§ Order for Second Reading read.
The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas)
I beg to move, "That the Bill be now read a Second time."
There will be common agreement on all sides of the House, I think, that after the five days of debate on the Ottawa Agreements very little that is new remains to be said. I think I am correct in saying that every principle contained in the Bill which I have now the honour to introduce has already been debated at length; but there are two points which I desire to emphasise at the outset of this discussion. It is commonly asserted, and more often implied than stated, that the Ottawa delegates were merely puppets, and that the policy adopted there was merely a Tory party policy. That obviously would be the impression of those on the other side who would not know quite what it was to hold their own. I think it is fair to say that, whatever may be the merits of the Agreements, whatever fault may be found with those Agreements, we at least have no hesitation in saying to the House and to the country that at no stage of the consideration of them was there ever a difference between the delegates, and the national aspect of the question was always uppermost in their minds.
I am surprised to find that some of my late colleagues were shocked at the statement that any agreements had been made at all. I put it to the House that, having adopted the principle of Protection, and the obvious and natural products of nearly all the Dominions being foodstuffs and raw materials, no one outside Bedlam could have assumed for one moment that a British delegate, or a British delegation, could attend an Imperial Conference representing this country and refuse to accede to the principle of Imperial Preference. It is absurd to assume for one moment, after it had been clearly stated by the Lord President of the Council that we were going to Ottawa with a free hand, that we should run away from the question of Imperial Preference. I suggest that if 1002 any such instructions had been given no member of that delegation would have taken part in the Conference, and not even the "Agree to Differ" Clause in those circumstances would have tempted me to go.
During these Debates we have heard various definitions of parties in this House. The hon. and learned Member for East Bristol (Sir S. Cripps) attached to the right hon. Gentleman the Member for Darwen (Sir H. Samuel) and his friends the descriptive of "Levites." I think we were included under the name of "Sittites." [HON. MEMBERS: "No."] That makes my task much easier. We have heard of the Sittites and the Levites, and, if that argument is carried to its logical conclusion, remembering the incidents of 12 months ago, I say quite frankly that, as far as we are concerned, we might reasonably be called Quittites. At that time that would have been an accurate definition of the situation.
It is very interesting to observe that, in the discussion on the Conference Agreements, it has been assumed that we went to the Conference merely as sort of innocent lambs. I have attended many conferences with my right hon. Friends and hon. Friends who sit on the Labour benches, and I wish to tell them quite frankly that the Ottawa Conference was a P.S.A. compared with some of the Labour conferences which I have attended. The only thing that I missed from that Conference, as compared with Labour party conferences, was that we did not proceed to address each other as "Comrades." It is true that there was plain speaking, and who, after all, remembering that we were representing the Empire as a whole, would deny that we were entitled to speak plainly to each other? All through those proceedings we never lost sight of the Imperial aspect of the question. My only regret is that my right hon. Friends and hon. Members opposite were not present just to see what a happy family we were.
I submit to the House that the criticism, so far as it has been directed against the Government policy is, in my judgment, unfair. It has been repeatedly stated, and indeed it was emphasised by the hon. Member for Caerphilly (Mr. Morgan Jones) that not only had the Government done nothing for the unemployed, but that they had done nothing 1003 for the miners. The hon. Member for Caerphilly went out of his way to ask: What has the Prime Minister done for the miners? What has the Prime Minister done that he should be treated in that way, because that was an imputation that the Prime Minister had not only ignored the miners, but had deliberately neglected them? I might retort and ask: What have the miners done to reach such a stage that the Member for Caerphilly should be regarded as their only champion? I submit to the House that the interests of the miners have not been lost sight of by the Government. Is it denied that an agreement with the representatives of the steel industry in this country is of some advantage to the coal industry?
My hon. Friend the Member for Gower (Mr. D. Grenfell) will no doubt take part in the Debate later on, but I am sure that the hon. Member will not join issue with me when I say that, so far as Labour is concerned, any order obtained from any body of men in Canada or anywhere else ought to be welcomed by all Labour representatives and should not be decried.
§ 4.0 p.m.
I repeat, that the representatives of the steel industry, after weeks of negotiation, brought to us a unanimous agreement which said, in substance, "Not only are we satisfied with this agreement, but it means thousands of tons of steel being imported into Canada that cannot be obtained in existing circumstances." Therefore, if, as we know, there is a minmum of 2½ tons of coal in every ton of steel produced, how can the hon. Member for Caerphilly maintain that the interests of the miners were ignored? That is the indirect protection so far as steel is concerned, and no one can challenge the statement that that agreement received the unanimous approval of those not only representative, but the people who were in a position to get the benefit of the orders in that agreement. With regard to coal, my hon. 1004 Friend knows perfectly well that, apart from bituminous coal, South Wales is specially interested in anthracite. The hon. Member skipped over anthracite.
§ Mr. MORGAN JONES
On the contrary, I both mentioned iron and steel—the extra coal to be consumed in iron and steel—and I made a reference to anthracite.
I will get the quotation. The inference, the impression and the obvious intention of my hon. Friend's speech was not only an attack on the Prime Minister, but to say in substance, "You have neglected, you have ignored, you have done nothing for, the miners of this country." Why does he run away from it now? As I have already pointed out, the steel agreement is not only of value to the steel trade, but it is indirectly of value to the miners. That, at least, is one part of the answer. [An HON. MEMBER: "What does it represent?"] In 1928 the total export of anthracite coal to Canada was 453,000 tons. My hon. Friends know perfectly well that I inquired personally three years ago with regard to the development of the trade in anthracite and bituminous coal in Canada. What did Canada give? The result of the Canadian Government's action was directly and deliberately intended to give a benefit to this country, aimed so as to prevent what they call dumping. I have already said that for 1928 the total export was 453,000 tons. For the nine months of this year it is more than double; it is 953,000 tons. Incidentally, there is also the bituminous coal which, for the nine months of this year, is nearly 100,000 tons more than the peak period in the past for Canada alone. [An HON. MEMBER: "That was prior to the agreement!"] You cannot have it both ways. It is no use standing in this House and going to the country and saying: "You have done nothing for the miners and nothing for steel," and then, when facts and figures are given, merely turn round and say, "That is prior to the agreement." See what the inference of that is. You admit the benefit; you admit the miners' benefit.
The hon. Member knows perfectly well he may say that here, but he dare not go to Durham and say it. But let me deal with the point of the interruption. "Ah," says my hon. Friend, "But Canada's action in helping the anthracite industry was an action taken before Ottawa." Certainly, and confirmed at Ottawa, and, having given us the benefit, would it not be mean on our part to say, "We take the benefit from you and we admit the benefit, but we are not prepared to give you anything in return"? That is exactly the situation.
§ Mr. D. GRENFELL
In order to give a full explanation to the House, will the right hon. Gentleman tell the House the prices at which coal was sold to Canada in 1924 and 1932?
I do not quite know the relevance of that, because I assume that if I or my hon. Friend, he representing specifically and particularly the miners, went to South Wales to-morrow to meet any body of miners and said to them, "We are in a position to sell more coal to Canada and thereby give you more employment," they would not be quibbling and saying, "But before we want those orders, we want to be satisfied about the price." And, incidentally, I may turn it the other way. If they look at that more closely they will say, "The higher the price the better for us." Therefore, if, as I have now shown to the House in the case of steel indirectly, coal directly, and wool, it is admitted by those engaged in the industry that the preference now obtained by them as a result of Ottawa enables them to compete more successfully, what becomes of the argument that we are ignoring the unemployed situation in this country?
I want my hon. and right hon. Friends for a moment to consider the question apart from the direct, immediate reduction in tariffs. The value of Ottawa, in my judgment, must in the end be judged on a long and not a short-range policy. In that connection, what is the position which all of us took up in the past when we attended a Labour conference? At every international conference where 1006 organised labour has been represented in the past, what has been our case? It is no good reducing the wages here. We want to lift them up right through, so that there will be fair competition, and not sweated labour one against the other. That is the logic of the case, and let us apply it to what we succeeded in obtaining for the first time. Tariffs are taken practically out of the hands of the Government. Is not that vital? What are the factors to determine? All labour factors. When the Board sits and has to determine the tariff to be imposed, what is it compelled to consider? First, the price of raw material; then the social services—that is what we as a Labour party have always advocated, for social services must be a factor in considering the price of the article; wages, standards of living and expenditure. In addition to that, the representative of any industry in this country is given the right to appeal before the Board, argue his case, put all the facts as he understands them, and the tariff then to be determined is not to be a prohibitive tariff but a competitive tariff. Every speaker from the other side has been quoting Mr. Scullin in support of their case. It is most extraordinary. When Mr. Scullin was dealing with us two years ago he said to every Member he met on that side, especially to my hon. Friend who is going to reply, "How foolish you are! I do not understand why you do not adopt protection." That was his daily grumble.
Exactly, and I will give the reason. Follow the significance. When this Agreement was published, Mr. Scullin was opposed to it root and branch. He said, "I oppose it because, in my judgment, it compels a reduction of tariffs." That is why Mr. Scullin opposes it, and that is why hon. Gentlemen on the other side of the House quote Mr. Scullin in support of their particular case. There never was such inconsistency. [Interruption.] I was very nearly tempted to use another word. Although I used it once—[Interruption]—and got into trouble, and although I know perfectly well that there are some phrases that are applicable at a given moment and others that are applicable to other circumstances, I was seriously tempted, having heard all the speeches against 1007 this Bill and read those that I did not hear—[Interruption]—I was seriously tempted to use that phrase as adequately describing the position of my hon. Friends to-day.
I was asked at Question Time whether the Government took any steps to deal with what is undoubtedly a very serious barrier to trade between Canada and ourselves, namely, the Customs method of valuation and all those extra charges that not only make for uncertainty but very often make business impossible. I have already indicated in an answer that on the main issue the Canadian Government promised to deal with all these aspects of the situation, but the House will be pleased to know that yesterday the Canadian Government introduced into the House of Commons a Valuation of Goods Bill, with a view to removing the difficulties that our manufacturers have experienced in the past, and to remove what we all know to be one of the main causes of uncertainty in business. I mention that incident now because I think it is a further evidence and illustration that, whatever may have been said in Debate, whatever may be said about the intentions of those who were parties to that Agreement, those of us who attended on behalf of the British Delegation not only have no reason to doubt the good faith of the Dominions, but we are already getting evidence of their sincerity in giving effect to the Agreement.
In dealing again with the question of unemployment, I would ask my right hon. and hon. Friends on the other side to realise what is going to be the position of unemployment in this country unless the Dominions are placed in a position to deal with the problem of migration. We have been twitted that we did not raise the question of migration directly. That is true. But, I would ask, what would have been the criticism, from the other side of the House at least, if, when we knew perfectly well that there were unemployed in Canada, Australia and New Zealand, we had suggested that it was our duty or intention to try to ship people to them? Would it not have been absurd to suggest that, when we knew perfectly well that they could not find work for them?
1008 I want to apply to the problem an examination of the figures in connection with our own unemployment register. We are, unfortunately, perilously near the 3,000,000 mark. I know that my late colleague knows this very well, because he has gone into it, but how many people inside this House or outside realise the tremendous part that migration must play in our home unemployment figures? From 1919 to 1931, no fewer than 1,346,000 persons migrated to the Dominions. For the first time in our experience, last year more returned to this country than left. If we could start prosperity again in the Dominions, if we could put them on their feet, if we could do something that would enable them again to welcome to their shores those hundreds of thousands of our own people every year, that is the real impression that would be made on the unemployment figures in this country. Therefore, when we are calculating a balance, when we are saying on the one hand, "What have you got?" and on the other, "What have you given?" I would ask the House to keep clearly in mind that, if we have done something, even by a sacrifice on our part, to help to restore their position, it is something of real and permanent value which will start the flow of migration of our people to their own kith and kin. Therefore, I put it to my hon. Friends that these facts at least demonstrate that we did not ignore, to put it no higher, the problem of unemployment when we were in Canada.
I now come to another aspect which is seriously challenged, and, if I may say so, I have endeavoured to ascertain the logic of the case. I listened the other night to the hon. Member for Ebbw Vale (Mr. A. Bevan) and others challenging the meat situation. They complained against it; in fact they denounced it in unmeasured language. Some of them resented the analogy between the meat agreement and the Coal Bill which they supported, but I put it to the House that it is the most complete analogy that I know. Let us examine the facts. I say that, when we agreed to the scheme of meat restriction, we deliberately did it as a means of increasing wholesale prices. We did not disguise that. We knew perfectly well that, unless there is an increase in wholesale prices, there is no possible 1009 hope for those who produce. But was not that exactly the case that the miners stated on behalf of the coal quota? Will it be denied that the miners' leaders in this House and outside quite deliberately said: "We refuse to be a party to producing coal at a cheap rate at the expense of sweated labour for us"; and that therefore they said, "We want a scheme, and will 'support a scheme, that has for its object an increase in the price of coal"? There are also the railwaymen, who a dozen times have said, "We, the railwaymen, refuse to be parties to cheap transport at the expense of sweated labour for our people." That, I believe, is still sound Labour policy. If that be so, if miners and railwaymen are entitled to say, "We will not be parties to sweated conditions for our people because we want to force the price of our commodity up," what is good for the miner and the railwayman is, I submit, equally good for the agricultural labourer.
A very curious thing is that, at the moment when my hon. Friend the Under-Secretary was dealing with this question in the House, and was being denounced for his analogy between the coal situation and the meat situation, there was being printed in the "Daily Herald" which was published the next morning an article by the late Secretary for Mines, Mr. Shinwell—a front page article, a "Daily Herald" star turn headed, "End this Coal Chaos." This is one of the means to end it:The export position is worse than ever, and the owners have no one but themselves to blame. In order to retain foreign markets, and even in the vain hope of recapturing them, coal is being sold at prices actually below the cost of production. As a result, the owners are losing money, while the effect on the earnings of the miners is obvious. Of course other coal producing countries are doing the same, but there is no reason why any of them should.What is the good of complaining of what we are doing for meat? We are told in our Dominions what is perfectly well known: "You are advocating a sound policy on behalf of your own people." Therefore, I submit that I could perfectly justifiably have used the phrase to which I have referred in explaining that particular matter.
I now turn to the argument, so frequently used, that as a result of our action we have become full-blooded Protectionists, and that, above all, we had 1010 no right to concede Imperial preference. Various speakers have given the history, as they termed it, of the last Imperial Conference. To sum up, they said, the Dominions asked us to adopt Protection and we refused. Why did they not tell the whole story? That is only half the story. Let me complete it. It is quite true that at the Imperial Conference the Dominions asked us to adopt Protection, and asked for Imperial preference, and we refused it. But the next stage was that we round ourselves compelled to abandon Free Trade and adopt Protection. It is common knowledge that, two months after the crisis, at the Trades Union Congress at Bristol, Mr. Henderson admitted that the late Labour Cabinet by an overwhelming majority had agreed to the principle of Protection. They have agreed to it and, having adopted Protection, and having agreed in advance that we believed in Imperial preference, how could we agree to any other policy than Imperial preference, as we did? So far from being condemned for inconsistency, we have been consistent throughout.
I do not understand the argument about what is called our weakened bargaining power. It is urged on that side that our difficulty at the moment is such that no foreign country will negotiate with us, that we are hampered, and that we have lost our bargaining power. I was glad to hear the reference made to our late colleague, Mr. William Graham, because we all know how hard he worked, but those of us who were in close touch with him to the end know that he never hesitated to say that the reason why he did not bring about an agreement was that his hands were tied and that we had no bargaining power. In regard to this question of negotiation with foreign countries, we are in a very strong position. The trade balances are all in favour of foreign countries—Denmark, £43,000,000; Sweden, £11,000,000; the Argentine, £31,000,000; Russia, £25,000,000; Germany, £21,000,000; Belgium, £16,000,000; and the United States, £100,000,000. When we are such good customers, when they can sell to us on such advantageous terms, surely we are in a strong position to go to them and say: "We want your custom, but we want more of it than we have had in the past, because up to now 1011 you have had all the benefit." Instead of hampering us, it effectively strengthens our position.
I proceed at once to deal with the very contentious question of Russia. The cancelling of the existing treaty need not in any way affect the present trading relationship between the two nations. It is not generally appreciated that Russia, in trading with us last year, got the benefit of £25,000,000 worth; in other words, we are a very good market to Russia. The difference between us is that all that she sells to us is on a cash basis and most of what we sell to her is on long credit. Ottawa did not interfere with existing trade negotiations. We said to the Dominions: "If any country, Russia or any other, by any particular action prevents the value of the preferences being enjoyed by you, we intend that you should enjoy the preferences, and we will take the necessary steps to see that they are carried out." That is exactly the Agreement. It was an honourable agreement and, incidentally, it is quite consistent with what our Dominions themselves have done.
We were very disturbed in the last Labour Government because we felt that the Treaty between South Africa and Germany was not a good agreement from our point of view, and yet when we made this Agreement at Ottawa, when we undertook to take the steps we did with regard to Russia, South Africa promised and has already entered into a new treaty with Germany which prevents her getting the preference that she would have got under the old treaty. Instead of condemning this action, I feel proud when I look at the history of South Africa. I know the differences of the past. I know the record of that Dominion, and I am proud that at Ottawa not only did she concede the principle of preference but took the responsibility of cancelling a treaty in order to give effect to it. That in itself is the best justification for our action.
I want to draw attention to the Clause in reference to the position of the Irish Free State. When the original Import Duties Act was introduced, free entry was given to all the Dominions, and the date 15th November was inserted. It was deliberately chosen because it enabled the Ottawa Conference to be held, and it was 1012 understood that any new agreement made at Ottawa would take the place of that free entry. Unfortunately, differences to which I do not propose to refer cropped up, and I announced on behalf of the Government that we did not intend to make a new agreement with the Irish Free State until the existing agreements had been observed. We found ourselves at Ottawa unable, for the reasons I have given, to make a new agreement. Therefore, provision is made in this Bill that on 15th November next the free entry that is now enjoyed by the Irish Free State will cease to exist. We do not intend to impose the new Ottawa Duties on Ireland. I need hardly say how much I deplore the fact that there is still one Dominion which, by her own action, is depriving herself of the benefits of the Ottawa Agreement, but I hope it is only temporary.
I have endeavoured to summarise the important Clauses of the Bill. It is intended only to give effect to the Ottawa Agreement, which I believe is the most important and far-reaching agreement that has existed between the Dominions, and indeed the British Empire as a whole. I commend it to the House, because I believe it shows that the Empire, with all its racial differences, classes and creeds, can, as one common family, take stock of all their resources and resolve to take all possible steps to help each other. In helping each other they have not been unmindful of their obligations to the world, and, so far from injuring the world, the example we have set, representing one-fourth of the world, going to the world conference as a united body having come to a common agreement, will he an example to the world conference which I believe mankind will bless.
§ Mr. LUNN
I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof the words:this House declines to assent to the Second Reading of a Bill which continues the policy of tariffs and preferences initiated by His Majesty's Government last year, further increases the already excessive burden of indirect taxation, and, even if it succeeds in diverting trade into fresh channels, will do nothing, to solve the problem of rising unemployment common to free trade countries and to tariff countries, which is a social problem relating to the constitution of society itself and incapable of solution either by a policy of tariffs or of free trade.1013 We have listened to a remarkable speech, one of a type to which we are quite accustomed. We had a speech from the Prime Minister very much on the same lines the other night and another yesterday, which shows clearly to me that they have become, body and soul, part of the Tory party. They are not only supporters of tariffs, but I have come definitely to the conclusion that they are supporters of the privileges of capitalism, vested interests and private gain. I do not know another instance in our public life of prominent public men so far betraying the principles of a lifetime. With millions of our people it is unpardonable, but while I feel sore about that sort of thing there is no need for passion with regard to it.
First and foremost, I want to take up the question of what the right hon. Gentleman said with regard to coal. I am going to declare quite definitely that neither the Ottawa Conference nor this Bill, nor anything that has been done, except the right hon. Gentleman's speech now, does anything for the coalminers. We have nearly 500,000 unemployed. They have increased by more than 100,000 during the period of this Government. We are getting retaliation from all our foreign customers, and it is not mentioned in the Ottawa Agreement. We are getting the full force of the reprisals from other countries. I am going to call the right hon. Gentleman's attention to a question that I put to him on 24th May. I asked him the total amount of British coal imported into Canada in 1931, and the total amount imported into the Dominion of Canada from the United States of America. While I may accept a good deal of what he said regarding anthracite coal and agree that it has been dealt with, it was not anthracite coal with which I was particularly concerned at the moment. I agree with a good deal of what he said on this matter, but he went into a passion upon the question of coal. I wish to give him the answer which he gave to me. He said that the total amount of anthracite coal purchased in 1931 by Canada from this country was 876,000 tons, but from the United States of America it was 1,966,000 tons.
Take bituminous coal with which we are concerned a good deal in England. The 1014 amount of coal purchased from this country by Canada in 1931 was 111,000 tons, but the amount of coal purchased from the United States of America was 9,566,000 tons. He also said that there was a duty of 1s. 7½d. upon every ton of coal imported into Canada. There was no mention of coal at the Ottawa Conference, and yet he said that he knew of no subject more important than that of coal which should be discussed in Canada. I have gone through the Blue Book dealing with the Imperial Economic Conference, and I noticed what was said by Mr. Emerson, who represented Newfoundland. In a speech which he delivered he dealt with the question of production of iron ore at Bell Island, and in conclusion said that:The steel manufacturers of Great Britain are and have been for many years using ore obtained from countries outside the Empire. I submit to the Conference that this is a subject calling for its consideration. It is typical of the class of subjects which has called it into existence.That was a claim made by Newfoundland for the discussion of a subject, but there was nothing in the speeches of the British Delegation, and there is nothing in these Command Papers, nor in the Bill, nor in the Agreements which shows that they have done anything with regard to the change over. I admit that you are not going to create any employment for anybody. There is nothing in the Bill which says that you have done anything to secure more trade for the miners in this country. It is an important subject, and you have failed absolutely to do anything for the coal industry. We were told that they were the most important people and that coal was the most important subject, and there was no mention of the matter until the right hon. Gentleman got up and told us what he has told us.
My hon. Friend says that he saw nothing. When I was speaking, the first interruption was that nothing was proposed at Ottawa. He has repeated it now, and I draw his attention to page 36.
§ Mr. LUNN
I am not quibbling, and I am not anxious to quibble on this matter. I readily conceded to the right hon. Gentleman what he had said regarding anthracite. I am dealing with the bigger question, and the one which, as a representative of the miners in this House, I consider the most important. I saw no reason for his passion upon the matter of coal after what has been done at the Ottawa Conference. To say that in the last nine months the imports of coal into Canada had increased by 100,000 tons—higher than the highest peak in the past—is not saying much. I welcome the idea, but it was done after the Ottawa Conference. An increase of 100,000 tons, which makes 200,000 tons, against 9,500,000 tons from the United States of America, is not much for the miners of this country. I will leave it there, as I think it is an adequate reply to what the right hon. Gentleman says regarding the coal industry and what we are to get out of the Ottawa Conference.
When the Import Duties were going through the House we were told that the Ottawa Conference was to be the crowning glory of Protection. We were told the same thing in scores of articles in the newspapers. To-day no one can say that an additional man will be employed in this country as the result of the Agreements and the Bill now before the House. The Lord President of the Council was very clear in his speech; he would give no guarantee whatever. There have been intentions and tendencies from many speeches heard from the benches opposite but nothing of substance. The right hon. Gentleman did not say that they were altogether a happy family. There was fighting, said the Prime Minister, and there were hard bargainings, said the right hon. Gentleman, but we have heard from many people who were at Ottawa that it was a wrangle and a ramp which have left a good deal of bitterness behind. If it is to mean that additional food taxes are to be placed upon the people in this country which cannot be removed without the consent of the Dominions, then the Empire will stink in the nostrils of our people at home.
The Bill covers many pages. There is a good deal of repetition in it, and it is very difficult to find anything of substance. You cannot see the wood for the trees. There is no enthusiasm for 1016 the Bill in the House. We have been told that we have no power to amend it in any way and that what powers we have not already handed over to the Import Duties Advisory Committee are now being handed over to the Dominions. So really there is no reason why the House should discuss the matter at all. The Lord President of the Council said that that was the end of it. We have had five days of Debate—this is the sixth—and I understand that there are to be seven or eight more days of Debate upon this question, and yet we are told that we cannot alter the Bill by a letter or a comma. I do not see why we should give so much time to the subject when our efforts to try to improve the Bill are futile.
We buy far more from the Dominions than they buy from us. They have a good market here, and, incidentally, we have fostered that market considerably during the last five or six years through the Empire Marketing Board. The Import Duties Act gives them 100 per cent. preference. Why all these words, qualifications, and tinkering little details. Sub-section (2) of Clause 1 of the Bill gives certain powers to the Treasury, but twice in that Sub-section it lays down the dictum:Without contravening any of the scheduled agreements for the time being in force.Similar words appear in Clauses 2, 3 and 4 of the Bill, and without doubt there is no need whatever for such Clauses to appear in the Bill when the powers are not with us but with the Dominions. Having come to these Agreements—and the contravention of these Agreements is of a far more definite character than anything that we may suggest or the Treasury take up—why not full and free co-operation and reciprocity by the Dominions? Under the Bill we are to give them higher prices for their produce and our people will have to pay. Is it so that they can sell their produce to other countries at a lower price. Is that one of the purposes of the Bill and of what Ottawa may mean to our people? If it is, it will not encourage the Imperial sentiment with which the right hon. Gentleman finished his speech. The idea in the Bill which seeks to isolate a group of nations from the rest of the world cannot do other than hinder world recovery. 1017 Sub-section 1 of Clause 1 provides not only for the fulfilment of the Agreements in the First Schedule, and the continuation after 15th November of the 100 per cent. preference, but also for the imposition of new duties mostly upon food and the necessaries of life. The details of duties in the Second Schedule are very difficult to follow and are so varied as to amount and method of application that traders in this country will never know whether they are right or wrong.
There is nothing in the Bill nor in the Agreements which in any way protects the consumers. The exploiter may take advantage of some of them, but there is no regard for the consumer whatever. His Majesty's Government at the Ottawa Conference agreed with a number of the Dominions to continue to exempt their produce from the general ad valorem duty of 10 per cent. imposed by the Import Duties Act. They also agreed that any agreement entered into shall remain in operation for five years. I am not going to challenge their right to take such a course with the position as it is in this House to-day, but we object and will not be bound by such decisions in the future, and we shall take steps at the earliest opportunity to deal with them.
There is one matter to which we object most strongly, namely, that the 10 per cent. ad valorem duties shall not be reduced without the consent of the Dominions. I should have thought that everyone in this House would have objected to it. I do not believe that anything which we do or wish to do here should be subject to the dictation or the will of any Parliament outside this country. No succeeding Parliament can be bound by these decisions. It has often been declared by Ministers in all parties that it is in the power of another Parliament to confirm, to increase, diminish or to abolish, to use the words of the Lord President of the Council. We shall adhere to those words whenever we get the opportunity. There is nothing of a definite character in this Bill for us. There is nothing of a definite character that the Dominion Governments have agreed to. They claim that before agreeing they must consult their own Parliaments, as mentioned in the Agreements, and that surcharges on imports from Great Britain will be removed when their finances allow. When 1018 will that be? Can anyone in this House say when that time will come? Although we have given them 100 per cent. preferences, certain Dominions can only promise a new scale of charges after the 1st July, 1933. Who can say what is going to happen in the various Dominions before the 1st July, 1933? There are possibilities of general elections which may change and remove those promises. Who can guarantee that the preferences suggested by India will be granted?
Who, representing India, could give any assurance authoritatively of what India would do? These Agreements may do far more harm than good to our trade with India. Our overseas trade is declining, and I cannot see anything in these Agreements that is likely to help us in any way. As a result of the Ottawa Conference we are to have taxes on wheat and meat and other necessaries of life. There are hundreds of thousands of people in this country who largely live on bread and butter. It is their staple food. These sort of Agreements, which will increase prices, mean that these people may have to turn to margarine instead of butter, that their hardships will be increased, and that millions of the unemployed and those on low wages will be in great difficulties this winter.
We have moved our Amendment, to the effect that we cannot accept this Bill. We decline to agree to it because it continues the policy of tariffs and preferences initiated by the Government this year. I need say no more on that point, because our attitude is well known. We are opposed to tariffs and preferences. On that question I take exactly the same view that the Dominions Secretary and I took when I was associated with him. He has spoken of Quittites. He has described himself correctly. On this matter he is a Quittite but I am not a Quittite. I am making the same speech that I should have made on this question at the time I was associated with him. We object to what may be an excessive burden of indirect taxation. If there is to be increased taxation it should be of a direct character, and not that it should be imposed upon the masses of the people, who are too poor to-day to secure what they ought to have in order to maintain life. The last part of the Resolution is largely taken from the speech of the Prime Minister the other night, to the effect that "there is a social 1019 problem relating to the constitution of society itself which is incapable of solution by either tariffs or free trade." That has been our policy and is still our policy. I do not understand the Prime Minister using those words and then voting for tariffs and Imperial Preference, if that is his sincere belief.
I should like to ask whether or not the total burden of tariffs will be heavier or lighter on our people as a result of the Ottawa Agreement. That is the test of Government policy in the Empire. I disagree with the Foreign Secretary that the Agreements embodied in this Bill will make it easier to negotiate trade agreements with foreign countries. I am largely in agreement with Sir Walter Layton, in his letter in the Press to-day, when he says that it is going to be impossible for this country to negotiate agreements which will be advantageous to our people. If Roosevelt is right and these Agreements will rob the United States of £50,000,000 of trade, how is that going to help us in negotiating with the United States to forgive our war debts?
The trading agreement with Russia is to be broken, Clause 5 of the Bill deals with that matter. The right hon. Gentleman has endeavoured to show by an illustration of some agreement between South Africa and Germany what would result if we looked after our position in the same way. I am opposed to that, and the Labour party is opposed to it. The Labour party has always been anxious, owing to the possibilities of trade between this country and Russia, that there should be nothing done to interfere with that trade, and that everything should be done to develop our trade rather than to restrict it, as it will be by the policy laid down in the Bill.
The Bill will hit very hard many industries in this country—iron and steel, engines, machine tools and textiles. We cannot agree to that sort of policy and we shall take every means in our power, however small we may be in numbers in the House, to prevent anything which will injure the trade of this country, when the Government are seeking to destroy it, as they are, absolutely. There has not been one instance of a country that has reduced its tariffs since we adopted Protection, and we say that this Bill and what the Government have already done will tend to send other countries into the 1020 opposite direction. I believe that the World Economic Conference is being strangled beforehand by the Government's decision. I remember the day when it was said, and the statement was posted all over the country: "Tariff reform means work for all. It will put into work a million people almost at once." What it has meant to us is that nearly half a million more people are out of work this year. As the Prime Minister said the other night, as he has said many times, it will do nothing to improve trade.
Let hon. Members read the speech which the Prime Minister made in this House on the 15th November, 1923. I might almost copy that speech and use it as mine to-day. He moved a vote of Censure on the Tory Government. He condemned any scheme of tariffs and Imperial Preference, conceived by sections of capitalists in their own interests, the effect of which must be to increase the cost of living. He described it as a quack pill in order to apply a cure, and went on to say:In every case the result of putting up a tariff wall or putting an extra tier in an old tariff wall has always been another tariff wall.He roundly condemned the idea that tariffs would be any help whatever in negotiating with foreign countries. His position to-day is one of deep-dyed hypocrisy in view of his statement then and his attitude to-day. We take up the same position to-day as before. The only question we have to consider is the depressing economic conditions in this country and in the world, and we say that this Bill will do nothing to remove or abate them. If the economic life of the world is to be restored it will not be by a narrow selfish imperialism, nor by the isolation of this country or the Empire, but by the co-operation of all nations.
There is embodied in this Bill a reactionary policy of economic nationalism. It will not help us to get out of our industrial chaos and it will not provide work for any of the millions who are in need of work. As this policy will make the conditions of the masses worse, it is possible that it may help the exploiter. I am sure that it is a last throw to bolster up private enterprise. There is no doubt that this Bill will help to create an international antagonism more bitter 1021 than we have ever known, that it will not make for healthy co-operation between the Dominions and ourselves, which I should like to see as much as the right hon. Gentleman and that together with the Protectionist legislation we have already passed this year, which has set on foot an economic war between this country and other countries, it may lead us on to a bloody war to blot out civilisation.
§ Sir ROBERT HAMILTON
This is the first occasion on which I have taken part in a Debate since my resignation from the Government. Our reasons for resignation were fully stated the other day and I do not wish to refer to them at great length. Yesterday the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) made a witty gibe at the expense of my hon. Friends who sit on these benches. I would prefer to cast myself upon the generosity of the House, because I know that whatever opinion hon. Members may have as to the wisdom of one's course they always recognise that it has been actuated by sincerity and taken with a full sense of responsibility. The right hon. Gentleman began his speech by saying that we had already for several days discussed the Ottawa Agreements, and rather inferred that it was a waste of time to discuss them any further. I was profoundly disappointed with what he said. He threw no further light on this matter, and it is necessary that further light should be thrown upon it. It is only by the discussions in this House I hat we are beginning to realise the full implications of the Ottawa Agreements, and it will take some time for those implications to be understood outside this House. Therefore, I welcome the opportunity of a more full discussion which the presentation of this Bill affords.
May I direct the attention of hon. Members to the Amendment on the Order Paper in the name of some of my colleagues? It will be observed that it places particular stress upon two points; one, that the Bill is not open to amendment at all, and the other to the very serious position created by the Bill in what is known as the constitutional question. I propose to deal with these two points. We have been told over and over again during the discussions that are taking place that we must take the 1022 Ottawa Agreements as a whole. We have to take them or leave them, we cannot amend them; and, so far, we have not been able to secure an alteration of the smallest nature. I take it that the same procedure will be adopted with regard to this Bill. The words in the title of the Bill are to:Enable effect to be given to the Agreements made on the twentieth day of August, nineteen hundred and thirty-two, at the Imperial Economic Conference held at Ottawa.Hon. Members, I am sure, must be surprised at the structure of the Bill. Was ever such a Bill presented to the House of Commons? It will be said that there has never been such a set of circumstances, and that the Bill is to deal with them. But what about the provisions which give power to the Treasury to repeal a tax and put it on again, and the power of the Board of Trade to prohibit trade with a country. These things have never been dreamt of before. Here they are in this Bill, and we have to take it or leave it. We have to accept it or reject it. If this is part of the price we have to pay for Ottawa it is one more reason for rejecting the Agreements. Let me call the particular attention of the House to a statement made by the Lord President of the Council on behalf of His Majesty's Government at Ottawa and to a resolution which was passed at the Imperial Conference at Ottawa. The statement by the Lord President of the Council was to this effect:His Majesty's Government in the United Kingdom therefore place before the Conference as its general objective the expansion of Empire trade brought about as far as possible by the lowering trade barriers as between the several members of the Empire. We believe such an objective to be the one best calculated to ensure the permanence and stability of the Empire, and to restore and increase the prosperity of all its peoples. We believe, too, that by reviving and strengthening trade within the Empire we shall he serving the best interests of civilisation as a whole and we shall be taking the most practical means of hastening the economic recovery which is so essential to the world at large.The Resolution prepared by the Drafting Committee stated its conviction:That by the lowering or removal of barriers among themselves provided for in those Agreements the flow of trade between the various countries of the Empire will be facilitated, and that by the consequent increase of purchasing power of their peoples 1023 the trade of the world will also be stimulated and increased.I have no reason to find fault with an objective of that sort; an objective which is clearly stated to be the lowering of impediments to trade, the lowering of tariffs, to do away with them. What we have to do now is to look at this Bill and apply a few tests in order to see whether it achieves the objective of His Majesty's Government. When the National Government was first formed the Lord President of the Council said, very wisely, that the success or failure of the Government would he judged by the success or failure of their treatment of the unemployment question. I take it he meant that if they succeeded in improving trade conditions of the country the figures of unemployment would improve. These distressful figures are, in fact, a barometer of our trade conditions. They rise and fall with the rise and fall in trade. Unfortunately, they have been falling during the past year, but immediately our trade revives we shall see the barometer of unemployment rise and the figures of unemployment fall. I agree with the Prime Minister, who deplored the misuse often made of unemployment figures, by people who set out to say that unemployment was due directly either to Free Trade or Protection, but. I think he went too far when he implied that Free Trade and Protection have nothing to do with it. He went on to say that rising unemployment in Free Trade and tariff countries means that in applying tariffs—you must apply them with discriminating care, which undoubtedly will extend throughout the Empire.That last phrase seems to me to be somewhat of a non sequitur. He went on to say that in his belief by discriminating tariffs something could be done to improve trade conditions. That is a view which is shared 15 the vast majority in this House, but there are a few who do not subscribe to it and there are many millions outside who do not subscribe to it.
May I use a simile to describe the situation as it presents itself to me? Imagine a number of farms in a valley, some of them are well looked after and the drainage channels are kept open. We will call those the Free Trade farms. There are other farms in the same valley 1024 in which the farmers do not pay the same attention to their drains, their channels are not kept open. We will call them the Protectionist farms. In ordinary normal times the want of drainage on the Protectionist farms may be somewhat of an inconvenience to the Free Trade farms, but when a cloudburst comes in that valley they are all involved in the same destruction. But that is no argument for saying that the Free Trade farmer should not keep his drainage channels open. Surely, if they are open the water will drain off more quickly and in normal times you will get a better return from the farm. That is what we say. The way to improve trade is to keep the channels of trade open, to see that there is no undue stoppage. That, after all, is the objective of the Lord President of the Council as declared at Ottawa. Has it been achieved?
It is obvious that when you are attempting to change our Free Trade system and bring it into line with the high Protectionist systems of our Dominions, it is necessary to put on a tariff where no tariff exists, because if there is no tariff you will hr unable to give a preference. That is often forgotten by people in this country when they ask why we cannot give a preference to our Dominions. In order to give a preference we first of all have to put on a tax; and that is why this Bill proposes to tax our people. It is in order to give preferences to the Dominions. I do not say that a preference will not give advantages in certain directions, I have always admitted that, but you have to look at the results of the tax which is put on in order that the preference may be given. In this case we have to see whether what we are paying is an equivalent to what we shall receive We have to look at the debtor and creditor side of the account.
The attitude of some enthusiasts for the Bill would lead one to believe that everything good will flow from it. The only reservation they have is that the Bill does not go far enough. In order to satisfy myself on this point I turn to the statements of one who at least knows the Free Trade argument, however skilful he may be in presenting a brief given him by the other side. I refer to the Foreign Secretary, and I have here a quotation from a speech which he made to his con- 1025 stituents on the 25th October at Cleck-heaton. It will be seen that he waxes almost lyrical over the Bill, not quite, there is still a little of the cautious reserve of the lawyer. Dealing with Ottawa the Foreign Secretary said:He took the view that the Ottawa Agreements were probably"—Hon. Member will mark the word "probably"—like the quality of mercy. They were twice blessed. They blessed the country that gave, and they blessed the country that took.I believe that we shall want a lot of blessings to make up for what we are giving.He believed that the net result would be a lowering of the trend of tariffs in inter-Imperial trade.My right hon. Friend does not put it very high. All he looks for from Ottawa is a lowering of the trend of tariffs in inter-Imperial trade. There is nothing about our trade with the rest of the world.How the agreements with the Dominions were going to work no one could say at present.There I thoroughly agree with the right hon. Gentleman——but for his part he thought it was just as well that they should trust the word of Dominion statesmen just as they expected Dominion statesmen to trust theirs.5.30 p.m.
That is all very fine. I do not distrust Dominion statesmen, but this Bill puts these proposals into law. We are to have taxes placed upon us. We know what we have to face, we know where we stand, but in regard to what we are to receive we are to trust the word of Dominion statesmen. That is rather a curious asset to put on the other side of the account. What is certain is that we are submiting at once to taxation which is definite and immediate in return for advantages which are small, indefinite, and in the future. The preferences and advantages which are being given are perhaps very fine if you take them individually and look at them through a magnifying glass, but we have to look at the range of commerce which they cover. As far as I can see, the range of commerce which they cover, in which this country is particularly concerned, is very limited compared with the enormous range of our foreign commerce. Then, beyond that, there are provisos and 1026 restrictions, the effect of which it is impossible to foresee at present, though I think that their effect will not be enlarging but restricting. Added to that there is the possibility of reprisals. By giving up our Free Trade system and entering a Protectionist system, we know that we are getting on very dangerous ground. Experience has shown us that, though the argument may be very good that a tariff may be used as a bargaining counter to bring down other tariffs, very often other tariffs have gone up. There has been a fight, a fight of tariffs. That is another of the things that we are giving up in exchange for what we have had in the past, and that is the most-favoured nation treatment in whatever part of the world we have penetrated. Surely that is giving up a very great deal for something that is very dangerous. It is the sort of exchange that does not commend itself to me, or to my friends on these benches.
Let me turn the attention of the House to the important fact that this Bill is a. finance. Bill, but that up to this moment we have had no estimate given in any shape or form as to what these taxes are to bring in. These taxes on a whole range of commodities, on foodstuffs, on raw materials, and medical comforts, what are they going to bring in? This is a finance Bill which was started in Committee of Ways and Means, and as soon as it is passed into law we shall have to pay the taxes. I ask the Government to tell the House and the country what is going to be the result of this Bill. There has been no estimate presented to us at all. Again, here, we are facing an unprecedented state of affairs, a, finance Bill imposing a range of taxes over a wide variety of subjects, and we have not one single estimate given to us of what it is to cost. I demand from the. Government that they should tell the country how these taxes are to be met. How many millions? I have heard estimates made up privately. I dare not refer to them. They are very large sums indeed. I am not in a position to say what the actual total result is likely to be. But the Government surely must know. I hope that before the Debate is ended someone speaking for the Government will let the House and the country know what the result of this Bill will 1027 be in the extra taxation that the country will have to meet.
Now for a few words about what has been called the constitutional question. I am not fighting on the word "Constitution," although in this country, with our flexible Constitution, it has always been the practice, when the procedure of past years has been departed from and some new precedent has been created, to say that there has been a change in constitutional procedure. That is what is taking place now. There was a, great search for precedents, a search of which the right hon. Gentleman the Foreign Secretary made considerable fun. No precedents could be found Why? Because the situation is unprecedented. I do not care whether you call it a constitutional change or an unprecedented state of affairs; the fact is that it is an unprecedented state of affairs. Let me call attention to what the Foreign Secretary said the other day in reply to my right hon. Friend the Member for Darwen (Sir H. Samuel), who raised the point originally. The Foreign Secretary said:I agree with my right hon. Friend that we are in the presence of a situation which is without precedent, and therefore the whole of his elaborate attempt to cite precedents was an error.The Foreign Secretary said nothing about his elaborate attempt to cite precedents in reply. The Foreign Secretary also said:I agree with him in what he said two days ago that these are Rice commercial agreements. I agree with him that the true theory of our annual financial behaviour is this: This House as a House is free to raise or lower whatever taxes it pleases, but common sense says perfectly clearly that if you are to have an Ottawa Agreement at all the House has to decide, and will decide by a very great majority, whether it is not prepared, for the sake of what can thus be secured, to acknowledge in all honour and good faith that it surrenders that degree of its annual powers."—[OFFICIAL REPORT, 21st October, 1932; col. 503, Vol. 269.]There is the admission of the whole ease. The House is being asked to surrender its power over taxation, and to do so for a term of years.
§ Mr. HOLFORD KNIGHT
As a lawyer, is the hon. Member arguing that there is any power in this Parliament to bind either its future action or the action of a future Parliament?
§ Sir R. HAMILTON
I am simply stating that the present proposals are unprecedented in the procedure of this House, and that if the proposals are carried through they will place in the hands of other Governments which are not answerable to the electors of this country the power to veto the remission of taxes by this House. That is what I am bringing before the House. It is a derogation of the right of Parliament, a right which is most jealously guarded, the right of complete control over the taxation of the people. It is a point which has not only to be thoroughly appreciated in this House, but outside. It has been a matter of great astonishment to me that during these Debates not one single Member has risen from the Conservative benches to protest against this proposal. I have not long been a Member of the House, but in previous Parliaments, if such a proposal had been brought forward, there would certainly have been one, two, three or four Conservative Members who would have risen to say that this was an unparalleled thing and could not be allowed. Five years is the term.
As regards the Indian Agreement, it may be denounced at six months' notice. We asked, in order to get over the difficulty—because we appreciate the difficulties and the causes which led the Government to make the proposal—that the same six months' notice of denunciation of the Agreement should be inserted in the other Agreements. But that is not allowed, and no reason is given. I suppose the Agreement is sacrosanct and cannot be touched in any shape or form. However, there have been protests raised against this procedure from Australia and Canada and in this country. It is most regrettable to my mind that this first attempt to give practical shape to Imperial legislation of this sort should have raised this contention throughout the Empire. But that is a thing which we on these benches always foresaw. We foresaw that if there was any attempt made to bind the Empire together by trade agreements it would lead to friction. It is one of the most disastrous things that can happen in a free Commonwealth of Nations like ours.
My right hon. Friend the Member for North Cornwall (Sir F. Acland) drew attention the other clay to the great danger of the strains and stresses that 1029 would be set up within the Empire if these Agreements are carried through. These Agreements have not yet the force of law. We are only discussing the probable effects of them. Look at the disputes to which they have already given rise. Imagine what the position is bound to be in 12 months, when the difficulties of working them out arise, when the practical difficulties arise, when great money interests are involved, and we shall have all the sordid questions of bargaining between money interests, submitting our Commonwealth of Nations to strains and stresses to which it should never be submitted.
Now a word on the question of the termination of the Russian Trade Agreement. An attempt has been made in previous Debates to brush aside the question of trade with Russia as if it was a matter of comparatively little importance. An hon. Friend of mine drew attention to the fact that stopping trade with Russia, is now having very serious results on the fishing industry of Scotland. Other hon. Members have drawn attention to the interference with the trade of machine tool manufacturers and the textile and other trades in Russia. The answer given, I think by the Chancellor of the Exchequer, was that someone has to suffer, but that we have to look at the beneficial results of the whole system of Agreements. I would like to look a little closer than that when it is our own people definitely who are suffering, and when we see the immediate results of what this ending of the Agreement with Russia means. Let me quote to the House from two Russian papers which appeared quite recently. This is from correspondence sent to the English Press. It is rather interesting, not because I agree entirely with the statement in these papers, but as showing the feeling that has been aroused in Russia and in Russian Government quarters by the action of the British Government. The first quotation is from the "Pravda," which states, in a reference to the denunciation of the trade Agreement:It shatters the foundations of Anglo-Soviet trade and will inevitably result in the curtailment of Soviet orders placed in England, just as the anti-Soviet campaign already, has done in the United States of America. America's exports to Russia are about 90 per cent, down, compared with 1931. Mr. Thomas is the lackey of the enemies of the British working classes.1030 I do not put it as high as that. I only say that the right hon. Representative of the Dominions Office, who I believe understands the game of poker, has allowed the pool to be scooped by Mr. Bennett. It is not many years ago since I listened with great interest to a speech which the right hon. Gentleman made, when he was a Member of a Government, of a different colour. In that speech he declared that the offers then made by Mr. Bennett were humbug. That speech was of such an excellent character—I do not say that regarding that particular remark, but as regards the substance of his argument—that I made a note of it for further reference in the Free Trade case. How changed to-day! What is the reason for the change? I do not attribute the reason in the way that the Russian correspondent of the English newspaper does, but I think that all of us must regret that one who can speak so well and so ably on behalf of Free Trade, should have accepted the position which he has now accepted as the apologist for this Imperial Protection idea. The other quotation is from "Isvestia" the official Russian paper. It says:It is the Soviet's task to show the Diehards that the Soviet market is not the small change of England's world policies but an asset which must be adequately valued. The Diehards are wrong in thinking their new anti-dumping campaign is going to soften the Soviet in negotiations for a revised trade agreement. The Diehards are going to learn that it is a dangerous game—with unemployment growing, municipalities going bankrupt, workless beginning to fight in the streets—to calumniate a country which by its orders provides jobs for thousands of British workers.I give these two quotations to show the effect in Russia and Russian official quarters of the attitude of the Government. The Chancellor of the Exchequer said the other day that the Russian Government were ready and willing to enter into a new agreement. I put it to the House that the temper of Russia may not allow us to get such a favourable agreement as the old one and, in any event, it is regrettable that our own people should be suffering from the denunciation of this agreement.
Mr. J. H. THOMAS
Do I gather from my hon. Friend that he considers it an unfavourable thing that Russia should do £25,000,000 more of trade with us?
§ Sir R. HAMILTON
I do not know what the right hon. Gentleman under- 1031 stands. I think his views on economics are somewhat different from mine. All I was drawing to his attention was the fact that the temper of Russia is not favourable to a good trade agreement with this country. There are many hon. Members in this House—and on the Conservative benches—who would have preferred an extension of the system of tariffs rather than the introduction of quotas. I agree that in the case of a tariff you have something definite and you know or can judge what the probable result will be. But with a quota you are in a different position. "Quota," to some is rather like that blessed word "Mesopotamia" to the old lady. By saying "quota" they think they can avoid putting a tax on meat. They say that they are not putting a tax on meat but only using a quota, but what is the result going to be? It is extremely difficult to work it out. Quotas are like boomerangs. You throw them at an object and if you hit the object the boomerang comes whizzing round again and may hit you on the head. You do not know exactly how a quota is going to work and I should like some more specific information as to how the Government expect the meat quota to work.
One thing we all know about quotas. If they are to be of any use at all they must be effective. I take it that the Conservative party mean to make this meat quota effective. There is only one way of making a quota effective and that is by nationalisation. You have to take charge of the means of production and distribution if you are going to make a quota effective. Do right hon. Gentlemen on the Treasury Bench realise the road on which they are starting? Hon. and right hon. Gentlemen opposite are getting some strange allies and I hope that the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) is proud of his new allies. I realise that the Government have had a very difficult course to steer. The avowed object of these agreements is to increase wholesale prices but if we increase wholesale prices, will not retail prices follow suit? The answer given on this point has been that in fact retail prices have not increased up to date. We all know the reason. World prices have fallen faster but a time will come when prices will stabilise and when that time comes, retail prices 1032 will rise. That is the inevitable corollary of increasing wholesale prices and it will not be a satisfactory result for our industrial population.
Then, in our efforts to please the Dominion agriculturists, has full attention been given to home agriculture? I have heard various voices raised here saying that home agriculture has been neglected in the interests of Dominions' agriculture. In a Free Trade country such as we have been in the past, the farmer, at least, has the inestimable advantage of buying cheaply what he wants, but if you put him into the middle of a Protectionist system and do not give him Protection for what he sells, he is going to be a great deal worse off than he would be in a Free Trade country. I have always told farmers in the past, "Hold on to Free Trade and never let it go, because this country will never be so silly as to put a tax on foodstuffs." Here we have the country, however, putting a tax on foodstuffs and we shall have to revise our views. It is impossible to leave one section and that the most important section of the producing community out of account. You cannot give Protection to the industrialist and leave the home agriculturist to struggle along as best he can.
When retail prices rise as a result of such a policy what follows? There is a call for higher wages and you get into the vicious circle of prices and wages of which we have had such a disastrous example in Australia. Prices rise, wages rise; then the industrialist asks for higher duties and still higher duties and so you have wages going up and duties going up and the poor primary producer is crushed under the burden. Is that what we have to face in this country? Is that a reason why we should pass this Bill and sacrifice the great position of security which we have held in the past? The world is looking as a last hope to the World Economic Conference and it is a significant fact that on the very day on which we are discussing this Bill Sir Walter Layton should have tendered his resignation from the preparatory committee in connection with that Conference. I commend to hon. Members the reasons which he has given for his resignation and I ask hon. Members to read them in full and not in the sum- 1033 marised form in which they have been given in some papers. I quote one or two sentences. Referring to the possibility of this country associating itself with low tariff countries and the handicaps which exists he writes:Among these handicaps—apart altogether from the growing tendency to introduce an element of permanence and rigidity into our tariff by various commitments—I would mention specially the introduction of the quota system in regard to meat, the implied endorsement in the Ottawa Agreements with Australia and Canada of the principle of compensatory tariffs, and the unhelpful attitude adopted by Great Britain towards regional agreements in Europe such as the Dutch-Belgian Convention initialled at Lausanne in July of this year.I give one other quotation:In the absence of a radical change in the world's commercial policy—in which this country's attitude could be an almost decisive factor—I do not see the possibility of a really satisfactory outcome of the World Conference on the monetary side.These are important statements from a man in Sir Walter Layton's position and we ought to consider them not once but twice or thrice. The world is full of political distrust at the present time. In Europe our pulses are beating very fitfully under the stinging cold of frozen credits. The only thing that can restore our circulation is the warm breath of peaceful commerce and Great Britain chooses this moment, of all times, to give up her lead as a Free Trade country and emrbark on a policy the results of which, I am afraid, cannot help and may indefinitely retard the recovery of ourselves and Europe and the world.
§ Mr. ENTWISTLE
The hon. Member for Orkney and Shetland,(Sir R. Hamilton) in referring to the speech of the Foreign Secretary said he knew the Free Trade arguments. I also may claim to know them. Not only was I familiar with the Free Trade arguments when I had the honour to belong to the party of the hon. Member who has just spoken, but, since I left that, party, some seven years ago, I have tried to keep myself familiar with the Free Trade arguments. There is hardly a textbook on the subject which has appeared since then that I have not carefully perused and all I can say is, that the more I read of the Free Trade arguments, having regard to present conditions in this country and the world, the more convinced I am, not only of the 1034 soundness but of the absolute necessity of the Government's policy. The hon. Member for Orkney and Shetland referred in somewhat contemptuous tones to the structure and draftsmanship of the Bill. He said in effect "Never was such a thing heard of as that the Treasury should have the power to put on or remit taxes." He spoke with great assurance on that point. I presume he is referring to Clause 1 of the Bill but the proviso to that Clause says:Provided that nothing in this Subsection shall authorise any such duty to be charged at a rate higher than the rate specified in Part I of the Second Schedule.6.0 p.m.
The hon. Gentleman himself was a member of a Government which passed the Abnormal Importations (Customs Duties) Act, and that Measure gave power to the Board of Trade, by Order in Council, to impose or reduce or remit taxes within the limit of 100 per cent. duty. That power was absolute, and the tax came into operation before it was approved of by the House of Commons. I presume that this is the new constitutional issue which is being raised by the hon. Member. He says "Never did a Bill give power to a Government Department to affect a tax." Why the limitations in this case are precise and the proposal is mild compared with the Act which the hon. Gentleman allowed the Government of which he was a Member to carry into law. To my surprise, he also referred in scathing terms to the quota and said that nobody could consistently support a quota who was not also in favour of the nationalisation of the means of production, distribution and exchange Am I right or wrong in saying that the hon. Gentleman was a Member of a Government which passed the Wheat Quota Act? That was not so long ago—at any rate it was during the period when the hon. Gentleman was a Member of the Government—and I am surprised to hear that, by having given his imprimatur to that Measure, he has committed himself for the remainder of his political life to approval of the whole programme of Socialism. I want now to refer to the letter which was written by the right hon. Member for Darwen (Sir H. Samuel) and his colleagues when they resigned from the Government on the issue of this Ottawa Agreements Bill, and there was one phrase in that letter which ran like this: 1035The policy of Protection by limiting imports has cut into our exports, reduced by one-fourth our valuable re-export trade, and increased unemployment.One would think, on reading that, that the clear implication was that the statistics of our trade showed, with the force of an irresistible conclusion, not only that there had been a fall in our export trade, but that that fall was attributable to the policy of Protection adopted by the Government. What are the facts? In the nine months of this year our exports have fallen by £21,000,000; in the nine months of last year, under Free Trade, our exports fell by £150,000,000. Is there any conclusion to be drawn from that that the small fall of £21,000,000 is entirely attributable to Protection, when under Free Trade we had a fall of £150,000,000? Our re-export trade, which, according to this letter, has been destroyed by tariffs, has fallen £9,000,000 this year, and fell £20,000,000 last year, under Free Trade. Where, therefore, is there any evidence for such a sweeping assertion as is contained in that dogmatic sentence of the right hon. Member and his colleagues when they resigned?
So far from there being a fall in our export trade under the Protective system adopted by the Government, the contrary is the fact. In the first six months of this year—and it is a very astounding thing, when I give the figures of world trade by comparison—the volume of our exports was actually greater than it was last year. Both figures appear in the "Board of Trade Journal." There is a 2.6 per cent. increase in the volume of the total trade of this country during the first six months of this year. There is a 6 per cent. fall in value, as compared with a 35 per cent. fall under Free Trade, but, in spite of a 6 per cent. fall in value, there is actually a 2.6 per cent. increase in the volume of our exports. What is the position with the rest of the world? During the same six months the total world trade has decreased 28 per cent. in value, while our own decrease was 6 per cent., with actually an increase in volume.
Hon. Members may say that the first six months' period is too early to judge by, and that I should take a period a little later, when Protection had had a little longer application. Let us then take the latest figures that are available, 1036 those for the second quarter of this year, and compare them with the corresponding period of last year, and we shall find that the figures are still more against the contentions of the right hon. Gentleman and his friends in their letter. In the second quarter of this year the exports in value are only 1 per cent. down on the second quarter of last year—that is practically the same—and, of course, much greater in volume, and in that same second quarter the world trade diminished by the same percentage as I have given, namely, 28 per cent. I ask, in the teeth of those statistics, whether anyone who is not completely blinded by prejudice could be guilty of such an assertion as is contained in that letter of resignation of the right hon. Gentleman and his colleagues. Really, I find it extremely difficult, even making the fullest allowance for prejudice, to be convinced of the intellectual honesty—I qualify it with that adjective—of my hon. Friend's argument.
Let me take some more statistics, and I do not want only to mention these in connection with the arguments of my hon. Friend, but I want to mention them as of great importance to this country as a whole and to the trade on which my constituency depends more than on, any other, and that is the cotton trade. It must be a trade which my hon. Friend will agree is relevant in considering what effect tariffs have had on the trade of this country, because it was always thought, 'or at least said, that if there was one county in this country that had kept this country to Free Trade, it was Lancashire, dependent as it was on its cotton trade—Lancashire, 80 per cent. of whose total production used to go abroad, almost completely dependent on the export trade, which was always given as the one example of a trade which would be damnified by a system of tariffs in this country.
What are the facts with regard to Lancashire? You would have thought that at least Lancashire would have benefited less than the rest of the country, if the arguments with which we were so familiar in the past had any basis in fact under present conditions. The statistics are amazing, because during the first nine months of this year the exports of cotton goods from this country have increased in value by 20 per cent. and in volume, 1037 which is far more important, as directly affecting employment, by 32 per cent., as compared with last year. Those are really astonishing figures. I will not venture to be so bold as to assign the precise causes for that increase in trade—[HON. MEMBERS: "Hear, hear!"]—but I shall have a word or two to say about it, and I advise hon. Members who say "Hear, hear" not to be too pleased at my reticence. At least, I shall not fall into the error of attributing a fall which they thought was existent, but which was in fact non-existent, to tariffs. It is significant that the industry which they relied on as their best proof of the damage to be done by Protection has, under Protection, had this very extraordinary revival in trade.
Look at the individual countries to which these increases in cotton exports have taken place, and the facts there also are very illuminating. I have been through them all very carefully, and analysed them. The largest increase in the exports of our cotton trade is to British India. That was only to be expected, because India was the largest market for our cotton goods, but the next largest increase was to Australia, the third to British Africa, the fourth to Hong Kong and Malay, the fifth to China, and the sixth and seventh to New Zealand and the British West Indies. There were relatively large increases to all these countries, and of all that I have mentioned there is only one that is not in the British Empire, and that is China, where we know that the increase in the value of silver has had a good effect on our trade.
Although there is a general increase in cotton exports there have been some decreases to individual countries, and it is very significant to look at this, particularly in the light of some of the arguments that we have heard from those benches. The decreases in the cotton exports are to the Gold Standard countries, and that is a very significant fact. The decreases are to Germany, the United States of America, Belgium, France, and Switzerland. I think I am right in saying that every one of those countries is a Gold Standard country, and yet we were told by the hon. Members sitting there, "Oh, because we have gone off gold, that is an additional reason why we must not have tariffs. There might have been something to be said for them 1038 when we were on the Gold Standard"—although one never heard any arguments for even temporarily abandoning Free Trade when we were on the Gold Standard—"but the moment we go off the Gold Standard we are all right, we have an automatic check. Automatically our imports will diminish and our exports will increase when we are off the Gold Standard."
How then is it that our exports in the cotton trade, one of the main exporting industries of this country, have gone down to the Gold Standard countries? And, remember, the premium on exports applies only to the Gold Standard countries; it does not apply to those countries which have linked their currencies to sterling at all. It is only with regard to the Gold Standard countries that the bonus or stimulus to exports applies at all, and yet in the case of the cotton industry we find, in the case of every one of those Gold Standard countries, there has been a decline in our exports to them, and, with regard to the countries to which there has been an increase in exports, they are most of them linked to sterling and are within the British Empire. I think those are very significant facts as to the success of the policy which has been adopted by the Government.
There is one more thing with regard to, the cotton trade which I wish to mention, and here I think I speak the voice of those engaged in the industry. It has been said that Ottawa has been a failure with regard to the cotton trade because in respect to India the question of cotton goods was not specifically dealt with at Ottawa, and also, with regard to Canada the cotton delegation came back before the Conference took place. In fact, I believe that the cotton trade and those certainly who are best informed in it are delighted with the Agreement with India which was made at Ottawa, and they are delighted for this reason, that there has been established for the first time with India the principle of preference, and that they regard as of the greatest importance. It is true that cotton goods were not dealt with specifically, because that, matter was sub judice and had been referred to the Tariff Board in India, but can there be any doubt, if the Agreement as a whole with India is ratified by the Indian Legislature, that the result of the adoption of the system of preference will 1039 be that there will be considerable advantages to Lancashire with regard to the export of cotton goods to India? Anyway, I am full of hope on the subject, and I shall be extremely disappointed if, as a result of Ottawa, there is not a very considerable advantage to the cotton trade of this country.
I have referred to the question of going off the Gold Standard. It was the argument that was raised by the Free Traders against our adopting Protection that we had this automatic balance which would inevitably come about through being off the Gold Standard. I have shown that it has not operated with regard to the cotton trade, but even if it had, I ask them to consider how that would have acted. They will admit, at any rate, that the tariffs which have been imposed—and remember that we had the abnormal duties of 50 per cent. for some months—must have acted as some check on imports, and fortunately they have not acted as much as a check on exports. Suppose we had not got these tariffs. We have got the obstacle to imports in the present depreciation of sterling operating in addition to the tariffs. Without those tariffs, there would have had to be a much greater fall in the value of sterling to have had the same check upon imports.
Even now I doubt very much whether we have not got an adverse trade balance to-day, taking into consideration invisible exports as well. That has been masked to some extent by the revival of world confidence in the future of this country. We know that one of the purposes of the establishment of the Exchange Equalisation Account was rather at that time to prevent sterling going up, because the short-term foreign balances were coming back into the City of London, but if you had not had any system of tariffs instituted as a remedy for our adverse balance of trade, you would have had none of this revival of confidence on the part of the foreigner, and you would not only have had a further fall in your exchange to compensate for not having the assistance of tariffs as a check to imports, but you would have had this non-revival of world confidence in this country, and you might have had a very serious fall in the value of sterling.
What would have been the effect of that? It would certainly have checked 1040 imports, but it would have checked them by increasing their value all round. It is all very well to-day to attack the Ottawa Agreements, and to try to tell the masses of the country, "Your food will cost you more for there has been a whole imposition of new food taxes." The whole policy of the Liberal party was to let the pound drop and drop until there was an automatic balance of foreign trade; as a result of that, it would not have been a 10 per cent. or 15 per cent. ad valorem; you would have had a very high percentage tax on the food of the poor. The policy of the Liberal party, which was no remedy, was to leave things to find their own level with this country off the Gold Standard. The result would have been a tremendous real tax on the food of the poorest people.
Nobody will deny that the tendency today is towards the development of science and the improvement of machinery and to render less advantageous the natural advantages which those countries which have hitherto been the main manufacturing countries have enjoyed. The cotton trade was first established in Lancashire because of the advantages of the climate. To-day, the humidifier in a mill almost does away with any advantage that may be attributable to climate. In fact, it is rather an advantage to rely on a humidifier than on the actual climate, because you have it under greater control and can regulate it and adapt it to the particular needs of your product. The tendency must be throughout the world for there to be no special advantages in any one given country in the production of manufactured goods, because machinery and science will counterbalance natural advantages and the human element to a great extent. That is one of the tendencies which the Free Trader has entirely ignored because the economics of the Free Trade system were built up on the reliance of other countries on the manufactures of this country. Other countries have been refusing to take these manufactured goods, either by putting up higher tariffs against us, or by developing their own industries.
If we are to be wise as a country and to take a long view, we must adapt ourselves to these facts. It will not be wise to try to rely entirely on being able to sell our manufactured goods abroad and to buy all our food from abroad. 1041 We must develop our agriculture as well so as to get a more balanced production in this country. Furthermore, we must seek markets for our manufactured goods where we are likely to find them. I have heard many arguments raised against the Ottawa Agreements, but I have never heard it said that there are any countries in the world which are more likely to be potential customers of ours than the countries whose main production of wealth is in primary and not manufactured products. Obviously, we are more likely to find markets for our manufactured products in the Empire than in almost any other foreign country. If there is one territory which is fruitful soil for our markets in manufactured goods, that territory is pre-eminently the Empire. On their own arguments, members of the Liberal party ought to support the policy which has been started at Ottawa.
There is another fact which, I think, most people will agree is the real basic difficulty in the way of world trade to-day and the proper functioning of an international monetary system. If there is one basic fact more than another, it is the attempt which is being made by countries to-day to maintain export surpluses and favourable balances of payments without a corresponding lending on the other side. When we were the one creditor nation and the one great exporting nation, the international monetary system of the world, though it was based on gold, worked quite smoothly because we were always prepared to re-lend the balance of our surpluses. That does not apply to the United States of America to-day. It is all very well saying that it ought to apply. Surely America will gain sense and see the true light of wisdom, but we know how difficult; it is to get democracies to move, and we have heard a great deal about the extraordinary difficulty of showing the ordinary voter in the Middle West what may be in his ultimate interest 20, 30 or 100 years hence. But we must try to base our policy on the assumption that America will not see the truth of that of her own accord immediately as the result of some fine international agreement which admittedly would be in the interest of the world at large. We must assume that they will come to the realisation of the truth only by bitter 1042 experience. The way is not to fold our hands and say that we will open our ports to goods coming from America and allow them to maintain a favourable trade balance with us, as the Secretary of State for Dominion Affairs told us in his marvellously powerful speech. America would allow the favourable balance to go on, and the result would be that sterling would go to nothing and there would never be a chance of restoring the world.
There is only one practical way of dealing with America on this question, and that is the way which the Government have announced as their policy. If America will not relend her export balances, she must be brought to the conclusion that she cannot have any surplus balances. She must lose her export trade if she tries to maintain a position which is contrary to natural law. This is not a subject of economics upon which there might be some differences of opinion. It is a basic principle of natural law that you cannot maintain a surplus without relending the balance. It may be difficult to get America to realise that. In the meantime we must make America realise it in the only way it can be done, and that is by practical experience. Her trade will fall off, and we can go to America and say, "You sell us £100,000,000 more than you buy from us. If you will not buy more from us, we will buy less from you." She might then be prepared to take more imports and that, in itself, would stop this basic difficulty, which, I believe, is the cancer at the root of the world economic system to-day.
It has been said over and over again with absolute truth that Ottawa will help the World Economic Conference. I believe that it will, but I take the view that it will be foolish of us to fold our arms and wait until wisdom has come to either the United States or to France. It may take time for these things to be fully realised by these two great countries, but, in the meantime, we must take such steps as will allow us to weather the storm. World prosperity will inevitably return. Until this Government came in, I was terribly afraid that this country would not share in a return of world prosperity, but as a result of the policy which has been adopted by the Government, I am certain that we shall share fully in that return to prosperity. In the meantime, 1043 we have taken such steps as will enable us to weather the storm.
Major LLOYD GEORGE
The hon. Gentleman who has just spoken said that ho knew the Free Trade arguments very well, but I am sorry that they have not gone deeper than they have done. Apparently he now knows the other arguments just as well as the Free Trade arguments, but I think that he will live to see the force of the Free Trade arguments. The hon. Gentleman referred to the letter written by the right hon. Member for Darwen (Sir H. Samuel) when he resigned, in which he said that protection was responsible for the drop in exports. The hon. Gentleman asked if there were any evidence. He would have known it if he had read the report of the Economic Committee of the League of Nations, which showed that in every instance where countries have tried to make themselves either self-sufficient or to stop imports, the result has been a diminution both of imports and exports, with the result that international trade to-day is about half what it was two years ago. The Dominions Secretary started to-day by saying that after five days' Debate nothing new remained to be said. I am not so sure about that. It may be, of course, that we have not had all the information that I think we ought to have had, because Ministers have been occupied in a large part of their speeches in hurling accusations against their late colleagues and receiving accusations hurled back in return. I feel that if we had not had that kind of thing, the Conservative party would have been even more depressed than they have been since these measures were introduced. It is perfectly astonishing that after 30 years' fighting for this policy, they have come to the day of their triumph as an army they are completely demoralised as a result of the consummation of their great policy.
I heartily agreed with the Chancellor of the Exchequer when he said that there is no difference in the House as to the desirability of promoting Empire unity, but that there might be different methods of doing it. He went on to say that the time was long past when any country in the world could ignore what was happening in other countries, and that every disturbance in one country must have its reaction in another. He 1044 also said that the country which could first place its feet on firm ground and lend their hand to those who were still in the slough, would render a great service to every country in the world. I want to ask the House, Have we done that at Ottawa? The Chancellor quoted in his speech last week the last Resolution at Ottawa. I wish that he had quoted the first. There, I understand, the representatives of this country suggested that we should march to closer economic unity by lowering inter-Imperial barriers, rather than by raising foreign ones. That very wise policy was trampled ruthlessly under foot by Mr. Bennett, and I wish that our delegates had stuck to the thing with which they started. The result has been that, while it is true that certain inter-Imperial barriers have been lowered, in many cases foreign barriers have been raised. I always understood that when Christian was in the Slough of Despond, one of his difficulties was the enormous burden upon his back, and I have yet to learn that the way in which he was helped out of the Slough was by the addition of a few more to the already heavy burdens that he carried. The delegation set out with the best intentions in the world, but I think they were bluffed out of the position they took up at the beginning. Why did they surrender? The Prime Minister said the other night that the first duty of the delegation was to avoid failure, and later the Lord President of the Council said that failure would have had disastrous results as far as the World Economic Conference was concerned. Surely it all depends on the cause of the failure. If the cause of failure had been the refusal of our delegation to retreat from the position they first took up, if they had decided to stick to their first intentions to free trade within the Empire by lowering inter-Imperial barriers rather than raising foreign ones, imagine what the effect would have been. In the first place, there would have been no failure, I am quite certain of that, and the result would not only have been a far more advantageous agreement for this country but we should have increased enormously the power and the authority of this country at the coming World Economic Conference.
The Chancellor of the Exchequer told us that the first test of these Agreements 1045 would be their effect on the future relations of the Empire. He said that the ties that bound the Empire together were wearing thin and that if something were not done they would break. The same kind of thing was said in 1903, yet 11 years afterwards those ties were still strong enough to bring hundreds of thousands of young men from the Dominions to the aid of this country in its great struggle, and strong enough to hold them here for 4½ years. That does not seem to me to indicate that the ties that bind the Empire are growing any thinner. Not only do I disagree with those who say that it is only by Agreements of this sort that we can keep the Empire together, but I say that if agreements are only to be got by such haggling as went on at Ottawa they are a positive danger to the safety of the Empire. I go further, and say that another Conference conducted in the atmosphere that was prevalent at Ottawa would in a very short time lead to the disruption of the Empire altogether, and there is not an hon. or right hon. Gentleman who was with that delegation who, in his heart of hearts, does not agree entirely with what I say.
I want to make it perfectly clear that I am not here to judge the Dominions. The Dominions must be the best judges of what suits them, but surely we must be the best judges of what suits us. I am going to speak from the point of view of how these Agreements affect us. There is no doubt whatever as to what we give, but, apart from a few vague phrases, there is a great deal of doubt as to what we get. The Chancellor told us the effect would not be immediate. I agree with him. Not until international trade improves shall we feel the full adverse effect of those Agreements, which make it more difficult for us to regain that portion of international trade which we have lost in the past. For instance, we tax raw materials. As far as I remember, Mr. Joseph Chamberlain never suggested taxing raw materials. Then we tax food-stuffs, and, quite apart from the effect of that taxation on the standard of life of our people, we are taxing the only things which, in many cases our customers have to exchange for the goods they take from us.
This country cannot live without international trade. Taking Great Britain and 1046 Northern Ireland, we have in this country 468 people to the square mile; taking England and Wales alone, the number is very much greater. That population is there simply because we built up the largest international trade the world has even seen. It is not the same with the Dominions. I am not saying that international trade does not matter to the Dominions, but in the case of Canada and Australia their population is only two or three to the square mile, and the effect of a dislocation of international trade will be nothing comparable with what it is in our case. We can ill afford any further loss of our international trade. We see around us to-day the effect of the losses already sustained, and I regret to say that I see very little hope in these Agreements of our making up from the Dominions what we shall lose in foreign trade.
The Chancellor told us that we shall get something like 8,000,000 dollars' worth of goods admitted free into Canada. Everything, with the exception of a few articles taxed here for revenue purposes, that the Dominions send us is to come in free. There is not much doubt about what we are giving, but again I ask, "What are we going to get?" The Financial Secretary to the Treasury said the other day that one thing, at any rate, that we get is an admission on the part of the Dominions vis-à-vis Great Britain, that they are abandoning Protection. That is a most astonishing statement. If that is true, why were the Dominions opposed to the Resolution first proposed by our Delegation; and if it is true, why have we got Articles 10, 11 and 17 in those Agreements? Article 10 says:Protection by tariffs shall be afforded against United Kingdom products only to those industries which are reasonably assured of sound opportunities for success.Has any applicant for Protection ever said his industry was not reasonably sure of success? I am afraid the applicant will have far more to do with it than the Government of Canada, if what happened in Ottawa is to happen here. Take Article 11. Apparently United Kingdom producers are to havefull opportunity of reasonable competition"—that is the first qualification—on the basis of the relative cost of economical and efficient production.1047 Who is going to decide "the relative cost of economical and efficient production"? Will the right hon. Gentleman tell me who has ever decided it? I have never heard that it has been decided by anybody, and if I may quote from the Report of the Balfour Committee, which was asked to decide this very thing—the widely advocated policy of using a Customs duty to equalise labour costs—their conclusion is:We have found it impossible to make any international comparison of labour costs, for the purposes of the present inquiry, and we do not envy a public Department required to obtain the necessary data on which to base a tariff.If every commercial treaty we made with other countries contained this article, there would be an end to international trade, because apart from things which.re cannot produce here, surely the only reason for international trade is that you either can buy the same article at a cheaper price or a better article at the same price. If you cannot do that, I do not see the point of international trade at all. Then there is the very important Article 17, on which I would like to get some information from the Government. As soon as the finances of Canada will allow, they undertake to givesympathetic consideration to the possibility of reducing and ultimately abolishing the exchange dumping duty.I do not know where there is anything definite about that. They will give "sympathetic consideration to the possibility"—two qualifications! Am I right in suggesting that under the dumping duty, in the case of articles manufactured in Great Britain which even to-day are going into Canada, the pound is treated as if it were at par? That is to say that if £100 worth of British goods arrive in Canada they are, for the purposes of duty, charged at the rate of 4.80 dollars to the pound, whereas in fact to-day the pound is 3.6 dollars. Is it a fact that under the present system of calculating these duties, despite the preferences which have been given to us by Canada, owing to this exchange dumping duty American goods get into Canada with a lower duty than British goods?
I would like to know whether the valuation of goods is going to be based on sterling or on the dollar, because if it is going to be based on sterling, with the pound at its present value, it seems to 1048 me that whatever concessions we may have got will to a very large extent be wiped out. If the British manufacturer thinks that by this Agreement he is, to use a well-known phrase, going to make up on the swings what he loses on the roundabouts, I am afraid there is a very rude awakening to come.
Now I would say a word about agriculture. Though I am not a Protectionist I have always said that if we are to have Protection the one industry in this country which needs it is agriculture. But what has happened? The Chancellor of the Exchequer said the first care of the delegation was that the British farmer should be looked after, the second care that the Dominion farmer should get an expanding share of the British market. There is no doubt that the Dominion farmer is getting an expanding share of the British market, but I have very grave doubts as to how our farmers have been looked after. The hon. Gentleman the Financial Secretary to the Treasury said the other night, with characteristic modesty, that he was not an expert on agriculture, so he would quote the opinion of one who was. He quoted Captain Morris, who represented Agriculture at Ottawa. He said that the Ottawa Conference" had proved to be the biggest step forward which has yet been taken by any Government in defence of the home producer." All I have to say on that is that if the representatives of every one of our industries were as easily satisfied as Captain Morris the whole of these Agreements is very easily explained.
I agree with what the right hon. Member for South Molton (Mr. Lambert) said the other day about the agricultural industry, and I think that we are entitled to an explanation. The farmer is to he taken care of! What about butter? The increased supplies since 1929 have come entirely from the Dominions. In the last two years there has been an increase of 1,420,000 cwts., and it is still to come is free. In the first nine months of this year, the importation went up by 300,000 cwts. In the case of cheese the Dominions are our greatest competitor. According to the Chancellor of the Exchequer, farmers are getting ruinous prices for their meat, English mutton fell from 11.95d. in 1929 to 6.75d. and lamb from 14.11d. to 7.5d. He told us that the cause of the drop in prices was excessive imports. Where from? Not from the 1049 foreigner. The excessive imports were from Australia and New Zealand. Since 1929 the imports of mutton and lamb from Australia and New Zealand have gone up by 1,600,000 cwts. and imports from foreign countries have gone down. In regard to frozen beef, Australia and New Zealand have increased their imports by over 500,000 cwts. in the last two years. The farmers of this country have to thank the Dominions for the prices they are getting for their meat products to-day.
What did the Chancellor of the Exchequer say he would do? Having admitted that the fall of prices of the British farmer's products is due to Dominion importations, is he going to curtail Dominion imports? No. Competition in mutton from Australia is to be the very same as it was in 1932 and that was an enormous increase over 1929. In beef Australia can increase by 10 per cent. I notice they only say that they will use their best endeavours not to increase it more than 10 per cent. I wish that our delegation had been a little more precise as to what they got out of the Dominions, and as precise as the Dominions were in what they got. The Australian Government are going to use their best endeavours not to increase their imports beyond 10 per cent. New Zealand can increase by 10 per cent. as well. In other words, despite the fact that it is to the Dominion's excessive importations that our farmers owe their plight, to-day there is to be no restriction of importation from the Dominions. I can assure the hon. Gentleman that that will be very little consolation to the British farmer, when he is in the Bankruptcy Court, to know that he is put there by a Canadian rather than a gentleman from the Argentine.
What about bacon and ham? I heard no reference to bacon and ham from the Chancellor of the Exchequer. He skated over that. I do not think he referred to it at all. Bacon and ham are of very great importance to this country. The Pig Commission report is out. Imports are to be curtailed, but there will be no benefit to the British farmer that I can see. If you look at the figures, you will find that the astonishing quota given to the Canadians practically makes up the amount of the curtailment. It is just about the same. Australia and New Zealand are to be encouraged to send pig 1050 products over here. I cannot understand why this enormous increase was given to Canada. I absolutely fail to understand, because their figures are to be 10 times more than the figures of 1929. Does the right hon. Gentleman think that British farmers want more competition? Or perhaps he thinks that when British farmers go to market, every time they see 10 Canadian pigs where they saw one before, the bonds of Empire will be strengthened 10 times. I do not think so. Why should we not have safeguarded ourselves in our agreement in the same way as the Canadians safeguarded themselves? Why should we not have provided that butter "of a sort or kind not produced in the United Kingdom" or cheese "of a sort or kind not produced in the United Kingdom" should have been in the Agreements? Why not a few things about foreign competition? If foreign competition is unreasonable, does anyone suggest that Dominion competition has been reasonable in the last few years? Only industries in Canada are to be protected that were reasonably assured of a prospect of success. Did no one on the delegation think that British agriculture had a reasonable prospect of success?
I can see precious little for the farmers of this country. I see no more for the industrialists of this country. I shall oppose this Measure, because I think it has enormously weakened our position in the economic conference which is about to take place. You have tied our hands, as all of us before you went to Ottawa said you would. I would only refer for a moment to a question that, was asked yesterday, as to what countries were coming over here to deal with the Government at the Economic Conference. The answer was Denmark, Sweden, Norway, the Argentine and Iceland. Before this Government put on these duties those countries had practically 100 per cent,. free entry into this country. After Ottawa, Denmark has 51 per cent. only; Sweden 33 per cent; Norway 32 per cent., and the Argentine 66 per cent. In the case of the Argentine, since Ottawa the free entries have decreased by 16 per cent. What have these countries to offer us, in exchange for our goods? Wheat, meat, butter, eggs and various dairy produce, timber and fish. We cannot deal with any of those countries in those commo[...] 1051 ties, because our hands are tied to the Dominions for the next five years. The only way we can do it is by raising the duty to the foreigner. We shall be setting a wonderful example to the World Economic Conference.
I am going to oppose this Bill because I think that in signing these Agreements we have struck another blow at our international trade, the shrinkage in which has been responsible for the vast army of unemployed that we have in this country, an army which, with its dependents, is probably equal to the total population of Canada and is in excess of the population of Australia. In my judgment, by coming to the Agreements we have given away the interests of that great population recklessly and unintelligently.
§ The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)
Of all the speeches which have been delivered in opposition to this Bill, I think I can say with truth that the speech to which we have just listened is one of the very few that have addressed themselves to the details of the Agreements. The hon. and gallant Gentleman will not expect me to be in complete agreement with him on everything that he says, yet I would like to cross swords with so able an antagonist. I propose at a later stage in my speech to come back to some of the points which he raised. I will deal with one at once. He has appeared before us in a new guise, that of champion of agriculture. He says that he has always been that. I am going to ask him what would he do to champion the cause of British agriculture? What is the gravamen of the charge that he has made against us? He said, "You did not look after the interests of the British farmer at Ottawa. You allowed him still to be subject to serious competition from the Dominions." That is the charge. Very well, but what would he have done if he had been at Ottawa, or if he were Minister of Agriculture to-day? I will put a proposition. He will not have Protection.
§ Sir P. CUNLIFFE-LISTER
I know that you will not. What is it that he 1052 would do? Would the hon. and gallant Gentleman protect the agricultural industry——
Major LLOYD GEORGE
I said very clearly that I have always been against Protection, nevertheless, if you are going to have Protection, for goodness sake extend it to the one industry that really deserves it. It does not follow that nothing else would have done. You have protected every industry and this one is still left open to the full blast of competition from the Dominions.
§ Sir P. CUNLIFFE-LISTER
I quite agree with the hon. and gallant Gentleman that it would he fantastic to have a policy that protected industry and left agriculture out. We are not so doing. In the past Session he spoke and voted against a whole series of agricultural duties, seasonal duties and general duties, which have been promoted with the purpose of protecting the farmer, the market gardener and every agricultural producer of this country. Every time a duty is proposed the hon. Gentleman has gone into the Lobby against it. Therefore, I am quite prepared at the proper time to defend the measures that we have taken and that we shall take to protect British agriculture.
What would their champion have done? He says that we have left agriculture open to the blast of competition from the Empire; he would leave them open to the blast of competition from every country in the world. He would leave free to come in here not only a limited amount of Canadian bacon, but he would leave free to come in here every ounce of bacon which could be collected not only in Denmark but in Poland, Czechoslovakia and many other countries. Would the farmer be likely to say "Thank you," for the unlimited blast of competition which the hon. and gallant Gentleman and his friends would let in? The hon. and gallant Gentleman must make up his mind which of two horses he is going to ride. He must either say, "I will protect the agricultural industry," and then he can come and say: "Is the protection you give them enough?"; or he must admit that agriculture is to have no protection from any competition. I think I know on which side the farmers and the agriculturists generally would come down.
I propose to come back in a few minutes to some of the more general 1053 criticisms that he and others have made. I should like to say a few words about one side of these Agreements, the Colonial side, which has not received very much attention, except that it has received the general condemnation of the right hon. Gentleman the Member for Bromley (Mr. Lansbury) who leads the first Opposition and the right hon. Gentleman the Member fur Darwen (Sir H. Samuel) who leads the second eleven of the Opposition. Both of them criticised in general terms the fact that I ventured to enter into Agreements in regard to the Colonies, because they believe that Colonial preferences from the Colonies and to the Colonies should not be extended in the Ottawa Agreements. Whatever other new departure we may have made, Colonial preference is nothing new, nor is it anything new that the Secretary of State for the Colonies should appear at an Imperial Conference to champion the cause of the Colonies. That has always been done at every Imperial Conference. The matter does not rest there. The right hon. Gentleman the. Member for Darwen (Sir H. Samuel) said that Colonial preference is included among the accursed things.
§ Sir P. CUNLIFFE-LISTER
I understood the right hon. Gentleman to be condemning the practice. It was a very general condemnation. Let us just see how far it goes. It was in that happy brilliant Liberal Government, which carried on from 1906 to 1914, that a number of preferences were granted in Barbados, British Guiana, the whole of the Leeward Islands, Trinidad and the whole of the Windward Islands. Very well. I do not know why right hon. Gentlemen should sneer at the benefits which they receive from the Empire when those benefits were accorded under the auspices of their chief priest. It was in the right hon. Gentleman's Government that these preferences were given. I should like to know what is the position of the right hon. Gentleman in this matter. Is it that he does not mind receiving a preference but that he will not give a. preference in return? That doss not seem to be a very generous attitude to adopt, or an attitude that is likely to lead to long-continued trade. I conceived that it was my duty to go to Ottawa, as representing the Colonies, to promote their trade, to get a new 1054 market and, in return, to extend Empire trade to their markets.
No one is more alive than the Colonies themselves to the importance of developing that kind of mutual trade. I think that they have reason to be satisfied with the results which have been obtained. In the first place, one great change has been made. Hitherto the Colonies have received preference only from this country, Canada and New Zealand. As a result of the Ottawa Agreements, for the first time, they have received preferences from Australia, the Union of South Africa, Newfoundland, India, and Southern Rhodesia. All these ewe, extended preferences to the Colonial Empire. That is a tremendous gain from the point of view of the Colonies. If one takes both the preferences which come as a result of the Ottawa Agreements, and the preferences which this country has granted to the Colonies since the present Government came into office, an enormous range of preferences have been extended to the Colonial Empire.
Let me take the objects on which different Colonies have received preferences. They include tea and coffee—everyone knows the position in East Africa, and knows that in the difficult economic position there that they will be a great benefit to East Africa—to the producers whether white settlers or natives. For the first time the Union of South Africa has offered a substantial preference of a penny per pound. I think the Union imports something like £430,000 worth of foreign coffee every year, and if even a part of that can be secured, under this substantial preference, by British East Africa that will be a great benefit and, incidentally, will benefit shipping as well. Then there is cocoa and rum. I do not know whether the latter is consumed in such enormous quantities—I notice retrogression on the part of drinkers in this country. But I am glad to find we have a very much increased preference on rum throughout the British Empire. There is also wine. Then there is the increased preference on sugar.
The value of this preference has made, I think, all the difference between bankruptcy and solvency to the sugar-producing Colonies, and they would be on our dole as taxpayers if we had not done that. I have heard that 1055 these preferences have been reflected in orders coming into this country. I was talking to one of my hon. Friends from a constituency where they make sugar machinery and he told me that already, as a result of the new preferences of a few months ago, new orders for sugar machinery have come into this Glasgow area. Then there are sago, tapioca, sago flour, and bananas which are enormously important. I was glad to get that position stabilised because bananas offer the best example of any cooperative society in the world. My right hon. Friend the Member for Orkneys (Sir R. Hamilton) will agree with this, that there is no more excellent example in co-operation than the way in which growers in Jamaica have formed themselves into this co-operative society to secure maximum prices for the producer. They have organised their growing, their collection, their distribution and their ships, for they own their own ships now. And they are handling the market over here. We join in appreciation of their effort. I hope the right hon. Gentleman will find a soft corner in his heart for what regularises and assists what is one of the best co-operative efforts ever undertaken.
Then there is grape fruit—a luxury and a very suitable thing to form the subject of a reasonable tax and agreed preference. All these Colonies can develop grape fruit, and they are growing it. On the list there are oranges and tomatoes—a secondary crop grown now over all the West Indies. I would like to acknowledge a generous concession by Canada for the whole of the year to these tomatoes. We have potatoes, rice, spices, canned fruit, honey, fruit juices, dried fish, canned fish, white maize, copra, palm oil, ground nuts, oil seeds, palm kernel oil, dessicated coconut, coconut oil, fresh coconuts, sisal, timber, tobacco, cigars, gums, resins, essential oils, sponges, and ivory. A pretty good list on which these people are getting a chance to develop their trade. As to asphalt, which is a product of Trinidad, the whole Empire is now going to give a preference. Then there are copper and tin, and then Trinidad comes in again, having got a very valuable preference on semi-refined petroleum going into Canada which will go far to compensate them for the 1056 market they have lost, for the time being, in the United States of America.
If the right hon. Gentleman the Member for Darwen suggests that one has done something wrong from the point of view of the Colonies in getting them preferences over that range of commodities, I honestly think that if they had to choose between him and me as their trustee they would rather have that than 'have nothing. The Colonies are rightly reciprocating in the extension of preferences to the British Empire markets. They have done a great deal in the past. The Chancellor of the Exchequer, when he was introducing the Import Duties Bill, paid a generous tribute to the preferences the Colonial Empire has given to this country for years past. This country has made a very generous response which is appreciated all through the Colonial Empire, but the Colonies are not content to rest on that. They hold very rightly that they should do all they can to increase that preference. A very great deal has been done, and a whole system of preferences has been introduced in particular Colonies which before used not to give preferences. Great areas like Malaya and Sierra Leone, an important place like Hong Kong, and a number of smaller Colonies have granted extensive preferences to this country, and these will be granted to the rest of the Empire moreover.
Many increased preferences have been given as a result of Ottawa, or as a result of negotiations which have taken place before, on a number of commodities in which this country will be interested. I will not attempt to give an exhaustive list: but there are rubber or canvas boots and shoes, motor vehicles, motor trucks, motor parts, cotton or artificial silk hosiery, silk hosiery, electrical appliances and apparatus, electric batteries and accumulators, condensed and powdered milk, hardware, canned meat, canned fish, canned fruit and vegetables, furniture, apparel other than hosiery, confectionery, biscuits, jams, jellies and preserved fruit, cotton piece goods, cotton yarn, dried, salted and preserved fruits and vegetables, iron and steel, perfumery, boots and shoes, woollen carpets and rugs. All these preferences are given by a number of Colonies to this country, and willingly given in return for 1057 the mutual preferences which you have been giving to them. If I may single out one, it would be motor cars. As a result of the revision of these tariffs in practically every Colony and Dependency where motor cars are used to any substantial extent manufacturers will get an effective 20 per cent. preference, and that ought to be enough to give them real hope in that market.
The right hon. Gentleman the Member for Darwen says we do not think about export trade. I have thought about it all the time. I know of no markets where your export trade can be snore steady and valuable than these Colonial markets. We have been told how export trade has shrunk, not only in this country bat in every other country. I find on looking at the proportion of our trade which used to go to the Colonial Empire that in 1924 only 6½ per cent. of our export trade went to the Colonial Empire. In the first half of this year 11 per cent. of our export trade went to the Colonies. You are holding that trade increasingly in very difficult times when the prices of primary commodities have fallen and you would have thought that they would be less able to buy. In addition, no great orders are going there on Government account, and yet the proportion of trade you do with the Colonial Empire has nearly doubled this year. It will be an increasingly valuable trade in the future. I think neither the Colonies, nor the United Kingdom, nor the Dominions can wish to wipe out mutual trade of that kind.
I am not quite sure that if the right hon. Gentleman the Member for Darwen was at the Colonial Office he would enforce a Free Trade policy. He has got a rather shady past. He was once a proconsul—High Commissioner of Palestine—and I am sorry to tell the House that a more arrant Protectionist than he was it would be difficult to find when he had the particular responsibility of administrating that Province. There was salt. He had a good high protection for salt and, in fact, he went so far as to carry on a system under which the Government became the sole purchaser—[Interruption]—and the price that was to be paid for the salt was a price that would enable the man in Palestine to produce, and it was to be equal to the price at which salt could be, not merely 1058 produced, but actually sold for export in Egypt plus the cost of transport.
§ Sir P. CUNLIFFE-LISTER
Yes; it is an isolated instance of the domestic competitor. But the right hon. Gentleman was not quite satisfied with this socialistic arrangement, and he thought of a better way. He said that when this agreement came to an end——
§ Sir P. CUNLIFFE-LISTER
I know, but let the right hon. Gentleman remember what he proposed to substitute for that agreement. He said that when the agreement came to an end it ought to be considered whether the domestic industry should not, in place of this monopoly, have a protective duty. That was the hope that he held out to them.
§ Sir H. SAMUEL
If my right hon. Friend will allow me to interrupt him, I should like to point out that the system which he explains was not my system; it was the Turkish system which was in existence, and which I inherited. I endeavoured to secure an alternative to the State monopoly deriving its salt from Egypt. This concession for the development of salt in Palestine was asked for by a private contractor, and I gave the contract to him instead of to the Egyptians.
§ Sir P. CUNLIFFE-LISTER
Now let us come to the right hon. Gentleman's own unaided efforts, in which he had no inheritance. I think he will remember a proposal that there should be increased protective duties on flour, the food of the people; on bricks, which build houses, and which it is so important we should not make more costly; and on cement. Those were the proposals made by the right hon. Gentleman's Government, and they were too much even for my right hon. Friend the Dominions Secretary, who at that time held my office. He could not swallow that. The right hon. Gentleman the Member for Darwen, nothing daunted, returned to the charge. He thought he would find some form of Protection towards which my right hon. 1059 Friend would be more sympathetic, and this time it was on tobacco. The right hon. Gentleman found that there was increased competition from Egypt in tobacco and cigarettes, and, of course, that had to be met. Palestine could not be left to the full blast of competition from Egypt. He therefore proposed to my right hon. Friend that there should be an increased duty on cigarettes, on manufactured tobacco, and on an article which I believe is called "tombac," and which I understand is the kind of tobacco that the Arab smokes in a water-pipe. I should have thought that my right hon. Friend the Member for Sparkbrook (Mr. Amery), who had succeeded my right hon. Friend as Colonial Secretary, would have jumped at this form of Protection, but he was a little diffident about it. [Interruption.] It is extraordinary what one's past is. My right hon. Friend the Member for Sparkbrook said he thought that cigarettes were all right, and that the duty on cigarettes should go up, but for some reason or other he drew the line at tobacco and "tombac." The right hon. Gentleman, however, was not to be defeated by my right hon. Friend the Member for Sparkbrook; he had had enough of him; so what he did was to go back and put up the duty on cigarettes and the duty on "tombac" too.
§ Sir P. CUNLIFFE-LISTER
No; it was a protective duty. There was a revenue duty and an excise. That was the duty which the right hon. Gentleman put up and which he enforced, and the reason given for it was that it was because of the competition that was coming from Egypt, and that this domestic industry—a promising, nascent industry, I think it was called, and one likely, under Article 11 of the Agreement, to have a reasonable economic chance of success—was entitled to receive some protection. Accordingly the right hon. Gentleman put a duty on cigarettes and on "tombac" too. I suppose that that was the first example of an agreement to differ. At any rate, if hon. Gentlemen thus stray a little from the straight path of Free Trade when they have the practical responsibilities of administration, there is still hope for them, if not in this world at any rate in the next.
1060 I was asked about the African Treaties. From the Colonial point of view, the attitude of the Colonial Governments, as I think I have already stated, is perfectly plain. If this country should decide that it is in the interests of British trade that any of these treaties should be terminated, the Colonies would accept that perfectly readily. They have received generous treatment at the hands of this Government, and they would be perfectly ready to accept that decision, and should such a step be taken they would forthwith introduce a preferential tariff. The decision does not rest with them. It is a decision in connection with which there are many legal complications, and which, on its merits, should be taken here in the interests of British trade. From the Colonial point of view I say without hesitation that the Colonies will willingly accept whatever decision the Board of Trade and the Government decide is in the general interest of trade here.
Having dealt with a subject which is peculiarly my own, I come back to some of the general arguments which have been advanced against the Bill. You can only oppose this Bill on one of two grounds. You can either say that you object to any agreement of any sort or kind being made within the Empire, or you can say that the agreements which we have made are so bad, that the advantages we have obtained for this country are so meagre, that the negotiations ought to he turned down. Those are the only two grounds on which any conscientious or reasonable man could object to these Agreements. To the first, the answer is that, if we were not to make agreements, we ought never to have been allowed to go to Ottawa. Really, all this talk about there being friction if you ever make an agreement with one of your own countries seems to be rather stupid. It is rather like saving that you ought never to get married, because you might have a quarrel after-wards. The very people who say we ought not to make agreements within the Empire are urging us to make agreements with foreign countries to-morrow. I am all for making agreements with foreign countries, but why not make agreements with your own people first? What rubbish it is to say that if you make agreements with foreign countries they will have a good effect and give you 1061 mutual trade and there will be no friction, and then to say that you cannot have an agreement within the Empire with exactly similar results.
As to the alternative objection, that these Agreements give us no advantage, or no practical advantage, it is impossible to measure with mathematical precision the value of this or that concession, or to weigh the particular value of a concession which we receive against that of a particular concession which we give. I do not think there is anyone who can do that with precision either one way or the other, and I say perfectly frankly that it was not in that spirit that we went to Ottawa and conducted our negotiations. I do not think we should have got very far if it had been. I think that the kind of talk that there has been about hard bargaining and haggling would have had a great deal of truth in it if we had set about negotiating the Agreements in that spirit. What we said, broadly, was that we wanted to develop mutual trade in the Empire, and that we fully recognised that it could only be done on the basis of preferences, whether by way of tariffs, or by way of giving an assured position in our market, or in some other way which would be good business for ourselves. We are not concerned to measure one concession against another; we want to get the widest measure of mutual trade for all of us, and we know that, if we get that, it will be to the mutual advantage of all.
By going into the negotiation in that spirit and making the Agreements which are now before the House, very substantial advantages have been obtained for this country both at the present time and in the future. The advantages are fourfold. In the first place we get the actual reductions in tariffs and increased preferences set out in the schedules. Nobody can say exactly how much trade is going to be got either out of any one of these concessions or out of them all in the aggregate. All I can say is that I would rather take the unprejudiced view of our industrial competitors than the prejudiced view of the right hon. Gentleman the Member for Darwen. The hon. Member for Rothwell (Mr. Lunn), who moved the Amendment for rejection, said that the Canadian tariff alone was said by the Americans to be worth £50,000,000 a year to us. Really, if it is worth anything like 1062 that, can anyone say that we have not got a great advantage? [Interruption.] The right hon. Gentleman was not here, and I was.
§ 7.30 p.m.
§ Sir P. CUNLIFFE-LISTER
I took the words down. The hon. Gentleman said that that statement was made by the President of the United states, [Interruption.] Do let the poor man make his own speech. Whether he meant, that it was said by the President or by Mr. Schwab, at any rate it was a very substantial advantage. Taking the Canadian tariff, in the case of steel alone there are, if I remember aright, 52 items in the tariff, and we are to have a new preference on 40 of them. Everyone in the steel trade is very well satisfied with that. The right hon. Gentleman the Member for Darwen said that the steel trade itself had a great deal to do with the Agreement. Does he complain of that I want to see all the industries following that line, I am only too delighted that we should have the assistance of our industries in negotiating with the industries in the Dominions, and that what we had to do in the case of steel was in large measure to register an agreement which had been come to between the respective industries. Does the right hon. Gentleman suppose that if we had not had the Ottawa Agreement those preferences would have found their way into the Canadian tariff? Of course they would not. We have a new free entry in 79 eases, and that, in the worst year of trade, means that this free entry covers a total import trade of something like 31,000,000 or 32,000,000 dollars. In Australia the prohibitions are gone or are going, as are also the 50 per cent. surcharge and the primage duty on bulk goods, and we have a formula of preference which gives us increased preferences, over a very wide range of goods. With regard to India, on which the hon. Gentleman was silent, we get preferences for imports totalling, I think, £32,000,000, and that in a bad year. Since the Ottawa Conference that has been followed up, and we have an Agreement in regard to galvanised sheets, which will be added to and form part of the Agreement. I attach less importance to the immediate gain than to the principle on which the Tariff Boards are to work, granting the 1063 minimum protection which an efficient industry needs as against an industry in this country. [Interruption.] The hon. Member sneers at that, but let him ask any manufacturer in this country—I do not care if he is the most hard-shelled Free Trader—whether he would rather have a Tariff Board working on that principle or a system under which the measure of protection against us was the measure of protection which would be needed against the most sweated labour competition coming into the Empire or a system based on Section 43 of the Canadian Customs Act. It has been said not infrequently in the House, and still more frequently outside it, that the concession will be valueless, because it will not be worked honestly. What right have you to say that? Why do you suppose that, when a Dominion puts its hand to an agreement, it is not going to carry it out as honestly as we carry out agreements to which we have put our hands? I do not believe it for a moment. The Agreement is deliberately framed in a form to make it work. It is not left to the discretion of the Canadian or Australian Government. The British manufacturer is represented and it is laid down precisely how and in what terms the Tariff Board is to make its decisions. It has been deliberately designed to work and the whole structure is so framed not only that it should work but that it must work. It is a real insult to the people with whom we have been negotiating to say that they do not mean business when they have put their names to an arrangement like that.
Lastly, we have done something really effective to raise wholesale prices. It may be asked: "Are you quite sure that you have done enough, and that the figure that you lay down will be sufficient to give this effective increase in the wholesale price of meat?" That is a kind of criticism which is very reasonable. That is why we are doing the thing experimentally. That is why we mean to go next year into the whole position and make sure that we have a scheme which is watertight and which works in the interest of the home producer. A tariff by itself would have been of no use to the domestic producer here. You would not have given him even that. What is vital to him is not only that he shall have some security 1064 in these markets, but that he shall have the certainty that prices will rise to an economic level. The system which we have adopted is the only way in which you can ensure to your producer both security of market and the chance of expansion and an assurance that he will be able to sell at a reasonable price.
Then you have India in for the first time. It is tremendous. If Ottawa produced nothing else, to have a delegation, not of the Indian Government but of representatives of Indian opinion—political and business opinion—amazingly able in the way they conducted their work—coming to the conclusion that it was good business for India of her own free will to come into a great economic partnership with the Empire is one of the biggest things that has ever been done for the trade of the country.
I am told "All that may be so, but how will you be able to negotiate with foreign countries?" A list was given today or yesterday of foreign countries that are tumbling over themselves to come here. I remember a saying of Mr. Deakin that in the markets of to-day the seller is a courtier, but the buyer is the King. Whether you have 70 or 80 per cent. of your markets to deal with, you find people anxious to come and do a deal with you. Those are the advantages which this country gets—advantages in the present and growing advantages in the future. Not only do we get those advantages, but it is a fitting prelude to the world conference. For what have we done? We have shown that the nations of the British Empire can organise together; we have shown that tariffs can be made an instrument of reasonable protection; and we have shown how effective action can be taken to raise commodity prices—very valuable to the Empire and equally valuable throughout the whole world. It is because we have made sound agreements on these lines that the Bill will commend itself to the House, to the country, to the Empire and to the world at large.
§ Mr. T. GRIFFITHS
I am sure the House has listened with very great interest to the right hon. Gentleman's speech. He has given us a review of the negotiations between his Department and the Colonies at the Ottawa Conference, and he has given us a long list of articles. 1065 He just touched at the end of his speech on the question of India and the steel trade. When the House met after the last election I was very faithful in my attendance, because I wanted to listen to the maiden speeches that were going to be delivered. Six out of every 10 of them were on the need of protection for the iron and steel trade, When the Abnormal Importations (Custom Duties) Bill and the other tariff Bills were introduced, I, as a nee Trader, opposed them tooth and nail, but I came to the conclusion that, as the Government had embarked on a Protectionist policy, I was going to get the best deal I could out of it for my members in the iron and steel trade, and every time the question of iron and steel was discussed I gave the Government every assistance possible and all the information I could in order to help the industry.
The Dominions Secretary has told us that they have made a very fine arrangement with India. I am probably the only direct representative of the iron and steel trade on these benches, and I believe I am speaking on behalf of some of the steel manufacturers who are Members of the House when I say that we feel very alarmed at the arrangements they have made so far as India is concerned. I will give statistics from a report submitted by our statistical department to the head office of my executive. You have to go back to 1914 to find out the development of the iron and steel trade in India. The production of pig-iron in that year amounted to 234,726 tons; in 1929 it was 1,395,165. They have a tariff board, and they have a prohibitive tariff against imports of iron and steel and other material. India has developed to such an extent that to-day she is able to send pig-iron into Scotland and South Wales at a cost of about 25s. per ton, as against the cost in this country of 55s. per ton. I hope that the right hon. Gentleman will keep these figures in mind. If you look at the statistics, you will find that, as far as the pig-iron or blast-furnace trade in Scotland is concerned, India has practically wiped them right out. Here is a report which appeared in our local Press this morning:Two parcels of tin-plate bars from India have been received at Cardiff this week, the steamship Clan Mackinlay bringing 1,031 tons, and the Clan Keith 1,024 tons, making a total of 2,055 tons, from 1066 Calcutta, and representing the first parcels from an Empire country for some months.I hope that the right hon. Gentleman will keep that in mind. I have letters here which passed between Sir Horace Wilson and Sir George Rainy, and between the Indian Government and this Government on the arrangement made at Ottawa. I am simply asking for information, because, if my interpretation of this matter is correct, the Agreement made at Ottawa between India and this country is the most disastrous arrangement that could ever take place in respect of the iron and steel trade of this country, and I emphasise the point. This is the agreement, if I am correct. On the basis of present selling prices the duty on galvanised sheet in the Indian tariff market is to be adjusted as follows: 30 rupees per ton on sheets made in the United Kingdom from Indian sheet steel bars, and 53 rupees per ton on sheets made in the United Kingdom from other sheet bars. I am prepared to be informed on the matter, and I shall be only too glad for information that I am wrong. I hope that I am wrong in my interpretation. The United Kingdom, exporting galvanised sheets to India from South Wales made of steel bars, will have to pay a tariff of 50 rupees. Fifty rupees standardised at 1s. 6d. is £3 15s. 0d. It means therefore that, the Melyn Galvanising Works, the Gorseinon Galvanising Works, the Whitford Galvanising Works, the Lysaght Galvanising Works, and the Panteg Galvanising Works, with which the right hon. Gentleman is well acquainted, when producing steel out of their own tin-plate bars, will have to pay 50 rupees tariff before the steel can enter into India. The Indian representatives no doubt said to our negotiators: "We produce pig iron in India; we produce the steel bars in India, and, if you will accept our steel bars and produce galvanised sheets out of them, you will be permitted to export them to India on payment of a duty of 39 rupees." If my interpretation is a correct one, the arrangement is the most damaging and disastrous that this Government could enter into, and for this reason. We have been asking for protection for the iron and steel trade in order to prevent France, Belgium and Germany from importing steel bars into South Wales and so enable my members to he set to work. That is what we have 1067 been asking the Government to do; to prohibit them. In fact, I have said to the Government that they have not gone half far enough in the 33⅓ per cent. duty. I have been asking the Government to prohibit them altogether as I want a, square deal for my members now that you have embarked upon Protection. But what you have done is to embark upon an arrangement with India as a result of which South Wales steelworkers will be kept idle and the furnaces and the mills closed down, and you will admit into South Wales Indian steel bars which have been made out of sweated labour.
Mr. J. H. THOMAS
I will answer my hon. Friend at once by saying that the steel arrangements were made in consultation with, and on the advice of, those who are closely connected with the industry. But so that there shall be no ambiguity, if my hon. Friend will put a specific question on the Order Paper on the point he has raised, obviously he will get an answer, but I want to remind him that I gather that he is opposing our Motion. The significance which I attach to his speech is that, speaking for the steelworkers, he not only endorses our policy of Protection, but he wants to go farther.
§ Mr. GRIFFITHS
I will put myself right. When those duties were introduced I said that as a Free Trader I opposed them tooth and nail, but immediately the Government embarked upon a protective policy and it was carried through this House I was prepared, in order to get a square deal for my members, to prohibit the French, Belgian and German bars from coming into this country. I have turned round to point out to the Government that I was prepared to do that because those people were not working under as favourable conditions as our people, but the Government have entered into an arrangement with India to keep my men in South Wales still idle in respect of bars which are produced under sweated labour. That is the explanation I gave. I do not know whether I am correct or not.
I wish to point out to the Members of this House who, as I intimated in my 1068 opening remarks, have been delivering maiden speeches in favour of Protection in the iron and steel trade, that at Blaenavon in my constituency the blast furnace has been closed down practically for 10 years, that in Ebbw Vale the blast furnaces and the whole of the steel works have been closed down for the last two or three years, rendering about 4,000 people idle, that in Brymbo they have been closed down for 18 months or two years, and that Baldwin's at Port Talbot are only working occasionally. I have mentioned these four works because it is not every steel works in South Wales which produces its own pig iron. I am going to ask a fair question. I do not want the right hon. Gentleman to reply to me now. What hope is there, after all the maiden speeches and the legislation passed by the Government during the last eight months, for Blaenavon, Brymbo, Ebbw Vale and Baldwin's at Port Talbot? There is absolutely no hope at all. I repeat that if the Government can do anything to help the iron and steel trade they will get support. I am not speaking on behalf of my party, but on my own behalf as a direct official of the Iron and Steel Trades Confederation, and on behalf of its members. If they will do something they will have my support, but, if they are going to introduce legislation of this kind whereby sweated Indian labour is to be introduced to keep my members in South Wales and Scotland still idle, I shall oppose them tooth and nail as I did when they introduced the Tariff Bill.
§ 8.0 p.m.
§ Major BEAUMONT THOMAS
I particularly want to deal with the point raised by the hon. Member for Pontypool (Mr. T. Griffiths). It is rather difficult to understand the position of the hon. Member. Some years ago we had the pleasure of entertaining one another at a general election and on that occasion he very strongly and forcibly opposed the policy which is being carried out by this Government, namely, the policy of protecting the iron and steel industry—[Interruption]—and the policy of protecting those trade union members whom he never forgets to mention whenever he gets on to his feet. The only thing I have to say in regard to that is that if he bad supported that policy a few years ago, his members, not only in Pontypool but elsewhere in the country, might have 1069 been in a very different position from that in which they are to-day. The hon. Member has drawn particular attention to the Agreements which were made with India. We must first of all get it clear in our minds what was the position with regard to the importation of sheet bars before legislation was passed by this Government placing an import duty on foreign sheet bars entering this country. The position was that sheet bars coming into the country not only from India but from other countries came in free of duty, and the hon. Member for Pontypool supported that policy tooth and nail. The position to-day is that there is a duty on foreign bars coming into the country, but no duty on bars coming from India. One would have thought that the hon. Member for Pontypool, who has in the past supported the free entry of Indian bars, would have continued to do so, but apparently he has changed his mind.
Then we come to the Ottawa Conference. That was a very different kind of Imperial Conference from what could have been held 30 years ago. It was a business meeting and there had to he give and take on all sides. Moreover, the position in India to-day is very different from what it was even a, few years ago. In India, as elsewhere, in making a businesslike arrangement we had to consider whether on the whole the arrangement made with India, was of benefit to this country or not. In the existing position there is a duty of 83 rupees per ton on all sheets going into India, and unless some new arrangement had been made that arrangement would stand and would operate against those for whom the hon. Member for Pontypool speaks. The arrangement that has been come to is that if British sheets are made out of Indian bars the Indian duty will be reduced to 30 rupees per ton. If the sheets imported into India are made out of British bars or Continental bars the duty will be reduced from 83 rupees to 53 rupees. Therefore, we have a reduction in the tariff on British-made sheets made from Indian bars going into India, of over 50 rupees per ton. The hon. Member for Pontypool may think that that is not worth having, but we on this side of the House and in the industry itself believe that it is worth having.
§ Mr. GRIFFITHS
Is the hon. and gallant Member prepared according to that proposal to see a steelworks closed down in Llanelly, and to allow Indian bars to come into the country free?
§ Major THOMAS
The hon. Member knows that I have been fighting this matter for many years. To-day we have to take the best we can get and, at any rate, the new proposal is a good deal better than what we have had hitherto. We have to make a business arrangement. What would the hon. Member have done if he had gone to Ottawa and had been faced with the Indian delegates? He went into the Lobby against the tariffs which were put on last year, and, as told him, against the interests of his own members. He has done it over and over again. I suppose that he will now go to his constituency and tell his members a different tale, that he stands as a Tariff Reformer not as a Free Trader and that the free entry of Indian bars is a scandal. Did he say that last year? He has never said it before.
Let us get back to the business in hand. The Indian steel makers have agreed that British sheets imported into India in excess of 80,000 tons per annum can be made from any steel other than Indian and get a reduction in duty down to the 30 rupees per ton. That is a very important matter. In 1928–29 India imported about 280,000 tons, so that if the importation into India reaches the level of 1928–29 the new duties will allow to be imported into India 280,000 tons of British sheets, of which at least 200,000 can be made of British steel, and still get the lower duty of 30 rupees per ton. That is a business arrangement, and the steel industry and all those concerned with it have done extraordinarily well with India at the Ottawa Conference. We all know the very great difficulties there are in making business arrangements of this kind with India at the present time, and we have to congratulate ourselves on the steel arrangement and the arrangements made generally at the Ottawa Conference. It was largely due to the fact that the iron and steel industry had a cut and dried programme before they went to Ottawa and, as the Secretary of State for the Colonies has said, all that the delegates had to do was merely to register the Agreement which had been made.
1071 The hon. Member for Pontypool has given figures showing the increase in the production of iron and steel in India. That is a matter which we have to face and it had to be faced at the Ottawa Conference. I have no hesitation in saying that in the arrangement which has been made by the steel industry with India we have faced up to that fact and it is an arrangement which will be of benefit to the iron and steel industry and those whom the hon. Member for Pontypool represents.
§ Mr. HOLDSWORTH
Those who sit on these benches have been very apprehensive about Ottawa for some months past. We were afraid what the results might be, and the fear has been justified by the decisions which have been taken. We enjoyed a temporary encouragement from the words used by the Lord President of the Council at the opening meeting of the Conference. I should like to read some of the words that he used. He reminded the Conference that:The countries of the Commonwealth depend upon world prosperity both directly when they are selling commodities for which a world market is indispensable to thrum, and also indirectly when they sell to the United Kingdom, because the purchasing power of the United Kingdom depends upon her ability to sell in the world market and that, in turn, depends upon the ability of the world to buy.He went on to speak of price levels and said:These objects could best be achieved by assuring traders of a market for their goods, by the removal or limitation of existing barriers to trade, particularly arbitrary and erratic quota systems and exchange restrictions.He further asked the Conference toAim at the lowering rather than the raising of tariffs and to remember that any action which we take here is bound to have its reactions elsewhere.No words could better describe our attitude towards the ultimate solution of world economic problems. Can these Agreements fulfil that desire? On the contrary, we are to increase both the range and the height of our tariffs on imports from foreign countries. The Agreements do not and cannot enlarge the area of trade. They merely alter the flow of certain channels. We believe in Empire Free Trade, but let it be free trade with absolute freedom of entry as between one particular state of the Em- 1072 pire and another. We have no belief in this Beaverbrook species of Free Trade.
Much has been said on the constitutional issue. I would be the last man in the world to claim to be an authority on the constitutional issue, but I want to make one or two observations on this particular point. The new engagement to impose and retain tariffs are in general to be for a period of five years. I do not think it can be challenged that this must both restrict the area and complicate the process of bargaining with other countries. Our domestic policy, by limiting any pledges to a year, left this freedom little impaired. A period of one year is not fatal to bargaining, but one of five years most certainly is. I was very interested to read a report of the Imperial Conference in 1930, when the Government of that time made it perfectly clear that the rights of the United Kingdom Parliament to fix its Budget from year to year was safeguarded the whole of the time.
If nations are to be encouraged to negotiate with each other there must be some certainty that the agreements made will be honoured. Why is it that there is such a bitter feeling in some parts of this House and the country against Russia? The reason is that they have repudiated obligations. I do not defend for one moment the repudiation of obligations by any country. What I want to say is that we ought not to make such agreements as will tie the hands of a future Government to a policy with which they do not agree. The obligations which these agreements contain, that we are not to be allowed to lower duties on certain goods without the consent of the Dominions, is an obligation to which I as a Liberal could never agree. The majority of the pictures which one sees in walking down the long corridors of this House relate to two periods in the history of this country, the Tudor period and the Stuart period the two periods when men in this House were fighting for the control of finance by the House of Commons. The consummation of that great struggle came in 1910 under the leadership of Mr. Asquith. We have already passed an Act called the Statute of Westminster, which gives to the Dominions a perfect right to legislate, so far as their internal affairs are concerned, without the interference of this House. Now the reverse process is to be followed and the 1073 Mother of Parliaments is to ask her daughter States for permission to take certain action. The status of Great Britain is to be less than that of the Dominions.
Our Debates during the last few days have been concerned with generalities and tendencies, very little has been said regarding particular trades. There is a tremendous long list of increased duties and new taxes on food. The Dominions also are to have a perfectly free market here while retaining their protective and often prohibitive duties against British trade. The attitude of Canadian industrialists was fairly summed up in the "Montreal Star" on 31st July last:We do not propose to permit any wares to come into this market on even terms with Canadian products in any case where we are protecting a Canadian industry.That has been carried out to the full so far as the wool textile trade is concerned. It is impossible to expect either the textile manufacturers or the operatives to ask "what can we give" unless there is Borne compensating advantage. The Second Reading of a Bill like this provides an opportunity for dealing with this particular matter. Let me tell the House the way in which the export of wool textiles to Canada has decreased during the last few years. In 1929 the export of wool textiles to Canada was approximately 17,500,000 square yards. It has gone down and down until in 1931 we were only exporting to Canada 4,500,000 square yards. In worsted goods it has shrunk during the same period from 8,713,000 square yards to 5,150,900 square yards. It is the same story with regard to Australia.
What is the position to-day with regard to the new duties? The most astounding statement made in the course of these Debates was made to-day by the Secretary of State for the Dominions, who told us the gains that were to be got by the iron and steel trade, the coal trade and the wool trade. I do not profess to be an authority on iron and steel or on coal, but I claim to know something about the wool trade. There is not a single individual or a single firm of any standing in the wool textile industry of Yorkshire who claims or expects an increased trade because of these Agreements. I do not say that there are not certain trades which will derive an advantage. Let me tell the House, in 1074 figures which can be checked, what these particular new duties mean to the textile trade. Mr. Driffield, the Secretary of the Huddersfield Chamber of Commerce, has tabulated the Canadian duties as they affect the West Riding of Yorkshire. Take 16 oz. cloth, which is selling to-day at 1s. 6d. per yard in the home market, under the old duties it paid a duty of 87.25 per cent. The new duty, with this remarkable preference, will be 71.9 per cent. I could give the House many of these figures from 1s. to 10s. Take the 10s. a yard cloth. The old duty was 34.125 per cent., while the new duty is 31.8 per cent. Take the case with regard to overcoating; and I would point out that the Canadian and Australian duties affect more seriously the cheaper class of goods. Take the 32 oz. overcoating, at 3s. 6d. per yard. The old duty was 78.321 per cent. and the new duty, with the wonderful preference, is 65.36 per cent. On overcoating of 38 ozs. the old duty was 81 per cent. and the new duty will be 69.83 per cent.
§ Mr. HOLDSWORTH
In regard to special woollen serge of 20 ozs. the old duty was 88.5 per cent. and the new duty will be 72.72 per cent. Mr. Driffield in commenting upon the duties in regard to textiles says:Further comment is absolutely unnecessary as to the value of these concessions in view of their prohibitive tariff.Let me say a word with regard to Australia. The old duty on 54 inch cloth entering Australia was 2s. per square yard, and 35 per cent. ad valorem. The new duty on such cloth is 1s. per square yard and 30 per cent. ad valorem. On a cloth priced at 2s. 6d. a yard the old duty was 4s. 3d., or 166 per cent., and the new duty will be 2s. 7¼d. or 104 per cent. I could go on giving such figures. Take a cloth at 7s. 6d. per yard. The old duty was 6s. 8d. or 89.4 per cent., while She new duty will be 4s. 9½d. or 63.9 per cent. These figures need no emphasis. In addition to this heavy tariff the Australian £ is still at a discount of 25 per cent., that is that for every £100 worth of English goods the Australian importer has to pay £125. All things considered, therefore, the wool textile exporters in the West Riding refuse to wax enthusiastic about these new 1075 duties. If I had time I could read quotations from a Bradford newspaper of the same night as these new duties came out, but there is not a single person—I make this challenge because there are other textile experts in this House—of any standing in the wool textile trade who expects any increase of trade from these duties.
§ Mr. HOLDSWORTH
The hon. Member may be a clever solicitor and I know that he is a director of several concerns, but when all is said and done he would never claim to be a practical man in the textile industry. However, seeing that the challenge is made I will prove my words. Mr. William Hunter, the managing director of Francis Willey and Company, the head of which is Lord Barnby, one of the most influential men in the textile industry, says:I prefer not to express an opinion until I have had an opportunity of studying in greater detail the effects of the recommendations, particularly in view of the undertaking which has been given to reduce the amount of meat, bacon and ham imported from foreign countries, and the effect that these recommendations may have on our overseas trade to the countries from which we draw these supplies at present.Mr. John Emsley, who has more looms than any other man in the wool textile trade in the world, made this statement:As T see it we have made a very bad bargain.Sir Frederick Ackroyd, a member of the Conservative party, whose struggles between political faith and trade interests must be very difficult indeed, said:It seemed very doubtful if much advantage would come to the British trade from the Canadian Agreements.There are columns of that sort of thing. I can prove every word that I have said. There is not a single practical man of any standing in the textile trade who claims from the Ottawa Agreements any improvement in the wool textile trade. These duties which have been lowered remain higher now in every case than they were in 1930. The rate on wool blankets prior to 16th September, 1930, was 20 per cent. ad valorem. In August, 1932, that worked out in actual rate at 83 per cent. I had better explain to the House how that figure is reached. 1076 The present basic rate quoted by the Canadian Government is 22½ per cent., plus 20 cents per pound weight of blanket. The result of the new agreement is to reduce the basic rate to 22½ per cent., plus 10 cents per pound weight, and they leave the other duties exactly as they were.
Let no man in this House be deceived by this Schedule in the Blue Book. It is impossible for anyone who does not know how these duties are actually-worked out, to tell what is the percentage on any given article by simply looking at the Blue Book. The effective rate on blankets under the new agreement will not be that which is quoted in the Schedule, but 83 per cent. ad valorem, less 10 per cent. per pound weight. The way in which this remarkable duty comes about is this: The Canadian duties are increased above the basic rate by the following method. The British pound having depreciated, the value for duty purposes is levied on the former par value of the pound. That par value is 4.86 cents. I made these calculations a fortnight ago, but if the value of the pound has gone down since it will make my case better. The ordinary rate is 3.78½ cents per £, or the equivalent of 15s. 6¾d. The duty is levied at the rate of 20s. In many of the items given, such as blankets, there is a specific weight duty. That is so, for instance, in the case of overcoating, which I have mentioned; and at the rate of which I spoke, 84 per cent., almost 45 per cent, comes from the imposition at the rate of 22½ cents per pound weight. Forty-five per cent. is made up with specific duty.
But, in addition to the arbitrary fixation of the rate of payment on the gold or dollar basis, the difference between the actual value of the pound and the fixed value set by the Customs Department is assessed as a special, or what is termed a dumped, duty. Again there is a further tax of 3 per cent., called an excise tax, levied on the duty-paid value, that is the value at the par level of the £ sterling, plus the ad valorem rate, plus the specific rate. In order to show the House how complicated this question of duties is, I want to read a question that I put to the Board of Trade yesterday. I asked the President of the Board of Trade if he would state the rates of Customs duty and any addi- 1077 tional tax, such as dumping duties, exchange balancing duties, pinnage tax or sales tax, levied on the classes of goods mentioned in the United Kingdom—Australia Agreement, Schedule F, Parts 2 and 3, imported from the United Kingdom into the Commonwealth of Australia, as at 1st June, 1924, and 1st October, 1931. I asked a second question in exactly the same terms relating to Canada. The reply I got was—The preparation of this voluminous material asked for would involve an expenditure of time and labour which would not be justifiable in present circumstances.Even the Board of Trade itself acknowledges what a huge task it would he to tell me all the different increases of duties which are to be levied under that Schedule, and which are in existence now. As a matter of fact, the new duties in the Schedule will still remain higher than they were in 1930. I suggest that Those duties were increased before the delegates from the Dominions came to the Economic Conference in 1930 in order to he prepared for that. I am rather sorry that the Secretary of State for the Colonies has left the Chamber, because I wanted to answer a particular point that he raked. I know that there is a provision in this particular Blue Book with regard to the tariff boards. I want to say that our experience is that such boards have a record that does not inspire confidence. I do not think there is anything to be gained by being mealy-mouthed about this question; we ought to state quite definitely that we believe that the tariff boards must be used in the interests of the particular country in which they are acting; they must decide between the interests of the Canadian and the British producer or between the Australian and the British producer. The right hon. Gentleman never told us that even the appearance before the tariff board is qualified by Article 11. Article 11 in the Canadian Agreement used words like these:Reasonably assured of sound opportunities of success.There is also a proviso regarding infant industries, not fully established. Who is to decide the point when they are to be reasonably assured of success? Who is to decide how long an industry has to be in existence before it can claim to be grown up? All these prohibitive duties 1078 in Canada are put in for what? To protect the interests of the Canadian textile manufactures, the whole of which could be put in four of the mills of the West Riding. One single thing Bradford knows with regard to these particular Agreements. The remarkable thing to me is that this country knows in actual terms what it is going to pay for these Agreements, but it does not know in actual terms what it is going to get. Those things are to be left to other people to decide. [An HON. MEMBER: "No!"] An hon. Friend behind me says "No." The only think that can be said is that Bradford has been given a choice between jumping over a seven-foot wall and jumping over the House of Commons, and she can do neither. The Lord President of the Council in the closing session of the Conference, addressing Mr. Bennett:It is a curious thing, Mr. Prime Minister, how typical of the Conference has been your weather in Canada this summer. We were met with blue sky and sunshine and we have had a great deal of that. We have also had storms; we have had thunder and lightning; and we have very nearly been washed out. But we up the Conference on the most beautiful day that we have yet had, and that is an omen.[HON. MEMBERS: "Hear, hear!"] Well, it may be taken in two ways. The most beautiful day was the last day of the Conference. So far as we are able to judge the dawn of that day that we want to see, when economic barriers shall be swept away, is not brought nearer by these Agreements and because of that, we shall oppose and denounce them with all the vigour that we possess.
§ Dr. W. H. McLEAN
It was with great pleasure that I listened to the admirable account given by my right hon. Friend the Secretary of State for the Colonies regarding the preferences in the Colonial Empire. There is no doubt that the fact of these preferences having been given to the Colonies by the Dominions is one of the greatest results of the Conference. For myself, I hail these Agreements because they complete that charter of the Colonies which was initiated by the Import Duties Act. The Colonies can now develop upon an economic basis, with a fixed market; that is to say, they can produce and extend production for a known market instead of for a speculative and unknown market as in the past. Colonial producers, native and European, 1079 are now in a much less precarious position. They can now in many cases produce, economically, secondary crops, and thus avoid reliance on single crops, the failure of which might spell ruin.
The great amount of preparatory work done by the Government in connection with this Conference is, probably, not fully realised. I had the opportunity of seeing some of that work when I had the privilege of assisting my right hon. Friend the Secretary of State for the Colonies in his very complete preparations in connection with the non-self-governing Colonial Empire. I would remind the House that that Empire consists of some 40 separate governments, with an area greater than that of the Indian Empire, and a population nearly equal to that of this country and all the Dominions taken together. It includes people of many races, coloured and creeds, to whom we in this country stand very largely in the position of trustees. The preparatory investigation included, not only an examination of commodities suitable for preferences between the Dominions and the Colonies, but also an examination of shipping facilities, because, obviously, it was no use offering stuff unless you knew beforehand that it could be shipped regularly between the producing Colony and the Dominion offering a market. This investigation disclosed the interesting fact that there exists between every Colony and all the Dominions regular shipping services by mainly British lines. That fact speaks volumes for the ramifications of British shipping throughout the world.
The preferential market now arranged should result in enormous Colonial development because, as I have explained, that development will now be upon an economic basis with fixed markets within the Empire. Such development means orders in this country for machinery, engineering plant and special machines for various agricultural processes and also, an increased demand for shipping services. All this means additional employment to this country. This is of course but one aspect of the Empire trade picture, but it is one of the most important aspects because the Colonial Empire is capable of enormous development. It is one pf our main sources of supply of raw material for industry and complementary to that, it 1080 affords an ever expanding market for our manufactured goods.
As my constituents in Glasgow are interested directly and indirectly in Colonial trade I was glad to have an opportunity a few days ago of meeting some of the leading manufacturers in my constituency who are concerned with Colonial trade and more especially those engaged in the manufacture of machines for the special processes in the Colonies, connected with sugar, sisal, palm oil and similar products. I found that those manufacturers were alive to the great opportunities offered as a result of Ottawa. They informed me that, as far as Colonial trade was concerned, they were perfectly satisfied with all the arrangements made regarding preferential markets. They said that already there is a distinct improvement and it was also encouraging to be told that all orders for sugar machinery required in the Colonies are placed in this country. All this means continually expanding employment for our people in this country.
I think it may be fairly said that the Government, in securing these markets, have taken the greatest and most practical step ever taken to fulfil our trusteeship towards the millions of our fellow subjects who inhabit the Colonial Empire. Owing to the improvements which have been made in native conditions of life and the consequent decrease of the death rate, the population has so increased that but for the efforts of the white men, in producing something exportable and finding a market for it, it would be impossible to maintain the standard of life which the natives now enjoy. In fact in some cases it would be impossible to maintain the population at all. The population of the Colonial Empire has increased by about 50 per cent. in the last generation and in some Colonies it has been doubled in that time. The measures taken by the Secretary of State with regard to trade with this country, in addition to the Ottawa Agreements, has put the development of the Colonies on a secure and sound basis. The economic future and the welfare of all these peoples has been assured in a manner and to a degree which they have never before enjoyed. This is indeed a great achievement for the Government.
Sir JOHN SANDEMAN ALLEN
I would like to approach this question on 1081 somewhat different lines. I think it would he a good thing to recall the history of this Bill, and I am sure that those who know what has taken place at Ottawa realise the enormous amount of work that has been put in by the delegates who went there, assisted, no doubt, very largely by their advisers, but I think we should not let this opportunity pass without expressing our appreciation of and gratitude for the very hard work that has been done. We know that it has been done in the interests of the country and in the hope of real success coming out of the Conference. As to that success, in spite of the Jeremiads which we have heard, mostly from a small coterie in this House who rather like to play old tunes on old fiddles—I know that sometimes an old fiddle makes a very good tune, but you get rather tired of a tune when it is played in the wrong place—I am quite satisfied, from moving up and down the country and meeting business men in many places, that the genera] feeling in the country is, that the Ottawa Conference has been a very real success. There is no doubt that certain trades have been very hard hit for a long time past, and although the representative of the textile industry spoke rather more forcibly about the sorrows of his trade than about the Ottawa Agreement, even he admitted that some amelioration was arranged at Ottawa.
In my view, what we ought to look at is the history of the position. What happened at Ottawa was that the major portion of the time was taken up in arriving at a proper understanding of the position. Our Government went there well informed, well armed with advisers, and with a well prepared case, but that was not so, I understand, in the case of many of the Dominions, and it took a very considerable amount of time to arrive at a proper understanding of the inter-relations between this country's trade and that of the Dominions, but ultimately, by the process of education, which is the one thing that will help us, agreement was reached. In any relation in the world the first thing to do is to educate each other about our position, and then, if we arrive at a mutual understanding, we are much better able to proceed further. I understand that that is what took place at Ottawa. The first step gained was an understanding of our different responsibilities and the relative 1082 effects of the changes in our trade, and the spirit of that was excellent. If hon. Members will look at the declaration of policy, which impressed a great many of us, they will see how admirable it is.
This question came before the autumn meeting of the Association of British Chambers of Commerce. I know that some people look with suspicion on the Federation of British Industries, but the chambers of commerce represent the views of business men generally, and this is the resolution which was passed at that meeting:Cordially endorsing the idea of mutual support which brought the British Empire together at Ottawa, the Association of British Chambers of Commerce congratulates His Majesty's Government on the progress made in clothing the idea in reality.The Association recognises that, until all the Schedules are published, details of the Agreements must remain obscure, bat it accepts the declarations of policy which have been signed by the various Dominions as showing the spirit in which the tariff schedules will he framed and modified from time to time in order that commerce from other parts of the Empire may enjoy the position of a domestic competitor and may flourish.The Association believes that when these declarations of policy are enforced, a great step will have been taken to restore the power to trade to all Dominions of the Empire, and it hopes that in due course the same policy will be allowed to apply the same cure to the restrictions winch prevent the exchange of goods and money throughout the world.That was the general opinion of the business world, taken broadly, on the Ottawa position, but directly you get to details, of course, everybody entirely approves of all taxes dealing with somebody else's business, but taxes affecting their own particular pet business are another matter, so that you will always have grievances arising. Having read that resolution, I want to bring clearly to the mind of the House that that is the general view of the majority of business men on this question.
What have we heard in this House? I do not propose to repeat what others have said, but I cannot allow to pass unchallenged the suggestion which has been brought forward by the right hon. Member for Darwen (Sir H. Samuel) and others, of what is called the constitutional question, that is to say, fixing for a period of years a minimum figure of taxation and so depriving future Parliaments of their liberty to lower taxation. 1083 No complaint has, however, been made of the many agreements fixing a maximum taxation or pledging continuance of no taxation at all. Some of these have been mentioned already, and I would add the Treaty of Berlin, which practically had no limitation on anything at all. Then there were the so-called Congo Basin Treaties, which ran for 10 years and were then renewed for a further period, and there was also the Anglo-French Convention, running for 30 years and now, for the last four years, renewed year by year. It is perfectly childish to talk about a constitutional question when we have examples of that kind in front of us.
The technical side of the question has been dealt with by others, but I would like to point out the business man's view of this matter, and that is that with a comprehensive and definite business arrangement, it stands to reason that sufficient time should be given for it to prove itself, and it is absurd to suggest that such an arrangement, covering such large areas and varieties of trades, should be subject to six months' notice. The period fixed is, to the business man, very reasonable. Give it a trial for four or five years, and then you will know where you are, but to embark on these arrangements, which involve negotiations for months both before and afterwards, and allow them to be subject to six months' notice, is ridiculous. The Government have done once more the wise and sound thing, and I do not see why my hon. Friends of the Opposition here should object to anything of the kind. They are very strongly in favour of supporting a five years' plan somewhere else, and why do they object to a five years' plan here? It is a good plan. That is by the way, but. I was quite sure that that comparison would interest my hon. Friends above the Gangway here.
I was very interested that my right hon. Friend who is Secretary of State for the Colonies should have called attention, as he did, to the very great advantages of the Ottawa Agreements in connection with the Colonies. My only regret is that it has not already been recognised on the back benches of this House. We had at the start a statement from the right hon. Member for Darwen which 1084 startled me and many others here. He was suggesting that pressure was being put on the native population and that they were going to suffer and be compelled to pay more for what they wanted. There is no recognition of the immense advantages which have by wise handling been obtained for the Colonial Empire in this absurd and rather dangerous suggestion. Our administrators out there and at home have had to face plenty of trouble arising out of evil propaganda from different sources, which disturbs the natives and imparts all sorts of false ideas to their mind. It is to be regretted that an ex-Minister should make a statement of a kind which might militate against what we are standing for in those distant lands, namely, justice and fair play, which are the principles that govern our administration there.
The Minister for the Colonies has made the position pretty clear. There is only one point which I should like to amplify. It would be well known that there are certain Colonies that at present by international treaty prevented from granting preferences which they might otherwise like to grant: and although in the Agreements reciprocity is provided for, it carefully says that in those cases where a Colony is prevented by international treaty from granting preferences, it shall nevertheless not suffer in consequence and shall obtain the full benefit of the preferences which are obtained. In fact, the whole arrangement is a generous and broad-minded arrangement for the great benefit of the Colonial Empire. Do not let us forget that in the long-run the expenditure of all the Colonies is backed by the taxpayers of this country, so that in all that has been done in the Ottawa arrangement a great thing has been achieved for the Colonial Empire.
I know that some people belittle the schedules so far as this country is concerned. One hon. Gentleman who spoke for the textile industry was rather like a lady—in the presence of the one woman Member who is here I will say, like an ordinary lady—who takes a particular instance in which she has suffered and immediately makes that a general rule to apply to everything. We have to avoid that danger and not imagine that, because the textile industry has not had all it hoped for, nobody is getting what they need. It is neither advantageous 1085 nor desirable to waste any time on further discussion of the principles of Free Trade and Protection, of which we have heard a great deal too much. Some of us who have heard it all before merely ask one question. Why is there such an intense desire even to throw overboard our Empire trade relations rather than prevent the whole country being overflowed, with all the dykes down and all the workpeople put out of work?
There are some observations of a different character I wish to make. In the case of the preference allowed to Canadian wheat a certain difficulty arises owing to the fact that the St. Lawrence River is closed for some five months in the year. It has hitherto been the custom for grain during that period to go through United States ports, and under present practice it will be difficult to satisfy the Commissioners that special parcels of wheat may have been directly consigned from Canada. In the case of the Ottawa Agreement, we find that in regard to Rhodesia and Nyasaland, whose produce passes all the year round through Beira, the position is somewhat similar, but a special arrangement has been made in Section 6 of Clause 2. I merely mention it now because it calls for consideration, and it may be necessary to see what can be clone to avoid blocking that very important time of the year.
Another point is in regard to Clause 5 which provides against Russian and other dumping, so-called. I consider this Clause to be necessary not only in the interests of the Ottawa Agreement, but of our trade as a whole. Many Members of the Opposition, who in many cases can argue soundly, lose themselves in a mass of prejudice when discussing Russia. I am not prepared to deny that the same state of affairs exists amongst some hon. Members on the other side of the House in connection with the same subject. We have to approach this question as business men. I do not believe that the steps which have been taken will interfere with proper and legitimate trade with Russia. What we want is balanced trade with Russia, and Russia in its own interest really wants the same, although it may not he prepared to admit it. I am sure that if these arrangements are properly carried out, it will not lead us into trouble in future.
1086 There is provision in the Bill for a preference on wheat, but there is no similar provision for any special care to be taken about the great milling industry in this country. I hope, and the Merseyside hopes, that the Government will watch with great care to see that there is no dangerous overflow in that direction. With regard to fruit, I fear that the Government have made a mistake. I think that they are wrong both as to their dates and the tax on weight. I remember that in 1923 proposals of a similar kind were brought forward, only much worse, and they were combated by the trade who knew what they were talking about. After all, it is not the first time that mistakes have been made, and I want to bring this before the House. There has been a tendency, particularly in certain parts of the Debate, to be angry when the reply has been given that these Agreements must stand or fall. It would be a poor sort of arrangement if the Agreements were subject to being chopped about in the different Parliaments of the Empire. Of course, they have to be maintained as they were settled.
Later on we may mutually arrive at modifications, and it is absurd to object to them because they cannot be altered. I want to say what I have said to a number of traders who are troubled—and it is important it should come out in the House—that there is nothing to prevent a proper negotiation and discussion with the Dominions concerned in regard to any mistakes that have occurred in the Agreements. I want to emphasise that what makes this arrangement more valuable is that it shows that we have arrived at a mutual understanding with the representatives of the Dominions that they now appreciate the line that this country takes, and that we understand their difficulties in a way we never did before. So the ground is prepared for negotiations on these matters, which was not the case before. Therefore, let no trade be misled by attacks in this House or outside into thinking that they are very badly dealt with for five years. It is rather important to clear that up.
§ Mr. JANNER
The hon. Member has touched upon a very important point, and in view of the fact that he has come to the conclusion that in respect of fruit a definite mistake has been made, I would like him to tell the House what his atti- 1087 tude is going to be in the event of the Government refusing at any stage to remedy that mistake, and insisting on that mistake being retained for five years?
Sir J. SANDEMAN ALLEN
That is not exactly what I said. What I do say in answer to the question is that, as far as I am concerned, and I am only putting forward any own view, I do not expect the Government at this moment to make any alterations, even if they do see that things are wrong, because, as I have just been arguing, it would be foolish and un-businesslike if they tried to do such a thing. It would be absurd to suggest it, but it is also absurd to suggest that the only alternative is waiting five years for an opportunity of remedying it. I shall not wait five years, or even 12 months, before bringing the matter to the attention of the Government. The thing is perfectly reasonable, only we must have a little patience. Those who are in office are quite capable of dealing with that question with an authority such as I have not got. I say, as I did when I started, in spite of the mild chuckling of some of my Labour friends on the right, that they know in their hearts that it is all right.
The great issue has been met—not by quarrelling with the Dominions or creating an arrangement which is going to bring about difficulties, but by establishing relations such as have never before existed. The hon. Member for Orkney and Shetland (Sir R. Hamilton) talked about the danger of our quarrelling. All that we have done has been to get everybody at a round table and discuss things, and instead of having an agreement with each of them we have an agreement made with all together. I feel very strongly that the only right and proper thing to do is not only to vote for the Second Reading of this Bill but to do so with enthusiasm and gratitude, realising that an immense step forward has been taken in the interests of the trade of this country, in the interests of the trade of our Colonial Empire and of the Dominions such as will ultimately lay the foundation for improving our trade with everybody else.
§ Mr. BATEY
The hon. Member for West Derby (Sir J. Sandeman Allen) said he could not understand those of us on these benches opposing these proposals. 1088 We have opposed them because we believe they will be injurious to the interests of the working class of this country. We have often been charged with being the friends of every country but our own. On this occasion we are the friends of the working class in this country, and hon. Members opposite are the friends of the working class in the Dominions, and are putting their interests before those of the working class here. That is the difference between us on this quesiton. I rise principally to deal with two arguments advanced this afternoon by the Secretary of State for the Dominions. He began by saying that the Ottawa proposals were in the interests of the miners and also in the interests of the unemployed. I regret that he is not present now, when one is replying to those points, because I want to answer them. In justifying his statement that the Ottawa proposals will benefit the miners he said that indirectly they would benefit them through the improvement in the iron and steel industry. I know nothing about iron and steel, and therefore I leave that industry alone. He went on to say the miners would also benefit directly. His only statement in support of that claim was the fact that during the first nine months of this year Canada has bought more coal from this country. I am glad Canada has bought a little more of our coal—but it is only a little more. I think that Canada might have gone much further than she has done and bought far more coal during those nine months, in prospect of the Ottawa Conference and the arrangements to be made there. Even if the increased purchases of coal by Canada are maintained during the whole year at the same rare as during the first nine months she will not have bought more than 2,000,000 tons of our coal during the year. Last year she bought 11,000,000 tons of coal from America and less than 1,000,000 tons from this country. [Interruption.]
§ Mr. BATEY
Even with the increased tonnage that Canada is buying this year, at the very most she will have bought less than 2,000,000 tons from us in contrast with 9,000,000 tons from America. There is nothing there to boast about, especially when we remember that we 1089 have lost markets through the policy of the Government, when we remember that for the first nine months of this year we have lost 3,000,000 tons on our sales to Germany. The small increase in the coal we have sold to Canada is not much encouragement in face of that enormous loss. The Dominions Secretary did not tell us that Canada is sticking to the tax of 35 cents per ton against British coal—not anthracite coal, I agree; but if we examine the figures we find that less than half the coal bought by Canada is anthracite, the rest being bituminous. Some of us come from the North of England, where our pits have been lying idle, closed down, and where our men are unemployed. We want those men to work. Our country is in the North of England; our interests are not in Canada, South Africa, Australia or New Zealand. Against any coal coming from the North of England the Canadians now have a tariff of 35 cents per ton, yet our people, in their poverty, are to be called upon to pay dearer for their wheat, their meat, their butter and their cheese. Canada is to be allowed to send wheat into this country free, but Canada calls for a tax of 35 cents against our coal.
One is always a little amused to hear the Dominions Secretary dealing with coal. I have heard him deal with coal before in this House. I remember when he went to Canada—I am sorry to say these things in his absence, but I know the Dominions Secretary well—and on that occasion he took a cargo of coal and said that he was going to set all the pits in this country to work after he came back. He went to Canada and then he afterwards stood at the Government Box and made us believe that he had succeeded in getting enormous orders for coal. He talked about building seven ships. Listening to him, you could have sworn that you saw the seven ships sailing. The seven ships that were to be built were necessary to carry the coal for which he had got orders in Canada. There has not been a single ship built. Instead of selling more coal to Canada, we are selling less.
The Dominions Secretary said to-day that I dare not go to Durham and oppose these proposals. I have opposed these proposals throughout Durham. It was just as foolish for him to say that I dare not go to Durham and oppose these proposals as it would have been for me to 1090 say that the Dominions Secretary dare not say "Damn" in his own house. We are opposing these proposals because our class, the miners' class, is called upon to suffer in two ways. These proposals will not benefit the millers in the least. A slight increase in trade with Canada will not benefit us, or at least it will be such a slight benefit that we shall scarcely notice it. We believe that because of the tariff policy of the Government, and of these Ottawa proposals, we have been injured in the European market, in which we have lost, during nine months, orders covering from 1,000,000 to 3,000,000 tons. Our miners are going to suffer because of this policy and because of the loss of those markets and the closing of the pits.
Instead of saying that they are going to suffer, I should have said that our people are suffering, and that they are to suffer more because of the policy that has decreased several of the European markets for our coal and has made it impossible for our men to find work. Our miners, instead of benefiting from these Ottawa proposals, will be injured in two ways; by loss of work and by dearer food. They can ill-afford to pay dearer for their food, but that is going to be the effect of the Ottawa proposals and of the tariff policy of the Government upon our class. The Secretary of State for the Dominions argued that these proposals would not only benefit the miners but would help the unemployed.
One is interested when one hears the Dominions Secretary talking about helping the unemployed. He used a peculiar argument, which was that the unemployed will be benefited because there will be more migration. In order to make out a case, he quoted figures of migration from 1921 to 1931, which showed that more than a million persons had migrated from this country to the Dominions. Like an old trade union official, he knew how to select his figures to make his case appear as bright as possible. Why did he not give us the last figures that he quoted in the House, when he gave the number of those who had migrated from this country to the Colonies in 1913 and 1931 In 1913, he said, 285,046 had migrated, whereas in 1931 there were only 27,151. He said something more on that occasion. He said that those entering this country in 1931 were 53,181. That, is, 26,000 more people came back in 1931 than went out. 1091 He gave that as one of the arguments for these tariff proposals.
There is no prospect in migration. The figures show how badly the Colonies have behaved to us during those latter years. They show that they were not in the least benevolent and that when it suited their purpose they prevented migration altogether. They prevented our people from going into the Dominions. We are told that migration was not discussed at the Ottawa Conference. There is no prospect that migration is going to be permitted again, and that our people are to be permitted to go to the Dominions. The Dominions Secretary said that by this policy we shall make the Dominions richer, and that, if we make the Dominions richer, they will be able to employ those miners. We do not want to make the Dominions richer at the expense of our people. It is our people that we should first make richer. On these benches we stand for the interests of our own people before the interest of any of the Dominions. In the mining industry, there are about 1,000,000 men; with wives and children, there are practically 4,000,000 people depending upon the mining industry.
There is very little hope or prospect, in these Ottawa proposals, from the small increase of trade with Canada. Australia, New Zealand and South Africa do not buy a single ton of coal from us, and yet we are pursuing a policy which will give preference to those Dominions and are ignoring European countries. I am glad to see the Lord President of the Council here, because when the Dominions Secretary talked about this cure for unemployment, it is like the Lord President's cure for unemployment. He will remember that during the election he talked about seeing a silver lining. He said he thought he could see a silver lining in the dark clouds of unemployment, and that there were signs that employment was improving. This, he claimed, was due to the policy of confidence inspired by the National Government, and he said if they were returned it would put a new heart into this old country of ours. The right hon. Gentleman saw a silver lining 12 months ago, but he does not see it to-day.
I was amused the other night to hear the Prime Minister get up at that Box and say to my colleagues on the Front Bench that it was not fair to blame any 1092 Government for unemployment and that unemployment was outside any Government. Why, during the election, on 15th October, 12 days before the poll, he said in his division, that certain financial changes had had no evil effects because the National Government had given people confidence, and that industry was reviving, and was going to revive, and that the number of unemployed would be reduced. I wonder where the industry is which is reviving. It is not in his division. I had some figures yesterday of all the Durham Exchanges, giving the applications for the end of September this year, as against the applications at the end of September last year. I notice at the Exchange in the Seaham Division there were 4,376 applications against 2,230 last year. There are other Exchanges in the same division which tell a similar story, though perhaps not quite so bad.
I submit that there is nothing in these Ottawa proposals that encourage us to believe that they will help us from the unemployment point of view. In spite of all that may be, and has been, said in the past by either the Lord President of the Council, the Prime Minister or the Minister of Labour, who said we were turning the corner, or what was said by the President of the Board of Trade at Newcastle, namely, that at the end of 1932 we should be immensely better than in 1931—in spite of all that, there is no prospect of anything better, and there is nothing in any of these proposals to make us believe that they will lead to any employment in this country. Therefore, we are bound to oppose them. It is certain that this National Government has done nothing to help the working classes of the country, and there is nothing to encourage them to look forward for anything from this National Government either during the winter or during the rest of the Government's period of office. The Government would be wise not to rely too much on proposals of this kind. I have never found such an ugly temper among working men as there is to-day, and it would be wise on the Government's part to do something more than this in order to try to find work for the people, and not waste the time of the House on proposals such as these.
§ 9.30 p.m.
§ Mr. ANNESLEY SOMERVILLE
The Debate as far as it has gone seems to me to have put the Government's case in an unshakable position. It would be difficult to listen to more comprehensive and convincing speeches than those of the Secretary of State for Dominion Affairs and the Secretary of State for the Colonies. I was particularly interested to hear the Dominions Secretary ask why we should refuse to the land worker what we gave to the miner and the railwayman. And why should they not have the same treatment? He was defending the provision with regard to the meat quota. I have listened to nothing more amusing than the way in which the Colonial Secretary convicted the Leader of the Free Trade party of advanced Protection when he was a Pro-Consul in Palestine.
The criticisms of the Bill have resolved themselves into prophecies of evil for the consumer, but all these prophecies have been discounted very largely by the events of last year. Since this country became a Protectionist country, the trend of the cost of living has been downwards. There have also been prophecies of danger to our relations with foreign countries because of the restriction on trade, but, as the Colonial Secretary pointed out, that is not consonant with the fact that foreign countries are tumbling over one another in order to enter into relationship with us. To anyone who has believed in and worked for Tariff Reform for many years, the position at which we have now arrived is one which gives intense satisfaction. There have, been three occasions when the opportunities of Imperial unity in the shape of fiscal unity have been offered. Sixty years ago Disraeli said that self-government, when it was conceded to the Colonies—now the Dominions—should have been conceded as part of a policy of Imperial consolidation; it should have been accompanied by an Imperial tariff. Later, Mr. Joseph Chamberlain tried to persuade the country to accept Imperial fiscal unity, and now, for the third time, our delegates—to whom we owe great gratitude—have had this offer put before them and have accepted it. There is now opened a new era of Imperial co-operation.
There is one point upon which I want to touch, and that is the question of migration. The Lord President of the 1094 Council in his speeches, to which I have listened with great pleasure, has spoken of the rationalisation of the industries of the Empire. We have now an opportunity of carrying out that policy. It was inevitable that Canada, with her wonderful mineral wealth and her marvellous water-power, should develop into a great industrial country. The United States have realised that. What is the position in that area? We have 68 per cent. or nearly 70 per cent. of the imports of Canada coming from the South. About 48 per cent. of Canada's exports go south. We want trade to flow more East and West and not so much North and South. What do we find? At the strategic point factories have been built with American money, the key-men are Americans and the products made in Canada come into this country to enjoy preferences. America is taking a great and growing share in the industrial development of Canada, and I ask, Why should we not take a great and growing share in that development?
Here is a suggestion from industrial Yorkshire. Why should not groups of non-competitive firms purchase sites in Canada, of which there are many, and found there garden cities, Welwyns and Letchworths, drawing from here workers of all grades—operatives, artisans, engineers—and also teachers and doctors, not merely looking to settle them on the land? What does Canada need? Canada needs capital and population, and we can supply them. This new era is the time to make that offer to Canada. That leads me to the question of migration. The Lord President of the Council, referring to a previous speech, said that migration was not a subject that was examined at Ottawa, but that migration—I hope I am doing justice to what he said—must wait upon a revival of trade. I feel strongly that to a large extent, indeed almost altogether, individual migration has ceased, but the spirit of adventure is not dead. That is evidenced by the fact that, under the £10 passage scheme to Canada initiated by my right hon. Friend the Member for Sparkbrook (Mr. Amery), nearly 40,000 migrants went to Canada at their own risk. In order, however, to produce migration on a large scale, we must have co-operative effort on a large scale. We need new markets; Canada needs new markets and more population; 1095 and it is a truth that new settlers produce new markets. Such garden cities as I have suggested, coming from industrial Yorkshire, would undoubtedly restart the flow of migration and produce new markets. I would urge the Government to take into consideration this question of migration. It needs a large cooperative effort on the part of this country in conjunction with the Dominions. We must not sit down and wait until times are more favourable, until trade revives sufficiently; now is the time to consult, to prepare, and to act.
§ Mr. GRAHAM WHITE
Like my hon. Friend the Member for Windsor (Mr. A. Somerville), to whom we always listen with pleasure in this House, I had the advantage of hearing the speech of the Secretary of State for the Dominions, and also that of the Secretary of State for the Colonies. My hon. Friend will not be surprised if I say that I did not derive such complete satisfaction from those speeches as he did; in fact, I think I am more in agreement with his own speech than with those earlier ones. I do not wish to touch in any detail upon the parts of this Bill which are not acceptable to those of Ls who sit on these benches; I have a rather more limited object in view this evening. Before I pass to it, however, I should like to refer to one or two observations which were made by the Secretary of State for the Dominions—I am sorry that he does not happen to be in the House at the moment.
The right hon. Gentleman expressed the view, which I think was also expressed, if not in terms, at all events by implication, by the Secretary of State for the Colonies, that we should have been shocked at the making of any agreement arising from the Ottawa Conference. That is not the case. For my own part, I yield to no one in my desire to support any agreement arrived at at any conference which I can persuade myself will really work for the unity and harmony of the British Empire. Neither will I yield to any Member of this House in my belief in the destiny of the British Empire, and the beneficent influence which it can have upon the progress of mankind and the comity of nations. If the Agreements which have issued from Ottawa, and are now enshrined in this Bill, had fulfilled the forecast of the Con- 1096 ference made by the Lord President of the Council, and had in fact resulted in a large extension of freedom of trade within the Empire without what we consider to be very serious disadvantages indeed, handicapping us in our approach to the World Conference, upon which all our hopes are now being centred as, possibly, the last thing which may save our civilisation from complete collapse—if that forecast had been fulfilled, and if there were not, as we conceive, very serious disadvantages, not only to our competitive position abroad, but also in regard to the World Conference, then, indeed, these Agreements would have had my support.
My difficulty is this: We have been told that the bonds of Empire were wearing thin, or getting threadbare, or fraying, or suffering some other process of deterioration which fitted in with the vision of whoever happened to be speaking oil the subject at the time. We were told definitely by the Leader of the Conservative party in the House of Lords that you cannot build an Empire upon sentiment. That may be true, but I do not think it is an argument that can be advanced with much force and substance having regard to the history of the British Empire, and more particularly that portion of our history in the years 1914–18. But, whether that be true or not, my difficulty is that I cannot get myself to believe that you can strengthen or found an Empire upon a basis of percentages, that it can he built and cemented by the nicely calculated balance of a little more or a little less, or by that type of sentiment which was generated at all events in some portions of the Conference at Ottawa. I mention this, not because I expect hon. Members to agree with me—I am afraid they will not—but because it happens to he my view, the view on which I have to act and take decisions and to take the personal consequences whatever they may be. I hope that that is a point of view which, if my hon. Friends cannot agree with it, they will at least respect.
The Dominions Secretary went on to refer to the compensatory tariff which has been embodied in the Agreements, and subsequently in this Bill. He extolled the value of it as a concession and an advantage, and for the purpose of promoting trade; and my hon. Friend the Financial Secretary, in mentioning this principle of the compensatory tariff, 1097 asked, "What more can Free Traders desire?" There is nothing new in the principle of the compensatory tariff. The world at large has had long and disastrous experience of it. It has played a very big and disastrous part, not in the extension but in the destruction of world trade. What it means is simply that, when an industry is specially unsuitable to any particular country, Protection is not withdrawn from it but is increased. It does not merely destroy trade. It strikes at the very root and basis of trade. The only justification or reason for world trade is that some country or some people can produce more advantageously and more cheaply than others. Obviously, to abolish this difference simply to abolish the reason for trade and if in Canada, by the process which my right hon. Friend indicated with such precision, intimating the various charges that had to be taken into account, overheads, cost of labour and material, these processes are carried out and the compensatory principle is applied, why on earth should anyone bring goods from this country to Canada when he can get them made on that principle on the spot?
The right hon. Gentleman said the compensatory tariff was not to be prohibitive. It was to be competitive. That is a contradiction in terms and a contradiction in fact. We are told that these Agreements are the foundation upon which we are to build. I wish someone, before the Debate closes, would give us some vision of the edifice that is to be erected on these foundations. In particular, I should like to have some idea of the edifice raised by the Dominions Secretary on the principle of a compensating tariff and a compensating balance. I hope no one will suggest that the compensatory tariff is a concession to this country, or that it can do anything to promote trade between ourselves and any other country with whom that process may be operating. Unfortunately, the outcome of the Ottawa Conference was not such as to enable me, at all events, to persuade myself that it was in the interest of the Empire and to persuade me to support it.
The upshot of the whole business is that some industry some day and in some degree which no one can estimate, will be able to sell more of their goods to the Dominions, but against this highly problematical advantage, which no one 1098 has yet stood up and defined with any precision, we have to set the very great, disadvantages which have been mentioned by my right hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton). We have surrendered our vastly important right to buy our foodstuffs wherever it suits us best. We are to have Protection in an increasing proportion on our food and raw materials, which will inevitably handicap us in the competition of the world and also lead to vastly extended intensity of competition in the foreign and neutral markets. Another thing which I hope will not escape attention is that the Agreements and restrictions embodied in the Bill, more particularly the quota system, are inevitably directed principally against those people with whom it is most desirable that we should come to trading agreements.
But it was not to deal with these matters that I rose. I had a more limited object in view. I wish to relate this Bill, and the proposals that it contains, to the conditions of employment and world trade in which it is being introduced and to examine it as a possible remedy in those conditions. I doubt if we have sufficiently realised that, since the War, we have entered into an entirely new era in the world's history. It is, perhaps, the saddest feature of the days in which we live that man, after many centuries of struggle to secure a means of comfortable and assured existence, has successfully solved that problem. The world to-day is entering upon an era that may be described as the complete world. Production has developed to such an extent, through the application of science, through the skill of the engineer and the chemist, and through the means for the rapid transmission of news, that there is available a productive capacity to supply not merely the reasonable needs of every man, woman and child alive to-day but of a, very much greater population than exists at present. The saddest thing is that on the distributive side of the business we are making such a complete mess of it. We have only to look at the glut of various materials that are lying idle throughout the world. In spite of this, there are 30,000,000 of unemployed, and there is more misery and anxiety than ever before in the world's history. In fact, the only people who are living normal lives, free from anxiety, are those 1099 primitive communities living within the Arctic circle or in the heart of Africa, or in other far distant places, who are immune from the benefits of civilisation.
This Bill is put forward for the reason, among others, that it is a help towards unemployment in these islands. There is a new consideration at present which is inevitably offsetting any improvement in employment that can possibly be derived from the operation of this Bill, even if it achieves the most rosy anticipation of those who have hitherto spoken in its defence, and that is the rapid development of machinism. There is nothing new in rationalisation and machinism. Production has always sought to rationalise itself. What is new about it is the rate at which it is going on to-day. There is not an industry which is not being driven in self-defence to adopt this process. At a time when trade is normal, when there are expanding markets and so on, there is no reason, in theory at all events, why the labour displaced by this rapid development of machinery should not be absorbed in the development of other industries, but in the present stagnant conditions of the world, whatever the Bill may do, it is a sad fact that the development of rationalisation puts men out of employment and adds them permanently to the body of the unemployed.
The complete summary of the position is that the wonderful system which we have built up to supply our needs is so delicate and so complex that it will only work when there is complete co-operation and goodwill between the nations of the world. There has been a complete retreat from co-operation in international relations and, until it is restored, there is no hope for the recovery of trade, either through this Measure or indeed through any other step that can be taken, neither is there any hope for the great mass of the unemployed. The full effect of the retreat from the cessation of co-operation in the world has not yet been felt. The volume of international trade is still running down; the area of international default is threatening to increase. The traders of the world are struggling and are entangled like flies in a spider's web trying in vain to escape from the difficulties into which they have been enmeshed by the folly of Governments who 1100 are resolutely engaged in hampering trade by quotas, tariffs and the like.
These are the conditions in which we are asked to consider this Bill. The full effects of the closing of the world's greatest market have by no means worked themselves out in the world's economy, and we must not forget that when the Bill becomes an Act the tariff will be far-reaching and of great height. Of our foreign imports in 1930, 83 per cent. were free. As a result of the operations of the Import Duties Act of last year our Free List had shrunk to 30 per cent. After the passage of this Bill the Free List will contain only 23 per cent. of our foreign imports. Whatever may be thought of the results, of this economic fact, we are going on steadily reducing the volume of international trade, steadily laying up our ships. Whatever opinion may be held about these particular proposals, they cannot be described as a contribution to the co-operation which is necessary to save our civilisation.
Some speakers in this Debate have mentioned the disadvantages which they saw accruing, or would be likely to accrue from these proposals in various trades in which they are interested. Some others more optimistically inclined have anticipated and spoken hopefully of the advantages which, in their view, might arise from these proposals. I would ask the House to consider also the effect of this Bill as a contribution to the solution of our world troubles. In my judgment, the most disturbing thing about this Bill and these proposals is not the food taxes, is not the constitutional aspect and not all the other points which have been urged against it from those benches, but the fact that our delegates at Ottawa should come back to this House and present this Bill to the House thinking or professing to think that it is a useful contribution to the world's economic difficulties. I should like to ask the Government what their policy is with regard to the World Economic Conference. What are their ambitions in entering it, on what are their hopes centred, and what do they envisage as a result of the Conference? Will their ambitions and their hopes be satisfied by a repetition of the successes and triumphs of Ottawa? Do they contemplate an issue of the same order, that is, a little off the top of the tariff walls 1101 here and a substantial increase in other directions? Is that the issue they have in their minds? If that is to be the out-come, the outlook is indeed grim and harsh. We can do nothing but tighten our belts and prepare to face a steady reduction of the standard of life in this country with what courage we can.
There is indeed a wonderful potential capacity for recovery in the world at the present time. There are 30,000,000 unemployed only too anxious to work. There are manufacturers and traders only too anxious to get on with their work if only the Government and politicians would stand out of the way. We saw a dawn of hope in the trade of this country for a few weeks following the proposal of President Hoover for a moratorium. Those hopes faded out again with the reaction of France to those proposals, and when France began to withdraw her gold from America. They were kindled again at the great success of the Lausanne Conference. Whatever people may say or think about it, without any question whatever it put an end to the question of Reparations for all time. It was, indeed, a great step towards the recovery of the world. Unfortunately, the Process of recovery started by those new hopes has again faded out as a result of the complete failure up to the present time of the Disarmament Conference to achieve any tangible results.
It was the principle of the compensatory tariffs to which I was referring a few moments ago which was one of the reasons which has led—and I deeply regret it, as I think everybody in this House will do—the resignation of Sir Walter Layton from the committee which is to prepare the way for the World Economic Conference. It is a profound misfortune that the Government should not have the services of Sir Walter Layton in this matter. He has served, as few men have served, with knowledge and distinction, not merely the present Government, but past Governments in international discussions and arrangements for the last 10 years. He has not only been entrusted with work by this country, but he has the confidence and personal knowledge of many men abroad with whom he would naturally have been brought into contact. It is a profound loss, and it is unfortunate that the Government should have lost his co-operation 1102 at this time for the reasons which he set out in the letter, which, to my regret, and, I believe, the regret of everybody, appeared in the papers this morning. There has been no reaction to the Ottawa proposals such as followed President Hoover's proposals or the Lausanne Conference. An hon. Member who spoke a few moments ago quoted some expressions of opinion from commercial sources in regard to the Ottawa Conference, and a previous speaker from these benches indicated that there was indeed no enthusiasm for them in any part of the country.
I noticed yesterday that the secretary of the Manchester Chamber of Commerce, in a speech which he made in the north of England, said that they contained nothing for Lancashire or Yorkshire, and that when the bareness of the cupboard was impressed upon the public mind he thought that the support for the Imperial tariff policy of the Government would be subject to a serious strain. Be that as it may, there are in the world to-day all the possibilities of a recovery. We have at hand everything which is necessary for the construction of a brave new world. The only thing which is standing in the way is the lack of co-operation and the low standard of statesmanship and government throughout the world. There has been a complete cessation of co-operation. We find it even difficult to co-operate in fixing the rendezvous for a meeting of importance in connection with the Disarmament Conference.
Mr. J. H. THOMAS
I do not think we ought to allow the hon. Member's statement to go on record unchallenged. I can understand the disagreement of the hon. Member who, until a few days ago, was a Member of the Government, but I want to know from him whether he or any of his colleagues, outside Ottawa, on disarmament and on other matters, ever took exception of any sort or kind to the Government's policy.
§ Mr. WHITE
I welcome the opportunity of answering that question. If my observations conveyed that impression, I have given an impression which I did not wish to give. I was speaking not of this Government but of the general level of statesmanship throughout the whole of Europe. There was nothing personal to the present Government in what I said. I think that my right hon. Friend will probably agree 1103 with me, if he surveys the situation from the angle at which I am looking at it, and he will come to very much the same conclusion. At any rate, I feel that there is in the world to-day the elements of an entirely new world, something entirely better than that which the people have ever enjoyed before, and it is obvious that it is the poor statesmanship in the world to-day which is standing in the way.
I would ask the Government to enlarge their vision in these matters, to enlarge their ambitions and to seek at the World Conference to produce something far better and far wider than this Bill, because something of this order is no use in the present situation. We do not want a crazy pavement on which the traders of the world are to walk with stumbling footsteps. What we want is a broad highway, and to that this Bill makes no contribution. I ask the Government to enlarge their ambitions, to take bolder and more radical steps, to do something which is worthy of British statesmanship and worthy of the lead which we are in the position to give and which has some real relation to the needs of the situation.
Duchess of ATHOLL
I do not wish to follow the hon. Member for East Birkenhead (Mr. White) along the rather gloomy path that he has trod, further than to say that I think, if he will look at the Board of Trade returns, he will see how many foreign countries which send their primary products to us in large numbers have suffered in the last few years from the competition in our markets of state-aided dumping. He will then realise how very much these countries stand to benefit by the cessation of State-aided dumping in our market and I hope that he will realise that the Government are rendering in this way a real service to international trade. No greater service to international trade could be rendered by other countries than that they should follow the example of our Government in this matter. By doing so they would clear out many channels which are at present clogged and choked.
A week ago I addressed to the Government a few questions, and I can well understand that, owing to the many topics that the Ottawa Agreements raise, it has not been found possible to answer them, 1104 but as one or two of them seem to me to be of importance, I venture to put them again. One question is whether it will be possible to take any action in regard to state-aided dumping before the expiry of six months. I rather fear from what has been said that that will not be possible. If that is so I would bring before the Government once more the very serious position in which several branches of British farming will find themselves, because of the competition of state-aided dumping from which they are at present suffering in regard to barley, butter and poultry. I wish more especially to stress the case of poultry. I do not wish to go over the ground that I covered last week. I spoke of prices and of the increasing imports, particularly of poultry coming from Russia. I wish to add that if the Board of Trade returns are examined it will be seen that we are entering upon the time of year when the largest quantity of Russian poultry is wont to come into the country, and I urge the Government to see what emergency steps can be taken to save our poultry industry and other branches of farming from this very serious menace in the next few months.
It is clear from a perusal of the Bill that it affords no security against State-aided dumping to the British producer except in things in which the Canadian producer may be interested. The realisation of this fact will bring a great deal of disappointment to producers in various industries in which Canada is not concerned. I mentioned the other day the large number of Russian doors which it is being attempted to send into this country at not more than 4s. each c.i.f.. London. I mentioned other industries such as the glue industry. To-day, I had an admission from the Secretary for the Department of Overseas Trade that from Germany certain milled-oat products, including oatmeal, are coming here under conditions facilitated by State co-operation. The importations of oatmeal from Germany are causing a great deal of loss to our millers and are adding to the difficulties of our farmers. I would ask the Government to give us an assurance at an early date that they will not do less for the British producer, whether manufacturer or farmer, to secure him from unfair competition than they have pledged themselves to do for the Cana- 1105 dian producers. I do not think that we can ask for less.
I would repeat a question which I put a week ago, namely, to ask whether the cessation of State-aided dumping on our markets will involve giving notice in regard to any other Treaties or commercial agreements besides the Russian temporary agreement, and if so can we know how long it will be before action can be taken to prevent State-aided dumping from the other countries concerned. I should like to touch on a reference which was made the other day in the "Financial News" to the fact that while the Ottawa Agreements were going on a deal was put through by the Aluminium Corporation of Canada with Soviet Russia for the exchange of Canadian Aluminium for Soviet oil, a deal which the "Financial News" said received the approval of the Bennett Government. It is rather a serious charge to bring or to be implied against the Government of Canada that while their Government was pressing on us that we should take steps to stop dumping from Russia in our market, that Government should have been approving a bargain between the Canadian Government and the same Russian Government. Those who have made that charge or implied it forget one very important fact, that Russian oil is not one of the things on which Canada has put an embargo. Therefore, Russian oil can go into Canada without approval being required on the part of the Canadian Government. If those who made the statement had inquired a little further they would have found that the control of the company in question is not in Canada but in America, and, therefore, this deal, which has been used to throw what seems to me a very disagreeable aspersion on the Canadian Government is something in which they were not concerned whatever.
Let me refer to one other matter again arising out of the Debate last week. In the course of that discussion the hon. Member for Gower (Mr. D. Grenfell), referring to a speech I had made an hour or two before, said that he knew that a good deal of the information which I had given to the House on former occasions in regard to Soviet Russia was not to be relied upon. I do not want to waste the time of the House on a personal matter, but it is only fair to myself that I should say that it is nearly a 1106 year since I published a book which tried to make clear to the public the contents of the Blue Book on labour conditions in Russia published by the late Labour Government. I gave my authority for every thing I said in that book. They were nearly all official authorities, and, although I have been favoured by a good many reviews, I have not seen any serious attempt in any responsible quarter to challenge a single statement I made in that book. I only know of one attempt that was made, and I am ready to stand convicted of having correctly quoted an incorrect date given by my authority for an advertisement in a Soviet paper.
Whenever I have spoken in this House on Soviet Russia I have attempted, whenever I could without using up too much of the time of the House, to indicate my authority, and I have rarely said anything except on official authority, either the authority of our own Board of Trade returns or official Soviet publications. Therefore, I wish to say to the hon Member for Gower that if, instead of making vague and general charges, he will specify what statements of mine he has reason to believe are incorrect and will give his reasons and his authority, I shall be glad to make the statements referred to clearer and be ready to leave to others, especially those who have had some experience in sifting and discriminating between evidence, to judge as between his authority and mine. I have always felt that it is one of the principal duties of representatives in this House to try and make facts which are of importance to the country clear to the people of the country, and it has been my endeavour from first to last in dealing with this grave, intricate and difficult question to bring forward facts which I do not think have been made quite clear or which sometimes in my opinion have been deliberately obscured or ignored, and I resent very much the suggestion that I have not been careful in the statements I have made to the House.
§ Mr. PARKINSON
I was much interested in the appeal made by the hon. Member for Birkenhead East (Mr. White) for co-operation between nations and for a higher statesmanship. He was speaking of rationalism. We have had some experience of rationalism in regard to employment, and in my view the higher statesmanship which the hon. 1107 Member wants should apply itself to bringing about shorter working hours and higher wages, and the rationalisation of the means of distribution and other things which will tend to help the whole nation out of the slough of despond. The hon. Member for West Derby, Liverpool (Sir J. Sandeman Allen) said that the Ottawa Conference had been a real success, and that it had received the congratulations of the Chambers of Commerce. Apparently, they represent the opinion of the people who matter. We do not think the Chambers of Commerce are everything that matter in this country. There are other interests of much greater importance than the Chambers of Commerce.
I would like to devote myself for a few minutes to the statements made by the Secretary of State for Dominion Affairs. The right hon. Gentleman began by saying that the national aspect of the Government was always uppermost in our minds. He told us that the Lord President of the Council had said that they were going to Ottawa with a free hand, and that they never lost sight of the Imperial aspect of the case. I am only wondering whether the Government have lost sight of the interests of the people at home. After all, the people of this country stand to gain less from the Ottawa Agreement than any other part of the Empire. We cannot forget that we have in this country at the moment something like 1,000,000 miners, of whom probably one-third are totally unemployed, and they have families to care for. In the whole country there are nearly 3,000,000 people unemployed, and they have their dependants. These people require all the care and attention we can give them. They require it just as much as the people in the distant Dominions.
The Secretary for the Dominions went on to attack my hon. Friend the Member for Caerphilly (Mr. Morgan Jones), because my hon. Friend took upon himself the championship of the miners. The right hon. Gentleman wanted to know where the mining interests had gone, and where their champion was. I do not know why the right hon. Gentleman asked a question of that, kind. He might ask himself another question. The railwaymen at one time had a champion. 1108 where has he gone? He has simply been deposed and is a thing of the past. The miners can take care of themselves. The right hon. Gentleman gave figures of coal imported into Canada before and after the Ottawa Conference. He gave the amount in tonnage, but when asked for the value he said that that did not matter. I would put to him this question: To what extent have we lost coal markets in Europe owing to the action of the National Government through tariffs?
Mr. J. H. THOMAS
I will answer right away. Not a ton. I repeat, not a ton, and I emphasise it, and so that there can be no ambiguity I would state that the nations which my hon. Friend has in mind are at this moment in negotiation with the British Government because they realise the value of the British market to them. We have not lost a ton. What I want my hon. Friend to keep in mind is this: Do not tell the miners we have lost this trade because it would not be true.
§ Mr. T. WILLIAMS
Is the right hon. Gentleman not aware that the President of the Board of Trade to-day, in reply to a question by a supporter of the Government, said that the embargo on British coal to Germany, which has been in dispute for several months, is still only at the stage of negotiations? Is it not correct that the German Government imposed an embargo which was almost equivalent to 15 per cent. of their normal imports of British coal, and that they imposed it after the imposition of our import duties?
§ Mr. THOMAS
I am so glad that my hon. Friend has intervened. Miners and railwaymen will be reading this and I do not want them to be trapped. It is quite true as my hon. Friend says that Germany and France and others imposed embargoes but it was before Ottawa and not afterwards.
§ Mr. PARKINSON
The question which I put to the right hon. Gentleman was this. "To what extent have we lost coal markets in Europe owing to the action of the Government through Import Duties"? I will put it in that way instead of saying "through tariffs." He has said that we have not lost any since the Ottawa Conference.
§ Mr. PARKINSON
Perhaps the right hon. Gentleman will allow me to proceed. I am very much surprised at a statement of the kind made by the right hon. Gentleman. He knows that answers have been given to questions in this House which do away with the statement he has made, and that in any case his statement leaves my question unanswered.
§ Sir P. CUNLIFFE-LISTER
I understand that the hon. Gentleman is now basing his challenge on answers given by Members of the Government. I am speaking from memory, as I think he is, but am I not correct in saying that before we adjourned, the President of the Board of Trade gave an answer which showed that the embargoes on coal imposed in foreign countries—against which we protested—were put on before we introduced any tariffs.
§ Mr. LANSBURY
On a point of Order. I want to ask you, Mr. Speaker, whether it is in order for two Ministers in succession to interrupt a speaker in this way?
§ Mr. THOMAS
On the point of Order. The hon. Member for Wigan (Mr. Parkinson) within the recollection of the House, said he proposed to ask me a series of questions and surely I am in order in answering the question that he asked.
§ Mr. LANSBURY
Not until the hon. Member has finished his speech. The right hon. Gentleman knows better than that.
§ Mr. SPEAKER
I understood that the Leader of the Opposition rose to put a point of Order. No point of Order arises, and I was wondering who was in possession of the House.
§ Mr. PARKINSON
I suppose we may agree to differ on this point. I believe, however, that Germany imposed restrictions on three different occasions after the imposition of the Import Duties. On the question of the importation of bituminous coal by Canada from Great Britain in 1931, it was something like 111,000 tons, but the import from the United States was nearly 10,000,000 tons. 1110 I should like to know, did the British delegates request Canada to increase the quantity of coal imported from Great Britain? If they did so, and if they had only got a concession of 10 per cent., it would have meant at least 1,000,000 tons more going from this country to Canada which would be a great help to all our industries. That 10 per cent. would have made a real difference. If our delegates had asked for it—I do not know whether they did so or not—it would have been evidence of a real effort to do something in that respect. As regards migration, we are told that it could not be dealt with owing to unemployment in the Dominions and Colonies. That statement if I take it correctly means that it can only be made possible by sacrifices on the part of Great Britain and not of the Dominions.
Then of course we have had the usual attacks upon the late Cabinet, and the suggestion that they had agreed upon Protection. It is sought to make out a case by comparison to justify the Ottawa Agreements. Why does the right hon. Gentleman opposite, along with the Prime Minister, try to abuse Cabinet confidence by insinuation? Is it not better to have these questions put openly to let the whole nation know what has been done, and let them decide upon the matter. Surely that would be much better than to have insinuations thrown across the Floor of the House day after day. Now, of course, I understand that we are bound by the terms of the Ottawa Agreements or at least that we shall be so bound, because we have no power in this House to alter them. I should like to ask the right hon. Gentleman whether he has seen the article in the "Manchester Guardian" to-day, where it says:On Monday by an Order in Council he took regenerated cellulose imported from Britain off the free list and clapped on a duty of 20 per cent.If that has been clone by Mr. Bennett, I believe he has taken advantage of his position, and that he ought not to do it. It also suggests further that if a man can do that kind of thing, he can make it very awkward for the Lancashire products.At the same time he raised the duty against foreign countries by 10 per cent. This seems hardly to be in the Ottawa spirit, 1111 but the Canadian Government is apparently within its rights. All that it promised. … 'was that no existing duty shall be increased on United Kingdom goods except after an inquiry and the receipt of a report from the Tariff Board.'I do not know whether that was a breach of contract or not or whether Mr. Bennett is not taking advantage of the opportunity which has come before him. If he is, it is up to the Lord President of the Council to draw his attention to what has been done.
We had a question to the right hon. Gentleman protesting about the ending of the Russian Trade Agreement. That Agreement is to be ended, and I think it is wrong, speaking personally and on behalf of the party with which I am associated, as it is one of the greatest future markets of the world, and when we are in the trade depression in which we find ourselves, I do not think we can afford to sacrifice any market, no matter in what part of the world it may be. He gave comparisons of exports and imports, but, of course, we are all familiar with these comparisons, and I should like to read one or two extracts. Speaking at the Queen's Hall on the 12th October last, the right hon. Member for Darwen (Sir H. Samuel) said:It should be our effort to develop further our trade with Russia, with its vast population of 150,000,000. We did not scruple to trade with the Russia of the Tsars, and I see no reason why we should not trade with the Russia of the Soviet.Then we had the statement made by the secretary of the Amalgamated Engineering Union in Manchester, and I hope the House will agree that Lancashire will be very hard hit on the question of machinery, if the Agreement actually comes into operation, because Lancashire has been supplying a large amount of material in the different kinds of machinery to the Russian Government. Mr. R. Moss, the Manchester district secretary of the Amalgamated Engineering Union, said, in the course of an interview:If it is true that Russian orders are to stop, it will be a terrible blow to the Manchester district—a tragedy, nothing less. On the mere suspicion that it may be true, the numbers of unemployed in the engineering and allied trades are already increasing seriously. In Manchester and Salford there are about 14,000 men in these trades on the live register of unemployed. In the whole Manchester area of the A.E.U., including 1112 Warrington, Ashton, Broadheath, Oldham, and similar centres, the allied trade unions have about 15,000 unemployed. The majority of the 50,000 would soon be out of work if there are no more orders from Russia.That is taken from the "Manchester Guardian" of the 8th October. I should like to put it before the House that these things must really be taken into consideration. We cannot compel the Government to consider the matter, but we can at least lay it before the Government as something to which they ought to give full consideration, in view of the fact that trade is as it is at the present time. With regard to another statement made by a hundred per cent. supporter of the Government—I mean the right hon. Member for Tamworth (Sir A. Steel-Maitland)—nobody will doubt his loyalty to the Government, and I think the Government will not doubt his sincerity. This rather a longer extract, but I think it ought to be made known, as it is part of a speech made by the right hon. Gentleman in Edinburgh on the 18th October last, when he said:Russia is faced at the moment with two great temporary difficulties—the need for capital and the present agrarian difficulties. But if those are surmounted, I have no doubt of the success of the Russian scheme of industrialisation. It is not a question of the five-year plan, nor even a ten-year plan. But 15 or 20 years will probably see an industrialised Russia. If this view of the future of Russia is a true one—and I believe it to be so—the question of the attitude of this country towards Russia is one of great importance. I went to Russia with a strong dislike of the way in which the Bolshevik regime was started. I have that dislike still. I am, from the point of view of the immediate future, in favour of increasing trade with Russia as much as possible. In this country capital is lying idle. In Russia it is urgently needed. Why should not the supply meet the demand? Of course, security would have to be forthcoming, and this should not be impossible.I do not think I need quote any more. I have given the opinions of people who are really in the know. I want to ask my right hon. Friend, when he talks about comparisons between exports and imports: Since when has he found out these inequalities? He was a member of the last Government which extended the period of credit, and surely everything has not gone badly during the lifetime of the National Government? He was a member of the last Government, and he is a member of this, and, if one may para- 1113 phrase a line of the "Vicar of Bray," it would read something like this:Whatever Government is in power, shall remain in office.Whether that be the intention of the right hon. Gentleman or not, or whether he is altering his opinions and views simply to meet an emergency, I do not know, but I do expect him at least to do all that he can to be consistent in these matters. A man cannot change his opinions too frequently; he must have some principles on which to rest. The right hon. Gentleman finished on the note that we must take every step that we can to help each other. I agree; every country should take every step to ease the burdens of the others, and to help them over their difficulties. When delegates went to Canada, this country understood that their objective was to lower tariffs and barriers. The Conference, however, has put tariffs on our people in order that preferences may be given to the Dominions and Colonies. It might also be said, as was mentioned by the hon. Member for Orkney and Shetland (Sir R. Hamilton), that there has not been any kind of balance-sheet or forecast given to the Government as to the amount of money which this arrangement will cost the country. I do not know if any final statement has been made, but it has been bandied through the Press that something from £10,000,000 to £12,000,000 will be imposed upon the consumers of this country. Of course, no reduction in the ad valorem tax can be made except by consent of the Dominion.
We have countries very near us with which we are doing heavy trade, particularly in dairy products—countries like Denmark, Sweden and Norway. The relations between Denmark and this country have been maintained at a high level for a considerable time, and Denmark has become a very good customer of this country. We must also take into consideration the position of Norway and Sweden with whom our trading relations have been satisfactory. Denmark is one of our best customers, and, if we adopt the policy of taxing Danish butter and other products, it will reduce our importations from that country and will inevitably reduce Denmark's ability to purchase our goods. I submit that these things are really worth considering, because owing to the 1114 nearness of those countries it is possible for a great trade to be done which will be beneficial not only to one country but to both. There is also the question of other dairy products, with which I will not deal now.
It has been stated by the Lord President of the Council that Canada will allow us to import 8,000,000 dollars worth of goods free. On the other hand, this country is an open door for all the exports from Canada free. I want to know whether it is a fact that United States goods entering Canada will pay lower rates than British goods will after the acceptance of these Agreements? That is a perfectly proper question to put. It is only by answers to questions like that that we shall really get to know exactly how the Agreements will operate. The same arguments could be used in regard to many of the articles mentioned in the Schedules to the Bill. What effect will they have on our trade agreements with foreign countries, especially with South American countries? We have built up a great trade with and also have invested a tremendous amount of capital in those countries. How are these Agreements going to affect our trade relations with them, and what effect will they have upon those British investments? It is not likely that we can hope to secure really good returns on our investments if we cripple the trade of those countries by breaking the agreements which are already in force or allowing them to run out. Those countries have populations which are increasing, and they offer very great prospects as future markets. Are we to say to them that we cannot enter into agreements with them even though they offer us favourable terms?
We well remember the visit of the Secretary of State for the Dominions to Canada. I do not need to recapitulate what was said by him, because I could not do it in the same form as he did. He went over there and took a shipload of coal, which of course was sold, and he came back brim full to the top with new orders—so many orders that they could not be carried with the ordinary sea transport available, and new ships were to be built. Whether they were built or not I do not know, but if they were they passed in the night, because nobody has heard anything more about them. As re- 1115 gards the position with which we are now faced, the Prime Minister has told us:Every one who has been in direct contact in economic negotiations with the representatives of the Dominions knew that this was the kind of Agreement that had to be made if the Conference was going to succeed. … All that we did was to put up the stiffest fight that was possible in order that these tariffs should be as advantageous as possible to this country."—[OFFICIAL REPORT, 18th October, 1932; col. 139, Vol. 269.]The Lord President of the Council made a further statement, He asked a question:What have you got out of all this, what does it mean in trade? I answer quite frankly; I do not know; no one knows. What we have done is to make the way a great deal easier, and it is up to British men to seize the advantages which we believe we have made for them."—[OFFICIAL REPORT, 20th October, 1932; col. 452, Vol. 269.]Those are statements by our two leading statesmen, and neither of them gives encouragement. Both are very doleful and doubtful. I do not think either of them believes in his heart that we have got anything at all or that this country will be one penny better off after these Agreements than before. I fear that the suggested beneficial effects of this Bill will not materialise to the interest of our poor consumers, but that, on the contrary, they will be called upon to bear the burdens out of their own meagre earnings. It is time that we had a straight statement as to the position of this country. It is not right to keep it vague. If we believe that we want to be straight, one with another, we ought to understand thoroughly each other's intentions in matters of this kind. It is not a question for Tory, Liberal or Labour members of the community, but for the community as a whole, as to whether we are to get a good deal out of these Agreements, or whether we are to be satisfied with a mistaken agreement, which is not going to avoid all those things which we expected it would avoid.
§ Mr. J. P. MORRIS
The range of the discussion which has taken place on the Ottawa Agreements has been so extensive and minutely explored, that it is with difficulty one now attempts to make a contribution without incurring the risk of boring the House with useless repetition. I say "useless" advisedly, because I am convinced that there is no hon. 1116 Member with an unbiassed mind who carefully studies the speeches of the leaders of the delegation at Ottawa, but will agree with me that those Agreements marked the biggest advance that has ever occurred in the economic history of the British Empire. Empire channels have been cleared for an increased Empire trade, an increase which will be mutually advantageous to every partner in the British Commonwealth of Nations. Therefore, I say that it is useless at this stage of the proceedings to examine microscopically every little detail of the Ottawa Agreements. The right way to approach an examination of the Ottawa Agreements is to take a comprehensive view, and to ask oneself: Do the advantages outweigh the disadvantages, and is the result one which this House ought to approve?
Will these Agreements be the means, in the first place, of lifting the depression which now encircles British Empire trade? Secondly, will they be an example to the rest of the world, that good will and co-operation is a much better policy than the madness of economic nationalism, with its corollary of high tariff walls which have largely been responsible for throwing out of gear the machinery of world commerce? My view is that the Ottawa policy will achieve both those ideals. I am fortified in my opinion by the principles enunciated by Mr. Bennett, the Prime Minister of Canada, at the Conference. In order to dispel the unjustified, mischievous and malevolent criticisms which have emanated from the Labour benches, and from certain sections of the Liberal benches, that this country has been milked dry by Canada in return for the doubtful advantages which we receive, may I be permitted to read an extract from the speech which Mr. Bennett made at the opening of the Conference? Mr. Bennett said:We have a common purpose. We have a supreme desire to achieve it, and there can be no group of countries in the wide world so capable of united action as are the countries which comprise the Empire.Further on he said:We may take heart, for there is no task of which we are incapable. When we marshal the strength of the Empire in the sum total of its co-operative parts we are invincible, provided each part brings to the whole its maximum contribution. None of us should come to this Conference asking that others do for us what by every test we should do for ourselves. We must see 1117 to it we are prepared to make some contribution to the whole, knowing that in that way only can we expect the whole to make some contribution to us.Similar sentiments were expressed by all the leaders of the delegations at Ottawa. They are wonderful sentiments, and I honestly believe they were expressed with the profoundest sincerity. For my part, I am prepared to trust the Dominions and to believe in their good faith to implement the promises they gave to secure peace, happiness and prosperity in the Empire.
I desire to address myself to the two conflicting attitudes adopted by the right hon. Gentleman the Member for Darwen (Sir H. Samuel), in the one case, just prior to the General Election and the other when along with his two colleagues and their gregarious flock they deserted the National Government at a time when the crisis confronting the country is even more severe than that of 12 months ago. The right hon. Gentleman, after admitting that he was prepared to examine with an unprejudiced mind—mark the phrase, "with an unprejudiced mind"—the question of tariffs, the expansion of exports and the contraction of imports, commercial treaties and mutual economic arrangements with the Empire, as laid down in the Prime Minister's manifesto, now throws over the pledges he gave because, as he says, this Agreement ought not to be enforceable for more than six months, and that the Government have no right to pledge——
§ Mr. JANNER
I think the hon. Gentleman has rather made a mistake. My right hon. Friend the Member for Darwen does not say the Agreements, if they are accepted, should not be enforced for a longer period than six months. He said a very much more sensible thing than that. He said that they should be terminable by six months notice, which is entirely different from the statement the hon. Member has just made.
§ Mr. MORRIS
That is exactly the point that I am making. If the Agreements can be terminated at any moment on the giving of six months' notice, what is the difference? The Agreements might be entered into to-day and abrogated next week on the giving of six months' notice. As I was saying, another objection of the right hon. Gentleman the Member for Darwen was that the Gov- 1118 ernment have given a pledge that these Agreements would remain in operation for five years. In the opinion of the right hon. Gentleman the Member for Darwen, not this British House of Commons, but any one of the Dominions, should decide in what manner and to what amount taxation should be raised in this country. That is what he terms the constitutional issue. He also declared with vehemence that our hands are now tied in negotiating trade agreements with foreign countries. Really, I have never heard such nonsense in all my life. I could easily answer the objections raised by the right hon. Gentleman, but more skilful brains in a more capable manner have spiked his guns, and, as far as I am concerned, I consign his constitutional objection to the limbo of lost causes. Before I finish, I will read another extract from Mr. Bennett apropos of the duration of these Agreements. This is what he says:We must decide our course and follow it unswervingly. An agreement terminable on short notice would, I fear, have but the effect of increasing instability of conditions, and trade stability is essential to our recovery. Furthermore, a short-time agreement would in our view but suggest real doubt as to its backing. We have come together in confidence in our power to make out a plan for our common benefit. Let us manifest this confidence by adopting a plan the lifetime of which will outlast any vicissitudes which may counsel its abrogation. But provision for flexibility must be made so that either country may negotiate foreign trade agreements without impairing the effectiveness of great preferences. I say that in the successful pursuit of this plan we would achieve the added power which we all desire to enlarge our place in markets beyond the Empire.In view of these statements of Mr. Bennett, and of the complete answers given to all the objections raised by the right hon. Gentleman the Member for Darwen, and not for a moment doubting the sapiency of his mind, I find it extremely difficult to believe that he ever brought to bear the unprejudiced mind that he promised us. I speak feelingly on this matter, because, in obedience to the wish and desire of my Leader, in an attempt to make the National Government a reality, and to prevent repercussions in neighbouring constituencies, I was prepared to offer, and indeed did offer, to resign my constituency in favour of the right hon. Gentleman the Member for Darwen in order to ensure his safe 1119 return to this House. Had I done so, I should now be feeling more distracted and disappointed with the right hon. Gentleman than I now am. The older one gets, the more shocks one receives, and I was profoundly disappointed that the intelligentsia of the Liberal party should be so blind as not to have observed the change in the circumstances of this country. My own view is that their motives have been actuated by a desire to make a last attempt to fan the dying embers of Liberalism. They are not only obstinate, but they have polished the obstinate rock of last-ditch obstinacy. The Free Trade policy which may have been best for this country in the nineteenth century cannot possibly claim that distinction in the twentieth. It is a policy that has no regard to the enormous growth of economic national- 1120 ism in all the countries of the world since the War. The position of this country has changed enormously since the time in 1846 when the policy of Free Trade was prosecuted with such vigour by Cobden and Bright.
§ Ordered, "That the Debate be now adjourned."—[Captain Margesson.]
§ Debate to be resumed To-morrow.
§ The remaining Orders were read, and postponed.