§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)
I beg to move,That the Order, dated the 19th day of April, 1932, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the 21st day of April, 1932, be approved.
§ The Motion which stands in my name— [Interruption.]
§ Mr. SPEAKER
I must ask the hon. Member for Dumbarton Burghs (Mr. Kirkwood) to allow the Debate to proceed without interrupting.
§ 3.30 p.m.
§ Mr. CHAMBERLAIN
Whatever reasons may be adduced against this Motion, it cannot at any rate be said that, either as regards the procedure which is being followed or as regards the nature of the Order itself, anything is being done which was not foreseen and. indeed, expected, even by those who felt it to be their duty to oppose the proposals in the Import Duties Act. I may remind the House of some words which were used by my right hon. Friend the Home Secretary, speaking on the Ways and Means Resolution on the 4th February. He said, in relation to the Advisory Committee which is set up under that Act:It is free to propose duties upon any article, except those in the Schedule of Exemptions, and duties of any amount; there is no limitation—20, 30, 40 or 50 per cent.; and for any period.He went on to say:That Committee, in order to avoid obvious inequalities between this trade and that, will have to treat them substantially all alike.A little later still he said:The House of Commons itself, in order to avoid the importunities which would beset it, will be expected to pass and to sanction the whole of those duties in a single Order."—[OFFICIAL REPORT, 4th February, 1932; cols. 328–9, Vol. 261.]Although my right hon. Friend was, perhaps, not equally happy in all the prophecies which he made on that occasion, it will be agreed that he anticipated with singular accuracy the course of events which has in fact followed. The Order made by the Treasury is, of course, founded upon the recommendations of the Advisory Committee under the Import 1122 Duties Act. I remember that, in the course of the proceedings in Committee, I was asked, I think by the hon. Member for Rothwell (Mr. Lunn), to give some assurance that the recommendations of the Committee would be accompanied by sufficient data to enable the House to form a judgment on their value or otherwise, and, although I was not able to accept the Amendment which he moved at that time, I did give him an assurance which was sufficiently satisfactory to enable him to withdraw his Amendment. I think the House will agree that that assurance has been amply fulfilled.
The Committee have given us an exceedingly frank and full report, in which they have set forth quite clearly the considerations which have influenced them in making their recommendations. They point out that, under Sub-section (2) of Section 3 of the Act, it is evidently contemplated that duties at a higher level than the 10 per cent. should be imposed upon a wide range of imports, and they go on to indicate two courses which it seemed to them were open to them to follow. The first course was that they should take each industry in turn, and that they should make an exhaustive examination of it and an investigation into its relations with other industries, in order to arrive at a conclusion as to the duty which would be appropriate to that particular industry. The other course was to try to cover as early as possible the widest field, and to do that by means of a series of recommendations of a more general character. They say that, as is, I think, perfectly clear, the first course would have necessitated very considerable delay in dealing with the bulk of the industries of the country, it would have left them all in a state of complete uncertainty as to what was to be their fate, and it would have presented opportunities, which no doubt would have been taken advantage of, to introduce a flood of imports into this country such as that with which the Abnormal Importations (Customs Duties) Act was passed to deal. In these circumstances, although they recognised that the second course would probably involve mistakes and errors in detail, in classification and in categories, those mistakes, after all, could rapidly be corrected as soon as they had been established, and they felt that the dangers and risks involved in that course were altogether out- 1123 weighed by the risks involved by the delay which would have been caused if they had taken the first course. I think the course adopted by the committee will commend itself to the general approval of the House, and I will proceed, therefore, to examine the proposals which they have made.
The House will see that, leaving out for the moment foodstuffs, the proposals cover by far the largest part of the manufactured goods which are imported into this country. The committee have divided the articles into four different categories. The bulk of them, containing the finished articles, are to be subject to a general levy of 10 per cent. in addition to the 10 per cent. ad valorem duty, making a total of 20 per cent. Then there is another class which embraces agricultural machinery and tools, a considerable range of building materials, cordage, ropes and twine, and some other articles, to which the committee have felt that a lower rate of duty was applicable; and for that category they have recommended a total, including the general ad valorem duty, of 15 per cent. Rates of 25 and 30 per cent. in all are proposed for goods of a luxury or semi-luxury character, and, finally, there is a small class, excluding for the moment iron and steel, to which it is proposed to apply an additional duty of 23⅓ per cent., making a total of 33⅓ per cent., because these are articles, like some bicycle parts and certain chemicals, which have obvious affinities with other articles already subject to a duty of that amount. That is the general plan of the committee's proposal.
I am quite aware that some of my hon. and right hon. Friends behind me would probably have desired to see a higher level of duties proposed than that which the Committee has actually put forward; but the Committee have given a number of reasons, which I am bound to say seem to me to be adequate, why we should not attempt to make the general level higher than 20 per cent. On the other hand, hon. Members will no doubt have in mind the fact that the present depreciated value of the pound has a protective effect which must be taken into account in considering the total result of these proposals. Further than that, I would call attention to paragraph 19 of the Committee's Report, in 1124 which they intimate that certain cases have already been brought before them which, prima facie, would appear to justify a claim for a higher duty on particular lines, and, therefore, while the general level is laid down by the Committee at 20 per cent., they do not exclude the prospect that further investigation may induce them to propose higher additional duties than 10 per cent. in the case of individual items. In any case, of course, I need hardly remind the House that, under the Statute which we have already passed, the Government have no power to impose duties at a higher rate than is recommended by the Advisory Committee, and, therefore, if in any industry it is felt that the duties proposed are insufficient, and that higher duties would be justified, it is for the representatives of that industry to make their case to the Committee, and not to Members of the Government.
Of course, it may be said, at any rate, if the Treasury had no power to make an order imposing higher duties, it was not obliged to take this level but could have imposed duties at a lower level. That, of course, is true. On the other hand, when this House has set up a judicial body of the kind and character of the present Advisory Committee, free from all political pressure, to make its recommendations in what it believes to be the best interests of the country as a whole, I think it will be agreed that a very strong case would be necessary to justify the Government in declining to accept the Committee's recommendations and in imposing duties at a lower level in accordance with its own views. But in the present case I must say I do not think the evidence shows that these duties are too high. On the contrary, I should say they are on a moderate scale. I have already quoted the Home Secretary as anticipating, before the Committee had been set up, that it might recommend duties as high as 50 per cent. I do not know whether he meant 50 per cent. in addition to or including the 10 per cent. ad valorem duty, but in either case that was a good deal higher than the Committee have actually recommended and I have no doubt, therefore, that my right hon. Friend and those who agree with him are astonished and gratified at the moderation that the Committee has shown.
1125 I notice that in the Amendment that has been put down by the Opposition there is no expression of opinion as to whether these duties are too high or too low. They confine themselves to expressing the view that the proposals are hasty and ill-considered. I have no doubt they have taken pains not themselves to fall into the error which they profess to have discovered in the proposals of the Advisory Committee, and I hope that, in the course of the discussion to-day or to-morrow, they will give us the proofs of the leisurely and thorough consideration which, no doubt, they have given to the question. If they consider that a general level of 20 per cent. is hasty and ill-considered, will they tell us what they consider would be a well-considered and proper duty to impose? Should it be 10 per cent., should it be 5 per cent., or should it be nothing at all?
§ Mr. CHAMBERLAIN
I am glad I have extracted an opinion, even if it is not an official opinion. I hope we may have either confirmation or contradiction of that view in the course of the Debate to-day. Perhaps at the same time, if it is a fact that the Opposition would have preferred either lower duties or no duties at all, they will give us some indication of where they would find the revenue to make up the gap which would be caused.
§ Mr. CHAMBERLAIN
Because, although the amount in question here is only £5,000,000, we know that the official Opposition are also prepared to abolish the last increase in the Beer Duty, which means another £10,000,000, and also to abolish the means test, the cost of which it might be difficult to estimate, but which would certainly not be less than the £5,000,000 and the £10,000,000 together and, therefore, the gap of £30,000,000 which the hon. Member thinks it would be quite easy to fill—
§ Mr. CHAMBERLAIN
No doubt their proposal will neither be hasty nor ill-considered. Perhaps they will let us know what is their plan for providing the extra £30,000,000.
1126 I pass to one or two other points which arise out of the recommendations. In the first instance, I have noticed some criticism of the proposal on account of the fact that, with one or two exceptions, they do not propose any additional duties upon foodstuffs. Here again the Committee have given in the course of their report reasons, which I do not think the Opposition will consider either hasty or ill-considered, why they have not gone beyond a very narrow range of foodstuffs on this occasion. They have pointed out the importance of foodstuffs in the general cost of living, but, further, they have drawn special attention to what I have no doubt is very much in the mind of hon. Members, namely, that the question of foodstuffs is bound to play an important and perhaps a predominating part in the conference that is to take place at Ottawa later in the year and, in view of the fact that that conference is to take place, and that the whole subject of foodstuffs from the Empire as well as those produced in this country must be there discussed, and conclusions must be there arrived at, the Committee have felt, I think rightly, that it would be premature to lay down proposals at this stage, and that the matter must wait for further consideration after the conference has finished.
I might, however, allude to one particular item among the foodstuffs that are dealt with, namely, condensed and sweetened or slightly sweetened milk. There is a rather long and perhaps complicated provision for the duty which is to be imposed in that case. The explanation of it is that the duty upon sweetened condensed milk is at present a duty upon the sugar content of it and, therefore, it is no protection to the producer of sweetened condensed milk in this country. I am advised that the actual amount of the duty on the sugar content is equivalent to about 12 per cent. at present on the value of the article itself, and the result of that is that there is no protection for the home manufacturer. The result of the Committee's proposal is that he will get a 10 per cent. protection, as in the case of any other article on which there are no additional duties placed.
I pass from that to the question of machinery. The Committee have evidently ' been very much impressed with the im- 1127 portance of the question of machinery. Machinery is among the most important productions in this country. There is hardly any class of machinery that is not produced here, and as a finished article machinery would naturally take its place in the category to which a 20 per cent. duty is applicable. If these proposals had been hasty and ill-considered, the matter might well have been left there, but the Committee have had in mind that although, as I have said, machinery of almost every class is produced in this country yet in many classes there are particular specialised machines which are not so produced here. Indeed, there are machines which are so specialised that a single factory can produce the whole requirements of the world, and in such a case obviously it is not to be expected that manufacturers would go to the expense of setting up plant or producing such machines in this country. On the other hand, the Committee is impressed, as the Government is impressed also, by the great importance of facilitating the equipment of factories in this country with machine tools or machines of any kind which may reduce costs and add, therefore, to their efficiency.
It certainly would be an unfortunate position if, in making this general scale of Import Duties, we were to render it more difficult for firms to import machines which they cannot procure in this country but which would enable them more effectively to compete with their foreign competitors either at home or abroad. That is a state of affairs which obviously calls for some special revision, and therefore the Advisory Committee have recommended that dispensing powers should be given to the Treasury, which, by licence, may admit some of those special machines free either of all duties or of the additional duties upon the recommendation of the committee after consultation with the Board of Trade, and subject to the conditions which the House will find in page 7 of the committee's report. It is probable that at first the classes of machinery which will be the subject of those special and exceptional licences will be considerable in extent, but the Committee express the view that as they are able to pursue their investigation it will be possible to narrow the field, and, I think it is obviously desirable that the 1128 field should be narrowed as soon as possible and as much as Is compatible with the particular objects we shall have in view.
In speaking of the class of articles which would be subject to the 33⅓ per cent., I said that I was leaving out for the moment the question of iron and steel, but I should now like to say a few words about that industry. The iron and steel industry has been the subject of two very complete and exhaustive inquiries, one by the last Labour Government and one by the last Conservative Government. Both of those inquiries served to show how very complicated and difficult is the whole subject. The industry is one of very wide ramifications and it is one which is inextricably bound up with a very large number of other industries in the country. The Committee, however, express the view that the maintenance of the iron and steel industry in this country at the highest possible pitch of efficiency is not only essential for the economic progress of the country, but is also vital to its security. On the other hand, they are of the opinion that in view of the complexity and difficulty to which I have alluded, it would not be possible for them even to sketch out the main outline of a permanent system of Protection for the industry without a very much more detailed investigation than they have yet had the opportunity of pursuing.
It is for that reason, in order to avoid hasty and ill-considered proposals, that the Committee, instead of attempting to put forth a plan which is not thoroughly considered in all its aspects, have recommended a temporary and provisional arrangement under which certain products of the industry, which will be found detailed in the Second Schedule, shall be subject, for a period of three months, to an Import Duty amounting in all to 33⅓ per cent. At first sight it may seem paradoxical that these products, which are semi-finished products, should be subject, even for a short time, to a higher duty than the finished products which, of course, will be subject to the 20 per cent. duty. But I think that the purpose of the Committee will be clear if the House will consider that it is analagous to the operation of the Abnormal Importation Duties. That temporary arrangement is not so much 1129 protection as to give an opportunity for the situation to remain stable while the committee are pursuing their further investigations.
There have been in these particular articles very heavy importations during the last few months. I notice, for instance, taking as an example the figures of sheet bars, that the average monthly import in 1931 was 60,000 tons, but in the four months from November of last year to February of this year the imports amounted to 80,000 tons a month. And if I take the whole total of the articles which are comprised in the Second Schedule, I find that whereas the average monthly import in 1931 was 186,000 tons, in the four months from November to February it was 219,000 tons, which is an increase over the average of last year of 18 per cent. That shows, in the first place, that it was necessary to take some special steps to stop this abnormal importation, and, in the second place, it indicates, what is, I believe, in fact the case, that very large stocks have been accumulated in this country and that consequently we need not be under any apprehension that the trades which use this particular class of material will suffer in any way from the prohibition of imports during the short time which the Committee ask in order that they may pursue their inquiries.
The consideration of the iron and steel trade brings me to another point of very great importance, and that is the question of efficiency. I notice that the Opposition in their Amendment assume a general inefficiency on the part of British trade. I should characterise that as a hasty and ill-considered expression of opinion. There is no foundation for such a sweeping charge against British industry. I will go further and say that the fact that in these most difficult times we are able actually to increase our share of the world's trade is the best possible proof that at any rate the bulk of British industry is exceedingly efficient. After all, it is exceedingly difficult for anyone who is not intimately acquainted with a particular industry in all its bearings and all its aspects to say what constitutes efficiency in that industry and how far it has or has not reached a proper standard. The House may remember 1130 that under the procedure of the old Safeguarding of Industries Act the committees which were set up in order to examine the applications of various industries had to answer a number of questions, and one of those questions was whether the industry was carried on with reasonable efficiency and economy. You have only to look at the reports of the committees in order to see the embarrassment the question caused. I do not think, as far as I remember, that there was a single case in which committees were able to say that a given industry was not carried on with efficiency and economy.
In one case they might, perhaps, have said that the efficiency varied as between one firm and another. In another case they might have said that it would probably be better if some amalgamations took place. But even if you could say that in the case of a particular industry efficiency had not reached its highest conceivable point, you would still have very great difficulty in laying down exactly what steps should be taken in order to reach that point. Let us take the cotton industry. Suppose you said that it was desirable that there should be extensive amalgamations and that redundant or obsolete plant should be eliminated. Yes, but a general statement of that kind cannot be laid down as the condition of granting a tariff to industries. If you are to do that you must go further and say what specific amalgamations are to take place, and on what terms they are to-take place. Anyone 'who knows the cotton industry will realise the difficulty of going into details of that kind.
No, Sir. We have to bear in mind, in trying to use our duties as a means of enabling and encouraging British industry to make itself more efficient, that if we are going to try to lay down the conditions of efficiency without which we will not grant a tariff, we may be withholding from the industry the very condition which is essential to give it the chance of reorganising itself. After all, there is hardly any case in which reorganisation of an industry does not call for the employment of a considerable amount of fresh capital. In circumstances such as those in which industry has been trying to carry on recently, the attempt to raise fresh capital has been almost hopeless. 1131 You can give a fresh opportunity to industry to put its house in order under the shelter of a tariff such as is proposed in the Order that I am now submitting. Then, at any rate, you have produced one of the conditions which will greatly facilitate the raising of the necessary capital.
While I have thought it desirable to point out to the House the exceeding difficulty of laying down beforehand the conditions of an efficiency which ought to be achieved by any particular industry, I do not want it thought that that means that either the Government, or the Advisory Committee for the matter of that are at all indifferent to the necessity of achieving the utmost possible efficiency. The views of the Government on the subject have been repeatedly affirmed by one Member after another, and I myself recollect that in enumerating seven objects which we hoped to achieve by our proposals in the Import Duties Act, we included this as one of them, and my right hon. Friend the Lord President of the Council has stated in the most emphatic manner that we do not intend that a tariff shall be allowed to shelter inefficiency. I am sure, from the conversations which I have had the opportunity of carrying on with the Chairman of the Advisory Committee, that the Committee, no less than the Government, fully realise the danger that an industry might, if given sufficient protection, be willing to sit down under the shelter of that protection and fail to take the steps for reorganisation and re-equipment which perhaps were recognised to be necessary.
Let us take the iron and steel industry as a case in point. If they are to be efficient they must not only be able to supply the requirements of the home market at a reasonable price, but their costs must be sufficiently low to enable them to compete successfully with foreign competitors both at home and in foreign markets. I say at once that, whilst we shall give consideration, and favourable consideration, to any recommendations which the Committee may hereafter make to us for the setting up of a permanent framework of a tariff for the iron and steel industry we shall not be satisfied unless, simultaneously with the granting of that tariff, we found that the industry 1132 was taking the necessary steps to reorganise itself and to put its house in order, without which it cannot hope to maintain a permanent place as one of the flourishing industries of the country.
I am happy to believe that in this matter there can be very little difference of opinion upon this side of the House, because I remember that my right hon. Friend the Home Secretary, although laying the greatest possible stress upon the need for industry not to be satisfied with a tariff but also to take steps to make itself more efficient, said that he would foe prepared to admit the claim that some. measure of security was necessary for them whilst they were embarking upon these steps, and that he would be prepared to give favourable consideration to granting them such security. That is really the proposal that we have put before the House. Whilst I do not want to be making rash prophecies, and whilst I recognise that reorganisation of such an industry as iron and steel is not a matter which can be carried through in a few weeks or even months but must be given a substantial interval, yet I certainly shall be extremely disappointed if before the year is out we do not see satisfactory signs that the new tariff which will be granted to them is being used for the purpose which I have described to the House.
There is another point in the Advisory Committee's report which, I think, has been the subject of some misapprehension. On page 10 the Committee state:Without giving any binding pledge in the matter, we desire to state that it is not our intention to recommend any reduction in the general level of protection now recommended, during the next 12 months.I noticed that my right hon. Friend the Home Secretary, in a speech at the National Liberal Club, complained of that statement, because he said it showed that it would be impossible for us to use our tariff as a means of bargaining or negotiating with foreign countries until after the expiration of that 12 months. I am Very glad to be able to relieve my right hon. Friend's apprehensions on that score. It is really a misunderstanding. Negotiations for commercial treaties with foreign Governments are not the function of the Advisory Committee. They are the function of the Government, and the 1133 Advisory Committee certainly would have been going beyond its province if it had indicated that in any way it was concerned with negotiations of that character.
It is true that if the Government enters into negotiations with foreign countries they will have to obtain the sanction of Parliament before putting them into operation, but they do not require to found themselves upon any recommendation of the Advisory Committee. Therefore, the fact that the Advisory Committee have stated that, so far as they are concerned, they do not propose to recommend any lowering of the general level during the next 12 months, does not in any way preclude His Majesty's Government from entering upon, and even concluding negotiations with that object, with any foreign country with whom it may seem desirable. But we have already made it clear, as the House is aware, that until after the Ottawa Conference we are not prepared to conclude any arrangements with foreign countries. Ottawa must come first, and we must see what is concluded at that Conference before we can usefully talk with other countries. Having once exhausted the possibilities which may accrue from our conversations with the representatives of the Empire, we shall be free to discuss commercial treaties which may involve the lowering of the duties in this country in return for a similar lowering of tariffs against us by any countries that desire to enter into negotiations with us.
Some distress and concern have been expressed on account of the sudden change from the 50 per cent. duty of the Abnormal Importations Act to the lower levels which have now been recommended. In so far as objection is taken to the suddenness of the change, I may perhaps remind the House that really, whether the change took place simultaneously with the issue of the new Order or took place when the Abnormal Importations Act expired on 19th May, made a difference of only about three weeks, and one can hardly think that that would be a very serious matter, whilst, undoubtedly, there would have been considerable difficulty in administration if you had had the two sets of duties running side by side. But in so far as the complaint is that the 50 per cent. ought to have been carried on, that really takes us back to the main 1134 question as to what the general level of a permanent protective system could be.
In any case, as I have said, it would not be in our power to alter the recommendations of the Committee in the upward direction. The Advisory Committee are independent of us. We are not responsible for their recommendations, and, whether we think they are right or whether we think the recommendations are too low, we cannot move them upwards. But there again, if industries are dissatisfied, it is for them to apply to the Advisory Committee, to make their case to the committee, and I know that the committee will be very willing to hear anything that may be said. On the other hand, from what I know of the lines on which the Advisory Committee is working, I think it is very unlikely that it will depart from the general idea of 20 per cent. being the level at which the bulk of the duties should stand, and I imagine that if any variation is to take place it must be rather in the direction of higher duties on particular lines than of any expectation that the whole level of duties will be raised.
I have dealt, I think, with most of the salient points in the Order, and I will sum up. I repeat that this Order is the logical, natural and expected sequence of the provisions of the Import Duties Act. This House has set up an independent and impartial body in order that the question of the rates of duties should be free from political pressure, and that the body which should be responsible for the recommendation should not be subject to the dictation of Ministers. Lobbying has been the curse of tariffs in other places and we do not want and we do not intend that we shall suffer in that way. We believe that we have ensured that result by the body which we have constituted, with its independent function. While, as I have said, the Government are not responsible for any of the recommendations that the Advisory Committee may make they do not, and they do not desire, to shirk their responsibility for putting these recommendations into operation. If the Opposition had attacked the Government on the ground that they ought not to have put these recommendations into operation I should not have had any complaint to make against them, but I do regret that they should have made the Committee the subject of what I consider 1135 to be an unfair and an unfounded charge, and I hope that the House will treat their Amendment with the censure which, in my opinion, it deserves.
The Committee freely and frankly admit that it is very probable they may make mistakes. They do not set up to be infallible, and at the same time they have said that it is their intention if those mistakes can be established to correct them without any avoidable delay. My belief is that the real objection of the Opposition is not to these proposals in themselves, not because they consider that they are hasty or wrong, but that they do not desire to see any proposals made at all. Thereby they show how completely they are out of touch with realities. In my opinion, the country is now determined to try out a system of moderate Protection such as is embodied in this Order. It is not satisfied any longer to listen to theories that have already been shown to be inapplicable to the conditions as they exist in the world to-day. The proof of the pudding is in the eating and by that test, and that test alone, we are willing to abide.
§ Mr. DAVID GRENFELL
I beg to move, in line 3, to leave out the words "be approved," and to add instead thereof the words:by protecting inefficiency and crippling the export trades upon the hasty and ill-considered recommendation of the Import Duties Advisory Committee will inflict lasting injury upon the country.My first duty is to offer a welcome to the Chancellor of the Exchequer after his recent indisposition. The Opposition appreciate the fact that the right hon. Gentleman always states a case as clearly as any man can state it, and we have not been disappointed in his presentation of his case to-day. We have certain comments to make on some of his remarks. He has stated that these proposals were not unexpected, and he quoted the prediction of the Home Secretary. I remember the speech of the Home Secretary on the occasion in question. He was then a prophet of woe, and not a prophet who gave his blessing to any proposal of this kind. I do not know whether the Home Secretary still wrings his hands in contemplation of what has come about, but I am inclined to believe that he will 1136 find words of condemnation for what is contained in these proposals. The Chancellor of the Exchequer went on to say that there were those who believed that a higher scale of duty should have been imposed. To my surprise, and I am sure it came as a revelation to the House, the right hon. Gentleman said that those who demanded higher duties could make their case to the Advisory Committee. I did not know that that opportunity was opened to those people, I do not think the House realises that it is open for anyone who wants a high scale of duties, or who can make a case for any special tariff, to go to the committee, uninvited, and to make a demand for a higher scale of tariffs. That is a new light on the question, and I believe it will play a very large part in deciding whether these proposals are to receive the approval of the House or not.
The right hon. Gentleman guessed that on this side we should have been better pleased to see Parliament doing its work without the Advisory Committee and without these proposals, and obtaining its revenue in the accustomed ways. He put a question to us, and I will put a question to him. He asked whether the Opposition would tell the House how they would obtain the revenue. He said that the revenue might properly be applied to the reduction of the Beer Duty and the abolition of the means test. Let me put a question to him. From the revenues to be collected under this Order do the Government propose to reduce the Beer Duty and to abolish the means test? That is a fair question to put in reply to the comment that the right hon. Gentleman made on our attitude. He taunted us with something which we do not deserve. He said that on this side of the House we hold the general opinion that industry in this country is inefficiently run. We do not hold that opinion. A very large number of us have been working in industries, and we know quite well that our industries are not altogether badly managed.
The right hon. Gentleman referred to iron and steel and other industries. He knows that efficiency in industry is not a static condition. It is a comparative condition, varying from place to place and time to time. What is efficiency to-day may be inefficiency to-morrow, and what is efficiency in one place may be inefficiency in another. There are people 1137 who know a great deal about the iron and steel industry, and it must be admitted that in that industry there are foreign firms working with greater economy and able to produce iron and steel and steel products at a cheaper rate than we are able to do in this country. We blind ourselves to the real problem of the iron and steel industry if we do not recognise that there is a good deal to be done in the improvement of our equipment and plant.
§ Mr. GRENFELL
I would rather not give way. I have a long way to go, and I do not want to be interrupted. The right hon. Gentleman made other comments. We are surprised at the rapid evolution that has taken place on the other side of the House and the very great distance that has been travelled in a very short time since the General Election. A Government composed of the most conflicting elements came back from the electoral battlefield, with an unprecedented majority of Members, representing for the time being the greater part of the people of this country. They had a majority to save the pound and to maintain stable conditions of finance and trade in this country. Many people voted for a National Government who would not have voted for it had not that condition of things prevailed. There was no strong feeling in the country in favour of Protection. Judging from the speeches and manifestos of the Prime Minister, tariffs were not the major issue at the election. I have taken the trouble to read the Prime Minister's speeches, and tariffs were certainly not the major issue. Viscount Snowden has always been, and apparently is, a most inveterate opponent of tariffs of any kind. He is a Free Trader, as is the Home Secretary, or he was until very recently. I am waiting to hear his speech to-day.
Those two statesmen have declared their opposition to tariffs, again and again. I would ask them whether the electoral battle was fought to establish Protection in this country. What about the hon. and gallant Member for Bournemouth (Sir H. Croft) and the right hon. Member for Sparkbrook (Mr. Amery)? Do not let them forget, and do not let any hon. Members forget, that there would have been no Tory majority in 1138 this House had it not been for the Lord Privy Seal and the Home Secretary. Those two individuals are more responsible for the Tory majority in this House than any other circumstance or person. What of the President of the Board of Trade? He has become the darling of the Tory party. They have forgiven him for the years of opposition to tariffs and for all the scorn he has poured on their efforts to prove that he was wrong and that they were right. He has now come to the stool of repentance and, without loss of time in profitless self-recrimination, he has taken up the banner and led the procession. Having ousted the hon. and gallant Member for Bournemouth and the right hon. Member for Sparkbrook from their place in the van, he strides along briskly and finds all the stalwarts in his rear.
The Chancellor of the Exchequer is not certain whether the President of the Board of Trade is a convert, but in a National Government one cannot choose bed-fellows. The President of the Board of Trade is making speeches. I think I have read almost every great speech made by the right hon. Gentleman for many years past. He is a speaker of exceptional lucidity, but he is very difficult to follow in these days. Speaking to the London Chamber of Commerce the other day, he said:Those who failed to see the difference between the world of to-day and the world as it was 12 months ago showed a strange lack of imagination and a very grim sense of humour. We were all dependent on one another. All the world in the past had been our customers. We did not want to lose any of them, but we wanted our customers to be able to pay their way. We did not want artificial regulations of great international payments to be so worked as to destroy the level of commercial prices.4.30 p.m.
The right hon. Gentleman went on to refer to the mischief caused by reparation payments. Yet he goes on deliberately adding one more artificial element to the tangled fabric of international relations. The argument of right hon. Members opposite seems to be as follows: The world is suffering greatly from disabilities of a specially difficult and complicated nature. There are additional obstacles to the flow of trade. Channels which have been prepared over centuries of time are now being closed. The machinery of trade has broken down here and broken down there. The larger part 1139 of available business is swallowed up to pay old bills which do not belong to the transactions of the day. There is a lack of balance and a lack of confidence. Trade is dying and goods are of little value. This is a regrettable condition due to abnormal and artificial elements which are present in international life. Let us have a few more obstructions, a few more obstacles as a means of speeding up the progress of trade and industry. We heard a good deal of the doctor's mandate during the election. We did not know which of the practitioners was going to take charge of the patient. No one knew the exact prescription. We were all looking for an antidote. The President of the Board of Trade had a surprise waiting for us. He is not one of those old-fashioned doctors who give a warm drink for a cold, or an icepack for the fevered brow. He is a homeopathic practitioner; and for convulsions he recommends jerks, and for intoxication a few more drinks. We have had Debates on the Abnormal Importations Act, the Horticultural Products Act and on Import Duties. Now we come to Orders covering a large number of commodities. From the tentative measures which were taken last November the Government have gone on the rake's progress, and are now rushing downwards on a course which they must follow, from which they cannot escape.
The total annual value of imports now subject to additional duties is £150,000,000. They cover a wide range of products, as we find in the classifications which have been adopted by the Board of Trade. This additional burden of taxation is to be borne by almost every article which enters into the homes of our people. The raw materials of industry have to pay their quota. About 55 per cent. of our imports from foreign countries come under the new protection duties; 17 per cent. come under the old revenue duties, and less than 28 per cent. of our imports are to be permitted to come in. free. We have gone a long distance on the road to universal high Protection in the course of a few short months. The Free List covers articles which cannot be produced at home. I have compiled a table showing the total amount of the new duties to be imposed, but I will not go into details showing the value of articles subject to a 10 per cent., a 20 per cent. or a 33⅓ per cent. 1140 duty; but I find that on food, drink and tobacco there is now to be levied additional taxation, quite apart from the old revenue duties, to the value of over £16,000,000. That is the amount which will have to be paid on imported food, drink and tobacco. On raw materials, mainly unmanufactured, there is to be new taxation of £5,500,000; on articles mainly or wholly manufactured new taxation of £35,500,000; a total of £57,000,000. That is the new taxation imposed in these apparently innocent Orders, issued by a small committee whom nobody knows and whom nobody can control.
If you also count what has been done in the last few weeks and add it to this £57,000,000 of new taxation, that is to say, £6,000,000 tax on imported wheat and £3,500,000 additional taxation on tea, you will find that the total value of new taxation is in the neighbourhood of £66,000,000. That is what the consumer of food and raw material has to pay for a National Government. Essential raw materials and food come from foreign countries who are good customers of ours. It is interesting to watch the development of the new tariff offensive. The foreigner has to look after himself, and he has done so by a system of import quotas, additional duties, and licences, but even where he has not taken deliberate action to safeguard his interests, the direct result of our policy has been to prevent him from making his usual purchases from us. To the extent that the tariff imposed for prohibition purposes, not protection, has been successful in keeping out goods, the foreigner's purchasing power has been reduced. The foreigner is doing all he can to keep our goods out, and where he is not intentionally keeping our goods out, he is worse off, because we fail to purchase his goods, and in this way all nations are being driven into bankruptcy and default.
The duties have been described as discriminatory. What is discrimination in this regard? When does taxation become discrimination? I have tried to follow the incidence of these new duties, and I find that they will fall much heavier on some countries than on others. If you follow the course of imports to the country of origin you will find that the overwhelming weight of this new taxation will fall on goods derived from 1141 Belgium and Germany. I do not believe that the Advisory Committee have any intention of discriminating against these two countries. German and Belgian exporters have not been specially singled out, but the great weight of these taxes will fall on these two countries, and the question which suggests itself is: will the German and Belgian exporter pay? Does the foreigner pay? And, if so, how is he to pay? He may contribute by sending goods at less than cost price. Indeed, I know that in some cases these tariffs are going to be utterly ineffective. Steel at present is coming into South Wales in spite of the 33⅓ per cent. duty. In that case the German and Belgian exporters may pay the duty, but they will have to produce at a price and sell below that price. How long can they keep on doing that? How long are we going to hasten their default and bankruptcy, which will hit us just as much as it does these countries. If Belgian and French exporters are effectively shut out from this country what becomes of our exports to them? They will be compelled to take action to protect themselves against excessive exports from this country.
The Advisory Committee have brought forward their recommendations. I want the right hon. Gentleman to explain what kind of inquiry has been pursued by the committee. No one knows. Upon what evidence have they proceeded? Who are the people who have been in consultation with them? Is it a truly independent body? The Chancellor of the Exchequer has said that we do not want political influence in these matters; we cannot afford it. But is this body really independent? Have they no political views of their own? Do they read the newspapers, and know what is said about them? Do they read the OFFICIAL REPORT of the Debates in Parliament? Are they independent of all influence? Is the Advisory Committee completely responsible for what they do? Have they any responsibility to this House? We may criticise them, but are they amenable to our criticism? I was staggered to-day when the right hon. Gentleman said that anybody who as discontented and wants a little more can go to the advisory committee and ask for it, like Oliver Twist. If that is the position, then these proposals are much more dangerous and formidable than they appear at first sight. 1142 There will be considerable propaganda for further Protection and for the abolition of the Free List. The right hon. Member for Sparkbrook (Mr. Amery), speaking in this House on the Ways and Means Resolution said:These proposals are not so much a tariff as an initiation, an adumbration, of a tariff. They lay the foundation, but do not carry us yet very far towards what either industry or agriculture, or our balance of trade, really require. It is a fledgling rather than a full-grown bird. If I may venture to use the foreign language of a menu, it is a poussin rather than a full-grown poulet, suited for delicate appetites not yet wholly accustomed to strong meat, but perhaps not altogether satisfactory to a starving industry or wasting agriculture."—[OFFICIAL REPORT. 4th February, 1932: col. 309. Vol. 261.]What appropriate terms! The hungry, ravenous crowd for tariffs are compelled to resort to the language of the menu card in dealing with these proposals, and I predict that the poussin is going to be a gobbler before the right hon. Gentleman is satisfied. The agricultural industry is not satisfied. There will toe propaganda on their part. They will go to the committee and take full advantage of what the right hon. Gentleman has told us this afternoon. The "National Farmers' Union Record," a very interesting journal, which is sometimes critical of the Government and sometimes friendly, says thatFarmers' interests stand to be damnified by the new duties on agricultural machinery and implements, sacks, sodium nitrate, machinery belting, horseshoes, etc. There is no escaping, therefore, the urgent importance of a prompt disclosure of the Government plan in the realm of agricultural policy. The knowledge which induced the Advisory Committee to recommend additional duties on food products in a few cases, such as shell fish, oysters, caviare, certain preserved fruits and vegetables, condensed sweetened milk, and so on.The farmers are on the warpath. They are going to carry on propaganda, and are already doing so in this House. The Chancellor of the Exchequer says that the Advisory Committee is to be immune from lobbying. He has been away from the House for a few days, but if he keeps his eyes and ears open he will find that Lobbying is going on very actively indeed. But the House of Commons is left out of all these consultations; it is not allowed to be a party to them. Orders are to be issued, and are to operate; taxation is to be raised, trade is to be 1143 restricted, industry is to be denied its raw material, and working people are to be thrown out of employment at the command of this Advisory Committee.
§ Mr. GRENFELL
No, thrown out of employment by this Advisory Committee, and the House of Commons is only to be told in a general way why the Order has been made. The Advisory Committee is to be given full rein to take us where they will and we shall find ourselves in the cart with no one to check the career of the team, who have been given their heads and a clear road to run until they come to a halt of their own accord. What is the constitutional position of this scheme? Who is to know whether they have made adequate inquiries? What chances have we of rectifying their mistakes? The right hon. Gentleman admitted that from time to time these three people, imperfect people like the rest of us, might make mistakes. Who is to rectify those mistakes, and when, and how? What is the corrective for the mistakes liable to be made by these gentlemen?
The right hon. Gentleman the President of the Board of Trade is not here at the moment, but he has a worthy lieutenant who is listening to what I say, and he will doubtless report it to his senior, who does not believe that any of these Gentlemen know as much as he does about tariffs. He made a speech some time ago, and I will quote it for the benefit of the House. He displayed a most complete contempt for the experts in that speech, which was one made on the Import Duties on 9th February, when he said:There is one thing I should like to say in conclusion and it is this. I make no reference to the use made of experts, or that should be made of experts, before we arrived at our decision, but I wonder if we had asked for guidance from Sir Walter Layton, Dr. Sprague, Sir Josiah Stamp, Mr. Clay and Mr. Keynes, who are some of the best known economists in this country, whether we should have got an agreed and identical opinion? We could not have sheltered behind their diverse views; we should have been bound to have taken action."—[OFFICIAL REPORT, 9th February, 1932; cols. 705–6, Vol. 261.]The right hon. Gentleman has overcome his aversion to experts. Perhaps he does 1144 not dislike experts so much if he is allowed to choose those who are his guides and ours in these matters. The right hon. Gentleman opposite to-day told us that he had a definite view of the limitations of the Advisory Committee, and I do not believe he will want to shelter behind the Committee. I believe that he is courageous enough to take his own responsibility in these matters, but I will quote something that he said to see whether he has not had occasion to re-examine his own position very carefully indeed. Speaking in this House, I remember, he said:I will say that I can hardly conceive it possible that a Committee of this kind, having the task before it which it will have, will not begin by making a rapid survey of the whole field of industry in order that it may produce some kind of classification of industry and formulate some sort of principles on which their subsequent recommendations will be based. Do not let the House forget that the ultimate responsibility for decisions that are finally taken after the Committee has made its recommendations will rest not with the Committee, but with the Government. The Government will not shirk that responsibility. We know very clearly and definitely what it is we want to do. We believe that in these proposals we have an instrument which will be effective for our purpose."—[OFFICIAL REPORT, 16th February, 1932; col. 1602, Vol. 261.]What are the proposals? What is the instrument? If the Government are going to take this responsibility, to make this survey of the whole field of industry, and to locate the faults and the shortcomings of our industrial system, what use is there for an advisory committee? The right hon. Gentleman told us to-day that it is not possible under this Motion, the Advisory Committee having brought forward recommendations, for the Government to raise the scale of duties beyond those recommendations. Therefore, even the Minister is relieving himself of responsibility and passing it on to this committee, which is away from this House, and, like a limited joint stock company, has no soul to be cursed and no body to be kicked. Has the committee based its recommendations on its own knowledge? Has it consulted any of the parties interested? What is the nature of the evidence? Who has been called in to assist the committee?
We see the effects on trade and we know of the serious apprehensions caused by the existence of this committee. No 1145 one knows what industry is to be attacked next, and the effect so far is very disturbing. I will quote from the "Monthly Review" of one of our leading banks, to show what public opinion thinks of the condition of trade at the present time and the effect of these proposals. I will quote, first of all, as a compliment to the right hon. Gentleman, the report sent from Birmingham to one of our leading banks for publication in its "Monthly Review":Business continues to be restricted in all sections. Still more furnaces have closed down recently, showing not only that consumption is lagging behind production, but that furnacemen see little probability of surplus stocks being absorbed within a reasonable time. Pig-iron prices remain at the same level as for the past 12 months…. The 10 per cent. duty apparently has no appreciable effect on imports of foreign steel…. Business in galvanised sheets is poor"—That is an industry working on raw materials imported from abroad, now subject to the very heavy rate of duty of 33⅓ per cent.particularly on the export side, but quotations are maintained.Now we go to Blackburn:A few mills have recently re-started after varying periods of idleness, and all concerned are expecting a brighter period"—I am giving both the bright and the gloomy patches:though most manufacturers are rather cautious at the moment in case the improvement should be only transitory. The position of sterling has to some extent stimulated trade with the continent, and as the boycott in India appears to be breaking down, some orders are coming through, though the high Indian import duties make business difficult for Lancashire.This is from Bradford:The second series of London wool sales, which closed on 16th March, was on the whole somewhat disappointing, though at the close prices were firm, and the tone good.Then we go to Bristol:The new duties which came into operation on 1st March have had no marked effect upon values. Several continental countries are reported to be prepared to meet the duties themselves if by so doing they can succeed in placing their surplus stocks here.Next Cardiff, coming nearer home:No evidence has been forthcoming during the past month of any improvement in 1146 the basic industry of this district. Customs returns of coal exports for February gave a total of 1,239,874 tons, as compared with 1,339,534 tons for January. The January total was less than that for December by nearly 47,000 tons, while the December figures were the lowest for the whole of 1931 with the exception of the first month. The statistics, therefore, afford no comfort.And so on from place to place. Take Scotland:The Clyde industry made an inauspicious beginning for 1932, both in tonnage launched and in the booking of new work. The depression continues to be reflected in the amount of work completed…. No orders at all were placed with any of the Clyde shipyards during February, and the absence of inquiries would appear to suggest that no change in the position is likely over the next few months.Here is Hull:The shipping firms of this Port are passing through a difficult time, which has not been mitigated by the change in the country's fiscal system. The number of ships lad up shows no tendency to diminish. Restrictions upon the export of coal still hamper this district. The latest reduction in Germany's quota of permitted imports from this country provides yet another serious problem for Yorkshire shippers.And so on. The dreary tale goes on from city to city, from port to port, and one finds no comfort at ail in the reports of business people, reflecting as accurately as anything can the position and the prospects of trade in this country.
The right hon. Gentleman must be aware of the dangers of going too far on the road which we are now following. We are vitally dependent on our export trade. Damage to our export trade can never be compensated by stopping imports. The record of coal exports, as shown in the trade returns, deserves the urgent attention of the House. Yesterday the Secretary for Mines gave figures to show how we had already lost a large proportion of our export trade. Licences and surtax on coal imports have kept our coal out of markets which we formerly enjoyed. The Government have not carried out their promises to the House. They have handed over the functions of Government to this Advisory Committee of three people. I will now read something that I saw in the "Times" to-day, to show how we are getting deeper and deeper into the difficulties which these duties were supposed to obviate. I see from the "Times" to-day what the 1147 French Government are going to do. We in this country have made a large part of our livelihood by selling coal produced in this country all over the world, and our coal sales are just as important to us as the sale of manufactured goods. Let me read what is said is going to happen in France, according to the "Times":The programme of the Government for the further protection of the French coal market is understood to be complete. It is stated to include a revision of import licences, the use of which has enabled the import quotas to be exceeded by 120,000 to 160,000 tons a month.It goes on to say:These measures, taken together, are expected to reduce imports of coal into France by at least 20,000,000 tons a year, including a reduction of 12,000,000 tons in special grades not produced by the French mines. The total annual imports will then be about 8,000,000 tons. In addition, it is understood that the Government will apply to French coal the special transport rates now allowed to British coal in transport through France to other markets. French coal importers"—And this is the lesson to be gathered, whether we observe conditions in France or in Great Britain—are protesting against these measures. The latest important complaint received by the Government came from the port and municipal authorities at Rouen and stated that the effect of the measures on trade and employment in that town would be serious.The effect of these restrictions and limitations on the import of coal into France is very detrimental to the activities of the ports and harbours of France, but we must not forget also the effects on the ports of London, Cardiff and Liverpool, and the other ports of this country. The French port authorities at Rouen are very much concerned because the French Government, in the supposed interests of the French coal industry, are depriving the people of Rouen of employment and of income which they earn by the shipping of coal.
The Secretary for Mines, in his very excellent review of conditions in the coal mining industry yesterday, stated that we had lost 37,000,000 tons of export trade since 1913. We are now exporting 60,000,000 tons, as against nearly 100,000,000 tons in 1913. He gave a number of explanations why we had lost here and why we had lost there. He referred 1148 to the change in political boundaries and the maladjustments under the Treaty of Versailles. He came to the most recent difficulties, particularly in France, Belgium, and Germany, and he gave a figure, which we must accept, showing that coal exports are down by 600,000 tons as compared with the first quarter of last year—this, in spite of the small increases in the 16 small markets which the Minister did not specify.
We oppose this Motion to-day, and we have submitted our Amendment not in any frivolous way. We are concerned with the effect of these Measures and with the very heavy incidence of this vast amount of new taxation on the people of this country. Every home and every person in this country will be called upon to pay a very large contribution to the revenue. We are of the opinion that no benefit to trade and industry will arise from tariffs and we are anxious that our export trade shall not be prejudiced by limitations on imports which will result from the operations of the Order. If that contribution is to be maintained, there is to be no protection. If the contribution is not forthcoming, we believe that great damage will be done to the employment of the people under conditions which do not make for greater efficiency. We are convinced that final efficiency cannot be attained by erecting these artificial shelters at great expense. We are apprehensive of the result of this policy, and we distrust very much the procedure under which these duties have been imposed. We move this Amendment in the hope that the House and the country will see that our view of things is the right view.
§ Mr. MACMILLAN
The new tariff system which, with the 10 per cent. tax already imposed, is the subject of this Motion, can be regarded from two points of view, either as a means of producing revenue or from the purely protective aspect. It is not perhaps unnatural that the official Opposition objects to these proposals on both counts. They also have to stand attacks from other quarters. They are attacked from the flank, and to some extent from behind the lines. The attack upon them is even led by some of the prominent generals in the Government army. The Home 1149 Secretary, and that section of the Liberal party which follows his lead, object to these duties altogether. Like every other hon. Member, I have a very great respect for the Home Secretary. I admire his consistency and his courage, but I deplore what seems to be his bigotry in this matter. We sometimes object to what seems to us a rather sanctimonious display of his faith. But then he has got to support what is now rather an exploded creed. But he is well within his rights according to the agreement that the Government have come to in order to deal with the delicate problem of conscientious objectors in the Cabinet.
I do not complain on that score. What I do not understand is the alternative policy which he would have us pursue. From the point of view of revenue, these duties are expected to produce a sum of £32,000,000 a year. How otherwise than by these duties would he have us raise that money? Would he have us raise it by direct taxation? That would mean at least 7d. in the pound at the current rate of Income Tax. But nobody has said more about the injurious effect of a high rate of taxation than the Liberal party, including the Home Secretary himself. If the money is not to be raised by direct taxation, is it to be raised by indirect taxation? But it is on that very score, that taxes are an addition to indirect taxation, that the Liberal party object to them. Would they narrow the field? Do they say that these taxes cover too wide a range and, instead of putting the taxes upon iron and steel, and so on, would they put them all on to beer and tobacco, or artificial silk or, if I may be guilty of such a profane suggestion, even upon chocolate or cocoa? That means that they would prefer to tax both the necessaries and the tiny luxuries of the poor.
Perhaps the Home Secretary would say that if he had a free hand he would not require this £32,000,000 at all. One of his ardent supporters, the hon. and gallant Member for North-East Bethnal Green (Major Nathan) committed himself to this view at an early stage of the Budget Debates. When he was pressed by my hon. Friend the Financial Secretary to the Treasury, he said that he would save the money required by disarmament and otherwise. That position is quite open to him, although in itself 1150 I do not think it is a very strong one. He is only a private Member. He is not in office or directly responsible for the Government of our affairs. This is a melancholy truth, and we all regret it. On the other hand, the Home Secretary holds one of the most important offices in the gift of the Crown; he is a Privy Councillor, and he therefore has a very special allegiance. He is a Secretary of State, a member of the inner Cabinet and, as it were, one of the most corruscating of all the luminaries whose radiance fills our political firmament. Why has he chosen to hide this dazzling light under a bushel? In a speech the other day at the National Liberal Club —ostensibly he was speaking to the club, but I suspect it was directed to the Liberal party assembled at Clacton—he made a reference to this matter in the following words:I cannot assume that my freedom to differ would entitle me to propose an alternative Budget to that of the Chancellor of the Exchequer. I can express my belief that no very great difficulty would be found in balancing the Budget without these tariffs, or without recourse to sources of revenue already strained to the limit.If this somewhat cryptic statement means anything, it means that the Home Secretary has devised, or thinks himself capable of devising, a means by which the national expenditure can be reduced by £32,000,000 a year. We can only understand that from what he says, unless, indeed, he has thought of some method of taxation which is neither direct nor indirect. Are we to believe that the Home Secretary has thought of economies to the terrific tune of £32,000,000 a year, economies which he will be prepared to present to this House, economies in our defence services which he would defend as a patriot, or in our social services which he would agree to as a humane and progressive statesman, or in our debt services, upon which he would stake his reputation as a financial expert? Are we to believe, I ask, that the Home Secretary has thought of these economies, but has not thought of imparting those suggestions to his friend the Chancellor of the Exchequer? We all agree that it is a very sensible arrangement by which the majority of the Cabinet is allowed to differ from their colleagues, but surely they are still on speaking terms? Surely they have not been put into Coventry? I 'ask why the Home Secretary locked these secrets in 1151 his jealous breast. Why has he not revealed them to the House of Commons? He alone possesses the key to this maze. It is a very peculiar situation. Unlike Mr. Tom Shaw, of immortal memory, he can produce the rabbit, but he keeps it in his hat. I think we are entitled to ask why we are not told by the Home Secretary how this very remarkable economy can be achieved. We all have our views as to the various cuts and economies which have been imposed upon various classes of the community during recent months, but this mystery economy of £32,000,000 that can be easily made without dangers and hardships, if only the Home Secretary would tell us how to do this, is indeed the "unkindest cut of all."
I have dealt with the proposals as regards revenue. May I, with the permission of the House, say a few words on their purely protective aspect? One of the most remarkable features of the Debates that we have had upon the Budget was the very large measure of agreement that was shown by hon. Members from different sides of the House. Every one of them was agreed as to many of the facts which have contributed to the present crisis, which is un-parallelel for many centuries in the history of civilisation. We are agreed that the world is suffering from many difficulties and many artificial and abnormal disturbances. They are the results of the War. War debts, reparations, the attempt to transfer enormous payments from one country to another without regard to the normal balance of trade, inflation and deflation, the maladjustment and ultimately the sterilisation of gold which has followed as a result; the catastrophic fall in the price level; the reduced value of silver, especially affecting the Far East and South America, and, finally, as a result of all these things, the freezing up of the luxuriant stream of commerce into a kind of icebound pack—these are the difficulties through which even the most hopeful among us must sometimes despair of our ever being able to find a way.
The brilliant speeches of the right hon. Member for Hillhead (Sir E. Home) and in particular of the right hon. Member for Epping (Mr. Churchill) have called special attention to one facet of this 1152 many-sided problem—I mean the fall in the price level. They have laid especial stress upon the results of that upon all debts and obligations which are fixed in terms of money, and upon the disastrous results which it has had upon all classes of producers. While I agree, and I think we all agree, with the diagnosis that they have made on this question, may I be allowed to say that that diagnosis is not altogether complete? I believe there is a more fundamental and more permanent maladjustment from which the world is suffering, even greater than these temporary abnormal and artificial difficulties which are the result of the War. In the meantime, may I point out that the Government are doing everything that a Government can do to deal with these artificial and abnormal features? In the first place, by introducing an honest Budget, honestly balanced without any subterfuge of any sort, the Chancellor of the Exchequer, whom we are all glad to see again in his place, has done a great deal to make possible an ultimate conversion of the debt and, by that means, substantially to reduce the claims of creditors upon producers. By the fiscal weapon which he has taken and to which this Resolution refers he has done a great deal to restore the balance of payments which is a central necessity in maintaining our financial stability. Let us remember that we can never restore world confidence until we have first restored the confidence of the world in the financial stability of England and this at least we have done. By the proposal for the Exchange Equalisation Account he has done a great deal to defend exporters from undue rises, or artificial and speculative rises in the exchange value of the pound.
As regards Disarmament, the Prime Minister in spite of his health has made and is making a great effort at Geneva to prepare the way for a successful Conference at Lausanne, and, at Lausanne, we all know that the Government will pursue the same forward and generous policy. Every Member of this House on every side hopes and even prays for a successful result of these conferences, because on the result of these conferences it may be said that the whole future of the world depends. Some might say that the Government could not do less in dealing with all these questions than they are now doing and I do not think 1153 anybody can assert that the Government could do more. But, important as foreign policy is, the Government very rightly recognise that even if agreement can be obtained at Lausanne, even if these questions which bear so heavily upon us now, can be dealt with in the most satisfactory manner possible, there are still grave difficulties facing this country. Every true analysis of the crisis, indeed any but a superficial analysis, must admit that, lying underneath the temporary abnormalities there are maladjustments in the world economic system which bear with particular hardship upon this country. These maladjustments, although immensely accelerated by the War, did not originate in the War. They originated in conditions which had begun long before the War, conditions which belong to and were the inevitable outcome of the development of the economic system of the world. Therefore, without minimising any of the immediate factors such as debts, reparations and the like, I should like to say a few words about these permanent factors because I think they constitute the real, final, theoretical justification of Protection.
What are those factors? They can roughly be classed under three heads. First, there is the spread of industrialisation in the world. That has been immensely increased by the War, but it did not originate in the War. It is quite true that owing to the conditions of the War, many countries, both belligerent and neutral, took up the production of war materials. It is true that during that time industrialisation began in many countries, but the spread of industrialisation did not originate solely in the War. The second factor is the increased productivity of labour, both in agriculture and in industry owing to scientific methods, and, the third, and in many ways the most important, is the absence —due partly to political disturbance and due partly to natural causes—of any rapidly expanding areas in the world where the investment of capital goods can go on, as it used to go on during the last century. I have said that industrialisation did not originate in the War. Of course that factor has been immensely stimulated by the result of the War. The smaller political units which were the result of the Peace Treaties have developed, of course, into 1154 small economic units, and one of the difficulties of Middle Europe is the growth of these smaller economic units, and, following on that, the growth of what we now call economic nationalism. Of course, we all know of the increase in the power and capacity of the machine. We have almost reached the stage long ago foreseen by Samuel Butler when he wrote that brilliant book "Erewhon," when the machine seems sometimes to be the enemy rather than the friend, the master rather than the servant of mankind.
Finally, as regards the lack of new and rapidly developing areas, that has been due to political disturbance in the Near East, in India, and above all in China, but what is much more important is the fact that there is nothing in this century comparable to what was the real clue to the prosperity of the 19th century—I mean the condition of the vast Continent of America, North and South, which at the beginning of the last century was almost empty of white people, and yet was eminently suitable for white colonisation and development. That continent during the whole of the 19th century was an enormous source of capital investment and the expansion of capital goods in every form, and it was upon that expansion that the real success of the 19th century depended. Although there might be temporary maladjustments and temporary slumps and booms yet the continued growth of that great area was able to absorb the surplus.
If this analysis be at all true, I think it is a defence for a permanent system of Protection. Quite apart from the temporary difficulties with which we are faced, the situation involves a completely new solution of our problems, because they are new problems. We may dislike it. We may feel that we would rather have lived in the 19th century. We may resent the situation, but we cannot alter the facts and when you cannot alter the facts I think it is time to alter your policy. The policy that we pursued in the 19th century was, I think, the right policy at a time when the world was organised on what might be called a complementary basis. The world to-day is organised on a competitive basis and a new 20th century policy is required to suit 20th century facts. If that be true, how may such a policy be carried out, and 1155 how is it related to what the Government have done or are doing? First, the total amount of imports must be restricted, because we are importing too freely from countries which used to be prepared to take our manufactured goods in exchange but are now largely manufacturing those goods themselves.
Secondly, the character of the imports must be controlled. We can no longer allow our industrial system, our well-built up and developed system of relationship between capital and labour, to be attacked and shattered by the free introduction into this country of dumped and sweated goods. That kind of importation must not be allowed to go on and that is prevented to a great extent by the duties which are the subject of this Resolution. Thirdly, home production must be expanded. We must attach far more value to the home market than it was necessary to do during the period when we were organised upon the complementary basis which I have described. That, the Government are doing, and there is no more important side of the Government's activities than the agricultural policy which they are pursuing. Fourthly, we must find alternative fields for the employment of our people apart from the great basic industries. I myself believe that it is by the agricultural proposals of the Government that the whole of their long-term policy will, ultimately, stand or fall. I do not believe that you can go on unless you are able to draw back upon the land a very large number of the people now employed in the basic industries. Fifthly, since the home market cannot, itself, be a sufficiently large unit or sufficiently self-supporting, quite obviously you must develop the largest unit you can get at. This, the Government, I understand, propose to do, first of all upon an Imperial basis, by such arrangements as they can make within the Empire, by the development of the Crown Colonies, by preferential arrangements with the Dominions. It is for that reason that most of us in this House look with such hope towards the meeting of the Ottawa Conference.
Lastly, apart from the Empire as a unit we must bring into the sterling and Imperial ambit those countries which are prepared to work with us and make 1156 friendly and useful trading arrangements with us. For that purpose the duties which are the subject of this Resolution will be a powerful bargaining weapon in the hands of the Government. But, as the Chancellor of the Exchequer very properly said, the Government before they embark upon that second set of negotiations will first of all attempt to arrive at the Imperial settlement. That they must do, before embarking upon negotiations with countries outside the Empire. These lines of approach seem to me to represent a wise policy, a prudent policy and a progressive policy, a policy which commends itself I think to the great mass of Members of this House and which commends itself, I am sure, to the great mass of the electors of this country.
Of course, I am not saying that it is an easy policy. It is much more difficult to run a Protectionist system than a Free Trade system from the point of view of government. After all, laissez faire is a very easy thing to do. It is like coasting down hill on a bicycle. You just put up you feet and go. The trouble is that one day you have to climb up the hill on the other side. From the point of view of government we are now embarking upon a very difficult and delicate undertaking. I agree with the Chancellor of the Exchequer that we have this great advantage over other countries—that we have devised a system which is now free, and I think will always be free from political corruption. I am sure that every Member of this House in his personal capacity is only too relieved to know that we are not to be allowed to make representations to the Advisory Committee. We have already a difficult enough time, but if we were called upon to make such representations our lives would become intolerable. But in any case corruption, in a country with so long a tradition of political honesty, is not a grave danger.
The Chancellor of the Exchequer made a reference to a much more important question, namely, that of efficiency and I think that what he said to-day will be received with the greatest pleasure by all people who really care about the future of British industry and, above all, by leading industrialists in this country. The statement of the right hon. Gentleman was very reassuring and 1157 it will be of the greatest possible use to those who, as be rightly says, constitute by far the greater proportion of British industrialists, namely, the people that are efficient or want to be efficient. What the Government can do is to help industry to help itself. The Government have given industry an opportunity. They can give it a lead in other directions. In some of the basic industries the Government may have to give some kind of financial support, or they may have to lend expert knowledge and assistance, but industry must make the effort for itself and I am glad that the Government are pursuing the policy of creating favourable conditions for industry, rather than that of trying to impose from above precise methods of industrial reorganisation.
At the beginning of my speech I ventured to make a few rather bantering observations about the Liberal party. I hope that those observations will be taken by them in good part and I would like to end what I have to say by an appeal to them, which they may not think highly satisfactory but which I assure them is genuine. It is now 90 years since Free Trade became the accepted fiscal system of this country. It was carried against the strong convictions of the Tory party of that time. It was carried after a bitter and a violent political campaign in which the Tory party had the additional cause for resentment, of having found its leader go over to the enemy's cause. But it is a remarkable fact that only two years after that decision was taken, the man who had been one of the most virulent, as one of the most brilliant opponents of Free Trade made this statement:Protection is dead and damned.5.30 p.m.
That was no mere cynicism on the part of Disraeli. It was a recognition of the obvious fact that you cannot change your fiscal system every time you have a change of Government. Once the country has embarked upon Free Trade or Protection it has to stick to that policy for at least a reasonable term of years. Free Trade is now dead and damned. This new system will last and must last for at least a generation. Whether Free Trade or Protection is right, alternations every two or three years between one and the other would be a devastating system in 1158 which to operate industry. Therefore, it would be better and wiser to accept the situation and to concentrate upon the difficulties, which are great indeed—no Protectionist would deny that—of making Protection really effective. When I went to the last volume of Disraeli's Life in order to verify my reference, I looked up "Protection." I could find only this reference to it in the Index—"Protection, see Free Trade." That volume was published as short a time ago as 1920. I cannot help thinking that if one were to look up in years to come the life of some statesman of to-day, perhaps the right hon. Gentleman the Home Secretary, the reference in the index will read, "Free Trade, see Protection."
There are great difficulties before us. There is immense opportunity for service. There is the difficulty of developing a new industrial technique and organisation and getting all the possible benefits that are offered to industry by these duties. In that I hope and believe the Liberal party, as well as all other parties of the State, will render service. Finally, the House should recognise—I think that it does recognise—that the carrying into effect of this great new fiscal system is a great responsibility upon industry and upon the House itself. It marks a new epoch in our history; it marks the work of a National Government; and it marks what I think the majority of the House believes may be the beginning of a second Renaissance of the British people in every part of the world.
§ The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel)
I would ask leave to submit to the House the reasons that will lead a number of my right hon. and hon. Friends and myself to vote against the Motion which has been moved by the Chancellor of the Exchequer. As the House is well aware, this latitude has been conceded to us as a means of maintaining the constitution of the National Government as it presented itself at the last General Election. When four members of the Cabinet, anxious to co-operate with the Prime Minister on other matters, found themselves dissenting upon this subject and tendered their resignations, our colleagues were good enough to press us to withdraw those resignations on the under- 1159 standing that we should be allowed full liberty of speech and vote on this issue. The hon. Member for Stockton-on-Tees (Mr. Macmillan), in the course of his able, thoughtful and kindly speech, was good enough to refer to us as coruscating stars. I am not sure that that description is quite the right one, but it calls to my mind that in yesterday's Press it was stated that in the early hours of this very morning there would occur a remarkable astronomical phenomenon, which was described as the simultaneous disappearance of the four satellites of Jupiter. I am not sure whether satellites is quite the right word either, but certainly we might say that four minor stars in a bright and variegated constellation would have simultaneously disappeared if it had not been for the unusual and unprecedented freedom that has been allowed to us. I would ask the indulgence of the House to-day if I give again the reasons for our dissent, with special reference to the Motion that has been moved by the Chancellor of the Exchequer.
Let me first invite the attention of the House to the procedure in which we are engaged—this very Resolution as a resolution. It is, of course, one of the disadvantages of tariffs that if they are considered by Parliament by the ordinary methods of its deliberation, every individual Member may be subjected to strong industrial or commercial pressure from his own constituency on behalf of particular interests, to the pressure of local interests disregarding, perhaps, national or Imperial considerations. That, as the Chancellor of the Exchequer has said, has been the curse of tariffs in Protectionist countries. If, on the other hand, in order to avoid that, the procedure is adopted that we are asked to practise to-day, we have the other evil, that the powers of Parliament are wholly surrendered to a small outside tribunal under no adequate authority or control. It is a Committee of three men in a room, who write down a figure—10, 15, 20, 33⅓, or whatever it may be—and, having written the. figure, the Treasury accepts, the Cabinet endorses, Parliament is asked to agree automatically, and it becomes the law of the land; the Customs officers enforce the figure of 1160 duty which has been imposed, and from that date the British importer pays the tax, which is collected from him under the authority of the law. During the Debates on the Import Duties Act, we had long and sometimes lively discussions upon the question of the Free List, and what should be inserted and what left out. Parliament may debate at full length the inclusion of some particular commodity, may divide on it, and may resolve that that article is not to be taxed, and yet we give the power to this Committee to reverse, three or six months later, the decision of Parliament, and to omit that very commodity from the Free List; and the only means Parliament will have of restoring its original decision is to reject the whole of a Resolution containing, perhaps, some hundreds of separate provisions. Either alternative is a bad alternative, and if I were asked which I would choose, I would take neither. I would have no Protectionist tariff at all.
It is a fact that the increase of prices which many persons anticipated would take place in this country, some on the ground of the departure from the Gold Standard, and some on the ground of tariffs, have not taken place. In the main, the prices of commodities and the cost of living have remained fairly stationary. There is always the temptation among political controversialists, whenever a particular occurrence takes place, to relate it to the one question in which they themselves are interested. If unemployment goes up after a tariff is imposed, the Free Trader is tempted to say that it is because of the tariff. If unemployment goes down soon after the Abnormal Import Duties are put on, some defender of those duties will say that unemployment has gone down because of those duties. As a matter of fact, of course, all of us know quite well that in all these matters several factors are involved, and the event that takes place is the resultant of various forces. At least five forces are now operating upon prices, some of them tending to make them rise and some of them tending to make them fall. The imposition of tariffs is one; the departure from gold is another. My right hon. Friend the Member for Hillhead (Sir R. Horne) in a most interesting speech which impressed the whole House the other day, used these words: 1161Although as I believe the tariff is of first-class importance, it is in present circumstances entirely overshadowed by the question of currency.He went on to say:The rise in the value of the pound sterling, such as occurred three weeks ago, from about 3 dollars 50 cents to 3 dollars 80 cents entirely wipes out, so far as checking imports is concerned, the 10 per cent. duty."—[OFFICIAL REPORT, 20th April, 1932; col. 1499, Vol. 264.]That is perfectly true. Currency changes may have far more effect upon prices in one direction or the other than a tariff, than even a considerable tariff. Then there may be tendencies to lower prices. For example, it is said and I think -with truth, that in some circumstances a protective tariff may enable particular industries to work fuller time than before and to reduce their overhead charges, and thereby even to lower their prices. These cases are comparatively few. The safeguarded industries during the five years that the Safeguarding Duties were in operation did not show any such tendency, except perhaps in the motor industry. [HON. MEMBERS: "Oh!"] Certainly in the artificial silk industry and gloves the tendency was the other way; fresh factories sprang up and the factories certainly worked even less time than before, and consequently worked at a greater disadvantage than previously. But there is sometimes, I agree, that factor which tends, even under a tariff, to lower prices in a particular industry and perhaps for a time. There is another tendency in addition to keep prices down; it is that the goods that are now being sold are to a large extent accumulated stocks which were brought in in anticipation of the tariff and which have not paid the duty. If prices have not risen, if goods are not dearer because of the duty, it is because the goods that are now being bought are often goods that have not paid the duty. That is a purely temporary phenomenon, and when goods come in after having paid these taxes, we may expect to find their prices correspondingly increased.
More important than any one of these factors, either on the one side or the other, in my opinion—I suggest it to the House for what it is worth, but the facts speak for themselves—is the continued enormous drop in world prices. It has continued even with accelerated speed 1162 during the last few months. In two years up to last summer the average level of world prices fell no less than 40 per cent. —one of the most astounding phenomena in the economic history of the world— which is the main cause of the catastrophe from which all countries are suffering. It was thought last summer that then, at all events, prices had touched their bottom, yet if you look at the figures quoted in the "Economist" you will find that since Great Britain went off the Gold Standard, perhaps partly even because of that, during the last seven months world prices have fallen 16 per cent. below the figure at which they were then. Prices now are 84 per cent. of what they were last September. Domestic prices in the United States and Germany have fallen 10 per cent., and that would have taken place here, no doubt, but tariffs have cheeked it. The net result is that our prices 'have increased 4 per cent. If you go up a staircase, you expect to reach the top, but if your staircase is an escalator which is going down all the time, you may climb without mounting. That is what is happening with regard to prices. Although the tendency here would have been to raise prices, the continued drop of world prices proceeding at the same time has left the general level of national prices much as they were.
That the people of this country pay those taxes, with rare exceptions, I have not the smallest doubt. One can produce dozens of invoices sent to importers, in which there appears the statement, "The duty of 10 per cent. payable by you is so much." It appears there in the ordinary course of commerce. If these duties are not paid by the people of this country, why is there that strange exemption in the Import Duties Act which allows shipyards to import anything they use free of duty? If the foreigner is paying the taxes, why not tax him on the commodities used in shipyards? Why indeed have any Free List at all? Why surrender all those useful sources of revenue which we can so easily call upon the world to pay?
Let me next draw the attention of the House to the extent of this tariff. In a table in this week's issue of the "Economist" the new duties are analysed. The figures have to be those for 1930, as the figures for 1931 are not 1163 yet available, but if all these new duties had been in force in 1930 they would have applied to £409,000,000 worth of our imports. Of these, foodstuffs represent £154,000,000, now being taxed for the first time; raw materials and unmanufactured goods £55,000,000, now being taxed for the first time. What are called "wholly or mainly manufactured goods," although a large part of them, as we know, are half-manufactured goods which are almost the raw materials of many industries, are being taxed to the extent of £204,000,000. That is a total of £409,000,000 worth of imports now being taxed this year for the first time. In addition to that there are the old revenue duties and the old protective duties, amounting to £184,000,000, so that out of a total importation of just over £1,000,000,000 more than £600,000,000 is now subject to import duties. That is 60 per cent. The United States, which is considered to be a very highly protected country, taxes only 40 per cent. of its imports, and allows a Free List of 60 per cent. Here, in this newly protected country, the proportions are the exact opposite. We have begun with more protection, half as much again—60 per cent. against 40 per cent.—as compared with the United States.
I know that there are many in this House and in the country who have studied this question and who say that while these import duties, extending over this great range of commodities, will raise prices and make things dearer it is right that prices should be raised, that we want an increase of prices because the world is suffering from too low prices. That is quite true, taking the world as a whole. They may quote great authorities, who will be accepted, like the Macmillan Committee or the recent admirable book of Sir Arthur Salter, who say that what the world needs is a general restoration of prices to their earlier levels. Yes, but it must be the world level of prices. That is what Sir Arthur Salter says in his book:What the world needs now is an increase in the general world level of gold prices, preferably until it reaches the level of 1929. What it needs afterwards is a reasonable stability of the world price level.If you raise prices throughout the world you give more money to the primary pro- 1164 ducers, the agriculturists in North and South America, in our Dominions, in the East, all over the world, who might be purchasers of our goods to a far greater degree if only they had the wherewithal with which to buy. That is an object to be achieved; but to raise prices only in these islands by means of a tariff is a very different thing, by no means to be defended on that argument. It would be no advantage to our customers, and no benefit to our export trade, but, on the contrary, to raise the level of prices here and thereby the cost of production, and ultimately the cost of living, must raise this island, as a competitor in the world's markets, to a more costly standard of production than its competitors.
Let me take a particular instance, cheap quality steel used for making tin-plates or corrugated iron. Our manufacturers are in competition with manufacturers in other countries. Let the level of the commodity be raised everywhere, in common with all other prices, and our manufacturers are at no disadvantage; on the contrary they will be at an advantage, because if the producers of meat or fruits in different parts of the world have more money and their industries expand there will be more demand for our tinplates; but if the increase of prices is limited to this country our manufacturers do not get that advantage, while they are under the direct disadvantage that in competing with other tinplate manufacturers in Germany or Belgium their raw material is dearer and their chances of successful competition are less. So I would ask the House to recognise that the general argument that what is needed is an increase in the world level of prices is by no means a justification for the kind of tariff we are discussing.
Indeed, the example I gave is one that clearly shows the effects of the duties now before the House. Steel is to be taxed 33⅓ per cent., as though steel were one commodity. When people talk of a duty on wheat they talk as though wheat were one thing, but there are many varieties of wheat, of different qualities and used for entirely different purposes, and coming from different countries. It is so, also, with steel. The steel which is used by our tin- 1165 plate manufacturers is practically not made at all in this country. It is what is called Bessemer basic steel, of a cheap quality, not good enough for girders or joints, though quite good enough for corrugated iron or tin cans; but because it comes under the head of "Steel" it will be taxed under this Order by a 33⅓ per cent. duty, with the result that when present stocks are exhausted those manufacturers to whom I have referred, who depend to the extent of 70 per cent. of their production upon export trade, and who are allowed no drawback, will have to pay 33⅓ per cent. more than their competitors, in addition to the disadvantage due to the depreciation of sterling, and their trade must be knocked to pieces. That is only one example. There are a number of minor trades to which the same considerations apply. All these duties, by making production dearer, must be a disadvantage to our producers.
What will the farmers think of a 15 per cent. duty on agricultural tractors? Of what service is that to agriculture? This island—and this is the essence of the whole matter—cannot live on the home market alone, nor even on the home market supplemented by what further markets our Dominions can afford to allow us to enjoy. The Dominions have a white population of only 22,000,000 people, whereas the population of the world outside the Empire is 1,400,000,000, and although it is immensely to be desired that our trade with the Dominions shall be expanded, and we earnestly hope that the Conference at Ottawa may be successful to that end, the fact remains that we ought not to sacrifice for the trade with those 22,000,000 people the possibilities of the larger trade with the 1,400,000,000 outside. We cannot depend upon the home trade. To say that foreign factories are being induced to come here is no answer to the contentions with regard to export trade. I admit quite freely that protective tariffs of this kind will induce foreign factories to open branches here, but foreign factories, as a matter of fact, have often been induced to come here for other reasons than tariffs. Numbers of branches of works in other countries were established here before tariffs were spoken of, such as the General Electric Company, the Western Electric Company and Siemens Brothers.
1166 Only the other day I was visiting Welwyn Garden City, and saw there a great new factory, built long before there was any question of tariffs, by an American and Canadian company, for the manufacture of grindstones, and giving considerable employment to a number of people there. When that factory was erected there was never any idea that there would be any protective duty for its assistance. As for motors, the chairman of the British Ford Motor Company, Sir Percival Perry, has said again and again that, in the case of the great new establishment at Dagenham for the production of Ford motor cars, the plans were laid and the land was bought even before the War, even before the McKenna Duties. He has declared on behalf of his company that it is a matter of entire indifference to them whether there is a protective tariff on motors and tractors or whether there is not. [HON. MEMBERS: "Oh, oh!"] That is a statement he has made in public speeches, and he has no inducement to make it unless it is true. He is not a mere politician, as the derisory cheers of hon. Members behind me seem to indicate. Factories have come here in the past, and will come here again, on account of the advantages that this country offers, especially in the supply of highly skilled and steady labour which the British workman can provide, the excellence of our harbours and communications, the stability of our financial system, and, not least, the fact that they were free to purchase here, at the world's lowest prices, any commodities or raw materials they might need in their manufacture from whatever country they could get them at best advantage.
If it is said, as it has been said, that this tariff, so far as it has been in operation, has, by checking our imports, led to more employment of British labour, if it is said that the decline of imports in the first quarter of this year compared with the first quarter of last year has amounted to £16,000,000, and that that means £16,000,000 more work for British workmen, then what is the significance of the decline of £12,000,000 in the same period in our exports? That has to be supplemented by the unhappy reduction of our shipping earnings, which, I am informed on good authority, amounts to between £1,500,000 and £2,000,000? Our invisible exports are diminished by 1167 nearly £2,000,000, to be added to the £12,000,000. We have reduced imports by £16,000,000, and, on the other hand, our exports, visible and invisible, have been reduced by nearly £14,000,000. If the £16,000,000 means increased employment for British workers, the £14,000,000 means reduced employment for British workers.
As for the balance of trade, I notice that my right hon. Friend the Chancellor of the Exchequer never even mentioned it to-day. If the result of import duties is to improve the balance of trade on the one hand by £16,000,000 and to depreciate it on the other by £14,000,000, the advantage is exceedingly little compared with the vast figures with which we are concerned. To deal with the balance of trade by means of a general protective tariff is like baling out water with a sieve. It is said by my right hon. Friends that they fully recognise the importance of our export trade, they know that this island cannot live on its own market alone, and they agree that tariffs will be bad for us unless they do improve and enlarge the export trade. They say that will be achieved in two or three different ways. In the first place, they declare that tariffs must not be a sop to inefficiency. They have relied upon this Advisory Committee to give a stimulus to the better organisation of industry. Have the Committee done so? There is a simple all-round increase of duties from 10 per cent. to 20 per cent. unconditionally, with not a word about efficiency.
It is true that the iron and steel duties are imposed for only three months, and that during that time, it is said, we may hope to see technical improvements and reorganisation. That may prove to be the case or it may not, events must show, but for all the rest of industry, the great range embodied in this Order that has been made, what attempt has been made in any one particular to implement the promises that the Advisory Committee would use its best efforts to procure efficiency? My right hon. Friend the Chancellor of the Exchequer said, "We do not intend to allow a tariff to encourage inefficiency," but that is exactly what is being done, for if these duties are conferred on them, and traders are assured of protection against foreign competition in all those industries, what inducement 1168 have they to put their house in order, what inducement have they to raise their standards of production?
The advocates of Protection, recognising the supreme importance of those considerations as to exports, say also that they will be able, by means of tariffs used as a, weapon, to batter down these foreign tariff walls. The result will be that your Ptotection will not be Protection and nothing more, but that the next stage will be a general reduction of world tariffs through the influence of Great Britain denying her markets to those countries which are not giving her fair treatment. Where does that appear in the Order now before the House? Where is there anything that is even envisaged in that direction? I drew attention in a speech outside the House to the fact that manufacturers are to be guaranteed 12 months under the tariffs that we are proposing in order to give them security and allow them time to improve their organisation. I pointed out that that was the very negation of the whole policy, at least for 12 months, of using our tariffs as a means of inducing other countries to lower their tariffs. To that the Chancellor of the Exchequer has answered that, although that was the position of the Committee, if the Government saw reason to alter their recommendation as a part of any negotiations with foreign countries the Government was absolutely free to do so. What then becomes of the security? Why did the Tariff Committee give this guarantee unless it was intended to give our manufacturers some assurance of stability? As a matter of fact it is obvious that the whole policy of retaliation and the policy of Protection are contrary to one another; they are not complementary but contradictory, and if you have the one you cannot have the other. If you give security to manufacturers who are going to have protective tariffs you cannot say that at some future date that you will lower or abolish those tariffs for the sake of advantages, perhaps to other industries, in foreign markets.
Furthermore, there is one other point to which Parliament has never yet given its attention in connection with bargaining with foreign countries. It is supposed that we are free to give better terms to those countries which will give better terms to us. That is the formula which is used. But all the countries, or 1169 most of those countries and ourselves have, in our treaties, what is known as the Most Favoured Nation Clause. This specifically declares that if we do give better terms to one country we must also give the same terms to all other countries, and they have the same obligations. If, for example, the Scandinavian countries want to enter into a bargain with us and lower their tariffs on British goods, the moment they do that they are bound to give the same terms to Germany, Czechoslovakia, the United States and a score of other countries. If it is intended to embark upon this policy of making separate bargains with countries, or groups of countries, then this Parliament must make up its mind whether it will not give up the whole principle of the Most Favoured Nation Clause for unless it does so, the whole policy is doomed to sterility from the very beginning. You cannot even begin your negotiations until you have decided whether you are going to give up the Most Favoured Nation Clause.
§ Brigadier-General Sir HENRY CROFT
Does that not cancel out the right hon. Gentleman's point with regard to 12 months?
§ Sir H. SAMUEL
If my hon. and gallant Friend means that the policy is futile for two reasons instead of one, I Jo not dissent. I think that both of those arguments are valid and do not cancel out but cumulatively destroy my hon. Friend and his friends. But now all the world knows that what is needed above all by mankind is to facilitate international commerce, and we are told that we are putting on these new duties in the hope—in the perfectly futile hope—that they will be the means of reducing duties elsewhere. I believe that there is a Chinese saying that mankind suffers from five great evils—flood, plague, famine, robbers and rulers—and of these very often famine has been the chief. Now we find that mankind is suffering not from famine, but from plethora, and while the world's storehouses are bursting with goods we have 20,000,000 people unemployed throughout the world who are starving for the need of them.
After going through the greatest War in history this generation is now passing through the greatest world depression ever known, and you cannot deal with it by insular remedies or even Imperial 1170 remedies; you can deal with it only by international remedies.
If I am asked whether, in spite of all this, it is not essential to have these duties for the sake of revenue, I point out that so far as this Order is concerned it is negligible from that point of view, because the only revenue estimated to be derived from these hundreds of duties is about £5,000,000, compared with the sum of £760,000,000 required to meet the Budget. In a speech which I made in February I said that, of course, a revenue of £30,000,000 or £40,000,000 would be most welcome to any Chancellor of the Exchequer, but the question is whether this is the best means of raising that revenue, and whether this is the best form of taxation. I submitted that the reason why it was not was because it draws from the citizen twice as much as reaches the Exchequer, and the other part, owing to the higher price of commodities in general, goes into private pockets.
As for a substitute for these revenues, let me again refer to the authority of the right hon. Gentleman the Member for Epping (Mr. Churchill), a former Chancellor of the Exchequer, who recently told the House how he would raise an additional £20,000,000, apart from any capital assets such as the Dollar Exchange Fund, by means of annual revenues. My right hon. Friend the Member for Epping the other day made a very amusing speech full of banter. When a Government is formed not on a party basis, but containing a number of men of widely different opinions, the situation lends itself to criticism and to raillery, but I do not think that we need to trouble very much about that. I do not know what national purpose my right hon. Friend had in view in the speech which he delivered the other day. I know that he regards this Government as having been guilty of many sins, several sins of commission, and graver than that one sin of omission. I need not specify what it is. Probably that may be the reason for the right hon. Gentleman's genial rancour. The right hon. Gentleman's speech was animated I think by a spirit of pure mischief. There has always been a certain Puck-like quality in my right hon. Friend. Hon. Members will recollect how Puck says:I am glad it so did sort,As this their jangling I esteem a sport.1171 —an elderly and less lightsome Puck. The right hon. Gentleman's speeches amuse everyone, but they influence no one. I think this House of Commons is entirely indifferent to the personal gibes and Parliamentary rhetoric of my right hon. Friend, of which I have no doubt we shall have another brilliant example in a few moments. This Parliament is unprecedented in its composition and in the circumstances of its election. It contains a great number of new Members, young, keen, and sincere, who know that they have been sent here to carry out a task, and who see clearly the part they wish to perform. They have been taught that Free Trade is nothing more than an old shibboleth, but I do not think that they will be ready to accept tariffs merely as a new shibboleth. They are inclined to look upon the tariff scheme as part of a great policy of planned reconstruction—a national policy which they think will lead to a revival of industry, making our industries more efficient and progressive, and ending the long nightmare of unemployment. They look upon these tariffs as part also of a great Imperial policy leading to the economic unity of our Empire, and to the mutual advantage, they hope, of all parts of it, and leading to a closer and a lasting political unity. They also hope that it may prove to be a world-wide policy giving greater freedom to international commerce. And they are willing to use tariffs as a means to those ends, and as a price to be paid for the purchase of benefits of precious value.
I agree that if that is so the price must be paid first, and that we cannot expect that the goods shall be delivered simultaneously. The question is whether they will in fact be delivered at all. Events will tell. But if the price is paid, and the goods are not forthcoming, then there will be a revulsion of feeling which will quickly change the whole aspect of our political life. I will end by saying something which I desire should meet with the general approval of the whole House, and with that end in view I cannot do better than quote a sentence or two from a speech made by my right hon. Friend the Lord President of the Council not long ago, in which he said:Whatever may be true of other countries, however successful our tariff policy may be, whatever you can say, in the future international trade and commerce is still going to be the very life-blood of our coun- 1172 try. Therefore we have to look farther afield than Great Britain, and we are bound to cast our eyes upon the world outside to consider what its conditions are and to see what we can do to help to restore the world.Those are wise words and on that policy at least and on the consequences of that policy we can agree to agree.
§ Mr. CHURCHILL
We have listened to a very able speech, and a speech which would have been very appropriate had it been delivered from any other place than that which my right hon. Friend occupies. In the conditions in which it was spoken, I cannot help being reminded of what was said a good many years ago about the late Duke of Orleans, at the time when he issued some manifesto affecting French Royalism:He has missed a very fine occasion of keeping quiet.Let me borrow the language of my right hon. Friend which he applied to me interrogatively—accusatively. Let me ask him, what national purpose is served by the speech which he has just delivered? Will it save Free Trade? Will it help to make Protection come into working more smoothly? Will it comfort the Free Trade Liberals? Does it tell us anything that we did not know before? Will it strengthen the National Government? Will it improve our constitutional procedure? And, last, but not least, will it relieve my right hon. Friend himself of any burden of responsibility?
When I first heard about this agreement to differ, I did not condemn it; I thought it was a tolerable expedient in all the circumstances. Free Trade is almost a religious doctrine with many people. The Government was formed on an all-party basis. The Liberals reserved their rights in this matter at the election. They can plead a conscientious difference. The Government was admittedly formed to embrace these different points of view, and, therefore, it did not seem impossible, although it was obviously undesirable, for the Free Trade Ministers to say, "Our opinions on the main economic issue are unchanged; we cannot advise the country to go in for Protection; but there are larger things at stake at the present time than the issue of Free Trade and Protection. Our colleagues have asked us to remain; they have accorded us full liberty to disso- 1173 ċiate ourselves from their main policy, and, therefore, we are here on those terms." I think, stretching a point or two, that that might have been put up with. But I am bound to say that, when I went to Ottawa, I was disconcerted to find how strong was the opinion among leading men of both parties there that something had happened over here which had effected a grave and permanent alteration, and possibly injury, in the system of Cabinet Government throughout the Empire. We must not forget that, although we have no authority over the great Dominions of the Crown and the many Governments which have imitated and modelled themselves upon us, what we do exercises an enormous influence upon them, and, therefore, I say I was disconcerted when I went to Ottawa. But I never imagined then that we were to be confronted repeatedly with what I can only say is the indecent, and even scandalous, spectacle of Ministers wrangling upon the Treasury Bench, and of important officers of State doing their utmost to discredit, impede and undermine the main policy of the Government of the day.
I think my right hon. Friend's position is uncomfortable from many points of view, and I sympathise with him, apart from politics, very much indeed. His position is not secure even in logic. I understood his view to foe that, although Protection was wrong, once he had made that clear, the importance of the National Government at this time was so great, and his contribution to it was so indispensable, that he must nevertheless continue as a Minister. Therefore, it seemed to me that his view was that preserving the National Government was more important than preserving Free Trade. That is a perfectly tenable and a perfectly respectable view. But it surely follows that he should not weaken the Government by any action which he takes on behalf of Free Trade. He has decided between these two propositions, and, at the summit of things, nearly all questions are fairly evenly balanced; there are great perplexities on either side. My right hon. Friend has decided which is his major and which is his minor proposition, and I think the speech that we have heard from him to-day shows an illogicality and an inconsistency. It goes 1174 back on his decision that preserving the power and efficiency of the National Government is more important at this juncture than preserving the Free Trade system.
No doubt my right hon. Friend desires to escape responsibility. But can he escape responsibility while he is a Minister? Can any speech that he makes, however able—and, as I said the other day, speeches are not so important in a controversy of this kind as action— can any speech relieve him of his responsibility? Of course, he can declare that he did not advise Protection, but he cannot discharge himself from his responsibility in carrying Protection, any more than Pontius Pilate, washing his hands in public, could escape from his responsibility while he remained a high functionary of the Roman Empire. My right hon. Friend is actually driving forward Protection with all the force of His Majesty's Government, and all that his speeches, like the one that he has just delivered, tell us, is that he does not believe in what he is sharing in doing, and that he thinks it economically unsound and socially unjust. If my right hon. Friend really feels so strongly about the question, if his sense of proportion has changed, and he no longer thinks that the National Government is more important than Free Trade, I am afraid I cannot help him any further. If that be the conclusion which he has reached in his breast, only one course, only one step is open to him.
But let me see if, searching in the past, we can find some incidents for his guidance and assistance. Very often in history eminent men have been placed in false situations by the force of events. Study their conduct. There was Naaman, who had to bow the knee in the Temple of Rimmon when he went there in connection with his duties at the Syrian Court. His position has been quite well understood in history; he has not been stigmatised for it; but I expect that if Naaman, when he went into the Temple of Rimmon, had perpetually interrupted the service, there would have been a good deal of ill feeling among the congregation. Henry of Navarre said that Paris was worth a mass. Perhaps it was; perhaps the peace and unity of France was worth a mass to him; and history 1175 has certainly, despite the lamentable cynicism of his remark, not dealt unkindly with Henry of Navarre. But imagine the situation if, when he was at the altar at this ceremony, he had felt it his duty on every occasion to announce that he regarded the whole thing as blasphemous and idolatrous. I am quite sure that his action would have been robbed of much of its grace and of all its efficacy. I hope that these historical examples may be of some service to my right hon. Friend and to those who are acting with him.
Very high claims are made on behalf of His Majesty's present Government. A supreme crisis arose, and it still continues. The efforts of all well-meaning men are required. They have to combine together. They have to lay aside every impediment to stop the pound sterling from falling— no, I beg pardon, from rising—[Interruption.] With all this language my right hon. Friend is identified. He has now added another reason for his support of the Administration in all these difficulties and compromises, namely, a Conversion Loan in the future. I should never have thought, myself, that the Home Secretary would have been consulted on such a matter; I should have thought that it was really a question which did not require his special assistance; and I cannot believe that the Liberal party would sabotage a national Conversion Loan, or would not give it loyal support, merely because he severed his connection with His Majesty's Government. But it is the Conversion Loan, which is in the future, for which my right hon. Friend has to wait, although he is unconverted to the main policy of the Government, and probably also is wholly inconvertible.
It is sometimes stated that the situation in which we find ourselves is similar to that in which we were during the War—that we have our backs to the wall. I have never quite agreed with that view. I thought, myself, that there was a good deal of exaggeration about the crisis which arose last August and September—and a certain amount of manipulation. Anyhow, my view has not prevailed. The foundation on which the Government rests is that a great and supreme crisis is running in full career at the present time, and the Home Secretary owes not only his Ministerial office—I do not put that too 1176 high, because, after all, an office is not a sugar-plum in this country; it is a sacrifice, a service, a burden—he owes not only his Ministerial office, but his seat in Parliament, to the fact that very large numbers of Conservatives took the view that individual opinions must be subordinated, that party colours must be suppressed, in the interests of a national attempt to deal with our affairs.
Together with the Prime Minister and my right hon. Friend the Lord President of the Council, the Home Secretary has invoked all the highest obligations of patriotism upon all of us. They have raised the signal "Country in danger," and, as always in this island, the country has responded to such a call. If this be true—and much of it is undoubtedly true—does it not demand service and sacrifice in a very special degree from Ministers and leaders themselves? Is it not imperative for them to set an example? Ought not the conduct and the behaviour of a National Government to be upon a higher plane, and not upon a lower plane than that of an ordinary Government? Is it not an offence, even I think I might say a flagrant offence, in a Minister in a high position to lower the repute and weaken the actions of the Government—[An HON. MEMBER: "Which Minister?"] I am addressing myself to any Minister who should take such action, but in the main the target of my observations is the Home Secretary. I want to ask this question. Are only the common electors and the private Members to make sacrifices, while the generals are free to frolic and rollick as they please? We all know the quotation from "Measure for Measure." I took the trouble to verify it a few minutes ago.That in the captain's but a choleric wordWhich in the soldier is flat blasphemy.Surely aristocratic privilege can be pushed too far—this doctrine of one law for the rich and another for the poor being so crudely and stridently proclaimed. Discipline, yes, but discipline only for the rank and file! I remember how the Party Whips were used, for instance, on the Statute of Westminster Bill, and we know they will be used when the Beer Duty comes up for consideration. The right hon. Gentleman takes part in all this. He is a consenting 1177 party, nay, a part of the contributory energy which drives this process forward, and yet, when he himself is dissatisfied, he is ready again and again to defy all tradition and all convention. I must labour, with the aid of the House, to bring home to the right hon. Gentleman, for whom I have the highest esteem, the enormity of the course of action that he is following. The Government asked for a doctor's mandate. Doctors sometimes differ. They differ on a particular case, they may differ very strongly, but they do not go alarming the patient and alarming his relations by brawling in public. Still less do they try to interrupt and impede a critical operation. Such conduct would be judged unprofessional, and there are very good reasons, both to the patient and to the doctors, why it should be judged unprofessional.
Take another example. In war there are often differences between high commanders—terrible differences. They see themselves ordered to carry out attacks which they are sure will fail, and sometimes they are tragically vindicated. But I always understood that it was a point of honour that such differences, however forcibly expressed in the council of war, should not reach the troops or reach the enemy. Anyhow, it is always the duty of every man whole-heartedly, whatever his personal interest or his personal fortune may be, to hope and wish for the success of the national arms and the national cause. When we entered the Great War, there were many who disapproved, and some who expressed their disapproval, but there were very few who carried that expression of disapproval so far as to hamper the national defence. [Interruption.] I never made such a charge against the Prime Minister.
§ Mr. CHURCHILL
I know far more about what happened at that time than the hon. Member ever had an opportunity of learning. What I was going to ask my right hon. Friend, speaking as an old Liberal, addressing a Liberal, was why he does not try to model his conduct in this difficult time more upon the lines of the late Lord Morley and Mr. John Burns? They differed very strongly, but they made their protest and, after that, remained wrapped in inpenetrable silence. 1178 I should have thought that my right hon. Friend would follow their course. It is true that they resigned. No one is asking him to resign. On the contrary, I think the House as a whole wishes him to stay. He has shown that he is a courageous, efficient and upright Minister. The House as a whole is in favour of the continuance of the present regime, and we should be very sorry to see the simultaneous disappearance of the four satellites of Jupiter. The right hon. Gentleman has made his own position clear, but he need not make it clear ad nauseam, and he has no right to do it if it weakens the efficiency and humiliates the prestige of a Government whose creation and whose continuance he has repeatedly declared to be vital to our interests.
The inauguration of Protection itself is a tremendous and an intricate operation. Very high hopes are set upon its success. I think that something very like a wave of despair would pass across millions of our fellow-countrymen if this great new experiment and departure were to fail. If, for instance, prices rose and profiteering grew, if there was very little diminution in unemployment, if agriculture languished, if Ottawa faded, some of the stoutest and most energetic and active forces which have carried our country through many stormy years would suffer, almost heartbreak. Therefore, whatever views we have, or have had, we must hope for the success of this great national movement. Even the most bigoted Free Trader can have no other wish than that success will attend the policy that has been declared, and certainly no one in a high official position ought to keep on nagging and niggling and crabbing and clutching at those who are actually in charge of a policy of this kind. The right hon. Gentleman had much better recognise that we are definitely committed to a policy of Protection.
Never has there been so great a change, certainly not in my experience, which has been made with the overwhelming assent and acceptance of the country in so unstinted a degree. Nothing now can stop us becoming a Protectionist country. All those reasoned dectrines and philosophies of Free Trade have been discarded by universal suffrage by the whole stream of opinion, from the poorest up to the most intelligent and powerful 1179 people in the land. They have been discarded in favour of Protection. The decision has been taken. What, then, when this experiment has begun, can be the usefulness of such a speech as that which we have just heard? It can only spread doubt and alarm and hamper the execution of the policy. I hope, now that that speech is over, that it is the last of these exhibitions that we are going to witness, exhibitions which, though they do not in the least alter the course of events, are an offence against Cabinet Government and are an affront to Parliament. I see the Minister of Education, and far away in the corner the Secretary of State for Scotland. I appeal to them, at any rate, to leave it where it is now. Do not let them renew to-morrow the deplorable incident that we have been forced to witness to-day. If they care at all for the continuance of the National Government, do not let them make it a by-word and a laughing stock. Let them rest upon their unmistakably plain declarations and provoke no further the patience of this friendly House of Commons.
Upon this issue which is before us to-night I am a supporter of the Government. I cannot claim, of course, to rival my right hon. Friend the President of the Board of Trade in his Free Trade record. He has been a vestal virgin of Free Trade. It is true that he had a past. It is true that during the Great War he engaged in flirtations, like the Paris resolutions and the McKenna Duties. Still, a lot of things happened in the Great War that we cannot look too closely into after the event, and thereafter the right hon. Gentleman repented of his conduct and by many years of absolutely impeccable behaviour succeeded in living it down. Only a year ago he was the most complete, unimpeachable Free Trade purist in the House of Commons. I, on the other hand, cannot compete with him. I admit that I have been led further and further astray ever since 1920, when I had to vote for the Safeguarding Duties and for the key industries duties, and I am, I believe, the author of more Protectionist duties in my five Budgets than any other man until, of course, the present tariff.
But, although I cannot rival my right hon. Friend in his fiscal record, at any 1180 rate I like very much the way he is addressing himself to this new problem. I am very glad that he has not allowed himself to be led into what I might call compromise Protection. I was afraid we should see a number of half-hearted expedients which would rupture Free Trade without giving Protection a fair chance. The country does not want compromise Protection. It wants scientific Protection. I mean the adoption of such a fiscal system as shall be adapted, on a Protectionist hypothesis, to the peculiar needs and requirements of our island and of our Empire. We do not want to have any more of these attempts, not only in the fiscal but in so many, fields of politics, to bridge a 12-foot stream with a six-foot plank, and then for the sake of good feeling and party loyalty make it a seven-foot plank. We do not want any more of that.
We want this policy, now that it has been definitely and irrevocably adopted, to be tried out in its full integrity. Therefore I am going to support the whole of the Schedule of duties which are now the subject of our Debate. No doubt there are serious mistakes in it, but the wonder is not that there are mistakes in it, but that they are so few. The wonder is that this enormous change, this revolution, is being brought into operation so smoothly with so little real divergence of opinion and with so little effective outcry from the trades and industries concerned. Some of these matters we can discuss on the Budget. Silk, for instance, is more appropriate upon the Budget than to this discussion. There are the questions of the textiles and so forth, but, of course, those representations must be attended to by the Commission. I am not going to worry about those matters or aspects now.
I am not at all alarmed by the speech of the right hon. Gentleman. On the details the decision has been taken. I am content to ask, Has the Schedule of Duties been framed by clean hands! Has it been framed by competent people? Has it been framed by men with sincere convictions? Has it been framed by men who have no axe to grind, personal, party or political? The answer to all those questions seems to be sound and satisfactory. The advisory committee may be wrong, but they are much more likely to 1181 be right than wrong, and I should leave them to do their work. I do not think that we could have had a better, more competent, more honourable or more disinterested committee than the one which has been set up. Every interest can have access to that tribunal. But look at all those arguments, that enormous area of arguments, which used to be used against Protection—which I used with others—completely swept away by the procedure which the Government have adopted. They have been completely swept away. All those arguments about improper political pressure! There has been none. There has been no scramble of great interests, no log-rolling, bribery or corruption, none! And it may well be that this country, with its long-developed civilisation and Parliamentary institutions, will be able to gather the benefits which protectionist countries have reaped without incurring at the same time those grave maladies which have so often accompanied them in other countries. This policy has been decided by the great mass of national opinion and of intellectual opinion in the country. I believe that the execution of it has been done in the right way and in the best way, and, as far as I am concerned, at every stage I shall give it God speed.
Mr. HOPKIN MORRIS
The right hon. Gentleman the Member for Epping (Mr. Churchill) has taken the Home Secretary to task, not so much upon his views or because of the stand he has taken in regard to the Order which is now before the House, but upon his remaining a Member of the Government. I am not disposed to quarrel with the right hon. Gentleman in his strictures upon the matter. Whether the right hon. Gentleman the Home Secretary remains a Member of the National Government or not is a matter of small importance. But I do not agree, if I may say so respectfully, with the right hon. Gentleman that this issue is one to be lightly dismissed by the House of Commons because there is an overwhelming majority in the House in favour of the procedure. It is true that the House has an overwhelming majority in favour of Safeguarding or of Protection in some form or other, but that is no reason why those of us who still fear this policy should not make 1182 a protest when the policy is discussed by the House. It is our opportunity, and indeed it is an opportunity for Members of the Government. Whether the new procedure is a good procedure or a bad one may be a matter for difference of opinion.
Like the right hon. Gentleman the Member for Epping, at first I thought it was a good thing that there should be differences of opinion in the Cabinet and that those differences of opinion should be expressed upon the Floor of the House. It was the first sign of change and of the restoration of the supremacy of the House. The one thing which has been marked in the constitutional development of this country in the last few years has been that the House of Commons has ceased to have its full representative power. Gradually it has been more and more dominated by the executive and by the Cabinet. Anything that tends to a full and free discussion by the Members of the House and gives us a free hand to determine these issues is constitutionally to the good, and so far I welcome it.
I now come to the Order which is before the House. We cannot discuss it in detail. We must either accept it or reject it as a whole. I do not want to cast any reflections upon the sincerity of the Advisory Committee. I accept every word which the right hon. Gentleman said about the sincerity of the committee, and I am prepared to accept every word he said about the ability of the committee. That is not the issue. We have to deal with the recommendations of the committee upon the basis upon which the committee placed their report before the House. What do the committee say about the information which was before them? They clearly recognise, in the language of the right hon. Gentleman the President of the Board of Trade, that they are the three strong, wise men who have been selected to deal with the task of imposing duties. One would accept the estimate that they are the three strong, wise men, but what is the information upon which they are acting? What have they set out to do? They rightly complain that the one really dangerous characteristic of a tariff system is that it should be uncertain.
The hon. Member for Stockton-oh-Tees (Mr. Macmillan) this afternoon rightly 1183 pointed out that, whether you go in for a system of Free Trade or of Protection, the first essential is that the system should be fairly tried out. I understand that that is also the view of the right hon. Gentleman the Member for Epping. Clearly the worst possible thing that can be done is to give Free Trade a trial for a period of three or five years and then to revert to Protection, and then again to go back to Free Trade. It is bad because it results in uncertainty. It makes business contracts an impossibility. It is for that reason that the committee have condemned the uncertainty with regard to the tariffs they are to impose. What are they doing in regard to these proposals? I take the instance of iron and steel, which has already been taken this afternoon. The President of the Board of Trade last December resisted under the Abnormal Importations Order a proposal to put a duty upon iron and steel. He resisted the proposal because in his view there was not sufficient information at the Board of Trade to justify its adoption. Upon what information have the Advisory Committee acted? They have heard no witnesses from the users of steel. The only information, according to their report, which they have used and relied upon, is the information supplied to them by the Board of Trade. The President of the Board of Trade has no information, and therefore there was no information before the committee, even on their own showing. An hon. Gentleman shakes his head.
§ Major THOMAS
I believe that the committee have received evidence from the Board of Trade. In fact I know that they have.
Let me state what they say themselves, as they are the best judges of the evidence. They say that they have framed their conclusions upon evidence tendered to them by the Board of Trade. The Board of Trade in December had not sufficient information, although it was the best equipped organisation.
Has there been any additional information? If additional information has come into the possession of the Board of Trade between December and May, why has not the right hon. 1184 Gentleman himself come to the House and asked for an additional Order under the Abnormal Importations Act? He could have done so. He has not done so. I assume that he tendered all the information he had in his possession. If the committee had had additional information from the Board of Trade in April and May, why, in paragraph 20 of the report, do they say:The most difficult case of all is presented by the iron and steel industry.They have not had sufficient information to justify imposing a tariff for a fixed period. They are imposing it for three months, and the only two reasons why they are imposing a tariff are set out in the report as follows:We are satisfied that the maintenance of a prosperous iron and steel industry in the highest degree of efficiency is essential to the economic progress of this country.That is the first reason. The second reason is that:From the point of view of national security it must still be regarded as vital.Those two reasons given as being essential to the progress of the industries of the country and for the national welfare will equally be valid three months hence. If that is the case, and those are the only reasons, why have they limited the period to three months?
Lieut.-Colonel Sir MERVYN MAN-NINGHAM-BULLER
Will the hon. Member read the third line of the paragraph—"It is so urgent"?
The reason why it is urgent is set out in the last half-dozen lines of the paragraph, and the two reasons why it is urgent are, first of all, that other industries and the progress of other industries depend upon it, and, secondly, that it is vital to the national interest. I am pointing out that those two reasons will equally be valid three months hence.
§ 7.0 p.m.
The real point is the uncertainty. Take the post-War tariffs. The difficulty about the post-War tariffs of Europe have been twofold. First of all, the articles which have been subject to duties have been uncertain throughout the whole of the European countries, and, indeed, in our own country. That sort of thing is bad because it is not 1185 known what articles are to be the subject of duty from year to year and from country to country. In the second place, your tariff wall has been uncertain in extent. It has moved upwards and downwards with a great deal of uncertainty. Here is a committee complaining of this kind of uncertainty and adding to uncertainty an uncertain limit of time. The duties upon some of the articles in the Order have now either been lowered or totally exempted. That is an uncertainty. Another uncertainty relates to the tariffs to be levied, and another is the period of time during which duties are to be imposed. There are present all the worst elements which have characterised tariffs in post-War Europe. That is not a condemnation of the sincerity of the Advisory Committee or of their ability. The condemnation is that they have not had the material before them upon which to come to a sound conclusion. This House is asked to endorse this report.
The President of the Board of Trade has made a series of very important speeches since the formation of the National Government, and I shall take the reasons which he has given for the Abnormal Importations Orders. He has said in the course of these speeches, which are very interesting, that this is not the time for the great parade of conscience and that the one thing that is essential is a balanced judgment and full knowledge. Where, from beginning to end, is the full knowledge upon which we can discuss the conclusions of the Advisory Committee? If there is full knowledge, why is there all this uncertainty? Conscience may not be necessary, but, if we are going to dismiss conscience, let us have adequate information before take the next step, and that adequate information is missing here. In another speech the right hon. Gentleman pointed out that what was wanted as an effective business man was a Free Trader who was not too securely wedded to the shibboleths of his faith. He had better be careful lest the new mistress may become too exacting in other matters.
Are we producing any changes for the welfare of this country? I shall take two tests. The first test is that of revenue purposes. A question was put to the Home Secretary by the hon. Member for 1186 Stockton, who asked him how he was going to raise the revenue of £32,000,000 if he dropped those duties. It is no good putting that question and thinking that you have answered it if no detailed scheme is given you in reply. The mere fact of putting that question shows how serious the issue is. It is the amount of national expenditure that we have to raise which is the problem. When you have to find £32,000,000 of revenue it does not matter whether it is raised by direct or indirect taxation. We are taking it out of the life-blood of industry in this country quite as effectively in this way as if we were putting another 7d. on the Income Tax. It is not improving the condition of industry. The only way we can deal with that problem is by strict retrenchment. It was said in the last House that, if you had a party Government, no matter what party was in power, whether Conservatives or Labour or Liberals, the parties would seek to bribe the electorate at election time and would try to outbid one another and therefore would return to advocate expenditure and not to be effective guardians of the public purse. Here to-day we have no such problem. We have a House which is practically unanimous on the question of retrenchment. If this National Government cannot retrench by £32,000,000, it is hopeless for any Government to carry out retrenchment. Are they going to shirk it and merely transfer it to a convenient form of indirect taxation? If this is the solution of the National Government, it is merely adding to the burdens of the country.
We were told by the President of the Board of Trade in February that these duties were to be used to bargain with other countries. He then demanded an instrument with which he could go to Lausanne or elsewhere for the lowering of tariffs. Where is the indication of that here? Although it is not a binding pledge, one of the things that the Committee claim here is that these duties should be kept in force for a period of 12 months. That means that for 12 months they cannot be used for bargaining purposes. If you are going to vary the duties within 12 months, you add to the uncertainty and you do what the right hon Member for Epping complained of—you do not give Protection a fair chance. Does the right hon. Gentleman 1187 express the majority view of the Government when he says that we should give Protection a fair chance? If we are going to do that, what happens to the President of the Board of Trade and the other section of the Government which demands a bargaining weapon? One cannot have it both ways. The Government must make up their mind what they want to do. They have already delegated not only their own powers but the powers of this House to an Advisory Committee, which is virtually independent of the House and has powers of taxation. It matters not how wise or how strong these men are, it is time that the House re-asserted itself as dominant in the sphere of taxation. If it has not the taxing power, it has no other powers.
I have yet to understand how those, who were demanding during the General Election that the House and the Government should be free to use this weapon merely to deal with the adverse balance of payments or with the pound that was running away, can justify their attitude now. We have neither of these circumstances to contend with to-day. When one considers this Schedule it aggravates the problem. Examine the world and consider how these tariffs will operate in the modern world. One can divide the world to-day as one could not divide it before the War. The great creditor countries are the United States, France, ourselves, and a few small countries in Northern Europe, while the rest of the world are debtor countries. If the Advisory Committee framed a system of tariffs which hit our creditor countries, it would be a logical scheme, but the main part of these duties fall upon those countries which belong to the debtor class. If we impose duties upon them, how can we expect them to buy our goods? How are they going to buy them? We are damaging trade and increasing the burden on our invisible exports. These restrictions, apart from being a bad example to the rest of the world, are going to add nothing ultimately to the wealth and prosperity of this country. They may add to the employment of this country, but that is a different proposition.
The hon. Member for Stockton says that we should go back to agriculture and 1188 develop the agriculture of this country. He sees quite clearly the outcome of this argument and, to do him justice, he does not shirk it. Let us see what it means in this country. With a great industrial country like this, carrying a population of 46,000,000, are we prepared to go back to an agricultural standard of life here? It may be a good thing, but it is a far lower standard than the industrial standard of life now obtaining here. We cannot carry a population of 46,000,000 on anything like the present standard of life on an agricultural level. We will have to reduce it. I take the figures of a Tariff Reform economist who stated that we could only carry in this country 15,000,000 people on the present agricultural standard. We will have to reduce our standard of life by two-thirds on the present standard. Will anyone say that the present standard is too high? It is idle to talk of this country going back to an agricultural level. If that is so, why impose these burdens on agriculture to-day, burdens which handicap the agriculturists, who are trying to make the best of it? If we are not going back to an agricultural standard of life, we must farm the rest of the world. The only difference between the farmer here and the manufacturer is that the manufacturer is farming other parts of the world. He is quite as much a farmer. We live by the products of the land. We do not live by manufactured goods, but by exchanging them for food. The manufacturer farms the land abroad just like the farmer here. The whole of this scheme, however, treats them as separate.
While I have no desire to criticise the personnel of this committee, I say that there should be careful review and careful information, and a full hearing given to all the parties interested before this tribunal. If they are going to hear the steel producers, let them hear the steel users, too. Let there be a full hearing and no question of a rash imposition of a duty for three months. Let the whole question be thrashed out in public so that we know where we are. Let not the country be deluded by the putting back of a few thousands at work here and a few thousands there. We could solve the unemployment problem here to-morrow, because there is plenty of work if people would work for nothing. The problem is to give the people work at the present standard of life or a higher standard of 1189 life. There is no attempt by the National Government to deal with this problem. They are merely tinkering with it, and by tinkering with it leading the country into believing that they are doing something.
§ Mr. BOULTON
In rising to address this House for the first time, I do so with that humility which I feel the great traditions and customs of this Assembly impress upon a newcomer. It is because the subject under discussion has such importance for the area in which I am interested that I venture to intervene in this Debate, and I crave the indulgence of this House for the few remarks that I wish to make. This anxiously awaited Order has on the whole I think it will be admitted, given general satisfaction. I am no less surprised than the Chancellor of the Exchequer himself at its moderation. Nevertheless it is a great step forward on the road to that national reconstruction towards which the Government have made such a bold start and for which they have an overwhelming mandate from the electors, and particularly from the working people of this country. If there is one thing more than another which this country will not tolerate, it is a policy of compromise. It has given its verdict and it expects bold and courageous action from this Government, however much such action may offend the sentiments of the most orthodox, so long as it tends towards placing our industry and our national finance on a sound foundation with ultimate benefit to the country. It is not a question today of the old controversy of so-called Free Trade versus Protection. That controversy has fortunately been buried and, in spite of what hon. Members opposite or those who sit below me may say, the issue at the General Election was made abundantly clear, and an equally clear verdict was given. Speaking for myself as representing a large industrial area if there is any one hon. Member returned to this House to support the Government with a free hand and a tariff policy, it is myself. I put the question in the forefront of my election address, and the electors replied in no uncertain way. That is probably the position of the large majority of hon. Members. Those who accuse the Government of abusing the mandate which they received may perhaps like to see a tariff policy fail. Be that as it may, it shows how far removed 1190 they are from realities and the real feelings and sentiments of the people. The people wish this policy to be tried, just as Free Trade has been tried, and if it should fail—and in the present world conditions I am convinced that it will not fail—we shall have to try something else. I have never advocated a higher tariff than is necessary for placing our industries upon fair competitive conditions, but I venture to say that if we impose tariffs that are not efficient for the purpose for which they are designed, then we shall court failure.
The Advisory Committee has an immense responsibility. It has been given great power, and it may well be that it will be a deciding factor in shaping the future of our industrial development. I have no desire to criticise the Committee. They have had but little time to investigate the mass of information and statistics that must have been thrown at their heads by the Board of Trade. I think this first Order has met with satisfaction. I believe they have started on right lines. Naturally they have not been able to please everybody at once and it is no use disguising the fact that whereas some industries may feel quite satisfied there are others that feel profoundly disturbed. I have the honour to represent a constituency that is in the centre of one of the largest industrial areas in this country, mainly dependent upon the iron and steel and ancillary trades. Those trades have been hit harder perhaps than any others since the War, partly owing to disarmament but mainly due to unfair and severe foreign competition. There are no fewer than 55,000 persons unemployed in Sheffield alone, and this long overdue Protection which has been given to the iron and steel trade has been received with immense satisfaction both by the manufacturers and the workers. There are, of course, points to be adjusted and as I understand that those points are already under consideration I will not labour the point. I believe that this Protection has come just in time and I hope that it will be sufficient to revive and restore this great and important industry to its rightful and former position both in this market and in the markets of the world.
It is, however, with the lighter trades that I am more particularly concerned. 1191 Some of those trades came within the scope of the Abnormal Importations Act, whereby they benefited by duties of 50 per cent., but under the new Order they are now protected to the extent of 20 per cent. only. Many of these industries have been living from hand to mouth, and it is no exaggeration to say that the effect of this Order has thrown them into consternation. I will give one example only, which I think is typical of most of the industries to which I refer, and that is the cutlery trade, which is the most important of the lighter trades and one of the most ancient trades in this country. This trade was originally protected under the Safeguarding Duties Act. The world, as this House knows, has been drifting towards and demanding cheaper quality goods and when the duties of 33⅓ per cent. were imposed in 1925 manufacturers were induced to put down new machinery and to turn their attention to making these cheaper quality goods, and develop this comparatively new side of the industry. But when the Socialist party came into office Mr. (now Viscount) Snowden, in his wisdom or otherwise, let it be known that these duties would be allowed to lapse at the end of their period, and in December, 1930, they did lapse.
I have heard hon. Members who sit on the benches opposite cite, in several of our Debates, the cutlery trade as being one of those trades which even under Protection could neither compete nor pay a decent rate of wages. How could any industry develop and prosper under such conditions as those to which this trade has been subjected. The duties were never allowed to remain long enough to produce any real effect, and, worse still, the very fact of stating that the duties would lapse knocked out all the confidence and security in the trade. I think it was the hon. Member for West-houghton (Mr. Rhys Davies) who stated that these industries paid very poor wages. I know that in many cases the wages are far too low, but if he inquired he would find that it is as much as or more than the industries could afford to pay under the adverse conditions under which they have been working. If the hon. Member had been in his place, and if he did not know it, I would have reminded him of the fact that the wages 1192 that are paid were agreed to by the trades unions and the employers.
The cutlery industry however, conclusively proved one thing, and that was that a duty of 33⅓ per cent. was not sufficient to allow it to meet foreign competition. The reduction in wages in Germany alone of 20 per cent. is in itself a great factor. I do not wish to weary the House by quoting figures or producing a mass of conclusive evidence I have to prove this, but I will give one instance of the competition which this trade has had to meet in regard to the cheaper quality goods. Take a two-blade penknife. The German price is 4s. 6d. a dozen, the English manufacturer's price paying trade union wages, for a knife of the same quality is 11s. 2½ per dozen, made up as follows: materials 2s. 5¼d., labour 8s. 9¼d. This was before the duties were imposed. I notice that the hon. Member opposite shakes his head. I could give many other instances from this trade to prove what I am saying, but I think the example I have given will sufficie to show that nothing less than 50 per cent. plus the depreciated pound will be sufficient to enable this industry and the other industries which I have mentioned to compete in the cheaper quality goods. It is this side of the industry which ought to be encouraged and developed. I am advised it can be largely developed if given efficient protection and it is this side only of the industry that we can hope to absorb the unemployed connected with the industry.
The employment in four years in this industry has been reduced by 50 per cent. and if the estimate of production in 1930 was compared with that of 1914 it would be seen that they are only working 30 per cent. of their full capacity. Enormous stocks of foreign goods have been dumped into this market. I am advised that within 16 days before the Abnormal Importations Act came in, stocks equalling a whole year's imports came into this country. Those, I am advised, will take the best part of a year to absorb. How is this and other industries, such as the horticultural implements industry, the file trade and the tool trades, going to fare under a duty of 20 per cent? When the Abnormal Importations duties were imposed they raised great hopes and expectations. Inquiries came in, provisional orders were placed and manufacturers in these industries arranged for 1193 the extension of their plant and for the provision of new machinery with which to develop the cheaper side of their trade. But during the last week or two I have had no end of correspondence from my constituency showing me that these orders have been cancelled. One order, if I may cite one instance, for 1,000 dozen pairs of scissors has been cancelled.
It may be said that the manufacturers were imprudent in making their arrangements for putting down new machinery before they knew how they stood under the new duties, but if they had not done so they would not have been able to meet the new demands which they expected, and of which they had every sign. Moreover, if they had not made arrangements to meet the demands they would have been accused of being unenterprising. It was never anticipated, and I do not think that reasonably they could have anticipated, that these abnormal importation duties would have been disturbed so suddenly and reduced so greatly, at any rate until they had done their work efficiently, and enabled the industries to get on to their feet. The 20 per cent. duty now imposed will certainly bring in revenue, because, when the great stocks are absorbed, we shall still get importations, but it will not allow us to get our people back to work, which is surely our chief object. I am convinced that that is the object of the Committee and of the Government, and I therefore hope and urge that, as soon as such facts as I have instanced can be placed before the Advisory Committee, an amending order will be made and accepted by the Government with the least possible delay.
Time is of the essence of the whole of this matter, if these industries are to be allowed to survive and unemployment is to be reduced. The workers and employers in these industries are at one in urging for efficient protection. It is on the question of employment that this Government will be judged. I speak with intimate knowledge of the conditions of the workers in these industries who have so long suffered from the distress of unemployment. It is these people who have sent me to this House in the confident belief that this Government would 1194 relieve them from the yoke of unfair and severe foreign competition, in whose grip they have been brought to the verge of despair. I support whole-heartedly the new Order as a first instalment, but I would urge the Government to use their influence to see that no undue delay shall take place in those cases where conditions warrant immediate action.
§ Mr. T. GRIFFITHS
I congratulate the hon. Member for Central Sheffield (Mr. Boulton) on his maiden speech. He has made a useful contribution to the Debate, and I am sure that the House will be pleased to hear him on many other occasions. He has dealt with the iron and steel industry in the Sheffield district and I, in the short time I propose to occupy, am going to deal with the industry from Scotland to South Wales. The Chancellor of the Exchequer this afternoon explained this new Order in such a clear and concise way that everybody in the House could understand it. He is an unrepentent Protectionist. Then the Home Secretary, speaking also from the Front Government Bench, showed that he is an unrepentent Free Trader. My mind went back to the year 1919. From that date up to the present no more important question has been discussed in this House than the coal trade. The great advocate of that trade was the late Mr. Vernon Hartshorn, and although he spoke as a representative of the miners, he always had the interests of the industry as a whole at heart. It is from that standpoint that I propose to speak of the iron and steel trade. I have the welfare of the industry at heart and I propose to give the Government some information as to the results of the Abnormal Importations Act and the Import Duties Act.
The Home Secretary to-night seemed to me to be flogging a dead horse. These Import Duties have been in operation for over a week and, therefore, to condemn them now is like flogging a dead horse. I want to try to assist the Advisory Committee by pointing out to them the strength and also the weakness of their proposals. The Advisory Committee are going to make an exhaustive examination in order to find out the advantages and disadvantages to the trades which will be affected by these Import Duties. How has the imposition 1195 of the 10 per cent. duty affected the steel industry? The figures I propose to give are correct, because they come from our statistical department, and have also been issued by the iron and steel trade manufacturers. In January, in South Wales and Monmouthshire, 34,000 tons of steel were produced; in Derbyshire, Leicestershire, Nottinghamshire and Northamptonshire, 87,000 tons; in Lancashire and Yorkshire, 21,000 tons; in Lincolnshire, 33,000 tons; on the North-East Coast, 78,000 tons; in Scotland, 16,000 tons; in Staffordshire, Shropshire and Warwickshire, 26,000 tons; and on the West Coast, 32,000 tons. That is a total production of pig iron for the month of January last of 330,000 tons. In February, the total production was 323,000 tons. Therefore, in January you had a production of 7,000 tons more before the duties were imposed than you had in February after the duties were imposed.
§ Mr. GRIFFITHS
That would not make any difference at all. I am not trying to score any debating point; I am simply giving information. There must be a reason, and the reason is this. Under the Abnormal Importations Act and under the Import Duties Act you allow Empire goods to come in duty free, and India is able to produce pig iron and send it 7,000 miles to Scotland, and put it on the Scottish iron market cheaper than the Scottish people can produce it themselves. Therefore, the Scottish blast furnaces are closing down, not as a result of Continental competition but because of Empire competition. I am not finding fault; I am simply giving this as information. We had a report in South Wales the other week that India was not only sending pig iron to Scotland, but that she was sending pig iron into South Wales and also steel bars, and offering them on the exchange in Swansea. If the intention of the Government in imposing these duties is to set men in the iron and steel industry at work, then what is the difference between the men being kept idle by the importation of Indian pig iron rand being kept idle by the importation of Belgian or French pig iron and steel bars? I am putting it as a question, and not to try to make a debat- 1196 ing point. These men will still be idle, and I want the Advisory Committee to go into this question.
The Home Secretary, in his speech this afternoon, mentioned employers who were using Bessemer steel bars from abroad. I want to point out to the right hon. Gentleman that, so far as the production of tinplates in South Wales in concerned, 80 per cent. of the tinplates are what we call the best tinplates which can be produced in the world, and you must have good acid and basic steel to produce them. It is useless for the Home Secretary to point out to us who are in the steel trade that it is absolutely essential to get Bessemer steel. If 80 per cent. of the tinplates produced in South Wales can be produced out of our acid and basic steel from South Wales, then the other 20 per cent. can be produced out of our acid and basic steel as well. It is unnecessary to get Bessemer steel. I want to go farther. I call these independent employers who are members of the Tin-plate Manufacturers Association, but who will not work with them in the pool on the quota system for the regulation of trade, black-leg employers. If they want Bessemer steel, they simply have to go to Ebbw Vale, where we have 4,000 men idle, and Ebbw Vale can produce them as much Bessemer steel as they may want.
But now I come to the very important point that I have been trying to stress in every Debate in which I have taken part in this House, and that is the question of the national planning, the reorganisation, and the reconstruction of the iron and steel industry. The Chancellor to-day stated that the condition on which this duty of 33⅓ per cent. has been granted is that the employers will work for efficiency. They must get a high pitch of efficiency, he said. We have steelworks in this country that are efficient. All our plant is not inefficient. We have steelworks, we have rolling mills, we have wire mills, hoop mills, and section mills in this country that are efficient, but that does not mean to say that the industry is efficient, because it does not matter what country adopts Protection, it is not the most modern plant that fixes the price in the market; it is the most efficient plant that fixes the price. Therefore, this efficient plant is able to cover the cost of production and perhaps make a little profit, but the people with 1197 the modern plant are able to make enormous profits under a protective system of this kind.
I therefore appeal to the Financial Secretary to the Treasury that when they get any recommendations they will consider, not only the melting department, but the re-rolling side as well, because that is very important. Take Germany, if you like. I am speaking from memory, but I believe I am correct when I say that in 1924 Germany used to export about 5,000 tons per annum of tinplates. In 1930 she exported 60,000 tons, and those 60,000 tons are meeting Welsh tin-plates in the neutral market. I therefore appeal to the Financial Secretary to take all these points into consideration. You have not only now the Iron and Steel Trades Confederation, but you have several professors; for instance, Professor Bone, of the London University, a very clever man, who has studied the steel industry of the country and who has openly declared, although he said that we may have to have Protection as an expedient, that the iron and steel industry of the country must be brought under a utility organisation. That is his view, and several others have said the same.
In fact, the hon. Member for West Swansea (Mr. L. Jones), speaking the other day in this House, admitted that they had redundant plant which would have to be wiped out; and we have had an expression of opinion from even some of the leading men in the iron and steel trade. Sir William Lark said that there would have to be reorganisation and reconstruction of the industry. I therefore appeal to the right hon. and gallant Gentleman to keep in view the points I have put before him and to see to it that the advisory committee will not lead us down a blind alley. We do not want to be worse off under Protection than we were under the old system. I hope that things are going to improve, and if the points that I have put before the House are kept in view, I am sure it will be very helpful.
§ Sir JAMES DUNCAN MILLAR
I am sure the House will welcome the contribution to the Debate of the hon. Member for Pontypridd (Mr. Griffiths), who has such a full knowledge of his subject and who is rightly anxious that the industry he is interested in should benefit 1198 under the Government proposals. I desire to say a few words, as one of the Members of the Liberal party, who was returned at the General Election as a whole-hearted supporter of the National Government, and who believes that the Government were justified in asking for the fullest powers to deal with the situation and that the Government were accorded by the country the fullest powers, including, if necessary, the imposition of tariffs, in order to meet the requirements of our country. It appears to me that the Government has acted throughout entirely within both their rights and their mandate in the fiscal proposals which they have submitted to the House of Commons.
In common with the majority of my Liberal colleagues, I supported the Abnormal Importations (Customs Duties) Act, the Horticultural Products (Emergency Customs Duty) Act, and the Import Duties Act, all of which I regarded as put forward in good faith by a Government which included representatives of all the parties who were concerned to see the country through its present difficulties; and I cannot see how this policy can be less the policy of the National Government because there happen to be a few dissentients who still remain within the Government. I think the Government were entitled to decide this matter as they have done, in the light of the considerations which appealed to them as being in the best interests of the nation.
We are considering to-day the Order which has been made, following upon the provisions of the Import Duties Act, and the powers which have been given to the Advisory Committee. I think everyone should recognise the extreme difficulty of the task which has been imposed on the members of the Advisory Committee. I have studied their recommendations with care, and I am bound to say that they appear to me to indicate a desire to proceed with caution, to avoid as far as possible injury or dislocation to our trade, and to make corrections and adjustments wherever they are called for at the earliest possible moment. They also indicate—and I welcome this very much—their intention to prevent any attempt to exploit the consumers of this country, and they have it in their power to do so. Although the Home Secretary said there was not a 1199 single word about reorganisation, if he will read the recommendations again, he will find a reference made to the need for. reorganisation as being important for the purpose of securing the re-establishment of many of our industries.
The proposals involve both the lowering of a number of duties which were imposed under the Abnormal Importations (Customs Duties) Act and the imposition of additional duties. I think the Advisory Committee in the general scheme which they have adopted have endeavoured to discriminate fairly between various classes of articles. For example, in dealing with luxury and semi-luxury articles, they have suggested higher rates. Is there anyone here who disapproves of a higher duty being put upon articles which are of a purely luxury character coming into the country to-day? I have not heard anyone raise their voice against that. On the other hand, the Advisory Committee have also endeavoured to secure that a lower duty shall be placed upon certain articles which are necessary for the carrying on of certain of our industries, particularly agricultural implements and building materials, and they have made a very valuable suggestion regarding machinery which will enable us to secure the machinery which we require in this country under conditions which may make it unnecessary to levy any duties.
In the case of the highest duty of all, the 33⅓ per cent. on iron and steel, we have a clear statement to the effect that this is made as a temporary proposal in order to deal with the question of abnormal importations, to enable the committee to take still further into account the situation and to have regard to representations which no doubt they will receive from all sections of the industry. These proposals may fairly be regarded as being put forward in the nature of an experiment. I, for one, do not share the views which have been expressed by several hon. Members in this Debate that this is a cut and dried, finished policy which, whatever the results may be, is going to be continued. I believe that the good sense of this House will always see that a policy of this kind must be judged by its results and by its effects upon industry, and I confess that when I heard the speech which the Lord President of 1200 the Council made on the Financial Resolution, I was greatly impressed by the views there put forward, when he said that he "believed that we should have to feel our way, that the risks were great on all sides, but that the elastic method put forward would meet the case and give the fairest trial." He said also that he preferred the method which was adopted under the Import Duties Act to the imposition of a higher protective duty, which some of his friends would have wished to secure at the outset.
The criticism which has come with regard to this Order has come from three different sources. The Opposition Amendment throws no light whatever upon the policy of the Opposition on the merits of these particular duties or indeed upon their views generally on the subject of Protection. They are obviously out to discredit and destroy the Government. I have listened with interest to the Debates which we have had in this House, and have noticed that the right hon. Gentleman the Leader of the Opposition and his friends have always wound up with an appeal to the country to adopt Socialism as the one panacea for all our ills, but that they have avoided, and still avoid, giving any indication of their views on the specific import duties, to which their Amendment docs not even refer. Therefore, we know exactly where we are so far as the Opposition criticism is concerned. With regard to the other criticism, we have, on the one hand, the criticism that these duties are not high enough and that they should have been expanded. That appears to me to afford excellent evidence of the fact that there has been no surrender here to an extreme Protectionist policy, but that there has been a definite effort to adopt a moderate policy which might commend itself to the country as a whole. So far as the third line of criticism is concerned, namely, that expressed by the Home Secretary and his colleagues who dissent from the Government, no one can fail to recognise the deep sincerity with which the Home Secretary and his colleagues have expressed their views, nor indeed their right as they hold them, to state them. I would like to remind the House that their differences are differences of method and degree, and not of principle. I have 1201 studied very carefully the speech which the Home Secretary delivered on the Financial Resolution, and the alternative proposals which he then put forward, and I make bold to say that in those proposals you will find that he was quite prepared to accept a measure of Protection in order to afford security to industries over a period of time, that he was prepared to accept the precedent of the Dyestuffs Act, that he was willing to accept whole-heartedly the policy of the Government in regard to agriculture, including the wheat quota, and, indeed, on fisheries also, along with the tariff which was involved, and that he subscribed also to the idea of economic pressure being used for the purpose of lowering foreign tariffs. In the alternative to be proposed—and he has attempted to make no alternative proposal—with regard to how the money which has been raised under the new import duties could have been secured from other sources, we have had to-day another illustration of his difficulty in dealing with that matter. We have not definitely heard from him what his policy is in that respect. He is bound to satisfy the House and the country that there is some better way which he can indicate but, so far as I can see, he is not in a position at present to do so.
I would like especially to take the opportunity of repudiating, as I do very strongly, the view that has been expressed by a section of the Liberal party that the Government's proposals involve a gross breach of faith with the electorate and a dishonourable betrayal of the pledges given by party leaders and supporters of the National Government at the General Election. That charge has not been made by the Home Secretary or by his colleagues, but I suggest that we are entitled to have from him a complete repudiation of the view which is being spread outside. We are entitled to ask that he and his colleagues should make it perfectly clear that they are not prepared to accept the view that is being expressed by many of their supporters.
§ Sir J. DUNCAN MILLAR
I have explained to the House the view which I have taken on these duties, that they have been put forward with a desire, in good 1202 faith, to secure the best interests of the country. I would like to draw attention to the fact that at the proceedings which took place recently at Clacton. In the resolution and speeches which were there delivered it is now perfectly clear that a section of the Liberal party, led by the hon. and gallant Member for Pembroke (Major Lloyd George) regards itself as no longer under any obligation to sup-port the National Government, and is prepared to put forward candidates in the constituences and fight them.
§ Sir J. DUNCAN MILLAR
The right hon. Gentleman may cheer. I have no doubt that it suits his book very well. He and those associated with him may be glad to receive help from that quarter. Notice to quit has been given to the leaders by the dissenting Members of the Liberal party at the Clacton conference, in a way that made it perfectly clear that they consider themselves free from any obligation to support the present Government. I should like to suggest that that is not the view that is held by a very large body of Liberal opinion throughout the country to-day. In the "News Chronicle" newspaper it was stated that pledges which had been given at the General Election had been treated as mere scraps of paper and that there had been a betrayal. Following upon that—my colleagues here who agree with that view will, I hope, define more clearly their position to the House—the "News Chronicle" points out that the Liberal party "holds itself not only free but obliged to do everything in its power to defeat the Government policy, which means in the long run to defeat the Government itself."
It is high time to point out that these attempts to weaken and undermine the Government at a critical time, when it is essential that we should speak with a united voice, are very much resented by the country. In making common cause with the Opposition, that section of Liberals are not only rendering a great disservice to the nation, but they are destroying the influence of their own party. They certainly cannot claim to represent that very large body of opinion in the country which is determined to secure the continuation of the National Government, and which is much more disposed to follow the guidance of such 1203 Liberals as the President of the Board of Trade, who can speak with great authority and experience of the matters which we have had under discussion. I believe that a continuation of the National Government is more essential to-day than ever. There is no alternative but national chaos. I am sure that the great majority of the House of Commons are anxious to carry out the national mandate honourably and to avoid a renewal of party controversies. I assert that that is the view of the great majority of the Members, and I regret to think that outside this House efforts should be made to destroy this Government by those who, only so far back as the General Election, were pledged to give it their whole-hearted support. There are many hon. Members returned by voters who represented the Liberal and Labour parties, and Liberals returned by voters of the Conservative party. We must recognise the fact that we have not been sent here to renew party controversies, but to get on with the job of trying to secure for the country some advantages that will see it safely through these difficult times.
My point of view is that the experiment which is being carried out to-day is being carried out under the safest and fairest conditions that it would be possible to secure. I am perfectly certain that the House of Commons will always regard its Members as having a right to offer constructive criticism, but what I object to is that the criticism which is offered to these proposals is not only destructive of the proposals, but is destructive of the Government. Of that there can be no question whatever. The right hon. Gentleman the Member for Epping (Mr. Churchill), in a very brilliant speech, spoke of the serious difficulties in which those right hon. Gentle-men and other Members of the Government stand who are voicing their opposition to these proposals. I agree with him that they are men of brilliant ability whose services we should be sorry to dispense with. I want to say this perfectly clearly as a Liberal who has been in this House for many years and who was associated with them in the old days. There are many Liberals to-day in the country who regard it as the one vital issue at the moment to maintain in being, with its full autho- 1204 rity, the National Government, and who are prepared to make sacrifices for that purpose, and are prepared at the same time to justify their position in the constituencies. I believe they will secure the support of their constituents in the line that they have taken. In giving my support to the Order, I believe that it proceeds along the lines which have already been approved by a great majority of the House of Commons. I am certain it will be carried by an overwhelming majority, and that the country can look to the Government to carry out the Order with a single regard to the interests of our industries and with the sole object of securing the increased prosperity of our nation.
§ Mrs. COPELAND
In rising to make my maiden speech, I claim the indulgence of this House, an indulgence that I know is always graciously accorded to a new Member. I should also like to take this opportunity of thanking hon. Members of all parties for the kindness that they have extended to all of us women Members. In speaking in this Debate to-day, I wish to support the Government. I listened with interest to the Chancellor of the Exchequer's speech, and I feel strongly that we in this country are on the right track at last. Most of us have long supported tariffs and have not been disappointed, unless we have perhaps been disappointed that in some ways the tariffs are not as high as we hoped they would be. I wish to speak entirely from the point of view of the pottery industry, which is one of the oldest in this country. It employs some 70,000 people in North Staffordshire. "It is not a large industry," you will say, but it is one which has helped to make England great. There is no doubt that the porcelain and earthenware manufactured in North Staffordshire are included among the finest produced in Britain. Some of that porcelain has gone forth in the world to make England famous, because it is so good.
I know that some hon. Members say that china gets broken. I can assure them that there is china and china, and that the stuff we make in England is infinitely better and of a more durable quality than other china imported from abroad. Some three years ago the best quality of china was given a splendid pro- 1205 tection with which we did not perhaps do as well as we might have done. That was due because it took us so many months to get that measure of safeguarding that our friends across the water managed to fill this country with enough stuff to last a good many years. So we did not at first do quite as well as we expected; but we have been doing better these last months. In regard to these new tariffs, as I have said, it is a matter of grave concern to the pottery industry that they are so low, but we must be grateful to the Advisory Committee for having stated that, if any industry can prove that higher tariffs will be beneficial to them, the committee are willing to give consideration to that industry. Our industry may be but a small one, but I can assure hon. Members that it does a great deal not only in the way of employing a great many people directly, but also by assisting other industries. The coal industry for example would come off very badly if the potteries in North Staffordshire were to close down.
In that area, apart from the manufacture of all kinds of pottery, we are also very much interested in the manufacture of tiles. The present duty in respect of tiles is not quite as much as we want. No doubt people generally ask for more. That is a great failing in life, but I can assure hon. Members that a higher tariff in this case would greatly assist our people. A great many of these imported glazed tiles were already in England when the duty was put on. There is also the fact that unfortunately the building trade in this country has not been doing as well as we had hoped, and we also know that people abroad are not doing as well as they might do. The result is that foreign manufacturers are very apt to send their products in here at less than cost price. That is bad for us, and I feel very strongly that, with the aid of a higher tariff, we would be able to carry on better in this industry.
There is no doubt about the fact that our industry has suffered severely during past years, chiefly from foreign competition. Manufacturers abroad are able to deliver their goods in this country at prices which are about half those at which we can afford to make the goods. Why is this the case? It is simply because, in all countries, the greatest expense in connection with pottery manu- 1206 facture is the expense of labour, and I should like to put this point to hon. Members of the Opposition. Are they thinking of tariffs as only a means of raising revenue, whereas tariffs, by benefiting industry in this country will also enable industry to keep up the standard of living of the people? I ask hon. Members, is it fair that we should allow to come into this country goods which are made in Czechoslovakia and Japan and other countries at what I consider to be starvation wages? I am informed that 10s. 6d. a week is considered quite good pay in Czechoslovakia. Can we allow goods manufactured under those conditions to come into this country and lower the standard of living of our own people? I say "no," and I firmly believe that, if we raise these tariffs, the time will come when our industry will be on its feet again.
I submit to hon. Members with all sincerity that pottery is an industry worth cultivation. It is a craft. It is not merely an industry which employs a few boys and girls. It employs men who have made a study of it for years. It is, in our opinion, the finest industry in the world; and I think the time is come when we ought to encourage our own people instead of encouraging the importation of foreign manufactured articles. Ours are the finest workmen in the world and, given steady employment, they can do better work than the workers of any other country. In putting in this plea for the pottery industry, I ask hon. Members to remember that our people have been undergoing a very difficult time now for many years. They are at present down to the lowest ebb, but, notwithstanding that fact, they are remarkable for the patience and courage which they display. In conclusion, I wish to say that anything that can be done to keep our people employed ought to be the first duty of this National Government, and those for whom I speak to-night believe that by means of higher tariffs the Government can make it possible to provide that employment which is so urgently required.
I wish, first of all, to offer my congratulations—in which I am sure I shall be joined by the House generally—to the hon. Member for Stoke (Mrs. Copeland) on the splendid speech which we have just heard from her. 1207 Whether we agree or disagree with the views which she has expressed, we are all agreed that she has shown knowledge of the industry associated with the district which she represents, and I hope that the House will have the benefit of contributions from her in many future Debates. I do not think I should have intervened in this discussion had it not been for certain statements of the right hon. Gentleman the Member for Epping (Mr. Churchill) regarding the policy of the Government and his criticism of the Home Secretary for the attitude which that right hon. Gentleman has taken up in defence of his Free Trade principles. The right hon. Gentleman the Member for Epping spoke of the policy which the Government are now pursuing as having received the blessing of the great mass of the public of this country. I suggest that at the last General Election there was no tremendous mass of opinion shown in favour of the policy now being adopted by the Government. I would remind the House that, big as is the majority of Government followers here, yet there were 7,000,000 voters who voted for the Members sitting on these benches, while millions of Liberal voters supported Conservative candidates who are in this House to-day, never dreaming for a moment that when those candidates got here as supporters of a National Government they would set out on the definite political programme of the Conservative party.
We deny that the National Government were sent here for the purpose of pursuing the policy which has now been adopted by them, and we fear that, in that policy, the well-being of the country is not being given the first consideration. We fear that, in connection with this policy, consideration is being given mainly to individual interests by those who have been sent here to support the National Government. It is easy to suggest tariffs for special industries. If you select an isolated industry and talk about the imports, it is easy to make out a case for a tariff; but when we are considering this matter we ought to have regard to the general well-being of the country instead of specialising on any particular industry. As regards the duties already put on, and their effect on the industry which I represent, I may say 1208 that we have suffered already as a result of the National Government's policy. Immediately the National Government made it known that duties were to be imposed on certain imports, our coal export quotas to Germany and France and our opportunities for the export of coal diminished. It may be very well to talk about setting up a new industry as a result of the new duties which will employ 150 girls, but you are closing pits that are employing thousands of men with responsibilties and families. You talk about setting up some little luxury trade with foreign capital, but at the same time the policy which the Government are pursuing is throwing thousands of miners out of work. The Government would have done a more useful work if they had given attention to the heavy exporting trades.
The Schedule involves not only the putting of duties on semi-manufactured and manufactured articles, but the putting of millions of pounds of duties on foodstuffs. All that is in addition to the wheat quota system. I challenge any Member of the Conservative party or of the National Government to say that he put out an electioneering address in which he stated that he was in favour of the taxation of the people's food. Not one of them has ever attempted to bring any proof that he preached that gospel during the General Election. The result of the Wakefield by-election less than a fortnight ago showed what the large industrial districts are thinking of the Government's policy. We on this side of the House say emphatically that we can improve neither the employment nor the distress and difficulty with which this country is faced by the adoption of a system of tariffs. Can any hon. Gentleman cite the case of any country which has benefited from tariffs? What is the position in even the highest tariff country in the world? Unemployment and destitution are rife. We say that the tariff is not a cure for the evils from which this country is suffering. The National Government have been disloyal to their own followers and to the country; they have not carried out their pledges, but have misled the people by adopting a system of tariffs on the people's food. If the opportunity were given to the people in industrial areas to-morrow, they would show their resentment by con- 1209 siderably lowering the number of Members who are supporting the National Government.
Rather than criticise the Home Secretary, I want to go out of my way to compliment him. It is not often that I take the trouble to compliment even a Liberal, but I like the right hon. Gentleman for his honesty of purpose in not being quietened either by appeals from the right hon. Member for Epping (Mr. Churchill) or by some of the forceful circumstances that have been operating in the Press to keep him quiet. He has made it clear that in the Cabinet there is not unity on the policy which the Government are now pursuing, and in honesty and fairness to the traditions of this House, if he conscientiously believes what he says of this policy, he and his followers ought to resign and come to this side of the House and fight the Government.
§ 8.30 p.m.
§ Mr. HAMER RUSSELL
I am sure that the House will extend to me the usual courtesy and freedom which it extends to all maiden speakers. I am afraid, however, that it will be difficult for me not to enter into very contentious points, because I am following a speaker who has very much annoyed me. Nothing annoys me more than for a Member to say that this House is composed of men and women who are here for personal gain and to serve personal motives. In my view there never was a House of Commons in which were so many Members who are making such enormous sacrifices as those who sit in this Parliament in order to do their duty and to see this country through. Yet we get the sort of talk that we have received from the hon. Member for Hemsworth (Mr. Price), who has just gone out.
I represent one of the great centres of the steel industry, the Brightside division of Sheffield. The people of that division depend upon steel, both heavy and light steel. I know the division and the people in it well. There is a tremendous lot of suffering and sorrow in the division. I frankly hurt myself every time I go into it, which is every weekend, and I come away downcast and sorrowful because of the suffering there. I feel the responsibility of being their Member in this House. They put me here not without knowing me, for I had 1210 fought a by-election 18 months before against a Liberal and a Labour man, but I was not victorious. I stuck to the division, and at the General Election I fought and won it on the policy of Protection. I fought for that policy also at the by-election. I made no bargain with the Liberals at all, and I am in this House as a representative of the policy of Protection, because I was sent here by a constituency which believes in it and believes in me.
I stand here to beg of the Government to get on more quickly than they are doing at the moment. I am very glad, and I know that the great steel makers in my division are delighted, to have the 33⅓ per cent. duty on their steel as an experiment. I should like to ask the Government, however, why they could not have put on a duty when they introduced the anti-dumping Measure? If 50 per cent. had been put on heavy steel when the other 50 per cent. duties were put on to stop dumping, we should have got over the testing period and we should now have been ready to settle down for the duties which are to be put on steel as a more or less permanent measure. I hope, however, that the Government will give a definite promise—and I think that they ought—to any big firm that lights up its furnaces and begins to employ fresh labour and runs a full output during the next three months, that the 33⅓ per cent. shall not be dropped to something like 20 per cent. in a night.
My hon. Friend the Member for Central Sheffield (Mr. Boulton) mentioned cutlery and the lighter things in steel. I should like to give an example of what was done in regard to duties upon razor blades from time to time. The razor blade trade is enormous. We can understand how enormous by the number of razor blades that we use in a week. Under the McKenna Duties there was a 33⅓ per cent. duty on razor blades. That was not an experiment, but it proved to be an experience, and the experience was that 33⅓ per cent. was not enough to protect the industry from foreign competition. Under the Abnormal Importations Act a 50 per cent. duty was put upon razor blades, and that proved to be adequate. Our manufacturers set about, in their magnificent way—because I do not think there are any better organisers than our own manufacturers—to produce a full output of razor blades. Works 1211 began to turn out all they could manufacture, new employés were taken on, and the German razor blades were absolutely cut out. When the exchange went against the Germans we had the whole market to ourselves. Under this Order the duty has fallen to 20 per cent., and the factories that had begun to produce a full output are now closing down, and the new factories which were being erected and prepared are closing down. The orders for new machinery for this extra production have been cancelled, and men and women are being thrown out of work every day since that Order came in.
I claim that the razor blade trade for the time being is ruined. I say "for the time being," because I am glad to know that the association concerned is to make strong representations to the Advisory Committee, and I hope they will soon get the 20 per cent. duty increased. If it is not increased, then it is merely a revenue-raising duty, and there is all the difference between a revenue-raising duty and a protective duty. When I looked through the list of duties I really wondered whether the Advisory Committee had yet discovered the difference between a revenue-raising duty and a protective duty. A duty cannot be both; there is no question about that. If these duties are revenue-raising duties I must say that I was not sent here to support them, and that is all there is to it. I came here to support protective duties and not revenue-raising duties.
May I refer to one other item in this Order, into which I have gone very carefully, and that is the duty on foreign doors? In 1931 foreign doors were coming into this country in enormous numbers. We imported 3,146,000, whereas we made in this country only 198,499. The British door manufacturer, struggling as he may have been before, is in a much worse state under this Order. In the first place, he has to pay 10 per cent. duty on his raw material, and in the process of manufacture there is about a 10 per cent. loss in waste, represented by sawdust and so on, which does not count in the case of the imported door. The British maker is absolutely at a disadvantage. The door which comes to this country from America is a very good 1212 door, but we could make such doors in England. The door is sent at 4s. 7½d. c.i.f. to any United Kingdom port. Of that sum 1s. 8d. has been paid by the Americans as freight and insurance, leaving the price of the door on the quay in America at 3s. The British door costs 9s. at the moment—[Interruption]—and the price may be reduced.
Here is a point of which enough has not been made. If we so tax doors, razor blades or anything else as to keep our market here to ourselves, and can put all our mills on full production, we shall very soon reduce manufacturing costs. There will be a decrease of unemployment and the expenditure on relief will fall, more men and women will be earning money, and more managers and governing directors and people of that class will be earning money and paying Income Tax. It is not all going to be loss to this country. Further, if a plant is running full time, three shifts a day, each door will cost less than if the plant were working only one shift a day. I would like to see the difference between the 7s. American door which comes to this country now and our 9s. British door bridged. The American door should be taxed up to 9s.—I do not say above that. In that case we shall immediately find that the manufacture of British doors will be cheapened, and that before very long the price of them will come down to the American price of 7s. and out of that 7s. we shall have taken the 10 per cent. duty on the raw material.
I want to see the 3,000,000 doors that we now import made in this country. I do not want this country to import doors during the coming year, and probably we shall not do so, because there are already huge stocks in the country. I want to see foreign doors so taxed as to give our manufacturers the opportunity of mass production such as the Americans have, and see them producing at the same price as the Americans. I shall, of course, support this Order, though I wish it were imposing more drastic taxes. I hope the new Order will have higher taxes, because I really want to see Protection for the sake of the people who are out of work, believing that Protection is the only way of helping the working classes of this country.
§ Mr. SOMERSET
I wish to congratulate the hon. Member for Brightside (Mr. H. Russell) on the very able maiden speech which he has just delivered and which is quite after my own heart. We have also heard several other very good speeches, and I also wish to congratulate the hon. Member for Hemsworth (Mr. Price) upon his speech. I suppose it is not out of place that an hon. Member representing a constituency across the water should say a few words in regard to this Order. The Irish representatives are a very small body in this House, but we are as one in supporting the Government in regard to the imposition of these duties. I shall, of course, support these import and protective duties, and I shall vote against the Amendment, which is quite unworthy of the brains of the Front Opposition Bench.
I want to say one or two words in regard to the industry which I have the honour to represent. We in the North of Ireland are a small body, but we are very loyal to Great Britain. Our one staple industry is the linen industry. Probably very few Members of this House have had the same experience as I have in the linen trade, and probably there is no one better qualified to speak for it. I entered that trade at the age of 15, I served my time in it, and I have been in it ever since. It is the biggest industry in Ireland, and it is greatly affected by foreign competition. The history of the linen industry in Ireland goes back to the time of the Huguenots, when hand-looms were used, and those who know the extensive linen industry which exists in Ireland at the present day will realise what great progress has been made since then.
In the North of Ireland we are proud of the linen industry which has been developed in that country. It is to-day a highly efficient industry employing a very large number of people. In my own constituency of North Belfast we have the biggest linen factories in Ireland. I, myself, am a large employer of labour. I have not entered very much into politics, but I came to this House with one idea, and that was to secure what we are securing to-day, and which I hope we are going to secure in a greater measure in the near future. If that turns out to be the case, I shall be well rewarded for my efforts, and I feel proud to-day that we are now in the position of obtaining some 1214 measure of protection for the linen industry.
As is the case in the cotton trade, the linen industry has undergone great changes, and now everybody requires different colours and designs, and that part of the business has been carefully studied by the trade in Belfast and the North of Ireland. We complain that for years we have been subjected to a terribly fierce competition from Belgium, France, Czechoslovakia and Soviet Russia, because all those countries have been sending linen goods into the home market. I know they have a perfect right to do that, but I want to point out that in regard to the goods manufactured in the North of Ireland a large part of the actual cost of the production of linen goods is due to the expense of handwork and special machine-work of all descriptions. I know there are articles in which 30 or 40 per cent. may represent the cost of the linen, but the cost of the labour would be 30 or 40 per cent., and where we have been beaten has been in regard to the competition we have had to suffer from abroad.
Will those who are sitting on the Front Government Bench kindly take note of what I am about to say? Take the case of a mill in Belgium. I have here figures relating to an ordinary-sized mill with 650 looms. The wages paid to the people in that Belgian mill, as compared with the North of Ireland, would be that the Belgian workers receive £5,000 less. Some statistics issued by the Ministry of Labour show that on the 22nd June, 1931, taking the index figure for wages, Great Britain was 100, and the corresponding figure for France 58, Belgium 50, Italy 39 and Czechoslovakia some point less than 74. We cannot get away from figures of that description. If a mill on the Continent with 650 looms costs £5,000 a year less than in the North of Ireland, that makes competition impossible because the difference in the wages is so great that we cannot compete on equal terms.
I would ask those who are opposing this Order, what is their alternative to a tariff? It is no use sending me back to Belfast to tell the workers there, "I am very sorry, but nothing can be done." That is no good, and we ought to inform the foreigner that we are not going to keep him at work while our own people 1215 are walking the streets. What we want in this matter is common sense. I do not see the use of all the talk that we have had to-day in this House about different Liberals and about the Home Secretary. I think we ought to forget all about the Home Secretary; he does not concern us at all. The big problem to-day is that of unemployment; the big thing for us in Belfast is to keep our workers employed, and we shall not secure that end by coming here and talking a lot of nonsense about this great Home Secretary. I am sure he is everything that is said about him, but why should we be led by him? I want the House to understand that, as far as loyal Ulster is concerned, we want employment for our people; we want something that will enable us to keep them respectably and let them have decent homes and decent wages; and that cannot be done unless we have some measure of protection.
I am not going to criticise the present Advisory Committee, but I am of opinion that they will have to consider later what shall be done in regard to every industry, and I hope they will take into very serious consideration the particular industry that I represent. With regard to tariffs, my theory is, and I think most Members will accept it, that, where labour enters very largely into the cost of any article, the duty must be higher. The Advisory Committee have made it plain that they are making inquiries into all these matters. This is no time to hustle them, and I do not want to do so, but I say that a 20 per cent. duty on goods in the cost of which a large amount of labour is included, is not enough. If our workers are to be paid 50 per cent. more than the continental workers are paid, there must be a corresponding rate of protection in this market.
I finish as I began, by saying that my heart and soul are in the cause of the workers. I want to see every loom in our city and district going. In September, 1931, 20,000 of our people in the linen trade were receiving unemployment benefit, while in March, since we got the tariff and since we went off the Gold Standard, that number has been reduced to 9,900. There are 10,000 more people working, happy and contented as the result of this tariff, which some people 1216 say ought not to have been put on. Moreover, we have 30,000 more spindles and 2,500 more looms working, and the workers are working full time. I appeal to the House to give the industry a fair chance. There is not a manufacturer in the north of Ireland that is not up to date and does not wish to do his utmost for his business, and not one of them is out to get wages lowered in any way. We want to keep our people happy and contented, and we want their wages to continue at their present level, or higher if you like. We want a chance to get on with our work.
§ Mr. MALLALIEU
I cannot claim to be an expert in any of the matters which are covered by this Order, but, as a person with two eyes in my head, two ears, and a certain amount—perhaps not more than the average—of grey matter behind them, perhaps I may be allowed to make one or two comments on the Order which we are discussing. There was one statement in the White Paper which gave me very great pleasure when I first read it. It was the statement that:We have also excluded many commodities on special grounds, for example, on account of their importance to other industries.That seemed to me to be a very hopeful statement from the Advisory Committee, and I confess that, unlike the hon. Member for Pontypool (Mr. Griffiths), I was surprised, when I went on with my reading of the White Paper, to find that a tariff was to be imposed upon basic Bessemer steel, which, of course, is a raw material of the tinplate industry, not only in South Wales, but elsewhere. I hope that some explanation will be given of this step. As a mere Free Trader, it does seem to me to be inconceivable why a tariff should be placed upon this particular commodity, which cannot be made in this country, or which is not at present made here, anyhow, and which cannot for a very considerable time be made in this country.
§ Mr. MACMILLAN
May I point out to the hon. Member that Bessemer steel was invented in this country, and was first made in this country? Its manufacture here was only given up a few years after the War. I would also point 1217 out that it is not the character, but the price, of the commodity that determines the form of steel used by the re-rollers. The reason why they buy it is not because it is Bessemer steel, but because it is cheaper than open hearth steel. We gave up its manufacture because we regarded the open hearth process as a more efficient process.
§ Mr. MALLALIEU
I am sure the hon. Member will credit me with a knowledge of the facts that he has now given to the House. I was not saying that we have never made Bessemer steel in this country. What I said was that we do not at this time make it in this country. I agree with the hon. Member that the price of this steel is a great consideration. It is the greatest consideration. As I have said, I am not an expert, but I am informed—the House may take the information for what it is worth—that this particular steel is the most suitable material for the tinplate industry of South Wales, and, in any case, it is the least expensive raw material for that industry. I was, therefore, amazed to find this particular commodity charged with a duty at the exceedingly high level stated in the White Paper, because, whether the duty allows the commodity to come in at an increased rate, or whether the tin-plate manufacturers will be forced in future to use the open hearth steel which they can obtain in this country, we believe that the cost of their raw material will be greater, and that they will have greater difficulties than they have at present in competing in the markets of the world outside this country.
As is probably known to most Members of the House, 20 per cent of the manufacturers of tinplate in South Wales are independent manufacturers, by which I mean that they are not connected with companies producing their own raw materials. It has been said that 80 per cent. of the tinplate manufacturers have come to the Advisory Committee and demanded a tariff upon their own raw material, and I should like to put before the House a word of explanation in that regard. It is perfectly true that 80 per cent. of the manufacturers of tinplate are somewhat insistent in their demand for this tariff, but the 80 per cent. are also producers of raw material; and it is in their capacity of producers of the raw material that they have come here asking 1218 for a tariff to be put on this commodity. I believe this is one of the very worst examples of the evils of a Protective system, this tinplate industry of South Wales, because the 80 per cent. are attempting to squeeze out the 20 per cent. who do not happen also to be producers of the raw material, so that there will be a complete monopoly on their part if their wishes are carried into effect.
There is something even more important with regard to this Order which I should like to put before the Members of the Government who have the matter in hand. It is the complete absence still of any attempt at a system of drawbacks. The South Wales tinplate industry has been maintained largely owing to the fact that all other considerable countries that manufacture tinplates have allowed drawbacks in their tariff system, with the result that the finished product may go from South Wales to those countries provided that it is again to be exported from those countries containing goods—fruit or other commodities. We have no such system under this Order. May it not very well be that those countries, seeing that we have gone even one worse than they have, will say, "We will retaliate at once," and, although our high priest of Protection may have drawn out one demon from the body, six others will enter and the last stage of the industry will be considerably worse even than the first? I should be very grateful if we could be told what is the intention of the Government with regard to a drawback system. Not only in this particular example that I have cited but, of course, in the example of the entrepot trade it is vital that we should know what is going to be done in the matter of drawbacks.
May I draw attention to the extraordinary decrease in the re-export trade that has taken place this year? We have been reminded by the Home Secretary that we must not place all evils at the door of our own particular bogy, and I am not going to attribute the whole of the decrease that I am going to describe to the operation of the Abnormal Importations Act, but a considerable part of it must be laid at the door of that offspring of the Board of Trade. In woollen piece goods in the first three months of 1931 the re-export trade was something like £94,000. In the first three months of 1932 it was £49,000 —a tremendous decrease. The re-export 1219 trade in leather and fur gloves has been almost extinguished, the decrease being from £126,170 worth to £8,451 worth. It is not only that we are losing our merchant trade. When a man comes from the Irish Free State to buy in London, he may come with the idea of buying German goods but, when he is in London, he sees other things and he may very well take back many home produced goods also. The consequent loss, if we lose our entrepot trade, will be tremendous, not only with the entrepot trade but with goods already produced in this country. I daresay many Members were extraordinarily amused by the statement attributed to Sir Herbert Austin in the Press when this White Book was first made public. In effect he said, "I am exceedingly alarmed that this tariff should be placed upon steel without any condition as to the price at which the steel must be sold in this country. I fear profiteering." All I can say is that he ought to know. He has had these duties upon his own industry all these years. He ought to know how possible it is to profiteer in these circumstances.
I must reply in some sense to the figures given by the last speaker about industry in Northern Ireland. He stated that there had been a great decrease in unemployment there since the Abnormal Importations Order. I cannot reply out of my head to the figures he gave, but it would be relevant to say what happened in the West Riding of Yorkshire in similar circumstances. There, there has been a tremendous decrease in unemployment since September, 1931, and I believe the Parliamentary Secretary to the Board of Trade has attributed this fall in unemployment to the Abnormal Importations Act. He said there had been a great gift by the Government to the West Riding, and he quoted a figure which I have not in my mind at the moment and said there had been a great decrease in unemployment, from 35.5 to 15.3 per cent.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Hore-Belisha)
I said that the statistics of unemployment showed a drop, but I do not know that I said this was all due to the Abnormal Importations Act.
§ Mr. MALLALIEU
I think the hon. Gentleman said it was due to the general tariff policy of the Government, which for the most part was the Abnormal Importations Act. Of this decrease in unemployment from 35.5 to 15.3 per cent. which has admittedly taken place, no less than 18.9 of that 20.2 per cent. drop had already taken place before the Abnormal Importations Order came into force. That, no doubt, is exactly what happened in the North of Ireland, too, and the moment the Government started interfering with the normal course of trade the decrease in unemployment was at once retarded and thereafter you only had a 1.3 per cent. decrease. The hon. Member for Stockton (Mr. Macmillan) made a touching appeal to Liberals and he cited Disraeli, who said Protection was dead and damned. He said, "Now Liberals, come along. You have to take your beating like sporting men and admit that Free Trade is dead and damned." I should like to point out one great difference between the position of Disraeli then and our position now. I admit that Disraeli took his beating like a sportsman, but the whole point is that he had really had a beating. It had been put to the country and there was no doubt about it.
I want to explain my position, as I was asked to earlier in the Debate, with regard to the alleged breach of faith by the Government. Hon. Members may quite likely have made very pretty Election addresses in which they stated that they were going to tax food. I am not going to talk to individual Members here of dishonesty. What I am saying is that no-one read your Election addresses. What people read were the statements made by Leaders of the National Government at the time, all of whom, as far as I know, stated that Protection was not an issue. That is what we mean by saying there has been a breach of faith. There was to be an expert and impartial inquiry, and there has not been such an inquiry. I would not have returned to the point at all but for the fact that it was raised earlier in the Debate, and I felt that some clarity ought to be given to the situation in order to show just how we view it. No system can possibly succeed unless it has the good will of the country, be it Free Trade or Protection. When it has been shown that Free Trade has not the good will of the country, I have no doubt at all that 1221 Liberals will take their beating well, but at the moment that is not the case. I am opposed to these Orders. It is an exceedingly poor way to start reviving trade by taxing the raw materials of industry and to have no drawback system whatever. This is no way of ensuring that our merchants shall in future chase the morning down the sea, nor yet to ensure that for us shall the wagons of the world be drawn.
§ Mr. LEVY
I propose to confine my remarks to the silk industry. I was comforted yesterday when the Chancellor of the Exchequer said that he was going to give it his serious consideration, but I was grieved to-day when he made no mention of it. I should like to remove some of the impressions which the Chancellor of the Exchequer gave to the House. He said that all industries had the benefit of the 10 per cent. revenue and the 10 per cent. extra ad valorem tax. That does not apply to the silk industry. He said that if there was a grievance, the industry could appeal and state their case before the Advisory Committee. That does not apply to the silk industry. He suggested that the Advisory Committee had not made a hasty and ill-considered proposal, I suggest that they did not make any real investigation into the silk situation, and also that if they had they would not have put the industry back into a state of "as you were."
The Chancellor of the Exchequer said that the Import Duty was put on in order to stop dumping. If that be true, I presume that it is now taken off in order to encourage dumping. He said that the committee made further recommendations. He evidently forgot that the silk industry is absolutely precluded from stating its case before the Advisory Committee. He stated that the committee have admitted that they have made mistakes and omissions. I suggest that they have made a mistake in this case. Therefore, we come back to the position that as an industry we are precluded from the 10 per cent. revenue, that we have no right to state our case before the Advisory Committee, and we are in the hands of the Chancellor of the Exchequer, absolutely and entirely. It is up to him in his wisdom to see that the industry gets fair play and a square deal.
1222 I am sure the more he investigates the matter the more he will realise how essential it is to cure the anomalies which exist if we are to survive, and the industry is to be retained in this country. I have the honour to represent a constituency where the first mill was started in the year 1800. It is a very important industry. Having regard to the answer which the Chancellor of the Exchequer made to my speech on 21st April, I am not pressing for the removal of any of the existing duties either on the raw material or on the imported manufactured goods, but I suggest a 30 per cent. overriding ad valorem duty upon semi-manufactured and manufactured goods in order to give some scientific and comprehensive protection. I feel convinced that the House will not consider that it is excessive when I explain later the position of the present duties, and how it affects the industry, especially when they have regard to the fact that the countries from which the goods are imported pay in some instances as much as 60 per cent. less wages than we pay in this country. Further, should such a tariff slightly restrict the import of the manufactured goods the Chancellor of the Exchequer would not only recoup revenue on the extra raw material used in manufactures in this country, because more goods would be made here, but he would not have to pay out the subsistence allowance to people who were unemployed as they would have found work. The Income Tax receipts would increase and other trades would benefit, including the trades which supply the buildings, plant and machinery, while in a number of instances a large quantity of new houses would be built to house new employés, instead of a number of large orders having to be cancelled owing to the withdrawal of the Import Duties. I feel sure that every Member of the House will appreciate the advantages in favour of Protection in this case.
I will not state the whole of the case of the silk industry, but I propose to call attention to what I consider to be a few of the salient points. I will go back no further than 1925. I wish to show to the House how the duties were imposed. In 1925 we were a Free Trade party. The right hon. Gentleman the Member for Epping (Mr. Churchill) was the Chan- 1223 cellor of the Exchequer. He wanted revenue. He picked out the silk industry. He placed duties upon the imported goods. On imported piece goods he placed a duty by weight, and upon manufactured goods he placed an ad valorem duty. He also placed a countervailing duty by weight upon the raw material. The idea was that they would balance each other in such a way that it would be in accordance with Free Trade policy, but he certainly was accused at that time because there was a slight margin of protection in favour of the British manufacturer. Owing to circumstances over which the right hon. Gentleman had no control, with the decline of value, the ad valorem duty decreased, with the result that the duty paid upon the manufactured goods decreased accordingly. It will also be appreciated that with the decline in the value of the raw material the duties increased pro rata, with the result that we now have the disastrous anomaly whereby it is cheaper to import the finished article complete than to import the raw material with which the article is made. In other words we give a protection to the foreigner. I think it would be agreed by everyone, whether Free Trader or Protectionist, that there is one thing which is characteristic of the British nation, and that is fair play and a square deal. If we are not going to have Protection ourselves, do not let the foreigner have it.
The Chancellor of the Exchequer may say quite properly that our system has changed. We have changed our fiscal policy and we are now going to protect our industries. There is a case here where it does not apply, because the Protection is in favour of the foreigner. When this duty was imposed on the raw material it was at the rate of 3s. per lb., and since the value to-day is roughly 10s. 6d. per lb., that is approximately 33⅓ per cent. There is one thing I should like to explain which I feel quite convinced hon. Members do not understand. When the silkworm makes it cocoon it exudes a gummy substance which forms an integral part of the silk. That gummy substance has to be discharged from the silk, either in the net or in the finished fabric. Therefore we get in the raw material, when it comes over here, un- 1224 discharged silk, but in the fabric it is discharged silk. When the duty of 3s. per lb. was imposed, the ordinary person no doubt had the impression that this duty was on 16 ozs. As a matter of fact, when the gummy substance is discharged, the silk loses 25 per cent., with the result that we are paying 3s. per lb. on 12 ozs. or, as a matter of fact, 4s. per lb. Thus we are paying an import duty of 40 per cent., if the value of raw material is, as it is to-day, 10s. 6d. per lb. I want the House to bear that particularly in mind, because I shall have to refer to it when we come to deal with the ordinary 33⅓ per cent. duty.
Hon. Members will find from this White Paper that the hosiery trade came within the abnormality duties. A duty of 50 per cent. was put on, but it was realised, and it was accepted by the President of the Board of Trade, that sufficient stocks had been dumped into this country to last us seven or eight months. Before five months have expired and before these stocks have been exhausted, the whole of that abnormality duty is swept away, and we are brought back to exactly the same position as existed before that duty was imposed. It should be made perfectly clear that we get no benefit from the 10 per cent. revenue or from the 10 per cent. tariff. In this White Paper the Advisory Committee have stated that we receive 33⅓ per cent. protection. They have either forgotten or deliberately ignored, the fact that we have a countervailing duty on raw material which more than cancels it out. As I have shown the result has been that the 33⅓ per cent. duty, which is supposed to constitute protection, is in fact cancelled out by the 40 per cent., and that leaves a 6⅔ per cent. protection in favour of the foreigner. Therefore we are in the same position, and we shall be subject to exactly the same dumping, with the result that where orders have been given for the extension of factories and where plant has been put down or orders given for it, the whole of that is cancelled, and where employment was increasing or had increased that, too, is now cancelled out.
Thus we find this particular industry in the invidious position of being the only industry which is left out in the cold. It is the only industry which has 1225 not received the same consideration as all other industries, and simply because we were subject to the Excise and Customs Duty under the 1925 revenue tax, that precludes us from all those benefits which are available to other industries. I stated the other day that Mrs. Baldwin, the wife of our leader, gave an exhibition of silk. It was not a comprehensive exhibition but was confined to the best quality of silk articles. Our Gracious Queen was good enough to visit the exhibition. Her Majesty was amazed at the selection that was on show there, and commanded that no Court dresses should be made of material other than of British manufacture. It has been said that the British people cannot make the various qualities of silk with which the foreigner now provides us. I want to state quite definitely and emphatically that, given a square deal, English workpeople can make all the silk that is required for this country, whatever the quality may be. We do not admit that we play second fiddle to any foreigner in the manufacture of anything in the silk industry.
It has been said in some quarters that we are inefficient. I put it to the House that when you have regard to the fact that we have been labouring under all these enormous difficulties since 1925, with the foreigner having the advantage and the English manufacturers at a disadvantage all the time, and when you come to consider that even now we are employing 72,000 people in the raw silk and artificial silk industry, if that does not prove absolute efficiency, then I want to know what efficiency is. I assert without fear of contradiction that the silk and artificial silk industry as a whole is as efficient as any other branch of the industry in any other part of the world We are the largest silk consuming country in the world, outside the United States. We take practically 50 per cent. of the total output of France, Switzerland and Italy combined, independently of the silk that we take from Germany, Japan and other countries. Furthermore, the price of the silk goods in France is higher than the price of the silk goods charged for export, which is an absolute and conclusive proof of dumping in this country.
I hope that the Chancellor of the Exchequer will put this matter right. He can put it right at the time of the 1226 Budget. It may be that he will want a fresh Financial Resolution, but I am sure that everyone will agree that even that trouble is worth while in order to save this industry. I appeal to him to investigate this industry. It is a case of extreme hardship. It is an old and important industry. One of our best customers used to be Canada. Before 1925 the raw material imported into Canada was negligible. Then they started a comprehensive system of Protection, and in seven years they have built up a very important industry. To-day they import into Canada more raw material than we import into the United Kingdom. That is a lesson of an important industry being built up under a comprehensive and scientific tariff system. I hope that I have clearly shown the hardships and handicaps under which we suffer in this trade. If nothing is done for the industry there can be no question that it will go out of existence and that the unemployment figures will greatly increase. That ought not to be allowed. I resume my seat with a confidence that the Chancellor of the Exchequer will take immediate steps to remedy these evils, and will protect the industry, as it rightly deserves, and re-establish confidence in our own people.
§ Mr. ALEXANDER RAMSAY
I have heard every speech that has been made on this Order, and I have been surprised to find that, with very few exceptions, they have traversed once again the old academic, theoretical questions of Protection or Free Trade. I should like to remind the House that there is a great body of public opinion, certainly the whole of industry, that is looking very eagerly to this discussion, not because it is concerned with the academic issue, but because it is concerned with the specific proposals contained in the Order before the House. The academic question and the general theory is a battle that has been fought and won. The opinion of the public on that matter is completely firm. They gave the National Government a mandate and, whatever the implications surrounding that mandate, one thing is absolutely clear, and that is that the public did expect this Government to bring into being such a measure of Protection as would give the industries of this country a new lease of life. Therefore, what we 1227 are really concerned with is to discover how far these particular proposals satisfy the mandate which the country gave to the Government in regard to this issue.
A good deal has been said during the Debate to-day about the relations between Members of this House and the Import Duties Advisory Committee. I think we are all agreed, without question, that any irresponsible criticism, any sectional criticism, or any desire to approach these various matters from a personal point of view would be a great disservice to the House, to the Committee and to the country. When the Committee was appointed by Parliament, Parliament entered upon a great constitutional experiment. We put deliberately into the hands of certain gentlemen, whose mental processes in connection with these matters were comparatively unknown, a greater influence than has ever been wielded by a similar number of men outside Cabinet circles. It is obvious that in conditions such as these it is the duty of the House, and of every Member of the House, to render to that Committee all the constructive help that it is possible to give. But it does not follow from that, as some hon. Members seem to assume and as even the Chancellor of the Exchequer seemed to assume, that therefore this House of Commons is to be eliminated or even subordinated.
We are all agreed, without question, that the Advisory Committee will perform its functions ably and with a single aim for the public good, but I think the Committee will be willing to agree that Members of the House of Commons when they address themselves to this schedule by the avenue of criticism are serving their public duty, and that it is their public duty to say frankly and clearly what they believe to be the position in regard to these matters. I want to make it perfectly clear that I regard this Order with very great disappointment. From my contact with very many people in industry I say, without hesitation, that the general impression in industry is one of great disappointment. I should say that industry viewing the future in the light of the attitude of mind displayed in this Order, regards the situation with considerable uneasiness. I think I can make the reason for that fairly clear.
1228 We can approach this Order from two points of view, either from the point of view of the particular matters that are dealt with in the Order, or in a more general light. I would not worry the House in regard to detailed matters if I did not feel that the method by which these matters have been dealt with displays an attitude of mind with which I disagree. First of all, we have a recommendation with regard to the recent Abnormal Importations Order. I do not desire to traverse any ground with which I am not personally familiar. I have certain cases within my knowledge where the duties have been removed from 50 per cent. in one case to the ordinary revenue duty of 10 per cent., and in another case a duty of 16 per cent.
The President of the Board of Trade when he fixed an abnormal import duty of 50 per cent. on certain commodities must have been persuaded, obviously, that these commodities were particularly susceptible to foreign competition, and yet within a comparatively short time we find the 50 per cent. completely removed and in one particular instance no additional duty offered whatever. In the case of typewriters, a matter of great concern to my constituency, it is within my knowledge that on the basis of a. 50 per cent. duty, or on what they conceived to be the least duty the Committee could give, 33⅓ per cent., active negotiations were commenced by foreign companies to start the manufacture of these articles in this country. In the last few days since the Order has been so tremendously varied, these negotiations have absolutely fallen through.
Let me test the point of view of the Advisory Committee by mentioning one other article. An important industry in my constituency at one time was the manufacture of cast-iron enamelled baths. For some mysterious reason the committee do not give a 20 per cent. tariff, only 15 per cent., and yet I cannot walk down the main street in my constituency without finding men out of work, skilled workers in this industry, because we are building into houses subsidised by public money these foreign baths, which are only a few shillings cheaper than our own products. The cast-iron enamelled bath trade is governed by a difference of 5s. If the price of our baths go down the 1229 foreign price goes down, if the price of our baths go up, then the price of foreign baths goes up. Some of our importers and some of our municipal councillors are pursuing the old fetish of buying in the cheapest market without asking whether that market really is the cheapest, and are putting these foreign baths into publicly subsidised houses to the detriment of our own workpeople.
Let me reduce this matter to its logical conclusion. If you take the life of a municipal house at 20 years, do not put it too high, and you capitalise the difference between the foreign price and the English price, and consider that in terms of rent, you will find that the additional rent that a tenant would have to pay would be 3d. per year, and to achieve that you are content to go on buying foreign baths, and put the working man in my constituency out of his job. I put it to the House quite frankly that in a position of that kind and in face of these known circumstances to offer a tariff of 15 per cent. is merely playing with the issue of Protection as regards this particular commodity. I could go on to one thing after another. We had a 50 per cent. tariff on illuminated glassware, but that has been removed and now we are offered 15 per cent. Is there any hon. Member who believes that there is a company in England which can make illuminated glass or domestic glass against the peasant labour, I might almost -say the slave labour, of Czechoslovakia on a preference of 15 per cent.? I suggest that the committee are playing with the issue.
We have had a discussion as to the necessity or otherwise of importing Bessemer steel from the Continent. I do not want to enter into a discussion on tinplates, I have troubles enough of my own, but I am informed that the tube trade of the Midlands and Scotland, the manufacture of which depends on the importation of Bessemer steel commonly called Thomas steel from the Continent. It is true that there is a steel made in this country at a much higher price which has not such equal welding properties and which gives a large proportion of scrap. I ask the House to notice that the tube strip which has been imported as the raw material for the tube trade is being taxed by a 33⅓ per cent. duty, but the finished product which the tube 1230 maker makes, the article which he sells, has only been taxed by 20 per cent., and, therefore, the tube makers of the country are relatively worse off than they were before. Relatively they are in a worse position to the extent of the difference between 33⅓ per cent. and 20 per cent. Surely any hon. Member of this House acquainted with these facts will be acquitted of any evil intention if he draws the attention of the Advisory Committee to them and asks them as a matter of urgency to bear these considerations in mind and endeavour to put the matter right at the earliest possible moment.
I do not want to weary the House and, therefore, I will draw to a close. Let me however draw the attention of hon. Members to the general consideration. The Advisory Committee in their Order have set for themselves a general level of protection of 20 per cent., that is perfectly obvious. The Chancellor of the Exchequer, as I understood from his speech, seems to approve of that 20 per cent., and regards it as being in all the circumstances of the present adequate. Indeed, he went further, and in regard to the steel trade mentioned that a tariff of 33⅓ per cent. is prohibitive. I hesitate to think what some of my plain-spoken friends in the Midlands will say about a 33⅓ per cent. as being a prohibitive tariff. I could take the Financial Secretary to several houses selling foreign steels in Birmingham and in London, and if he will give me an order I can buy him strips and bars, with the 33⅓ per cent. and with the depreciated pound, at anything from £l to £l 10s. per ton less than the English price The 33⅓ per cent. is not prohibitive; it does not meet the case.
It is a well-known fact, and it is generally agreed, that there is a considerable disparity between the real wages paid in this country and on the Continent of Europe. The International Labour Office at Geneva, to which out of the goodness of our hearts we subscribe a considerable amount of money, published figures relating to real wages in various countries, and I am informed that this publication was such an exposure of the conditions in certain European countries that they protested and the International Labour Office, for the sake of peace and quietness, had to stop issuing it. But there is a great disparity. The hours of labour on the Continent are longer. We know 1231 that in relation to capital charges such as mortgage interest, debenture interest, and capitalisation generally, the Continent is very much better off than we are, because their situation is affected by a financial policy of inflation, whereas ours has been and is still prejudiced by a suicidal policy of deflation. The British Electrical Manufacturers' Association not long ago worked out figures in which they showed that in regard to heavy engineering products certain Continental manufacturers had a benefit of 20 per cent. in costs over English manufacturers, because of factors, reasons, and conditions over which the English manufacturer had absolutely no control whatsoever.
To take one item alone, the taxation of the individual on the Continent—and all taxation, mark you, ultimately becomes part of your burden of costs—is half in one case and a third in another, of what it is in this tax-ridden country of Britain. If it can be established, as I think it can, that the Continental manufacturer has an advantage of 20 per cent. in costs over the possible production costs in this country, because of reasons which the manufacturer cannot control, what is the use of assuming that 20 per cent. will give us a satisfactory measure of Protection and enable us all to do all that we hope to do in regard to rehabilitating our industries? It is demonstrably clear that if the Government or the House really mean Protection, 20 per cent. ought to be the datum line from what Protection starts, and 20 per cent. or anything less than 20 per cent. is not a protective tariff, but is merely a revenue tariff, which will put money into the pockets of the Treasury, become a charge on the consumers of the country, and will not help British industry in any appreciable degree.
Therefore, I want to ask the House, when reviewing this matter, as, of course, they must review it sooner or later, and when they feel that perhaps in deciding what a particular tariff is going to be that they have to take a chance, if they feel that they are not properly equipped with information to make them certain that they are doing the right thing and that they must take a chance, let me beg them to take the chance on the side of the British manufacturer and not on the side of the foreigner. I wish I could get the House 1232 to reduce this whole problem to the terms of human lives. I wish I could take them to my constituency in West Bromwich, in the very heart of industrial England, and show them the poverty, the penury, the real suffering, the resentment caused by long continued unemployment and the hopelessness of the outlook. I think then the House would be prepared to regard this whole question from another angle, not from the angle of putting a microscopical examination over the pros and cons, and probably being influenced by old Free Trade associations and traditions, but I think they would take a broad, generous, and courageous step and give us that full measure of Protection without which British industry will not make the step forward that this House is confidently hoping that it will make.
§ 10.0 p.m.
§ Mr. GREENWOOD
I rise with a certain diffidence, not that I can claim the privileges of a new Member, but to address this House for the first time, though not, if I may say so, for the last time. During the time that I have been in the House of Commons, in opposition and in office—and I was a Member of two Labour Governments—I never remember a Government which had fewer friends on the Floor of the House than this Government has shown that it has to-day. I have listened to speeches, and I have not heard any really thorough-going approval of the policy of His Majesty's Government. I have heard for the first time in this Parliament a Debate in which two right hon. Members of the Cabinet have taken part on opposite sides, and I have seen such an exhibition of national unity as I never expected to see during my political life. It is even more amusing to me than the screaming farce of the Marylebone by-election. [An HON. MEMBER: "Wakefield!"] I will come to Wakefield presently. At the last General Election, and during the Wake-field by-election, an appeal was made to the public of this country for national unity and the abandonment of mean, narrow, party politics. There is no unity in this Government. If I may say so, the people whom one might describe as Simonites are now indistinguishable from the murky background of Toryism. The Home. Secretary to-day 1233 has been well and truly dealt with by an old colleague of his, the right hon. Member for Epping (Mr. Churchill). The Home Secretary to-day, by permission of the governors of the prison, has been allowed out of his prison cell for an hour in the exercise yard. He has had his constitutional—a very awkward phrase to use in connection with this Government—and he is now back in charge of his warders. The right hon. Gentleman said he could help the Government on other great questions than tariffs, such as reparations and so on. If the Government are going to do what is right with regard to those questions, they have no need to be helped, but if they are not going to do what is right, I cannot see the right hon. Gentleman exercising any more influence over them than he has over the question of Protection. It seems to me that he is supernumerary officer in the Government, in any event.
It is an astonishing thing to see a Member of a Protectionist Government appealing to this House and to the country as the arch-apostle of the Free Trade doctrine. I was led to believe that the real difference of opinion between the Conservative and Liberal parties lay in the fiscal issue, that the Liberal party would die in the last ditch in order to preserve Free Trade. Now, apparently, to certain Liberal minds it has become a side issue, but those of us who sit on the Opposition benches cannot regard it as a side issue. It is not merely a main plank in the Government's programme; it is the only plank in the Government's programme, and the truth is that the Order which is now before the House is a triumph for the Tory party and for Tory policy. Hon. Members know that that is so. We know that at the last General Election the Secretary of State for Air said that the primary business was to destroy the Labour party. We know that the Tory party went to the election with the secret hope in their breasts that they would be successful and return with a Protectionist majority, and Liberal Members of the Government knew it as well. The right hon. Gentleman the Home Secretary and his friends may chirrup in their little golden cage, but they still remain on the perch, and they cannot escape. The spirit of the Samuelites may soar to the skies, but their bodies are in the hands of the 1234 gaolers. A Government which has not a united voice on what is, in the view of the great majority of this House, a fundamental issue, is not a Government but is a scratch team of competitors.
This is a Protectionist issue. The complaint of hon. Members against the Government is that there has not been sufficient of it so far. The Order now before the House means a complete system of Protection for this country. [Interruption.] I am very glad to have the admission of hon. Members. We have, in four or five short months, carried through a fiscal revolution which no other country in the world has done in 50 years. [Interruption.] I am very glad to have that admission, for I am now going to deal with what was said by the hon. Member for West Bromwich (Mr. A. Ramsay), who talked about a mandate. Our case is that there was no mandate, and that there is no mandate to-day for what has been done by this Government. The Lord President of the Council himself, and other Members of the Government, denied that the last election was an election on the issue of Protection. That cannot be denied. That was not only said during the election but has been said since the election by Members of the Government. The last General Election was the most stupendous political fraud ever perpetrated. [Interruption.] I do not begrudge hon. Members their pyrrhic victory. [Interruption.] It is a pyrrhic victory, and right hon. Gentlemen know it. I am simply making this point, that has not and cannot be denied from that Front Bench, that at the General Election this question was not an issue— [Interruption.] I am prepared to give way to any Member of the Front Bench if he cares to get up.
§ Mr. GREENWOOD
I am not submitting to Bolshevism run mad. I cannot agree to a Government being led by its back benches. There are sitting opposite to-night Members who, to my knowledge, in the north of England said, "Never, never, never will we agree to taxes on food," who are in this House and who have voted for such taxes. They are the people who have carried through a fiscal revolution in this country without the 1235 authority of the electors. They said at the election, and it has been repeated in the House to-day: "We are honest people. We would not overturn the fiscal system without telling you that we were going to do it. In any event we must have this full and impartial inquiry." What has happened? That was said throughout the whole election campaign, and as soon as the results were declared, Members of the Government scuttled back to Whitehall, flushed with, victory, and, regardless of political honour and political honesty, started forging the bonds of Protection. [Interruption.] That cannot be denied either. [Interruption.] Here is a Government, an emergency Government—[An HON. MEMBER: "A National Government!"]—I said "emergency." I deny that it is national. This emergency Government is imposing, so far as it is able to do it, a permanent system of Protection on the country. There is no limit as to time. When my right hon. and hon. Friends tried to limit the operation of certain duties, that was refused. This National Government are using their power to a narrow party advantage.
My next charge against the Government in this matter is its abuse of Parliamentary procedure. Not only has it carried through a fiscal revolution in this country without either adequate notice or adequate discussion, but it has carried through a constitutional revolution—not that I am against that, but right hon. Members and hon. Members opposite, who have always stood as the great friends of constitutional government, have no right, when they happen to call themselves a National Government, to abuse, as they have, the procedure of the House of Commons. Everything from fresh fish to umbrellas, all in one Order! I am not sure that hon. Members opposite agree with the thousand and one things that are in the Order. They might like to vote for some and against others, but, oh, no! the new bureaucracy that sits there says: "Swallow all or nothing," and, as most hon. Members who sit opposite are not coming back after the next election— [Interruption.]
Let me carry this constitutional question a little further. It may be a matter of levity to the supporters of the Govern- 1236 ment, but it is, from the point of view of the country, the Empire and the world, a very important question. This is the Mother of Parliaments. During the last six months the rights of Members of Parliament have been trodden underfoot in a way that they never have been before, and we now have a Tariff Advisory Committee in a position of virtual dictatorship. It makes or issues decisions on a Friday, and they become operative on the following Monday without a word of Parliamentary discussion. Those very estimable gentlemen, who possess no human feelings—[Interruption]—so I have been assured to-day—who sit above the battle, who cannot possibly respond to pressure, are enabled over the weekend, to put several million pounds worth of taxation on the backs of the people of this country.
A very important form of taxation has, in fact, passed outside the control of the House of Commons. We are told that this body is independent and impartial. A. national organ has deplored the fact that the Amendment moved from these benches to-day should raise this question of the Advisory Committee at all. Why were they appointed? They were appointed with the knowledge that they had to introduce a Protectionist system into this country. That is the only reason why they were appointed. Independent—yes, in the sense that it may be for them to determine on which particular commodities taxes are to be put, but would they be of any use to the Chancellor of the Exchequer if they did not put on any taxes at all? Of course they would not.
We lost the United States as part of the British Empire over a century and a half ago, on this very principle of taxation without representation. This is "the Boston tea perty" all over again. The three worthy gentlemen who are now able to impose new taxes on the people overnight are as great a menace to democracy in the world as the British Government was in the 18th Century. It led the way to democracy when it accepted the fact of "the Boston tea party." If the Tory party likes to go back on its tracks; if the Tory party wishes to destroy political democracy, it must take the consequences. We have been told to-day that there is no log 1237 rolling here. The Lord President of the Council spoke of it the other day and the Chancellor of the Exchequer has spoken of it to-day, and even the right hon. Gentleman the Member for Epping seemed to think that this country was an exception in that respect. No log rolling here. Oh. no! Yet the right hon. Gentleman the Member for Epping stood there this afternoon and said that the representations of the textile trade must be attended to. We are warned that representations must not be made to this House, we are warned that Members must not approach the Advisory Committee. But everybody knows what is happening to-day. It is the old story of log rolling for which there is no kind of remedy. Human ingenuity cannot devise a remedy against individual self-interest, and log rolling to-day is there, and hon. Members opposite know it is there.
If the Cabinet cannot stand up against it, and if Liberal Members inside the Cabinet cannot influence the Government; if all their powers are useless, why should we suppose that the Advisory Committee is going to be able to withstand the pressure which is being brought to bear. It is indeed the function of the Advisory Committee to establish as thorough-going a system of Protection as they can, and I must congratulate them on their success so far. The truth is, and it is a sad thing to have to say, that in this country now Tammany is in the saddle. Parliament now is being reduced to a farce and the blame for that cannot be placed on the handful of my colleagues here. It is suppressed; superseded in fact by bureaucracy—that new bureaucracy about which so much was said in the last Parliament when I was the main villain in the piece. It is superseded by bureaucracy on the one hand, and by the dictation of big vested interests on the other. This National Government, so-called, has therefore carried out both a constitutional revolution and a fiscal revolution, and it is a very interesting reflection that the Tory party, the friends of law and order, without any authority from the country, have carried out two far-reaching revolutions.
This is the new Hitlerism. This is the British Hitlerism—Hitlerism not victorious by straightforward methods, but victorious by the backstair methods of the last election. Their great policy is Pro- 1238 tection—crude Protection—the crudest of crude Protection. Tariffs are the crude sewage of Protectionist minds. Tariffs are the refuge of intellectual idlers. They do not touch the real economic problems of to-day. One of the great centres of controversy now is the iron and steel trade. If tariffs touch that problem, then the world situation in iron and steel— because the greater part of the production is in Protectionist countries—would not be what it is to-day. What are the facts? In 1930 the world's production of iron and steel fell to about 80 per cent., and last year to rather less than 60 per cent. of what it was in 1929. The countries that suffered the greatest decline were the Protectionist countries, and it is obvious that there must be some problem which lies far deeper than the tariff problem and which must be faced if there is to be economic recovery. I know that hon. Members are claiming that because of their tariffs the economic situation has already improved. The hon. Member for Colne Valley (Mr. Mallalieu) referred to that.
I heard in the Wakefield by-election how my opponent claimed that the improvement in employment in the woollen textile trade was due to the imposition of duties, and I remember how he quoted speeches of the Parliamentary Secretary to the Board of Trade, who claimed that it was due to the policy of the Government. The only policy of the Government was their Abnormal Import Duties, and the truth is that at the date when this country went off the Gold Standard there were in the woollen textile industry nearly 85,000 people unemployed. The figure on 21st December, which was the date nearest that when we went on to tariffs and when we were still off the Gold Standard, show that the reduction of unemployment was very considerable. There were only 39,000 people unemployed. On 21st March there was still nearly 37,000 unemployed. I am prepared to argue that in the three months during which tariffs were operating that was due to our going off the Gold Standard, but I will give my opponents that. The point is that for every 16 persons now employed in the woollen textile industry, 15 are employed because we went off the Gold Standard, and only one because we went on tariffs. In other words, the Government are claiming 1239 the credit for going off the Gold Standard, the very thing they came into existence to avoid. That is generally true of other trades. A letter in the "Times" yesterday showed that at least nine-tenths of any improvement there has been is due to the very thing this Government sat up night and day to prevent, the abandonment of the pound. One Sunday, when they were not looking, we lost the pound, and they claim credit for the result of their inactivity.
Behind the big economic problems that affect the world is one that affects this country, and that is the question of inefficiency and disorganisation. The Chancellor of the Exchequer said this afternoon that we on this side were assuming the general inefficiency of industry. In a sense that is true, but that does not mean that we assume inefficiency on the part of all individual firms. What we do say, and it cannot be denied, is that in industry after industry there is inefficiency which can be eradicated, which ought to be eradicated, which is not being eradicated, and which tariffs will not touch. That is the case with iron and steel. We were told by the Chancellor of the Exchequer this afternoon that efficiency cannot be made a condition of tariffs. If it cannot, the last argument for tariffs has gone to pieces. Iron and steel is a case where, clearly, there ought to be drastic and far-reaching reorganisation. We are going to give them, abnormally, 33⅓ per cent., which has been shown in the House today to be perfectly useless. There have been times in the last two years when a duty of 100 per cent. would not have wrested the iron and steel industry from its difficulties. It is reorganisation which is required, and that is not going to come out of tariffs.
The Government say, "We will give you tariffs for three months, and then we will think about whether we can do anything to promote efficiency in your industry." I say we shall never get efficiency that way. If we give our money we are not going to get value for it afterwards. The question of iron and steel is really crucial. The President of the Board of Trade admitted that the protection of iron and steel means that the whole pass has been sold. I do not like quoting speeches made some little time ago, though many of my own 1240 speeches have been quoted against me, but the President of the Board of Trade, speaking less than 18 months ago at a Free Trade conference, an assembly he will never grace again, said:If we were so weak as to give way with regard to iron and steel we would surrender the whole field. If you can make a case for tariffs for iron and steel you can make it out for everything under the sun. You certainly cannot resist food taxes if you give way on iron and steel. The same principles apply to each. The effect of the tariff is just the same in each case, and I venture to prophesy that you spill find the protectionist campaign will centre more and more, if a Conservative Government is returned to power"—as is now, of course, the case—on the steel industry. It would be the beginning; it might be the beginning of the end.10.30 p.m.
And yet when there was a Conservative Government sitting there from 1924–1929, when with timid fingers they were playing with Safeguarding, the question of iron and steel was forced upon them from their back benches. They had an inquiry—[Interruption]. Yes, they had an inquiry, and at the end of it they decided to do nothing. It was much too complicated for them, and its ramifications spread too far, the repercussions were too serious, and what fell from their palsied hands six years ago they now grasp, because they have got the temporary support, or at least the temporary activity, of people from other parties to enable them to sustain the appearance of a National Government for a political party advantage. Everybody who knows the major industries of this country, and the difficulties with which they are faced, must realise that there is an international problem and a national problem to be dealt with, and they must also realise that whether tariffs are on a 33⅓ or a 50 per cent. basis, to leave untouched those great national and international problems, on the solution of which the return of prosperity depends, would be fatal.
We have had some very frank talk to-day about prices. The Prime Minister has been writing about prices in that extraordinary publication called the "News Letter." It is admitted—it was admitted by the hon. Member for West Bromwich (Mr. A. Ramsay)—that tariffs are going to raise prices. No guarantee 1241 has been given from the Treasury Bench during all the discussions we have had that wages will rise proportionately. One thing is certain, that while the employers would utilise the opportunity to raise prices, they would be very reluctant to raise wages or to raise the purchasing power of their own employés. But that is not the whole story. There is no more inefficient method of raising revenue than by tariffs. The Exchequer does not reap the full benefit. It takes its toll on the goods imported into this country, but the employer takes his private toll on the goods which are manufactured in those countries, and the consumer pays the double bill. So that while there is a contribution to the Exchequer on the one hand, the public will have to pay the bill without any guarantee or certainty that there will be improved purchasing power through higher wages. I believe the people of this country might be persuaded to pay higher prices for things if certain solid social advantages were to be reaped, but in this proposal there is no prospect of greater efficiency, and no prospect of higher wages or more security for the workers, because nobody has ever proved that Protection is a cure for unemployment, and there is no prospect of securing better commodities or better service for the general body of consumers.
The Government, of course, will have their way; they will get their Order. When there are 11 Members to one, that manageable majority will ensure that the Government have their way, and they will go slipping down the slope from now onwards. They cannot stop. The Tory party have tasted blood; they are having the time of their lives. It reminds me of the story of the new lady driver out for the first time in her car. All the automatic signals were against her, and still she went driving on. A policeman rushed on to the footboard, and said to her, "Can't you read?" She replied, "Yes, I can read, but I can't stop." The Tory party cannot stop now, and they cannot read. They cannot read the signs of the times. They know, and, indeed, the Tory party during the last Conservative Government were parties to the statement, that one of the greatest needs of the world is fewer and lower tariffs, and not higher and more tariffs. Instructed opinion in the world knows that one of the obstacles to the return 1242 of normal trade consists of the tariff walls, which have crept higher and higher since the War; and yet this Government, in face of all that, are adding to the tariff area of the world.
They will go on pleading, I suppose, that tariffs are a bargaining weapon. We have heard that statement to-day. The history of tariffs in the world proves that that is not so. The facts of to-day prove that it is not so. One of the effects of tariffs is not lower tariffs, but reprisals and more tariffs. I am sure the Government cannot read. They have not read the handwriting on the wall yet. The Wakefield by-election—[Interruption]— ought to be a warning to the Government. The Lord President of the Council said the other night that Wakefield was won on beer. I suppose his party knows more about that beverage than we do —[Interruption.] Let me assure the right hon. Gentleman that the Government were defeated at Wakefield because they cannot scare the people again, because the public are realising the dishonesty of the Government in fighting an election on a programme of national unity, and utilising a national victory, for purely party ends, to realise the dreams of the Tory party. For 30 years they have dreamed of this, but, though they have been in office, they have never dared to do it. They are utilising the national crisis, with the aid of their captives to give the Government a semblance of a National Government—they are utilising that national crisis, which I agree with the right hon. Gentleman the Member for Epping (Mr. Churchill) was a little exaggerated, and, as he said, manipulated—to carry into effect a programme with which they would never have had the courage to face the country. If the Government had gone to the country at the last election and said, "In six months' time you are going to have a complete system of Protection," the National Government would not be sitting here to-day. They would have been ignominiously beaten. I can say about hon. Members opposite what was said by an old friend of mine over there, "The day will come when we shall see your faces no more." [Interruption.] He was not right; I am back.
I make this as a present to the Government. I am certain that they will not accept it, but I offer it to them. The 1243 real moral of the Wakefield by-election is that you cannot fool the people of this country. You cannot go to the country with the highest patriotic motives, and with panic in the other hand if patriotism will not do, and then, behind their backs and without their knowledge, carry through a revolution. If we did that, what would be said? I hope we shall always have the manhood to go to the country on the things that we believe in. [An HON. MEMBER: "The means test."] If it were in order, I should be delighted to explain that to the hon. Member. Everyone knows that the really important problem to-day is that of the economic situation. Everyone who will be honest with himself knows that tariffs will make no contribution to the solution of that question. Indeed, one of the first ways in which we have to deal with this situation is to get rid, as far as we can, of the tariffs that already exist, and to deal with the problem on international and national lines. I believe that tariffs are the last gamble of a dying system. I believe people are using this in the hope that they can bolster up the old order. I do not believe you can do it. Now, when the world is passing through a serious crisis, which I have never tried to deny—I admit its existence—the only solution is to get rid of the bad old methods and the bad old ways which the National Government are trying to restore. I believe that, until you can get out of people's minds as the mainspring of your economic system the motive of private gain, our economic system will just go staggering on, and our view on these benches—and we shall express it when occasion offers—is that tariffs are useless, and that a complete change of the economic system is the only solution of our present difficulties.
§ The FINANCIAL SECRETARY to the TREASURY (Major Elliot)
I am sure we are all more than delighted to see the right hon. Gentleman opposite back in his place again, or rather in a new place on the Opposition side for, when we knew and loved him, he was sitting here on the Front Bench and indicating his resolute belief that he could pull the system through by means of the legislation which he and his friends used to introduce and then run away from. We are very glad to see him back. He brings that quaint old world note into our 1244 Debates which they have lacked in the past few months. I understand that the inhabitants of the Catskill Mountains in the United States treated Rip Van Winkle harshly when he came among them, and that he was only treated kindly by his devoted dog which came up to lick his hand and then died. We shall be more generous. We love Rip Van Winkle. Let him tell us his fairy stories. We shall sit round, especially the younger Members, and say, "This is the sort of thing we used to talk about during two years of Labour Government." He will always be sure of a welcome among us. His choicer gems of speech about the sewage of the Tory minds dropping from their palsied hand is the sort of thing we have not heard since the Irish Members disappeared. Let him go on. Many more such bright things will crop up in his brain. These are things of which we cannot have too much. The complaints of this guardian of tradition are also welcome. That the House of Commons is passing through a fiscal revolution or a constitutional revolution, that a committee brings out a report on the Friday and it is put into action on the Monday seems to him to be shocking, staggering and unprecedented. It is exactly that sort of thing which makes us realise how far we have travelled in the months since this Government came into power, instead of appointing committees and then discussing them for the rest of our lives.
Some arguments were brought forward —not many—but they were all a long way from the words of the Amendment. The recommendations of the Import Duties Advisory Committee and the "lasting injury" they were about to inflict upon the country were hurried through by the Mover of the Amendment, and were never referred to again by any speaker on the other side.
§ Major ELLIOT
I am not for the moment dealing with speeches from our side of the House but saying that those matters were not referred to by either the Mover of the Amendment or the Seconder, or by any of the speakers, or even by the eminent right hon. Gentleman the Member for the Wakefield Division (Mr. Greenwood), as he took care 1245 to assure us. He had a lot of things to say and there are one or two interesting points I should like to touch upon for a moment or two before I get on to the Debate in regard to which I should like to say a few words before the evening concludes. So much has been said about the Wakefield By-Election that we might have thought that a debate was being held upon the result of the by-election and the eminent deeds of the right hon. Gentleman who now represents that constituency by a majority of 30,000. [An HON. MEMBER: "Three hundred."] Has all this song and dance been made about a majority of 300? What would have happened if the right hon. Gentleman had won by 500? I understand that it was fought and won on some great national issue. I was looking at one of the urgent messages and appeals sent out on behalf of the right hon. Gentleman. There was an urgent message and appeal from the cinema exhibitors in Manchester and district:
Dear Exhibitor,You will probably have observed that the Chancellor's Budget statement in the House of Commons to-day has revealed nothing whatever for the benefit of our industry. This must be as bitter a disappointment to you as it is to us. Mr. Greenwood, when in the Cabinet last year, voted in favour of Sunday Cinemas, and he is now pledged in favour of Sunday Cinemas and a reduction in the Entertainment Tax and the abolition of the tax in the case of the lower priced seat. We ask you, for the protection of our own business.[HON. MEMBERS: "Why not!"] Yes, but this is a great national issue.We ask you, for the protection of our business, to send a motor car to Wakefield on Thursday next to bring voters to the poll in support of Mr. Greenwood, who, if returned, will undoubtedly place his great abilities at the service of everyone of us. Now is the time for action. One day's effort may result in permanent benefit for our business.
§ Major ELLIOT
This by-election victory is said to be the nation's "Hitlerism on the backstairs." I think it is something very much simpler. It is just the old business of by-elections going against the Government of the day because it has disappointed certain powerful interests, who have taken the 1246 first opportunity, as they are legitimately entitled to do, to give the Government a good smack in the eye. The right hon. Gentleman has excelled himself in coming forward on a great national issue. He quotes the Boston Tea Party; and he cries "We lost the United States, the same course is being taken to-day." What we are meeting with to-day is that certain interests say:Now is the time for action. One day's effort may result in permanent benefit for our business.No, the right hon. Gentleman must learn the tone and temper of the new House of Commons. He will not frighten this House by telling it that a revolution either fiscal or constitutional is in progress. The only thing which will frighten it is if he threatens it with a return to the old ways of muddle and delay that this House has been returned here to sweep away as soon as possible.
To do the Opposition justice, other speakers went far to realise the new conditions with which we are faced, and I was more than interested to find hon. Members such as the hon. Member for Pontypool (Mr. T. Griffiths) approaching this problem in a realistic spirit. Several maiden speeches and speeches by other hon. Members all showed that the House was attacking this problem with the object and desire of making a great new experiment, and to give it every possible chance, and of seeing, at any rate, nothing should be said in this House that would injure the chances of employment for our people and the remodelling, if necessary, of the whole social and industrial system under which we live. The right hon. Gentleman the Home Secretary, in a very able speech, referred to the terrible responsibility which this Government in this House is facing to-day, and he placed it squarely upon our shoulders where we are content to bear it and to accept the responsibility. He said with the greatest truth that unless we were able to deliver the goods, and unless events justified our course of action, then, indeed, we should be condemned, and everyone of us in every part of the House knows it is on that, and not on the history of the last 150 years, or even the last 15 months, that this administration will be judged finally when it goes again before the people.
Hon. Members have put certain specific questions, some of which I should like to 1247 answer, if time permits. Some hon. Members said that the tariff is too high, others that the tariff was too low, and others discuss the situation generally with a view to seeing in what direction the country is evolving. Let me deal with those who said that the present tariff is too high. This argument came from various parts of the House, and from the Liberal Members below the Gangway. I wonder if they fully appreciate the astonishing fact that a review of the British tariffs which the Advisory Committee has carried out has led, indeed, to the raising of some tariffs but to the lowering of a great many more; a lowering which some hon. Members think is too great and too drastic. It is ungenerous to complain that the country is being rushed into tariffs and not to recognise what a great work has been done by the Advisory Committee, and in so short a time, and how boldly the committee has tackled the mountainously high tariffs in certain portions of the industrial field, alongside of the complete absence of tariffs in certain others.
The figures are interesting. The amount of goods covered by the articles included in the Abnormal Importations Order was £51,000,000. The tariff bar upon these goods (multiplying the value of the goods by the rate of the duty) was 25.6 million pounds. The amount of the goods covered in Schedules 1 and 2 of the Order which we are debating amounted to £136,000,000, but the rate of duty is very considerably lower, and the tariff bar on the two Schedules together comes to £29,000,000. So that what we are discussing is not merely the raising of tariffs in various directions, but the rearrangement of the British tariff so that a barrier of 25.6 million pounds has been replaced by a barrier of £29,000,000, while the whole range of the British Import Duties has been reconsidered and brought for the first time into some rough relation, one trade with another. That is an achievement which I would ask my Liberal and Free Trade friends particularly to consider, because unless they admit the strength of the case for these Orders as well as concentrating upon what they think are the weaknesses, they will not get that attention from the country and the House which they desire.
The hon. Member for Colne Valley (Mr. Mallalieu) complained that we have made 1248 no provision for drawbacks. He must himself have voted, or abstained from voting, or he may have voted against, the Financial Resolution on the Finance Bill which specifically empowers the Advisory Committee for the first time to recommend drawbacks to be given in respect of any of these articles. That is a very important point and one to which no attention was paid to-night. That Clause will be in the Finance Bill, drafted and founded upon the Financial Resolution. Provision for it will be found in the Finance Bill, which will be in the hands of Members next week, as a result of the Resolution brought forward by this Government, which the hon. Member accuses of having no respect for trade or for the requirements of his own constituency. Those who say that the tariffs are too high have not put so much vigour and vehemence into their case as those who complain that they are too low. There again we must found ourselves upon the Advisory Committee. The case of the Silk Duties has been raised by the hon. Member for the Elland Division (Mr. Levy). These duties are specifically withheld from the purview of the Advisory Committee. We shall have to embark on the consideration of these duties on the Finance Bill. Those who attack the Advisory Committee should consider into what a Serbonian bog we should be plunged if we had to draft a tariff on every one of the articles contained in these Orders and in the Schedules, with all the amendments which the ingenuity of hon. Members opposite would find it possible to introduce. Those who say that the tariffs are too low, I ask to admit that the efforts of the Advisory Committee offer by far the best chance of an impartial review which the country can ever hope to get. In certain individual instances indignation may be felt at the reduction of some duties, yet unless these duties are revised and lowered as well as increased by such a committee, it is hopeless to expect any permanent scientific tariff to be framed and set up in this country.
As to the size of the duties, it has been calculated that the present recommendations of the Advisory Committee, combined with a depreciation of the pound, represents protection of something in the 1249 neighbourhood of 35 per cent. I ask hon. Members to remember that the key industry duty, on articles which were specified as vital to the commercial and military existence of this country, was fixed at 33⅓ per cent.; and that was with a depreciated exchange against us and not in our favour. It was regarded as a high and adequate duty in the case of many articles of supreme importance to the country. Therefore, one cannot say that the duties fixed by the Advisory Committee have not a prima facie case to be considered as adequate until the industries to which the duties are applied can prove the contrary.
The general argument which has been brought forward is more interesting and more important. The hon. Member for Stockton (Mr. Macmillan), in a most thoughtful and interesting speech, the hon. Member for Stoke (Mrs. Copeland) and the hon. Member for Pontypool argued the merits of the case admitting, as everyone will have to admit, that we have changed from the simpler system of the 19th century to the infinitely more complicated system of to-day, from a century of scarcity into a century of glut, from a century where a flood of goods was produced in one or two great industrial countries and eagerly welcomed by all countries into which they went, to the system of to-day, in which countries in many cases have become not more dependent upon each other but less dependent upon each other. To-day all can grow the plant for all have got the seed. The seeds of industrial equipment which in the 19th century were practically confined to half a dozen great industrial centres have now been scattered practically over the world. Manufacturing equipment is enormously widely spread; even access to power, which a little while ago was confined to those countries with accessible coal seams is, with the discovery of oil and with the present extraordinarily cheap transport with the development of hydro-electric power, being widely scattered through the world. The localised supremacy of the industrial nations which existed in the 19th century is no longer a feature of the 20th century.
That drives us first of all to the breakdown in the old international system of the nineteenth century which we have all 1250 seen taking place. It is that breakdown, and no desire to betray principles, which has brought so many Free Traders to sit along with us on these benches. They realise that things have changed and that new methods must be applied to new circumstances. When the right hon. Gentleman the Leader of the Opposition, defender as he is of the fiscal autonomy of India, sees the enormously increasing manufacturing power of India, when he is asked to contemplate, as he is by his own follower the hon. Member for Pontypool, the spectacle of Indian pig iron coming into South Wales, travelling 7,000 miles and being delivered cheaper than the people in that manufacturing centre can make it themselves, he is not dealing with an India which is more dependent on England than it was before, but with an India which is less dependent. With India, as with every other country where access to our markets is a factor, we shall have to negotiate and make commercial treaties and arrangements, and what we can do in the case of India we can certainly do in the case of Powers less closely allied to us, economically or commercially. The right hon. Member for Wakefield says that our tariffs will lead to more tariffs and to the breakdown of the commercial system. What led to the breakdown of the system while we were still Free Trade? Will he answer that? If the working men were satisfied when we were a Free Trade country, why did they return us in these overwhelming numbers?
§ Major ELLIOT
That is the fundamental truth of the position. At the last election the working men of the country said "Free Trade or not, it is not good enough for us," and they hurled right hon. and hon. Gentlemen opposite out of Parliament because, they said, "These men are not willing to try a new experiment, and this new experiment will have to be tried in this country before we can get any better." The difficulties of our century are not difficulties which can be got over without a change of system, and this House of Commons has its eyes open to these new conditions. That is why it is willing to accept these sweeping changes in procedure which are contemplated by the Import Duties Act and brought into 1251 effect by these Orders, and unless we are willing to try new experiments and make sure that we do not allow these experiments to be destroyed by faintheartedness, we shall deserve all the condemnation which we get. I do not know whether, in fact, we go far enough in the proposals which we are now bringing before the House. It may be that we shall require to go further. I am not afraid of that. We shall bring forward further proposals, and not merely in one field, but in many fields.
On this occasion we find ourselves at variance with some of our friends on this bench, and with some of our friends who support us in the Government of the day. There are other experiments, equally important, which will have to be embarked upon by this Government. We believe that these experiments will have to be tried by some Government. If they are not to be tried by this Government, by what Government are they to be tried? By right hon. Gentlemen opposite, who do not even argue the case for their own Amendment, are incapable of making any speeches except the old, fusty, platform speeches which have done duty in half - a - hundred election campaigns [Interruption.]
We are asking the House to come to a decision which undoubtedly involves a great change in the procedure of this House, which involves the imposition of import duties on many articles which have not hitherto been subject to such duties. But a decision which is part of an ordered plan and system, upon which this country will develop as long as we can manage that it shall develop. We believe that it will develop for many years to come under a system of controlled imports, such as is now the accepted practice of every country in the world. It is not possible to believe that any great country will depart from the principle of the selection of the imports into its economic system. This is the fundamental issue which we are asked to decide, and it is in favour of such a selective control that we ask the House to vote in approving this Order.
§ Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. C. Edwards.]
§ Debate to be resumed To-morrow.