HC Deb 11 November 1932 vol 270 cc687-722

I beg to move, That the Additional Import Duties (No. 6) Order, 1932, dated the first day of September, nineteen hundred and thirty-two, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the eighteenth day of October, nineteen hundred and thirty-two, be approved". At the suggestion of Mr. Speaker, and for the convenience of the House, it was decided that Orders No. 6 and 7 should be considered together. I am sure that the House is anxious to pass as soon as possible to Order No. 8 which deals with iron and steel and that very little explanation of Orders 6 and 7, which are of a miscellaneous character, will be necessary in order to secure their confirmation. Order No. 6 relates to three classes of commodities—certain preserved fruits, candied peel, and poultry and meat paste. The Committee have made very detailed recommendations in accordance with the usual practice, and the Treasury Order follows the recommendations. The fruits are luxury articles, and there seems to be no reason why they should not bear the additional duty. As to the poultry and meat paste, most of the well-known brands are already of British manufacture. There is keen competition in the internal market, and there is no reason for any rise in price. Foreign imports in this class are chiefly of German sausage, which is not likely to be an article which will arouse any very considerable interest.

The Order also deals, as will be seen in the second part, with a miscellaneous collection of substances. With regard to screws, there is perhaps a word to be said. Screws of various kinds are one of those commodities in respect of which there has been international agreement, and in this country imports have been made very heavily, at prices far below those ruling in the country of origin. For three months following the imposition of the Additional Import Duties duty, we found that the British producer was being heavily undersold, notwithstanding the 20 per cent. duty. The addition of these duties is intended to place the British manufacturer on a competitive basis with the foreigner, and already a reduction in home prices has been effected since the imposition of the higher duty. Under the third part of the Order there is a considerable number again of miscellaneous substances, including scissors, gloves, paints, varnishes, wrapping papers of various kinds, hair combs, and a number of other articles, and for all of those articles reasons are given by the Advisory Committee in their recommendations, and unless any special point arises on any of them, I merely beg to move that that Order be confirmed.

Order No. 7 deals with two classes, wagons and shoes, and I think the House would like a word with regard to the second part. On wagons, the recommendations are quite clear, but when we come to boots, bootees, shoes, overshoes, and slippers, I think the House should know, in two sentences, the extraordinary effect of the arrival of Japan in the year 1931 as a competitor. Japan came into this trade in 1931. Her interest hitherto had been small, and by the end of that year she had become practically the largest supplier of this class of article. Before 1931 no rubber boots came in at all, and nearly one quarter of the whole of the imports during 1931 came from Japan before the end of the year. The figures are extraordinary. In 1929 she sent merely a few dozen pairs of rubber shoes; in 1930, 8,000 dozen pairs; and in 1931, 167,000 dozen pairs. This is only one other instance of the wholly extraordinary effect on world trade generally as a, result of intensive Japanese exports. It serves as an instance to call the attention of the House to the way international trade is varying all over the world as a result of Japanese efforts to secure markets under terms which we regard as unfair competition. I shall be happy to answer any questions on these Orders.


Will the hon. Gentleman explain what he means by unfair competition?


I mean unfair in the sense that there is no competitive basis by which a western supplier of like articles can compete with the eastern supplier.


We have had put before us a miscellaneous set of recommendations. It is difficult in the course of one afternoon to deal with such a varied mass of products and we get little chance of a proper discussion. We are just given the recommendations from the Committee about these duties, but we are not given any information as to where these goods come from and the effect that this tax will have on our trade with other countries. There are only one or two points with which I can deal in connection with No. 6 Order. I should like to have a word in regard to leather gloves. We understood that this form of protection was to go with efficiency and the organisation of the trade. We are told that it is an old-established industry, but there are a lot of old-established businesses in the country and they are not always efficient. There are 300 small manufacturers of leather gloves and the trade is quite unorganised. They make only the higher grades of gloves. The imports that we have had hitherto have been the cheapest type such as are worn by the poorest classes. The mass production of these has been developed in certain countries, and I want to know in these circumstances whether the industry at home is prepared to deal with the demand for cheap gloves. I understand that there is no big firm in the industry; it consists of many small firms who have not hitherto catered for the cheap market. They go along on their own specialised lines. We have nothing about that in the report of the Committee. This duty will kill the re-export trade of which £190,000 worth is done. There is a long list of goods in this Order, such as paints and varnish, with which we have not time to deal.

Then there are screws for wood. One of my hon. colleagues will have something to say about them, but it seems to me that this is a very curious way of dealing with these matters. Apparently everything was all right as long as there was a world monopoly of screws; as long as they were tightly holding on to one of those international agreements which oversteps all the limits of patriotism it was quite all right, they could make what profits they chose, and they did make very good profits; but as soon as they fall out and honest men come by their own, then each particular section has got to be protected. I should like some more information about this matter. All we have got is an assurance given by the manufacturers. I suppose we shall always get assurances from manufacturers of every sort. I do not think an assurance of that kind, based on no information given to the House, is worth very much. I am not going to deal with the minor matters of poultry and meat pastes, sausages, glacé cherries, and so forth. Those are mainly luxury items, and it is not worth while spending much time over them.

The hon. Member has told us something about rubber boots, bootees and the like, but I do not think the report of the Advisory Committee goes into the matter in any detail. Here we are supposed to be protecting ourselves against the competition from Japan. One thing I would like to ask is why boots which cover the ankles suffer a duty of a penny a pair more than the others. It seems to be a mid-Victorian regulation. I should like to be given some assurance as to the cost of these articles. We are told the market is flooded by cheap Japanese goods. What are they used for? A lot of very cheap goods are used for sports, and no one wants to discourage sport.

I should like to know something about the organisation of these trades in this country. In their reports the committee often stray outside their bounds and talk about revenue considerations, but we hear very little about the efficiency of the trades. When we were discussing this legislation we were always told that Protection and efficiency must go hand in hand, and that there must be proper organisation, but we now hear very little about that side of the matter. I think that before long we ought to be given a report on all these trades showing what has actually happened, because even Pro- tectionist Members have commented on the danger of trades going to sleep behind tariff walls. These rubber shoes may be an instance of dumping from Japan, as is alleged. We are told there is unfair competition. Unfair competition used to be talked about 20 years ago. I should like to know something about the organisation of the rubber trade. The information given to us is wholly inadequate, and we do not believe that any of these advantages ought to be given to private interests without the very strictest and closest inquiry by the committee in the interests of the community.


We have just listened to one of the most typical speeches from the Labour benches I have ever heard. Apparently there is no such class in this country as the workers or the producers of these goods. The hon. Gentleman showed a great deal of consideration for the re-export trade, and shed a certain number of crocodile tears over the consumer who wants to buy the cheapest kind of Japanese footwear or sportswear, but apparently did not remember that we have over 2,500,000 people out of work. It is these industries which are employing some of the people who are in work, and if we did not take some such steps as these a lot of them would be thrown out of employment.

I only wish to raise one question on Order No. 6, and that has to do with gloves. It is very remarkable that with regard to the two branches of this one industry—because glove-making is one industry—the Committee should arrive at exactly opposite decisions in regard to leather gloves and fabric gloves. They seem to have decided, according to the arguments put forward in the White Paper, that the leather glove industry—and this is rather unlike the criticisms of the hon. Member for Limehouse (Mr. Attlee)—has been fairly well organised, has been capable of producing a considerable proportion, about 60 per cent., of the gloves that have been used in this country, and that therefore it is an industry worth preserving. In order to preserve it, they reccommend an increase in the duty from 20 to 30 per cent. On the other hand, in regard to fabric gloves, a smaller branch of the same industry, they say: This industry has reached a high degree of development in Germany, whence the world market is supplied with gloves made almost entirely from Lancashire yarn. They go on to say that if they were to give a high degree of protection to the manufacture of these gloves in this country, they were afraid that the price would be higher, that the consumption would go down, and that Lancashire yarn production would suffer. On that argument, the whole of their position is based. What justification is there for that? What security have we that the German manufacturers of glove fabrics will also use Lancashire yarn? Why should they not carry their organisation a little farther and decide to manufacture yarn for the gloves? Why should they not import cheaper forms of yarn from other European countries where there are lower wages than obtain in this country? There are all these possibilities. We may find that in grasping at the shadow we have dropped the substantial bone.

2.30 p.m.

This subtle form of argument is supposed to be Protection for the Lancashire yarn industry by a side wind, but, if that is so important that we are to throw out of employment practically all the people who are now engaged in the fabric glove industry in this country, we may find we have got nothing, because the German glove industry has begun to use other forms of yarn. What is the argument? The White Paper says: During and immediately after the war a largo production was developed in this country both of gloves and of the fabric of which they are composed. That hardly does justice to it. Immediately after the war, and until the end of 1920, we were employing about 10,000 workers in the fabric glove industry. Now there are a few hundreds. Why should we not go back, now that we need employment, in what is, after all, a luxury article? People may talk about the necessity for gloves, but if it is only a question of having gloves to keep your hands warm, it is not fabric gloves, but a heavier kind of gloves, that would be a necessity. Why should we not go back to that position? The Committee say that the fabric glove industry, notwithstanding the substantial measure of protection given by the Safeguarding Duty, was only carried on on a very reduced scale. That is not a very fair statement. We alternately put on a 33 per cent. duty and then took it off. Every time it was taken off by hon. Members now on the Opposition side, when they had the power to throw people out of work, we opened our gates freely to a flood of importations from Germany that lasted for about a couple of years out of the next five-year period of the fabric glove safeguarding duty. It never had a chance. In the earlier part of this year, under the 50 per cent. duty, the industry was going up by leaps and bounds. Every person in my constituency, and in the West generally, who had any skill in using sewing machines and making gloves, was brought into employment, and we had even to bring down from London girls who had had a certain amount of training in the use of machines in order to work in the glove industry. Suddenly the whole thing has been thrown out of gear again, and, in the supposed interests of the Lancashire yarn manufacture, this industry is to be killed. The White Paper makes another threat. At the end of the paragraph dealing with this subject, it says: We propose to examine further the question whether it would be practicable and desirable to remove the additional duty of 10 per cent. to which glove fabric is now subject as being within the general category of tissues of cotton. It is certainly true, as is stated, that such fabric gloves as are made here are largely made from imported fabric, but, if there is no actual manufacture of fabric gloves in this country, there will be no possibility of maintaining a glove fabric industry; the one goes with the other. But, instead of putting on a sufficient duty to keep the industry of fabric glove making not only alive but growing in this country, and a lower duty on the glove fabric, so that we could manufacture both the gloves and the material of which they are made, the Import Duties Advisory Committee have decided that both these industries are not worthy of any protection, and that, therefore they had both better go.

It is necessary for me to tell the House, further, what has happened in the six months under the 20 per cent. duty since the 50 per cent. duty was taken off. In March, the eight principal firms manufacturing fabric gloves in this country together made, in that month, 17,598 dozen pairs. In the month of October, the production dropped to 4,500. One firm, who made 3,999 dozen pairs in the last completed month of the earlier period, are now only making 766. The Advisory Committee were warned that this would be the result. It has been the result, and it shows that in six months the industry has been practically destroyed. We have a higher rate of unemployment in Bideford, the principal glove-making town in my constituency, than in any other part of Devonshire, although not one girl capable of making a glove was out of work only six months ago. That is the policy which is so strongly advocated from the benches opposite, and it is the only part of these Orders that they would applaud. Although the hon. Member for Lime-house was entirely against the placing of an increased duty on leather gloves, he made no criticism of the fact that the fabric glove industry was to be destroyed.


May I ask the hon. Baronet whether we are responsible for these Orders, or for the imposition or taking off of duties?


I was only referring to the criticism, by the representative of the party on the front bench opposite, of the part of these Orders to which he objects, and to the fact that he had no criticism to offer of the part which throws out of work practically the whole of the people engaged in a small and struggling industry which used to employ 10,000 people.


The hon. Member who followed the Parliamentary Secretary to the Board of Trade referred to the question of screws, which, he said, had been imported into this country at prices very much below those ruling in the country of origin. It is evident that some reorganisation is necessary in connection with the screw trade, because they had an international agreement which created a monopoly of the whole output of the industry. Evidently, since the breaking of the international agreement, they have begun to feel the pinch, and have to make application for additional import duties. I would like the hon. Gentleman to tell me what was the cause of the international agreement being broken. Was it because the manufacturers of this country withdrew from it, and compelled other countries to compete so successfully with our people in this country, as it is said they have been doing? This is a point which might seriously be considered, because the British production is not such as would be a real menace to any particular part of the trade in this country.

We manufactured, in 1931, approximately 16,000,000 gross of screws, and, according to the White Paper, roughly speaking, only 3,000,000 gross of screws were exported. I fail to see where the importation of screws from other countries can do what is said in this White Paper. It is stated that the people who are exporting their goods to this country Secure in their home markets under the protection of high tariffs, these manufacturers have been able to quote very low prices abroad. But the White Paper, after stating the case of the importers, says that British manufacturers will be able to place on the foreign market their goods much cheaper, and, at the same time, cheapen supplies to the British consumer. I want to know how it is possible to quote a cheaper price to the people abroad and to our people here. The statement made by the hon. Member, in his opening remarks, was that screws were quoted in this country at prices very much below those ruling in the country of origin, which means that the price in the country of origin have been increased to the home consumer.

They also promise in this White Paper that they will watch the interests of the home consumer. I wonder who is going to watch the interests of the home consumer, because not only has there been a monopoly abroad, but there has been a monopoly in this country. The manufacture of this commodity is in the hands of one firm to a large extent. Nettlefolds, I think, are by far the largest makers of screws in this country, and I would like to ask if they are in financial difficulties—whether they have not been making sufficient return on the capital invested that they are entitled to ask for protection? We find that in the two years 1918 to 1920 they paid dividends of 15 per cent. tax free, and from 1920 to 1930 10 per cent. tax free. During the last two years they have paid no ordinary dividends at all, but last year they made a net profit of over £233,000. Is it necessary that these people should be protected I Surely their organisation is sufficient now to provide them with a profit on the capital invested.

Whatever may be said about the import duties, they are going Ito increase the cost of articles to the home users, and put an additional cost upon all works in connection with which screws are used. The value of the imports affected it is difficult to estimate, but the total value of imports of nails, tacks, rivets, washers and screws for 1931 was something like £230,000. It may be said that they are going to protect the home user, but will they? Every additional duty placed upon any commodity coming into the country means that the user is going to have to pay. [HON. MEMBERS: "No."] Of course, that is a. matter of opinion. You cannot tell me anything than has been reduced owing to the imposition of an import duty. [HON. MEMBERS: "Screws."] There is only one thing about screws. The consumers are being screwed in every possible way, and it is about time for them to make it clear that they have no intention of submitting to these things where they are not necessary. In this industry there is no evidence of any need of an import duty because they have been holding their own in world competition, and would have been holding their own to-day but for the breaking of the international agreement. I should like the hon. Gentleman to reply to the questions I have put to him with a view to clearing up the position of this industry.


I am amazed at the speech we have just heard. The hon. Member dealt entirely with screws, but apparently he had not taken the trouble to listen to the very definite statement of the Parliamentary Secretary in which he explained that already the price of screws has been reduced since the duty was imposed, and in consequence of the duty.


I mentioned no other article but screws.


The hon. Member got up to make a speech about screws, and he discussed the price of screws. The Parliamentary Secretary also discussed the price of screws, and, while we are on the subject of screws, we might as well stick to screws, and the price of screws has been reduced since the duty went on. I should have thought that is all there is to be said about screws. Again, we had a rather extraordinary speech from the hon. Member for Lime-house (Mr. Attlee) on the question of rubber shoes. He said: "Why do we not look into the efficiency of these firms?" He must know that whatever other Charges you can bring against rubber manufacturers, they are outstanding examples of the very highest industrial and scientific efficiency. Is it not time that hon. Members opposite stopped slinging mud at British industries?


I never slung any mud. I only said that I wanted information, and I am now getting it from the hon. Member, who is always so ready to give it.


If you ask questions about people's characters, you are implying that there is something doubtful about them. That is the general implication. If you are satisfied about it, you do not ask questions. I want to reinforce the argument put forward by the hon. Member for Barnstaple (Sir B. Peto) about the extraordinary difference in the treatment accorded to two branches of the glove-making industry. I think that Parliament and successive Governments have treated the fabric glove makers abominably. May I give the history? On 23rd August, 1922, they were given protection at the rate of 33⅓ per cent. against gloves from Germany only. Under the provisions of the Safeguarding of Industries Act, duties could be put on against individual countries provided, of course, that we had no treaty with those countries which prevented such discrimination. That was the position with Germany at that time. The duty lapsed on 20th August, 1924, because the Government of the party opposite refused to continue Part II of the Safeguarding of Industries Act. On 23rd December, 1925, under the provisions of the Safeguarding White Paper of the last Conservative Government a Bill was introduced which, among other things, imposed a duty of 33⅓ per cent. on fabric gloves. That duty ran for five years and lapsed on 22nd December, 1930, and at once the industry was in difficulties. But the importation was so abnormal this time last year that it received attention under the Abnormal Importations Act and a duty of 50 per cent. was imposed. The results of that very high duty—I think rather too high—was the immediate resuscitation of the industry. Factories which had been definitely closed were brought to life again. A friend of mine who had not had an order for 12 months was able to start his factory. Then there came the Order of 26th April under the Import Duties Act, which reduced the duty from 50 to 20 per cent., and at once the industry was again in difficulties. Now we have the decision that 20 per cent. is to be the limit. The hon. Member for Barnstaple gave the figures, and it has also been shown to me, that the production in October was roughly one quarter of the production last March.

I do not wish to criticise the Import Duties Advisory Committee, because all of us want to keep it out of political argument. I am speaking on this issue because there is a question of principle involved. They have definitely raised the issue by their recommendation that they may deliberately contemplate the extinction of an industry, and that is, I think, a very grave matter of principle. Therefore, it is right that the House of Commons should seize the opportunity of this Report to express, not by a vote, because we have not an opportunity of doing it by a vote, but in speech our views as to whether it is right that now that this country has adopted a policy of Protection we should deliberately contemplate the wiping out of an industry—because that is what it means—and the entire destruction of employment in a number of small towns in this country. You will completely paralyse the social life of a certain number of small centres. There is at stake possibly, or might be a total employment of anything up to 10,000 people. At the moment the number is much smaller. I know that the Parliamentary Secretary, in reply, can only say that the matter will be taken into account, because these matters have been referred to the committee. I hope that if the committee receive any further applications from this industry they will give the most serious consideration to it in view of the disastrous consequences which, I believe, will follow their present decision.


I rise to support the observations which have been made by my hon. Friend the Member for Barnstaple (Sir B. Peto) and my hon. Friend the Member for South Croydon (Mr. H. Williams) and to appeal to the Parliamentary Secretary to ask the Government to request the committee to reconsider their decision in regard to fabric gloves. It is sometimes said when we make these requests to the Government that they have no power to ask the Advisory Committee either to reconsider or to consider anything. If my hon. Friend will look at Sub-section (3) of Section 2 of the Import Duties Act, he will see that it is abundantly clear that any Government along with any member of the public has the opportunity of requesting the committee to consider any recommendations: The Committee shall take into consideration any recommendations which may be made. That, surely, must mean by anybody, and I am sure that my hon. Friend does not suggest that the members of the Government are nobody.

What is the basis upon which the Tariff Advisory Committee should make their recommendations? It is a remarkable fact that the Import Duties Act lays down no principle at all upon which this matter should be considered. I was delighted to hear the Parliamentary Secretary—if I heard him correctly—say that the object the committee had in mind was to give British industry reasonable opportunities of fair competition with foreigners in our home market. That is the basis upon which, under the Ottawa Agreements, British manufacturers are to be given an opportunity of selling their goods in the markets of the Empire, and it is to be hoped that they will at least be given similar opportunities here in our own market.

I had an opportunity of reading the case submitted to the Tariff Committee on behalf of the fabric glove manufacturers and the glove fabric manufacturers. Their case was based solely on the fact that the wages paid in Germany were far lower than the wages paid in this country. It was on that basis alone that they asked for an additional duty. I have also had an opportunity of reading the case submitted by the opponents of the application. With the exception of the Fine Yarn Spinners' Association of Lancashire, the remaining opponents' case was based on the statement that we can make far more profit by importing foreign-made fabric gloves than by manufacturing them ourselves. One of the remarkable features of the opponents' case was that it was supported by a leading glove manufacturer in this country. In the past, judging from the buttons on the gloves and the words "British Made" that they had been in the habit of putting upon those buttons, people have supposed that this firm had been making their gloves in this country. Yet they supported the opposition on the definite basis that they could make more profit by importing fabric gloves than by making them in our own factories in this country.

So far as the opposition of these people is concerned, it is contrary to the very principle that my hon. Friend enunciated as the reason why the Committee turned down the application. There was not a scrap of evidence submitted to dispute the fact that the wages in Germany were from 50 to 60 per cent, the wages paid here, nor was there the slightest evidence given to suggest that the figures supplied by the applicants for the additional duty were incorrect. In regard to the objections from Lancashire, it is very remarkable that the last five or six pages of their case in opposition stressed the very point that the hon. Member for Barnstaple made, that not only would Germany eventually spin the yarns that Lancashire was now selling to them, but that they had in fact started to do so. The fine cotton spinners of Lancashire gave figures showing how that trade, the spinning of those yarns in Germany, had been growing in the course of the last few months. It seems to me that in opposing the application in this case Lancashire has been doing what she has done so often before. She has adopted the very short-sighted policy of looking to what she may sell at the moment and overlooking the long-sighted pohey of where she is going to sell her yarn when Germany begins to manufacture the yarns herself. Germany does not buy those yarns from Lancashire out of thanks for the fact that we allow fabric gloves to come in here at the present rate of duty. She buys the yarns because she cannot get them from anywhere else and she will obviously go on buying the yarns so long as she cannot get them from anywhere else, whether we put a duty on fabric gloves or not. I appeal to the Minister that he should ask the Committee to reconsider their decision and to advise the Government what duty should be imposed upon this class of goods, in order to give to our manufacturers a full opportunity of reasonable competition in our home market.


I want to emphasise the admirable point made by the hon. Member for Barnstaple (Sir B. Peto) as to the inconsistency of the Advisory Committee. In their recommendation not to put a heavy duty on fabric goods the Committee say: This would be likely to lead to a considerable increase in price and a serious contraction of consumption, with adverse reactions on the yarn industry of Lancashire. I want the Parliamentary Secretary to reconcile that argument with the other argument where a Duty is desired. The two arguments are not consistent. The hon. Member for Barnstaple is an honest Protectionist, and when he finds a Free Trade argument put in. he cannot understand it.


Is the hon. Member aware that the price of German-made gloves has gone up since the Order was made?

3.0 p.m.


I am not discussing the price of German-made goods. I am discussing the inconsistency of the two arguments. You cannot have it both ways. The Advisory Committee, composed partly of Protectionists and partly of Free Trade members, apparently want to do something for Free Trade, and, when they do not want to give a Duty, say that it will lead to a "considerable increase in price." That is what Free Traders say, and hon. Members who are Tariff reformers will realise that this contention is confirmed by the Committee and that duties do tend to an increase in price. In this case they will react on the Lancashire yarn industry. I desire to emphasise this Free Trade point of view. If by a Duty you prevent the purchase of Lancashire yarn the same thing applies if you put a Duty on anything else. We do not send goods out of the country for nothing. The more goods we import the more goods we send out. [Interruption.] In that case, why not arm this Committee with the right to prevent all goods coming into this country? If hon. Members are correct it would be a good thing to prevent all goods coining into this country and let us live on each other. And what about the consumer? He gets the advantage of cheap goods under Free Trade. [Interruption.] Is it not an advantage to buy goods cheaply? Why deny people that advantage? How are you going to build up your foreign trade if you prevent goods coming in? If you prevent goods coming in how are you going to send goods out? I am utterly at a loss. I entirely agree with the hon. Member for Barnstaple in the very logical mind which he has. He is a Protectionist who believes in Protection, and cannot understand how it is possible to have a recommendation based on Free Trade arguments in one Order and based on Protectionist arguments in the other.


The two points that have arisen in this Debate are those connected with the fabric glove industry and those connected with the imports of screws. Those hon. Members who have spoken about the fabric glove industry will realise that there is no proposal in this Order that there should be a duty on fabric gloves. Their discussion, therefore, is not relevant to the question whether or not the House should adopt the particular duties which are in the Order. Theirs is clearly a complaint that

something which is not in the Order ought to be put in the Order. No doubt their observations will be read by Members of the Advisory Committee, and no doubt the fabric glove interests will make their own application to the Advisory Committee, reinforced by such arguments as those we have heard to-day.

With regard to screws, the only information I have to give to the hon. Member for Wigan (Mr. Parkinson) is this: An international series of agreements parcelling out the world's trade in screws means a greater premium in order to secure any free market. Hitherto Great Britain has been a free market. The result of putting on this duty is to put our manufactures in a far better position to deal with what was otherwise a surplus for the manufactuiers of screws under an international organisation. The House should know that the importation of these screws has enormously increased. Since 1924 the increase is no less than 80 per cent. For these reasons we ask that this Order be now confirmed.

Question put, That the Additional Import Duties (No. 6) Order, 1932, dated the first day of September, nineteen hundred and thirty-two, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the eighteenth clay of October, nineteen hundred and thirty-two, be approved.

The House divided: Ayes, 189; Noes, 38.

Division No. 362.] AYES. [3.2 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.) Carver, Major William H. Fielden, Edward Brocklehurst
Albery, Irving James Castlereagh, Viscount Fuller, Captain A. G.
Allen, Sir J. Sandeman (Llverp'l, W.) Cazalet, Thelma (Islington, E.) Gilmour, Lt.-Col. Rt. Hon. Sir John
Allen, William (Stoke-on-Trent) Chalmers, John Rutherford Goff, Sir Park
Anstruther-Gray, W. J. Chapman, Sir Samuel (Edinburgh, S.) Goodman, Colonel Albert W.
Poplin, Lieut.-Col. Reginald V. K. Chorlton, Alan Ernest Leofric Grattan-Doyle, Sir Nicholas
Atholl, Duchess of Clarry, Reginald George Gretton, Colonel Rt. Hon. John
Baldwin, Rt. Hon. Stanley Clayton, Dr. George C. Hacking, Rt. Hon. Douglas H.
Balfour, George (Hampstead) Cochrane, Commander Hon. A. D. Hall, Capt. W. D'Arcy (Brecon)
Balniel, Lord Cooke, Douglas Hanley, Dennis A.
Barrie, Sir Charles Coupar Cooper, A. Duff Hartland, George A.
Beauchamp, Sir Brograve Campbell Craddock, Sir Reginald Henry Headlam, Lieut.-Col. Cuthbert M.
Beaumont, Hon. R.E.B. (Portsm'th,C,) Croft, Brigadier-General Sir H. Hellgers, Captain F. F. A.
Belt, Sir Alfred L. Crookshank, Col. C. de Windt (Bootle) Henderson, Sir Vivian L. (Chelmsford)
Benn, Sir Arthur Shirley Davidson, Rt. Hon. J. C. C. Heneage, Lieut.-Colonel Arthur P.
Bossom, A. C. Dickie, John P. Herbert, Capt. S. (Abbey Division)
Boulton, W. W. Donner, P. W. Hope, Capt. Hon. A. O. J. (Aston)
Bowyer, Capt. Sir George E. W. Duckworth, George A. V. Hore-Belisha, Leslie
Broadbent, Colonel John Dugdale, Captain Thomas Lionel Howard, Tom Forrest
Brockiebank, C. E. R. Duggan, Hubert John Howitt, Dr. Alfred B.
Brown, Ernest (Leith) Duncan, James A. L. (Kensington, N.) Hudson, Capt. A. U. M. (Hackney, N.)
Brown, Brig.-Gen.H.C.(Berks.,Newb'y) Eastwood, John Francis Hume, Sir George Hopwood
Buchan-Hepburn, P. G. T. Elliot, Major Rt. Hon. Walter E. Hurd, Sir Percy
Burgin, Dr. Edward Leslie Ellis, Sir R. Geoffrey Jackson, Sir Henry (Wandsworth, C.)
Burnett, John George Eimley, Viscount Jamieson, Douglas
Campbell, Edward Taswell (Bromley) Emmott, Charles E. G. C. Jesson, Major Thomas E.
Caporn, Arthur Cecil Erskine, Lord (Weston-super-Mare) Joel, Dudley J. Barnato
Johnston, J. W. (Clackmannan) Nicholson, Godfrey (Morpeth) Shepperson, Sir Ernest W.
Jones, Lewis (Swansea, West) Palmer, Francis Noel Skelton, Archibald Noel
Ker, J. Campbell Patrick, Colin M. Smith, Sir Jonah W. (Barrow-in-F.)
Kerr, Lieut.-Col. Charles (Montrose) Peaks, Captain Osbert Smithers, Waldron
Kimball, Lawrence Peat, Charles U. Somervell, Donald Bradley
Kirkpatrick, William M. Penny, Sir George Somerville, Annesley A. (Windsor)
Knebworth, Viscount Perkins, Walter R. D. Sotheron-Estcourt, Captain T. E.
Lambert, Rt. Hon. George Peters, Dr. Sidney John Southby, Commander Archibald R. J.
Latham, Sir Herbert Paul Petherick, M. Spears, Brigadier-General Edward L.
Levy, Thomas Peto, Sir Basil E. (Devon, Barnstaple) Stanley Hon. O. F. G. (Westmorland)
Liddall, Walter S. Peto, Geoffrey K.(W'verh'prn,Bliston) Stevenson, James
Lindsay, Noel Ker Potter, John Storey, Samuel
Lockwood, John C. (Hackney, C.) Powell, Lieut.-Col. Evelyn G. H. Stourton, Hon. John J.
Loder, Captain J. de Vere Pownall, Sir Assheton Strickland, Captain W. F.
MacAndrew, Lt.-Col. C. G. (Partick) Procter, Major Henry Adam Stuart, Lord C. Crichton-
MacAndrew, Capt. J. O. (Ayr) Pybus, Percy John Sugden, Sir Wilfrid Hart
McCorquodale, M. S. Raikes, Henry V. A. M. Summersby, Charles H.
MeEwen, Captain J. H. F. Ramsay, Capt. A. H. M. (Midlothian) Sutcliffe, Harold
McKie, John Hamilton Ramsay, T. B. W. (Western Isles) Tate, Mavis Constance
McLean, Major Alan Rankin, Robert Thomas, James P. L. (Hereford)
McLean, Dr. W. H. (Tradeston) Reed, Arthur C. (Exeter) Thomson, Sir Frederick Charles
Maitland, Adam Reid, David D. (County Down) Touche, Gordon Cosmo
Makins, Brigadier-General Ernest Reid, James S. C. (Stirling) Vaughan-Morgan, Sir Kenyon
Margesson, Capt. Henry David R. Rhys, Hon. Charles Arthur U. Wallace, Captain D. E. (Hornsey)
Marsden, Commander Arthur Robinson, John Roland Wardlaw-Milne, Sir John S.
Mayhew, Lieut.-Colonel John Rosbotharn, S. T. Warrender, Sir Victor A. G.
Mills, Sir Frederick (Leyton, E.) Ross, Ronald D. Wells, Sydney Richard
Mitchell, Harold P.(Br'tf'd & Chisw'k) Runge, Norah Cecil Weymouth, Viscount
Mitchell, Sir W. Lane (Streatham) Russell, Albert (Kirkcaldy) Whiteside, Borras Noel H.
Molson, A. Hugh Elsdale Russell, Hamer Field (Sheffield,B'tslde) Williams, Herbert G. (Croydon, S)
Monsell, Rt. Hon. Sir B. Eyres Rutherford, Sir John Hugo Wills, Wilfrid D.
Moore, Lt.-Col. Thomas C. R. (Ayr) Salmon, Major Isldore Winterton, Rt. Hon. Earl
Moreing, Adrian C. Sanderson, Sir Frank Barnard Womersley, Walter James
Morris-Jones, Dr. J. H. (Denbigh) Savery, Samuel Servington Worthington, Dr. John V.
Muirhead, Major A. J. Selley, Harry R.
Nail-Cain, Arthur Ronald N. Shakespeare, Geoffrey H. TELLERS FOR THE AYES.
Nation, Brigadier-General J. J. H. Shaw, Helen B. (Lanark, Bothwell) Mr. Blindell and Lieut.-Colonel
Sir A. Lambert Ward.
Adams, D. M. (Poplar, South) Grundy, Thomas W. Pickering, Ernest H.
Attlee, Clement Richard Hamilton, Sir R. W.(Orkney & Zetl'nd) Price, Gabriel
Banfield, John William Harris, Sir Percy Rathbone, Eleanor
Batey, Joseph Janner, Barnett Rea, Waiter Russell
Bernays, Robert Johnstone, Harcourt (S. Shields) Thorne, William James
Bevan, Aneurin (Ebbw Vale) Jones, Morgan (Caerphilly) Tinker, John Joseph
Cocks, Frederick Seymour Lansbury, Rt. Hon. George White, Henry Graham
Daggar, George Lawson, John James Williams, Dr. John H. (Llanelly)
Davies, David L. (Pontypridd) Lunn, William Williams, Thomas (York, Don Valley)
Edwards, Charles McEntee, Valentine L. Wood, sir Murdoch McKenzie (Banff)
Evans, Capt. Ernest (Welsh Univ.) Mallalieu, Edward Lancelot
Foot, Dingle (Dundee) Mason, David M. (Edinburgh, E.) TELLERS FOR THE NOES.
Greenwood, Rt. Hon. Arthur Nathan, Major H. L. Mr. John and Mr. G. Macdonald.
Grenfell, David Rees (Glamorgan) Parkinson, John Allen

Resolved, That the Additional Import Duties (No. 7) Order, 1932, dated the eighteenth day of October, nineteen hundred and thirty-two, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this Douse on the eighteenth day of October, nineteen hundred and thirty-two, he approved."—[Dr. Burgin.]


I beg to move, That the Additional Import Duties (No. 8) Order, 1932, dated the twenty-first day of October, nineteen hundred and thirty-two, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the twenty-first day of October nineteen hundred and thirty-two, be approved. Order No. 8 relates to iron and steel, and knowing the interest which is attached to the matter, I propose quite shortly to state the effect of the Committee's recommendation and the nature of the Order which has been made. It relates to the heavy section of iron and steel, and the proposal is that a duty of 33⅓ per cent. be continued for a period of two years, provided that the industry in the meantime has made satisfactory progress with a scheme of reorganisation. It will be appreciated at once that this extension for a long term follows upon two extensions of three months each, and in order that the House may understand the position, let it be clear that we are dealing with iron and steel from the moment of the production of the pig iron down to the rolled steel in billet, bar, girder, or plate. That branch of the industry employs somewhere between 150,000 and 200,000 insured workers, or something under two per cent. of the insured workers in industry in this country. In terms of volume, it is something under 8,000,000 tons of metal a year.

Competition comes from Belgium, France, and Germany, and is particularly in the form of billets and bars, a large quantity of foreign bars specially suitable for sheet and tin-plate having, as the House is aware, found its way to this market. It is a startling fact, and it is clear to demonstration, that foreign exporters of iron and steel coming in the category now under discussion have progressively reduced their prices to an enormous extent. The cost in the country of origin is in some cases very much greater than the cost at which the goods are exported, and the import price into this country of foreign steel, measured in gold, has fallen 60 per cent. as compared with the price of steel three years ago. The Advisory Committee and the steel trade are alive to the fact that the interests of the consumer must not be prejudiced by this Order, which has been in force for over six months. No deleterious effects have been experienced, and the advantage of the Order is that a definite line of policy is laid down instead of a temporary three-months-to-three-months basis.

The House will appreciate that the foreign exporter of iron and steel cannot indefinitely sell at a loss without serious consequences to himself, but if he is under the impression that the market will again become free at the end of a given period, and if that period is a short one, he may well be prepared to go on making losses for a short period as a definite part of the price for securing the market at the end of that time. It is believed that the very policy of making this date for three months only and then extending it for a further three months has encouraged the foreign exporter in the belief that he will secure a better entry by keeping in the market in the interim. The announcement of the duty for two years should put an end to any doubts upon that matter, and the foreign exporter is now notified in the clearest possible terms that any short-dated policy of consenting to bear a loss will be of no avail to him, and that the 33⅓ per cent. duty is deliberately devised to re- main in force for a sufficient length of time to enable the home producer to reorganise his plant and output, and to deal effectively with his foreign competitors. That is at once the reason and the justification for the period of time which the Committee has recommended, which the Treasury has adopted, and which the House is now asked to confirm.


I should like to register a protest, which, I am sure, is shared by hon. Members in all parts of the House, at an important Order like this being brought forward at 3.15 on a Friday afternoon. It is in the power of the Government to put the most important Order first, and they have deliberately conspired to limit the discussion on it to three-quarters of an hour. These duties are now in force without the least possible regard to the wishes of Parliament, and surely if they are to be confirmed the House ought to be given much more time to discuss them. As I know that there are many Members who wish to speak on this important matter, I will make my remarks as short as possible. If any case can be made out for a tariff, this is an instance of the way in which tariffs ought not to be imposed. The Government and the Conservative party have skirted round this question of tariffs on iron and steel for many years. They have approached it very tentatively, and from time to time we have heard speeches on the subject from the front bench. We have listened to speeches in the country from the Lord President of the Council, in which he has suggested the grave risks of giving tariffs to iron and steel; and the President of the Board of Trade has made his most eloquent Free Trade speeches on this very subject. There was, therefore, considerable reluctance to impose these duties.

If the President of the Board of Trade had been wedded to the policy of tariffs on iron and steel, the courtship must have been conducted with great delicacy. With his betrothal, when the Import Duties were imposed, iron and steel were not included. His Presbyterian conscience must have been violated, because it was decided to have a companionate marriage by means of a six months' tariff. This afternoon we are seeing the ceremony consummated.

We have not thrown any mud, such as was the subject of complaint in the Debate on the last Order, at the iron and steel trade. The Chancellor of the Exchequer, in a speech made on May 4, said: 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 was taking the necessary steps to reorganise itself and to put its house in order." [OFFICIAL REPORT, 4th May, 1932; cols. 1131–2, Vol. 265.] So the house is out of order. We have not said it is out of order, but the Chancellor of the Exchequer. We have not said it is inefficient, but the Chancellor of the Exchequer. We have not said that the British steel industry is lagging behind its competitors in the rest of the world, but the Chancellor of the Exchequer. It cannot be said that we are throwing mud. All the mud is being thrown against these patriotic Britishers by the patriotic Chancellor of the Exchequer.

There is a further piece of first class evidence that the iron and steel trade was considered to be in a position in which it would not be judicious to grant it a protective tariff. If my memory serves me accurately, the industry made an application for Protection under the Safeguarding of Industries Act. We were not told that it was rejected, but it; was never granted, and I understand that one of the conditions for granting Protection was that the industry had to prove itself efficient, so we have to assume, if all the evidence goes for anything, that the application was not granted because the industry was at that time inefficient. When the first of these duties were imposed, iron and steel were left out. Then we had a speech in the House by the President of the Board of Trade, a speech from which I will not quote, because, like most of his speeches upon Protection, it becomes increasingly ambiguous. Then we had a tariff for three months. Everybody in the industry knew that if there was any case for Protection at all there was no case for Protection for three months only. That was a most stupid thing. If you are going to "bank" upon Protection, then give the industry Protection in a sensible manner. It was absurd to assume that the steel trade could get any of the benefits, if there are benefits under a tariff, with a tariff for three months only.

Then they came along and gave an additional three months. Why was the three months tariff given? We were informed by the late Parliamentary Secretary to the Board of Trade—who has now been elevated to a position in which, I am sure, he will discharge his duties with credit to himself and good results to the nation—when these duties were imposed, that this was a perfect example of how to use scientifically the powers of Parliament to grant a tariff, because the Advisory Committee were going to meet the representatives of the steel trade and make it a condition of the tariff that the industry should reorganise itself. It was a perfect example of what has been called by some of the young Members of the Conservative party, who are able to romanticise even upon Tariffs, State planning—reorganisation behind the barriers of Protection against foreign countries. Sir George May met the owners in the steel trade. He warned them seriously that they could not expect to obtain Protection unless they gave evidence that they were going to reorganise the trade. Of course, they at once hoisted the flag or reorganisation. They appointed a committee immediately, and sub-committees out of that committee. Those committees have been meeting. We have not been informed what they are doing. All these things are done in camera, and the House of Commons has no information at all. But the committees have been going on, and I await reports from them with great patience and with hope. What have they reported? We have it here before us. They, Strongly urge, therefore, that the Advisory Committee will recommend that the duties on iron and steel products, adjusted as proposed, should, subject to their being satisfied as to the continued progress of reorganisation, be maintained for at least two years. The first report of the committee which was to reorganise the industry in order to justify tariffs is that which asks for still more tariffs for two years. We have, those embodied in the Order before the House at the present time.

I want to make one short point, because it is an essential point. It must not be understood that hon. Members on these benches hold the view that basic industries, like iron and steel, can be thrown open to the anarchic competition of world economic affairs without disaster to British industry. I strongly hold the view that you cannot expect large aggregations of capital such as are necessarily employed in the steel industry to be attracted from the ordinary credit resources of the nation into the industry on the small margin of returns which results when the industry is exposed to the day-by-day competition of the world market. I am profoundly satisfied with the view taken by this Party, which is that the modern unit of production has reached the stage where it cannot be properly replenished on the margins of competition allowed.

Are you providing industry with the conditions of reorganisation by putting on a tariff? We were told that the price of steel has fallen by 60 per cent. in the last two years. Can any tariff properly protect industry against such wide fluctuations as that? This Party stands primarily for the national ownership of the iron and steel trade and for the national control of imports on iron and steel, and not for the tariff method at all. The situation in the iron and steel trade is exactly similar to that which exists in the coal trade. There is a productive capacity far in excess of any reasonable assumption of consuming power. In the steel industry, on a conservative computation, there is a capacity to produce about 13,000,000 tons of steel annually. On the most optimistic estimate, there is a market for 9,000,000 tons, taking the peak figure in the last 10 years. I suggest to hon. Members who are vitally interested in the steel industry that, with an output of 13,000,000 tons, to compete for a 9,000,000 toil market, means that there is, in each unit of production in the steel trade, the same condition of incalculability as if it were exposed to the competition of the world market.

3.30 p.m.

That is the central proposition. Each single company in the steel industry is not being given conditions suitable to its reorganisation, when competition among themselves places each unit in exactly the same state of uncertainty and incalculability as if it were exposed to world-market conditions. It is because that position has arisen that the reorganisation committee is unable to make any recommendation that is satisfactory to Parliament. The reorganisation committee's first duty must necessarily be to reduce the productive capacity of the steel trade according to 'a reasonable calculation of the market for the industry. The next proposition is: who is going to die? Who is going to the wall? Who is to surrender his place in the steel market? Can you expect to find agreement between competitors there? Can you expect to find that banks, who are deeply involved in respect of enormous sums of money which have been necessary to keep the steel trade alive during the last seven or eight years, will, without external pressure, abandon their claims upon the steel companies? One of the most important difficulties with which the steel industry is confronted is the fact that the banks, having no industrial experience in this country such as the German banking system has, have lent money to the steel trade, and are now trying to salvage their commitments. There is an example in the case of the Ebbw Vale Company, to whom a large bank has advanced a large sum of money in the stupidest way, without being able to impose conditions as to technical reorganisation, and that bank is keeping that poor company miserably alive in order that it may be able to salvage its commitments.


Are we to understand that the hon. Member wishes the bank to kill that particular company?


Killing a company and killing an industry are not the same thing. You can save a monarchy without cutting off the King's head. The hon. Member is now mixing up the unit of organisation with the unit of production. You can destroy a steel company, and, indeed, that might be an essential condition of the reorganisation of production. Our proposition is that the tariff which is at present proposed will not provide the industry with the conditions essential for reorganisation, and that, consequently, its effect is merely to protect the profits of steelmasters in certain parts of the industry at the expense of the consumer of steel in Great Britain. Iron and steel are such an important raw material, lying at the foundation of all the finishing trades of this country, that no raising of prices and no limitations of any sort ought to be allowed without the best possible safeguards that the consumers of steel will be able to get their steel in circumstances which at least compare favourably with those of their competitors abroad. Such conditions, however, are not imposed; the matter is left to the exercise of voluntary judgment on the part of steelmasters who are competitive and not co-operative, and who, therefore, cannot possibly do it.

Our view is that, if the iron and steel trade is to be reorganised, it can only be done by the imposition of some overriding authority upon the iron and steel trade itself. [HON. MEMBERS: "Trade unions!"] The trade unions have recommended to the iron and steel industry a scheme which would save it, but which the employers are too competitive and stupid to adopt. The employers in the steel trade are displaying exactly the same evidence of lack of co-operation which has been shown by the coalowners of Great Britain for the last seven eight years. The coal industry to-day is no better off than it was when the merciless competition was started which has reduced the standards of labour in the coal trade. Therefore, I say to hon. Members who are interested in the steel trade that they are not obtaining from the House of Commons the conditions for their industry which they ought to obtain. The House of Commons is asked to give this largesse to the iron and steel trade without getting any compensating conditions in return. I conclude as I started, by saying that this is one of the ways in which Protection ought not to be given. It is simply building a wall around chaos, and there will be as much chaos inside the tariff wall as there is in the wall itself.


I agree with the hon. Member that 40 or 50 minutes on a Friday afternoon is not adequate for dealing with a subject, of this importance. We are parting with the control of this industry for two years. We are going to fix a policy which will affect all the elaborate organisation of the industry, and neither under the provisions of the Import, Duties Act nor by the ordinary machinery of the Finance Bill will it be possible for the House of Commons to change it for two years. Therefore, I think we are justified in examining the proposal rather fully to see how it is going to affect the various industries. I quite agree with the hon. Member who has just spoken that this is no new problem. It dates back, not to the last Parliament but to the Parliament, before the last, when there was a committee appointed by the Lord President of the Council, then Prime Minister, to examine all the ramifications of the trade, to see whether it was advisable to safeguard it and how far it was possible to reorganise it. This is no bolt from the blue on the iron and steel industry. This is no surprise gift. They knew that they were going to have a chance of getting benefits from the country, and they have had good time to review the whole situation.

As the hon. Member pointed out, they were given three months. We do not blame the committee—I certainly do not—for giving them another three months for a further investigation in order to see whether the grant of Protection might not suffice to enable the industry to play its part in national economy. I will not say it was sinister. I always treat the committee with respect, and I want to keep it outside the arena of party politics, but it is unfortunate that, instead of the committee investigating the problem itself, appointing economists and with officials from the Government Departments, and using the usual machinery of investigation, they handed the whole thing over to the industry itself. They made the industry the criminal at the bar as well as the jury and the judge. I would like hon. Members to study the annexe giving the conclusions of this committee. It will not come as a surprise to the House to know that arrangements as to price and supply have proceeded far more rapidly. They were very quickly able to come to price-fixing arrangements under the shelter of the tariff, but although they have been thinking over this problem for the last two or three years, they say they are not in a position for another two years to come to any proposal for reorganisation. So that this over-worked, over-harassed committee, on the advice not of an impartial committee but of the trade itself, is going to have the two years for which they ask.

I am glad that the hon. Member who has just spoken referred to the President of the Board of Trade. He very rarely graces this House with his presence. I agree that he has a very competent substitute in the Parliamentary Secretary, but, after all, the hon. Gentleman has not got the position, and, if he will allow me to say so, the business experience that the President of the Board of Trade has. The President has made speeches on the iron and steel industry, and it would be a great temptation to go back to the old Free Trade days; but at this late hour I will not do that, and I am far too old a friend of his to remnid him of the days when he and I thought alike. I am Doming to his new era, to the time when he has been President of the Board of Trade. No doubt hon. Members will be familiar with the great speech he made to a rather hostile House on the iron and steel problem just before last Christmas. He said: We are discovering that those who are the producers of steel are much more vocal than the users of steel. It was only with the greatest trouble during the last few days that I have been able to collect views of some gentlemen who are large and important users of steel. Because they are not connected with some organisation which covers a very large area of the steel trade they have not had their representations put before the Board of Trade or before other Departments. He went on to say: When you compare them with the number of persons in insured trades who are also in industry which depends upon steel in various stages and in various classes for its raw material, you will see how marked is the contrast. I take the latest figures we have, and in July there were engaged in the heavy trades 188,000 individuals, in the using trades 1,825,000 individuals. Similarly, if you take the case of the unemployed. The unemployed in the heavies were 83,000, according to the latest date in October. Among the using industries they were no less than 537,000. I just put this simple appeal to the House. When we are dealing with this question do not let us underrate the 1,800,000 and give the whole of our sympathy to the 188,000."—[OFFICIAL REPORT, 9th December, 1931; col. 2003, Vol. 260.] I have come up to-day particularly co speak of the 1,800,000 men employed in the using trades and the vast complex interests who are dependent on cheap and abundant steel for their prosperity. You cannot eat or wear steel. It is a raw material and I am going to show how, as there is no one to look after their interests while this Steel Committee is sitting and arranging prices, but forgetting about organisation, the vast interests of the consumers of steel are being sacrificed. I am going to give a practical example. I have in mind a very large firm in the North of England, whose name I am prepared to give to the Parliamentary Secretary, which, until 12 months ago, was working to 100 per cent, of capacity, employing 425 men full time and was full of orders. Now they are working only 35 hours a week, the number of men employed is down to 225 and there are much smaller orders and inquiries because of increased prices. It is common knowledge that British steel is recognised by the trade as a whole as superior in quality, and the users of steel have had a practical monoply for most of the constructional trade in the country and in the Crown Colonies because British steel is nearly always specified. It is a very curious thing that, in spite of the figures in the annexe to the Report as to the low prices prevailing in Belgium, France and Germany, British steel manufacturers for their general home trade, in spite of competition, are able to maintain their prices. They have not had to suffer from foreign competition because of the custom of the trade to insist on the use of British steel. The firm I am speaking of, now on half time or worse, paralysed for want of orders, have been able to buy steel in the world market.

It is a mistake to think that all English manufacturers are inefficient. On the contrary, allow English manufacturers a fair field, allow them to buy their raw material in the open market unhampered by tariffs, whether Imperial or home protection, and they are able to hold their own. I am not one of those who would disparage British industry. In this case the industry is able to pay better wages than the Dutch. Owing to better organisation and efficiency, and to the fact that they have been able to buy their semi-raw material in the open market, they have been able practically to collar the trade. Now along comes the Custom House officer. Immediately there is, not only a duty, but an adverse exchange, the imported article jumps up to £6 5s. 0d. Even then—and I want the House to mark it—they can compete and hold their own to some extent with the foreigner. In spite of the high duty and the adverse exchange, they are so well organised that they can compete. What are the Steel Combine doing? Anybody who is familiar with the trade realises the temptation of a monopoly to take advantage of the position. They have devised a very ingenious system of rebates. They are not satisfied with the tariff given to them by the Government, but in order to monopolise the trade and to dictate to the consumer they have devised an ingenious scheme of rebates. I meant to bring details along with me to the House, but I will let my hon. Friend know how the rebate is arranged. It is arranged for the whole of the orders for steel from one of the firms signing the rebate undertaking to go to one of the combine firms and for there to he a rebate of 10s. a ton.


That is for home use?


Yes, for home use—from £8 15s. to £8 5s. The firm to which I have called attention, like any other firm, requires not only foreign trade but a proportion of home trade. If they refuse to sign the rebate form they are deprived of an opportunity of getting steel from one of the combine firms and they lose the advantage of the 10s. a ton, and are thus cut off from obtaining orders for bridge building and steel construction, and engaging in the various ramifications of the steel trade.

We have to recognise that the tariff is here, and we have to swallow it and put up with all its disadvantages. We cannot alter it. All we can do is to look after the interests of the consumer. I suggest to the Minister that he should insist that the Tariff Commission should inquire into the whole system of rebates, not in two years time after the damage has been done and most of the engineering firms have been knocked out of the market, but now. If the Commission says that it is outside its province, a Departmental Committee should be appointed right away in order to inquire into the whole system. I am assured that as a result of the working of the extra duty, plus the rebate system, the whole of the orders which formerly went to my friends who own this big construc- tional engineering firm in the North are going to competitors in Holland, and for the first time in the history of the firm they are being cut out by Dutch competitors. Before tariffs they were working full time, with 450 men; after tariffs they are only working a 35-hour week and have only 225 men, and meanwhile the business is going to Holland. There is one of the practical results of a tariff in practice.

The Lord President of the Council said that we have to learn in the light of experience. We are learning in the light of experience that it is a very serious thing to put on this duty for two years, trusting entirely to a committee composed of the producers of the article. If we are to have a committee, let it be a joint committee of both the users and the consumers of steel. One hon. Member said that he was in favour of price arrangements, of monopolies and of agreements with industries abroad. Of course he is. He is logical. He is a Socialist. He wants to nationalise industry. The way to get industry nationalised and to bring about Socialism is to destroy freedom of contract behind tariff walls. My hon. Friend believes in that. He believes in Socialism. I dislike Socialism. I want to see freedom because it is essential to progress, but if you are to have a monopoly of this kind, exploiting the consuming interests, inevitably you will be led to some form of nationalisation or State control. For these reasons, I shall vote against these proposals. I should have liked to elaborate my opposition more, but I content myself by protesting most emphatically against the attitude that the Committee have adopted, because of the effect of these duties on the consuming interests concerned.


I rise to express my approval of the action of the Advisory Committee in recommending these Orders, and the wisdom of His Majesty's Government in accepting and implementing them. At this hour it is impossible to say more than a few words in supporting the Order, but there are one or two points that I should like to impress upon the House. No one who has had any interest in the steel industry or who has any knowledge of what is happening in that industry can have any doubt as to the vital necessity for an Order of this kind. I speak from this bench and I speak as a Free Trader, I speak as one who deplores the necessity for action of this kind, but I am bound to confess that, after very long and anxious thought, I can see no alternative to an Order of this kind if we are to preserve this basic and fundamental industry, one of our greatest industries, and if we are to maintain the standard of life of the workpeople engaged in it.

There are certain aspects of international trading, particularly between European countries, in regard to which the principles of international trading as we have been taught them in the past, and as this country has practised them, have no longer any real, practical bearing. We are living in a completely changed world, and this question of the steel trade is one of the changed factors. It is no longer a question to me of Free Trade or Protection in the sense in which we have generally discussed the issue. We are discussing the merits of a new system in this country. Other countries have departed further and further from the view that we have held for something like 80 years. Instead of following us they have gone wider and wider apart from us. It does not matter how devoutly we worship at the shrine of Cobden or at the shrine of Adam Smith, our fervour will avail us absolutely nothing if other countries decline to follow us in the belief in our doctrine and exploit our belief in it ruthlessly, so as to threaten us with absolute ruin in our basis and fundamental industries.

The Lord President of the Council, in his speech last night pointed out the changes in practice which had taken place and which were forced upon us during the War by enemy action. During the War we were compelled to do things which we did not like to do and things which we did not desire to do. He pointed out that we were compelled to do these things in sheer self-defence. In this country we do not look upon trade as being war, but in my judgment the analogy is a true one. We have been driven to do this in sheer self-defence. I would very much prefer to see all the channels of trade absolutely free, but if other nations insist upon making conditions more and more difficult, then we must take such steps as we consider necessary to protect the standard of life of our own people and to protect our own industries.

This is one of those steps. The position, as far as the price of imported steel is concerned, is well known, and there is no time or me to go into that question in detail, but I cannot understand the case referred to by the hon. Member for South-West Bethnal Green (Sir P. Harris). Everybody knows that the price of steel is £1 per ton less now than it was a year ago, and it is idle to put a case forward like that of the hon. Member and expect us to reply to it unless we are aware of the details. What is going on in the steel trade is real dumping. There has been a great difficulty in finding a definition of the word "dumping", but the definition given by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) is crystal clear, that it is selling in a foreign country at a price which is below the cost of production in the country of origin. That is what is happening in the steel industry. The Advisory Committee say: The cessation of clumping is an essential pre-requisite to any such scheme for the rehabilitation of the iron and steel industry. I agree with the hon. Member for Ebbw Vale (Mr. Bevan), and I wish that the Advisory Committee had taken prompt and drastic action at once. The forestalling that has occurred has filled out warehouses, and as soon as these stocks are exhausted I expect to see another influx of imported goods made under conditions which the iron and steel workers of this country would not tolerate. One word about efficiency. We have often heard the terms efficiency and rationalisation used; two magical worth which have often been used in connection with the steel trade by people who do not know the difference between a blast furnace and a slag heap. It is time that someone said a word in defence of the British steel industry. In my own constituency there is a steel industry which is as efficient as anything in this country, indeed, as efficient as anything in the whole of Europe. It has a composite plant, owns its own colliery and, so far as profits are concerned, has spent between £5,000,000 and £6,000,000 since the end of the war, of which more than half has been found out of the company's own reserve of profits. It is idle to talk so loosely and bring general charges of inefficiency. Everyone knows that there is inefficient plant in Great Britain and inefficient workmen, just as there are inefficient managers. In conclusion let me say that this Order will at least give hope to miners and to workers in the iron and steel industry; to transport workers and railway workers, among whom there are hundreds and thousands unemployed and who up to the present have seen little chance of gaining anything in the way of occupation. It gives the industry also a sense of stability, the two years period will do that. It will also help those hundreds and thousands of workers in the north east of this country, where we have suffered so acutely from unemployment for so long. I shall support the Order.


I wish to raise a single specific issue, of which I have notified the Parliamentary Secretary, who I understand is to answer for the Government. The point relates to a question arising out of the early part of the recommendations made by the Advisory Committee. It is essential that the Government should realise that the recommendation made in this report—

It being Pour of the Clock, the Debate stood adjourned.

Debate to be resumed upon Monday next.