of legislation—Workmen's Compensation Acts, Factory Acts, and the questions of minimum wages and reduction of hours of labour, so that people may have opportunities to develop as well as being able to meet their material needs. I think that that is a very right thing to do, and I shall hope and believe that our trade union movement will develop substantially.

8.0 p.m.

The right hon. Gentleman the Member for Tamworth said he wondered if the members of the Opposition would ever learn. I might return that comment by saying I wonder whether he has ever learned why, with all the opportunities that his party had, with all the political power that they possessed, with all their economic ownership and their right of entry into every part of the world, the result of the working out of their policy has been this stagnation of industry and trade and successive bankruptcies. How is that that they are unable to bring the skill and labour of the people of the world into contact with the raw material and produce wealth and generally advance the condition of the people? The answer must come from them. We have never had the power; they have had political power all the time, and, while my friends were in office, they were never able to do anything of which the right hon. Gentleman's party dis- approved. You definitely told them how far they could go and what were the limits of their opportunities, what Bills they had to withdraw and how far you were able to strangle this or the other thing. Your policy must necessarily be dictated by these employers' organisations. They are perfectly legitimate organisations, and they make their representations according to their point of view. But a large number of them, in the absence of Parliamentary control over them, will make public necessity private opportunity and will make conditions not better but much worse than they are now.

You are asking for a reduction in the cost of production. We can only do that by reducing wages or introducing more material into industry. With mass production applied to industry we are bound to create a greater volume of goods than we have now, but through decreased purchasing power we are unable to buy them back. It is over 30 years ago since I attended social science classes in order to try to understand the economic structure of capitalist society. The right hon. Gentleman the Member for Epping gives us his lectures and certainly, as far as his analysis of economic questions goes, they are very enlightening. I think he must have gone to the same school that I did to be able to handle them so well. When he is speaking about finance and gold, when he tells us about the evolution of the precious metals and enumerates the agencies that have been employed for the purpose of measuring values as between commodity and commodity, I am confident that he is on the right lines. I have read a good deal about him and have listened to him and I hope you will listen more to him. I am sure he is a much better economist than he is a bricklayer, at all events. His contributions on the economic side are of value, but how you are going, by reducing the purchasing power of the people, to increase their purchasing capacity is a form of arithmetic which my economic examination will not allow me to calculate. I do not know how you are going to do it. How you will be able to stimulate the export trade by tariffs again I fail to realise.

You have asked for a mandate and you have the power now but the people did not vote so much for that as for work, and it is your job to provide them with it. You started very well by adding 30,000 more to the unemployed in my industry during the past month. I do not know how you are going to start providing employment if you are going to make further unemployment by substantially reducing the opportunity for building operations. The workers did not vote so much for you as they did because tariffs were the last thing you have been able to offer them. I should be as glad as a bird if you were able to make inroads into the problem of unemployment. Who would not be? But how it is possible to do it you know better than I do. Certainly I am not able to understand it myself. You are backed by every employer, every landlord, every profiteer, everyone you can think of. You are backed by all the forces outside in order to save the nation. I wish you luck in your job. I hope you will get on and do something quickly and well.

The Government, by press, by radio, by intimidation and by jugglery are elected to save the nation. The more quickly the results of your policy are felt the more quickly you will feel the inadequacy of the measures you are going to employ. The electorate themselves will desire and will have at no distant date a reckoning with you. I am conscious that any Resolution that we may pass is transcended in all its importance by economic development. Economic development will brush past all our particular theories unless we understand them and harmonise our thought and actions in regard to them. It is no use to rely upon certain old phrases and think they are able to save us, because I am confident that they will become more and more obsolete and incapable of doing it. In the absence of better planning, as against ill-considered pressure, the problem that you have now will be intensified instead of diminished.

I have been in some of the discussions with representatives of the employers from all industries and, although there has been the desire, there has not been the willingness to get down to the question of regarding Great Britain as a unit capable of making a general contribution to industry. There is no horizontal conception of industry going past these shores to other parts of the world. There is no general plan. There is no recognition of Great Britain. Great Britain must be regarded as an economic unit, with its factories and workshops, its resources and its skill. There has been an increase of 25 per cent. in our production with an increase of less than 10 per cent. in our population, and asking our people to accept a lower standard of life does not fit in with any decent arithmetic that we can think of. Not only have we increased production but, side by side with that, we have unemployed factories and machinery and unemployed and partly employed workmen. What would it have been if we had got hold of the raw material and utilised the skill and capacity of our factories and workshops and all the other things? We should have brought joy and comfort into the homes of millions of people instead of asking them to accept something less. That is why we are unable to agree with the remedies you are putting forward and, in the absence of intelligent planning, you will have these difficulties intensified and not diminished. Industry is interdependent. Coal is essential to power, engineering is essential to provide machinery, building is essential for factories and housing, and transport is the nerves and arteries of the whole lot. They are not co-ordinated. Each wants to introduce its separate preserve and not to allow other people to come in.

In the discussions which we have had with the employers there has been a desire to see how far these things will develop but not a willingness to get down to it. Private and individual enterprise must ignominiously fail. You have been speaking of our working men and saying they want the dole. They do not. They want work. Lord Lloyd, in opening a shelter at Waterloo recently, said that out of nearly 11,000,000 men who have passed through the Church Army shelters in the last year, only 11 refused to do shelter tasks. These figures ought to be posted up everywhere so that the cynics can see them. He said it would be hard to convince him that the overwhelming majority of the unemployed did not really want work if they had a dog's chance. In the absence of providing them with work, we have no right to deny them the natural resources of the country. Your job should be to save them and not to bolster up inefficient industry. We have 40,000 employers in the building industry. I do not suppose 200 of them are decently equipped. Many of them have come in as the result of winning cross-word puzzles, or something of the kind, and we have the dickens own job to make them conform to decent standards. The industry wants organising and it ought to be brought into a state of efficiency, and the community would benefit definitely as the result of that. We can say it of other industries too. In 12 mouths' time, if I have health and strength, I feel that I shall have the grim satisfaction—it will be no pleasant satisfaction—to know that your election promises are unfulfilled and the policy that you have proposed is unequal to the task of saving the nation.


May I claim the kind indulgence which the House always gives to a new Member? I think many of us have listened with a good deal of satisfaction to the speech of the President of the Board of Trade. I sincerely hope and believe that, when passed, the measures that he has suggested for dealing with the problem of dumping may prove to be a prelude, I might say a stepping-stone, to the revival of our trade and industry. It has been rightly said on several occasions during the Debate that no specific mention of the unemployed has been made in the King's Speech, but that does not, to my mind, and I am sure to the minds of all of us, diminish in the slightest our determination to do everything we can to help them to the best of our ability. I think it fair to say that one of the greatest mistakes made by the late Labour Government in dealing with this question was that they laid emphasis on increasing the benefits for the unemployed instead of directing all their energy and activity into finding them productive work. Everyone knows full well about the abuses that have taken place, but these do not concern me to-day.

What does concern me is the vast number of our fellow countrymen and women who, through no fault of their own, are out of work and whose only desire is not to take unemployment pay and transitional benefit but to get wages and genuine employment. The trouble about those who have abused unemployment insurance and the dole is this. They give rise to the entirely fallacious belief in many quarters that the number of those who do not want work is equal to, if not greater than, those who are genuinely and conscientiously seeking employment. Those of us who are in close touch with our constituencies know this to be entirely untrue. Many of us on these benches have been returned to Parliament by very large majorities, and we realise quite well that we have had the generous support of all sections of the community, including the unemployed, who have taken their cut of 10 per cent. just in the same spirit as those to whom the reduction cannot possibly mean nearly so much hardship. I am sure that no one wishes to see the curtailment of our social services to which the Prime Minister himself referred the other day as those incomparable social services. I realise that the present financial situation is still very acute. All have suffered, but, if there is one case which I think deserves greater sympathy than another, it is that of the wife of an unemployed man with a large family of young children, because every single penny is of vital importance in her weekly budget. Although she often has, on the one hand, heavy liabilities, and, on the other, only a slender income, it is a remarkable and a wonderful thing that she hardly ever allows a deficit in her budget because she knows what it would mean to the children. I realise that any alteration in the statutory allowances would require legislation, which, at the moment, would be as difficult as it would be undesirable. I know also that the National Government are busily engaged in examining the best means of restoring our trade balance, which, after all, is the only real and lasting way of helping our unemployed. Many of us on these benches believe that this can only be done by a change in our fiscal system, and we look to the Government to bring forward at no distant date the necessary measures, some of which have been indicated this afternoon by the President of the Board of Trade.

We all regret the necessity for the economies that have taken place, but to my mind some Members of the Opposition have largely exaggerated the bad effects of some of these economies. Take education—and I speak with some small knowledge and experience of this subject—I can assure hon. Members opposite that local education authorities can, by wise administration, so adjust their expenditure that the effect of the econo- mies on the whole fabric of education can be rendered almost negligible. I am reinforced in this belief by the splendid' spirit of co-operation which is being shown by the majority of our teachers, and by their full realisation of the national crisis.

One word in regard to housing. I agree entirely with what the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle) said in his most interesting speech last week. Although we are spending more than £12,000,000 in subsidies, we are not meeting the needs of those who can only afford 5s., or, at the most, 7s. 6d. for their weekly rent. During the three or four years I served on the housing committee of the London County Council I among others felt strongly that we ought to be constructing a far simpler form of flats and tenements if we were to meet the immediate needs of our poorest citizens. Members who are familiar with London will know that the county council have recently built some blocks of flats with a less elaborate finish than the normal type, and these have enabled us to reduce the rents by 2s. or 2s. fid. But this is not enough. I am certain that with the co-operation and consent of the Ministry of Health we could do a great deal more in the direction of far simpler kinds of houses, flats, and tenements, and I urge the Minister of Health to consider this question very carefully at the earliest possible moment. When we realise that the election was won, unlike any other, on an appeal for sacrifices and not promises, I am convinced that the National Government in their hour of great victory will not for get that among their supporters were many of those upon whom the cuts and economies fall heaviest, and that they will show by wise and sympathetic action that the opinion expressed by the Leader of the Opposition in a speech last week, when he said that they were not a National Government in the real sense of the word, was an entirely erroneous and unfounded statement.


On this the first occasion of my addressing the House I desire to express the view of an agricultural constituency in Northern Ireland, the largest in these islands. I know very well that whatever you decide to do or whatever you decide not to do you will not be influenced in the least by what we think there. Nevertheless, I am prepared to vote for any measures that may be introduced which will have the practical effect of helping the farmers of Fermanagh and Tyrone. It is rather an anomaly that a constituency 80 per cent. agricultural, and a country 80 per cent. agricultural, should be tied legislatively to one that is 80 per cent. industrial, because a policy that might be a perfectly good policy for you might be a most disastrous one for us. But there we are, an ox and ass combination tied together to pull the Imperial plough. I heard the announcement of the President of the Board of Trade with some satisfaction. My only trouble is that we have had no pronouncement upon the question of agriculture—the question that is most vital to us in the six counties in Northern Ireland—but I realise that, circumstanced as we are, We must accept any fiscal policy that is suitable to your needs whether it is good or bad for us. We are merely, as it were, a fly on the political wheel.

The question of Tariff Reform or Free Trade was not the vital question with us. It was true that our opponents said that if we were elected to this House the farmers in Fermanagh and Tyrone would shortly find themselves in the workhouse, and the result was that the farmers voted for the workhouse rather than for the promise of Protection that might or might not benefit them. It is an anomaly I think that in a constituency which returned me and my colleague by a majority of 5,500 we cannot elect on any public body a majority. That is a result of your Act, the Act of 1920, constituting the Government of Northern Ireland. The practical effect of that is that each of our opponents' votes is precisely equal to two and a-half of ours. That is why we desire the extension of Proportional Representation, which I have heard mentioned in this House, to Northern Ireland, and to constituencies represented in this country.

I and my colleagues belong neither to the Labour party, the Liberal party, the Tory party nor to any of the cross-breeds that have been the product of an ill-assorted parentage. We come to this House with what I regard as a rather unique policy. We are sent here to do for our constituency and for Northern Ireland precisely what the Prime Minister claims to have been sent to do for the country as a whole—to make the best of it. I notice, however, that whatever domestic policies arise here—I have heard a good few of them and a good deal of the washing of dirty linen in public—no party will do for Ireland what we could do for ourselves if the opportunity were given to us. I will give a specific instance. When the Tory party were in power, here, the Tory linen manufacturers of Northern Ireland asked that help should be given to them in the safeguarding of their industry. If they expected help or sympathy they were gravely disappointed. The British shopkeepers, who wanted cheap and showy lines of linen, were found to have more influence with the Tory party and the Prime Minister than the whole of the Unionist and loyal parties of Northern Ireland.

There are no politics here when it is a question of a British versus an Irish industry. That is the conviction to which I have been driven. In that connection I would recall the fact that in the city of Belfast and in the town of Newry I saw a huge hoarding which had been put up by the Empire Marketing Board, for which we have to pay, like other citizens. Although we in Ireland produce the best butter, beef and probably the best bacon in the world, the citizens of our country were told by the Empire Marketing Board that they ought to support Canadian mutton and New Zealand butter. That proves to me that whatever policy you may inaugurate here is for the benefit of the people here and not for the benefit of the people in my country.

Another question arises out of the Indian settlement. The question of India presents in some respects aspects similar to the Irish question. There is the religious difficulty. You have used the religious difficulty in India, as you have used the religious difficulty in Ireland, in order that you might the more effectually keep the people in subjection. When the right hon. Member for Epping (Mr. Churchill) is inclined sometimes to speak harsh words in relation to the settlement of the Indian question, I would remind him of the fact that he was one of the signatories to the Irish Treaty, which partitioned Ireland and has wrought a great deal of dissatisfaction in that un- fortunate country. I would ask him to remember that there can be no peace in Ireland, any more than there can be peace in India-, so long as the basts of the settlement is the partition of that country. It was the right hon. Member for Epping and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) who signed the Irish Treaty. He did not come to this House and ask sanction for the terms of that Treaty. He signed the Treaty first and came to the House afterwards.

8.30 p.m.

I would remind him also that the two main signatories of that document, he and the Prime Minister at that time, gave the delegates to understand that there were two courses—partition or war. Is that old bitter policy to be the policy in regard to India? Is he going to give to the Indians a like alternative? If saner counsels had prevailed in this House when Mr. Gladstone introduced his Home Rule Bill, and if moderation had been more in evidence, we should have had a better Ireland to-day. The situation would have been entirely different if this House had listened to the advice of Mr. John Redmond, who trusted this House and went to his grave with a broken heart. When you come to the solution of the Indian problem, you will require the good will of the Indian people, just as you require the good will of the Irish people. They are your most important customers, and you must realise that no settlement forced upon India, no more than the settlement forced upon Ireland, will ever produce that feeling of good will without which no Government can face the future.


As a new Member I crave the indulgence of the House, in case I should inadvertently transgress any of its Rules and customs. I should not have ventured to intervene in this Debate if I had not concluded that my experience was such that I can, even at this stage, offer some suggestion to the Government in considering the question of national economy, especially in connection with the restoration and the maintenance of our trade balance. I am encouraged to do this more particularly as a result of the stress which the President of the Board of Trade placed upon the necessity for the exercise of Rational economy, and his very evident appreciation of the close relationship between national economy and the very difficult task of restoring our trade balance. For the purpose of restoring our trade balance, there have been during this Debate various insistent and somewhat impatient demands for immediate steps to be taken to introduce a Measure of fiscal reform. There can be no doubt that a great majority of Members of this House are convinced that there should be a Measure of reform of that nature applied immediately, and I am one of that number. I rely very largely and, indeed, implicity upon the promise that has been given by the Leader of the House that the tariff, or whatever it may be, shall be a people's tariff and not a profiteer's tariff. I am very hopeful that, whatever it may be, it may not be able to be regarded as a premium upon inefficiency but, on the other hand, that it shall be an incentive to energy, initiative, enterprise and inventiveness. If it is not so we shall slip back still further, we shall lose still further our hold upon the world's markets, and we shall gradually, and I. feel rapidly, be compelled to accept a lower standard of life. I am very hopeful, too, that the scientific nature of the tariff which we are promised will reflect itself in some graduated scale which will indicate some relation to the labour that has already been applied to the particular commodities under consideration. In that way a tariff will be protection of our labour.

I listened with great attention to the important statement of the President of (he Board of Trade and I could not find in it anything to disquieten one as to the effect the present proposals of the Government will have upon the primary foodstuffs of our people. I was satisfied that I had rightly interpreted the intention of the Prime Minister as expressed on Tuesday of last week when dealing with the question of primary commodities, which I take to be primary foodstuffs, when he said that there would not be by means of a tariff a farthing increase upon the primary products unless there was at the same time a corresponding increase in the wage standards of our workers, or unless it was absolutely necessary for the purpose of maintaining the best wage conditions which industry could provide. I should be gravely per- turbed if it had been otherwise. No one knows better than I the conditions of the slum dwellers in this country and in Scotland, and no one knows better the very difficult conditions under which the poorest of our people live. The problem of the domestic chancellor of the exchequer in these localities, that is the woman with her basket on Friday or Saturday night in the market, is a very grim problem indeed and one which is depressing and distressing to those of us who know her job so well.

Up to the present we may be satisfied that the tariff proposals are proceeding with a view to a general revival of our trade and prosperity. Those people delude themselves however who contemplate that any measure of fiscal reform alone will solve our industrial problems. Of itself it will help considerably. It will help in any case to re-establish confidence in this country and thus do a considerable amount of good, but there must be some supplementary methods to the tariffs themselves. I have been a little disappointed at the lack of constructive proposals put forward during the? Debate for supplementing the benefits which are expected from a measure of tariff reform. The proposals which have emanated from the Opposition benches have not been in the least degree helpful. I am quite accustomed to their declamatory methods. Their proposals have been very nebular and have consisted in proposals for compulsory amalgamation, rationalisation, nationalisation and co-ordination. The term "confiscation" has not been used, but the same trend of thought has been applied as that which has led the Soviet Government of Russia to the formation of their industrial policy, which includes confiscation, and which has also brought in its train certain conditions which are repellant to our ideas of justice and liberty, so repellant that we do not like to contemplate them.

Their proposals, in short, amount to some arrangement whereby there would be committees or councils, or boards, or Soviets, or whatever they may wish to term them, of men apparently without any particular experience in the intricacies of industry for the purpose, as they term it, of supervising and super-controlling, but really obstructing and interfering with, those who do know something of the intricacies and management of industrial affairs. Herds of officials and hordes of inspectors who would considerably increase the overhead charges upon industry and, worse still, gradually tend to a further reduction in the economic production of the industries themselves. It is not upon these lines that I am proposing to make any suggestions at all. Indeed my suggestion is entirely the reverse of additional government control and additional government expenditure.

I would suggest to the Government that in their consideration of questions of national industry they should adopt the methods which would be adopted by a board of competent directors dealing with the particular industry to which they are attached in times of grave depression. A competent board of directors would, in the first instance, consider very carefully and analyse very carefully their overhead charges. I suggest that the Government should consider the overhead charges in relation to national industries, those overhead charges which consist of rates and taxes. We have it, on the authority of the late Chancellor of the Exchequer, that the rates and taxes of this country absorb one-third of our total income, and our total income has been generally computed to be about £3,600,000,000 per annum. I think we are entitled to assume that on account of the depression of the last two years that amount has been considerably reduced, and that we may now estimate it at about £3,000,000,000. If we deduct from that the charge of rates and taxes we get a sum of £1,800,000,000. That is £60 per annum per head of our electorate, or 25s. per week for every elector in this country. It is not very much.

My chief complaint against capitalism is that there is insufficient of the capital. We have to devise ways and means of securing more. The only way I can see of securing it is by increasing our production, and the only way of increasing production is by stimulating our industries and stimulating demand. I suggest that the best way of stimulating the demand on industry would be to give industry a measure of relief from the burden of rates and taxes. That burden has increased very rapidly within the last 20 years. In the matter of the Civil Service, for instance, the annual cost? of such administered services has increased during the last 18 years from about £50,000,000 to about £200,000,000 per annum, and in those figures I have disregarded the administration of pensions, to which special circumstances apply, and I have excluded such revenue-producing undertakings as the Post Office, and Customs and Excise. But, comparing like with like, the figure has increased from £50,000,000 to £200,000,000. The cost of our local authorities operations during that period has increased from about £150,000,000 to £400,000,000. Eighty years ago saw the birth of our Civil Service. Since then it has increased enormously in personnel and in cost, and with it the service of the local administration. I sincerely believe that it has grown to such a vast extent that at the present time it is a serious menace to the State.

The Civil Service and the operations of the local authorities are very closely related. For instance, take such services as education, road improvements and housing. They commence with the establishment of a central department, with secretaries, assistant secretaries, and so forth, with a number of inspectors, and then the local authorities are rapidly galvanised into activity and they set up similar and complementary departments, and officials of the same kind. Then the Government proceed by means of monetary inducements to sting these local authorities into activity, whereby there is a lavish expenditure of combined Government money and local authority money. It is noticeable that once these officials are appointed and once these departments are created they develop remarkable tenacity. The officials cling tenaciously to their work and office, and continue to encourage the expenditure of public money. I am sure that if any Government had the courage to comb out these national administrative services, they would get results in economy which would be astonishing and far in excess of the particular economy that their direct action would achieve. In any case I suggest that the time has come when this Government should make an effort to exercise some sort of control over that Frankenstein, that vast Civil Service that has been evolved during the last 40 or 50 years. There is now extremely little control over it.

I know that the excuse is often made for the Civil Service that it is honest and incorruptible. I would concede to them the same measure of honesty and incorruptibility that I would concede to any other body of British people similarly circumstanced. They have extremely good salaries, they have perfect security of tenure, they have liberal pensions, they are very largely free from care and responsibility, they have reasonably short hours and extremely long holidays. I do not think that this Government ought to permit these administrative services to continue without making an effort to effect some economy in regard to them and some relief of the burden under which our industries are suffering to-day. I do not disguise from myself the fact that it would be an extremely difficult job for any Government to tackle.

So far as my political memory will carry me, there have been very few Ministers with sufficient power and sufficient influence to have any effect upon this great service. Mr. Gladstone might have done so, or the father of the present Chancellor of the Exchequer might have done so, but in their day it was not really necessary. Since then there has been scarcely any Minister who has been sufficiently free from all the harassment and worry of opposition and other factors of that kind to give very much attention to so serious and intricate and difficult a matter, but I think that now there is a unique opportunity and a particularly good reason for doing something. The reason is the paramount necessity for taking every means available for the exercise of economy, and the opportunity arises from the fact that there is in this House such a huge majority that the minds of Ministers and of the Government ought to be perfectly at rest when they are undertaking a task of this kind. They can be assured that in this particular work or in any other work for securing economy and industrial revival they will have the full support of an overwhelming majority so long as they are proceeding to action directed along the lines of increasing our national prosperity and safety.


I would like to congratulate the hon. Member who has just spoken upon the admirable manner in which he has delivered his first speech in this House, and I would add that we shall be very pleased to listen to him on future occasions, whether we agree with him or not. Another thing I would say, because I think it will be in keeping with the traditions of the House: I am sorry that the hon. Lady who addressed the House a little while ago has left her place. I believe she has been the first of the new lady Members to address the House. Everyone will agree that she made a most admirable speech and showed an intimate knowledge of certain aspects of local government. I am sure that the House will be very ready to listen to her on any future occasion.

I wish to make a few comments on the speech of the hon. Member for Barrow-in-Furness (Sir J. Walker Smith). It seemed to me to be a mass of curious contradictions. The hon. Member began by expressing his pleasure at the statement of the President of the Board of Trade and added that he was glad to see in that statement the inauguration of a tariff system for this country. Then he went on to denounce practically all forms of State activity. He saw in the State activity which has been developing during recent years a real menace, but surely he must understand that the statement made this afternoon by the President of the Board of Trade will certainly involve many more State officials. It will involve interference on an unprecedented scale, with the trade and commerce of this country, in a way which has never been known here before. Apparently a form of State action which reduces to a minimum external competition meets with the approval of the hon. Member, but other forms of State activity which are calculated to improve the lot of the people do not meet with his approval. I leave the House to decide for itself on the great contradictions noticeable in the speech to which we have just listened.

9.0 p.m.

I, too, listened with some degree of interest to the statement of the President of the Board of Trade. I do not know whether or not in his case we are going to have a convert becoming a fanatic in the new cause to which he has gone over. It is true that he spoke to us very calmly and coolly. He described the complicated character of the machinery of our trade and commerce and industry. He spoke to us of the delicacy of its adjustment and explained that you could not ruthlessly interfere with it, without doing serious damage. All the time that he was talking, although I did not dissent from what he had to say, I could not help thinking that the system which he stood at that Box defending had been functioning now for many years and had left large numbers of our people in the direst poverty, and I wondered if the new proposals which he was initiating were likely to alter that fundamental fact of our existing economic organisation. He told us that the work of a single scientist might be more beneficial to the community than 70 Acts of Parliament. I do not know why he chose the number of 70. [HON. MEM-BERS: "Why not?"] But surely he must understand that under existing conditions the work of a single scientist frequently brings misory and want to hundreds of working people. Surely although the work of the scientist does, in the long run, bring about a general improvement in the material conditions amidst which we live, it does not alter that fundamental fact which we see in our economic organisation to-day—the fact that the great mass of the wealth producers live in relative poverty, while at the other end of the social scale we have a tiny minority living in wealth and affluence.

Consequently, although I do not want to pronounce any very definite opinion in regard to this question of tariffs and free trade which is being discussed today, I wish to make this comment. Quite a number of Members have commented upon the mandate which they received at the election. We are all entitled to make comments on that subject. As far as my constituency is concerned the-, national candidate in that Division pushed tariffs into the background and said that they were not the immediate issue. [HON. MEMBERS: "That is why he lost!"] It may be so. I am only commenting on the fact and perhaps the central office will prime him better in future. I have no doubt in my own mind, and I say this frankly, that the results of the election are, in the main, a mandate for at least an experiment with tariffs These violent swings of opinion as they have been reflected in some of the recent elections seem to me to mark the growing impatience of millions of people with the slow working of our present political machinery and with parties who fail to deliver the goods. [HON. MEMBERS: "Hear, hear!"] Hon. Members opposite may cheer but I would remind them that they have to deliver the good and I do not know whether they are going to do it or not. Somebody has spoken about the cross-currents which are discernible in the present House of Commons. The Lord President of the Council on Friday took up that remark and said they were not so much crosscurrents as currents flowing into a single stream, which, he presumably meant, was going to carry us by-and-by into a sea of prosperity and well-being. An hon. Member seated beside me, while the Lord President was making that remark, was so unkind as to suggest that these crosscurrents were not running into a stream but into a bog of confusion and muddle.

Apparently, judging by the statement which we have heard to-day, a step has been taken in what the majority of the supporters of the National Government consider to be the right direction. Apparently, they are very well pleased. A little earlier the hon. Member for Dundee (Mr. D. Foot), in a maiden speech, made some references to the utterance of the right hon. Member for West Birmingham (Sir A. Chamberlain) in connection with his remarks about the Home Secretary, and he expressed the view that those remarks ought not to have been made in this House. I can easily understand how it was that the right hon. Member for West Birmingham made those remarks. I listened to most of the Debates in the last Parliament—except on two or three occasions I troubled the House with no observations of my own—and I can easily understand the right hon. Member for West Birmingham talking about the Home Secretary in the way he did, especially in view of the fact that the Minister of Agriculture the other day told us that he had made preliminary investigations and had come to the conclusion that a quota system for wheat growing in this country was probably the right thing to do; and now I notice in the columns of the Press that they have gone a stage further. Of course, that carries with it some form of guaranteed prices for British grown fruit.

While that speech was being made, I recalled a speech made by the Home Secretary from the Opposition side of the House in connection with the sugar-beet industry, in which he made it clear that for practically no results of any consequence already nearly £80,000,000 of taxpayers' money has been used to subsidise the sugar-beet industry, and I can easily understand that, when the question of guaranteed prices for British wheat arises, the Homo Secretary may remember the speech that he made in connection with that industry, and that he may be a source of very serious trouble in the inner counsels of the National Government. Consequently, the right hon. Member for West Birmingham would no doubt like him to be out of the way as soon as possible.

There are two other things that I want to say. First of all, I cannot understand, in spite of all the speeches to which I have listened and all the Debates which have taken place in this House, how your tariff proposals are going to get us out of the difficulties in which we find ourselves. Here we have an economic system which on its productive side is anarchic and chaotic, pouring into that vast pool which you call the market ever increasing quantities of goods, and yet there is only one way in which the masses of the people can take out of that pool the goods they need, and that is either by means of the wages that they receive or various forms of maintenance or pensions that they may receive. All your policy hitherto has been, and up to the moment still is, designed to prevent them from taking out of that pool, and I see nothing whatever in your tariff proposals that is likely to alter that fundamental trouble. Yes, you have to deliver the goods, and we will wait and see whether you are able to deliver them or not.

There is just one other point. Obviously the first blood has been drawn by Lord Beaverbrook, and now we pass on to the next stage, which is presumably the Imperial Conference, What is the intention of those who have now carried their Protection proposals to this point of success in regard to the Imperial Conference? Their intention, of course, is to go much further than merely putting tariff walls round these islands to shut us off from what Sir Oswald Mosley once called the shock of competition from out- side. You are talking about Imperial unity, about making the Empire into an economic unity. Yes, but when I hear speeches of that kind, and when I read articles in Lord Beaverbrook's papers, or when I read books on the subject, such as some of the publications by the right hon. Member for Sparkbrook (Mr. Amery), one of which I have recently read, I invariably look once more at a map of the world, and I see British possessions and the free commonwealths that make up the British Empire scattered over the seven seas; and I ask myself, even when I have taken into consideration their vast climatic range and the vast variety of products that you can obtain from them, if it is possible to weld these scattered possessions into an economic unit.

Geography alone will defeat you. It is impossible for you to weld these scattered fragments into an economic unit; but even if it becomes possible, and even if you improve the means of communication and transport, the more you try to bring into existence these aggregations of communities into a self-contained economic unit, the more, will you intensify the economic antagonisms already too plentiful in the world, and the more certainly and surely are you laying the foundations out of which there will come friction and antagonism, that can have no other end than to plunge the world once more into war. So we need, when these proposals are adumbrated from time to time, to look ahead as to the possible consequences of what we are doing. We have been here for about a fortnight, and in this fortnight you have sown, by your actions in this House already, causes of economic friction the outcome of which one does not like to contemplate. Long before you can achieve some of those purposes that you have in mind, they will have been frustrated by the actions which you have already taken; and my only other word is this: Would it not be infinitely better, instead of moving along these lines, to leave no stone unturned to bring about world co-operation?


I believe that all on this side cordially welcomed the statement of the President of the Board of Trade this afternoon. I understood that he proposes to take powers to cope with importations of manufactured goods from abroad. I only hope those powers will be so wide that they will extend to cover all the great mass of manufactured goods which are coming into this country. Under cover of this proposal, I believe and hope that the Government will have time to bring in, in a little time, a scientific Measure to cope with this glut of foreign manufactured goods, because as far as I see there is no possible means of rectifying our adverse balance of trade except by means of tariffs. An hon. Member below the Gangway said earlier in the afternoon that he did not understand what the adverse balance of trade meant, and he asked for figures. I should have thought that anyone who fought this election could not fail to understand what the adverse balance of trade was.

For a great many years our imports have exceeded our exports by sums varying from £350,000,000 to £400,000,000 a year, but, owing to our invisible exports, we have generally been able to meet this deficit and show a credit on the right side. In fact, in 1929 when the late Government took Office, we showed a balance on the right side, with the help of invisible exports, of £138,000,000. A year after the late Government had been in power, this had dropped to £39,000,000; and this year all the evidence goes to show that, probably for the first time, we shall have a deficit of from £80,000,000 to £100,000,000, even taking in our invisible exports. The two items which form the largest amount in the invisible exports are our income from overseas investments, and our income from shipping. When I say that during the last 10 years our shipping invisible exports have amounted to no less than £1,467,000,000, the House will realise the enormous value, that our shipping trade is, not only as a means of employment for this country, but as a means of balancing our trade.

I venture to speak with a certain amount of experience as a practical ship-owner and shipbuilder, and as one largely interested in the iron and steel industries. As regards shipping, my firms are in touch daily with practically all the great industries of this country, so that I am able to feel the beat of the industrial pulse of the nation probably better than people who are not able to have the same opportunities as I have. I am often surprised to find that people do not realise that our great cotton, woollen, iron and steel, and shipping industries were born, bred and built up under the strongest Protection possible. From the middle of the fifteenth century to the middle of the last century, we had rigid Protection, and it was under that Protection that we grew up as the greatest industrial power in the world, not only as regards our cotton, wool and steel industries, but as regards our shipping industry. Goods were not allowed to be brought into this country or taken to our Dominions except in British ships, and three-quarters of the crew had to be British. I do not ask for anything like that, but I do say that shipping is bound up with our industries. You cannot separate the two.

When we adopted Free Trade 80 years ago, we expected that every country-would follow our lead. Unfortunately, other countries found that they could not build up their industries or maintain them unless they were protected, and, instead of the world having universal Free Trade, other countries protected themselves still higher. I agree with the free interchange of goods; universal Free Trade is the best ideal which you can have; but I can see no means of arriving at it to-day when all the other great nations of the world have decreed otherwise. A tariff gives you a valuable lever for reducing the tariff walls of other nations. We shall get nearer to the ideal of Free Trade by having a tariff as a bargaining weapon to help break down the tariff barriers. It is very sad to realise that we imported £257,000,000 worth of foreign manufactured goods last year and exported only £232,000,000; that is to say, for the first time we actually bought more foreign manufactured goods than we sold.

How does this affect shipping? It is vital to shipping. You can separate shipping roughly into liners and tramps. What the liners want is to get the greatest possible exports of manufactured goods from this country and to bring back raw material and foodstuffs. What is happening at present? We are getting only half cargoes, and in many cases quarter cargoes. The result is that our boats go abroad at a heavy loss, and, instead of bringing back full cargoes of raw material and foodstuffs, are bringing back a certain percentage of manufactured goods. As raw material occupies from two to three times the space of manufactured articles, you can realise that from a shipping point of view; we want to get our ships home with raw material and foodstuffs, and not with, manufactured or partly manufactured goods. As regards the tramps, the case is not quite so clear, but they depend on coal outwards, and, if we get industries on to their feet again by Protection, we shall enormously stimulate the use of coal in this country, and that will be a great benefit to the export coal trade of the country. Then, if our industries are put on their feet again, it means that we shall want more raw material, and that again will help the tramps.

In fact, it may be said that any measure which means the increasing of the export trade of our manufactures is bound to be beneficial to our shipping industry. It is not going too far to say that the welfare of our British shipping industry is bound up with the prosperity of our home industries. I have here a report issued by the Council of the Chamber of Shipping of the United Kingdom. It was unanimously approved and adopted at a meeting of the Council of the Chamber held on 8th October last. It is too long to read to the House, but I would like to quote a paragraph, because it. bears closely on this point: British exports will not regain their position in international commerce until the general level of British costs has been reduced to a point at which our productivity and prices can compete with those of other industrial nations. The adjustment of those costs must occupy a considerable period of time. In the meanwhile, it is essential to correct the disequilibrium of the balance of trade and no other means are open to Great Britain than the drastic reduction in the volume of her imports, either by total prohibitions or by a general tariff. That, coming from the Chamber of Shipping, should be a convincing argument to all those who ask, as regards tariffs: What about the shipping trade? There you have the governing body of the shipping world actually asking for the opportunity to bring in a general tariff or to have some provision to keep out imports. Our shipbuilding, which is a contentious point in this problem, has been going downhill a good deal lately. As a matter of fact, we are losing our share of the shipbuilding trade in the world in 1894, 58 per cent. of the world's tonnage was built in this country. At the end of June last year, this had dropped to 30 per cent. The other 70 per cent. is being built abroad in highly protected countries. It does not look as if the countries who have adopted tariffs are hurting their shipbuilding industry very much. They are capturing the shipbuilding trade of this country. We have now a new steel rebate scheme under which, I think I am right in saying, roughly 90 per cent. of the British yards are using British steel. I think it is true that in the whole of the Clydeside and with the exception of two small yards, in the whole of Scotland, shipping yards are using British steel. What we want is, not, to get cheap Continental steel, but cheaper British steel. Anything which brings that about will benefit the shipbuilding industry.


Would the hon. Baronet kindly explain to the House how a tariff is going to assist us on the Clyde, where every estuary is packed with shipping lying idle, to an extent estimated by the President of the Board of Trade at nearly 3,500,000 tons?


I agree. That is the point I was trying to make. Shipping to-day is in a desperate condition, largely due to the fact that we have lost our trade position. We have boats sailing at an enormous loss, whereas, if our export trade were going again—and the only means of doing that is by protecting the home industries against foreign imported goods and so increasing exports in the long run, and in turn affecting shipping -we would find that the whole of those ships would come out again. Shipbuilding can never be healthy unless the shipping trade is healthy. A ship-owner cannot give an order for a ship unless he has some money to pay for it. No shipowner to-day will build a ship unless he is absolutely bound to do so.

Turning to the iron and steel industry, I would like to take the first six months' figures for this year, which show that imports amounted to 1,273,000 tons. Exports were under 1,000,000 tons. For the first time, except during the War and during the coal stoppage, we imported more steel than we exported. We ought to shut out, or restrict, foreign steel com- ing into this country, get our own steelworks going and enable them to turn out a bigger quantity. Take blast furnaces, of which there are 394 in Great Britain. Before the War, 338 of these were in blast. The position in September, 1931, was that only 62 furnaces were in blast, or less than 10 per cent., and many of them are not on full production. It is impossible to turn out an efficient and moderately-priced article when you are working under those conditions. Foreign steel is being used for houses and girders. If our steel works had the chance to make all that steel, it would not only help the workpeople but increase production, and thereby lead to reduced costs and cheaper steel for British shipping.

9.30 p.m.

I have only one other word to say. The hon. Member for Bridgeton (Mr. Maxton) said last week that, in the King's Speech, interest for the working class had been entirely overlooked. What does he mean? Does he want us, in the present condition of things, when we have an adverse balance of trade and bankruptcy stares us in the face, to spend more money on education, to give greater benefits in unemployment insurance or to give more for social schemes. My experience in the election was that the working people did not want greater social services, but that they one and all said, "Do something to enable us to get work!" I believe there is only one possible way of keeping up the standard of life in this country which, with the exception of America, has the highest in the world, and that is by protecting our products for the workers. If we follow out the method which, I hope, will be introduced in this House, and by scientific measures protect our industries, I believe that we shall see very little in the future of that unemployment which has been the curse of this country for so many years past.


As the only woman independent Member of the last Parliament who has survived the stormy seas in which so many stronger vessels have foundered, I want to address a few observations to the House on the Gracious Speech. They will be very brief, because I know there are others who want to speak and because, Mr. Speaker, of your appeal for brevity. I do not propose to touch upon the question which has occu- pied nearly the whole of the speeches to-day and, indeed, nearly the whole of the speeches throughout this Parliament —the question of Protection in any form. I would rather deal with two questions which I regretled not to see dealt with in the Gracious Speech, notwithstanding that the Speech consisted mainly of phrases of such delicate ambiguity that one could read almost anything into them. I especially regretted to see that the Gracious Speech did not contain any allusion to electoral reform. I cannot say that I was surprised, although the result of the election clearly called for electoral reform, for was there ever a triumphant majority that, in the hour of its triumph, looked far ahead? Yet it does not require very long vision to see, in the very hugeness of the Tory majority, a presage of a future defeat, probably as complete as has overtaken the Labour party.

To what was that huge majority due? We have heard it said that it was a vindication of democracy. It is amusing to some of us to hear the Tory party, members of which a short time ago were denouncing their leader for according the "flapper" vote, now crying out: A Daniel come to judgment! O wise young judge! I believe in democracy, and in the so-called flapper vote, and I do not think we can attribute the misfortune of this hot-headed Parliament to either. There is nothing wrong with the electorate, but there is something very wrong with the mechanics of our electoral system. The Proportional Representation Society, with its usual promptitude, has already circulated to the House the statement that this Parliament is not a true representation, but an immense distortion, of the real distribution of political opinion in this country. Our electoral system is like one of those mirrors which, when turned to one side, grotesquely exaggerate, and when turned to the other, absurdly minimise everything. Those figures are so well known that I will not dwell on them.

Another result of the electoral system which is much less frequently observed is that it gives the determining voice in nearly all elections to that section of the electorate which cares least and thinks least about politics. The more one examines the facts and figures, the clearer it becomes, that in nearly all elec- tions the attached and convinced members of the Conservative, Liberal and Labour parties voted pretty steadily with their own parties. But there is always a large undistributed middle section which moves backwards and forwards with the swing of the pendulum and determines the fate of elections. If I believed that, as is the case in my own peculiar constituency, this undistributed middle consisted of people of real independence of judgment who liked to think out things for themselves there could be nothing better than that they should determine the issue of elections. Who am I, who have never joined a political party myself, to complain of others for not joining political parties?

But, taking the ordinary territorial constituency, must we not admit that the persons to whom the speakers, the pamphleteers and the canvassers address their persuasions, because thay know them to be almost the only people likely to be influenced, are those men and women who are generally unconcerned about polities save when an election bursts upon them and they have to make up their minds one way or another? Then their perplexed minds catch hold of those catchwords which make the greatest appeal to their really very hazy sense of patriotism or, more often, those which promise some security for themselves, their friends and fellow workers. The result of that system is satisfactory to the Tory party to-day, because they have shown the greatest skill in the invention of catchwords, and they have been helped, besides, by forces outside themselves, by the mistakes of their opponents and by international movements independent both of themselves and their opponents. Suppose at the next election it is the other way round. Catchwords alone do not win elections. They only win elections when they offer some security from real or impending evils, such as low wages, unemployment, high prices or impending wars. Suppose that at the next election there should be some such catchwords as "Your food has cost you more." "No cake for anybody until everybody has enough bread," or "I did not breed my boy to be a soldier; let those who make battles be the only ones to fight"—or something of that sort.

When I look round at the serried rows of Conservatives I cannot but think of the men and women who filled those benches only -a few short weeks ago, and whose ghosts still seem to haunt the corridors. They, too, did not want electoral reform, except in a shape which would have intensified all the evils of the present system. They felt secure, they felt that their party would go from strength to strength; but the storm arose, and in one night they were swept before it like the Autumn leaves are swept before the western wind. That will happen again; but next time the wind will, probably, blow from a different quarter. Let us be perfectly honest. It is all the more sure that it will be so because, with our electoral system as it now is, in the great majority of constituencies the great mass of the voters belong to the working-class, and is it likely that the working-class will be satisfied for long to be represented so predominantly by men and women so utterly different from themselves—[HON. MEMBERS: "Oh, oh!"]—so different in habits of speech and language? [HON. MEMBERS: "NO!"]

I do not think this strangely assorted Government will bold together very long, and I would appeal to the leaders of the Tory party to give us Proportional Representation while there is time, and then in the next Parliament they will be sure that the minority, as they will probably be, will at least be adequately represented, and what is better, they will be sure that the Parliament will be a true representation of the whole body of the nation—not only in its feet, not only in its hands, not only in its brain, not only in its stomach and its pocket, but in its whole complex personality. Time fails me. There are other omissions from the King's Speech to which I would have liked to refer, but I promised to be short, and so I will merely leave this appeal with the House—that before this Parliament ends the Government should give us a system of electoral reform which will bring Parliament more into conformity with that which it seeks to represent.


I have no doubt that the speech of the President of the Board of Trade pleased a large section of this House, but I doubt whether it gave the same degree of pleasure to the right hon. Gentleman who opened the Debate. We have had vary- ing arguments regarding tariffs during the course of this afternoon, from the full-blooded appeal of the right hon. Member for Sparkbrook (Mr. Amery) to the milder speech of an hon. Member opposite who hoped to have tariffs upon certain forms of goods but not tariffs upon food. I am not concerned at the moment to discuss tariffism at large. That does not appear to be the issue which was before the country in the election or which confronts us at the moment. Whatever the merits or demerits of Free Trade or Tariff Reform, I think the fundamental differences remain the same. As far as I understand them, the fundamental economic arguments have not changed in the slightest degree. The only thing that has changed is the setting in which the argument has been presented.

What was the argument put before the country during the General Election? The Prime Minister was asking for a mandate for a free hand to deal with the crisis that confronted the country. The President of the Board of Trade has told us that the crisis persists, is still as acute as it was in August, or when the appeal to the country was made later. That crisis was due to the financial position of the country, which threw it off the Gold Standard. It is true that our currency has been devalued in war time, but for the first time in the history of this country in peace, I believe, Great Britain found its currency devalued on the world markets. That was a serious and a new position. It is a critical situation, and it persists today, when the pound is varying between 15s. and 16s. That is a great hindrance in itself—that it should be moving backwards and forwards. The country has been able to keep its position as it is at the present moment, because—and clearly because—the purchasing power of the pound on the home market has remained fairly steady. The price level at home has scarcely varied. The moment that variation takes place, especially when the pound is in its present position, we shall be embarking on a new situation —a new social situation and a new financial situation which may very well prove disastrous to every class in the community. That is the danger which confronts us at the moment with our currency in its present position.

When we discuss the tariff remedy in that setting we are discussing it and the Free Trade argument in relation to a new set of facts, and that is the importance which I attach to the statement of the President of the Board of Trade this afternoon. I do not agree with him if I may say so respectfully. I would like to ask why he has singled out this afternoon a certain kind of manufactured goods. The right hon. Gentleman said that he could place a duty on those goods up to 100 per cent., but he did not tell us whether such taxation would not bring about an increase in the cost of living in this country. That is an important point. The right hon. Gentleman the Member for Sparkbrook has already told us that he does not want a tax upon food. I have great respect for the right hon. Gentleman. because he has always been perfectly consistent in his attitude on this question, and I admire the honesty with which he has always adhered to one particular point of view. I would like to ask the right hon. Gentleman to tell us why he wishes to omit placing a tax on food. I expect the reason is that such a tax would increase the cost of living, and anything that would increase the cost of living would result in the workers demanding an increase in their wages. We have already increased the cost of living in this country by devaluation.

I realise that it is almost a dangerous thing for such an overwhelming minority as that which is represented by myself to put forward any view opposed to the majority in this House. But one is entitled in the national interests, and not as an opponent, but as a supporter, of the National Government, and believing that the welfare of every class depends on the success of the National Government policy, to warn those who are charged with the destinies of this great Empire, that before they adopt any indiscriminate imposition of tariffs which would involve an increase in the cost of living, carefully to consider the effect of their proposals. What is now proposed is precisely what happened in Germany in 1921. In 1919 the German mark stood at 184 to the pound, and when similar proposals were made in Germany, the cost of living went up because the trade unionists demanded—and demanded successfully—an increase in wages, with the result that the mark, instead of being 184 to the pound, went up to 18.000, and that is a danger which confronts this country at the present moment.

Even among those who interpret the mandate of the country as being one in favour of tariffs, there seems to be a varying idea as to what is a scientific tariff. There is no common agreement among tariff reformers on that point, and why not? Why cannot tariff reformers agree among themselves as to the tariff to be imposed in order to be imposed with safety? No one has greater respect for the talents and abilities of the right hon. Gentleman the Member for Epping (Mr. Churchill), and I read everything that he writes with great interest. The right hon. Gentleaman told us in this House last week how he was thankful to his constituents and to his colleagues for having allowed him to march slowly from the position which he had hitherto occupied in regard to Free Trade to the new Tariff Reform position which, he had adopted. But when the right hon. Gentleman moved from one position to the other, he did not give us any adequate reason for that movement. The only reason which the right hon. Gentleman gave was that he had discarded one system and accepted the other. The right hon. Gentleman the Member for Epping now tells us that there must be no hesitation in regard to the new policy or about the adoption of the general scheme. The right hon. Gentleman once described tariff reformers as melancholy marionettes, and I am rather sorry to see him now join a body which he once so described. This is what he said on one occasion: What does Mr. Austen Chamberlain say? He tells us that no hesitation will be tolerated from Unionist Members of Parliament in regard to any Tariff Reform proposals which may in a future Parliament be submitted—by whoever may be the Chancellor of the Exchequer. No hesitation will be tolerated. Not opposition, not criticism, not dissent, but no hesitation will be tolerated. The members of the Unionist party are to go to the next Parliament not as honest gentlemen, free to use their minds and intelligence. They are to go as the pledged, tied-up delegates of a caucus forced to swallow without hesitation details of a tariff. That is what he said when he was President of the Board of Trade. [An HON. MEMBER: "What is the date of that speech?"] It does not matter what the date was, but that is what the right hon. Gentleman said when he was complaining of the imposition of a tariff which he had not seen. That is the position which the Government are asking the House to take up this afternoon. The real danger is that you might produce inflation by an indiscriminate imposition of tariffs. If the President of the Board of Trade can give us an assurance, much as I dislike such impositions as he proposes in his Bill, that he thinks they will not add to the cost of living, we might impose them in order to see their effect in redressing the adverse balance of trade. I am not alarmed at the hon. Member who said that he did not understand what was meant by the "balance of trade." The greatest economic experts have been engaged upon that problem, and the League of Nations has tried to find out what it means. Can any tariff reformer tell me what the "balance of trade" is now? Great expert as he is on these questions, I doubt whether even the President of the Board of Trade can say what it means. I see that the navigation returns are not able to give the figures. This is a question which demands the? closest examination on the part of every Member of the House, and I hope that we shall not be called upon to give a blind vote upon this issue.


The speech of the hon. Member for Cardigan (Mr. H. Morris) was one of an iconoclastic character, coming from the part of the House in which he sits. Although he is a supporter of the National Government, as he himself avows, he has not merely girded at the Members of the National Government who are in favour of tariffs, but also at those who, like the President of the Board of Trade, have been engaged with these questions all their lives. He questions the knowledge of the President of the Board of Trade, and refuses to accept the definitions and explanations which the right hon. Gentleman has given this afternoon as to what he meant by the balance of trade.


It is not for me to answer for the President of the Board of Trade, but I do not think he gave any definition of the balance of trade, as far as I heard him.


I have my notes here. The right hon. Gentleman described what to him was meant by the balance of trade, and the hon. Member for Cardigan, who has just questioned whether the President of the Board of Trade knows what the balance of trade is, himself referred to the document which was quoted by the President of the Board of Trade. If typical Free Traders, and tariff reformers, and anti-dumpers, and all the other various sections who have different ideas as to tariffs or no tariffs, ranging from the prohibitive tariffist to the ardent Free Trader, cannot explain what they mean, I think that the mandate they have got from the electorate has been obtained under false pretences.

The hon. and gallant Member for South Portsmouth (Sir H, Cayzer), speaking as a shipowner and a shipbuilder, gave the House some rather peculiar information, as did the President of the Board of Trade, also speaking as a shipowner, earlier this afternoon. Both of them are now in favour of tariffs. Both of them are now under the impression, and are seeking to convey that impression to the House and to the people outside, that tariffs are what the people voted for, and, therefore, are what the people are going to get. Both spoke of shipping. I have not the personal or business knowledge of shipowning companies and shipbuilding firms which these gentlemen have, but I know something about shipbuilding from the labour side—from the workman's point of view. When hon. Members speak of tariffs as helping the shipping industry of this country, I would ask them to let us know what can be done. Neither the President of the Board of Trade nor the hon. and gallant Member for South Portsmouth has given any indication on that point.

Let me give a figure or two. In 1920. close upon 1,500,000 tons of shipping were built in this country, and over 200,000 men were employed in building those ships. In 1929, we built 20,000 tons more than was built in 1921, with one-third fewer men. Are your tariffs going to find employment for the one-third fewer shipbuilders who have been thrown out of employment in those nine years; and, if not, of what use are your tariffs to the working class of this country when, owing to the development of machinery and the improvement of manufacturing processes, more and more workers are daily being thrown out of employment, and fewer men than were formerly employed are being continued at work for the same number of hours and at the same rates of wages? Unless you can give a satisfactory explanation of that position, the workers of this country are not going to find any benefit from the imposition of tariffs here.

10.0 p.m.

Hon. Members who come to this House claiming to be pledged to tariffs have to justify to the workers of this country that tariffs are going to find employment in a period when every day sees more rapid changes in the improvement of machinery and of the methods of producing wealth. [Interruption.] I am asked, What has Free Trade done for us? I am not here to tell you what Free Trade has done for us. Why should I? Ask the Liberals. The Liberals and Tories, for the past century, have been juggling the electors of this country between them on the two policies of Free Trade and Tariff Reform. Both have been in power for different periods, and both have left the workers worse off when they went out of office than they were when they went in. [Interruption.] What did we do? We did everything we possibly could until the Tories crabbed us, until the American bankers and the European bankers—[I Interruption.]


Ask the late Member for Burnley.


Yes, and ask Mr. Philip Snowden, the man who, you have said, is the great man. This is what he said on the Both July of this year, the day before the May Committee's Report was submitted to this House: There seems to be an impression abroad that the budgetary position of this country.…is in a condition of bankruptcy. Nothing could be farther from the truth than that.…With perhaps the exception of one country, our budgetary position is more satisfactory than that of any other country in the world."—[OFFICIAI REPORT, 30th July, 1931; col. 2510, Vol. 255.] That is what the man you are now trusting said at that Box on the 30th July of this year, and he ought to know. On the same day he made other statements to the same effect in much stronger terms. Consequently, when you ask me what I have done, you are asking the wrong man. You should ask your new Leader, Mr. Philip Snowden, what he was doing when he led you into this mess and yet stood at that Box and told you that all was well with the country. He misled you just as you misled us, yet you still keep him in your ranks; you are probably transferring him to another Chamber as the Lord Privy Seal.

I want to ask a question of members of the Tory party. After all, you are all in the Tory party. I do not call you a National party; I do not believe you are a National party. [HON. MEMBERS: "Why not?"] You ought to know; you have been in the wilderness long enough. The Government that was elected at the last Election was not elected on any party programme or on any national programme. There is not a Member of this House who can stand up and tell me that he stood on a National programme. [Interruption.] I invite any of you to produce your election addresses. In those election addresses, for the most part, will be found a statement that you are in favour of tariffs as the only remedy—[HON. MEMBERS: "No!"] Produce your election addresses.


The hon. Member will probably find it best to address me.


You, Sir, are the last Member of the House that I would ask to produce his election address. I am stating the facts. As far as I am aware, in the constituencies surrounding my own, practically every candidate who was standing in the so-called national interest issued an election address stating that he was in favour of tariffs as being the one thing that was likely to bring success to the country. I am more concerned with shipbuilding than any other thing. It is the staple trade of my constituency. When the President of the. Board of Trade and others talk of tariffs as being necessary for shipbuilding and say that Free Trade has brought the shipping industry into the plight it is in to-day, I want to ask them this. The President of the Board of Trade pointed out that the beginning of the downward tendency in the success of shipowning companies took place with the taking over of German shipping. We are all agreed upon that. But, since then, there have been other methods which have brought down the probabilities of success in shipbuilding. The shipowners of the country have during the past nine years transferred to foreign shipowners 4,600,000 tons of British shipping, which is now being used in competition with British-owned ships. They are used by foreign companies, mainly Greek, Italian and Scandinavian, run with crews paid lower rates of wages, loaded to a degree that British shipping is not permitted to be loaded, cheaply run, and, therefore, they can compete with greater success for the freights that have to be carried. The output, of shipbuilding amounted at the peak to 1,500,000 tons, and you have in that 4,600,000 tons three years' constant work for shipbuilders, without taking into account any other orders that might be placed during that period for replacement alone.

Some of us last Session were able to get a committee set up to consider the question of obsolete tonnage. It reported that nothing could be done. We endeavoured to get a three party scheme brought into existence by which, when ships became obsolete, they would be scrapped, and new ships, where necessary, built in their place. But neither the shipowners nor the shipbuilders could agree. The Government could not step in and, consequently, the committee had to report that nothing could be done. If those who are engaged in the industry would be more concerned with trying to maintain it, instead of seeing that all they are going to take from it is profits, particularly an industry which in the past has brought very large profits to those running the shipping and to the shipbuilding industry, it would not be necessary now to come and ask the House of Commons about tariffs as one of the thing6 likely to bring success to the industry. It is the same with other industries. When you discuss tariffs, you get all manner of statistics quoted, but the main figure that is in the minds of every employer of labour who advocates tariffs is not the amount of duty that can be placed upon the article that comes into this country, but a reduction of the wage of the worker. That is the dominating idea of the employers to-day. I have here a document issued by the National Federation of Employers Organisations. [An HON. MEMBER: "Who are they?"] Find out from the employers. I will give you the address of one of the directors when I have finished. This was issued in January last. It is the document which was in the main responsible for the setting up of the May Committee. It was sent to the Prime Minister on 12th February, the day after it was agreed to set up the Committee and before the Committee was set up.


Your party voted to-set up the May Committee.


My party voted to set up a committee.—not the May Committee. The Prime Minister set up the May Committee—this party did not—and it was upon a Liberal Motion. [Interruption.] There was no vote taken. A vote was taken on 11th February, but not on 12th February. Look up the OFFICIAL REPORT. The main point throughout the whole book is that they are demanding reductions in wages, and they say they cannot reduce wages because the Government are paying too high a rate to their employés and local authorities are also paying at too high a rate. They are demanding three things. They are demanding that, in order that they shall be able to reduce the wages of their employés, both local authorities and the Government shall be brought to consider that the wages they pay are too high and they mu3t be reduced first of all. They go further than that. They say that the rates of unemployment benefit are too high and they, also, must be reduced to enable them to reduce the standard of living which they claim is too high, and in order to reduce the standard of living wages must be brought down.


Will the hon. Member read the quotation he said he was going to give us, that the object of tariffs was to reduce wages?


I did not say anything of the kind. I said employers were talking about tariffs, and their main object—not the main object of tariffs, but the main object of the employers—was the reduction of wages. I was challenged on that statement and I produced this document of the employers to prove it. The first recommendation is that the existing rate of unemployment benefit should be immediately reduced by 33⅓ per cent. The May Committee decided that it should be reduced by 30 per cent. and the National Government decided that it should be reduced by 10 per cent. The second recommendation is that the reduced benefit should be confined to claimants who have at least six contributions to their credit for every benefit that they draw, getting back to the old one week's benefit for six weeks work, which used to be the standard. The third is that those at present drawing unemployment benefit who cannot satisfy the above test should be dealt with through a special fund provided by the Government and administered locally on a means test basis. There are the three things which this National Government has already put through—the means test, the alteration of the conditions under which unemployment benefit is paid, and the reduction of the amount of unemployment benefit. There is another recommendation: The Government should immediately review its wage level in relation to those of the exporting industry and make an appeal to all local authorities to adopt the same policy. The Government should also make it known to all local authorities that in future all public grants will carry with them the condition that they are not to be used in paying wages higher than those paid to a workman of corresponding scale in the exporting industries of the locality. What is that but an attempt to reduce the wages paid to what the employers, and some people in this House call the sheltered interests? Because an omnibus conductor or omnibus driver or someone is in the employment of a local authority and is receiving higher wages than those a ship-building or engineering firm is paying to an engineer, the engineering employer says, "I am not going to increase the wage of the skilled engineer to the level of the employ6 of the local authority, but I am going to demand that the wages paid by the local authorities to their employés shall be brought down to the level of the wage I give to my employés so that I can give lower wages still." [HON. MEMBERS: "No."] That is the argument here. They state it definitely in the pamphlet which is issued by the National Confederation of Employers' Organisations.


Read it.


I will send it to my hon. Friend.


Read the passage now.


Read what passage? This book contains the recommendations, which prove conclusively that the em- ployers are out to reduce wages. The National Government come along with their so-called free hand, with the manifesto of the Prime Minister and the letter of the right hon. Gentleman the Member for Bewdley (Mr. Baldwin). They ask for a free mandate, and the first thing that happens is that within a few hours of the meeting of this Parliament the free mandate vanishes, and the leader of the old National party, which consisted only of himself and a single follower in this House in 1919 has now rallied round him a band of 300 and has forced the Prime Minister and the others who issued this document immediately to lay down their free mandate and adopt what has been announced to-day by the President of the Board of Trade. I compliment the hon. and gallant Member for Bournemouth (Sir H. Croft) upon his persistence and consistency. Right through all the years I have known him in this House he has tried to impose his will upon different Prime Ministers, and he has now succeeded in doing so upon a Prime Minister upon whom we found we could never impress our will. [HON. MEMBERS: "Hear, hear!"] Yes, I admit that my colleagues could never impress their will upon him; he was too astute. I am going to Warn the hon. and gallant Member for Bournemouth to be sure, when he finds that the goods are delivered, that they are tangible and not promises. We have had a promise to-day of an anti-dumping tariff of anything up to 100 per cent. Take care that it is not one half per cent. when it is produced. When they find out what the Prime Minister really is; when the Members of the Tory party really find their feet in this House, they will get rid of the Prime Minister, who is at present their leader, and put someone more akin to their views in his place, and we on this side, while we regret having spent so many years in placing him where he now is, will not regret his passage even from the Tory party.


At this late hour I may be forgiven if I leave on one side the controversial points which have been discussed in this House, and what one right hon. Gentleman has said about another, or what one hon. Member has said on the platform about another. The people want something to be done and they do not care one bit what hon. or right hon. Gentlemen think about what they said at the General Election. The President of the Board of Trade said that what he wished to see was practically a general reconstruction of trade. I want to point out one or two matters which might be taken into account by his Department, and those depending upon him, which do not in the least mean legislation. These are vital points connected with the trade of this country. One is the question of transport, and the other is the coal trade. It matters little from the point of view of those who are users of transport, in one sense, whether they get tariffs or not, but what does matter to them at the present time is that they shall be enabled to deal with the railway companies in such a way that their rates and conditions may be to some extent altered.

I ask the President of the Board of Trade whether, having regard to the present position of the railways—it is a position which can no longer be regarded as a monopoly, but one in which competition has come in such a way that in future it will have to be regarded from an entirely different point of view—it is not possible for him to get together not only those who use the railways, but those who control the railways, and see whether they cannot come to some arrangement to deal with a Government Department and suggest an entirely new basis of railway rates in this country, based practically on a competitive arrangement, which will allow the users of the railways very different conditions from those which prevail to-day. I am not one of those who believe in abusing the railway companies for the present position. It is a position which has come about probably through no fault of the railway companies, and one in which we have to take account of the conditions of competition, not only in railway, but in road transport.

The Government should also take account of this fact. It is said that in dealing with transport you must claim efficiency. That is the one thing that the users of the railways do claim. They are entitled to ask that the Government shall take every step to inquire into the conditions on which not only the transport trade but those trades that are ancillary to transport, are conducted. The question arises, whether the time has not come when they are entitled to inquire whether the railways in future should not concern themselves with transport alone, whether all those other matters, such as manufactures connected with railways, might not be considered in relation to the other trades of this country, and whether it is not possible for some inquiry to be made into the cost which railway transport has to bear in respect of those ancillary trades. If that were done, it would probably be found that a good deal of the expenses of the railways are coming from these ancillary trades. It is not only a question of the Transport Union; it is a question also of investors in railways, and those who are employed in the ancillary trades. An investor has a right to know exactly his position because these are trustee investments, and it is important to know the nature of the security for these investments. As regards those employed on railways, the cost of development in the future is going to cause the use of machines and methods which are not in use to-day, and, therefore, those employed in railway shops do not know what the future is going to bring forth. The whole question should be carefully considered in relation to the railways and to the trades connected with the railways.

Then there is the coal trade. I speak with some knowledge of this trade, and I should like to put this point to the Government. Too long we have been accustomed to wait for trouble and then hold inquests on the trades of this country. At the end of July next statutorily one part of the coal trade comes to be reviewed, and at the end of December next another part. I put this point to the Government. It is accepted in the coal trade that there is considerable difference of opinion as to what ought to be done in the future. Thank heaven that one thing which we have got out of the way in this National Government is the question of nationalisation, and we shall be able to consider the future of the coal industry solely from the point of view of the industry; political preconceptions we can put on one side. I suggest that the best thing the Government can do is this; to say to the whole of the employers in the coal industry, "it is your duty to get together and produce some scheme upon which you are more or less agreed, and, in introducing that scheme, there is nothing to prevent you asking the labour side of the industry to discuss with you the best way out of the difficulties in which the coal trade undoubtedly finds itself to-day."

10.30 p.m.

There are two sides to every industry, and, now that we have political questions out of the way, I suggest that the best thing we can do is to say to the trade: "It is your duty and your obligation to come together and come to the Government with an agreed scheme. If in parts of your scheme you are unable to agree you must be willing to allow the Government to become the arbiters." It is no part of the duty of any Government to wait until the very last moment, and then, when differences have not been solved, to come in and make a suggestion and get a kind of agreement which nobody wants, which has not been considered from an industrial point of view, and which is thrown on to the floor of this House as the best kind of agreement that can be arrived at. This is a National Government, and I suggest that in this trade, which is one of the most important and basic trades of the country, it is the duty of the Government, if necessary, to compel the parties to come together and get a more or less agreed scheme. Then in regard to those details to which they cannot agree, the Government will be the arbitrator. With that agreement and that final arbitration, for heaven's sake let us have a free run in future and get the coal question out of this House once and for all.


We are coming to the conclusion of several days of Debate which has been in parts a little dreary, because to a large extent it has resolved itself into a post mortem examination of the cause of death of the party opposite. It is a little surprising that at this late hour there are still hon. Members opposite like the hon. Member for Govan (Mr. Maclean) who do not seem to have the faintest idea of what it was that brought about their death. I was surprised to hear the hon. Member still sticking to the old story of the bankers' ramp. He has not "come to" yet; he does not know what has lifted him; he does not realise that the causes of death were really quite simple. One of the most amazing features about the party opposite is the way in which, whenever they meet with defeat, they conjure up some bogey. It is either the Khaki Election of 1918, or the red letter of 1924 or the bankers' ramp of 1931. They never think of blaming themselves, and they never give the people of this country any credit for recognising the futility of the party opposite. What that partly really died of was suicide, owing to political ineptitude and personal inability of the most grotesque and futile kind. It was to sweep away that kind of futility that the country voted recently in the certain and definite way that it did.

One of the minor amusements of the election was the placarding of the country with posters inviting the people to "take action." The people went quietly home and did take action, first on the authors of the posters and then upon the party opposite. But there is one thing that the country does expect and is entitled to expect, and that is that it shall not have replaced that miserable lot by another lost which is incapable of direct, forceful, robust and vigorous action. Let me say at once, speaking as a back bencher of the party which comprises the largest part of this House, that we feel that the Prime Minister has been extremely successful in the Government that he has brought together as a National Government. The right hon. Gentleman has formed a very good and careful balance between political experience and political youth, and for the younger Members of the House I might add the injunction that there is all the difference in the world between political youth and physical youth. The Government, I am sure, will have the whole-hearted support of every one of the back benchers so long as they endeavour to carry through the task for which they have been formed. It will not be a grudging or stinted support.

The sneer that I heard last week, which was rightly rebuked my my right hon. Friend the Lord President of the Council —the sneer that there would be those in the ranks of the Conservative party who would endeavour to bring the Government down—is utterly unwarranted, and it showed no conception of the deep and traditional loyalty of members of this party. In what direction are we entitled to look for swift and robust action? First of all, as regards the question of the balance of trade. My hon. Friend the Member for Cardigan (Mr. H. Morris), who always speaks with great lucidity and interest and with whose speeches I often agree, to-day said that there was no such thing as balance of trade.


He said no such thing.


He said that no one in the world could say what an adverse balance of trade was. As a matter of fact, I am credibly informed that no doctor breathing can say what measles are, but most people know measles when they see them. There is one thing of which I can assure my hon. Friend, and it is that, whatever an adverse balance of trade is, we have got it. I also assure him that there is not one single living economist in this country who will not admit that at the present moment we are suffering from an adverse balance of trade.


Will the hon. and learned Member say whether there is a single living economist in the country who believes that tariffs are the proper remedy for the balance of trade?


I will deal with that point in a moment. I am certain that no living economist could point to any proposal put forward by the hon. Lady which had any relevance to the problem. Throughout the election, from every single platform this question of the balance of trade and the necessity for correcting it has been adumbrated with varying emphasis but always with emphasis,, and it would be a scandal if the Government were not prepared to take, and did not in fact take the most speedy and drastic methods of dealing with it, here and now. When we are told that this is a Protectionist ramp, one thing ought to be borne in mind. No party at the election even asked for a mandate for Free Trade with the exception, perhaps, of that small and familiar band of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), and response which he received was so enthusiastic that I understand he is now about to sojourn elsewhere in order to recover from its consequences. [HON. MEMBERS: "Oh!"] I am not meaning anything offensive in any way. At any rate, the only small group which pro- fessed a policy of Free Trade in the election was the small band headed by the right hon. Gentleman the Member for Carnarvon Boroughs.

All kinds of other methods of dealing with the balance of trade were put forward—the method of tariffs, the method of import boards, the method of prohibition—but one and all were agreed that in order to redress the financial situation in which we found ourselves it was necessary, promptly to cope with this vast gap between the goods which we sell and the goods which we buy. One step has been taken this afternoon and not a minute too soon. I was not present when the statement as to dumping was made and I am not therefore in a position to criticise it in detail, but I understand from my hon. Friends that, as far as it went it was satisfactory. May I without wishing to be over-critical suggest one or two considerations for my right hon. Friend the President of the Board of Trade when he comes to consider what is dumping. Do not let him be be misled by mere comparative figures of imports at one period and another. Those may be very misleading and the instance which I would bring to his special notice is that of the lace trade. [HON. MEMBERS: "Oh!"] Well, the great city of Nottingham, the senior constituency of which I have the honour to represent, overwhelmingly endorsed the policy of restoring the tariff in connection with the lace trade. It did so by returning not only myself but my hon. Friend the Member for East Nottingham (Mr. Gluckstein) who replaced one of the most respected former Members of this House, Mr. Birkett. Nothing but a compelling claim could have enabled him to carry his case so successfully.

In the case of the lace trade, it will be of no value if the President of the Board of Trade merely compares the present imports with the imports of, say, a year ago or two or three years ago, and for this simple reason, that a very large quantity of lace—and the same applies to other luxury articles which can be conveyed in a small compass—is now coming into this country by parcels post. I endeavoured to obtain from the late President of the Board of Trade any figures which would enable one to make some estimate of the parcels post imports, and Mr. Graham informed me that it was impossible to obtain such figures. It is therefore incumbent upon the President of the Board of Trade, when he comes to consider whether in fact there is dumping in any particular industry, not merely to range over the figures of imports for two comparable periods, if those goods are goods that may go into a small compass, but, as I suggest to him, that he should approach the matter more nearly than that and make inquiries in each case from those concerned in the industries, who will be able to call his attention to other methods by which their situation can be gauged and defined.

As we are talking about swift methods —because nothing less will do at present —why, in the name of all that is common sense, should not the Government at once re-impose each and every one of the Safeguarding Duties? There you have duties which have been tried and proved. There is not one of those industries which obtained the duty but had to pass through the sieve of the most stringent and difficult inquiry to which any industry could be called upon to submit, and at a cost in many cases of very large sums of money. In not one case had those duties proved a failure. They did no damage, but in each case they did good, in each case they were followed by improved employment, and, finally, they all attached to articles which in no sense of the word were strict necessities. Therefore, in my submission to the President of the Board of Trade and to the Government, the first and easiest step that they might take by way of an emergency is to re-impose at once every one of the Safeguarding Duties which the acidulated pedantry of Mr. Snowden, who is still a Member of the Government, insisted on removing.

I agree with my hon. Friend that when you come to the wider and more general range of tariffs, other views and apprehensions must be borne in mind. Obviously there is the case to be considered of the effect upon the price level, and therefore upon the possibility of a general demand for increasing wages, which in the present precarious position of sterling would be a disaster, but my hon. Friend speaks, if I may say so without offence, from a typically Free Trade point of view when he speaks contemptuously of the differences of view that exist between Protectionists in this House. Of course, there are differences of view. That is the difference between a Free Trader and a Protectionist. A Free Trader is a dogmatist, and we have been shackled with those economic theories now for 100 years, but a Protectionist urges an empirical economic policy which can view facts and economic matters merely on their merits and on the justice of their application, and in an inquiry of that kind there is room for that kind of difference of opinion which seems to surprise him, but I can assure him that it represents no more than the difference between the generous, empirical point of view of the average Protectionist and the narrow hidebound pedantry of the Free Trader.

The difficulties, the dangers and trials of the situation with which we are faced are not fully appreciated yet, and there is not one of them that will not call for all the metal of the Government in its facing; but, great as are its difficulties, greater still are its opportunities. What have we done? We have emerged after facing the people, a democracy that was smarting from cuts. We have gone to our people to gain our balance and to gain our mandate. We have faced the people at a time when they might have been expected to respond with indignation or pique. We found neither. We have done something that no other country dare do, and it puts us at the head of every democracy in the world. It enables us to go into the councils of the nations, a Government with a mandate stronger and firmer than that of any other Government in Europe or the United States. We can go there and plead for some sanity in the currency methods. We do not pretend that we are satisfied with the world working of the gold standard, but we are entitled to go there and point out that in sterling we have a currency that is the lingua franca of half the civilised world, which is based on something better than metal, namely, the character of a people which has just been tried in one of the most signal tests in history. For that reason, the Government, great as are their difficulties and responsibilities, has an historic position and an historic opportunity of putting this nation once again high at the head of the councils of the nations of the world.


I heartily welcome the reference in the Gracious Speech to the coming conference at Ottawa. It is no exaggeration to say that the prosperity and the well-being of the people of this country and of the six Dominions will be largely determined by the success or failure of that conference. It must not —it cannot—be allowed to fail. If the House will permit a personal reference, I know the Dominions and the people of the Dominions, of whom I am one, better than I know this country and its people. The British people overseas are profoundly concerned about what is to happen in the next 12 months in the Empire. Let there be no two minds about that. It may well be that the making or the breaking of the Empire will depend upon the statesmanship of the Dominions Secretary.

For that reason I regret that the preparations for the coming conference at Ottawa, and our representation there in the role of the Dominions Secretary, has not been entrusted to my right hon. Friend the Member for Sparkbrook (Mr. Amery), who, by common consent of all parties in all the Dominions, is preeminently the statesman best qualified to guide the deliberations of that conference to a most successful conclusion. By the appreciation and the interest he has shown over a great many years in the difficulties that confront the different Dominions, by his vision and earnestness, by his great tact and the cordiality with which he has received visiting statesmen from overseas, he has won for himself a unique position in the affections and esteem of the peoples of the Dominions. His reputation as a great Empire statesman is unrivalled. Yet, after all these years of profound study and experience at the Dominions Office and in the Dominions, after being intimately connected all his life with the Dominions, after having fought battle after battle for the Empire in this House against heavy odds, and for more than a generation, we find the right hon. Gentleman the Member for Sparkbrook, a Member of a Parliament pledged for the first time in history to give the fullest effect to those ideals for which he has so long and so hardly striven—and a supporter of the Government, yet excluded from the Government.

With great respect to the Prime Minister, of whom I am a loyal supporter, I consider that is a great mistake. There will be no two opinions in the Dominions about it being a mistake. Seek the view of any visiting statesman from the Dominions, and, if he takes you into his confidence, he will tell you the same. The right hon. Gentleman would have been in the Government if the interests of the Empire and of the British race had not unfortunately, at this of all times in our history, been subordinated to political expediency. As a man coming from the Dominions I appeal, with all the earnestness of my being, to the Prime Minister, to see that the right hon. Gentleman the Member for Spark-brook is one of those who represent this country at Ottawa next year in order that his immensely valued services may be at the disposal of that all-important conference. I have a great respect for the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas), and I have said so publicly on many occasions. But he is the same right hon. Gentleman who was at the head of the Dominions Office at the time of the imperial fiasco last year. The views that he expressed then, and his actions, would not be acceptable, in fact they would be wholly unacceptable, to the vast majority of the hon. Members in this House to-day.

We are told that the Imperial Conference cannot be held until next July. I conceive that to be a mistake also. We are told that, for domestic reasons in one of the Dominions—we are not told which Dominion—it will not be possible to hold that Conference for the next eight months. Imperial Conferences, like all other conferences, entail a considerable amount of inconvenience, especially for those Ministers who have to be absent from their own country for a number of months. The majority of the Dominions want this conference early in the New Year, and so do the majority of hon. Members in this House. It is inconceivable that any of the Dominions would not be properly represented at Ottawa, if the conference were held early in the New Year, no matter what domestic inconvenience it involved. I cannot help feeling that the matter is not wholly unconnected with the Dominion Secretary's desire to make a tour of the Dominions. We all agree that in ordinary times it is very desirable for the Secretary of State periodically to visit the Dominions, to reciprocate the visits of their Ministers to this country, and to meet and exchange views with the Governments and Oppositions and to acquaint himself at first hand with the ideals and aspirations of those people. But this is not an ordinary time.

There was an Imperial Conference here last year, and there is to be another conference in Canada in a few months' time. There are important decisions to be taken in the Cabinet before that conference is held, decisions primarily affecting the right hon. Gentleman's own Department. There is also important preparatory work to be done by his Department before the conference can take place. This afternoon the question was asked as to what exactly is the object of the Secretary of State for Dominion Affairs in making this tour of the Dominions. I would like to repeat that question. Is it his object to convey to the Dominions some decision of the Cabinet which is not already known to them, and which he cannot entrust to the ordinary channels of communication? Or to suggest to them lines upon which they and we can work out some common scheme for the closer economic unity of the Empire? If so, do not the Cabinet accept the unanimous recommendations made by the Dominion Prime Ministers last year as the basis for the Ottawa Conference'? Surely we should be given some idea as to why he is going round the Empire, and a complete assurance that the story he is going to tell in the Dominions this year is very different from that which he told the Dominion Prime Ministers when they were here last year.

Or is he going round the Empire, I will not say on a joy-ride, but on a fishing expedition to find out what they are prepared to do? If that be his object, I earnestly suggest to him that he had far better stay at home. In these days of cables and wireless and telephones connecting us with all the Dominions there is not a piece of information which the right hon. Gentleman cannot have on his table in Downing Street within an hour or two of its being available at the other end.

Besides, the Dominions point of view is already known to us. It was stated over and over again at the conference last year, which sat for more than six weeks and appointed a large number of committees. In every case the Dominion Prime Ministers to-day are the same as those who were here last year. Why does he want to go to South Africa? General Hertzog is the Prime Minister of South Africa. His views are perfectly well known. General Smuts is the Leader of the Opposition. He is in London. Why does he want to go to Australia? Australia is pressing for the Ottawa Conference to be held early in the New Year. Only last week Mr. Forde, the Minister of Customs, said that unless immediate steps are taken to expedite the conference, Australia will have to consider entering into commercial treaties with foreign countries. Why should he go to New Zealand? For the last 20 years the attitude of successive Governments of that wonderfully loyal Dominion has never been in doubt. Why should he go to Canada? I understand Canada is pressing for the conference to take place as soon as possible. America is reported to be asking Canada to enter into commercial treaties with her, and the Prime Minister of Canada is already on his way to this country. Why should he visit Newfoundland? The Prime Minister of Newfoundland was here until a few weeks ago. The right hon. Gentleman could call him up on the telephone if he wanted to speak to him. In any case, why go to Newfoundland via New Zealand? I suggest to him that he should confine this Empire tour to a weekend in the Irish Free State.

There is one other point on which I would like to say a word. For the success of this Conference it is absolutely vital that it should meet and deliberate in the right atmosphere. In the past the atmosphere of Imperial Conferences has been anything but conducive to success, and the fault has lain with the Governments of this country. Now the people of this country have spoken. Those who were responsible for the Imperial fiasco of last year have been almost entirely wiped out of political existence. The people of the country have returned a National Government with an inspiring message. This time it is we who must assume the initiative and say to the Dominions, "Come along, and let us, here and now, and for all time, make certain of achieving that great and glorious destiny that lies before our race."

Question put, and agreed to.

Resolved, That an humble Address be presented to His Majesty, as followeth: MOST GRACIOUS SOVEREIGN, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

To be presented by Privy Councillors or Members of His Majesty's Household.

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