HC Deb 14 April 1932 vol 264 cc1030-128

Again considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

Question again proposed: That a sum, not exceeding £84,690, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1933, for the salaries and expenses of the Office of the Committee of Privy Council for Trade, and Subordinate Departments, including certain Services arising out of the War.


When our proceedings were interrupted I was about to draw the attention of the Committee to the very remarkable figures as to increased output per worker, shown in the Macmillan Report. Take coal-mining. In the five years from 1924 to 1929, you find a 27 per cent. increased productivity; in iron and steel 20 per cent.; in engineering and shipbuilding, including motors, 15 per cent.; leather and boots, 26 per cent. That is the position which faces industry after industry. Even if we got back to 1929, or to the 1913 position, with regard to our export trade, we could not anywhere near employ the people who are looking for employment in these particular industries. Yet we still hear great talk of our need for increased production. The same thing is happening all over the world. Industry after industry is being rationalised, the powers of production are increasing, and the world has not up to the present devised a means for consuming the extra production.

5.0 p.m.

What is the President of the Board of Trade doing? He is going to take care to increase production in just those particular departments where over-production is already going on. That will be the only effect of his import scheme. He is going to introduce into this country the manufacture of articles which were formerly produced somewhere else. Every other country is doing the same thing. I have an enormous list here of country after country—Belgium, Czechoslovakia, Denmark, France, Germany, Hungary and so forth—all engaged in setting up tariff barriers of one sort and another. I have no doubt that in those countries the equivalents to the right hon. Gentleman have come down to their Parliaments and announced with joy that they were going to produce something formerly produced in other countries. The only result is to multiply the plants and the number of producers of commodities without finding any market for those commodities, and as a policy for facing the present world conditions, that strikes me as being absolutely ludicrous.

A word on the policy which has resulted in increased productivity. It is generally known as rationalisation. It is the rationalisation of industry and the irrationalisation of the national life. What is the right hon. Gentleman doing with regard to reorganisation by industries, first of all, because every report states that there is to be reorganisation by industries? We have had reports on cotton, we have had various attempts at reorganisation in the coal industry, and we have had proposals with regard to the iron and steel industry. The right hon. Gentleman told us nothing about that, and I should like to know whether any negotiations are taking place with the trades concerned. With regard to iron and steel, the statement made by one authority, Professor Bone, is this: Unless world conditions speedily improve, ere long we may have seriously to consider in the national interests a reorganisation of our iron and steel industry on 'public utility' lines, with some element of effective public control, with a view to more scientific management and development, reasonable prices for standardized products, and proper international arrangements regarding outputs. For the production of iron and steel to meet the world's demands is fast becoming an international question of the first magnitude, in which all the chief producing countries are equally concerned. That is a statement of opinion by a distinguished professor. We hear from time to time questions about what is going to be done with regard to iron and steel, and the reply given from the Government is that it is a very difficult matter. So it is. As this professor says: The really important question for this country now to decide is at (or up to) what stage or to what extent in such production as a whole does or will it best pay us to import unfinished material in order profitably to turn it into a finished one. We want to know what is the Government policy. When we had a Debate on steel we had a question put up by the steel manufacturers, and we never got a clear answer as to what the Government proposed to do. We do not know whether they are going to insist on any reorganisation. We at times have a wail about the cotton trade, but we do not know whether the Government propose to take a hand in its reorganisation; and the right hon. Gentleman comes here and gives no hint that he has any idea with regard to the reorganisation of industry at all.

I wonder whether the right hon. Gentleman or the hon. Gentleman has read much of recent publications on these topics. In the "Times" of to-day there is a long article, and also a leading article, on this question of a national planning of industry. We find from speaker after speaker in the country and in this House references to this question of national planning. You have, in the book to which I have already referred, the whole question put to this country as to what is going to be its industrial future. The writer says that we cannot depend any longer on the old fashioned laissez faire idea that things will work out for themselves. We hat e to consider the fact that the Russians have a Five Years Plan, and we have to consider whether or not we are going to have a plan in this country.

If I had put forward as a suggestion this need of a national plan quite a short time ago, such Members as were present would all have had Russia in their minds, and they would all have said, "Oh, the Russians, with their ridiculous Five Years Plan." As a matter of fact, the tune has changed entirely, and in every country people are now beginning to say, "Is not the Russian Five Years Plan going to succeed, and what are we going to do about it?" I was speaking yesterday to a man who has just returned from a tour in the United States of America, and he said that all the young industrialists there are learning all they can about the Five Years Plan, and even in the United States there are questions as to whether any longer they can go on in the old style or whether they should not have some kind of plan. That is also the burden of Sir Arthur Salter's book, to a large extent—the need of an international economic plan and a national economic plan.

I think that on this occasion we ought to have had some kind of statement made by the right hon. Gentleman as to whether the Government have any plan for the future of this country. Have they worked out any idea as to how this country is going to retain its position in the world of industry? Have they any plan worked out for the various parts of the country? I wonder whether the right hon. Gentleman has seriously considered the possibility of calling together a body of people and thinking out the industrial future of this country in relation to the geographical distribution of the population and our national resources. The right hon. Gentleman has told us that it is very significant that the great majority of these new industries that are being set up in this country are being set up in the London area. He said that one or two were being set up in the depressed areas. That is not what has been happening during the past five years.

I have here a plan got out by an exceedingly competent economist, showing exactly what has been happening to the new and expanding industries in this country. He has drawn a map, on the one side, of unemployment, showing its geographical distribution. If you look at that map, you will see the dark blots of extreme unemployment in Lanarkshire, Glasgow, the North East coast, South Lancashire and Yorkshire, and South Wales, all black; and, broadly speaking, the lighter parts of the map are in South East England and the South Midlands. On the other side, you find where new and expanding industry is taking place, and the great dark areas, showing the greatest intensity of new development, are around London and the South Midlands and the South Eastern counties. If you put those two maps together, you will find that practically in only one case does new industry coincide with excessive unemployment, and that is on Tees-side, where you have the development of the chemical industry, but everywhere else you find that, so far from the new industries coming in to take the place of declining industries, they are going to other districts.

Cannot something be done with regard to that development? I should have thought that at a time when we are told that we must economise, that would be something that a National Government would do. I do not know whether the hon. Member can tell us anything with regard to the surveys that were to be made of depressed areas. I suggested it myself, and the idea was taken up under the Labour Government by the then President of the Board of Trade, the late Mr. William Graham. A survey was made in these depressed areas, and measures were taken to devise means for bringing new and expanding industries into districts where trade has declined. The most economic thing to be done is to bring industry to the people in the houses, plants and factories that are there already, rather than havng to shift the people and make new factories in different parts of the country.

Nothing can be done unless some active, energetic control is undertaken, and I want to know whether any steps are being taken in that direction. It may be that it might need legislative sanction, but there are various things that could be done by the way. The President of the Board of Trade could get into touch with the Minister of Transport. He will find that on the Continent a great deal has been done with regard to making transport facilities and stimulating industry in the particular localities where you want it. There is the question of the ports. I do not know whether the right hon. Gentleman realises that by their tariff legislation the Government are upsetting the port arrangements of this country. There are grave fears lest the method of dues on imported goods is not going to upset the relative position of the ports, quite haphazard, without any reference to any plan. There is the question of the migration and the housing of workers, because sometimes you get expanding industries which cannot expand because there is no place for the workers to go to.

Finally, on this point, I come to the right hon. Gentleman's own pet proposals. The Government's particular fancy is tariffs. There is one thing that might be done, even under tariffs, which we have urged. Given that you are to have tariffs, why not use them as an instrument for directing the economic life of this country? You may say that that is a Socialist idea, but Sir Arthur Salter, in his recent book, says: A strong and competent Government might stimulate and assist reorganisation of an industry by offering a temporary and conditional tariff, but the conditions would need to be clearly defined and rigorously enforced. On the whole question of industrial reorganisation, this authority states: Programmes of industrial production again need obviously to be based upon collective estimates and to be subject where necessary in their execution to some collective influence. That is what we are seeking. I am afraid the hon. Member opposite has not really accepted that doctrine. I remember that when a question was asked by an hon. Member from the Conservative side as to whether he would help one of these industrial development associations, he said that he could not; that it would be quite wrong to help one more than another, to favour one part of the country at the expense of another. I submit that in these days that is entirely wrong. The Board of Trade or some organisation set up by the Board of Trade, like a council of industry, has got to take direction of these things if we are to get even a little way out of our present difficulties. I think it is a point of very great importance. We on this side do not think you can effectively reorganise world economics or the economic structure of this country under your present system, but we suggest that you should have a try. Sir Arthur Salter says: No one can suspect that even if we now get through without disaster, we can long avoid social disintegration and revolution on the widest scale if we have only a prospect of recurring depressions, perhaps of increasing violence. We have indeed before us only the alternatives of collective leadership, collective control, or chaos. As far as I can see, there is no collective control by the National Government at present. In fact, they are formed upon a basis of limited liability to support the policies of people whose economic ideas are as the poles asunder and which policies are temporarily needed for a specific purpose. Whatever may have been the policy in the crisis—it is not my purpose to say Whether it was good or bad—at any rate there is nothing like a continuous plan. If hon. Gentlemen opposite in control were of the same mind we might get a plan even if it were a bad plan, but as long as we have Ministers holding the opinions of those on the opposite benches I am afraid that we shall not get it. We consider that it is possible, if the Government will bend their minds to it, to take some thought for the economic future of this country. The right hon. Gentleman might consider with the Minister of Transport the condition of transport facilities, and he might consider with the Ministry of Health who already has the amenity planning control, the industrial planning control and bring the two together.

Above all, and finally to return to the point which was made by the right hon. Gentleman, there is the question of squandering resources. We know that the right hon. Gentleman is very sensitive about the care of the savings of the people. He told us so at the election time, and he told the country so. He was very careful lest the wicked Socialists should squander the money which the people had put by. No doubt he was very angry. Has he no class sympathy for his own people who invest their money? Unless you take some control and direction of the money and investments of this country and see that they go into a line in which they will develop the economic life of the country you will create a position worse than any position of which this party has ever been accused of being guilty of creating. I appeal to the hon. Member when he replies to try and deal with the matter on broad lines and to realise that all over the country many people of very different opinions realise—and, indeed, all over the world there is a feeling—that it is time that some more orderly thought and control was put into the industrial life of this country and of the world. The arguments that apply to the world situation to which hon. Members might devote themselves when they come to talk about foreign trade are exactly as applicable to this country. Unless you have better organisation you cannot deal with the problem of your distressed areas, and you will have unemployment continuing as badly as in 1929, if not quite as bad as it is to-day.

Vice-Admiral TAYLOR

I was intensely surprised to hear the hon. Gentleman who spoke on behalf of the Opposition blaming the Government for a lack of policy. He said that they had announced no policy, and he blamed them for not having announced a particular policy for dealing with the crisis which it is admitted, at present exists in this country. When the financial crisis was upon this country the Government initiated a policy and carried it out. It was one with which the hon. Gentleman now that he is in Opposition does not agree, but with which in the main he did agree when he was a member of the late Socialist Government.


The hon. and gallant Member must excuse me. I was never a member of the Cabinet and I never took part in any discussion whatever on the matter. He is entirely mistaken.

Vice-Admiral TAYLOR

I apologise to the hon. Gentleman for making a mistake in that respect. It was a policy with which the members of the Socialist Government were in the main in agreement when they formed the Government of that time. Now the hon. Gentleman is blaming the Government because they still have no policy. I ask him whether the Abnormal Importations Act, with its restriction on foreign imports, the Revenue tariff of 10 per cent., and the setting up of the Tariff Commission with the object of protecting the industries of this country where they require such protection, the extension of an Imperial policy for the extension of our export trade, and the greater freedom of trade between every part of the Empire, the substitution of markets in the Empire for markets which we have lost on the Continent, do not constitute a policy?



Vice-Admiral TAYLOR

I will make the hon. Gentleman a present of his opinion, but in the opinion of the country it is undoubtedly a policy, a policy which has changed the whole fiscal system of the country, because we have definitely abandoned the old free imports policy and are taking the first step, which is only the prelude to further steps, in the protection of the industries of this country. And we have embarked upon the greatest policy of all—the policy of Empire Free Trade or, if you will, Imperial economic unity in order to bring about the greatest possible freedom of trade throughout the Empire and by that means, with the power we obtain, to beat down the tariffs throughout the world which everyone admits are such a dire hindrance to world trade at the present time. The hon. Gentleman also rather objected to the setting up of foreign factories in this country. He talked of a swallow not making a summer. [Interruption.]


I said that the hon. Gentleman did not object to the swallow because it did not make a summer.

Vice-Admiral TAYLOR

I am glad that he did not object, because one swallow in this policy will lead to many others, and the summer will undoubtedly arrive in due course. He criticised the smallness of the measures which have been taken. He said that the President of the Board of Trade had no right to take any satisfaction to himself because we were in a better position now than any other country in the world, as it was nothing to be proud of. He does not seem to realise that we have to make a beginning, and that it is a very great advance in this country that, despite the deplorable conditions throughout the world, we, at any rate, are beginning to show an advance in the direction of an increase of our trade.

I wish to deal particularly with the Abnormal Importations Act and the effect it has had upon the imports and exports of commodities which come under the Act, and also with regard to the effect it has had upon unemployment. We have been told that the question of tariffs is an experiment. I grant that the Abnormal Importations Act, with the very high tariff it imposes of 50 per cent., is more in the nature of a prohibitory tariff than of a general tariff in the ordinary sense of the word for the protection of our industries. But that tariff was brought in for a specific purpose, and it will shortly be altered in accordance with what is considered necessary. At any rate, the experiment has been launched, and it will be tested upon the results it gives to this country, whether on the whole it has been to the benefit of the country or not. I am prepared to stand by such a test. It is the best and the only test, but it can only properly be tried out provided that it is applied, not to a few of the industries of the country, but generally over the whole range of industries, including the greatest industry, agriculture, wherever it may be required.

I will come back to the Abnormal Importations Act, and take the question of imports first. In the month of March, 1930, of the commodities now coming under the Abnormal Importations Act we imported £3,947,812 worth; in 1931 we imported practically the same amount, £3,685,229 worth; but in March, 1932, when the Abnormal Importations Act had been in operation for a few months, we had dropped down to an import of only £705,992. That means that for the month of March, 1932, the imports had dropped by nearly £3,000,000 compared with March of the previous year, and by over £3,000,000 compared with March of the preceding year. In fact, the imports of the commodities affected by the Act have practically been wiped out. Therefore, the effect of the duties under the Abnormal Importations Act in restricting imports has been achieved. The drop in imports has been of a general character over the whole range of the commodities.

I will give the Committee some of the details of the reduction of those imports, as they are very interesting and important. In regard to garments, in the month of March, 1931, we imported £713,000 worth. In March of this year we imported only £166,000 worth. In cotton manufactures, which were mentioned by the right hon. Gentleman, we imported in March, 1931, £607,000 worth, and in March, 1932, £49,000 worth. In woollen manufactures there was a still more extraordinary drop. Last year there were £779,000 worth and this year £56,000 worth. In woollen yarns there were £286,000 worth, and now only £4,000 worth. We have practically wiped out the imports of woollen yarns. In typewriters and parts the imports dropped from £55,000 to £10,000; glass bottles from £45,000 to £8,000, and domestic glass-wear from £144,000 to £17,000. This reduction in imports will be of little use to this country unless it can be shown that the gap which has been created by the restriction of foreign imports has been filled by the products of British industry and British labour. If that can be shown, we shall have achieved a great object by increasing home production and increasing employment in our country. The President of the Board of Trade enumerated the number of applications which had been made for the setting up of foreign factories and stated that some 70 odd are in the course of construction, or, of being enlarged. There have been repeated statements in the Press of factories which are being extended in this country, in which short time was previously worked, and in which full time is now being worked, and in others in which overtime is being worked. All these things go to show that British production has been increased, and that British labour is being employed to a greater extent than it has been employed previously.

5.30 p.m.

I should now like to turn to the statistics in regard to this matter. Of the groups covered by the Abnormal Importations Act figures of unemployment are given in the case of 12 groups in the Ministry of Labour Gazette. The others are not given. An examination of those figures give some very remarkable results. Taking the period from November to February, for the last three years, we find that from November, 1929, to February, 1930, unemployment increased in those 12 groups by 93,000, an increase of 53.6 per cent. From November, 1930, to February, 1931, unemployment increased in those 12 groups by 24,000. But if we take the same period, that is from November, 1931, to February, 1932, the period covered by the operations of the Abnormal Importations Act, we find that not only has unemployment not increased but that it has fallen by 36,000. That figure is the more remarkable because at this time of the year I think it is generally the case that unemployment increases. In the two previous years that was the case to a very large extent, but, due to the operations of the Act instead of having this normal increase in unemployment, we have a decrease of 36,000.

These 12 groups comprise cotton, woo], worsted, linen, jute, hosiery, carpets, tailoring, dressmaking, pottery and earthenware, glass bottles, linoleum and oilcloth. These groups are the only ones covered by the Act for which the Ministry of Labour give the official statistics as regards unemployment, but they are sufficiently numerous and they are of sufficient importance to show that the demand which has been created, due to the restriction of foreign imports, has been met by increased production of home commodities and increased employment of our own people. Of that, surely, even Members of the Socialist party cannot entirely disapprove. This policy, or lack of policy as they call it, must be a matter of some satisfaction, in that we have increased employment for our people and increased home production. The hon. Member who has just spoken from the Front Opposition Bench asked what we are doing to increase our export trade. Surely he must know that before we can increase our export trade it is absolutely essential that we should have the vast proportion of our own home market, because by increased production, by the greater output of the industries of this country, we can reduce our overhead charges, and reduce the price of the article we have to sell, thereby competing on fairer terms and with more chance of success with the foreign article which is made at a far lower cost of production than exists in this country at the present time.

Let me turn to the export of the items covered by the Act. The export market is still in a very bad condition. Everybody realises that, but it is a great satisfaction to me to know how well we are holding our own in this matter. Although it may not be much satisfaction to the hon. Member who has just spoken, it is a matter on which we can congratulate ourselves. If we turn to the exports for the first quarter of 1930 and 1931, we find that the exports fell in that quarter from £45,000,000 in 1930, to £24,000,000 in 1931, a drop of £21,000,000. The fall from the first quarter of 1931 to the first quarter in 1932, when the Abnormal Importations Act was in operation, was only £635,000, compared with the £21,000,000 fall in the previous year. Therefore, it is fair to assume that this very satisfactory check, this almost complete wiping out of the fall in our export trade, has been directly due to the Abnormal Importations Act and the protection of British industries.

Not only have the facts and figures which I have given this afternoon shown that the operations of that Act has increased home production and restricted foreign imports, almost entirely eliminating them, but that they have also increased our export trade. These are things that the Free Trader said would never happen; but you cannot get away from facts. The hon. Member who has just resumed his seat told us about the development of manufacturing industries in Czechoslovakia, Yugoslavia and other countries on the Continent, which were created behind a, tariff wall. He asked what they were doing with their exports. Some tell him they were flooding the British market with them and preventing British goods from being sold, but on account of the operations of the Abnormal Importations Act that condition of things no longer prevails in regard to the articles covered by the Act. It is because of that Act that we have been able to cut out those imports, to obtain the market for ourselves and to increase British employment. These facts and figures should be a matter of congratulation for the President of the Board of Trade for his courage and foresight in bringing forward the Abnormal Importations Act, and also for those who made it possible for him to do so. They reflect great credit upon him. These results should be a lesson and an encouragement to the Government to go forward in the course which they have taken, in order to improve British trade and British employment, not only by protecting those articles which come under the Abnormal Importations Act but by protecting all the industries of this country where protection is necessary, including the main industry of agriculture.

I was very pleased to hear the President of the Board of Trade expounding the policy of greater inter-Imperial trade, the great ideal for which I twice have stood. When I first did so, I was a sort of pariah dog, proclaiming something which was quite impossible, something outside the realms of practical politics, but within 14 months it is the accepted policy of the National Government of this country. I take no credit for that.


Beaverbrook has not accepted it yet.

Vice-Admiral TAYLOR

Oh, yes, he has. I believe in that policy, I stood for it because I believed in it, but I take no credit for it, and I am only too delighted to be able to stand here to-day proclaiming that it is now the policy of the National Government. It is the spirit with which every representative of the Empire, who goes to Ottawa will he imbued that will govern the benefits which will accrue from the Conference that is to meet in that great city of Canada. There we can, without the slightest doubt, obtain from the great units of the Empire a far greater proportion of their markets than we have at the present time. It is there that we shall increase our export trade. By the tariff that will be introduced, which we shall be able to use, against the foreigner, we shall be able to reduce the foreign tariffs. After the Ottawa Conference we shall be able to come to trade agreements with the foreigner, in order to obtain a greater proportion of his market than we have at the present time. I congratulate the President of the Board of Trade on the action which he has taken up to the present, and I hope that the Government will go forward with courage and continue the policy of protection for our industries and of inter-Imperial trade, which so far has had such beneficial results for the people of this country.


It must be reassuring to the Cabinet, after the speech of the hon. and gallant Member, that they are absolutely sure of the support of the "Daily Express" and Lord Beaverbrook. In opening the Debate, the right hon. Gentleman made reference to what he called the crisis. Reference was also made to it by the hon. and gallant Member who has just spoken. I have been a Member of this House for a considerable number of years, and I was here last July. I have heard a lot about the crisis, but the Socialist leader of the so-called National Government was afraid to meet the ordinary Members of the Labour party and tell them whether there was or was not a crisis in August of last year. I was not a Member of the Cabinet or an official of the Government, but just an ordinary Member of this House, and I came back here, notwithstanding the wild lies and the rest of it that were used last October to further the progress of the so-called Socialist-pseudo-Liberal-Tory-National Government. We were asked by the hon. and gallant Member to believe that everything is well with the country now, because of the incoming of this Government.

Vice-Admiral TAYLOR

I did not say that all is well. We are getting on to the right path. We have made a start.


We were on the right path in 1924, when the hon. and gallant Member was not a Member of this House. The Labour party were in office in 1924. At that time the Prime Minister was a Socialist. [Interruption.] I was willing to admit that he was a Socialist at that time, but I am doubtful of it now. At that time the Labour Government lasted for only nine or ten months. The present Government have been in office almost as long as the Labour Government were in office in 1924, I should like to call attention to the condition of the industry with which I am and many Members of my party are connected. I should like to contrast its condition in 1924 with its condition to-day. The right hon. Gentleman did not take much credit to the Government for the position of the mining industry. He admitted that there was very little improvement. Indeed, it is not a question of any improvement; the industry is in a worse condition now due to the policy pursued by this Government. It we can depend upon the figures which have been issued the number of men employed in the industry has decreased. On 18th March, 1930, my hon. Friend asked a question as to the number of men employed and he received a reply which stated that there were 1,213,724 persons employed in the mining industry. In the statistical abstract issued by the Mines Department for 31st December, 1931, I find that the number of persons employed was 799,374, a decrease of 414,350, or 33 per cent. That is about the number of men the mining industry gave to the country in the Great War, in addition to supplying the necessary fuel for carrying on the Great War. The reward they have received is that a large proportion of them have to go about idle, and have been so for anything from three years to six years.

I want to deal with the figures in regard to what are known as the exporting areas, that is to say, South Wales, Scotland, Northumberland, Durham and, to a lesser extent, Yorkshire. In 1924, when a Labour Government was in office, there were 250,055 persons employed in South Wales, but at the end of December last year there were 139,089, a reduction of 110,966, or 44 per cent. That is to say, 56 men are now working in South Wales where 100 men were working in 1921. The position has not improved during the last three months, on the contrary, it has got worse. In Scotland, in 1924, there were 141,805 persons employed in the mining industry and in December last year the number was 81,787, or 60,018 less. That is to say, where 100 men were working in 1924 there are only 62 working now. In Northumberland the decrease is over 40 per cent. as compared with 1924. In Durham the decrease is 33 per cent. and in Yorkshire 19 per cent. Over all these five areas, these exporting areas, there has been a decrease of 294,516 in the number of persons employed, or a decrease of 35 per cent. Some hon. Members on this side of the Committee who are connected with the industry meet the results of it every week-end, and up to a certain point there will no doubt be a considerable amount of sympathy amongst the Tory-Liberal-Socialist - National - Labour Government, but it is impossible for anyone who does not come into direct contact with these men to understand the situation.

These figures cover a period of seven years, and if any hope of any improvement in the condition had been given by the President of the Board of Trade this afternoon there is not a single Member on these benches who would not have applauded his remarks. But the right hon. Gentleman holds out no hope whatever. He knows that there is no hope. We are not going to blame the Germans or the Poles or the French. They are doing exactly what we are doing ourselves, and they are perfectly entitled to safeguard their own interests. It is part of the price we have to pay for a tariff. The mining industry bore the burden during the War and has borne the burden since the War up to the present day. The President of the Board of Trade was a Member of the Government which started the War, and everybody knows that the industry with which he is connected did extremely well. It would pay to have another war. The right hon. Gentleman was also largely responsible for preventing any undue profits being made by the mining industry because he was the Minister in charge at the time when maximum prices were fixed for coal.

While the mining industry was largely responsible for providing the fuel which enabled the War to be carried on to a more or less successful conclusion and contributed something like 400,000 men to the State, almost immediately the War was ended it was attacked and the miners were compelled to stand out for three months. They had only just recovered from that three months' attack when they were again attacked for nearly nine months, and I am not exaggerating when I say that from 1920 up to the present time the mining industry has been treated as though it was something in the nature of an alien in Great Britain. It is an industry which can only be dealt with on a national basis, and if this were a National Government it would be treated in this way. But there is no indication, and never has been any indication, that the present Government is a National Government really Animated by a desire to safeguard the interests of the working classes generally throughout the country. It was not an economic or an industrial crisis last August so much as a political crisis.

My hon. Friend the Member for Lime-house (Mr. Attlee) offered a number of suggestions to the Government, although a Socialist is one of those fellows who is not supposed to have a constructive mind. There are a, number of things which might be done. I think the mining industry, being a national industry, ought to be represented in the Government by a Secretary of State and not by a Minister subject to the decisions of a Cabinet of which he is not a member. If this were a National Government something would be done to provide the Admiralty with British coal insteal of oil from foreign countries, although that oil is largely produced by British capital. The Department for which we pay considerable millions of pounds every year might very well to its advantage and to the advantage of the mining industry buy the coal that is necessary for fuelling purposes in Britain and put a considerable number of men who are now idle in employment again. The right hon. Gentleman made a reference to the new men who have been put in employment since the present Government took office. He gave us the numbers in Lancashire and Yorkshire and on the North-Fast coast, but he took good care to make no reference to Scotland or to South Wales. I happen to have the figures published in a book issued by a Socialist body, and it gives the number of persons who have been employed afresh during the period of this Government. I find that there are something like 310,400 new entrants into industry, and they are principally to be found in such industries as the motor industry, cycle industry, printing and bookbinding, furniture and upholstery, the miscellaneous metal trades, electrical cables, electrical engineering, the chemical trades, rubber, mechanical instruments, the manufacture of scientific and photographic apparatus, and certain other industries of that kind.

6.0. p.m.

Of all these people who have been employed, 89,950 have been employed in London and 42,190 have been employed in Birmingham. That was part of the payment which Birmingham got from the Tory Government. Between them, London, Birmingham, Manchester and Coventry employ 56 per cent. of the numbers which I have given. London, Birmingham and Coventry employ 47 per cent. or roughly one-half of the total of new entrants. Yet last month the unemployment rate increased in London and in Birmingham, and in March, according to the unemployment index, there was not a single county in England, Scotland or Wales with a percentage of unemployment less than 10, so that the improvement is not as great as the right hon. Gentleman would like to make us believe.

I do not know what reply the Under-Secretary is going to make, but I know that he is in a different position to-day from that which he was in a year ago. He is not so "cocky" to-day as he was when he was denouncing the Labour Government. He has to defend himself and his Government now, and the months as they pass will make it more and more difficult to defend the position of this Government, particularly with regard to the industry to which I am referring, unless there is a considerable change. I would be very pleased indeed, and my colleagues belonging to that industry, who are in the House of Commons by the same right as every other Member, would also be very pleased, if the National Government could give us any indication that there is going to be any improvement in conditions in the mining industry. Otherwise, I fear that the difficulties through which the country has passed during the last few years will be nothing in comparison to the difficulties which it will have to face in the next five or six years.


If I may make special reference to two of the speeches which have been delivered this afternoon I would say that I was much impressed both by the general review of the situation given by the right hon. Gentleman the President of the Board of Trade, and by the speech of the hon. Gentleman the Member for Limehouse (Mr. Attlee). I wish to refer to some of the things which were said by the hon. Member for Limehouse, and I shall do so, not in any critical spirit, because when the hon. Gentleman makes a contribution to these discussions I, personally, am always impressed by the attitude which he adopts towards industrial questions and particularly industrial organisation. He dealt with the twin problems of overproduction and under-consumption. The whole world knows that these are the big problems which we must gradually get over before we can solve the general industrial depression. There are different points of view as to the proper solution. Hon. Members below the Gangway have the definite policy that the way of solution is to increase the power of consumption of the masses of the people. The hon. Member for Limehouse, however, dealt definitely this afternoon with the question of the development of unemployment, in spite of the increased ratio of production per individual employed in industry, and it is well that the Committee should realise that this is a growing and serious problem in industry in this country.

Economists have coined a new term during the last few years to describe this kind of unemployment, which is a result of improved methods of production. They call it "technological unemployment." It is becoming a growing menace to the working people of this country. It is all very well to talk about planning industry on a national or international scale; it is all very well to talk about rationalisation and regionalisation of industry, but every piece of rationalisation that takes place, results in the displacement of labour and, unfortunately, in industry we have to be prepared for that. One of the inevitable results of rationalisation is to reduce the number of people employed. In the country generally I believe there is very often a misuse of the word "rationalisation." A number of people seem to think that the word "rationalisation" has some relation to the word "ration." The public, one of these days, will have to realise that rationalisation simply means doing something in a rational or scientific way. If we are to conduct our industry on more rational lines, it means that we have to conduct it on a more scientific basis, and the more scientific is the control of industry and production, the less is the amount of labour employed to produce commodities. The consequence is technological unemployment.

I have my own ideas as to how we can get over that difficulty in time. In all probability the hen Gentleman the Member for Limehouse and I are as the poles asunder in our difference of view on the method to be adopted. I believe, however, that some development along the lines of national planning, as suggested by the hon. Gentleman, has to take place during the next few years and it is possible that, when we have developed such a scheme, we shall have to deal with the unemployment which results from that planning, by reducing the hours of work per day of the workers. It was also suggested by the hon. Gentleman—and on this point I wish to cross swords with him—that no steps had been taken in this country in the direction of organising or planning industry. We know that in the cotton industry definite steps have been taken in the direction of reorganisation. We know that in the ship- building industry very definite steps have been taken in that direction also. In the steel industry, in the north of England in particular and throughout the country generally, there have been definite steps towards planning and reorganisation.


I did not say that no steps had been taken towards the rationalisation or organisation of particular industries. I said that there had been no steps towards the national planning of industry as a whole.


I should be sorry to do the hon. Gentleman an injustice. I take it then that what he wished to convey to the Committee was that there had been no scheme of national planning to deal with the country as a whole. I suggest that it is impossible in a highly organised industrial country like ours to proceed with a national scheme for the planning and reorganisation of British industry, as a whole, unless you start gradually, by dealing with individual industries and then work up to planning on a national scale. The difficulties which are found in this country in the way of proceeding rapidly with schemes of reorganisation are relics from the immediate post-War period. We are bound to admit that the construction of works in this country in the steel industry for instance, was carried on with very little planning during the later period of the War. That was due entirely to the special needs which the War Departments placed on the steel industry. Our problem therefore in the steel industry, and in other industries as well in this country is to wipe out redundant plant, and that will take a number of years to accomplish. Fresh finance is essential and until there was some element of certainty it was impossible to find industrial or financial leaders or anybody in this country, to come forward and help in reorganising and financing the industry afresh.

I wish to say definitely, and I ask the hon. Gentleman the Member for Lime-house to believe it, that the leaders of British industry, particularly those whom I know, are very conscious of the need for the reorganisation and planning of their own particular industries. I may mention that during the last few months, as a result of the introduction of the Import Duties Act, definite steps have been taken in various parts of the country, with some confidence, to reorganise various industries and it is hoped that following upon this increase of confidence, new developments may be seen very shortly. I am in total agreement with the hon. Gentleman on a scheme of national planning but I disagree with his view that you can proceed with such a scheme, except on the basis of dealing with the individual industries and then building up to a national scale.

May I give an instance of what I have in mind 9 I started by saying that the problem of to-day was that of overproduction and under-consumption. I take, only as an instance, the case of the steel industry. The problem which we are up against in that industry is this: Europe has a surplus capacity of steel production. It is therefore essential that the steel industry of this country, having gained a certain amount of confidence as a result of the action of the present Government, should try to plan itself on a national basis. Having done so, it is entitled to go into conference with the steel-makers of Europe and to discuss with them an international cartel. It is in this way that I think the Government have given to the steel industry, in particular, some measure of confidence, because approaches have been made to the international steel cartel by the British steel industry during the last two or three years and it has been found impossible to come to agreement on the question of allocation of markets or allocation of countries because the Continental steel-producing countries would only start their calculations by taking into consideration the fact that they had the right to export freely to this country. The British steel makers found it impossible to discuss the question with the international producers on those terms. Now, having got the protection which the Import Duties Act has given the steel industry, we are in a stronger position to meet foreign producers, and to discuss with them the question of an international cartel and the international planning of markets generally. While, as I said at the outset, it is a pleasure to listen to the hon. Member for Limehouse, I doubt whether he is particularly serious about national planning, because, after explaining at some length what his scheme was, he finished by telling the House that he had no confidence in the present economic system, so that he apparently does not think that the scheme is possible under that system. Hon. Members who sit below the Gangway, at any rate, believe that a change in the economic system is possible in our time, whereas the hon. Gentleman evidently totally disagrees with them, and believes that the heaven is not for our time.


I said that we cannot change the system and make a better plan under capitalism.


I apologise to the hon. Gentleman; I misunderstood him. I am in agreement that national planning is essential, and that sooner or later we shall have to arrive at some scheme of national planning, because, whether it takes five years or 10 years, only by such a scheme will it be possible for us to enter into an international arrangement with other countries in their individual producing industries.

Mr. A. C. REED

As an industrialist who has had a long experience I think the Board of Trade is to be congratulated on the work of the last six or seven months. I am satisfied that the Committee can vote the Supply, feeling fully justified that the Board will make good use of the money. The change that has come over industry in that short period is really remarkable. Only last week I met a prominent Continental industrialist who was in this country nine months ago. Since then he has made a world tour, and he told me that the change that he noticed on his return to this country was simply remarkable, and, that although he was not a national of England, he felt that England was the country of the world once more. Such a testimony coming from an independent source is worth having, and I give a great deal of the credit for the change to the work of the Board of Trade. By its encouragement of industry under the. Abnormal Importations Act, the Import Duties Act, and the other measures taken to support industry, it has given renewed hope to every industry.

I am associated with the great paper industry which has both sides of the question before it. The Abnormal Import Duties apply to one small section of the industry, but not to the other section. In the one small section, in the last six months, there have been the most extraordinary advances. There was one particular line which was hardly manufactured here at all, largely owing to the dumping of the foreigner. Now new machines have been started and others have been adapted, and in the five months the manufacturers in this country have produced sufficient supplies for the demand. In another two or three months they will fully cover the demand. It is to be noted that that has occurred with a duty which is only temporary. In the other departments of that industry where there was no protection until the 10 per cent. duty was recently imposed, there has been no advance, and the trade was more or less stagnant.

I was interested to hear the figures given by the right hon. Gentleman the President of the Board of Trade showing the increase in the numbers of employed and the increased consumption of coal in this country. This goes to prove that the Abnormal Import Duties have already given a fillip to trade. As those duties cover only a small section of industry, it gives tremendous hope for the future when further duties are imposed and the large industries are covered by duties to enable our manufacturers—

The DEPUTY-CHAIRMAN (Captain Bourne)

I am afraid that the hon. Member must not go into the question of future duties because that involves legislation, which cannot be discussed in Committee of Supply.


On a point of Order. I understand. that the position was somewhat altered now that we have the Tariffs Advisory Committee, which can make recommendations for new tariffs. Is it not in order for hon. Members to argue, in view of the committee's powers, that they ought to recommend. certain tariffs.


I think that the old Ruling still stands. The Import Duties Act requires a Resolution of this House to give effect to any recommendations of the committee far new duties. I would also point out that the expenses of the Advisory Committee are borne on the Vote of the Treasury, and not on this Vote.


This is rather an important Ruling because, presumably, in the months that are ahead we shall have recommendations and reports from the Advisory Committee with reference to new tariffs and duties and modifications or adjustments in the amounts of existing tariffs and duties. Am I to understand that these are to be regarded as in the nature of legislative enactments, that the responsible Ministers of the Crown cannot be criticised with reference to them, and that every proposal for an alteration m tariffs and every reference to it here is to be treated as discussion of new legislation? I hope that that will not be the full implication of the Ruling which you have given, and I would like your further observations upon it.


The hon. Member will realise that I did not anticipate this question. I agree that the appointment of the Advisory Committee does create rather a new situation and one of considerable difficulty from the point of view of order. I would rather not commit myself at this moment, without further consideration, to a, Ruling which might govern future Debates. I think I can rule, however, that we cannot discuss new duties until there is a report from the Advisory Committee before the House, and, generally speaking, we must keep to the old Rule that things that may involve legislation cannot be discussed in Committee of Supply. On the question as to whether the action of the Minister in receiving the report can be discussed in Committee of Supply, I would rather not give a Ruling without further consideration.


In the consideration that you will give to your Ruling, may I ask you to bear in mind that it is competent for the Minister to make an Order as to the duties to be chargeable, and that it is only subsequently that the House has an opportunity of saying whether the Order shall continue? The duty becomes operative without any control of the House, and simply on the Order made by the Minister. When you are considering the matter, perhaps you will take that point into consideration.


While I do not wish to prejudge any Ruling that you, Captain Bourne, may give in future, may I ask whether it is not the case that the Advisory Committee is not borne upon the Board of Trade Vote at all, but upon the Treasury Vote, and that therefore it is not until the Treasury Vote comes up that the point can arise in the form in which it has been put to the Committee to-day; moreover that the reports of the Advisory Committee are to be made, not to the Board of Trade, but to the Lords Commissioners of the Treasury, and that they therefore cannot be regarded as a Board of Trade matter?


I would like to be clear on this point. I hope, Captain Bourne, that you will bear in mind one issue that may arise in this connection. During the past few years we have had arguments in our Debates in favour of tariffs and Free Trade. Now that duties have been imposed, would it be competent in a Debate like this to argue that they should be removed? I want to know how free we should be to argue in favour of the abolition of any duties in a Debate of this kind.


With regard to the point of the hon. Member for Westhoughton (Mr. Rhys Davies), I cannot, without studying the Acts, give a definite reply at this time, but I rather think that that would necessitate legislation, except in so far as certain Acts may lapse. With regard to the point raised by the Minister, I think it is quite clear that as the expenses of the Tariff Advisory Committee are borne on the Treasury Vote and as the report is made to the Treasury, the proper Vote on which to discuss any action or recommendation the Committee may make is that of the Treasury. I think that that is quite clear. With regard to the point raised by the hon. and learned Member for Bristol (Sir S. Cripps), I desire to give very careful consideration to this and to discuss it with the authorities of the House, because I realise that, owing to the legislation recently passed, the position is perhaps not quite the same as it has been in the past. Before the Chairman or I give a definite and binding Ruling, we should desire to consider it very carefully. We have no desire to curtail the rights of Members.


I should like to make another point. A good deal has been said about reorganisation, and especially Government reorganisation in industry. The history of the last few months has proved that our industrialists, if they are given the chance, can reorganise themselves. They want security; they want to know where they are, and when once they have security and can forecast the future for some years, they will proceed as rapidly over the coming years as they have done in the last six months. My experience is that our industrialists and workers are quite capable, under fair conditions, of competing with anyone in the world. Therefore, I ask the President of the Board of Trade to urge the Government to let us have the full Government programme of trade and industry at the earliest possible date. If they do, the industrialists of this country will not let them down.

6.30 p.m.


I will not follow the interesting speech of the hon. Member for Exeter (Mr. Reed), but will come at once to the statement which was made by the President of the Board of Trade. When the Government were formed, we thought that if there was one Department in the Government where we should have the strong man, the man of vision and of ability, it was the Board of Trade. The right hon. Gentleman has had considerable experience in this House, and has previously occupied the Department over which he now presides, but his statement this afternoon was one of the most disappointing statements to which I have listened from a President of the Board of Trade. I rather expected him to give us a world review of trade, and to take the House and the country into his confidence regarding the future prospects of trade. The only consolation he gave us was that while trade is bad in this country it is worse in almost every other industrial country. He pointed out that the decrease in production in this country is less than in all the other large industrial countries. He said the reduction here was about 11 per cent. last year—


Reduction of exports.


—and that in America it was 14 per cent.


On comparable figures it was about 35 per cent. in the United States.


The position is the same in regard to the actual production of various countries. This country withstood the blizzard of last year and the previous year very much better than most other industrial countries. The figures the right hon. Gentleman gave us are confirmed by the figures issued by the Labour Bureau of the League of Nations Union. I would point out to the right hon. Gentleman that this country, which was a Free Trade country, has changed its fiscal policy although it faced the industrial depression better than any other industrial country. The right hon. Gentleman himself, who until within the last few months was a Free Trader, is now, with his Government, following the very bad example of the other industrial countries. That is an indication that we shall not get from the Board of Trade, while it is under the control of the right hon. Gentleman, that lead in the reorganisation of industry which we expected.

From what the right hon. Gentleman said this afternoon, all that this country now has to depend upon is import duties. He gave no indication of any other Measure likely to improve either the inland trade or the export trade. His statement will be very cold comfort to industrialists and to those engaged in industry. I was very much interested in his juggling with the figures which he gave us, especially those dealing with the increased number employed now compared with September. I ask him to give the actual figures of persons who were in employment last September and who are in employment at the present time. I think he told us that somewhere about 450,000 additional persons were in employment. Perhaps the Parliamentary Secretary will give the actual figures of the persons in employment—the number of insured persons, I think it will be called —in September last year and March this year. If he does so, he will find that in September last there were 9,328,000 persons in employment, and in March this year 9,549,000, an increase of 223,000. I am not suggesting that that is not an improvement, but it is not the very glowing picture which the right hon. Gentleman attempted to present. I am afraid that, with all his ability, his attempt to go into figures this afternoon has not been too successful.

He told us, further, that 390 foreign manufacturers contemplate setting up factories in this country. I would respectfully advise any Member of the present Cabinet to be very careful when making prophecies about work coming into this country from abroad. The present Secretary of State for the Dominions went to Canada just after the formation of the Labour Government in 1929. The Government had hardly been formed before he must go for a, tour, to find new business. We expected, from what he said, that we were going to send lots of coal to Canada and to build the ships which would convey it, and the hon. and gallant Member for Gainsborough (Captain Crookshank), who was then on this side of the House, continued to question the right hon. Gentleman as to when the ships would be built and the coal sent, and when the country would get all the new business we had been led to expect from his statements. From that day to this the ships have not been built.


The hon. Member will not forget that it was a statement made by a Minister of the Labour Administration.


The hon. and gallant Member and his colleagues were so satisfied with his work while with us that they were willing to take him into their arms, and he is now one of the shining lights of the party of which the hon. and gallant Member is also a shining light. I am reminded that the right hon. Gentleman is going to represent the hon. and gallant Member at Ottawa. He is going to talk the same humbug as when he dealt with Imperial questions at the last inter-Imperial Conference. The President of the Board of Trade also told us that production had begun in some 43 of the new and adapted factories taken by foreigners. I and my colleagues are very pleased to think that there are any new factories to give additional employment to our people—we do not want to minimise anything the right hon. Gentleman can do—but I should be very much interested to know where those factories have been established. Have they actually begun production?


indicated assent.


How many are new? Perhaps the Parliamentary Secretary will be able to inform us what new factories have been established, where they have been established and the number of work-people employed.


They may be like the ships.


The right hon. Gentleman said that most of the new factories have been established in and around London, but that development associations have pointed out the advantages of certain of the distressed areas, and he mentioned Lancashire and the North-East Coast. I am sure he will not object if I ask him whether he or his Department will give a thought to some of the other distressed areas.


indicated assent.


I come from a district which has suffered from industrial depression over a longer continuous period and in a more aggravated form than almost any other area, and I ask the right hon. Gentleman to give some thought to South Wales, to Scotland, and some of the other districts which are suffering so grievously. We were very much interested, also, in what he said about the restrictions on our export trade in coal, but I think he treated the subject too lightly. I wondered whether he fully realises the effect of those restricted measures. I agree very largely with what was said by my hon. Friend the Member for Hamilton (Mr. D. Graham) that it is not easy to interfere with countries such as Germany, France and Belgium which at present have large stocks of coal on hand and are only following the example of the right hon. Gentleman and his Government in imposing these restrictive measures. Whatever the right hon. Gentleman may say about these restrictions having been imposed prior to the Abnormal Importations Act or the Import Duties Act, I would point out that for some three months Europe knew what was going to happen. The fact of our going off the Gold Standard gave this country a great advantage in its export trade, and when we had statements from responsible Ministers indicating that legislation dealing with abnormal importations and import duties was waiting to be introduced, of course European countries felt they ought to get in the first blow.

Bad as the condition of the coal industry is in this country, we certainly are in a much more favourable position than a large number of the other coal-producing countries; but that is not saying much, because I realise how difficult-it is to continue the coal industry as it is in this country at the present time. But, taking a view of all the large coal-producing countries—the United States of America, the United Kingdom, Germany, France, Poland, Belgium and the Saar—I find that their output of coal last year was 852,000,000 tons, as compared with 989,000,000 tons in the previous year, a reduction of 137,000,000 tons. Those-figures, I am reminded, exclude Russia. Comparing the output of last year with the output in 1929 in the same countries, there is a reduction of nearly 250,000,000 tons. I think that this indicates a substantial falling off in the use of coal. I do not agree with the statement made by the right hon. Gentleman that as far as the inland coal trade is concerned everything is going on very well. That trade shows a reduction of 230,000,000 tons in the output of coal in the countries which I have mentioned. Coal mining is still an important industry in this country, notwithstanding the reduction in the number employed in that trade. I did mean to correct the figure given by the President of the Board of Trade, and I think he will be inclined to agree with me that the figure which I gave was substantially correct.


I was speaking from memory, and I was suggesting that the very big drop in the export trade had been compensated for in other ways. The Parliamentary Secretary will give the figures later on.


I was quoting from the Board of Trade Journal. The hon. Member for Hamilton gave figures showing that from 1931 to March of this year there has been a reduction of nearly 50,000 in the number of men employed in the mining industry. Notwithstanding that fact, there are 835,000 people still employed in the production of coal for home consumption and the export markets. Besides this, the reduction in the number of men employed is followed by a marked reduction in the output, although the reduction in output is not nearly as marked as it is in the number of men employed. There has been considerable speeding up, and the figures which may be obtained from the Mines Department and the Board of Trade will indicate that as between 1926 and the commencement of this year there has been an increase in the number of unemployed. The output of 1931 compared with the average from 1921 to the end of 1925 shows an actual reduction of something like 37,000,000 tons, the reduction being from 260,000,000 tons to 223,000,000 tons. In output and in the number of miners employed the coal industry of this country has really gone back to where it was some 30 or 35 years ago. Coal is still the lifeblood of industry in this country. I am not going to deal with the question of internal consumption, and I know that I shall be out of order if I attempted to deal with administration. We want to take another opportunity of dealing with the Mines Department administration and the wider question when the Mines Department Vote is put down for consideration.

To-day I will deal with the question of the effect of these restrictions upon our export trade. No industry in this country has made a greater contribution to the trade balance or the balance of payments than the coal mining industry. For nearly half a century we have been making, through our export trade, a very large contribution to the balance of payments. In 1913 the export of coal, including bunkers, was round about 100,000,000 tons. Almost one-third of the output of the coal of this country is exported. In 1929, we exported 60,266,000 tons. That total does not include 16,000,000 tons used for bunker purposes. It means that 76,000,000 tons of coal left the shores of this country in 1929. There has been a considerable reduction in our export trade. In 1930 there was a reduction to 70,000,000 tons, and in 1931 there was a, further reduction to 57,000,000 tons. That is 13,000,000 tons less than in 1930 and 20,000,000 tons less than in 1929.

One cannot measure this altogether with regard to the volume of trade. We must take into account the revenue derived from the export of coal. In 1929 we Obtained nearly £49,000,000 for coal exported, not including bunker coal. In 1930 the amount was £45,000,000, and in 1931 the amount was reduced to £34,500,000. The unfortunate part of it is that the export of coal from this country during the first three months of this year, notwithstanding the reduction of last year, again shows a reduction. It is upon that aspect of the question that I want to take up some little additional time of the Committee. As I have already pointed out, one-fourth of the coal output is sold for export and bunker purposes, and 200,000 miners and their families are dependent upon the export trade. The export trade affects South Wales more than any other coalfield in the country with the exception of Northumberland. Last year, of the output of 38,000,000 tons of coal from South Wales 18,000,000 tons were exported, and more than half of the mining population in South Wales are directly dependent upon the export trade.

Already the loss of trade has had a very serious effect upon the mining population of that part of the country. The hon. Member for Hamilton gave figures which are substantially correct, but I was very much interested in a statement made by Professor Marquand, Professor of Industrial Relations at Cardiff University College. He said that from 1901 to 1911, 92,000 persons had migrated into Glamorganshire, 'whereas during the years 1921 to 1931 the four counties of Glamorgan, Monmouth, Brecon and Carmarthen had lost by migration 249,000 persons, very largely as a result of the depression in the export trade.


Will the hon. Member give the figures of the reduction for the first three months of this year?


I will give them to my hon. Friend later on. What we are concerned about is the attitude of the Board of Trade with regard to the question of interference with our export trade. A question was put on Tuesday to the President of the Board of Trade, and in his reply the right hon. Gentleman gave the names of a number of countries which are adopting discriminatory measures against the importation of British coal. The right hon. Gentleman said, in reply to the question: Quota restrictions on the importation of coal are in force in Germany, France and Belgium. As I have already informed the House, the recent successive reductions of the quota of British coal imported into Germany are regarded as discriminatory against this country. The French and Belgian quota restrictions apply to coal imported from all countries, but the method of calculation of the quotas and the administration of the licensing systems which give effect to the quotas are considered to be inequitable to this country. In Italy the general landing duty of 2½ lire per ton applies only to goods imported by sea, and accordingly affects coal from this country to a greater extent than coal from other countries.—[OFFICIAL REPORT, 12th April, 1932; col. 645, Vol 264.] Take German discrimination. The right hon. Gentleman knows that if these restrictions continue, the export of coal from this country to Germany will be reduced by something like one-fourth. We saw the effects of these restrictions in the first three months of 1930, when 1,185,000 tons of coal were exported to Germany. In the first three months of 1931 we exported 873,000 tons of coal to Germany, while in the first three months of this year the export to Germany was 777,000 tons. As I have already pointed out, the average was 400,000 tons per month, and that has now been reduced by something like 100,000 tons per month. We complain that those restrictions are only imposed against this country, and I under-stand that there is no restriction on coal imported into Germany from any other country.

7.0 p.m.

The President of the Board of Trade has said that other countries are suffering restrictions on their export trade to the same extent as we are suffering. It is nearly three months since those restrictions of which we complain were put into operation. They have now developed in an acute form, and little or nothing has been done by the Government in regard to them. Notwithstanding that, those restrictions amount to a flat repudiation of the obligations which Germany undertook in relation to the importation of British coal in connection with the Anglo-German Commercial Agreement. We realise that this is a difficult question, because we are informed that the situation on the Ruhr is deplorable, and the number of miners employed has been reduced by 20,000 during the last two or three months in the Ruhr where they have over 10,000,000 tons of coal stocked, notwithstanding that several hundred thousand tons of coal have been giver to the unemployed in that district. Had it been anyone other than the right hon. Gentleman occupying the position which he occupies, or had he been sitting in some other part of the House and someone else occupied the position of President of the Board of Trade, I have no doubt that he would be one of the first to press for these restrictions to be removed. As far as we have been able to ascertain, negotiations are going on in the ordinary way very smoothly and there is very little or no prospect at all of anything being done in the very near future.

The right hon. Gentleman casually referred to the restrictions in France and endeavoured to take some credit to himself and his Department for the removal of the surtax of 15 per cent. which the French Government put on. I certainly do not want to take from him and the Secretary for Mines and his Department any of the credit they deserve for assisting, but I think it was the deputation of the Mining Association which visited Paris which had a considerable amount to do with the removal of the surtax and also some other measures which have been undertaken by some of the coal-owners in South Wales. While it is true to say that the surtax has been removed, it is also true that the amount of coal imported into France from this country and from most other countries is to be restricted to 62 per cent. of the monthly quota average spread over the last three years. Owing to France not yet being able to tighten up the administration of her licensing restrictions, in January this year the imports of coal from this country into France were 92,000 metric tons less than the quantity allocated under the 72 per cent. restriction then in operation. As far as Germany was concerned, France allowed the Germans to increase their quota by something like 82,000 tons for the same period. Belgium increased her quota by 71,000 tons, Holland by 45,000 tons, and Poland by 29,000 tons. Again in February, when the 62 per cent. quota came into operation, the United Kingdom was the only country whose share of the import coal trade was less than that allotted under the licensing system. Germany was actually 8,000 tons more than the monthly average in the three years 1928, 1929, 1930.

France has already had to face two consequences of the licensing experiment —a considerable curtailment of pit-wood imports into Great Britain and lower earnings of shipping engaged in the cross channel trade. South Wales has been affected as the result of these restrictions because South Wales sends 53 per cent. of the coal exported from this country into France and the South Wales pit-wood importers are retaliating. I find, comparing March of this year with March last year, that in March, 1931, 63,965 mills of pit-wood were imported from France into South Wales but in March, 1932, that number had been reduced to 25,000 loads of pit-wood. At the same time there was an increase in the import of pit-wood from Portugal from 10,000 loads in March, 1931, to 46,000 loads in March, 1932. The result is that the French pit-wood exporters are themselves trying to find out some ways and means of dealing with this restriction. That gives very little credit to the President of the Board of Trade and his Department for doing anything regarding this question.

Take the case of Belgium; there is a restriction against the import of coal from this country by Belgium. While we cannot complain so much about the percentage or quota allowed to this and other coal exporting countries, the restrictions of Belgium have affected this country more than any other country owing to the year upon which the quota is based. In 1930 we exported from this country to Belgium 1,097,000 tons of coal, but the quota is not based upon that figure. In 1931 we exported from this country 657,000 tons of coal, and our difficulty is that the quota fixed by Belgium is based upon the imports of coal into that country last year. Belgium received a very large amount of coal from other countries, which was very largely to the detriment of the export coal trade of this country. I would ask the right hon. Gentleman to note that aspect of this matter and to see if something cannot be done in that direction. Not only is there the question of the quota, but there is the question of price. Although we cannot complain as to the prices paid for coal by the Belgian railways, yet it gives an idea of the price at which coal is being sold by this country to foreign countries. The Belgian railways have decided to take 665,000 tons of small coal, 85,000 of briquettes, and 45,000 tons of screened coal from the Belgian collieries at prices ranging from 100 to 110 francs. A large percentage of this order used to go to this country. They are now this year taking 60,000 tons of British coal, and, while they are paying 100 to 110 francs to Belgian collieries, the price quoted for Northumberland smalls was as low as 64 francs, or nearly 50 per cent. of the cost of the coal which the Belgian railways are taking from the Belgian collieries. One cannot interfere with the question of price, but it indicates the price at which coal is sold from this country at the present time.

It is not only a question of restriction, but of the artificial methods adopted by some of these countries to compete in the export coal markets with this country. A similar plan is in operation for the supply of coal for the railways in Poland as there is in Belgium. From what I understand the Polish coal industry is in such a bad way that the Government of Poland have had to come in and have virtually nationalised the industry there. The right hon. Gentleman wanted some examples of the success of nationalisation at times other than war time. We can give him a large number of examples of industries that have had to be taken over by the State from private individuals because they are unable to handle those industries, and this is one of those examples. Let us see how Poland regards the value of her coal industry. The importance of the export of coal in the balance of trade or of payments is regarded as of the utmost importance by the Polish Government. Last year they exported something like one-third of their output and the total value of their export trade was about £7,500,000. They made no end of sacrifices to obtain that export trade. We find that the price charged for coal free on board at the ports was 10s. a ton. After allowing for railway freights, dock dues, and other charges, the actual amount received by the Polish coalowners at the pithead for the coal which they exported would not amount to more than 5s. a ton and, taking into account the disadvantage they were placed in owing to our going off the Gold Standard, it is estimated that the actual value of the coal exported from Poland to those who produced the coal at the pithead would not have amounted to more than 4s. a ton. There was not only a very heavy subsidy from the pithead to the port but a very heavy restrictive duty against the importation of any coal into Poland.

Next I want to deal with the question of Italy. The right hon. Gentleman did not touch the Italian question this afternoon. I should have thought that out of consideration for his predecessor in office some little attention would have been given to the export of coal from this country to Italy. One of the first actions of my right hon. Friend, my late lamented friend, who was the friend of everyone in this House, the late Mr. Graham, when he accepted the post of the President of the Board of Trade, was to go to the Hague with the late Chancellor of the Exchequer. He came back from the Hague, notwithstanding all the difficulties of reparation coal, with a firm agreement with the Italian railways to take 1,000,000 tons of coal from this country for the three years 1930, 1931, 1932. That agreement will expire at the end of this year. Is the right hon. Gentleman or his Department doing anything to get an extension of that agreement I know there are difficulties. All the coal which was directed to be supplied during last year was not supplied owing to the industrial depression and financial difficulties. South Wales is very concerned about this question of carrying out the agreement and, if possible, would like an extension of the agreement, because 75 per cent. of this order for 1,000,000 tons of coal was placed in South Wales. Considerable concern has been evinced by exporters and coalowners in South Wales about this question. I know, as was mentioned in reply to a question on Tuesday, that there is a general duty on goods imported into Italy of 21 lire. Is there any coal-producing country in the world sending seaborne coal into Italy? No other coal producing country in the world is doing so. Therefore, the duty of 2½ lire which is charged by the Italian authorities is aimed entirely against this country, and that is another aspect of this question that I would like the President of the Board of Trade to take up.

As has been pointed out already, the export coal market is a restricted market; there is a scramble for it. We are in the market, Poland is in the market, Germany is in the market, America is in the market; and, while all these countries are in the market for a restricted trade, there will be these difficulties which are restricting the free flow of goods from one country to another. When the Coal Mines Act was passed in 1930, it was felt that it would be the means of organising the coal industry of this country into a national organisation. That was its primary aim, but it also aimed at getting some European agreement with regard to the export of coal. Are the right hon. Gentlemen and his Department going to allow the present chaotic condition to continue? Are he and his Parliamentary Secretary so concerned with regard to abnormal importations and import duties that they are not going to give the attention that they ought to give to this very important question?

No nation has all the trade advantages or all the capable business men, and no nation can do all the business that is to be done. The fostering of industries by means of tariffs, bounties or quotas invariably results in injuriously affecting the trade of all countries. A bounty on export coal carries Polish coal into markets that naturally would be supplied by other countries. When we went off the Gold Standard, it was thought that that would give a definite stimulus to the export trade of this country, and particularly to the export trade in coal. But, almost at the same time that we went off the Gold Standard, 14 countries increased their tariffs or imposed restrictive measures against this country. France put on the surtax which has been referred to, and other countries put on other restrictions.

I should have liked to follow up the statement of the right hon. Gentleman with regard to the inland consumption of coal, but I am afraid I shall have to keep that question for another occasion. I would, however, like to draw his attention to the fact that, owing to the more scientific use of coal in this country for the generation of electricity, in iron and steel production, and in gas production, the inland market for coal is gradually dwindling. I would ask the right hon. Gentleman's Department to deal with a question in which I know he is interested. I have heard him speak of the inroads which oil has made into the coal produc- tion of this country. Unless the Department or the Government give their attention to the scientific treatment of coal, and the question of oil extraction from coal, the outlook for coal in this country is not too promising. I would ask the right hon. Gentleman and his Department not to run away with the idea that, because they have taxed tomatoes or asparagus, or have put on a 10 per cent. duty which is to be a revenue duty, all is going to be well with industry in this country. That device has been tried in almost every other industrial country in the world, and it has failed.

The right hon. Gentleman is at the head of a Department which can do what I am suggesting, and I would ask him to pay greater attention to re-organisation and development, and not to think so much about matters like quotas on wheat. If we could have £6,000,000 a year for the re-organisation of the coal industry and the scientific treatment of coal in this country, or if we could have the amount spent on the Sugar Beet Subsidy, or the proceeds of de-rating, in 10 years the power-producing industries of this country would be completely revolutionised. These sums, however, have been frittered away here and there, while we know that there are projects, the products of scientific minds in this country, that could make this country absolutely independent of oil importation if that money could have been applied to them. I ask the right hon. Gentleman and his Department to pay greater attention to that aspect of the question, and not to rest satisfied that all is well as the result of the little that has been done in regard to tariffs and quotas.


I need the sympathy of the House in making my maiden speech, and perhaps the best indulgence that I can ask for is that no one will count the House out while I am addressing "the great open spaces." I am afraid I shall cover, to certain extent, the ground that has been covered by the last speaker, but I shall, perhaps, approach the question from a different angle. If I may make a personal remark, I feel a double responsibility in speaking on the subject of coal. In the first place, I feel the responsibility that attaches to every National Member who won a mining seat. A great trust was placed in us. Most of us turned out old and trusted leaders in the mining movement, and I know that I speak for those who are in the same position as myself when I say that we are determined to give the miners as good or better leadership than they had before. In the second place, I have a particular personal responsibility, as I sit for the Morpeth Division, which has always returned men of great prominence in the mining movement, from the days of the great Thomas Burt to the days of my immediate predecessor, whom, I am sure, we all welcome in his present position of secretary of the Miners' Federation.

I feel considerable embarrassment and responsibility, therefore, particularly in view of the fact—I hope I shall not be out of order in referring to it—that the House meets to-day under the shadow of a great potential crisis in the mining industry. I am not at all happy about the position. I am thankful, however, that to-night I shall deal with a more clear-cut issue. I may say, in passing, that I await very anxiously the declaration of His Majesty's Government as to policy: or, if they do not feel inclined to make a declaration of policy in these days, I would beg of them, at any rate, to assure a certain body of people that they will not have matters all their own way. I cannot say any more than that.

I do not take up the same attitude as the hon. Member for Aberdare (Mr. G. Hall). I think he paid far too much attention to the political aspect of trade, commerce, economics, and the export coal trade in general. In referring to Poland, Germany and France, he seemed to have forgotten that in all Continental countries economics is the handmaid of politics, while in this country, and in this country alone, politics is the handmaid of economics, and I am thankful that that is so. I am firmly persuaded that economics will beat politics, and that our claim for due attention to economics as a form of realism will bring us through again now, as in the past, and enable us to win the race. Poland is practically bankrupt, and Poland has to support the Silesian mines for purely political reasons, because of the great German population and the German frontier that runs through them. In Germany, the restrictions on imports are purely for the purpose of obtaining enough foreign exchange. The great imports of Polish coal into France are of purely political origin. Still, these matters are not what I am here to talk about to-night; I am here both to criticise and to support the Government and the right hon. Gentleman in their and his attitude towards the restrictions and the discriminatory action of Germany, France and Belgium against British coal.

I should like to mention what those restrictions are, and why we object to them very strongly. The House will have noticed that in Germany the restriction was imposed on the 1st October, 1931. Of course, I quite agree that the German Government knew clearly what the result of the General Election would be; but, seriously, I would ask the Labour party to abandon its childish and puerile attitude of making political capital out of imaginary motives alleged to lie behind the attitude of various foreign States. Ever since 1923, imports into Germany have been under licence. The system was worked perfectly fairly until October last. In that month, our quota was reduced from 420,000 tons per month to 300,000 tons, and subsequent reductions on the 1st February, the 1st March, and the 1st April of this year, were to 200,000, 150,000 and 100,000 tons respectively. This last figure, I submit, is absolutely ridiculous. We object to it because it is not applied in the same degree to other countries, and because it is contrary to Article 8 of the Treaty of 1924.

Turning to France, their action is clearly not an example of retaliatory action, although the French are very prophetic. It was imposed on the 1st August. The President of the Board of Trade referred to the surtax, but, personally, I do not attach much importance to the surtax, because it was always paid by the importer, and I do not; believe that it affected the imports of English coal into France in the slightest degree, or, at any rate, in any very great degree. What I object to is the quota, which was based on the average of the years 1928, 1929 and 1930, of which our proportion is 64 per cent. I do not blame the French Government for imposing that quota. I think that in this case, as, indeed, in regard to French fiscal and economic policy for some years past, we have been most unjust to the French Government. I believe that we can learn a great deal from the fiscal policy of France. What I protest against is the fact that the quota has been manipulated in a very unfair way by other countries. In fact, I see that during the five months from August to December last, Germany, Holland and Belgium have exceeded it by 21 per cent., while we have exceeded it by 51- per cent.

Turning to Belgium, which is the worst case of all—it is a very bad case, and represents treatment such as we did not expect from Belgium—we find that Germany and Holland are flooding the market with their own coal, while our exports to Belgium have fallen by from 15 to 20 per cent. per annum over the last three years. While these two countries have flooded the Belgian market, they have imposed a quota system which applies equally to us. That is the first unfairness. It was imposed first in 1930, when our quota was 76 per cent., but when it was found that the countries against which that restriction was direced, excluding our own country, exceeded that quota, it was altered to 70 per cent. of the 1931 figure, when our exports were already suffering.

7.30 p.m.

These are the cases against which the Government of this country ought to protest, and I am not at all satisfied about their action. I am sorry in my maiden speech to criticise the Government, but, frankly, I do not understand their attitude. I can quite understand the foreign point of view. I am persuaded that the world has gone mad; every country in the world is trying to sell and not to buy. It is madness, and we know it. I perfectly understand why the foreigner attacks us first and says, "Let England bear the brunt." It is because of the spineless attitude that we have long pursued throughout an epoch which is now, happily, only a question of history. I am not blaming the foreigner, and I am the last person to wish that the foreign miner should be unemployed, but I must consider my own constituents first. I quite understand the Government attitude of protest as far as it has gone. I believe there have been plenty of protests and threats of retaliatory action but, as to acts of retaliation, I have yet to hear of them. Have there been any negotiations begun with a view to reciprocal trade agreements? Reciprocal trade agreements take a very long time to arrange and to get down to, but I am convinced that, without any regard to Ottawa, it would be wisdom to begin considering reciprocal trade agreements, because anyhow they will not be implemented for another year. I think we could learn a great deal from our Continental neighbours in this way. They have had very long experience of these matters. Even what has been done has not been done strongly enough because, so far, I have failed to see any result of their action.

I want to know whether the German Ambassador realises the rising tide of profound feeling that exists in this country, and whether it has been made clear to him that Anglo-German relations will be seriously prejudiced if this policy of pinpricks—it is only a pinprick but a very offensive one—is persisted in. Does France realise that we are no longer a complaisant neighbour? Does she realise that we are willing to enter into negotiations, that we are not looking solely towards the Empire, that we do, after all, pay attention to the most elementary facts of geography, which tell us that we are a European country. I am an Imperialist but I still believe England is a European country and that it is with our nearest neighbours that we shall do the most trade. Do the Belgian people take into account our resentment at this treatment?

I am not in favour of whining to these foreign nations, nor of threatening, but I am in favour of taking up the perfectly reasonable and firm attitude that we are not prepared to go on with this situation. I am not a narrow nationalist. I am a Free Trader fundamentally, and I hope this country will initiate a new spirit in European fiscal affairs. We are armed with our new fiscal policy, but I demand that this Government shall realise that this is a matter of urgency, shall realise that negotiations take a very long time and that foreigners are very slow in realising that the English attitude has changed completely. The natural markets for our coal are, after all, Scandinavia, including the Baltic States—not that there is very much market there, but it is worth having—Northern Germany, to a certain extent Belgium, Northern France from Rouen westward, and Western France, and those markets are dwindling away. Every year, bit by bit, they get frittered away because of the action of foreign Governments.

I beg the Government to make a declaration of their policy, that they are not just going to be content to protest and then shrug their shoulders, or even threaten retaliatory measures, or even indulge in them, because in the end I cannot bring myself to believe that restriction of trade is likely to lead to an increase of trade. I ask them to initiate this policy of negotiation for reciprocal trade agreements. Not that I think that is the solution. I look for a true solution in international marketing schemes, and international schemes for limitation of output and reduction of hours. I think Mr. Shinwell's policy was right. It is at Geneva, with the aid of British owners and the British Government, that we shall find a way out of the present appalling position of the coal industries of Europe. You cannot do it by hard work and struggling. I beg the Government to take firm action and to impress upon foreign Powers that England has changed her attitude completely.


I am sure the whole House will want me to congratulate the hon. Member on his most admirable maiden speech, and I am sure everyone will want to hear him very often in our Debates. I say so with the more pleasure because I hold some of the same advanced views that he holds. He comes from a depressed area. I also come from a depressed area, though perhaps in Oldham we are a little more fortunate than he is, because at least we have big brick buildings, with vast floor spaces, suitable for new industries to settle in, and we have to-day—and we welcome it—a pronouncement by the President of the Board of Trade that the Government are going to try to guide the new industries that are coming into the country to settle in the areas that are most depressed. a is a little ironical that in my own particular district the next town to mine is Mossley, whose Member is so consistent in his upholding of the principles of Free Trade, and, if I read my morning paper aright to-day, a foreign industry has just come to that town and is going to absorb no fewer than 1,400 of the unemployed of Mossley.

But I got up to speak on cotton, and especially on cotton organisation. We have our markets almost entirely abroad, and it would be true to say that we must estimate those markets and go out for the trade which we can hope to gather to our mills in Lancashire. We are at the moment working under certain temporary advantages. We have what is definitely an advantage to the cotton trade—the Japanese-Chinese dispute. Then we have certain monetary advantages which we did not have some time ago and which have been responsible for an enormous temporary increase in employment. We are looking forward to further advantages from Ottawa. We are looking forward to expanding our markets within the Empire. I think we look forward to that with good reason, and I hope very much that the President of the- Board of Trade will, with the other advisers to the Ottawa Conference, have a representative of the cotton industry continually advising, not only at Ottawa but previously to Ottawa, on the actual needs of the industry.

Is the industry itself in a fit condition to maintain the temporary advantages that we have to-day, and to increase those advantages that we hope to get at Ottawa? Its organisation is antiquated. The raw cotton comes to Liverpool. It goes in a lorry to a warehouse. It goes in another lorry to a spinning mill. It Is then spun and the yarn goes off to another part of Lancashire to be woven. It then goes to a bleacher or printer or dyer. It then goes to a merchant. It then goes to a packer and to a shipper and is finally sold by an agent who has nothing whatever to do with the people who actually made the cloth. It is not so in Japan. There the people who import the raw cotton send it to the spinning mill. It is spun and woven close at hand, and the very people who import the raw cotton export the finished cotton piece goods. It is not so in India, where all the processes of cotton manufacture are carried out in one comparatively small area. In Lancashire we suffer under that disability.

We have also this disability. We have a frame of mind towards all these questions which is out of date. It was per- fectly up to date before the War, when trade was continually expanding, but now our trade is declining, and I should like to put it up as a proposition to the President of the Board of Trade that, while in an expanding market wholesale competition is a good thing, in a declining market it can have very evil effects indeed. It would be far better if that industry would estimate its markets and reduce its output to the estimate which it has formed. If it could say, "We need 35,000,000 spindles, we need so many looms," and if it could above all things say "We do not need our merchants at all, we will join in big combines," the weavers would join in big combines who would be their own agents, who would sell their own cloth, who would provide them with particulars of the market in which they were hoping to sell those goods. Otherwise, I can see no great hope for the cotton industry.

There is at present a scheme for a limitation of some of the plant of some of the sections of the industry and, so far as it goes, it is, I think, a good scheme. I hope it will have the full support of the Government, who have apparently, according to an answer to a question the other day, admitted the principle that, where an industry so desires, they will step in and force the recalcitrant minority in that industry to comply with the wishes of the majority. I for one welcome that admission. I am glad, especially in the days of our declining industry, that the Government have taken those steps, because no Government can view without grave concern the continued deterioration and loss of trade in what is still the greatest exporting industry.


I too want to congratulate the hon. Member for Morpeth (Mr. G. Nicholson) on his maiden speech, because I realise that he struck a note which is seldom struck by supporters of the National Government. I feel that the continued reactionary policy of the Government that the hon. Member now supports, and the irresistible logic of events, will finally drive him into the ranks of the Labour party. I am very glad also that the hon. Member has familiarised himself with the industry of the constituency that he represents. I am certain that any future contributions that the hon. Member cares to make regarding the coal industry will be listened to with very great interest by all of us. The constituency that I represent is interested in coal and in hosiery. I would not have taken part in this Debate at all if it had not been for some of the remarks made by the President of the Board of Trade in his opening speech. Naturally, coming to the House after these have been in operation for some time the Measures for which he is responsible, the right hon. Gentleman went to the Box with a great deal of pleasure, to demonstrate how up to this point his scheme had apparently been successful. I quite understand the pleasure that the right hon. Gentleman would take in being able to make that announcement to the House.

The right hon. Gentleman was pleased to inform us also of a number of factories that are being established by foreign firms in this country. If I did not misunderstand him the right hon. Gentleman sought to convey to the House the idea that amongst the foreign firms were one or more firms interested in the production of fine grade silk hosiery. He informed us that, generally speaking, hosiery can be broadly classified into the two categories of full fashioned hosiery and what is known as seamless hosiery. The right hon. Gentleman has been hopelessly misinformed by someone if he was led to convey the impression that a foreign firm exploiting an English invention known as the cotton patent hosiery machine is establishing for the first time in this country factories in which this patent machine is to be operated to make full fashioned hosiery. The cotton patent machine has been in operation in this country for quite a long time. I myself operated one 25 years ago, and full fashioned hosiery has been made in this country ever since the establishment of the hosiery industry in this country.

In regard to the fine grade hosiery machines, since the silk duties of 1924 or 1925 there has been—hon. Members opposite can take all the credit they like —a considerable boom in artificial silks and silk hosiery made on fine gauge, full fashioned, hosiery machines. What has always amazed me during these years has been this: Our own English hosiery manufacturers, who have been during the whole of that period agitating for tariffs on foreign hosiery imported into this country, have been filling their factories with these machines from Germany during the whole of the intervening years. I was not surprised, but during the "Buy British" campaign a short time ago I observed one of the hosiery establishments in London—I do not want to mention the firm, because they pay good wages to their employés, who work under exceptionally good conditions—in whose windows there was the slogan "Buy British." When I looked into the windows I knew quite well that every stitch of the hosiery exhibited for sale was made on machines which had been imported into this country from Germany.

It seems to me strangely inconsistent on the part of these people to talk in the way that they do. This type of machinery is built in this country. As I observed to the right hon. Gentleman this afternoon, Messrs. Cotton, of Loughborough, the firm with whom the patent is associated, build this fine gauge hosiery machine, and so do Messrs. Blackburn, of Nottingham. They go up -to the same fine gauges as the German machines—44 gauge, or perhaps finer gauges than that. There is, however, something happening to which I wish to call attention. Foreign firms are coming here to put up factories and to instal this type of machinery. The President of the Board of Trade, in the days when he was a passionate advocate of Free Trade, would no doubt tell this House about the lower standard of life on the Continent contrasted with the standard of life of the workers in this country. The foreign firms who are building these factories in this country are attempting at the same time to introduce the methods of production that are now operative in Germany. Those are vastly different methods from the methods current in the hosiery trade here. Only on Tuesday night a hosiery manufacturer told me that he would probably have to bring about drastic changes in his factory in order successfully to compete with some of these new foreign firms. I am inclined to think that some of those who now bless the right hon. Gentleman for what he has done, will live to curse him if, through the operation of these firms, the standards of life of certain operatives in this country are reduced because of the new methods of production introduced by some of these foreign firms.

The right hon. Gentleman told the House that some of these machines cost from 1,500 to £2,000 each. They have been operated in this country so far by two skilled men, one on each shift, with two shifts in the 24 hours, or in some cases three shifts. The Continental method is different. It is to have only a semi-skilled individual on the machines, and a skilled mechanic looking after a number of them, with the consequent payment to the individual operative of far lower wages than have been paid to our operatives under the system in vogue here. So it may not all be as good as the right hon. Gentleman imagines in these initial stages. We shall not only get foreign factories, but foreign methods of production. I noticed also that the right hon. Gentleman had something to say about invention. He was careful to tell the House, as on a former occasion, that he attaches a great deal of importance to invention, having regard to the future prosperity of this country. Surely he understands that inventions, though in the long run they may have very beneficial effects, may temporarily have very disturbing effects indeed. If I had time I would have no difficulty in showing how the invention of the internal combustion engine has worked serious havoc in some industries in this country —in the coal industry and others. In the long run inventions may have advantages, but temporarily they may turn whole districts derelict. Do not let us forget that.

But there is a glimmering of truth and understanding in the right hon. Gentleman's mind. Once he was prepared to let prosperity depend upon Free Trade —"Let trade be as free as ever we can make it. As the channels of trade are free prosperity will come to us." Now he pins his faith on the clash of rival protectionist systems, one of which he himself is seeking to establish in this country. I am astonished at the lengths to which he has gone. Lord Beaverbrook can now count him as one of his disciples. The right hon. Gentleman stands at the Box and subscribes to the doctrine of Empire economic unity. Ah, but he did it with reservations. The reservations were that he saw beyond the Empire to the larger world. He talked about still retaining our foreign customers. Yes, I imagine that in the future he will watch his ships sailing across the Seven Seas, and so long as he watches those ships I hope he will never become hide-bound to the doctrine of Empire economic unity. No. He will in the long run learn that the policy that he is now pursuing will not bring about the results that he has in mind. "Leave it to Free Trade," he said in days gone by. To-day he is for rival protectionist systems clashing with one another. He is wrong.

The hon. Member who has just resumed his seat represents one of the cotton constituencies of Lancashire. He also has an inkling of the truth. The State of the future, in which we are to have prosperity, will be a planned State, a State the whole of whose industries are carefully planned and carefully considered. At the moment we have only one example in the world of a planned State. We may not agree with its methods, but the planning is there, and sooner or later, because of the planning, we shall have to take note of it, and the hon. Gentleman and others who now support the National Government will be driven by the remorseless logic of economic events to the planned State.

8.0 p.m.


The speech of the hon. Member for Mansfield (Mr. C. Brown), to which we have just listened, was one with which I think a good many of us on this side were in agreement even if, like the curate's egg, only in parts. It is the first speech which I have heard from the Opposition that has not contained one definite contradiction, a contradiction which was exemplified in the speech of the hon. Member for the Hamilton Division (Mr. D. Graham), who condemned whole-heartedly, in common with every Member who has spoken on that side, the fact that the Estimates which we are now discussing are the Estimates of a country which has changed its fiscal policy, but all the time those who were devoting themselves to the forwarding of the interests of the great industries in which they have served all their lives were themselves arguing for national fiscal protection within our country for their particular industry. The remarks of the hon. Member for Hamilton on the coal industry, which he knows by long experience, were to the effect that protection for the country is bad, but that protection for the coal industry against the menace of oil and of new inventions is eminently desirable in the interests of his particular constituency.

It seems to me that we bad much better cease, in this House, arguing as to Protection and Free Trade. All that is finished. Let us say "Good-bye" to all that. Now we have an opportunity of seeing whether we in our political creeds are right and the hon. Members above the Gangway wrong, or whether they are right and we are wrong. I do not think we should be supporting the President of the Board of Trade or that he would be putting forward his views to-day, if we did not think, with a sincerity equal to that of the hon. Members composing the Opposition, that we are on the winning side. They think they are. Let us stop arguing about- it, and leave it to the practical test, which is really the only thing that counts in the end.

The question, whether we are under Free Trade or Protection, is bound up also with the question of national planning and the organisation of industry. The last speaker said that there was one country in the world which had planned nationally, and I rather think he wished us to plan along those lines. He is in a minority there, I think, but in common with him, we all wish to plan. I should like to ask the right hon. Gentleman the President of the Board of Trade if it is the policy of the Government to try to plan nationally, through individual industries certainly, but nationally, and to try to use what one might call the national spirit which came out during the election—whether you think it was spoof or whether you think it was genuine, does not matter; it came out—and to devote that national spirit to a national spirit in industry as well as in politics. If you want to do that, I suggest that there should be a much greater educative system in industry and that the Board of Trade, as the fountain head of that educational system, should seek to interest the workers in the welfare of the State and in the fact that they are cogs in the wheels performing a national task, and, coupled with the creation of that interest, should try to tell the country, through the various methods of publicity that exist to-day, what we are really aiming at, what our definite objectives are, for each particular industry. If we could do that, I believe we should get the wheels of industry running more smoothly than they are to-day.

There is one other point, and that is that when we are planning this national industry for three, four, or five years ahead, we might try to avoid some of the shocks which we have had in the past few years. I was looking the other day at a chart by an eminent stockbroker, showing the rise and fall in security values, and the rise and fall in commodity prices since the War, and it showed that the peak was reached in 1928, since which we have been going down; and every time a crash has occurred—the Hatry crash, the Kreuger and Toll crash, and so on—you could see, each time, a big jump down, then a small subsequent recovery, and then the slump continuing. We have to stop these shocks, because no financial system can hope to recover as long as we have repetitions of such things as the Kreuger and Toll business.

In the Estimates that we are discussing to-day there is a Board of Trade Companies Department, and I would like to ask the right hon. Gentleman what that particular Companies Department does as regards fulfilling the letter of the law absolutely in the way of insisting that companies file their accounts and submit the necessary documents within the specified time; whether the Department is satisfied that the companies which exist to-day in this country are for the most part working according to the high standards of national finance; and if he thinks he has sufficient powers to ensure that that small but discreditable minority, which does us so much harm to the confidence of the country as well as to the profits of individual electors, can be brought to book under the present regulations.

We have to control in the future, in some way—good Tory as I wake up every morning and try to be—the investments of British nationals. It has been recognised by the Federation of British Industries in a somewhat guarded way—not that they are particularly my ideal body —but it has been recognised on all sides. It is snob a vast subject, touching such issues as the State interfering with private enterprise and such questions as whether or not the (Stock Exchange control to-day is sufficient as regards the listing and quoting of securities; but could there be an inquiry set up by the Board of Trade at some time in the near future to go into the whole question and see whether the matter could be dealt with, possibly by legislation in the future, though that question would be out of order to-day? Those are the two points that I would like to put before the right hon. Gentleman. There is, first, the question of national planning, to bring everybody into the picture, to interest all those engaged in industry in the progress of this country, and, secondly, to safeguard by every possible means our progress from financial shocks, which have been one of the curses of the post-War years.


I do not think anybody will accuse me of having spoken out of my turn. I have been sitting here for several months, and it has been a great joy to me to-day to hear from the President of the Board of Trade the first words of comfort that I have heard in this House. As I dare say some hon. Members know, I call myself an industrialist. Only two or three years ago I led a busy life, with no thought of ever coming to the House of Commons, and it is because my particular industry stopped dead, I suppose, that I find myself here. Before I approach that particular industry, I want to touch upon the subject of coal, which has been mentioned by some of my hon. Friends below me, none of whom, I think, will accuse me of lack of sympathy with or interest in the coal miners, of South Wales in particular. I spent 30 years among them and lived among them, and I know a good deal about them, and I know a great deal about their sufferings at the present time.

The personal interest is always to be deplored if it can be avoided, but I think the personal interest here is worthy of mention, because I spent 30 years on the borders of South Wales in charge of a very large concern, which was one of the earliest of the iron and steel and coal concerns which went in for rationalisation, long before rationalisation became the cure for all the ills from which industry suffers. Whatever difficulties we suffer from at the present time, they are not due to a lack of rationalisation, because we rationalised, as I say, years before it became fashionable, and from controlling, as I did 30 years ago, 6,000 workpeople, we got up to 35,000 workpeople, and we were self-contained in almost every degree. It is because of what has happened there that I say I am glad to hear the words of comfort which have come from the President of the Board of Trade to-day.

We have heard a great deal about the effects of recent happenings in the coal industry, and we have heard a great deal to-day about the difficulties in respect of the exportation of coal. I think that if we have made a, mistake in the past, it is that we have been disposed to regard the coal industry as an industry independent of others. I believe that the coal industry is the servant of other industries rather than their master, and I think that both coalowners and miners have taken up, if I may say so, a selfish attitude in years gone by and have disregarded the possibilities of what the coal mining industry means to this country. Those who have studied the subject will remember that the origin of coal mining and iron making in South Wales lay in the hill districts, where the coal was raised for the purpose of making iron, and it is only in late years, in the last two generations, that the export of coal has been regarded as an industry. We must not forget that for those two generations we have relied upon the export of coal to pay for practically the whole of our foodstuffs which we have been compelled to import. It is because the coal export has gone down to such an extent that we find ourselves, in part at all events, in the difficulties which have arisen in the South Wales district.

I want the House to consider this point, and I do not want to apportion any blame to anybody—I think it has happened—but, rightly or wrongly, Parliament has taken too great an interest in the actual doings of the South Wales coal industry in particular. The cost of getting coal in South Wales—and I am sorry that the Minister for Mines is not here—has trebled in the last 33 years, and I think the mining Members present will agree with me that the men themselves have received no advantage out of the increase in the cost. Clearly the coalowners have not. The industry in South Wales, to all intents and purposes, is practically on its last legs financially. That was not so for a great number of years, and I suggest that a great deal of the fault is due to the fact that persistently one Parliament after another, whatever its complexion, has taken a hand at the manipulation of agreements, settled wages, and, in short, has almost controlled the industry, and, at the end of it—because I call this the end of it— if something better does not happen, the industry will practically be bankrupt. I hope that whatever is going to be done this year in the mining industry will be done outside the House of Commons, and that the owners and men will be left to conduct their negotiations in their own way and arrive at their own conclusions. Perhaps I am a little old-fashioned, but I am afraid that I do not support those five-year plans. I am not a believer in partial Socialism; I am a believer in individualistic effort, and I do not think for one moment that the coal trade, particularly in South Wales, would have got into its present unfortunate position if it had been left to conduct its own affairs.

I wish to say a word or two upon the companion industry, that is, the steel industry. My hon. Friend the Member for Abertillery (Mr. Daggar) and those associated with him attended a meeting the other day to see what industries could be introduced into their neighbourhood to take the place of the industry which has fallen down. There can be no other material industries in a district like that. The industries which are indigenous to such districts will have to be revived, or those districts must go down. More than 50 per cent. of the cost of steel depends upon two items—the cost of coal and the cost of railway rates. The cost of coal has gone up three times in the last third of a century, and obviously, unless there has been improvement in manufacture, the cost of coal must be a very important item in the cost of producing steel. Fortunately, there have been, particularly at Ebbw Vale, very great improvements in the use of coal and in its employment in the blast furnaces. There are no more important and no more modern furnaces than those which have been built there during the last 10 or 12 years. Their cost per ton compares favourably with that of any other blast furnaces in the world, and their cost for fuel cannot, I believe, be beaten by anything in Europe. Notwithstanding that fact, the industry has fallen down.

One of the ways in which coal can be reduced in cost is by the adoption of other methods of obtaining coal. I have had an opportunity of explaining to the Minister of Mines the result of a recent visit which I paid to the United States of America. There, in apparently similar circumstances, and in similar conditions, coal is being wrought and brought to the surface for about one-third of the cost of that in South Wales. They have diminished the danger to life by a very large amount. Their safety compares most favourably with ours. I have invited the Minister of Mines to consider these methods and have them examined by experts on both sides. I am not a mining expert, although I have been associated with coal for 50 years, and therefore I do no more than draw the attention of the Minister of Mines to these facts and ask him to have them looked into.

In regard to steel, the symptoms of decay have been showing themselves for a very long time. I distinctly remember in 1898 the first introduction of American steel into this country at a dumped price, and with a very few exceptions, including particularly, of course, the War period and the period of the Ruhr occupation, that industry has been subject the whole time, more or less, from one country or another, to persistent and unnecessary dumping. That is the principal cause of the decadence of the steel industry in this country. The steel industry is different from almost every other industry. The materials are expensive, very large quantities are required, and the turnover is enormous. When I tell you that the turnover of my late company was something in the nature of £6,000,000 a year, it will be seen that you have to deal with very large figures, and that they are subject to very large fluctuations if they are interfered with, as they have been for 30 or 40 years, by these extraordinary incursions of unnecessary foreign steel which prevent the steelmaker from being master in his own house. It is the principal cause of the state in which the steel industry finds itself.

It is not a question of labour. I desire to pay testimony to the labour which has been employed for so many years in the iron and steel industry. In my judgment, it is the best in the world. On my frequent visits to America I have found working there men who had been under me. They have been sent all over the world, and they are, from the technical and skilful point of view, the best in the world. They have the best record in regard to disputes. Ever since the Conciliation Board in the iron and steel trade was established some 45 or 50 years ago, I believe I am correct in saying, there has not been a dispute of any magnitude in the iron and steel trade in this country, which is a testimony I am glad to give. Moreover, they enjoy, I think, the highest wages of any workpeople in the country through the adroitness in the manipulation of the circumstances by Mr. John Hodge, who was for many years a Member of this honourable House. We as employers were always glad to pay these wages, because, we believe in good wages, and we know that if we pay them and get good work we can get a low cost per ton. So that there, again, that has not been the cause of our difficulties.

The industry requires very expensive tools and machinery. It costs to-day more than £1,000,000 to build a pair of modern blast-furnaces, and no one can venture upon such an expenditure unless he is satisfied that he will have a decent run and be able to employ those furnaces in a proper way, which is to say, run them night and day until they require relining. It has been said that we in South Wales have become the world's experts at stopping and starting blast-furnaces. The blast-furnace, of all things in the world, is the thing which wants to be kept running smoothly. The rolling-mills and producing departments are all very expensive, and unless you employ the best and keep up-to-date you cannot obtain a low cost. It is because we have been compelled to work in and out, through this constant dumping of foreign steel, that the English, Scottish and Welsh ironmasters have not been able to keep their places up to the pitch of perfection that they would otherwise have been able to do. It is not that they have not the knowledge, the brains and the technical ability.

The President of the Board of Trade, in his opening speech to-day, referred to the marvellous inventions that have been produced in this country over long periods of years. He referred to the invention of aniline dyes. I knew the inventor of aniline dyes, and I remember how he deplored the fact that his own country would not give him any protection and that he had to go to Germany to get this wonderful invention taken up. It was only because of the exigencies of the War that we were able to get it back again. Most of the inventions in metallurgy have been the product of this country. Bessemer, Siemen, Nasmyth and Cort are names that occur to anyone in this connection. There is hardly an invention of any kind in heavy metals which has not come from this country. It is not 'because we lack the technical ability, or the brains, or the staff, but because we lack security in this industry to enable us to go on, to have the knowledge that we shall have for that industry the home market for ourselves, and to obtain encouragement for the enlargement and perfection of our plant.

What about the 3,000,000 tons of steel that came into this country last year Every ounce of that steel could have been made in this country. There is nothing difficult about making it. The absence of that 3,000,000 tons of steel, representing something of the order of about 30 per cent. of the total output of steel in this country, prevented us from having the output which is necessary in order to obtain a low cost. Before the War we made the cheapest steel in the world. In 1913 a 5 per cent. tariff would have done the trick. In 1929 a 10 per cent. tariff would have done the trick. Whether a 331 per cent. tariff, which I hope is what we are going to get, will be sufficient, I cannot say—at any rate, not immediately—but it will help. I am satisfied that it is no use giving a tariff for a short period. You must give a tariff for at least 10 years. [HON. MEMBERS: "Hear, hear!"] I am glad to hear those cheers from the benches below me, because I want to say to those hon. Members that they have to learn to say "tariffs," and to believe in them. It is not the least use to talk as they have been talking for the last 30 years as to the non-efficacy of tariffs. They have to learn, and they will learn by experience, that tariffs are the things upon which we have to rely.

Who pays the duty? I think the President of the Board of Trade is aware of the fact that the 10 per cent. duty on steel is being paid by the importer. The price of steel before the 10 per cent. duty was 81s. To-day it is 76s., duty paid. We shall find that if we put on tariffs which are sufficiently protective to keep out most of the stuff, but sufficiently inducive to enable some of it to come in, it will serve a double purpose. We shall find that if the importer wants to import he will import, and he will pay the tariff. That is the universal experience all over the world. When I have heard some of my right hon. Friends during the past five months complain that tariff countries were in as bad a position as we are, I would have liked to remind them, as I remind them now, that from my own experience in those countries I have not heard one man either in America, France or Germany suggest that they would do away with their own tariffs because they have not been successful during the last two or three years.

8.30 p.m.

I rejoiced to hear the President of the Board of Trade to-day. I congratulate him on his courageous policy. Having introduced a new system or, rather, reverted to the old system, I wish him God speed in his work. I am satisfied that the confidence that he and those associated with him have inculcated in this country is going to produce the effect that we want, that is, a diminution of unemployment. I recognise that that is the test that will be applied when the National Government goes to the constituencies. If we do not succeed in reducing the number of the unemployed, very few of us will come back again, but it is my belief that the right start has been made and I have confidence in the National Government and particularly in the President of the Board of Trade.


It is not my intention to take up much time. I have listened very attentively to the speech of the hon. Member for East Leyton (Sir F. Mills). It was a very interesting speech, coming from a man who has had a long experience in industry from the employers' side. In many respects I say, without hesitation, that I am in agreement with him on certain matters that he raised. In regard to his statement about the steelworkers and the magnificent way in which they have conducted their negotiations in regard to wages and conditions of employment, I endorse everything that he said because, although a miner by occupation, I live in a steel manufacturing district and I know the various officials who carry on the work of the Iron and Steel Confederation. Can the hon. Member say the same about the position of the iron and steel workers, their conditions of employment and their wages, in the countries where tariffs have been imposed?

I often find that those hon. Members who talk on trade matters seem to think that here is only one portion of the community interested in trade, and that is the manufacturing portion, the captains of industry. They generally forget to include the workmen as part of the industrial concern and as someone who ought to be recognised in the interests of the organisation. The hon. Member told us that he has been in America and in nearly every Continental country, in his avocation as a large employer of labour. He will have made himself conversant with the conditions and wages of the men employed in various industries, and I suggest to him that if he could tell us that the conditions and the wages of the workers in the Continental countries where steel and iron are manufactured are better than the wages and conditions of our people and if, further, he can tell us that under tariff reform our conditions, if they are better than those of foreign countries will remain better, I shall not particularly care how it comes about, so long as our workers get reasonable conditions and good wages.

I am not going to deal with the coal situation, because it has been dealt with by some of my colleagues, but I should like to criticise that part of the hon. Member's speech in which he stated that he thought the. Government ought to leave the employers and the workmen in the mining industry to settle matters for themselves. He ought to know, because I think he has had some experience as a coalowner, that if we are left to ourselves all the taking will be on one side and all the giving on the other.

I cannot understand how it is that, although you meet the same employers in the iron and steel industry as you meet in the coal mining industry, they can come to agreement with their people without having resort to any lock-outs or stoppages, but when you discuss with these same gentlemen as coalowners they are the most impossible class of people it is possible to meet. They seem to change their position and outlook on industrial life. I have often thought that it was a case of selfishness, wishing to make more out of the industry than they ought to do. I hope I am wrong, but that suspicion is very strong in my mind. If we are to settle the question that is now on the horizon, shortly to come into full view, the mining situation, then the National Government has one of the gravest tasks it will have to face in the whole of its career. We do not want a dislocation of industry. There is not an hon. Member on these benches with all his failings who desires to see any conflict in the mining industry. We want a peaceful settlement, and it should be the work of the Government to see that both sides get together, to keep a watch on the proceedings of both sides, and by their help to get an amicable settlement of the situation before the 8th July this year.

The President of the Board of Trade made a most remarkable speech when you consider who the President of the Board of Trade is. I have heard him speak many times in this House as one of the chief apostles of Free Trade and the benefits it confers upon this country. Now, when he is in the responsible position of being the third captain of the National Government ship, he tells us of the glories and the great things which are going to happen because of certain Measures passed by the National Government at the end of last year and the beginning of this year. I can quite understand that as the father of these proposals he is net going to decry them. He is going to make them look as good as he can. He is an adept at manipulating figures, and does so in a very masterful sort of way. He tried his best to take our minds off the real issue before the Committee by asking us whether we could tell him of any productive industry conducted nationally which had been a success. I do not know of any productive industry which is controlled by the Government, and, therefore, how could the right hon. Gentleman, knowing this, expect us to give him an answer? But we do know of lots of industries conducted by private enterprise which have been a ghastly failure. If they had been conducted by the Government they could not have been greater failures.

Finally, I desire to say something in regard to my own district. The President of the Board of Trade has told us that the heavy industries are not showing any signs of prosperity, and with that statement we shall all agree. In the district I have the honour to represent coal mining, iron and steel production, and iron ore mining, are the chief industries. There are also subsidiary industries. In that industrial area we have at the present moment nearly the highest percentage of unemployment of any district in the whole of the British Isles. I live at Workington and the other day there was a meeting of the local authorities committee to review the situation. That conference passed a resolution which I expect has been conveyed to the Board of Trade to the effect that they intended to ask the divisional controller to use his best endeavours with the Board of Trade to institute an industrial survey pf West Cumberland. I hope the Board of Trade will grant the request of the local authorities committee for this in dustrial survey, because it is not a question of pits stopping and being reopened again, the fact is that a number of the mines will never be reopened again, they are completely worked out; and unless other industries can be induced to come into that locality in a few years time it will become a desolate and derelict area.

All that we ask, being a shy and modest people, is that this industrial survey shall he made so that the Board of Trade will be able to suggest to some of these hundreds and thousands of people who are now applying for sites for factories in this country, that they should take up a site in this area. Surely we shall be able to get one. That is not asking for very much, and it will help us to absorb some of our unemployed. The situation is grave and during the last three months the figures of unemployment have gone up by nearly 2,000 in that very small area. Those on the industrial side as well as those on the employers' side, and men and women of good will who are not directly interested in either the employers or workmen, regard the position with the gravest concern and are apprehensive as to what is going to be the situation in the immediate future unless something happens. I feel sure that the Parliamentary Secretary will look into this matter, and I shall be very glad to have a talk with him upon it.


I wish to support what the hon. Member for Limehouse (Mr. Attlee) said in urging upon the Government the importance of doing something definite to assist the depressed areas. I have had a little experience in the past in a depressed area and, although my most vivid recollection perhaps of my sojourn there is that of having forfeited my deposit at the end of an election, yet I retain a very friendly and affectionate feeling for the people of that area. I would urge upon the Government that some sort of definite measures will have to be taken. Having heard how many new factories are being started in this country, it seems to me that we have now a great opportunity of trying to encourage these new industries to start in depressed areas and not to come drifting down into the South of England. We welcome new industries wherever they may start, but when one considers the waste of man power and the waste in other respects which is involved in industrialising parts of the country which are now agricultural, and allowing those parts of the country to become derelict which for a century or more have been the centres of our great basic industries, it surely is clear that we must endeavour to carry out at once one branch of that national planning of which we have heard so much to-day in all parts of this Committee. I have here some figures which are not official but which have been worked out very carefully. They represent an attempt to estimate the cost to the community of transferring a man from an industrial area and constructing the necessary housing, roads and other things necessary in order to industrialise an agricultural area. My informant having gone into a number of calculations says: This would give an expenditure of £495 per industrial worker. This figure would include houses with the necessary schools, churches, shops, buildings, factories, gas, water and electric supply, roads, sewers and all such matters, but it does not, however, include factory machinery and equipment. He makes another calculation as a check, looking at the matter from a different point of view, and he arrives at a capital cost of £433. The truth probably lies between the two. There are three principal reasons why these new factories which are being started sometimes by foreign and sometimes by British firms, are tending to go to Slough, to Buckinghamshire, to Hertfordshire, to Bent and are not tending to go to South Wales, to the North-East coast, or to Lancashire. The first is a psychological reason. There is, unfortunately, an impression abroad that those centres which were chosen by the old industries because of their special advantages are now down and out. Another reason is the burden of rates, and a third reason, I think, is the apprehension, which may or may not be well-founded, that in those industrial areas trade unions are more powerful and insist upon restrictions which they are either unable to enforce or do not endeavour to enforce in the South of England. In this matter, though we may ask for a lead to be given by the Government, we may also ask the trade union leaders of this country to co-operate with employers to do away with the impression, which may be fallacious but is certainly widespread, that in those industrial areas owing to labour conditions it will be difficult for industries to thrive.

In the evening papers yesterday appeared a document which was said to have been issued by the French Ministry of Commerce. Whether it was a genuine document or not, I do not know. I understand that the French Ministry of Commerce has denied its authenticity, but the fact remains that what was said in that document about the unrest which is supposed to exist and the trade union restrictions in the depressed industrial areas of this country, represents a view very widely held abroad. It is largely for that reason that foreign industrialists are choosing the agricultural parts of the country in which to put up their works. I would appeal to the trade union leaders to do what in them lies to assist the local authorities of South Wales and other depressed areas to make those areas as attractive as possible to industrialists.

I think the hon. Member for Lime-house was perfectly entitled to ask the Government to take this matter into their earnest consideration. We Conservatives are proud of the great de-rating Measure passed by the last Conservative Government, but there was one argument put forward from the Labour benches in the discussion of that Measure which is absolutely sound. It is that although a great burden has been taken off industry, still, relatively, the advantage of Buckinghamshire or Berkshire over Aberdare or the North-East coast remains exactly as it was. Although now the industrialist is only paying one-quarter of the rates that he was paying before, whereas in some of the agricultural areas the rates are perhaps only 5s., 6s. or 7s. in the pound, in places like Aberdare they are or were 28s. in the pound. I ask the Government to consider carefully what they can do for these areas. Some of the great basic industries upon which our past prosperity was built up are not merely temporarily depressed because of the economic world crisis but are never likely again to revive and employ the number of men which they employed formerly. Surely at this time it is necessary to make preparations for the day when some measure of prosperity will come back. Surely it is a time to try to put whatever new industries are coming to the country into the depressed areas.

It is no answer to my argument to say that there should be transference of the unemployed from the places where they are now to new areas. We must consider the appalling waste which is involved. We must consider not only the loss but the suffering involved when men who have, perhaps, bought their houses are asked to move to other parts of the country with no security that they are going to find work when they get there. We have to consider what is involved in asking people to leave surroundings which, however dingy, are at any rate familiar, and to leave in many cases other members of their families behind. I hope that something can be done about this matter. A great deal has been written lately in analysis of this problem, and I think there is agreement upon the points which I have just put. But, so far, I have seen very few constructive sugges- tions for dealing with the problem and greatly venturing I would like to make one or two.

I understand that one enterprising industrial town in the Midlands in order to induce a factory to come there offered to exempt it from rates for a period of years. That course unfortunately was found to be illegal and the rates afterwards had to be paid by that factory. I wonder whether it would be possible for the Government to exempt for a period of time new factories willing to go into depressed areas from rates? I wonder whether it would be possible, as one small measure, to exempt in the Budget, all company reserves which were earned in these areas from Income Tax? Would it not be possible in that way to do something for concerns which are willing to start new factories in depressed areas? Of all the costs which weigh heavily upon industries, there is none which is a greater burden, which more definitely discourages employment than the contribution which has to be made by the employer in respect of each man he employs. It is obviously an anomalous and absurd situation that when a concern is endeavouring to increase the number of men that it employs it is penalised for every additional man that it takes on. I wonder whether the Government could consider some relaxation, some concession, some sort of subsidy of that kind in order to encourage these new industries not to come down into the south of England and spoil the rapidly diminishing English country side, but to go to the great depressed areas where there is most unemployment, most suffering, most privation and bring work and some hope to those who at present are in despair of ever finding work again.


In these times of quotas and rationing, it is the turn of the North Staffordshire potteries to have a little consideration in this House. We have heard so much about wheat, coal, steel and iron that our little industry in that corner of Staffordshire seems to have been neglected. I am sorry that the President of the Board of Trade is not sitting on the Treasury Bench, for I bring him a message from 250,000 people who are looking to him to be the saviour of that industry next Tuesday. I am surprised and sometimes amused at the shafts which are hurled across the Table at the right hon. Gentleman because he has realised at long last what has to come in this country. I admire a man who can change his mind and with a sphinx-like character stand at that Box while jibes are hurled at him. Nothing seems to touch him. There he sits unruffled. That is why we in North Staffordshire base our faith on him. We have a two-fold belief in him, for he is not only holding now what we for 25 or 30 years have believed must come, namely, tariffs, but he is a business man. There are too few business men in this assembly. There is too much wandering and meandering and a little too much time spent on what, like Bovril, could be compressed.

9.0 p.m.

We are dealing in the Potteries with an industry which has been languishing and gradually losing its foreign and home trade for years past. It is only those who get outside of England, who go into the far corners of the world selling the products of that industry, who can understand why we are losing our business, why the foreigners, like rats, are nibbling at the foundation of our overseas trade, why we see Czechoslovakia, France and other countries taking markets which we have held for a century. When the Abnormal Importation Duties came into force, the district which I represent took a new lease of life. At long last Britain had come to realise that we must cease to be the dumping ground of the world and that we must hold the right amount of trade which is our due; but, in the interval from the introduction of the duties to their becoming operative, the wily foreigner took good care to make the most of his time, and he threw into this country thousands of pounds worth of goods which up to now have prevented any benefit coming to my district. These stocks remain in this country and must be liquidated and absorbed before the pottery district can have the benefit of the new duties. What will be the feelings of dismay and consternation if, before we have the benefit of the Abnormal Importation Duties, they are reduced, and once more the foreigner is able to take the trade of our district. I should like the Advisory Committee to visit the district and to see the potteries and factories, which for centuries have been the talk of the world, but which are now closed down and are being converted into building sites for shops. That is the position to-day, and names which once were world-wide are now looked upon with contempt and pity as something that was and is not now.

Six or seven months ago I was enabled to see that the crisis was coming, not from any especial knowledge of my own or from any cleverness or wisdom. I saw that the inevitable crisis was being forced upon us, because we could not for ever be paying out and not receiving. I travelled 6,000 miles with the certainty that any man who came before the electorate with the story of what must be done could walk into this House and take his seat. I was looked upon, as many others were, as a crazy lunatic to storm the citadel of Labour, which for 24 years had been represented by a Member of the Opposition Bench. He was a good man, but he had a wrong belief. The only fear I had, as the steamer came across those 6,000 miles, was whether the Labour party would give the duties before I got home, so that my journey would be useless. That was the fear that touched my throat, which made me say, "Shall I get there in time?" Fortunately for me, and unfortunately for the Labour party, they missed the golden opportunity which would have placed them on the Government Benches with a magnificent majority.

I wish that hon. Gentlemen on the Opposition Bench, who are as good patriots as any other Members, could come with me for one month to the East. If I were a rich man, I would pay their fares and expenses on condition that they would use the senses which God has given them and that when they came back they would act according to their convictions. I am certain if that were done those benches would be an empty and desolate waste. There are no Free Traders abroad. Any man who does not believe in tariffs is regarded as so curious that be ought to be enshrined in the museum. Sometimes we are asked some very awkward questions, and I hope I am in order in dealing with some of them now, because we all have pearls of wisdom which we want to save for the very rare occasions on which we can speak on these topics. A letter from Calcutta came to me a few weeks ago asking "Who is the outstanding Member of your Cabinet?" What a thing to ask! How could I answer it? But in times of difficulty the mind works quickly, and I wrote back to say that the men on our front bench were all of such super-excellence that it would be invidious to make a, comparison, and I feel great satisfaction in having got out of that difficulty. Another man writes to me, "Now that you are in Parliament, put things right." In India my word goes. Here I am only 1/615th part of this great assembly. I had to write to explain that the destinies of England were handled by a body of men called the British Cabinet, and that for this year, at least, they must not expect to find me in that holy of holies. How they are going to manage without me until next session I leave them to guess.

But to come back to the potteries of North Staffordshire. If the duties have not been reduced, I want to take the President of the Board of Trade to that district, and he will have a reception there which will be comparable only to Christ's entry into Jerusalem. He will be regarded as the saviour of the district. They will not look upon him as a turncoat, or as a man who has changed his opinions. I would quote Scripture, which I understand one is allowed to do in this House. I forget the chapter and verse, because since November I have been more concerned with the OFFICIAL REPORT than with Holy Writ, but it says something like this. "There is more joy in Heaven over one sinner that repenteth than over the ninety and nine that need no repentance." That is the case with our good Friend on the Treasury Bench.

In a serious moment or two before I sit down I want to ask the Parliamentary Secretary to convey to the President of the Board of Trade my message, that North Staffordshire depends for its very life on the decisions which the Government, through the Chancellor of the Exchequer, will announce on the 19th April. It will be a matter of life and death for a quarter of a million souls. We have talked of depressed areas, but that is an area which is not merely depressed but which is almost hopeless. I got into touch with conditions there during the election. In the early days, before I was generally recognised, I put on an old coat and a cap, left myself unshaved, made myself look like an unemployed man, and got into one of the queues of unemployed and talked to them. For the first time in my life did I understand the absolute desperation of them. One can understand a man committing murder, robbery or anything when not only he, but the wife and children dependent upon him, are short of bread. I shall never forget the kind of sullen indifference I encountered there—all the demands for work that I heard—anything to keep the wolf from the door—during the two hours I stood in that queue and got into converse with those downs and outs, who found that slowly but surely their right hands were losing their cunning. They were losing their manhood, and they were desperate and ready for anything. I might be the hon. Member for Gorbals (Mr. Buchanan) speaking. I hope sincerely that the President of the Board of Trade will give my district a chance for its life. If it is only an experiment let us try it, and let me go back with the feeling that at any rate I, a humble back-bencher, have brought to the notice of the President of the Board of Trade the necessities of my district.


I cannot compete with the hon. Member for Hanley (Mr. Hales) in the eloquent speech with which he has just addressed the Committee. His imagination and powers of expression lend a charm to his oratory which I will not attempt to emulate, but I can sympathise with him in his feelings about the desperate condition in which industry finds itself to-day in many parts of the country. The President of the Board of Trade, in his survey, was very complacent about the progress which had been made during the last six months, and attributed it in large measure to the policy of the National Government. I observe, also, that the Press, in commenting on the returns of the Board of Trade, take the view that we have turned the corner, and are now on the upward move towards a revival of trade. But if we examine the returns for February and March, what do we find? It is true that there has been some slight increase in exports, but there has also been a great falling off in imports. The true test of the trade of a country is, surely, the aggregate trade. It is that which, in the long run, will create the greatest amount of employment for the shipping industry, the docks, the railways, and all the other accessories of trade and industry. In February, 1932, the aggregate trade amounted to £100,214,122 and in March it amounted to £92,315,713. That, I think, is the test of the falling off in the trade of this country, the exact reduction being £7,898,409.

While you may be making some progress in your export trade, if your falling off is very material in your import trade, then, obviously, there must be fewer people employed at the docks and on the railways, and the general falling off in employment must be greater in the long run. It may be argued that because there is some temporary increase, as undoubtedly there is, in what you do to increase employment in a particular factory in the country, if the aggregate trade falls—and the aggregate trade is surely the test of the trade of the country leading to the greatest amount of employment—then the system stands condemned. I do not think in the two months to which the President referred there is any evidence of an improvement in trade. On the contrary, the figures which have been given of the exports and imports for March compared with February, since these new duties have been in force, prove what has been predicted by many Free Traders, that while there might be increased prosperity in a certain direction, there would be a fall in the aggregate trade.

Take the shipping question. In normal years we have an income from shipping of something like £130,000,000 per annum. We have not that amount to-day. The City of London has been the monetary centre of the world, and that is due to the fact that we have been a Free Trade country. The City of London has an income of £60,000,000 or £70,000,000 from commissions and interest. That is a total income of £200,000,000 which comes to this country under the Free Trade system. When the hon. Member opposite speaks of the depression in the great basic industries of steel and iron and many other industries, the test as to what is the best system for this country and the most profitable is the test of the trade of the country as a whole. We Free Traders admit that there are many industries in this country which have been prosperous which, in the nature of things, if we adhere to a Free Trade system, will possibly fail because of the superior skill and advantages which other countries have developed in those particular trades, with the result that they have overtaken this country.

It is true that people have to face distress and even ruin if they persist in carrying on industries which are not suited to this country. Coventry was once a great centre of the woollen industry, and it changed over to the manufacture of watches. The competition with Switzerland and other Continental countries became too severe, and Coventry became a great centre for the manufacture of bicycles and motor cars. The people of the City of Coventry, under Free Trade, showed that they possessed a great adaptability in changing over, and what applies to the City of Coventry applies to Great Britain as a whole. If we are prepared, as apparently we are, in order to meet great depression and great distress to bolster up certain industries by adopting a tariff, it may give some temporary advantage to those particular industries, but it may undermine and remove the foundations which enabled this country under Free Trade to build up foreign trade second to none in the history of the world before the War.


If the hon. Member will look up the statistics of our overseas trade for 1900 to 1914, he will see that Germany and the United States were advancing faster than we were.


Those countries advanced because their foreign trade at that time was comparatively small compared with the trade of Great Britain.


The advance was so great that Germany was beginning to overtake all her competitors.


It is true that those countries made considerable advance, more particularly Germany, but I am right in saying that the foreign trade of this country was the greatest in the world prior to the Great War. While I admit that the foreign countries mentioned by the hon. Member were making considerable progress by their improved methods of doing business, Great Britain was preeminent in carrying on the greatest foreign trade the world had ever seen, and that enabled this country to accumulate those enormous reserves which enabled it to finance a large part of the Great War. Those reserves, of which we have a considerable remnant left, constitute the backbone and sinews of the London money market. I suggest to the President of the Board of Trade that, for the sake of temporarily giving a fillip to certain industries, it is a short-sighted policy to bolster up and support industries which, for various reasons, are disappearing from this country.

I have referred to the shipping industry and the exceptional position of Great Britain as the monetary centre. We are anxious to see a revival of trade and industry in this country, but it is a fact that London as a great monetary centre is dependent upon Great Britain being maintained as a Free Trade country, if as a result of a Free Trade system we still retain London as the monetary centre, then you attract to London the loan capital of the world, and you get a great flow of loanable capital seeking investment in London. That provides the foundation for all countries all over the world to come to London to float a loan. If the loan is floated in this country, it goes out of the country either in goods or services. If the conditions are favourable in London and a loan is floated for £2,000,000, £3,000,000 or £5,000,000 for the extension of the Buenos Aires and Southern or any other South American railway, it does not go to America in cash, but in steel rails, locomotives or other equipment. Therefore, the fiscal policy which enables London to retain its position as a great monetary centre lays the foundation for that revival of prosperity for which we are all anxious.

We are all animated by that desire and I give that credit to the hon. Member for Hanley and to other hon. Members. We may not agree but we all desire it and are all moved to offer our views as to what is likely to increase the happiness, prosperity and contentment of the people. We may differ as to the method. I am trying to show to the hon. Member opposite what I consider is the best way, and he can try to persuade me, for I hope I am not narrow-minded or prejudiced not to be willing to learn from him as I hope he is willing to learn from me. So we all offer our suggestions to this House, which is probably the most impartially minded assembly in the world, and which is courteous beyond a degree in listening to the views of a man who has anything to say and desires to put his ideas into the common stock. I am humbly offering to-day my ideas as to what is best to help us out of the present depression.

The President of the Board of Trade was once a valued colleague of my own, a man whom I looked to as one of the best apostles of the Free Trade system, which I still support and adhere to. Like many others, no doubt he may have become disheartened at the long-drawn-out agony, depression and distress and has given up his former ideals and beliefs and for some reason or another has been won over to those who believe that you can, by using his policy as a weapon, compel other countries to reduce their tariffs. There are many who are Free Traders at heart, but who say that unless you have this weapon you cannot compel other countries to reduce their tariffs.


May I ask two questions? How does the hon. Gentleman make his fiscal argument apply equally to the days when we were the workshop of the world and now that we are the purchasers? How can you possibly pay debts in goods or services when the American debt has to be paid in cash, because the adverse balance of trading is four to one on America? You cannot pay in services when you have an adverse balance.

9.30 p.m.


I do not subscribe to the idea of an adverse balance of trade. There is no such thing as an adverse balance of trade. There is an adverse balance of payments. It is very difficult to know what the figures are, because the Board of Trade cannot supply us with reliable figures as to the adverse balance of payments. This country is a creditor country and has something like £4,000,000,000 invested abroad, and these rentiers who own the investments continually change them so that it is almost impossible to know exactly what the figure is. When you have a creditor country, as we are still, it means that an excess of imports over exports is a good thing and not a bad thing, and for this reason. If you have a large section of your community composed of people who have made fortunes, say, in South America or India and who come and reside in this country, they are not producers or exporters. They are merely users of their dividend warrants which they cash, and, by the purchases they make, either in silks, satins, wines or other requisites, they go to swell the imports of this country and have no affect whatever on the export trade. So, with a country such as Britain, which is a creditor country, it is a good thing when there is a large excess of imports over exports. There has been a good deal of nonsense in the newspapers and in public speeches suggesting it is a healthy sign when your exports are increasing and your imports declining. To my mind it is evidence of quite the contrary. It is evidence of a declining wealth in this country. A good many people are probably living on their capital to-day. That is the reason why imports are declining. When you are accumulating capital and your people have made fortunes in different parts of the world and come to England to reside, they swell your imports because they are not exporters and engaged in industry. They are living in the west end of London, Liverpool, Edinburgh, Manchester, Glasgow or other large centres, and they are rentiers. They are merely surrenderers of their dividend warrants and of the interest on bonds or securities which they have probably invested in various parts of the world. That goes to swell the imports of, say, silks, and satins, for the dresses of the women of their household, and the other expenses which are incurred by the classes with large investments. What do we do? We pay America in either goods or services.


In cash.


In goods, services or by the surrender of these coupons. These go to make up the debt which we owe to America.


How is it possible for imports now to exceed exports unless at some time in the past exports have never exceeded imports?


Not for many years and not in my lifetime have exports exceeded imports.


Then how did we accumulate the balance?


We accumulated it just because we have been so rich. It is a curious thing, but if you study the history of the country you find that for many years there has always been an excess of imports over exports. That is a most extraordinary fact. If the hon. Member will study the facts which I have ventured to submit to him, he will find that in his lifetime there has been a continuous annual excess of imports over exports in this country. The reason for that is, as I have just stated, that we are a creditor country, and it is an indication of our wealth, and not of our poverty. On the other hand, in Australia, for example, as a result of an extravagant policy, there has been overborrowing, and the fact that Australia's imports have exceeded her exports is a reason for disquiet, which has created a certain amount of unrest and want of confidence in Australia. That is because Australia is a debtor country as compared with this country. It indicates that she is living beyond her means and getting into debt. Many people foresaw that Australia was pursuing a policy of over-borrowing and extravagance, and they said that sooner or later she would suffer for that policy.

If hon. Members will look up the statistics of the last 20 years, they will find that in this country from year to year during that period, there has been a continuous excess of imports over exports, and under that system this country has grown wealthy. The resources which we accumulated under the Free Trade system, made us the carriers of the world. Even to-day we build nearly half the ships that are built, and we own about one-third. I am sure hon. Members will agree with me that, when we travel round the world, we are proud to see that in every port the bulk of the shipping is flying the British flag. That position is in jeopardy to-day. I do not think we have lost it yet. I do not think that a 10 per cent, tariff is going to ruin us. I am not one of those who prophesy that this experiment—I hope it is only an experiment—will ruin this country, but I offer the warning that it is coquetting with a very dangerous system, which may become permanent. Hon. Members who are enthusiasts in their belief may desire that it should be permanent, and I can only refer them, as a warning, to the history of this country, and point out to them what we did under the system of Free Trade. It is true that, as the result of the War and its terrible heritage of debt, and the piling up of costs, things are very hard for many industries, and they have my fullest sympathy, though it may be said that that is cold comfort to a man who is just carrying on and not able to meet competition from Czecho-Slovakia, Germany and other countries which are able to operate at a lower cost.

As to the remedy, I come back to the question, How is prosperity to be restored to this country? I have no short cut to offer, but I do say that such a restoration of prosperity is possible if we will pursue the same policy that we formerly pursued—a drastic policy of economy—and if we get back, as I hope we shall in time, to a sound system of finance and restore the Gold Standard in this country. Some may ask what advantage that offers, and how will it improve trade? If the position of London is restored as the monetary centre of the world—and obviously that cannot be done unless we get back to gold—it will prepare the ground for the flotation of these loans, and we shall become again the bankers of the world. No other country is able to take the leadership in finance. The Americans and the French, with all their gold holdings, are unable to take the leadership. It rests in this City of London. Why is that?


Because we have a National Government!


The National Government can help. I am not an enemy of the National Government, though I have often been found in the Lobby against them, and I wish to give honour where honour is due. The position of London as a monetary centre depends on a number of factors. In the first place, geographically we have a unique position. I do not think that New York or Paris will ever be able to rival London. But one reason above all others why London has been, a great monetary centre, and may become so again, is that in the City of London there is the skill and knowledge, accumulated for many generations, with which other great centres are unable to com- pete. There is inherent in the financiers and bankers of the City of London an unrivalled knowledge and experience of finance, and I hope we shall have the courage and the patience again to approach this problem in the old way. There is no short cut to great prosperity; I have no panacea to offer to bring about prosperity within a year; I am not here to say that I can conquer unemployment and bring about work and wages for all within a twelvemonth. I should be false to the beliefs that I hold I pretended that I had any such remedy. But I believe, from my knowledge of the history of my country and from some considerable knowledge of the City of London, that the same qualities are still there to-day, that there is the same integrity and grit and pluck and determination in our youth, and that, given good government, given economy, and given the opportunity, we shall again excel as we did in the past.

I wish to say to the President of the Board of Trade that I rejoiced at one of the concluding sentences of his speech. He plays up in a very noble and eloquent fashion to the Imperial position which he now occupies. He spoke of our Imperial trade, and of what we must do when we get to Ottawa. I also have had some experience of the Dominions, having lived for two years in Australia, knowing Canada, and having many friends throughout the British Empire. I resent the imputation that we on these benches, although few in number, are not equally seized with the desire to see the British Empire flourish and prosper and that we are not equally as proud of the British Empire, although hon. Members may not agree with our views. We have our own ideas. We desire to see our trade develop to the very utmost with the Dominions. We believe that our world trade, upon which our greatness was founded in the past, is our greatest asset, and, while anxious to develop our trade with our Dominions, I rejoice in the concluding sentences of the President of the Board of Trade, that he was anxious not only to develop our trade with our Dominions, but to look beyond to world trade, and, if he is inspired with that belief, he will find many supporters on these benches who will be willing to rejoice with him and to support him.


I do not propose to follow the hon. Member into the some- what difficult topic of the correct form of administration of the Gold Standard by the President of the Board of Trade, or you, Sir, might think I was out of order, nor do I propose to follow the hon. Member for Hanley (Mr. Hales) in the consideration of whether the Home Secretary and the Secretary of State for Scotland should be put into a museum, because that again is perhaps hardly within the powers of the President of the Board of Trade, though it might be thought to be desirable by the hon. Member. I want to ask the Parliamentary Secretary whether the Government are content that tariffs in themselves are an ultimate solution of the industrial problem of the country, or do they merely look upon tariffs as being a preliminary measure, and do they intend behind that tariff wall to take steps to deal with the industrial position of the country by other means.

The President of the Board of Trade expressed delight and pleasure at the prospect of foreigners coming here to set up factories. I wonder if he has studied the effects of the same phenomenon in Canada? I was speaking to a very influential Canadian only two days ago, and he was telling me of the disastrous effect that it had had upon Canadian industries in Canada. A great number of the larger industries in the United States started units in Canada with the latest machinery and the latest organisation, and overhead costs entirely borne by the foreign organisation in the United States or, as it might be in this country, in Germany and France, with the net result that the new foreign factory set up entirely put the native factory out of business. That may or may not be thought to be desirable, but it is one of the consequences that may flow from this influx of foreign competition into the country, and it is something which must not be disregarded. When one comes to take a survey of the whole industry of the country it is, I am sure, one of the factors that has to be carefully considered as to whether it is necessary and desirable in a particular industry to encourage this form of competition, and whether in the long run you are really going to benefit industry by permitting at this stage some new development of that type.

Most of the speeches this evening, which have been delivered to the empty benches, have dealt with particular, isolated industries. We believe that that is an entirely wrong way to look at the problem. The hon. Member for Swansea, West (Mr. L. Jones), who speaks with great authority on the steel trade, expressed the view that any planning must start from the bottom. That is to say, you must start your planning by individual industries and gradually, from that, build up a national plan. In our conception of the meaning of a national plan, that would be a perfectly useless procedure, because the whole purpose of a national plan, first of all, is to decide upon which industries must be developed and encouraged, possibly even at the expense of other industries.

We have had in the past a large number of export industries of various kinds on the exports of which we have depended for the purchase of raw materials and foodstuffs, together with invisible exports in the form of dividends and so on. The time has come when it is necessary to consider, in view of the entirely altered conditions of world trade brought about by the industrialisation of other parts of the world during the period of the War and after, which of those industries we have to develop to their utmost as export trades and which of them, perhaps, may no longer be paying propositions as export trades at all. That question cannot conceivably be decided by any single industry itself. If we have a certain amount of national wealth available for the reorganisation or re-planning of individual industries, those industries at present are all in competition in the market for the money that is available.

The hon. Member for Swansea West said one of the difficulties of the steel industry has been its inability to obtain any capital for reorganisation in the last period of 10 years. The reason was that that industry was in competition for capital with other more attractive sources. Another Member, I think the hon. Member for Thanet (Captain Balfour), spoke of the trouble of available capital resources going abroad. That is one of the factors which have been in competition with the steel industry for fresh capital. In the existing circumstances it seems impossible, unless some- one takes a definite, controlling interest in the direction of that capital, to make it flow into those parts of the national economy where it is admittedly most required. It is in that aspect of national planning that we see the most extreme importance.

The view that I take of this matter is based upon Socialistic principles, but at the moment I am on the basis that any appeal of that sort to hon. Members opposite would obviously not meet with any response, besides which it would raise questions of legislation, which cannot be discussed to-night. What I am suggesting is that within the present system, circumstances being as they are, and tariffs being in existence, there is still ample scope for a planning arrangement. There is still ample scope and great utility in the consideration of how the available capital of the country can best be used in the interests of the country as a whole for the purpose of encouraging the industry upon which we must vitally depend for export in order to purchase our food requirements and raw materials.

That is a matter which, perhaps, the right hon. Gentleman or the Parliamentary Secretary would say they have no power to force. Be it so. There would yet be the greatest utility in having the plan, in being able to demonstrate to the country that this is a matter which has been carefully considered, that the Government have weighed the utility of mechanising the coal mines, reconstructing the steel industry, amalgamating the cotton industry or whatever it may be, that they have determined that in view of our industrial position in the world at the moment the first and most vital interest is, say, the reconstruction of the steel industry or whatever it may be upon the determination. There should be a thoughtful inquiry undertaken by the Government, to plan ahead not merely the next step, but to decide whether the great exporting industries could be brought into a state of competition in the world, or whether they are to be allowed to slide out of our great export industries. That plan would itself assist in directing capital into the right place. There must be many people in the City of London who, upon a, plan of that sort, if necessary backed by guarantees by the Government, which they have power to do now, could very well direct available resources into the most desirable places, whereas at the present time, whether in boom or depression, it seems almost impossible to get the money into the right place.

The right hon. Gentleman spoke about squandering money. I am sure that he remembers very well the booms of 1928 and about that period. He remembers the gramophone and wireless companies that were floated to the tune of some £20,000,000. He remembers the 25 artificial silk companies, about 18 of which ought never to have been allowed to have a penny. Those companies had no more reason for starting than any other bogus company has, and the money that was squandered upon them might very well and usefully have been spent in reorganising some of the great basic industries. Why is it that the right hon. Gentleman and his Government cannot take some part in the proper direction of that capital? I am not suggesting that they set up a national Investment Board, as we should do, or anything of that sort. But by their influence, once the Government were armed with a plan, the right hon. Gentleman could put his hand on his heart and say," I am sure, on the best advice I can get and putting my own best construction on it, that the wise thing for the country to do with its available capital for the next five years is this and this and this," if that plan were before the City of London, he could persuade the City of London, if necessary by guarantees or in some other way, so to utilise our available resources in this country. I believe that it is only by so doing that we can bring ourselves into a state of international competition.

The right hon. Gentleman is fully aware, of course, of what the position is as regards the American steel trade, for example. It is estimated that between 1914 and 1926, 1,650 million dollars have been spent in rebuilding and modernising plant in the largest steel companies. Between 1926 and the present time an annual sum has been spent at the same rate. That is somewhere near 2,500 million dollars which have been spent in reorganising and modernising. That is the money the steel industry of this country has been crying out for and has been unable to get. If only there could have been some means of directing our available resources into those channels, we as a country would have been much better off now than we are by having invested it in the gramophone and artificial silk and wireless and mining companies which have been floated. This money, as the chairman of Courtauld's said, has entirely gone down the drain.

10.0 p.m.

There is a second aspect of this problem which we believe to be also of very great and fundamental importance. The location of industry is in some ways almost as important as the question of the planning of capital, because by suitably locating industries you can do a tremendous lot to economise in the public services of the country. Not only that, but you can economise very greatly in the transport services, the dock services, all the services which are connected with an industry of any size at all. The element of geographical directional planning is one which the right hon. Gentleman seems to be disposed to leave entirely to the competition of the local development societies or whatever they may be—truly a somewhat casual way in which to deal with what is very largely the real wealth of the country. I venture to suggest that if the right hon. Gentleman was running this country as a huge business he would not leave location casually to be determined by anyone who liked to come, to put him as the owner of the property to such expense as he liked, without giving him any return for it. He would, I know, as any good estate manager would, say, "If you want to put down a factory on my estate you must put it down here. This is the convenient place. It fits in with the plan of my whole estate," just as a town planning authority does in the case of a town plan. Such an authority would say" You must not put factories here or there; it is not convenient. It would be inconvenient for traffic, for drainage, and for lighting."

Surely it is just as important to this country that we plan its available resources, as it is to some town or some city to plan its development. I suggest to the right hon. Gentleman that that is a matter over which his Department could have a very large measure of control, without needing Any fresh legislation, and it is a matter which, taken together with the other side of planning, is one which would produce a very large financial result in economies which, I am sure, the right hon. Gentleman desires to produce as much as anyone else.

Then there is another Aspect of the industrial problem which seems to us to have been entirely overlooked, not purposely, perhaps, though there has been no public statement of how it is being tackled or approached. That is the displacement of men by what is called rationalisation. There seems to be a general opinion in the country that if we could return to the happy days of 1913 in volume of production, we should cure the unemployment problem. That, of course, is a complete fallacy. The degree in which the productive capacity of man has increased since 1913 is hardly understood by some people in this country. I was looking at some figures the other day for one of the biggest and most up-to-date coal mines in this country, and I found, to my vast surprise, that the production in that particular mine was 40 cwts. per man per shift. The production for the whole of the district in which the mine was situated was somewhere about 26 cwts. per man per shift, and would correspond with a figure of somewhere about 20 cwts. in 1913. It requires very few large mines, on the basis of 40 cwts. per man per shift, to halve the labour that was required in 1913 to produce the same quantity of coal, and even if you could bring up your production of coal to as much as it was in 1913—and I do not think anybody with the wildest hopes would ever think of getting any higher at the present time—you would still have a vast problem of unemployment in the mines.

I want to ask the right hon. Gentleman what is being done to tackle that problem. That has nothing to do with getting more coal sold. I am assuming all that. I am assuming for the moment that he gets all the extra trade that he wants or could possibly expect, that the effect of the tariffs is everything he hopes. He will still be met with quite a different problem of unemployment, a problem far more difficult of solution even than the one upon which he is engaged at the present time. The one upon which he is now engaged is the one which arises from the cycle of trade, with depression and prosperity. That can be cured to the extent that the prosperity can replace the depression and more men can be drawn into employment, but the continual effect of rationalisation will always stand out beyond and outside that problem, and the longer we live the more we shall see the effects of it. Some day or another the right hon. Gentleman or someone has got to think out an industrial policy which is going to cope with that question, and not merely with the question of increasing the markets up to the state that they were in, say, pre-War.

In that connection, it becomes necessary, obviously, for the right hon. Gentleman to concentrate upon the consideration of completely new industries which have got to take up some of these men who can never hope, under any circumstances, to get replaced in the industries in which they were formerly employed. In that respect there is one opening which was at one time being explored by the Government, and I should like the right hon. Gentleman or the Parliamentary Secretary to tell us what is happening as regards it now. That is the problem of oil from coal. It is a problem, as I know, of great difficulty. I have had the privilege of having many talks with Mr. Bergius, the original inventor of it. I think I have seen all its history, from the time of Mr. Bergius's first patent. But the period has now come when, according to the speech Sir Harry McGowan delivered this afternoon at the Imperial Chemical Industries general meeting, the problem has become one which is commercially possible. If I may read to the House a short extract from that speech, he said: The year saw the successful conclusion of an Agreement between I. G. Farbenindustrie, Royal Dutch Shell, Standard Oil Company of New Jersey, and your Company to form the International Hydrogenation Patents Company. This agreement was ratified in April, 1931. … All patent difficulties have been eliminated. As the right hon. Gentleman knows, they were one of the chief things in the way. The pooling of information and complete exchange of operating experience have produced a great improvement in the process for production of petrol from coal and liquid coal products, and have also enabled us to test British coals on plants alternative in design to our own. That is no doubt the great German plant set up by the I. G. Farbenindustrie. The full scale development of synthetic petrol will come in due time, stimulated by the national advantages which will arise from the establishment of the industry—strategic security, reduction of unemployment, relief to the national balance of payments, benefit to the coal-mining industry, etc. Far-sighted action has been taken by this agreement—founded, as it is, on an impregnable international patent position. I suggest to the right hors. Gentleman that the time has come when this scheme, which has been talked of for so long in this country, owing to the patent situation and to nothing else—it is time that the Government took a definite hand in encouraging and assisting this scheme, which I believe no private company, however powerful, can carry through without Government assistance. As the right hon. Gentleman will know, I should like to see it carried through by, the Government itself entirely, but it is a system that, if it is to be started, must have a very large capital invested in it. A capital of something like £10,000,000 is about the minimum which is any use. But the problem which the right hon. Gentleman has to solve as regards the workers displaced by rationalisation is a problem so serious that the expenditure of £10,000,000, even on a chance of its succeeding, is, in our submission, very well worth while.

We are dealing here with what may be an enormous permanent charge on the State, a problem which is of great difficulty, and as far as we know at the present moment, unless the right hon. Gentleman has other ideas, there is no really large suggestion of a new industry before the country except this one. I feel confident that if the right hon. Gentleman inquired into it and was satisfied, as I think he would be, that technically it is perfectly sound, the country would be quite prepared to back a scheme which would lead to a very large increase in employment, not only in the coal industry itself, but in the operating industry that was connected with the actual production of the oil, the refining of the oil, and so on.


The hon. and learned Gentleman is now discussing a matter of first-rate importance. I am very grateful to him for raising the subject, but is it not the case that even now, when the patents difficulty has been straightened out, there is a complete gap between the actual cost of the synthetic petrol and the market price of petrol which is in commercial use? We have considered the matter from the point of view of capital expenditure and from the point of view of its being self-supporting, but if the hon. and learned Gentleman has any light to throw on the latter question, I shall be grateful to have it.


I am obliged to the right hon. Gentleman. He knows the figures, no doubt, very well, as regards the question of cost, but that is one of the reasons why it is absolutely essential for the Government to take part in it, because it is quite impossible for any artificial oil of any sort or kind, at present; prices of raw oil, to compete in any country; but, on the other hand, petrol has a considerable and large tax upon it in this country at the present time—and we should, I think, agree that if it was for the purpose of starting up a new industry of this sort, which is of vital importance to the future of the country, in these circumstances, with national control, of course, such a tax would be perfectly justified.

I am sure the right hon. Gentleman will tell us whether there is any hope that something of this sort may eventuate or whether there are any other plans which the Government have of dealing with this particular side of the problem, for the men who are permanently displaced by rationalisation in the industry altogether, apart from those who are tern porarily displaced by reason of the particular features of the depression in trade at the present time. We feel that it is not satisfactory for the National Government merely to introduce a tariff policy and then settle down in contentment. The vested interests, having obtained what they wanted, have left the House, and have no further interest in the discussion of industrial matters. We are discussing them with half-a-dozen or 10 people sitting on the National Government Benches. We do not believe that that is a satisfactory state of affairs, but that some really active policy should be carried on now that the tariff is here by which at least the country may be informed of its best interests, which nobody knows at the present time. Nobody can tell—I am sure that the hon. Gentleman who is going to reply is quite incapable of telling me—whether it is better for the country at the moment to spend £10,000,000 on the coal mines or £10,000,000 on steel, if there is £10,000,000 available, or on cotton, or agriculture or any other industry. We believe that if some plan of that sort could be worked out by the Government, it could be used for directing the wealth and energies of the country into the most profitable channels, and could avoid the very waste which the right hon. Gentleman and we also are so anxious to see avoided in this country.


The Committee will have listened with great interest to the stimulating speech which the hon. and learned Gentleman has delivered, raising, as it did, a great many considerations, which must give rise to forebodings in the minds of all thoughtful persons, as, for instance, what is to be the outcome of a system under which fewer men can produce more and more. If one could give a really succinct answer to this and similar questions, it would help more quickly to dispel the depression in which the world finds itself to-day. But I would not be so presumptuous as to offer a facile solution to such very interesting queries. Unlike the hon. and learned Gentleman, to whom I hope to give some satisfaction, I propose to follow the arguments of my hon. Friend the Member for East Edinburgh (Mr. D. Mason), for on this occasion—and I congratulate him upon it—he made a speech which was appropriate to the Vote we were discussing. He dealt with the question of the balance of trade, a phrase which has frequently been used in the discussion to-night, and still more frequently in discussions outside. The redressing of the adverse balance of payments has been the central task of the Government. It is that task which has absorbed all their thoughts and all their time, and which has inspired all their acts up to the present moment. When the figures for the year were published, the worst forebodings were realised, and we found that we had an adverse balance of payments of £110,000,000.


An estimate.


Certainly, everything is an estimate unless one can gauge it with extreme scientific accuracy, which neither my hon. Friend nor myself can do with regard to these matters. But we can have general impressions, when our general impressions are not based upon preconceived notions. Our adverse merchandise balance last year was £411,000,000. The mere fact that you are receiving more in merchandise than you are sending abroad is not, in itself, a sign of calamity. But when the difference is not made up by other receipts, then, indeed, you are in a serious position. My hon. Friend would be the last to deny, for it is a matter of general knowledge, that our shipping receipts had declined, that our dividends on foreign investments had depreciated. That, I should have thought, even my hon. Friend would assume, inconvenient though it might be for the theory which he holds. The result was that, taking everything into account, we had an adverse balance of £110,000,000. Whether that adverse balance be exactly 110,000,900 within a few millions I will not bother to dispute with my hon. Friend, but that we had an adverse balance and that we had all the evidences of an adverse balance, in having to obtain credits abroad, and in a depreciated currency, is beyond dispute. It was desired by the electorate, indeed it was imposed upon us by necessity, that we should endeavour to redress this adverse balance of payments. There were only two ways of doing it. [Interruption.] My hon. Friend has made so many speeches on this subject that I really am acquainted with his arguments.


I am sorry to interrupt my hon. Friend, but when he speaks of those credits abroad he is really misleading the Committee. Those credits that were obtained in October last year were not to redress the adverse balance of trade or the adverse balance of payment. They were for the purpose of supporting the pound.


Whether or not they were to redress the adverse balance of trade, they were to get rid of the inconvenience of the adverse balance of trade, and the whole policy of this Government, a policy which was desired by the electorate and imposed upon us by necessity, was to adjust the adverse balance. That could only be done in one of two ways—by reducing our purchases or by increasing our sales, or by both. The Government undertook the first part of that task in the Abnormal Importations Act, the result of which has been that we now can look at three clear months, and for those three clear months we have imported £15,000,000 less of manufactures than in the corresponding three months of last year. Even when one takes the exports into account, we have diminished our adverse balance of merchandise trade in the period by not less than £4,000,000. That is a very considerable achievement. My hon. Friend says there is no such thing as an adverse balance of trade—


Hear, hear!


—that there is no problem at all—


Hear, hear!


—and that there is no crisis.


Hear, hear!


If it had not been for the crisis, how does my hon. Friend explain his presence in this House? [HON. MEMBERS: "Hear, hear!"] Hon. Members opposite need not cheer. The crisis also explains the absence of so many of their colleagues. These matters, says my hon. Friend, settle themselves. Neither a nation nor an individual can buy more than it or he can afford. That is the argument of my hon. Friend. He says that you need not bother. I suppose you need not bother to balance the Budget. Taxes, in some mysterious way, will provide themselves. In the end, things reach a level. But it was not the policy of the Government to allow these matters to take their own course and, in the meantime, involve this country in a vast unemployment problem and in many other calamities. Accordingly, we have succeeded in reducing our adverse balance of trade. We have concentrated on keeping out of this country manufactured goods which, generally speaking, can be made here. What has been the outcome of that policy? In the industries which we were able to assist, a great improvement is registered. You cannot, I agree, protect shipbuilding in that way, but you can protect your textile industries. The consequence has been that you have given the home market almost entirely to the woollen and cotton industries and—it is one of the factors—there has been a decrease in unemployment in the textile industries since last September from 38 unemployed out of every 100 men to 20 unemployed men out of every 100 men. That is to say, that out of every 100 employed in the textile industry 18 who were out of work have got back. In the cotton industry 45 men in every 100 were out of work last September; now there are 23 out of work out of every 100. In the woollen and worsted industry the 35 per cent. of unemployment has been reduced to 15 per cent. Surely that is a result which is worth producing.


Does not the Parliamentary Secretary see that the large increase has been in the export trade, particularly to China. Does he suggest that it is all home consumption?

10.30 p.m.


No, I said that it is one of the factors to be considered; otherwise, how does the hon. and learned Member explain the improvement in the woollen industry, where exports have not increased in the same manner? All that my hon. and learned Friend is proving is that you can reduce imports without damaging your export trade. The hon. Member for Aberdare (Mr. G. Hall) was sceptical about the increase of employment which has occurred generally in the country. I do not want to exaggerate the facts. The hon. Member asked me to give him the exact figures. I was under the impression that they had been given by my right hon. Friend, but I am willing to oblige him. At the end of September, 1930, there were 9,646,000 persons in employment in this country. At the end of March, 1931, there were 9,383,000 persons in employment, a reduction of 263,000. That reduction was intensified by September of 1931, when the numbers in employment fell to 9,326,000. To-day there are 9,549,000 persons in employment, an increase of 223,000 on September of last year and also an increase on March of last year. Therefore the policy of His Majesty's Government cannot be said to have resulted in any decrease of employ- ment. In fact it has helped those industries which were susceptible of being helped. I will put it no higher than that. It has not penalised the consumer because there has been no general rise in prices. I am anxious to give the hon. Member for Aberdare, who made a most serious contribution on the position of the coal industry, complete satisfaction in regard to the questions he addressed to me. He asked: "Where are these mysterious industries; can the Parliamentary Secretary tell me where these new industries are to be found?" Certainly I will tell the hon. Member. In Greater London there are 30, of which 13 are in London itself, 10 at, Slough, three at Cricklewood and four at Welwyn. In Lancashire and York-shire there are five new industries; in the Midlands, six, and in other areas, two, making 43 in all. I quite understand the dilemma in which hon. Members opposite find themselves. In the first place, they disapprove of these industries altogether. In the second place, they plead, "Why do they not come into our constituencies?" In so far as hon. Gentlemen have been disappointed at not receiving new industries in their constituencies, I can only say that there are no sanctions possessed by the Government to oblige any particular undertaking to establish itself at any particular spot. Naturally, any undertaker of a new industry will have regard to the rates, to the general conditions in the neighbourhood, to the rigidity of trade union restrictions—[HON. MEMBERS: "Oh!"] I am giving an absolutely veracious account of what has been represented to us. I am not endeavouring to make any capital out of it; I am stating it, because we can benefit by experience. Some of these applicants who come to Government Departments for permission to bring foreign experts here say that they have a definite objection to particular areas because they understand that the trade union regulations in those areas are not sufficiently adjustable for their purposes, and, as I say, we have no control over them, nor can we compel them to go to any particular spot. I am answering the questions that were put to me.

I was further asked what we were doing to assist these areas by more persuasive methods. My right hon. Friend has narrated to the Committee that in each area there is a development council. Originally many of these councils were established in cities or towns. They have been brought together, as far as possible, into regional and area councils. A further step towards consolidating them—a matter in which the hon. Member for Limehouse (Mr. Attlee) was interested—has been made quite recently. The Travel Association has now changed its name to the Travel and Industrial Development Association. It is partly assisted by a Government grant and my hon. Friend the Secretary of the Overseas Trade Department is chairman of the executive committee. The object is to unify the advertising of the various areas abroad. The surveys upon which I was questioned have now all been received by the Board of Trade. The Government take no credit for their initiation. The credit is entirely due to hon. Gentlemen opposite. The surveys are now in the printers' hands; they will be made public and the development associations will be provided with all the information which they contain. That I think answers most of the interrogatories directed to me on this point and I chink the answers show that the Government are not, in the least, disinterested in the movement.

The hon. Gentleman next referred to our export trade of which he gave a very doleful description. The hon. Member for East Edinburgh—if I may venture to refer to him again without causing him to rise once more and interrupt me—if I appreciated his argument, said that the only thing which mattered was the aggregate of trade. Surely, the only thing that matters is the volume of the trade. When prices have fallen you may still have an equal amount of trade although you appear to be suffering from a decline, which is the position with our export trade. The facts are that from the autumn of 1929 until August, 1931, there was a continuous decline in our export trade, which fell in that month to £29,000,000, or under one-half what it had been in the year 1929. Since August there has been an increase in our trade, slight though it be, and it has reached £31,000,000 as compared with £29,000,000, and this in spite of the decrease in prices. In an unstable world, our exports have remained stable, and when my right hon. Friend drew attention to the fact that the exports of all competing countries had suffered considerably in comparison with our own, he was not rejoicing, as the hon. Gentleman endeavoured to represent, at the miseries of others, but was giving an illustration of the remarkable resilience of our people and of the success with which they had surmounted the obstacles that others had failed to overcome. It was not taking to ourselves undue pride or displaying any conceit.

Many speeches have been made to-day illustrative of the difficulties with which our export trade is confronted. The hon. Member for Aberdare (Mr. G. Hall) laid very great stress upon them. They take many forms. I was asked to give some particulars, but I do not wish to trouble the Committee by offering a catalogue of particular countries which have placed obstacles in our way. I could give a list of a number of countries which in the last few months have increased their tariffs. That is one difficulty, but a tariff offers an obstacle which is equal to all countries alike. I have a very few examples of countries that have reduced their tariffs, but I have a very conspicuous one in Australia.

Not only have tariffs been raised, but measures have been taken against this country on the ground that we have a depreciated currency. That is another difficulty which faces us, from which some of our competitors are entirely liberated. A third difficulty is the exchange restrictions which have been placed on the payment for our goods when they are sent to a very large number of countries. That is really a very serious problem.

Lastly, there are the quota restrictions and the various kinds of import controls. This quota method is a comparatively new method, and, when one discusses it, one is conscious of being relevant to a great deal that has been said this evening. Why, say hon. Gentlemen opposite, have you not a plan to improve your industries? Our difficulty is not to produce more or even not to produce with greater competitive facility. We are now producing at competitive prices, as the figures of our export trade indicate, but where you have a quota system in operation against you you are confronted with something which is quite novel. It does not matter how you reorganise your in- dustry, you cannot get into another country goods in excess of your quota. Unfortunately, our writ does not run in those countries, and when a country discriminates against us, when we get a quota which is not in proportion to our entitlement, we have a right to protest. It is in such circumstances as that that we have protested against certain quotas. We had a very remarkable maiden speech from the hon. Member for Morpeth (Mr. G. Nicholson), a speech which will render the greatest service to this country if it be printed abroad. After giving a very accurate analysis of the reasons why we take exception to the coal quotas of France, Germany and Belgium, he expressed an indignation which is common to the whole British people, and I hope note will be taken of his remarks. He suggested that the proper solution of the difficulty was to enter into bilateral commercial agreements with certain foreign countries in exchange for mutual advantages. It has already been announced that we will not undertake to enter into any commitments of that kind until after the conclusion of the Ottawa Conference, and, of course, we cannot recede from the declaration made on that point.


I suggested that negotiations should be started.


Yes, we cannot enter into formal negotiations, but I can assure the hon. Member that conversations have taken place, and we have a pretty shrewd idea of the directions in which it may be advisable for this country to advance, but everything, of course, depends upon the Ottawa Conference. We are just as conscious as the hon. Member for Aberdare of the great hurt that these coal quotas do to our people, and the reaction they have on employment in this country. Although I am not a member of the Opposition, I will elaborate the criticisms which he himself made on these quotas. From the beginning of the imposition of the coal quotas in France, Belgium and Germany we have suffered a reduction of 340,000 tons a month in our export trade, and the further contractions that now menace us will be responsible for another 250,000 tons a month. The reduction of 340,000 tons already suffered means unemployment for 16,000 miners in this country, to say nothing of trans- port workers, dockers, seamen, and workers in other trades involved; and the further reductions with which we are now threatened will be responsible for another 12,000 miners becoming unemployed. The value in pounds sterling of the losses which we have suffered and are about to suffer represents an export trade of over £5,000,000 per year. So we are painfully aware of what these quotas mean, and I ask the Members of the Committee, and specially my hon. Friend the Member for East Edinburgh, who has given so much reflection to these matters, whether the old doctrine that imports pay for exports can be true when artificial limitation is placed upon the means of payment. We can receive as much as France, Germany and Belgium will send us, but we cannot send another scuttleful of coal to those countries. In that case how can exports pay for imports? A great change has come over the world.

A further question I was asked on this point concerns the arrangement made under the Hague Protocol in accordance with which Italy was to take from us 1,000,000 tons of coal a year for three years. In the year 1930, Italy took 972,000 tons under that agreement. In 1931—the year for this purpose ends in April—she has taken 830,000 tons. The Italian State railways are on the very best understanding with the South Wales coal trade, and we have no reason to anticipate that there will be any desire on the part of Italy not to fulfil those obligations, and, if possible, to renew them.

I have painted the darker side of the picture. To compensate for our loss of coal exports to the countries with which f have been dealing, I would like to say that Scandinavia has increased her purchases of coal from us for January, February and March, as compared with the equivalent period last year, from 724,000 tons to 896,000 tons. Canada has almost doubled her purchases, and Brazil has more than doubled hers from 123,000 tons to 287,000 tons. Russia—if I dare mention that country—has purchased 49,000 tons in the same period this year, as against 6,000 tons last year. This, to some extent, has compensated us for the damage done elsewhere, and partly explains how we have managed to keep in employment such a large number of miners.

The measures taken to rectify the adverse balance of payments have not met with the misfortunes which were predicted. We have taken a further step. We passed an Imports Duties Act and there was included in it a provision for the taxation of food, but not to the extent which has been represented. We were told that as a result of that action the price of the people's food would mount immediately. Such items of the people's food as are affected by that taxation have been carrying that penalty now for more than a month. The hon. Member for North-East Bethnal Green (Major Nathan) played a very useful part in the Debates, and I am pleased he did so because we were short of critics. He performed a very necessary constitutional service by putting the contrary point of view. In one imaginative passage he told us that the wolves of Protection were about to stalk through the land. The foodstuffs I have mentioned have been subject to the wolves of Protection for one month or more. I cannot give the result to the Committee with extreme accuracy, because the index figure has not been published, but it will be published in a few days' time. All I will say is that I should not be surprised that the cost of foodstuffs will be found to have reached as low a level as it has ever reached since 1915, and the country will find that the wolves of Protection are quite tame. Whenever the Government try to deal with a practical problem, it is always possible to divert attention by indulging in generalities. I am not going to dispute now the doctrine put forward by the hon. and learned Member for East Bristol (Sir S. Cripps) about the merits of Socialism, because it is not necessary for me to do so, but I deny that we intended these tariffs to be used as a screen behind which inefficiency could flourish. That was the question which the hon. and learned Gentleman put to me.


No, I did not suggest that. I asked what the hon. Gentleman's Department was doing as regards the organisation of industry behind the tariff.


I do not think the new version of the question differs very much from the old. I do not want to do the hon. Member an injustice, and I will answer both questions. We do not consider it to be the function of a Government Department to run industry. We believe that industries are quite capable, or ought to be quite capable, of running their own affairs. The hon. and learned Gentleman will realise the disaster that would overcome the Socialist party if the day came when it was run by Liberals. Every man to his last. Intelligent, capable and energetic as the Civil Servant is, his task is to run the Civil Service and not industry, but where industries can indicate to the Government how the Government can assist them by removing obstacles in their path, there they can and do come to us, and we have endeavoured to assist them. We have given them the conditions in which they should secure their own efficiency. If they fail, then will be the time for hon. Gentlemen opposite to come to us and say, "Look at the deplorable condition of this or that industry," and it will be for the Government to consider whether they should take away from that industry the boon which has been offered to it, or should make other proposals. But in the first place we have been concerned with the very urgent task of stopping the leak in the roof, and not with arranging the disposition of the furniture inside. We have been doing that with great efficacy. We do not ask to he judged in accordance with any high moral principles. We only ask to be judged by the results.

Motion made, and Question "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to. —[Sir George Penny.]

Committee report Progress; to sit again To-morrow.

The remaining Orders were read, and postponed.

  1. ADJOURNMENT. 17 words
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