HC Deb 14 November 1932 vol 270 cc887-914

Order read for resuming Adjourned Debate on Question [11th November], 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.

Question again proposed.

Major NATHAN

The point to which I desire to draw attention arises naturally out of this No. 8 Order and, indeed, is of general application to the Orders already made and to future Orders that may be made under the Act. The point is this. By what machinery does the Import Duties Advisory Committee arrive at the conclusion set out in its recommendations? The Committee has certain statutory duties imposed upon it. Its function is to form an opinion as to whether an additional duty should or should not be recommended, and by Section 7 of the Act certain limitations and qualifications are placed upon the exercise of its discretion. For instance, while it is to have regard to the advisability of restricting imports, it is also to have regard to the interests generally of trade and industry in the United Kingdom, including those trades and industries which are consumers of goods as well as those trades and industries which are producers of goods. The committee, in forming its opinion, is not merely to evolve an opinion out of its inner consciousness. It is to have regard to certain definite criteria. I want to know how the committee is guided in order to enable it to arrive at the recommendations contained in the report. Speaking on 4th February, the Chancellor of the Exchequer said there would be expected of the committee a sort of judicial attitude. That sort of judicial attitude involves, in my submission, certain incidents. It involves, in the first place, that the committee shall have regard to the evidence before them. Indeed I would go further, and say that if they are to adopt a judicial attitude they must not merely have regard to evidence before them but have regard to nothing else save the evidence before them. I should like to know if the Parliamentary Secretary can tell the House to what extent that condition, as I understand it to be, has been fulfilled by the Import Duties Advisory Committee in making the recommendation now under discussion? That they were not merely to hear casual statements from representatives of the trade round the table is shown not only by the speech of the Chancellor of the Exchequer to which I have already referred, but is supported, I think, by the terms of the Act itself. The Act referred to witnesses and to witnesses giving evidence and it gave to the Committee the power to take evidence on oath and authority to administer oaths.

I want to know to what extent the Committee has called before it witnesses in the sense in which that term is used in the Act and whether they have, in considering their recommendations for the purpose of this Report, heard evidence, and whether that evidence has or has not been on oath? It is of great materiality, because the whole question of the manner in which the Import Duties Advisory Committee exercises its functions has been a subject of Debate in this House on more than one occasion, and particular reference was made in the course of the Debates to the iron and steel industry and the attitude which the Import Duties Advisory Committee would adopt in giving consideration to the position of that industry. Speaking on 19th February the Chancellor of the Exchequer used this language: I should say that if they"— meaning the Import Duties Advisory Committee— were dealing with a great industry like the iron and steel industry, for instance, they would not think of doing it in a hole-and-corner method, concealing what they were doing and, possibly, springing a decision on the public, when it was well known that they had not received representations made by a number of different trades interested in the products of the industry."—[OFFICIAL, REPORT, 19th February, 1932; col. 1984, Vol. 261.] I should like to know how far the Import Duties Advisory Committee has had regard in this particular case to what was there stated by the Chancellor of the Exchequer? I want to know whom they have consulted, and when, among the users of iron and steel? I know they have not consulted—at least when I say that I am informed on responsible authority that they have not consulted the Bar Re-rollers' Association and, for the purposes of this Order, at all events, whatever may have been the decision as regards the earlier Order, they have not consulted the independent tin and black plate-makers nor the independent galvanised sheet-makers, both of which are very large and important branches of the iron and steel industry. I am told indeed that on 17th September the galvanised sheet trade were invited by the Import Duties Advisory Committee to attend before them to hear an address by Sir George May on the iron and steel industry from the tariff point of view, but that is not the taking of evidence. Let me make it abundantly clear that I am not imputing in the least the good faith or ability or public spirit of the members of the committee, either collectively or individually. Quite the contrary. But it is the function of this House to inquire into the manner in which these vitally important functions are exercised. I ask what evidence they have taken and has that evidence been formal evidence in the sense in which the term is used in the Act or was it informal with people simply being called to come round a table and discuss matters? I hope that my hon. Friend will be able to give some information as to that matter, and I am sure that he will bear in mind what the Chancellor of the Exchequer said about asking people to attend arid to give evidence before them, this being in relation to the iron and steel industry now under discussion. The Chancellor of the Exchequer, on the occasion to which I have already made a reference, said: I should imagine that when they were considering what they should do about such an industry as iron and steel they would not only approach direct certain bodies and associations which were obviously affected, but would give public notice and would, in fact, invite representations to be made to them by a certain date, and it would be for them to select out of the representations made in writing in the first instance any which they thought sufficiently important to ask to attend and to give evidence before them. I am anxious to know to what extent that has been done? The Chancellor of the Exchequer went on to say: I think we might safely entrust the matter to the Committee on the lines that I have suggested."—[OFFICIAL REPORT, 19th February, 1932; col. 1985, Vol. 261.] The main object of my rising is to ask how far the Import Duties Advisory Committee has in practice in connection with iron and steel conformed to the conditions, as an Amendment laying down those conditions in set terms was not pressed in this House upon the representations made by the Chancellor of the Exchequer? I have endeavoured not to press the point unduly at this time of the night so as riot to keep the House, but I think that I have made the point sufficiently clear to invite a full answer from my hon. Friend.

11.0 p.m.

Mr. LEWIS JONES

I am loth to keep or delay the House at this time, but a number of statements have been made during the Debate upon this Order that I think it is only fair to the industry, and to the House in particular, that some reference should be made to them. One would have thought that the publication of the annexe to the report of the advisory committee would have satisfied most impartial people however biased as to the difficulties with which the industry is faced at the present time. We hear a great deal about reorganisation. I would remind the House that the iron and steel industry has a capital of £160,000,000, it employs about 250,000 working people, and during the year produces about 400 different specifications. To reorganise an industry as vast as the iron and steel industry, even under most normal conditions of trade, would be a stupendous task, but to reorganise an industry of this kind at a time when the output is only about 40 per cent. of normal must make the task well-nigh impossible. In the reorganisation of the iron and steel industry considerable consideration would have to be given from time to time to what must be the normal demands of the consumers of the industry. The iron and steel industry through their leaders have continually kept in touch with the consumers and dealers of iron and steel. Reorganisation is not something new so far as the iron and steel industry is concerned. Reorganisation in the industry has been taking place during the last 10 years; anyone who reads the daily Press must know of the steps that have been taken from time to time in this connection. I could give instances galore where efficient organisations have been amalgamated and where inefficient or less efficient works have been closed down as a result of competition. May I remind the House of the difficulties with which the iron and steel trade were faced in dealing with reorganisation during the past few months The first Order affecting the industry was published in April and was for a period of three months only. At the end of the three months the Order was extended for a further period of three months. The very fact that those Orders were only temporary, we know from our own knowledge, en- couraged the producers on the Continent to cut their prices to even a lower level than had been in operation for some time, and the 33⅓ per cent. duty that was imposed on foreign steel was absolutely ineffective against the uneconomic competition which British steel makers were suffering in the home market.

I have referred to the annexe to the report of the Advisory Committee. On page 6 particulars are given as to prices. I need not worry the House with them, but I would emphasise one or two points. Hon. Members will find there a statement made at the annual meeting of the Comité des Forges de France, where it was admitted quite frankly that every ton of steel exported from the French steel works was at a loss of 20 per cent. to 30 per cent. We who are interested in the industry know that that is a free on rail price, without taking into consideration the cost of transport to the port of delivery. We find that the President of the Federation of Steel Manufacturers in Germany admitted quite frankly that on every ton of steel sent from Germany to foreign countries, this country and elsewhere, meant a loss to them of from £2 to £3 a ton. This is authoritative evidence of real dumping. Even the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said in this House that Free Trade was never intended to carry the monster of dumping on its back.

What has been the object of the foreign steel makers? Why have they sold this steel under cost of production? In the first place, we know that this is the only country where foreign steel producers can sell their steel and receive cash against delivery. This is the only country to which they can export their steel where there is no restriction on foreign exchange. The second point is, that they have had in operation for some time on the Continent an international steel cartel, and it is of the utmost importance to every continental steel producer that he Should retain his quota in the international steel cartel. It is important that he should retain as high a production as possible in order to retain his quota in the international steel cartel.

There is one other very sinister reason. We know very definitely that the continental steel makers say, without equivocation, after having heard of the negotiations and discussions taking place in this country in connection with reorganisation, and the conferences that were taking place from day to day between steel producers, rerollers, fabricators and others, that they were determined to do what they could, by cutting the price of steel lower, to drive a wedge in and to prevent those negotiations from arriving at a sucessful issue. What is the result? The figures show that in October of this year the imports of foreign steel reached 163,000 tons, an increase of 60 per cent. over the imports of September last. The iron and steel trade, knowing all about this competition and the desperate efforts of foreign producers to send their steel into this country, appealed to the Advisory Committee, put their case before them, and as a result we have the Order now before the House, which I am sure will be accepted by a large majority.

So far as reorganisation is concerned, what is the National Committee doing? It was appointed in June, of last year, and four regional committees were also appointed to serve in various parts of the country. Ever since conferences have been continually taking place between national and regional committees and between regional and regional committees, with the interrugnum, when the principal steel manufacturers were at Ottawa arriving at an agreement with Dominion producers. The hon. Member for Ebbw Vale (Mr. A. Bevan) amused himself on Friday, but to his credit be it said that he, made this statement: 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 forces without disaster to British industry."—[OFFICIAL REPORT, 11th November, 1932; col. 711, Vol. 270.] That is the view of the Labour party for whom the hon. Member was speaking; he spoke first after the statement by the Parliamentary Secretary. It is a frank admission of the problem of the iron and steel trade. The hon. Member quite frankly disagreed with us as to the solution of our difficulties. He had his own solution. He suggested that the Labour party was tied to nationalisation. I was surprised to hear that, but then the hon. Member turned to another solution. At one moment he said that the only solution was nationalisation, and the next moment his proposal was an adoption by the iron and steel industry of the policy submitted by members of the trade unions in the iron and steel trade. That policy is the policy of a public utility company. I am surprised that the Labour party should adopt the policy of the Iron and Steel Confederation, because it is not so long ago that this proposal was submitted to the Trades Union Congress at Bristol and was adopted by only a small majority, and I find that the confederation itself complained about the prejudices of the representatives of the Miners' Federation and the Amalgamated Engineering Union. I am surprised to know that the hon. Member for Ebbw Vale has at last convinced his mining colleagues on the Labour benches as to the policy they should adopt. I am afraid that the hon. Member got rather entangled in his own rather torrential verbosity.

The hon. Member frankly did not know where he stood, but in the end he was quite definite in his statement that he was against the Order. Like every other critic of the iron and steel trade he was bound to turn to the question of inefficiency. I have ventured on more than one occasion, as a back-bencher, to protest against the cheap gibes that are always being thrown across the Floor on the inefficiency of British industry. At one moment it is the textile industry, at another moment the woollen industry, and the steel trade, of course, has had its share of the abuse. It is surprising how easily these charges can be made, and they are made generally by people who have never been inside a steel works. It would be of interest if I read a short extract from a report of the union that is concerned with the iron and steel trade. This is from the very report to which the hon. Member for Ebbw Vale referred: It is frequently asserted, and this has been a feature of discussions concerning it in political circles, that the industry is altogether out of date in its plant, technique, methods and organisation. Such sweeping generalities and condemnation are not justified by the facts, but may too readily be made the excuse for the failure of Parliament to recognise its share of responsibility with regard to the position of this great basic industry. I hope hon. Members will accept that as coming from the trade union closely concerned with the industry itself, and that they will not listen to the so-called experts who have very little or no knowledge of the industry. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) raised a new point on Friday. He complained of the difficulty that some of his friends in the north of England have had over the supplies of steel for their industry. He said that although the price of foreign steel was £6 5s., including duty and so forth, they had found no difficulty. Even then, he said, they could compete and hold their own with the foreigner. Then what is their complaint? It is in connection with the steel makers' rebates scheme. Anyone who listened to the hon. Baronet would have thought that the rebate scheme of the iron and steel trade was something new, an innovation due to tariffs. What is the essence of a rebate scheme in the steel trade or any other trade? It is this: "If you buy all your steel from British sources we will give you a discount of 10s. a ton." Is it not a practice in most industries and businesses to give discounts for bulk orders? This rebate scheme has been in operation since pre-War days. It is nothing new. It is an inducement to British consumers to retain their work for British labour. Frankly, it is part of a deliberate policy of the iron and steel trade in fighting a rearguard action to defend their industry.

Sir PERCY HARRIS

I did not object to rebates as long as there was Free Trade. Now that they have protection it is blackmailing to force them to pay more and lose the whole of their foreign business.

Mr. JONES

There is no blackmail about it. All that the North of England steel makers say to the consumers is, "If you will buy all your steel from us we will give you a discount of 10s. a ton." That is nothing new—

Mr. PEAT

May I point out that the rebate is 15s. a ton up to 22s. 6d. a ton?

Mr. JONES

I am obliged to the hon. Member for the correction. I simply mentioned the figure which was used by the hon. Baronet on Friday. The hon. Baronet argued as to the dire distress of the firm which he instanced. He said that before the tariff, or 12 months ago, this firm was employing 425 men and now it was only employing 225 men and was working only 35 hours a week. That is to say they have failed to get—[HON. MEMBERS: "Cheap steel."] No, not cheap steel. They are still getting cheap steel from the Continent and the hon. Baronet said they were perfectly satisfied and could still hold their own at £6 5s. No, his complaint was that they were not getting the discount and because they were not, that the amount of their work had been reduced by 59 per cent. in six months. There is an old saying which the hon. Baronet may know about "telling it to the marines." He may tell that story to the marines.

Sir P. HARRIS

I said that I was prepared to give the Parliamentary Secretary the name of the firm.

Mr. JONES

I do not doubt the fact that these people at the moment are working part time. I do not doubt that the number of employés has been reduced but, after making detailed inquiries to-day, what I do not accept is a reduction of work as a result of the rebate system which the steel people in the north of England have brought into operation.

If I may refer with due deference, as a back bencher, to the right hon. Member for Darwen (Sir H. Samuel), I might point out that, in speaking a few days ago in the unemployment Debate he made a surprising statement. In advising the Government as to the steps which they ought to take to deal with unemployment he said: They should not relax the pressure upon our great industries, particularly iron and steel, to secure efficient reorganisation."—[OFFICIAL REPORT, 8th November, 1932; col. 236, Vol. 270.] He had said previously: Further, it is necessary to promote the reorganisation of our industries. We were told that the iron and steel industries were to have protection only for six months and that it would not be continued unless they reorganised themselves. They have in fact done nothing except to form a combination to keep up prices, and yet the Import Duties Advisory Committee are extending the protection for a period of two years."—[OFFICIAL REPORT, 8th November, 1932; col. 231, Vol. 270.] I am perfectly certain that the right hon. Gentleman would not have made that statement had he not believed it to be true. I heard him make it and, frankly, I thought that he vas making a mistake. On making inquiries since, I find my view confirmed. No combination and no organisation of any kind has been set up to maintain prices. In order to prove my point, I give these figures from the "Board of Trade Gazette." In 1913 the index figure of the wholesale price of steel was 100. In January, 1932, it was 104.2; in February, 104.3; in March, 104.3; in April, 104.4; in September, 103; and in October, 103.5. Surely there is no evidence in these Board of Trade figures to show that what the right hon. Gentleman said, that we have taken steps to maintain prices, is correct.

Coal in September last had an index figure of 121.5, and in October of this year the price of coal had gone up to 124. It is only necessary to remind the House that coal is a very important factor in the price of iron and steel, and when it is remembered that the iron and steel industry is at present only working 40 per cent. of its capacity, it speaks well for the efficiency of the industry that, with an output of 40 per cent. and with coal at an index figure of 124, the price was just under the index figure of 104 in October this year. Yet the right hon. Gentleman said the steel trade had done nothing but maintain prices and had done nothing to reorganise.

I speak of this with some personal knowledge. There are four regional committees for re-organisation in the iron and steel trade, and I happen to be secretary of one of them. I beg the House, the Labour party, and the section of my party led by the right hon. Gentleman, to remember what reorganisation, increased efficiency, and greater modernisation really mean. Let me give an instance of what has happened in South Wales. I have a company in mind which owns five plants, two and a-half of which are closed down in order that the others may work efficiently. I have in mind another company owning two steel works, one of them closed down in order that the other may work efficiently, and I know of a third similar case.

When there is reorganisation it is always ruthless, and there is one body of people that suffer most, and that is the workmen. I ask the House to believe that there is still in the iron and steel trade a large body of employers who prefer to work, for merely humane reasons, a number of plants on part time in order to distribute labour among their men rather than by ruthless reorganisation to shut down completely certain plants in order to work the rest profitably. Reorganisation can react very seriously to the detriment of the men concerned. I beg the right hon. Gentleman to believe me that serious critical steps are being taken within the industry week by week in the direction of reorganisation, but I would ask the House to remember the facts of the case. You are dealing with a large number of plants in various parts of the country, you are dealing with a capital of over £160,000,000, and you are dealing with 250,000 workmen. If the right hon. Gentleman and the Home Office took the best part of 12 months to try to reorganise the constabulary forces of the country, and left it unfinished then, what hope can there he of reorganising the steel industry in three months?

Even in spite of all these difficulties, what has the steel trade of this country accomplished in the last 12 months? We are always told that the most efficient steel-producing countries in the world are the United States of America and Germany. In the first nine months of this year the pig iron output of the principal producing countries of the world was down by 393 per cent. There was a loss in output of 13,000,000 tons of pig iron, but Great Britain's loss was only 4 per cent. The steel production of the world was down by 15,000,000 tons, a reduction of 36 per cent., but Great Britain's output showed an increase of 2 per cent. Even South Wales was up by 27 per cent. If we take our exports into consideration, we find again that the exports of the world were down by 27 per cent., but the United Kingdom was up by 4 per cent., while in South Wales, where it is always argued that a tariff on steel would have a bad effect, the exports increased by 12½, per cent. in the nine months this year compared with the same nine months last year. I appeal to the House to believe me when I say that the iron and steel trade is quite alive to its great responsibilities for reorganisation, and the House may be confident in approving this Order, because before two years are up, the steel trade will have done wonderful work in the direction of reorganisation.

Mr. T. WILLIAMS

I do not intend to intervene in this family quarrel, nor to argue with the hon. Gentlemen in charge of the Order. I want to ask the hon. Gentleman who has just spoken and has told us about the wonderful efforts of the steel producers to be good enough to meet the Newport Chamber of Commerce, and reply to a letter which they have sent out to-day. Before reading it, let me remind the hon. Gentleman that there is £160,000,000 invested in coal, and that anywhere between 800,000 and 1,000,000 men are involved; and that, as a result of the general policy of the Government of which the hon. Gentleman is a supporter, certain things have happened to the industry. This is the letter from the Newport Chamber of Commerce: I beg to inform you that at the last general meeting of the members of this Chamber, the following resolution was passed unanimously: 'The Newport Chamber of Commerce views with grave concern the increasing hindrances to the marketing of coal. In regard to exports, we want respectfully to draw your attention to the fact that the imposition of import duties in this country has undoubtedly been used by many foreign countries as justification for increasing restrictions by means of duties, licences, quotas, etc., on their imports of coal, and the very existence of our industry is threatened. We urge His Majesty's Government to use the earliest possible opportunity and every possible means to secure niece favourable treatment of our coal from foreign countries as the reduction of our exports has largely increased unemployment in the industry and caused very serious harm to the trade of our ports and our shipping.' That is not from Transport House or from any Labour or Socialist organisation, but from a chamber of commerce which is principally composed of business people, of whom steel people form a part. If the hon. Gentleman will be good enough to attend the next meeting of the Newport Chamber of Commerce and explain the glories of import duties as applied to the coal industry, he will relieve Members sitting on these benches of a great responsibility. Steel is important, but coal is no less important. Notwithstanding the usual argument that every ton of steel requires so many tons of coal, we have fewer men employed than before. We cannot divorce that fact from the policy advocated by the hon. Gentleman.

Sir JOSEPH NALL

Will the hon. Gentleman tell the House who supported the quota under the Coal Mines Act, and what is the reference, either stated or implied, in the letter which he has quoted, to the matter before the House?

Mr. SPEAKER

I think that we had better get on with iron and steel.

11.30 p.m.

Mr. MALLALIEU

I hope the House will not regard me as very immodest if I do not fill in two or three minutes with obsequious apologies for delaying the proceedings at this time of night, because it is in no way my fault or the fault of any of my hon. Friends on these benches that so important a matter is delayed to such an hour before we can discuss it. The hon. Member for West Swansea (Mr. L. Jones), who delighted us with his vivacious and, in parts, even passionate speech, referred most dramatically to the uneconomic price of foreign steel in this country. He did not, of course, mention that all persons who sell steel from abroad to this country have a disadvantage of some 25 to 30 per cent. caused by the exchange. That, I think, should have been mentioned with his other statements as to the extraordinary dumping which this country is alleged to have been carrying. This very uneconomic policy of the foreign prices has another aspect which has not been noted: those prices could not possibly have lasted for very long—it is a well informed opinion that they would very shortly have come to an end—and yet this is the moment when our Import Duties Advisory Committee chooses to put this extraordinarily high duty on the foreign imports, making in all some 60 per cent., if the exchange is taken into consideration.

I wonder whether the House has fully realised the effect this must have on the users of steel—on the machinists in Lancashire struggling to keep together their business in the Far East in the teeth of the fiercest competition? What is to happen to them now that their raw Material is to be made more expensive? What is to happen to the re-rollers who have been struggling to keep their works open during these bad times and succeeding because they could buy steel in the cheapest market? Now they are to be deprived of that champ market, with Heaven knows what consequences to our export trade. What is to happen to the re-rollers not only in this country hut in Scotland, where it is so important a matter? They will be at the mercy of the producers of the heavy steel. I carefully did not say that they were the makers of their raw material, because the makers of heavy steel in this country are not, to any very large extent, the makers of their raw material; but they will be the makers of the raw material which these people will now have to use. It is well known that basic Bessemer steel and Thomas semi-steel are not made in this country, yet these are very largely the raw materials which the re-rollers use now. In future, they will be unable to use these raw materials.

Another point to which I wish to draw attention is that these duties are imposed under the Import Duties Act. Has the House forgotten already Section 3 of that Act? I will read it: Where it appears to the Committee that any additional duty of Customs ought to be charged in respect of goods of any class or description which are chargeable with the general ad valorem duty and which in their opinion are articles of luxury or articles of a kind being produced in this country or articles of a kind likely to be produced in this country within a reasonable time— Is there any suggestion that these are luxury articles? Do you usually find them in drawing rooms or hanging round ladies' necks? Is there any suggestion that they are produced in this country or are likely to be within a reasonable time? I am referring to basic Bessemer steel and Thomas semi-steel. In my opinion this Committee has not only acted with great folly but it has overstepped its powers, and in my opinion this Order should in no circumstances be assented to by this House.

Mr. PEAT

I do not apologise to the House, because I feel one must keep up the percentage of speakers who have some connection with the steel industry. There are one or two points which have not yet been sufficiently stressed. We have been talking of price regulation. Hon. Members have indicated that the prices of steel have not increased since 1913, but have been slightly reduced. I want to make an admission. In certain of the heavy steel industries we have had price associations. I am not going to have any- thing said in this House which is not exactly accurate. We have had price associations in the heavy steel industries for 30 years. If I may address hon. Members of the Opposition, I should like to point out to them that the fact that we have had price associations in some of the heavy branches of the iron and steel industry has done more for the workers in that industry than anything else. The wages are fixed upon a sliding scale, and I maintain that, if there had riot been price associations in the heavy steel industry, which deals with the basic materials, the wages of the workers would have been very considerably reduced.

The policy of the iron and steel industry is to maintain the price of steel as far as possible at a reasonable level which the consumers of steel can pay. The price does not come down and does not go up; it keeps fairly steady. That is a point which has not been made. Criticism has been levelled at the iron and steel industry from the point of view of the exporters of steel; the industry is very much engaged in subsidising exports, as well as in maintaining home prices. We have already paid £125,000 to the shipbuilding industry, and we are prepared to continue to act with them. We wish the sum were so many millions, because that would indicate production, and that is what we want. We are prepared to subsidise any industry which is exporting and which may give our industry production. If any hon. Member can criticise that, I fail to see his logic.

The iron and steel industry is subsidising shipbuilding, and also the bridge and construction industry. If any case is brought to the notice of the industry—not to a section of the industry, not to the North of England or to South Wales, but to the whole, because we speak as one man—which can show a, good claim for export work, it receives most careful consideration, and in some cases very considerable relief has been given. With that policy nobody can have any complaint. The industry has an export sales organisation which is without comparison in any other industry in the country. We effect, through one agency, practically the whole of the steel sales in Canada, and the industry is busy making similar organisations over the whole world. The leaders of the industry went to Ottawa the best organised industry in Great Britain. We had our plans cut and dried for presenting to the Conference before that Conference met, and it was very largely due to the efficient work done before the Conference met that the success of the Ottawa Conference, so far as the iron and steel industry was concerned, was due.

I want now to say something about the rebate scheme. That scheme has been criticised. It does not relate to the North of England, but, again, it relates to the whole of the heavy steel industry. It covers a certain range of heavy steel products made in this country; the scheme does not cover any product which cannot be made here in sufficient quantity and of a correct quality. The scheme has as its object an increase in production, and, in so far as we get that increase in production, we are prepared to give very large benefits to anybody who will guarantee to take British steel. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) produced a case of which, I understand, he has given all particulars to the Minister who is in charge of this Order. May I say, on behalf of the iron and steel industry, that, if the hon. Member will produce the facts and figures, I will have that case investigated, and, if there is a shred of justice in it, it shall be given to his friends? I cannot go further than that.

With regard to the future, in my opinion the iron and steel industry has already justified itself from the point of view of organisation. It is now asked to get the whole of its consumers together and to agree upon a scheme with them by which they will take the products at prices to be agreed upon by both sides, and it is sooner or later to sell through a central selling organisation. That is an enormous work. It cannot be done over night, or in three months. The great difficulty is that, although we can obviously come to an arrangement with our consumers when we get sufficient protection, yet, while there are one or two men in this country who are prepared to buy continental steel at the present ruinous prices and undercut their neighbours, the task is almost impossible. Until we get the protection for which we ask, which the hon. Member for Ebbw Vale (Mr. A. Bevan) himself has recommended, and which is sufficient to keep out the competition which at present is making the reorganisation of the industry impossible, we cannot go very far.

I should like to conclude by saying that I think the hon. Member for South-West Bethnal Green and the party to which he belongs should be more careful before they attack an industry which, as my hon. Friend has said, is fighting, and has fought for 10 years, a magnificent rearguard action. It has kept itself intact, it has kept its workmen together, it has kept their wages at a reasonable point, and it is prepared at the present time with all its equipment, staffs and workmen ready, to take advantage of the moment when it can be given a really fair and square deal.

Sir HERBERT SAMUEL

The House is well aware that in the many branches of the iron and steel industry much enterprise has been shown in recent years, and at Ottawa they undoubtedly took most effective and successful measures in order to secure full consideration of their case; but the question before the House to-night is whether we ought to approve of this extension for two years—an unconditional extension—of the very high rate of protection of 33⅓ per cent., in addition to the protection which the industry now receives through the depression in the value of the pound. In that connection, the hon. Member for West Swansea (Mr. L. Jones) questioned certain observations of mine, and asked on what authority they were made. It is for that reason that I venture to detain the House for a very few moments. I do not apologise for doing so, because this Order is by far the most important of any of those which have been laid before the House, and ought to receive adequate consideration from the House of Commons. The authority for my statement is the report of the Import Duties Advisory Committee which has been presented to the House as the material on which we should form our judgment. The House will remember the history of the matter. When Protection was first introduced, we were assured that it would not be given unconditionally to any industry that chose to apply but that it would be given only as a means to secure reorganisation and the highest efficiency of all our industries, and the Lord President of the Council again and again in the House and in the country was insistent upon that. We on our side said the right way to secure reorganisation, if we were to adopt a Protectionist policy, would be to say, "Produce your reorganisation scheme and show that it cannot be carried out unless such and such protection is given for such and such a time," and then the House might be prepared to consider the matter on that footing. But the Government, said, "No, we will give power to the May Committee to impose their own terms and we can rely upon them that it will not be given unless the proper measures of reorganisation are obtained." The May Committee themselves took that view and said the protection should be given only for three months and that then the matter should be reviewed in the light of such progress as had then been made. At the end of three months nothing effective had been done. They extended it for another three months and now we have this report. The report of the May Committee refers to the other report, which is printed here in the same paper, from the National Committee of the iron and steel industry, the first report made by them to the Import Duties Advisory Committee. I am quoting now from the May Committee. They refer to the difficulty, with the present very low prices, of arriving at any satisfactory arrangement between producers and consumers for obtaining the minimum production of British iron and steel and of carrying out a satisfactory scheme of reorganisation. They then say this: We have already given an undertaking that, provided the industry was prepared to carry lout a satisfactory scheme of reorganisation, it was our intention to recommend to your Lordships such a measure of Protection as was necessary to make that scheme effective. The hon. Member who has just spoken rather indicated that the industry was already at the highest point or, at all events, at a very high point of organisation.

Mr. PEAT

I did not say the highest point of organisation. I think it has a long way to go.

Sir H. SAMUEL

The hon. Member left the impression on the House that the industry was fighting hard and doing its utmost and, therefore, that those of us who said it was essential and urgent that there should be a larger measure of reorganisation really have not very much of a case. But that is not the view of the May Committee, who distinctly say in this report, and in their earlier report, that they were only prepared to recommend a measure of protection provided the industry was prepared to carry through a satisfactory scheme of reorganisation. They go on to say they appreciate the difficulties that have to be surmounted and they recognise that during the four months since the committees were appointed, progress has been delayed by many causes outside their control. They received a definite assurance that the iron and steel trade committee will press on with the preparation of a scheme. They go on to say: Nevertheless the position has to be faced that the scheme of reorganisation is not yet ready and the question of deciding what permanent measure of protection is required to make it effective must be deferred. In the report of the trade committee, which is embodied in the same paper, at a later page they say: It will naturally be found that arrangements as to prices anti supplies have proceeded more rapidly than the far more difficult and laborious process of reorganisation. They go on afterwards to say: The good will and desire for cooperation manifested on all sides in the course of these negotiations augurs well for the success of the subsequent and more complicated issues of reorganisation. That is the authority for the statement which I have made. The six months given by the May Committee, as a piece of temporary protection, have lapsed, and, in fact, nothing has been accomplished in regard to reorganisation. There is no scheme ready, even yet, to place before the May Committee for their consideration. In the meantime the arrangements as to prices and supply have proceeded rapidly. That is the basis of the statement I made, and it is precisely in accordance with our anticipations. If you give to an industry protection unconditionally, naturally they are in no great hurry to carry through measures involving expenditure and risk and immense energy. If they are under the immediate pressure of severe competition, they are under that impulse com- pelled to carry it out and very constantly do, but give them this protection, and they can rest as long as they like. They have had six months, and now they are getting two years. If a Protectionist Government are in power at the end of the two years, are they likely to diminish this 33, per cent.? Not at all. Industry knows it can go on almost indefinitely as it is, with the plain assurance that whether reorganisation is effected or not, protection will continue. That is the reason why we on our part oppose it.

Sir ROBERT HORNE

I confess I am at a great disadvantage in speaking in this Debate, as compared with the right hon. Gentleman because I happen to know something about the steel trade. I was connected with the management of a very great steel-making firm, and I am familiar with the difficulties of the trade at the present time. I hope the House will realise Chat the Government and the country have some responsibility for this situation. It was the exigencies of the War, imposed on the steel trade, which in the main brought about the difficulties with which the industry is faced to-day. I was one of those who were asked during the War to, do our best to increase the volume of steel in order to find sufficient steel for the building of ships and all the various munitions which were required to win that great victory. If the steel plants had not been increased, as they were, it is unquestionable that the War, which was a war of steel, would have ended disastrously for this country. The result was that the capacity of steel production was increased far beyond what was likely to be the normal consumption in time if peace. That is the position with which you have to deal. You have that large capital expenditure by steel firms without any possible chance at the present time of realising the full value of the assets which they thus created.

The country has a responsibility for that position, and we have to view it with some degree of responsibility and with some sense of duty towards this trade. How do we propose to do it? It is said that the May Committee started off by suggesting that within three months the steel trade would be able to present a scheme of reorganisation. Everybody who knew anything about the steel trade was perfectly aware of the fact that three months was a ridiculous time in which any reorganisation could be completed. The difference between the right hon. Member for Darwen (Sir H. Samuel) and the May Committee is that the May Committee, in the course of experience, have learned something, whereas the right hon. Gentleman has learned nothing. They have discovered first of all that three months was not long enough, that even six months was not enough, in order to reorganise a great industry upon which this country to a very great extent depends, and which employs a vast number of workmen, and that such a trade cannot be dealt with in the twinkling of an eye, but requires a very long period of time, if something is to be achieved. Anybody who knows the problem is well acquainted with the fact that a considerable period of time will be required.

Sir H. SAMUEL

Is it not the case that nearly two years ago, certainly more than a year ago, a Governmental Committee, inquiring into the steel trade, reported on the whole matter of re-organisation and made quite clear the necessities of the case?

Sir R. HORNE

That is true. I do not know whether the right hon. Gentleman has had the experience of trying to bring one or two firms together, let alone all the great steel trades of the country? You cannot do these things as rapidly as people can produce schemes on paper. They require very considerable negotiations. The time which is now being afforded by the Import Duties Advisory Committee is none too long. I also beg the House to remember the great difficulty of wiping out a whole lot of small businesses which up to now have been supporting, in particular localities, a considerable nucleus of workmen. When they disappear the whole district suffers. The hon. Gentleman who spoke from below the Gangway did not at all exaggerate in saying that people are very loath to see the extermination of a- district and the destruction of employment of a large body of people with whom they are acquainted and towards whom they are very sympathetic. It is nothing like as easy as some people think. More than that, you have to keep in mind that first attention has to be given to prices, and, in view of the fact that the steel trade to-day are selling their material at a price which is actually less than 1914 prices while at the same time their costs are immensely higher, it is no surprise to anybody that they should be dealing anxiously with prices in order to keep their businesses going.

I would add this fact, that while people talk glibly about rationalisation and getting great groups of industries formed—an excellent maxim for prosperous times—it is not an easy or prudent maxim in difficult times. One of our experiences was to find that the particular establishments which were best maintaining themselves in these depressing times could not be the great establishments formed with a vast amount of capital which must run night and day in order to get a return on their vast capital, but they were ail businesses supposed to be derelict, which were able, by reason of the fact that all their capital costs had long been written down, to work at a profit and to give employment. It was the old-established firms which would be worked out if schemes about which people know nothing were adopted. I respectfully ask the House to give support to the proposal which has been put before it and which gives this great industry that without which this country cannot survive. If it were possible that it should disappear you would require to make a State industry to keep the country going, because you cannot, afford to sacrifice the steel trade. You must give the industry a chance to survive and make arrangements by which they can snake a profit.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)

The case against this Order has not been made out. It is said that the Order is not necessary. The iron and steel industry have had protection for three months, extended for another three months, and that second period would have expired on 25th October. During the month of October the imports of foreign steel into this country exceeded those of the previous month by 60 per cent.; 160,000 tons came into this country, some of it at 40 per cent. below the cost of production in the country of origin. So much forestalling occurred before these Orders were made that it is estimated that there is a complete year's supply of foreign steel of some kinds in this country, which answers the point about the consumer. I have been asked to say a ward about the method of the Imports Advisory Committee in looking into these matters. Hon. Members have paid many generous tributes to the work of the Advisory Committee, and it certainly needs no defence from me, but I think it is well that the country should be told through these Debates the importance that is attached to advertisements by the Import Duties Advisory Committee when they are proposing to consider a particular industry. These advertisements are meant to be an invitation to all and sundry whose interests are likely to be affected, or who consider that their interests may be affected, to state their case and communicate with the Advisory Committee. I have been asked whether the committee heard evidence in this ease, whether evidence was taken on oath, whether witnesses were examined and whether particular trade bodies were heard. The answer is that not only was it a matter of public knowledge from the first Report of the Committee and in other ways that this matter was being considered, not only were statements received from the collective organisation of the heavy iron and steel trade, but detailed statements, written, and oral, interviews with representative bodies, manufacturers and individual concerns, i.e., rollers, manufacturers of sheets and plates, tubes, and consumers of iron and steel semi-finished products, have all been taken into account.

Major NATHAN

May I ask whether the statement of the hon. Member applies to the making of the original Order of April last or to the Order which the House has now Ruder consideration, or to the six months experience?

Dr. BURGIN

I am applying my answer to all three; the first Order, the prolongation of the Order and the present Order, and I am saying that in dealing with the iron and steel industry as an industry, with protection in the first place, then the interim instalment and now as suggested in this Order, all these different matters have been taken into consideration and evidence taken in the way which the Advisory Committee thinks best from the point of view of all in- terests, makers, producers and consumers and users alike to the satisfaction of the Committee itself.

Major NATHAN

At each stage?

Dr. BURGIN

The Advisory Committee must be the judges of what is necessary to complete their own knowledge and information on any particular matter. It is hardly likely to vary from one stage to another and the Committee are in touch with these different interests for this express purpose. The case of the consumers has been made by many speakers during the Debate. The real point is this; can a consumer's prosperity be built up on a producer's bankruptcy? The opinion of the Government is that it cannot and ought not to be. I entirely hold the view of the right hon. Member for Hillhead (Sir R. Horne) that the maintenance of a prosperous iron and steel industry is essential to this country. I thank the hon. Member for Darlington (Mr. Peat) for his encouraging and helpful speech in regard to the

efforts which the industry itself is making. Something has been said about efficiency. At a time when the production of steel was decreasing in the world, the British steel production increased by 1.8 per cent., Belgium decreased by 12 per cent., the Sarre Valley by 13 per cent., Germany by 28 per cent., France by 32 per cent. and the United States of America by 50 per cent. In times like those, Great Britain increased her steel production. It is the maintenance of an industry that can do that, which has been taken to heart by the Import Duties Advisory Committee. They make this recommendation, the Treasury have approved it, and the House of Commons will now affirm it.

Question put, That the Additional Import Duties (No. S) 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 daf of October, nineteen hundred and thirty-two, be approved.

The House divided: Ayes, 200; Noes, 42.

Division No. 363] AYES. [12.8 a.m.
Adams, Samuel Vyvyan T. (Leeds, W.) Cook, Thomas A. Heneage, Lieut.-Colonel Arthur P.
Agnew, Lieut.-Com. P. G. Copeland, Ida Hope, Capt. Hon. A. O. J. (Aston)
Albery, Irving James Cranborne, Viscount Hore-Belisha, Leslie
Amery, Rt. Hon. Leopold C. M. S. Craven-Ellis, William Hornby, Frank
Aske, Sir Robert William Crooke, J. Smedley Horne, Rt. Hon. Sir Robert S.
Astor, Maj. Hn. John J. (Kent, Dover) Croom-Johnson, R. P. Horsbrugh, Florence
Baldwin, Rt. Hon. Stanley Cross, R. H. Howard, Tom Forrest
Balniel, Lord Crossley, A. C. Howitt, Dr. Alfred B.
Bateman, A. L. Dickle, John P. Hudson, Capt. A. U. M. (Hackney. N.)
Beaumont, Hon. R.E.B. (Portsm'th,C.) Donner, P. W. Hutchison, W. D. (Essex, Romford)
Benn, Sir Arthur Shirley Duckworth, George A. V. James, Wing-Com. A. W. H.
Birchall, Major Sir John Dearman Dugdale, Captain Thomas Lionel Jamieson, Douglas
Bird, Ernest Roy (Yorks., Skipton) Duggan, Hubert John Joel, Dudley J. Barnato
Bird, Sir Robert B. (Wolverh'pton W.) Duncan, James A. L. (Kensington, N.) Jones, Lewis (Swansea, West)
Blindell, James Dunglass, Lord Ker, J. Campbell
Bossom, A. C. Edmondson, Major A. J. Kerr, Hamilton W.
Boulton, W. W. Elliot, Major Rt. Hon. Walter E. Knatchbull, Captain Hon. M. H. R.
Bowyer, Capt. Sir George E. W. Elmley, Viscount Knebworth, Viscount
Boyce, H. Leslie Emmott, Charles E. G. C. Lamb, Sir Joseph Quinton
Broadbent, Colonel John Emrys-Evans, P. V. Law, Richard K. (Hull, S.W.)
Buchan-Hepburn, P. G. T. Erskine, Lord (Weston-super-Mare) Leckie, J. A.
Burghley, Lord Erskine-Boist, Capt. C. C. (Blackpool) Leech, Dr. J. W.
Burgin, Dr. Edward Leslie Essenhigh, Reginald Clare Leighton, Major B. E. P.
Burnett, John George Fleiden, Edward Brocklehurst Levy, Thomas
Campbell, Edward Taswell (Bromley) Fox, Sir Gifford Little, Graham-, Sir Ernest
Campbell, Rear-Adml. G. (Burnley) Fremantie, Sir Francis Locker-Lampson, Rt. Hn. G.(Wd.Gr'n)
Campbell-Johnston, Malcoim Ganzonl, Sir John Loder, Captain J. de Vere
Caporn, Arthur Cecil Glossop, C. W. H. Mabane, William
Carver, Major William H. Gluckstein, Louis Halle MacAndrew, Lieut.-Col. C. G. (Partick)
Castle Stewart, Earl Goff, Sir Park McCorquodale, M. S.
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Geldie, Noel B. McKie, John Hamilton
Cazalet, Capt. V. A. (Chippenham) Goodman, Colonel Albert W. McLean, Major Alan
Chalmers, John Rutherford Gower, Sir Robert Macmillan, Maurice Harold
Chapman, Col. R.(Houghton-le-Spring) Graham, Sir F. Fergus (C'mb'rl'd, N.) Magnay, Thomas
Chorlton, Alan Ernest Leofric Greene, William P. C. Margesson, Capt. Henry David R.
Clayton, Dr. George C. Gretton, Colonel Rt. Hon. John Martin, Thomas B.
Cobb, Sir Cyril Guinness, Thomas L. E. B. Mayhew, Lieut.-Colonel John
Cochrane, Commander Hon. A. D. Hanley, Dennis A. Merriman, Sir F. Boyd
Colman, N. C. D. Hartington, Marquess of Milne, Charles
Colville, Lieut.-Colonel J. Haslam, Sir John (Bolton) Mitchell, Harold P.(Br'tf'd & Chisw'k)
Conant, R. J. E. Hellgers, Captain F. F. A. Mitcheson, G. G.
Malson, A. Hugh Elsdale Reid, James S. C. (Stirling) Sotheron-Estcourt, Captain T. E.
Moore, Lt.-Col. Thomas C. R. (Ayr) Reid, William Allan (Derby) Southby, Commander Archibald R. J.
Moreing, Adrian C. Remer, John R. Stevenson, James
Morrison, William Shepherd Renwick, Major Gustav A. Storey, Samuel
Mulrhead, Major A. J. Rhys, Hon, Charles Arthur U. Strickland, Captain W. F.
Munro, Patrick Robinson, John Roland Stuart, Lord C. Crichton-
Nall, Sir Joseph Ropner, Colonel L. Sudden, Sir Wilfrid Hart
Nation, Brigadier-General J. J. H. Rosbotham, S. T. Templeton, William P.
Nunn, William Ross, Ronald D. Thomas, James P. L. (Hereford)
Patrick, Colin M. Ross Taylor, Walter (Woodbridge) Thompson, Luke
Peake, Captain Osbert Ruggles-Brise, Colonel E. A. Thomson, Sir Frederick Charles
Pearson, William G. Runge, Norah Cecil Thorp, Linton Theodore
Peat, Charles U. Russell, Albert (Kirkcaldy) Todd, Capt. A. J. K. (B'wick-on-T.)
Penny, Sir George Russell, Hamer Field (Sheffield,B'tside) Ward, Sarah Adelaide (Cannock)
Perkins, Walter R. D. Salmon, Major Isidore Warrender, Sir Victor A. G.
Peters, Dr. Sidney John Samuel, Samuel (W'dsworth, Putn[...]y) Wells, Sydney Richard
Petherick, M. Sandeman, Sir A. N. Stewart Weymouth, Viscount
Pete, Geoffrey K.(W'verh'pt'n,Bilston) Sanderson, Sir Frank Barnard Whyte, Jardine Bell
Pickford, Hon. Mary Ada Scone, Lord Williams, Herbert G. (Croydon, S.)
Pike, Cecil F. Shaw, Helen B. (Lanark, Bothwell) Wills, Wilfrid D.
Powell, Lieut.-Col. Evelyn G. H Shepperson, Sir Ernest W. Wise, Alfred R.
Pybus, Percy John Skelton, Archibald Noel Womersley, Walter James
Ramsay, Capt. A. H. M. (Midlothian) Slater, John Worthington, Dr. John V.
Ramsay, T. B. W. (Western Isles) Smith, Louis W. (Sheffield, Hallam) Young, Rt. Hon. Sir Hilton (S'v'noaks)
Ramsbotham, Herwaid Smithers, Waldron
Rankin, Robert Somervell, Donald Bradley TELLERS FOR THE AYES.—
Ray, Sir William Soper, Richard Lieut.-Colonel Sir Lambert Ward
and Major George Davies.
NOES
Benfield, John William Grenfell, David Rees (Glamorgan) Parkinson, John Allen
Batey, Joseph Groves, Thomas E. Price, Gabriel
Bevan, Aneurin (Ebbw Vale) Hall, F. (York, W.R., Normanton) Rea, Walter Russell
Cape, Thomas Harris, Sir Percy Rothschild, James A. de
Cocks, Frederick Seymour Holdsworth, Herbert Samuel, Rt. Hon. Sir H. (Darwen)
Cripps, Sir Stafford Janner, Barnett Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Curry, A. C. Jenkins, Sir William Tinker, John Joseph
Dagger, George Johnstone, Harcourt (S. Shields) Watts-Morgan, Lieut.-Col, David
Davies, Rhys John (Westhoughton) Jones, Henry Haydn (Merioneth) White, Henry Graham
Edwards, Charles Lansbury, Rt. Hon. George Williams, Edward John (Ogmore)
Evans, David Owen (Cardigan) Leonard, William Williams, Thomas (York., Don Valley)
Evans, R. T. (Carmarthen) Maclay, Hon. Joseph Paton Wood, Sir Murdoch McKenzie (Banff)
Foot, Dingle (Dundee) Mallalieu, Edward Lancelot
George, Major G. Lloyd (Pembroke) Milner, Major James TELLERS FOR THE NOES.—
Greenwood, Rt. Hon. Arthur Nathan, Major H. L. Mr. John and Mr. Duncan Graham.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Monday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Eighteen Minutes after Twelve o'Clock.