HC Deb 20 July 1933 vol 280 cc2132-40

Motion made, and Question proposed, "That this House do now adjourn."—[Captain Margesson.]

11.1 p.m.

Mr. LEVY

I make no apology, even at this hour, for raising the question of Japanese competition, because it is of such vital importance to the British Empire as a whole as well as in particular to the Colonies. On Friday last the Secretary of State for the Colonies was making a survey of the work under his administration, and I think I am within the recollection of the House when I say that his survey occupied one hour and a-half, and during that hour and a-half he did not utter one single word with regard to that competition which is invading the Colonies and other countries in the form of an economic menace unknown in the history of this land. I do not intend to take up very much time, because there are a number of hon. Members who desire to speak on this subject, and I hope they will give ample time for the Minister to make his reply.

I could deal with various manufactured articles which are being exported from Japan to the various countries in the British Empire, but for the purpose of my case I desire to deal with two industries, the silk industry and the cotton industry; and I want the Minister to say in his reply what he is going to do about it, what action of an effective character the Government are going to take, and when they propose to deal with the matter. Japanese competition in the silk and in the cotton industry is a matter of extreme urgency. Our difficulty is that very few people outside the industries concerned recognise it. It is imperative that something should be done without delay if incalculable injury to those industries is to be avoided.

I do not want to worry the House with a lot of figures, but it is impossible for me to put up, as I am proposing to do, an unassailable case without boring hon. Members with some figures showing how indisputable are the facts. The position in the silk industry is shown generally by the decline in the world exports of British silk and the expansion of Japanese world exports of silk in the last two years. Between 1930 and 1932 British exports of rayon piece goods to all parts of the world, including Empire markets, fell by over 20 per cent., and in the same period the Japanese exports increased by over 80 per cent. This is most disquieting penetration by Japan, and it is not only continuing, but it is increasing. Month by month it becomes more serious. Let, me illustrate this from the home market. In 1931, the export of Japanese rayon tissues to this country amounted, in round figures, to 18,000 square yards, and in the first half of 1932 the Japanese export was 16,000 square yards. In the second half of that year it had expanded to 240,000 square yards, a total of 256,000 square yards for 1932. I wish to compare that with the first three months of this year, when Japanese exports of rayon tissue to this country were not less than 150,000 square yards, equal to 600,000 square yards a year, and more than 33 times the amount exported here in 1931.

In Empire countries, the same alarming results are shown. In 1930, Japanese exports of rayon tissue to the principal Empire markets was 46,000,000 square yards. In 1932 they were 71,000,000 square yards. In many of the Colonial markets Japan is doing a big and increasing trade, and buying practically nothing in return. For instance, last year Japan sold goods to the value of nearly £300,000 to Jamaica, but Jamaica sold to Japan goods only to the value of £360. Much damage is being done to British manufacturers by this Japanese competition in silk goods which are exact copies of some of the British cloths in quality, colour and design. My constituency is a heavy sufferer from this competition, because the spun silk yarns which are made in certain districts of Yorkshire for this style of cloth are no longer in demand.

I want to mention a few figures in regard to cotton. The cotton industry is equally hard hit. The latest official, comparative figures of British and Japanese exports show that Japan is advancing enormously, while we have lost, and are still losing, ground. In January, 1932, we exported a total of 179,000,000 square yards and Japan 89,000,000 square yards, but in October, 1932, our exports had dropped to only 138,000,000 square yards, but Japan's had increased to 200,000,000 square yards. In British Empire markets everywhere, the same sorry tale must be told. While Japan is encroaching greatly on British markets, our share of the import trade with Japan has fallen steadily. Two of our most valuable industries are being killed, and there is nothing slow about the process; it is proceeding apace. The latest report of the Department of Overseas Trade in this matter contains this arresting passage: These successes of Japan have been obtained by a deadly combination of low wages, good workmanship and favourable exchanges. Japan offers less and less prospect as a market for the manufactured goods of other countries. She is now established as one of the most serious competitors of those countries. I ask the Minister: What are we going to do, not in six months' time, not in 12 months' time, but now? I most urgently ask the Government to act soon in defence of the British industries concerned. Time is against us; it is on the side of Japan. She is digging herself in commercially all over the world. If we delay too long, we shall never be able to recover the enormous ground that we have lost.

I think I have quoted sufficient facts to put up an unassailable case, which I trust will prove conclusively, not only to the Secretary of State for the Colonies, but to the Government generally, that some action—and effective action—has got to be taken at once. Conversations and conferences may be all right, but in the meantime our trade is being taken away from us in the foreign markets of the world, our manufacturers are ceasing to employ the number of people that they ordinarily would employ; and, if it is the desire of the Government to decrease unemployment as speedily as possible, and to study the interests of this country and of the British Empire in accordance with the terms of reciprocal trade which were foreshadowed by the Ottawa Agreements, I sincerely hope that they will take this menace of Japanese competition seriously to heart, and will do something effectively to stop it.

11.12 p.m.

Mr. HAMMERSLEY

It is, perhaps, unfortunate that the exigencies of Parliamentary procedure make it necessary for us to deal with this extraordinarily important subject at this late hour of the night. It is because I recognise the exigencies of that procedure, and the necessity of giving ample time to the Minister to reply, that I propose to be extremely brief. Until recent years, mankind has accepted it as a premise and an axiom that cheaper costs of production, economies which can be made in production in general, must in the long run react to the benefit of mankind, to the progress of mankind, and so, finally, must lead to a higher standard of living throughout all the communities of the world. But, since the War, the inventive faculties of the West have been allied to the lower material requirements of the East, and we have seen, as a result of that combination, production at a hitherto undreamt-of low level of costs.

The whole progress of what one might describe as the old commercial countries is now in jeopardy. There is hardly a, commercial enterprise in the Western world which does not tremble at, the prospect of unrestricted Japanese competition. The problem is one of vast magnitude, and, though one realises the great importance of the office of my right hon. Friend, I do not think he will disagree with me when I say that we cannot expect the Secretary of State for the Colonies to solve, of his own power and his own volition, this very grave problem. We appreciate very much his attitude in saying that, as far as he is concerned, he will do what lies within his power to bring the policy of the Colonies into line with such a policy as may be indicated by the Board of Trade as in the best interests of this country. That is reasonable and fair, because it is indeed a problem of very great magnitude, and one which cannot be dealt with in any piecemeal fashion.

As regards our own country, it necessitates our looking at the situation from the point of view of the home market, of the neutral markets of the world, of the Dominion markets, and of the markets of the Colonies. But we do ask the assistance of my right hon. Friend, as representing the Colonies, in respect of those aspects of the problem over which, in our view, he has control, and in respect of which we believe he can be helpful. I should like to refer to one specific case, that of Ceylon, in which we feel the Secretary of State could, within the ambit of his responsibility, be more helpful in the situation that exists. The Ottawa Agreement indicated that we were to get reciprocal advantages from Ceylon. We were to give Ceylon definite advantages in respect of goods that we purchase and Ceylon in return was to give us advantages. The constitution of Ceylon was laid down by the late Labour Government. It is full of paper safeguards and for that reason is an interesting example to those who are about to institute a new constitution for India. That constitution makes it possible for the Governor to have overriding powers in certain circumstances. Clause 22 states: If the Government should consider it of paramount importance in the public interest that any Bill which the Council is empowered to pass should have effect, the Governor may declare that any such Bill should have effect as if it had been passed by the Council. This position of the power of the Governor to override the constitution in certain circumstances has been used. My right hon. Friend may say that the power that lie holds under the Constitution is of such a character that it is inadvisable in present circumstances to use it. What is understood by the words "paramount importance," has been decided in more than one case. If in cases where the authority of civil servants is in question it is within the power of the Secretary of State to overrule the Council of State, in my view, when a question of Government policy, a question involving the livelihood of large numbers of our fellow countrymen, is as stake, he is justified in maintaining that a position of paramount importance has arisen. I imagine the difficulties of the Secretary of State, but he must also recognise the difficulties under which we, who represent industrial constituencies in the North labour. We are anxious to help him in these difficult times as much as we can, but it is not a fair proposition to ask us continuously to refrain from bringing to the attention of the House and the country these very difficult problems if in fact we are not going to get a solution. It may be that no solution is possible but it is far better that. the country should know that no solution is possible than that we should remain under any misapprehension. In these circumstances, I hope that it may be possible, while the Government are engaged in these world affairs, for them not to overlook the importance of this Empire economic unity. I hope that the Secretary of State will be able to give us some reassuring words as to the future prospects with regard to Japanese competition.

11.21 p.m.

The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister)

I am delighted that the hon. Gentleman should raise this question at any time or place. I did not deal with it in what was a prolonged speech on the Estimates of my Department the other day because the President of the Board of Trade had only a short time before stated with precision exactly what negotiations he was undertaking, the scope of those negotiations and their object, and I had made a broadcast speech in which I dealt with this to the whole of the Colonial Empire. There were a number of other matters with which I had been specifically asked to deal. The hon. Gentleman is right when he says that it is not primarily a matter for the Secretary of State for the Colonies. We must, on matters of trade, take the advice of the President of the Board of Trade. No one can certainly give better advice, and it would be very much out of place if I tried to conduct the trade policy of this country rather than the trade policy for the particular regions of the world for which I am responsible.

There is no difference of opinion in this matter. Japanese competition is extremely serious in every part of the world, and in this country also increasingly so. Another thing is clear, namely, that Japanese competition stands absolutely in a class by itself and has to be dealt with as a separate proposition. The question is quite distinct when you are faced with competition from France or America or other countries where we have preferences which give us a turn of the market, but which are inadequate in the case of Japanese competition. I have seen instances of artificial silk goods in which the difference of price ranges from 150 per cent. to 200 per cent. That is a wholly different proposition. What is more, it is unreasonable to ask the Colonial Empire to deal with it in any other way. In the Colonial Empire preference has to come by good will. One has a certain authority, in certain cases; in other cases it rests entirely with the Colony itself, and no Secretary of State can force it through. It would therefore be impossible to ask them to put up duties to the extent of 200 per cent. against countries where that procedure was quite unnecessary and against countries to whom they sell an enormous quantity of goods.

Mr. LEVY

No.

Sir P. CUNLIFFE-LISTER

I am not talking about Japan. I say that to ask the Colonies to put on a duty of 250 per cent. against other countries who trade very largely with them is quite unnecessary in order to give us a turn of the market. Therefore Japanese competition has to be dealt with as a separate proposition. That is exactly the way in which it is being dealt with. The President of the Board of Trade and I have had very close negotiations with the Manchester Chamber of Commerce and those interested in the trade. The President of the Board of Trade has begun negotiations with the Japanese Government. Negotiations will be conducted chiefly between the representatives of the trade interests who are the people most closely acquainted with all the details of the business in order to see if they can arrive at an agreement in regard to markets on terms satisfactory to ourselves. Those negotiations have been undertaken and will go forward. I sincerely hope that they will be successful. If they are not successful, the Colonial Empire will be prepared to take whatever steps are necessary in order to protect British interests. At the present time, as regards West Africa, at the request of the President of the Board of Trade I have withdrawn from the Anglo-Japanese Treaty in order to take Japan out of the ambit of the Anglo-French Convention, which the trading interests are very desirous of maintaining via-à-cis other countries.

Perhaps I might read a quotation from the broadcast speech which I made to the Colonial Empire, which puts the whole attitude of the Colonial Empire: On the other hand, Japan buys very little from the Colonial Empire, whereas England buys much, and is stimulating her purchases by the preference. I know that I speak for a great body of public opinion in the Colonial Empire when I say that we wish to secure to Britain, to whom we owe so much, a fair share in our Colonial markets. As you know, the President of the Board of Trade has begun negotiations with the Japanese Government. In the Colonies we are no less anxious than is industry in this country that those negotiations should succeed, and the President can feel that he has behind him a full measure of Colonial support. In this determination of Britain and the Colonies that they shall have a fair share in each other's markets there is nothing hostile to Japan. It is but business and common sense. That represents the attitude not only official but non-official, throughout the Colonial Empire; that we should give the President of the Board of Trade in these negotiations every help we can.

As regards the question of Ceylon, the hon. Member asked whether Ceylon had fulfilled the whole of the Ottawa Agreement. Ceylon has not. With regard to the form of the Ottawa Agreement, while I negotiated on behalf of the whole Colonial Empire I was not able to bind the whole of the Colonial Empire. That is the constitutional position. The form of the Ottawa 'Agreement was that His Majesty's Government in the United Kingdom undertook to invite certain dependencies to make certain changes in their customs tariffs. Although other Colonies have adopted the Ottawa Agreement, Ceylon has not. I much regret that it should not have done so. I think that Ceylon would be well advised to do so. I still hope that the Ottawa Agreement will be adopted by Ceylon to the full.

May I return to the broad issue? Japanese competition has to be dealt with effectively and as a separate proposition. The negotiations are in very able hands, and I hope that they will succeed. Any help that we can give to the President of the Board of Trade and those who are conducting these negotiations we must certainly give.

Adjourned accordingly at Twenty-nine Minutes after Eleven o'Clock.