REDUCTION OF CUSTOMS DUTIES ON CERTAIN MUSICAL INSTRUMENTS, CLOCKS, ETC.

HC Deb 01 May 1933 vol 277 cc519-645

3.35 p.m.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

I beg to move: That, for the purpose of enabling effect to be given to an agreement regarding commercial relations embodied in an exchange of notes dated the thirteenth day of April, nineteen hundred and thirty-three, between His Majesty's Government in the United Kingdom and the Government of the German Reich, the duties of customs now chargeable under section three of the Finance Act, 1925, on goods of the descriptions specified in the first column of the Table annexed to this Resolution shall, as from the eighth day of May, nineteen hundred and thirty-three, be chargeable at the reduced rates respectively specified in the second column of the said Table. And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

TABLE.
Description of Goods.	Reduced rate of duty.
Pianos, non-automatic; and component parts and accessories thereof.	20 per cent, ad valorem.
Piccolos, flutes, clarinets, flageolets, bassoons, and cornets; and component parts and accessories thereof.	20 per cent, ad valorem.
Stringed musical instruments and component parts and accessories thereof.	20 per cent. ad valorem.
Gramophones without electrical amplification, of a value not exceeding 10s, each.	15 per cent, ad valorem.
Gramophones without electrical amplification, of a value exceeding 10s. each.	20 per cent. ad valorem.
Concertinas of a value not exceeding 35s. each.	15 per cent. ad valorem.
Concertinas of a value exceeding 35s. each.	20 per cent. ad valorem.
Mouth organs	10 per cent. ad valorem.
Clocks alarm (other than electric clocks), of a value not exceeding 30s. each.	20 per cent. ad valorem.
Clocks (other than electric or alarm clocks) of a value not exceeding 30s. each.	25 per cent, ad valorem.
Clock movements complete (other than movements of electric clocks) of a value not exceeding 15s. each.	25 per cent. ad valorem.

The Motion on the Order Paper covers only two of the categories of articles which appear in the Schedule of the Agreement. It would be very difficult to discuss these two categories without bringing into the discussion the merits of the agreement as a whole, and I venture to ask whether, if it met with the convenience of the Committee, you could see your way, Sir Dennis, to grant us enough latitude to discuss the Agreement as a whole, while taking the Resolution on these two categories.

The CHAIRMAN

As the right hon. Gentleman has said, the Resolution on the Order Paper only refers to some of the duties which are referred to in the Agreement. In these circumstances I think I should find it a little difficult perhaps to permit discussion of other duties which were not referred to in that Resolution although, of course, as they form part of one complete scheme it would probably cause considerable inconvenience not to permit such discussion. But in view of the fact that the Resolution on the Order Paper definitely refers to the Agreement in question and asks the Committee to pass the Resolution for the purpose of enabling effect to be given to that Agreement, I think the Agreement as a whole might be discussed, including all the duties that are referred to in the Agreement.

Mr. HANNON

Does that Ruling mean that we may deal with the question, for example, of Birmingham jewellery and imitation jewellery, which is not included in this category?

The CHAIRMAN

It means that the Committee may discuss any question which properly arises upon the Agreement contained in the White Paper.

Mr. HANNON

On that point of Order, may I ask why the Government present the Resolution in this way, and why the Resolution does not include the whole of the duties embodied in the White Paper?

The CHAIRMAN

That, I think, is a question which the hon. Member should ask the Government, and not the Chair.

Mr. RUNCIMAN

The Agreement which we are about to discuss is limited in its scope and not at all pretentious in its provisions. In some quarters there has been a desire to deal with the whole range of the German tariff, and it has been suggested that this present Agreement is an inadequate way of dealing with these tariff problems. The Government set out to deal not with the German tariff or with anything that pertains to such a wide range of duties as must be covered in that tariff, but to deal with a coal problem of a strictly limited character, with which otherwise we had been up to the present unable to deal. It will be necessary, therefore, if we are to take anything like a just survey of the position we have to meet, to realise what has been the state of German trade in British coal during the last two or three years. From January, 1930, to August, 1931, we were actually importing into Germany, not to the free ports or for the purpose of bunkers but to the destinations which were under the control of the German Customs, an average monthly total of 295,000 tons. The average from January, 1931, to August, 1931, was 246,000 tons, and it was immediately after this that Germany thought it necessary, in her own interests and for her own purposes, to limit the quota to 300,000 tons.

During the year 1931–1932 there was a very rapid decline in the coal production of Germany herself. In 1930 the monthly coal production of Germany was nearly 12,000,000 tons, but it dropped by November, 1931, to a little over 9,500,000 tons, by January, 1932, to 8,700,000 tons and by February, 1932, to 8,380,000 tons. It was in these circumstances that the German Government felt it necessary to lower the quota which was originally imposed in October, 1931, and the imports of coal were cut down. to such a low figure as 150,000 tons per month. The decline in the coal production of Germany continued, and she declared in April of last year that it was necessary to take a quota of 100,000 tons only. We were witnessing, by the imposition of these gradually declining quotas, the closing of an important market for British coal. We naturally protested against this very strict limitation of imports into Germany. We felt that it was necessary to protest against this way of limiting our traffic, and, as our protests did not produce any good result, we felt it necessary to remind the German Government that under the Commercial Agreement of 1924 it was within our rights to go to arbitration on any dis- pute which might arise under that agreement.

We discussed the possibility of dealing with the problem by way of arbitration and finally we came to the conclusion, in both countries, that we should lose a great deal of time, probably 12 months, if we went to arbitration, and that we should be able to deal with the problem more rapidly and more effectively if we entered into discussions between the two Governments. Accordingly, in the autumn of last year, or in the early winter, we sent our representatives to Berlin. At that moment it was inconvenient for German civil servants to come over here, and we did not want to stand upon the proprieties if we could arrive at a good arrangement. Our representatives went to Berlin, but they were unable to reach any agreement; we did not make much progress before Christmas. However, after the holidays were over the discussions were reopened here, and ultimately we succeeded in making the arrangement which is set out in the agreement now available to hon. Members.

The agreement is only three weeks old; we have published it at the earliest possible moment. To what does it amount? It is an agreement in which we on one side make concessions to Germany and on the other side receive assurances in respect of one of our most important export trades. There has been no attempt whatever to deal with the German tariff; that is a matter for further consideration, and I have no doubt that we shall be involved in discussions with the German Government in respect of their tariff in the future. They are well aware of that; but no attempt was made to deal with the general state of the trade relations between Germany and ourselves. All we asked was that we should be assured of an open market for our coal, and that the amount of the coal so dealt with should be of a substantially greater volume than anything sanctioned under the quotas of February, March and April, 1932.

Sir AUSTEN CHAMBERLAIN

Will the right hon. Gentleman say exactly what he means by "an open market"?

Mr. RUNCIMAN

I mean a market in which we can sell without restrictions being placed on our importers—

Sir A. CHAMBERLAIN

And without any duty?

Mr. RUNCIMAN

Yes. What has been the extent of our imports recently? We have been sending to Germany under the quota something within the region of 100,000 tons per month. Under the agreement the total amount to be sent to Germany may reach as much as 180,000 tons per month. But that does not represent the whole of the coal trade of this country with Germany. We have been free—never limited—as to the amount of coal sent to Germany for bunker purposes, and also as to the coal which goes to the free ports. I have been unable to ascertain from German sources the exact amount which is taken, but as far as we can tell, it amounts to about 1,000,000 tons per annum. The exact figure will probably be somewhere about 980,000 tons per annum. Therefore, the German coal trade is a material matter to the export trade of this country and has a direct and an important bearing on the amount of employment given in our coal mines. The total amount in the future will be not less than 180,000 tons per month under the quota. If the German consumption of coal goes up, then the quota goes up proportionately; if the German consumption of coal goes down, then there is no reduction in our quota, which remains at 180,000 tons. Bunker coal and free port coal are left perfectly free from any trammels, and will continue according to the requirements of German consumers and the shipping which uses the coal thus imported.

Mr. HANNON

I am sorry to interrupt the right hon. Gentleman, but has any condition been made in the agreement that if the German consumption of coal goes down our quota is to be reduced, and there will be no change in the tariff of this country?

Mr. RUNCIMAN

The hon. Member must have misheard what I said. I said that if the German consumption goes down, the quota is not reduced. If the German consumption of coal goes up, the quota is increased. I understand that in some quarters it is felt that the quota is not as large as it should be. In negotiating an agreement of this kind we do not always get all we ask, and we cannot expect to get all we ask, but it is a great deal better than the present position. If we were to go on month after month with an 80,000 or 90,000 or 100,000 quota, without any possibility of increasing that, it would be a very grave injury to the coal mining industries of this country—to the miners and the men engaged in the getting of coal and to all the transport organisations which are dependent upon the carriage and distribution of coal. We had to take into account all these varrous interests in making the agreement, and we drove as hard a bargain as we could. I quite freely admit that I have not enough Scottish blood in my veins to enable me to play the part of a hard-hearted bargainer, but, at all events, we did not give way on any one single figure without exercising all the strength and pressure that lay in our power. We had the advantage of some of the hest technical assistance which we could obtain, and I am glad to have this opportunity of expressing our gratitude to those who helped us throughout these negotiations.

What have we given on the other side? I understand that this excites almost as much interest as the increase in our coal market. The Germans asked us to make concessions to them in some of our tariff items on goods in which they have a special interest. That was perfectly natural. They selected among others those goods which appear in the Schedule to the White Paper and we bargained about them, and about the duties which were to be applied to them, and the result is as the Committee is now able to see it. What is the chief change that has been made or which is proposed to be made in the Finance Act Duties? The Finance Act Duties concerned cover musical instruments and clocks. Do not let the Committee suppose that musical instruments and clocks are going to be relieved of all import duties. Not at all. Most of the musical instruments will still have a duty imposed on them of 20 per cent. The biggest reduction will be on mouth-organs, but, on the whole, it will be seen that musical instruments are to remain in the 20 per cent. or 15 per cent. category. Alarm clocks of a, value not exceeding 30s. will still have a 20 per cent. duty protecting them. Other clocks will have a protective duty of 25 per cent.

I turn to the duties under the Import Duties Act. I would like to inform my hon. Friend the Member for Moseley (Mr. Hannon), so that I need not answer him further on the subject, that the reason why we take only two categories of goods in the Resolution to-day is that we must deal with those under the Finance Act, whereas the other items are all Import Duties Act items.

Mr. HERBERT WILLIAMS

Is it possible to alter duties under the Import Duties Act without any report from the Advisory Committee?

Mr. RUNCI MAN

Yes, it is quite possible to do that. The Advisory Committee is only an advisory committee, and the responsibility must ultimately rest with the Government of the day. Let me take the Import Duties Act items. Toys which represent an important item will still have a 15 per cent. protective duty.

Sir STAFFORD CRIPPS

Can the right hon. Gentleman give us the figures in relation to that item?

Mr. RUNCIMAN

No, I have not those figures with me. It is a considerable figure. I do not wish to belittle it at all. Then, articles made of any material, except articles made wholly or partly of silk or artificial silk, of a value not exceeding four shillings a, dozen, which are of a type suitable for use on Christmas trees, will come down to 15 per cent. protective duty. Jewellery and imitation jewellery, whether or not mounted or set, not containing any platinum or any gold other than rolled gold or gilt metal, will have a 25 per cent. protective duty, the present duty being 30 per cent. Powder puffs will have a duty of 25 per cent.; fur skins, 20 per cent. and hollow-ware, 20 per cent. Safety razor blades will still have a protective duty of 20 per cent. plus one shilling a gross. Acetic acid will still be protected to the extent of 20 per cent.; acetone, 20 per cent., tartaric acid, 15 per cent., and formaldehyde, 25 per cent. The Committee will see that there still remains in these industries a considerable measure of protection. It may be suggested that these industries ought not to have been selected. When we selected these goods we felt that the German Government pressed for this list because they were concerned in the production of articles such as toys and Christmas tree decorations to an extent, to which, obviously we are not concerned in this country. These articles do form a large and important part of their export trade. We felt that if we could obtain concessions in regard to coal and at the same time make such comparatively small concessions as these in respect of these articles, that, on balance, it was a good bargain for us.

The Committee may well ask how we assessed the advantages and the disadvantages. Let me take the former first. I naturally cannot expect anyone who is interested in these industries in which reductions of duties are proposed, to agree willingly to those reductions. It is their business to protest, and I am not surprised that in some quarters there should be protests, but it is the business of the Government not to deal with any one individual interest alone. We must think of the interests as a whole and, in doing that, I find that very much the best way of assessing the importance of these various industries is by taking the Lumbers of persons employed in their prosecution. I deal first with the coal trade. How many miners are likely to be affected by the changes which we are making? The additional employment, as nearly as we can measure it, will mean work throughout the year for 3,800 miners who would not otherwise be employed. There are already employed on the quota as we now find it 4,800 and, if you add the bunker coal it means that you reach a total of about 12,600 men directly interested in our coal trade with Germany. Of course you have also to add the very large numbers of men who are engaged in various transport and other ancillary trades, mainly in the ports, on the railways and in ships. At all events, the agreement which we ask the Committee to sanction if it is passed and if the quota is maintained as we have no doubt it will be, provides employment for an additional 3,800 men.

Now we come to the much more difficult matter of assessing the number of persons concerned in the various industries which appear in the Schedule and in connection with which concessions have been made on our side to the German Government. As far as we can tell, and I would not like to be taken as being anything like absolutely accurate in this figure, something like 1,800 persons might be affected if the duties which appear in the Schedule had their maximum effect. We know that no duty ever has its maximum effect, and we may therefore take it that the number who will be affected by this new Schedule may be considerably less than the figure which I have indicated.

Sir BASIL PETO

What does the right hon. Gentleman mean by the word "affected"?

Mr. RUNCIMAN

I mean the persons who, if this agreement goes through and if the duties did have their maximum effect, if they closed down part of the production in this country and if its place was filled by foreign imports, the effect might be shown in the employment of 1,800 persons. But we do not anticipate it.

Sir B. PETO

Surely the right hon. Gentleman does not want the Committee to understand that there are only 1,800 people employed in all these industries, making clocks and musical instruments and hollow-ware and the like?

Mr. RUNCIMAN

I never said that at all. I said that there could be only 1,800 persons affected by the lowering of the duties from 25 to 20 or 30 to 20 per cent. and so on. That, I admit, is a very difficult thing to assess, but we have done as well as we could, not with the object of making a case for debate, but with the idea of weighing the importance of these relative industries and then doing the best we could. That is the way in which we are proceeding, and I suggest that it is the best and only way in which we can measure the importance of the changes that take place after negotiations of this kind.

This agreement is not in the same category as those which have been concluded with Norway and Sweden and Denmark. They are of a different class, and they cover different and wider ranges of products. This agreement is mainly concerned with retaining for the producers of coal in this country orders which they were in danger of lasing and a great deal of which they had already lost. We have had to make concessions. I do not believe that any person, in whatever party he may find himself, would be able to carry through negotiations of this kind without making concessions in some quarters. It is absurd to imagine that we can drive bargains of this kind and at the same time give nothing away. We must of necessity do that. It is for the Government to decide what they believe to be of the major importance. We have done our best in the matter. This list, I agree, is a comparatively small one, covering a small range of industries, not commensurate with the bigger negotiations which must be conducted in future. It is essential to make concessions in order to purchase an advantage.

I would add only one remark. Tariff changes of the kind that we propose still leave the minimum rates at a far higher level than could have been contemplated as possible in the comparatively recent past. We have endeavoured to do what we could to relate the claims that have been made upon us. I am glad to say that now the outlook of the coal trade, as far as I can gather, is better than it has been for some time past. That will affect not only those who are interested in coal mining, but all the other people of the distressed areas, particularly in northeastern England. It is in their interests and their interests alone that I am able to recommend these proposals as they concern the coal trade. I can only express my own judgment, but I do not believe that what we are asking other people to concede in order that this greater object may be gained, is anything about which we may feel apprehensive, and I hope the Committee will confirm the action taken.

Mr. HANNON

Was any other item of British exports except coal taken into consideration at all in arriving at these conclusions?

Mr. RUNCIMAN

No. it is a coal agreement. I hoped I had made that clear. The agreement must not be confused with other negotiations which cover a long list of tariffs.

4.6 p.m.

Mr. GREENWOOD

I was grateful when the right hon. Gentleman in the very first sentence of his speech cleared the air by saying that this was not a pretentious agreement, because there are hon. Members who, having heard of the agreement, found themselves buoyed up with the hope that there was something substantial going to arise out of it. We now find that at the very best this ridiculous mouse, if even a mouse, has been born. When economic circumstances are as difficult as ever they have been in the history of this country, on this May day the House is asked to discuss the possible employment of 3,800 miners —[HON. MEMBERS: "Hear, hear!"]— a great contribution to the solution of a problem affecting an army of 3,000,000. Hon. Members, I am glad to find, are enthusiastic about 3,800 miners. I wish they were as enthusiastic about 380,000 miners. This agreement we are to regard as one of the fruits of the National Government's policy. The truth is that our coal exports to Germany are now two-fifths, or less than two-fifths, of what they were before the National Government came into office, two-fifths of what they were before the National Government introduced tariffs.

This agreement is an agreement to deal with one industry, and with one small section of the export trade of that industry. It does not deal on a broad scale with the whole problem of coal exports to all foreign countries. It deals, not with 5 per cent. of the production of coal in this country, but merely with about 5 per cent. of our export trade in coal. In return for that we are to give certain concessions. This Government has always been on the point of turning a corner. It has turned, or been about to turn, more corners than any previous Government. In fact it has become giddy at the very prospect of turning corners. Now it is about to turn another corner.

Lieut.-Colonel ACLAND-TROYTE

You ran away. You did not turn any corner.

Mr. GREENWOOD.

Hon. Members' observations may be amusing sometimes, but they are not relevant. This agreement may do something to deal with a fraction of the problem. The old argument used in favour of a Protectionist system was not that Protection was good in itself, but merely as a means of arming this country with power to reduce the tariffs of other countries, and we were told, especially after Ottawa, that there would appear such a succession of trade agreements that the result would be to pull down the walls of tariffs which we during the last 18 months had been helping to build. But this is an agreement which makes no difference whatever in the tariff wall of one of the chief tariff countries in the world. This is not a trade agreement to pull down the tariff walls of another country. It is a trade agreement which enables the British Government to go back on its tracks, which enables it to reduce import duties on certain odds and ends of imports, including mouth organs, on which the President of the Board of Trade boasted that the reduction was greatest. Whether the renewed importation of mouth organs is an asset to this country I greatly doubt. [An HON. MEMBER: "They are in Hyde Park to-day."] One of my complaints about hon. Members who support the Government is that they lack mouth organs; they are too inarticulate. Perhaps the President of the Board of Trade is increasing the importation of mouth organs in order to make his supporters more articulate than they have been for 18 months.

This is not to be regarded as an agreement of the kind which the Government promised to reduce the tariff barriers of other countries. What the right hon. Gentleman is trying to do in this agreement is to stabilise at an extraordinarily and abnormally low level British coal exports to Germany, and in return to reduce British import duties on certain musical instruments, and chemicals, and so forth, not merely against Germany, but, as I understand it, against all countries. Even if we are dealing with mere thousands instead of hundreds of thousands of British workmen, we have to consider to what extent there will be, or may be, a net improvement in the volume of British employment. In the last two or three years we have witnessed a very substantial reduction in the export of coal to Germany, a reduction which became larger and more rapid when the present Government took office.

The President of the Board of Trade has tried to explain it away by saying that in the early autumn of 1931 the native production of coal in Germany had substantially declined, and he led us to believe, not that he said so explicitly, that the new restrictions imposed by the German Reich against British coal were due to a desire to protect Germany's home industry. I should imagine that they were bound up with two events of some political significance. One was the return of a National Government, breathing Nationalist sentiments, oozing Protection at every pore. The second was a National Government pledged to the maintenance of the Gold Standard, a pledge which it failed to keep. It is true that in a few days of this country leaving the Gold Standard, in the temporary absence of the Prime Minister at Chequers one Sunday, Germany began to protect herself by further impositions against British coal. The right hon. Gentleman the President of the Board of Trade has given us figures which have been quoted, broadly at any rate, in this House in answer to a question put last June by one of my hon. Friends to the then Minister of Mines. By political action in Germany, following very largely upon Government policy here, the German people restricted the importation of British coal. In October, 1931, the quota was reduced from 420,000 tons per month to 300,000 tons; within five months it was reduced to 200,000 tons; a month later it was reduced to 150,000 tons; a month after that it was reduced to 100,000 tons; and we have staggered on since at round about that figure. The most that this country expects to get out of the new Anglo-German Agreement is to stabilise British coal exports for the future, assuming an enormous expansion of trade is impossible, as I believe, at round about the figure that has been prevailing for the last six months. [HON. MEMBERS: "No!"] I am subject to the correction of the President of the Board of Trade, and I say at round about the figure which has prevailed for the last six months.

It may be, as he says, that in negotiations concessions have to be made. The most that he can claim is that this agreement, if it is successful, is going to put off for some time, or prevent, the utter destruction of the British coal trade with Germany. It is not going to deal effectively with the coal trade in a way which will lead to a general expansion. On the other side, the right hon. Gentleman asked, "What have we given?" I am not sure. I am a little alarmed at this possible increase of foreign mouth-organs, and I see no reason why, on purely aesthetic grounds, gramophones worth less than 10s. should not be permanently prohibited from importation, instead of being encouraged now; but the right hon. Gentleman has given us no figures at all. He has explained, in this merry month of May, that Christmas tree decorations are one item in the great constructive policy of this Government for the restoration of trade, though he has not given us any figures of the volume of trade, but merely flung at us figures of the possible number of people who might be employed.

Let me put this to the President of the Board of Trade: if the duties which have hitherto obtained were right in the national interests, then to-day, in reducing these duties, he is conferring no real benefit, unless he can prove that a fundamental industry like mining will benefit to a substantial degree. If, on the other hand, he regards it, from the revenue point of view, as likely to produce money, then I should have thought the duties that he is going to impose now were less than they ought to be. He is satisfied that it is a good bargain, but many manufacturing interests in this country are far from satisfied that it is a good bargain. I would myself have preferred to give what assistance the State can give to a vital industry like mining than to those people who are producing mouth organs, but we are not at all certain yet that this is likely to be a good bargain.

The right hon. Gentleman has given us the figures, but those figures cannot be regarded as accurate within 30 per cent. either way, and when you are dealing with 3,800 and 1,800, 30 per cent. error means the difference between value and no value at all, because no account has been taken, at least in the President's own speech, of the indirect repercussions of changes of this kind on British trade. At the most, all that he claims as a result of a new attempt by means of this kind to modify the orientation of international trade is that he expects to get out of it in a year net increased employment amounting to 2,000 men. Let me say that the cessation of local government authorities' schemes when this Government took office meant more than that in South Wales alone—far more than that. My hon. and gallant Friend, the late Colonel Watts-Morgan, is not here now, but I think I am right in saying that under the local government schemes of work there were more miners than that employed in South Wales alone. Now this is a handful, a problem that we can handle inside this country. We are to have this elaborate international agreement, with possible effects that may reverberate throughout the whole world, and the net effect of it is a possible employment in the mining industry alone for 3,800 people, and in the clock and jewellery trades and so on which might be affected—there "might," for the President spoke very cautiously there—be a reduction of 1,800.

That is not a very substantial contribution to the solution of our economic problems, and we on these benches doubt whether, in circumstances like these, odds and ends of individual agreements between two single nations are going to be a net advantage to this country. Individual agreements are bound to be small in their possible advantageous effects, but may be disastrous in their international effects, and we are entitled to ask whether this is the way to help the coal industry, whether it is necessary to imperil other industries in some degree in order to assist the coal industry. We do not accept the view that in order to provide possible employment for 3,800 men in South Wales, Durham and Nurthumberland, we need put out of work 1,800 men in the Midlands, in Birmingham and elsewhere. We would say, "If you are dealing with a problem like coal, the line of approach should not be one where you attack 5 per cent. of the export trade, but one where you attack the whole wide front of the sales of the industry, and consider whether the industry is organised as it ought to be, whether it is conducted as it ought to be, whether it is conducted under the auspices under which it ought to be conducted." Our answer would be different from that of hon. and right hon. Members opposite. We say that one of the fundamental ways of restoring our economic position is not this way, of wasting time tinkering with small agreements, but is the more difficult way of considering the whole question of industrial reorganisation in such a way that as a result you add to the net volume of trade and do not give one industry advantage at the expense of another, unless it be done on broad social grounds.

My last point is this: We have had announced now the date of the World Economic Conference. It has been coming a very long time. I remember a speech of the Prime Minister towards the end of last year in which he told us that April was too late for him. The sooner this Economic Conference takes place, the better it will be. It might have taken place perhaps many months ago, but if the Government are going on rushing through these partial agreements —Denmark, Argentine, Germany—without any full consideration, the later the Economic Conference is held, the smaller the results will be. My own view is that the policy of the Government, from the Ottawa Agreements down to to-day, has been such as to imperil the possibilities of the Economic Conference when it is held. I do not think that a great economic Power like the United Kingdom is going to pioneer its way to the economic salvation of the world by small, tinkering, trading agreements. The problem is much larger than that. The problem is one for a World Economic Conference, a conference that ought to have been held in the interests of the world at least a year ago, but one which is to be held within six weeks, and held not under the best of auspices, because of the action that the Government have taken.

Let me say about this Agreement that it has this advantage, so far as we are concerned, that it does do something to reduce, on a very, very small sector, the tariff walls. For that, there is something to be said. On those grounds we cannot oppose it. There is no reason why we should be put into the position of voting for greater tariffs in the capitalist system. At the same time, let me say that though the Government may get a very small problematical increase in employment, it will hardly be worth the economic reactions which this agreement may produce. This is the wrong method of dealing with our economic situation. It is no use our trying to put our own solution. We should not get our way here. We would be astonished if we did. [An HON. MEMBER: "Alarmed!"] No, not alarmed but pleased. We regard this as a wrong method. We do not regard this agreement as one that can possibly give us any substantial benefit. The only advantage that it will have on a certain sector of trade is to reduce tariffs, and it will do a little bit, though not very observable, to do something to reduce the tariff walls which to-day are impeding world trade.

Mr. DICKIE

Will the right hon. Gentleman come to the exporting areas in the North-East of England and say that the recapturing of 1,000,000 tons of coal in a foreign market is of no value?

Mr. LAWSON

You have lost us a couple of million.

4.32 p.m.

Sir A. CHAMBERLAIN

The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) was no doubt in a difficult position, having regard to the very narrow path he had decided to tread, but I cannot altogether praise him on the elegance of his performance. The right hon. Gentleman made it very clear that he expected no good from the present Government, and that he had no confidence in them, but that was the only thing that he did make clear. What his own attitude really is to the subject we are discussing, or how he would endeavour to handle it, he did not explain, and I think that he was wise to refrain. He gave, however, a testimony to the usefulness of tariffs of which, as it came from the right hon. Gentleman speaking on behalf of his party, I took note. He said that the Government were willing to jeopardise and perhaps destroy the livelihood of a great number—it might be 1,800, or it might be many more —of people in this country by reducing the tariff protection which had lately been accorded to them. It is worth while to take note that, if for no other purpose, for the purpose of attacking the Government, he realises that these men do owe their work to tariff protection, and that if he or his friends had the power, as they have the will, to withdraw that protection, they would put these men out of work.

I naturally do not rise in the same spirit or with the same purpose as the right hon. Gentleman opposite. My right hon. Friend the President of the Board of Trade told me and that group of Members (sitting in different parts of the Committee, not exclusively coming from my native City of Birmingham) whose districts are affected by his arrangement, what our business was. He said our business was to oppose. I am not going to oppose; my Motion is not moved with a view to offering an immediate negative to the proposition which my right hon. Friend has laid before the Committee. It is to ask that he should allow to the Committee and to the Government time to get into touch with the interests affected, to ascertain and to examine in common the effects and the probabilities of the proposed agreement, and to see whether we cannot reach a rather greater measure of agreement as to the effects of the changes which he is proposing. In my right hon. Friend's opening sentence he saw the merits of the proposal; in it I see its defects. He said that this is not an endeavour to deal with the tariff problem; it is an endeavour to deal with the coal problem. My right hon. Friend has had his attention concentrated upon coal, and he has used words which are rather ominous for great cities like Birmingham, which are wholly industrial, and yet where the great mass of the industrial population is employed in small industries. You cannot so easily as my right hon. Friend supposes say that, if a great industry is benefited, it is right or that you must agree to sacrifice the smaller industries which are required to give up their prosperity in order to help the return of the prosperity of the larger industries. That is not quite fair, and I think that the Government would have been in a stronger position to negotiate with Germany if they had not concentrated themselves on the coal problem but had gone to work to make a commercial treaty covering the whole ground. No one in the Committee, except for party purposes, could scoff at any honest endeavour to improve conditions in the coal trade. I do not share and will not support the criticism of the right hon. Gentleman the Member for Wakefield because the Government deal with one country instead of waiting until they are able to come to an arrangement with the whole world. That would be to postpone any arrangement, perhaps indefinitely. But I beg my friends in the coal districts to consider whether even from their point of view it is a good bargain.

The point I put first of all to the right hon. Gentleman is, what has he got to which he was not entitled before he negotiated? Again and again in this House my right hon. Friend has said that the quota system as administered by the German Government was contrary to our existing commercial treaty. I will read only one sentence to support that. On the 14th April, 1932, the right hon. Gentleman, said: We had to point out"— that is to the German Government— that it is contrary to the Commercial Treaty which exists between the two countries, and that, moreover, we could not allow any discrimination against this country—for the same strict quotas are not applied to other countries as are applied to ourselves—to pass unnoticed."—[OFFICIAL REPORT, 14th April, 1932; col. 1020, Vol. 264.] That is the line which, up to the opening of these negotiations, as far as I know, my right hon. Friend consistently took. He said, "You, the German Government, are doing something which is contrary to the treaty which already exists between us." That does not call for a new treaty; it calls for the observance of the old treaty. My right hon. Friend has allowed himself to be induced to pay a price for that which we have already bought, to purchase goods which are already ours, and to win back a position to which he claims we were entitled under the existing treaty. I do not think that that is a very good bargain.

I think that if the country were, in other spheres, to be asked to make a sacrifice, it should be at least for something to which they were not previously entitled, and not in order to get the German Government under a new agreement to keep an agreement which they had previously signed and broken. I asked my right hon. Friend—and I hope that he forgives me for having interrupted him—what he meant by an open market. He said he meant free access for a minimum quantity of British coal. The amount was not to descend below that minimum; in the event of the German consumption of coal increasing that minimum was to be raised. Where is the free access? I do not call an open market a market with these strict limits, nor do I find in this agreement—perhaps my right hon. Friend will reassure me when he speaks—anything to prevent the German Government putting an import duty on coal provided it is applicable to all countries. That is all I have to say on coal. I submit that what we are doing by the present agreement is what the President of the Board of Trade had informed us was what we were entitled to under the old treaty.

I turn to those other trades whose protection is to be reduced. These duties were imposed only a short time ago. Apart from the general revenue duties, the traders, in order to obtain them, were told that they must not come to this House, that the object of the Government was to eliminate political interference, that their proper course and their only course was to go as traders, avoiding all political influences, to the Tariff Advisory Committee, and to submit their case to an impartial tribunal. That is the procedure through which they went. It is as the result of that procedure and by the decision of that tribunal that the duties now to be reduced were fixed as those which were fair and required for the protection of the trade. Is not there some contradiction in the procedure of the Government when there is such a barrier against obtaining protection and such levity in taking it off? Does not my right hon. Friend feel even now that it would be wise to give a little more time for consideration, that it would be wise to get into touch with the representative associations of those trades which are concerned, to convince them if your case is as strong as you think it is, or to be convinced and to modify your agreement if the case on the other side be as strong as they think? It is surely a handicap to the British producer if he can never have a duty or any measure of protection without the elaborate process of proof and argument before the Tariff Advisory Committee, and if within a few months of it being accorded to him, it can be removed by a simple agreement.

The whole Committee knows, I think, that the jewellers' quarter of Birmingham is situated within my constituency. It is a trade which, like all fashion trades, must always suffer severely in times of general distress, and it is a trade which, owing to changes of fashion apart from the question of distress, has been very hardly hit. It has been subjected to very severe competition from people in other countries with a lower standard of life than our English standard, which makes it difficult for our people to compete with them. The workmen in this trade are skilled workmen, whose skill consists largely in the delicacy of their hands and of their touch, like a surgeon's. When they are forced out to some rougher employ, that capital of theirs is destroyed, and they are rendered unfit for the work to which they were brought up. I think the final alteration in these duties was made only three months ago. The trade have had the protective duties a little longer, but the final alteration was made by putting on the free list certain things which are raw materials for them and which were not procurable from home sources.

My right hon. Friend gave us an estimate of the number of persons in this country who might suffer as the result of the lowering of these duties. I do not know what share of the 1,800 people he mentioned were allotted to the Birmingham jewellers, but has he made any allowance for the fact that these duties have hardly yet begun to work, that their effect in increasing employment has not yet been tested out, and that he is not merely turning into the street some men who are employed, but is arresting a development, which is holding out the prospects of re-employment to many others? The same thing is true with regard to the hollow-ware duty, fixed not so very long ago, and not found to be an excessive duty. At this moment there is actually a petition for an increase of the duty before the Tariff Committee. "Go to the Tariff Committee; they will do you justice," say the Government, and while that appeal is pending the Government now come here to reduce the duty already in force. Does my right hon. Friend think that that is reasonable? Would he defend it if his own constituents were affected and he were sitting in my place? I think, as he said, he would find it his duty to oppose. I do not want to oppose him unless he drives me into opposition.

There is one other case—I speak of those industries which I know. A silversmith and jeweller found his trade disappearing under the stress of foreign competition, which undersold his kind of goods at prices which did not even equal the cost of production here. Seeing that his trade was more and more declining, he looked about for a newer trade and a developing trade, and put down a lot of machinery for the purpose of making safety-razor blades. He was waiting for the imposition of the duties, which he hoped would come, in order to extend those works. If any hon. Gentleman is curious to know whether good blades can be produced in this country, I will be happy to give him a sample, although I am not going to advertise my constituent, as it would be improper for me to do by mentioning the name. There is an enterprising man who has taken up a new trade. He is encouraged by the duty to extend that trade, and before he can reap a benefit the Government come down and remove the duty, not because it has been found that the duty was too high, but because the President of the Board of Trade finds it necessary to pay the Germans twice over for what we have paid them once already.

That is my charge—well, I will not say my charge, but that is my objection to this agreement. I plead for more time for its consideration. Traders have hardly become aware of what was happening. They have had no opportunity to state their case. I beg my right hon. Friend not to rush this agreement through the House of Commons. There is no such hurry. We invite him to give us more time, and to meet them and us in friendly negotiations.

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

4.52 p.m.

Mr. AMERY

I wish very strongly to support the appeal made by my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain). I think there is no difference of opinion in this House as to the desirability of arriving at agreements. But we should consider the effects of those agreements, and my right hon. Friend has already pointed out that we are not giving concessions in order to secure equivalent concessions from Germany, but are giving concessions, and very serious concessions, as consideration for something less than what we have claimed that we are entitled to. My right hon. Friend has already quoted the words of the President of the Board of Trade. When he pointed out that Germany s quotas were contrary to the Commercial Treaty. He said that we could not allow any discrimination against this country, and that he hoped he would soon be able to announce that Germany had eliminated this discrimination from her policy. Yet now he comes down and tells the House, "After all, you cannot expect to get all you ask." What it comes to is that Germany is now consolidating her discrimination against us at a figure which fixes our coal imports at less than 40 per cent. of the average coal exports from this country to Germany in 1928–1930, and which is actually less than the figure of last year. It is astonishing that the President of the Board of Trade should have had the face to come down, and, in the rather jaunty speech which he delivered, tell us that that was all we could get, and that it really was something very substantial.

We have been told that 3,800 miners will secure employment—provided that the Germans do not put on a tariff, provided that the currency situation in Germany and other countries does not react against us. There is no guarantee about it. We get a permission to import a certain fixed maximum. What is it we are giving up in return? Nothing surprised me more than his rough-and-ready estimates, based on no argument and no statement of figures, of the possible loss involved. We were told that possibly 1,800 men might lose their employment if the tariff remissions had their maximum effect. I hope I may be allowed to say a few words on some of the industries affected. My right hon. Friend has already dealt with jewellery. I will say a word about the toy industry, regarding which the President of the Board of Trade was so contemptuous, and on which he fastened the whole interest of the House with very little reference to the much more important musical instrument and clock industries. The toy industry used to be almost entirely in the hands of the Germans. Anybody who did Christmas shopping up to a few years ago knows that perfectly well. In the last year or two that trade has been largely recaptured by this country. At any rate it now employs 6,000 persons—with the help of a low protective tariff of 25 per cent. That tariff has been reduced to 15 per cent. The President of the Board of Trade calls that a protective tariff. I do not think anybody would venture to call a tariff of 15 per cent. "protective" under present conditions.

The musical instrument industry, as the result of the McKenna Duties, greatly increased its output and its employment. The total number of pianos imported before the duty was reimposed in 1925 was in the neighbourhood of 16,000. It fell immediately afterwards to 3,000, and in 1930 was as low as 1,186. The production of pianos and other musical instruments in this country very largely increased. The figures of employment are peculiarly significant in view of the suggestion that the duties should be lowered. Employment in the musical industries went up from 20,000 to 26,500 between 1925 and 1929. Since that date the figures of those actually employed have fallen, and in March this year they were down to 19,000. Here is a trade which, in spite of the 33 per cent. tariff, is finding it extremely difficult at the moment to employ its workpeople. There are some 6,500 men and women unemployed in that industry, yet this is the moment selected for reducing the protection afforded from 33 per cent. to 20 or 25 per cent. The House may take it as a reasonable suggestion that the numbers unemployed are quite likely to go up from 6,500 to 8,000 or 9,000 in that one industry alone, and where the President of the Board of Trade got the figure of 1,800 unemployed which he gave I cannot imagine.

There is another very remarkable case to which he made no reference, that of the watch and clock industry. In spite of the McKenna Duties the market was so completely controlled by German and Swiss manufacturers, that for many years the British industry was unable to make any effective attempt to secure its own market for itself. Only in the last two or three years, by the expenditure of a great deal of capital and of a great deal of energy, has that industry come into the field. I hope the President of the Board of Trade will stay for one moment to listen to these figures, which show the amazing progress which has been made. I will quote to him one or two of the figures given by the British clock industry in the last number of their Journal. They point out that their total production East year doubled, and they hope to double it again in the present year. Let me just give one or two figures. In 1930 the British industry produced only 672 mechanical chiming clocks. In 1931 it produced 2,400; at the present moment it is producing at the rate of 42,900 and, with the additional protection that they believe they require to make their industry secure, it would put up the figure to 90,000. In the case of mechanical striking clocks, the output in 1930 was under 18,000; in 1931 it was 21,000, and at the present moment it is 161,000. The industry is convinced that it can bring its production up to nearly 300,000 if it is adequately secured of its home market. In fact, the manufacturers hope that they could increase their present yearly output of just over 800,000 clocks to a yearly output of over 2,500,000 if they could get reasonable security for their industry.

What would that mean in employment? The whole of that industry at this moment employs nearly 16,000 people, of whom 10,000 are employed by actual clock factories. If I may quote a sentence from this report, they say that suitable tariff conditions would enable the young industry to get a firm foothold. As a result, employment would be found for many thousands of workers, for already some 10,000 are engaged in the existing factories, and in a very short while this figure would be half as much again, leading, after that, to larger extensions still. This industry, which was not consulted; this industry, which had no opportunity of placing its position before the President of the Board of Trade, calculates that if it were given what in its opinion is a reasonable opportunity, it would employ at least 5,000 men more, contrasted with the 3,800 who are all that can be secured by the arrangement which has been made with Germany. Of course, no calculation has been made of the possible loss to that industry on its present employment. The industry, which has just managed to get going after so many years of delay and difficulty and is now employing nearly 16,000 men, ought not to be put in the position of having the duties suddenly lowered again and its whole future and the whole of the large amount of capital which has recently been put into it thrown into jeopardy.

I do not know that there is any need for me to detail the smaller industries. Nevertheless, I should like to point out that in the wrought enamel hollow-ware industry, after the duty was imposed, the output, which in 1926 was between 5,000 and 6,000 tons, went up to over 10,000 tons in 1929, and even in the last year of depression was over 11,000 tons, having almost entirely eliminated the foreign industry. The figures of employment have gone up from 2,122 in 1926 to 2,804 in 1929 and, in spite of the tremendous depression of the last three or four years, have only sunk by 50 or 60 during that time. There again, though it is only a question of seven or eight hundred men whose livelihoods are at stake, we might have had some fuller consideration given to them. This also is an industry which, according to the recommendations that its representatives have made to me, has not been consulted. My right hon. Friend said that they were to be told to go to the Advisory Committee: everything is settled there. After they have waited for appeals pending, and money has been spent on prosecuting them, and everything possible has been done outside politics, they are suddenly told one day that all their efforts have been in vain and their whole case has been given away.

Moreover, in these negotiations no allowance has apparently been made for any possible changes in the currency system. We are on the eve of a World Economic Conference, where it is possible, even if it is unlikely, that world currencies may be stabilised. Would it not be as well either to postpone the agreement until we know where we stand, or to insert some proviso as a protection—a very necessary protection—against changes of currency? As I see it, a serious currency depression in Germany, Belgium, Poland or any of the other coal-supplying countries would entirely destroy the value of the concessions given us, while at the same time it would enormously enhance the value of the concessions we are making on our duties. Yet we are bound, not only to Germany through the most-favoured-nation Clause, but to practically the whole of the rest of the world, to impose no higher duty, whatever the currency depreciation of a country may be, other than the duties laid down in the Schedule.

Again, would it not have been wise to wait until the whole most-favoured-nation situation had been cleared up at the World Congress? I believe at this moment that the most-favoured-nation Clause is the most serious obstacle that exists to any real development of mutual freer trade agreements between countries. It is an entirely obsolete proviso, that was once intended to extend the bounds of freer trade and for years past has operated in exactly the contrary direction. Every nation that has ally element of shrewdness in it, rather than give some concession, prefers to sit back and wait to see whether it may not get a concession without any effort on its part. Only we, in order to employ 3,800 men more in the coal-mines—and in itself I entirely agree that that object is worth securing —are lowering our tariff not only to Germany but to the whole world. Germany is a country from whom we get nothing in return. We are sacrificing what might have been a bargaining element in dealing with those other countries.

I confess that I should have thought that it would have been well worth while to try to go to the International Economic Conference and see whether by general agreement some modification or abolition of the most-favoured-nation Clause could be secured. In that event we could have entered on new negotiations with a much better chance of getting as much as we gained. To-day we get a small, limited concession from Germany—if it be a concession. In return we give something quite unlimited and indeterminate in its effect, both in reducing employment, in restricting possible developments, and in increasing competition not only between ourselves and Germany but between ourselves and the whole world.

The only argument I have heard outside this House in favour of this agreement is that it is terminable at three months' notice. That is something, but even if it is denounced in a few months' time, is it worth while continually disorganising our industry? We have had far too many changes already. It can only be assumed that it was for the satisfaction of putting into the Board of Trade someone who did not believe in tariffs and who knew nothing about them that we have had all the many changes, backings and fillings that this whole tariff business has contended with since the present Government came into power. Why on earth did they not give us a reasonable tariff at the outset?

An HON. MEMBER

Why on earth do you not turn them out?

The CHAIRMAN

I am afraid that the right hon. Gentleman is getting a little beyond the Motion.

Mr. AMERY

I would not wander beyond that position, but it was only in connection with the three months' notice of the treaty that I was protesting against this continuous uncertainty to which our industries have been submitted. I confess that, when we are told that this is what we have to expect, I shudder at what the rest of British industry is to be subjected to once the wider negotiations for tariff concessions are set on foot. I also look upon the whole business of the World Conference with a very mitigated confidence if it is to be conducted in the spirit and with the kind of vigour with which these negotiations have been conducted. As the situation stands, I certainly agree with my right hon. Friend that the Government should not go on with this matter to-day, but should take the whole situation into consideration again with the industries affected—industries which are entitled to be consulted. I also say very definitely that if the Government do not accept that view I shall vote against their Motion to-day and hope that as many of my hon. Friends as possible will also vote against it.

5.12 p.m.

Sir HERBERT SAMUEL

The Motion which is before the Committee is "That the Chairman do report Progress." Might I ask whether the Government are in a position to say whether they will accept that Motion or not? If they are not prepared to accept that Motion, is the Committee to continue the general Debate on that Motion instead of on the Motion moved by the President of the Board of Trade?

The C HA I R MAN

On the point of Order which the right hon. Gentleman has raised: It is, as of course he knows, laid down that on Motions of this kind the discussion must be strictly limited to the Motion which has been moved. That is not always a very easy principle to interpret, because the Chairman has to be guided by the reasons given by the proposer in moving that Motion. I am bound to say at the present time that I find it a little difficult to see whether it would be my duty to rule out of order on this Motion anything which would have been in order on the original Motion. I must regard myself, of course, in regard to that, as free to rule on anything that may turn up in the course of the Debate. A minute ago I considered that the right hon. Gentleman who last spoke, when he proceeded to deal with questions concerning the proposed World Conference and matters of that kind, though he might possibly have been in order on the original Motion, was going rather beyond the Motion before the House, which is that I report Progress, for the reasons which were given in support by the right hon. Gentleman. I therefore think, on the whole, that it would probably be for the convenience of the Committee to consider that the Debate is not narrowed by the Motion which has already been moved. Perhaps it would be only fair to say that, though technically hon. Members who speak upon the Motion now before the Committee are not debarred from rising to speak again on the subject of the original Motion, though they are not so likely to catch the eye of the Chairman as they would have been if they had not spoken.

Mr. LUNN

On a point of Order. The right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) at the close of his speech moved to report Progress, because a particular matter which concerned his constituency and his City was mentioned—

The CHAIRMAN

If I may interrupt the hon. Member, I did not say that. The right hon. Gentleman has moved that I report Progress in order that, in the whole circumstances of the case, the matter which was before the Committee may be further considered outside this Chamber.

Mr. LUNN

Yes, but might I submit that this Motion was on one side of the agreement? What I wish to ask you is: may we, in debating now on the narrower Motion to report Progress, discuss the agreement as though the Motion before the House were not for discussion? I want to be very clear that we can discuss any part of the agreement at the moment on the narrow Motion to report Progress. I think you ought to give us that decision.

The CHAIRMAN

I have already informed the Committee as clearly as I feel that I can, that at the moment I do not see the likelihood of any questions being raised which I should rule out of order on this and which I should not rule out of order on the original Resolution. I cannot tell what hon. Members may say, and I must reserve to myself the right to restrict the Debate if I should possibly find it necessary. In that event, of course, if hon. Members were debarred from raising a particular point, by a Ruling from the Chair, I should consider that they had a special right to be called if and when we get back to the original Resolution.

Sir A. CHAMBERLAIN

I do not want my Motion to be inconvenient to the Committee or that it should impede hon. Members and prevent them from discussing whatever they want which is relevant to the Motion. If the President of the Board of Trade is able to say that he will make a statement at the end of to-day's discussion, I will at once ask leave to withdraw my Motion so that we might get back to the discussion.

5.16 p.m.

Mr. ISAAC FOOT

I rise to speak at this stage with some apprehension because difficulties have apparently arisen between different supporters of the National Government who favour Protectionist views. We protest equally with the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) against a policy which involves successive changes, very often changes in the course of a single year. I would like first of all to pay my tribute to the President of the Board of Trade, because I am aware of the fact that in these matters he has had to meet with very considerable difficulties. He has had to deal with coal. I must express my regret that to-day we have not had the whole story from the beginning in August, 1931, up to the present time. I quite understand that the President of the Board of Trade wished to consult the convenience of the Committee and did not wish to occupy too much time in the Debate. Surely, however, the Committee is entitled to know what were the contending claims made by Germany and ourselves in the course of these discussions, what were the conflicting interests, how those interests have been reconciled, and how those divergent claims have been met. All that we have had so far is an occasional Press report. We have had some reports of the commercial correspondents in Germany republished in our own papers, we have had a great many questions put in this House in the last 12 or 18 months, and we have had an occasional reference to this subject in our Parliamentary Debates. But so far, there has been no coherent and connected story that would enable us to judge whether in this matter a fair Settlement has been arrived at in the interests of this country.

I wish that this full statement could be made. I do not object, in fact I con- gratulate the President upon directing his attention almost entirely to coal. We know very well that unless one-third of the coal that we produce in this country is sold abroad, there is not likely to be any health in the coal industry. All Members of the Committee, and not merely those who represent mining areas, have known something of the acute distress in the mining districts and they know how that distress has been particularly severe in the great coal-exporting areas. The difficulty and the stringency in the coal-exporting areas have had a very serious effect upon the whole of our coal economy throughout the country, and the great amount of trouble, arising under Part I of the Coal Mines Act has been largely caused by that. If anything can be done to add to the employment in the coal-exporting areas the hands of the President of the Board of Trade should be strengthened for that purpose. I know too that behind this achievement have been the ceaseless activities of those in the Mines Department with whom I had the honour of working, and my successor would be as eager as I am to pay a tribute to the assiduity, the courage and the unremitting efforts that they have always made to secure every legitimate advantage for an industry that has of late passed through a time of such distress.

It may be asked by hon. Members who are concerned with other industries, "Why should coal be put first?" Coal ought to be put first because it is the first to suffer in any economic struggle. It is the first conscript that goes into the field. When, in our controversy with Ireland, it was thought necessary to impose penal trade restrictions, the brunt had to be borne in the first instance by the coal industry. We are so situated in this country, and our circumstances are so special and so peculiar, that we are most vulnerable in coal, and when trouble arises and there are fiscal differences, and when there are difficulties over tariffs, coal is hit first of all and hardest of all. Therefore, I think that the President of the Board of Trade was quite justified in giving his first attention to securing what advantage he could for an industry that has borne more than its share of the trouble arising from the economic storm and stress of the last few years. Why, then, after these remarks that I have made, should there be disappointment? The disappointment, of course, is not with the actual achievement but in the sad contrast between the achievement and the high expectations, for which the Protectionists were responsible.

The contention has always been, "Give us tariffs as a bargaining weapon," and it was that contention that did more harm in the Free Trade ranks than any other. There were a good many traditional Free Traders—most of the Protectionists in this House have been Free Traders in their time, or they are the descendants of Free Traders—and the appeal was that we should use tariffs to reduce tariffs. Just as some pacifists supported the War because they were told that it was a war to end war, so many men of Free Trade predilections and upbringing were won over to Protection on the ground that you could use a tariff to end a tariff. That I believe was a very respectable and powerful argument. We gave our reply as well as we could, but we always said that there was no historical proof and that the expedient had failed everywhere that it had been tried. We asked why, if this device was so effective, it had not succeeded amongst the practised Protectionist countries of the world? We quoted the report of the Balfour Committee upon Trade and Industry that condemned the proposals for bargaining by imposing duties here. That committee pointed out that the expedient had been tried by other countries again and again. Let me quote the report. Experience, they said, shows conclusively that it cannot in the long run lead, and as a matter of historical fact it has not led, to the reduction in the general level of tariffs. If duties were to be imposed here as a weapon against other tariffs, foreign countries would certainly anticipate them by preparing special bargaining rates, said that committee. We tried to put these arguments, but we were voted down and laughed at in this House, and high expectations were raised. Hon. Members have heard questions put from week to week, "When are these bargaining negotiations to bring about some result?" and the President of the Board of Trade has said, "You must allow us to get into our stride." Last week, speaking at the annual dinner of the Chambers of Commerce he said, "We have now got into our stride." We were told during the Ottawa Debate that other countries were knocking upon the door of the Board of Trade and that they were waiting like suppliants upon the doorstep of the Foreign Office. Those who were asking questions were asked to wait and see the result. Now we have the result, and we wait to hear the trumpetings and the enthusiasm of the Protectionists.

As to the agreement itself, I quite agree with the right hon. Gentleman who moved the Motion and the right hon. Gentleman the Member for Sparkbrook that close examination is needed. There are concessions to Germany in respect of tariffs. I put forward, in support of the Motion before us, the point that nobody in the Committee knows the extent of the goods covered by the Schedule now submitted. I believe that it is not possible for anyone other than the President of the Board of Trade to obtain the figures of these goods during the past year. How can the Committee make up their minds upon this matter in the absence of these figures? I know that the agreement reduces the tariff in regard to a great number of articles. To that extent, as Free Traders, we support the agreement and are glad to see the tariff down. I should like to see the tariff down altogether. If, however, there is anything in the Protectionist case and this was done for the protection of the home market those interests are now being sacrificed. These tariffs are now to be reduced to all the world, and in this matter, who can say what are the sources of supply? What other countries will reap the advantage gained by Germany in the course of these negotiations?

Let me turn, again to coal. What have we gained in coal? It is very difficult to get the strictly comparable figures. I understand that the Secretary for Mines will be speaking later to-day, and he would help us greatly if he could give us the strictly comparable figures. I would suggest that he should give the figures for August because the President of the Board of Trade took the figures up to August, 1931. Now we should have put before the Committee the strictly comparable figures every month from August, 1931, to the month in our present year at the time the agreement was made. We have heard about the amount of coal that is sent abroad for bunkers and for the free ports, and we know that there is a slight difference between the metric ton and the long ton. We find that in one of the figures, coke is to be allowed and is in the agreement, but it was not included in the figures that were given to us by the President of the Board of Trade this afternoon. It would be fair—I am not making a debating point of this matter—if we are to measure the agreement, to understand what the comparable figures are, showing what we are giving and receiving as compared with what happened before this struggle commenced. I cannot at the present moment enter into the origin of that struggle, but in my opinion the reduction would never have been made by Germany, at any rate to the extent that it was, if we had remained a Free Trade country. Upon that I am quite satisfied.

Mr. MARTIN

The hon. Gentleman was Secretary for Mines. Can he substantiate what he is saying as the result of his experience, or is it out of order?

Mr. FOOT

Mine was a very general statement, and I should have been in a position to make it if I had never been Secretary for Mines. I should make the same statement if I had never been in office and if I had been an ordinary Member on the back bench. If the hon. Member wants proof of what I am saying I will quote from newspaper references which were Available to the general public from December, 1031, at different times until this present month, showing how close was the association between German policy in imposing this heavy restriction with the adoption of a tariff system in this country. In that respect I rely on information that is available to every Member of the House.

Major PROCTER

Is it not the case that Germany put on these restrictions before ever there was any decision to put on tariffs in this country?

Mr. FOOT

At any rate, I have made the statement in plain terms. I give it as my opinion that, had we remained a Free Trade country, that restriction at the end of 1931 and the beginning of 1932 would never have been made to anything like the same extent, and upon that I am able, if I am challenged, to quote from documents which are generally available. The question is, what have we gained, and I am asking for strictly comparable figures. I now want to ask one or two questions. I know that the figure quoted as to the permitted sale in August, 1931, namely, 420,000 tons, was simply a theoretical figure; it was a licensed figure at that time. Is the new figure of 180,000 metric tons to be an actual figure, or a licensed figure? If we are to compare a figure to-day with an earlier figure, it would not be fair to take a theoretical figure now and compare it with an actual figure in August, 1931. I gather that there is to be a system of licensing. Of course, there is no such thing as Germany buying so much coal, because Germany as an entity does not buy it, but in this matter I understand that a limit is to be set up beyond which for the present we are not to be entitled to go, and that will be arranged, I suppose, by means of licences. Then there is the question of coke, which is included in one figure and not in the other, and we should like information to be available as to the amount of coal sent for bunkers and for free ports.

Further, has any allowance been made by the President of the Board of Trade for the loss that will result from the intensified competition of those countries which hitherto have been supplying Germany, and which, under this agreement, will be deprived of their opportunity for sale? I do not know what the extent of that competition will be, but I see that the "Colliery Guardian," in discussing the matter this week, says that that is an element for consideration. Has that factor been brought within the ambit of the Board of Trade's consideration? The "Colliery Guardian" for the present week gives one or two figures which I might put before the Committee, because they show how our trade with Germany has been falling off in recent years. The figures for 1913 and 1931 are contrasted. In 1913, the total Germany import of coal was 10,370,000 tons, and, of that total, there came from Britain 8,952,000 tons. In 1931, the total German import had fallen to 5,681,000 tons, and of that there came from Britain 3,769,000 tons. The "Colliery Guardian" goes on to say that: The German offer will still leave us with only about a quarter of our trade in 1913, for which the rectification of frontiers provides no adequate excuse. Even so recently as 1930, we were sending 410,000 tons of coal to Germany per month, and in 1931 the average was 314,000. Now, I understand, we are to send 180,000 tons plus what goes for bunkers and for free ports. I suppose the fact has been taken into consideration that these arrangements affect, as they must, coal producers in Germany, and that they will be watched with great concern by them Is it anticipated by those who have been advising the President of the Board of Trade that what we have been, able to send hitherto in the way of bunkers and for free ports will still be supplied by us; or will there be an attempt to placate the coal interests of Germany by giving them a greater share of this special market? I am not qualified to answer that question, but those who are in touch with the matter can perhaps tell us what the position is. There is, of course, the provision, to which the President of the Board of Trade was entitled to draw attention, that, if there is an increase of coal consumption in Germany we are to have our share in it, but this will only be to the extent of one-fortieth of the increased consumption.

I do not want, however, to be involved in figures and statistics, but I would suggest that this is the net result in broad outline: We are actually going to sell less coal to Germany than we were selling when this unhappy business started. We are going to sell less to Germany than the reduced quota in the early part of 1932, against which we made our first protest. We are going to sell but a fraction of what was our coal trade with Germany only a few years back. If I have wrongly stated these three propositions, I shall be glad to be corrected.

We on these benches are not disappointed. It seems to me that we are the only people in the House who regard the position with some equanimity. We are not disappointed because we never expected very much. We saw that what would happen in the case of Germany would be what always happens when this tariff game commences. There is the manoeuvring for position. In December, 1931, there was a public appeal in Germany, and it was reproduced in our "Times" newspaper, that, having regard to the tariff policy of this country, there should be a restriction of coal imports into Germany, in order that Germany might be put in a better bargaining position. The classic example of that was Mr. Bennett, who raised his Canadian tariffs two and three times as high as they were before, and then offered us a small preference upon the aggregate. He might have been the man to send to Germany to carry on these negotiations. I ask the Committee to compare the result with the expectation. Three years ago we were a Free Trade country, defenceless, we were told—poor naked wretches, compelled to bide the pelting of the pitiless economic storm.

The CHAIRMAN

The hon. Gentleman is now getting a good deal beyond what would have been in order even on the original Resolution.

Mr. FOOT

I was going to show that the proposal before the Committee is not in accordance with the expectations that were raised when this policy was adopted by the Government. I will do my very best, Sir Dennis, and will certainly give way at any time if you think I am transgressing your Ruling, but I thought that, that policy having been adopted, I should be entitled to show that those of us who said that that was a wrong policy can vindicate our statement in the light of the history of the last few years.

The CHAIRMAN

It is always a little difficult to decide how far hon. Members can go into general principles on a specific question, but I think that the hon. Gentleman then was going a little too far.

Sir H. SAMUEL

I understood your Ruling to be that we could discuss on this Motion, although it is only a Motion to report Progress, what we could have discussed on the original Motion. The original Motion is one of approval of this agreement, and it is surely in order to discuss, as a question relevant to the approval or otherwise of the agreement, the question whether the agreement fulfils the expectations which have been aroused, and the purpose which it was supposed that this policy would endeavour to attain?

The CHAIRMAN

I particularly said that what the hon. Member was saying was going beyond what would be permissible under the terms of the original Resolution. It is a little difficult, as I have pointed out, to give a definite Ruling as to how far one can go on the question of general principle, but, if the hon. Member will take what I said to him in the spirit in which it was meant, I think he will Gee that he was going a little too far.

Mr. LAMBERT

May I put it to the Government that it would be for the general convenience if they would get rid of this Motion to report Progress, so as to allow of a full discussion? At the present moment there can only be a truncated discussion on this Motion. May I put it to you, Sir Dennis, as I understand you have ruled out of order my hon. Friend the Member for Bodmin (Mr. I. Foot) because this is a Motion to report Progress—

HON. MEMBERS

No!

The CHAIRMAN

I think the right hon. Gentleman is mistaken. It is perfectly true that I have ruled that it would be difficult to get out of order on the Motion which is now before the Committee without saying something which would have been out of order on the original Resolution, and my reason for interrupting the hon. Member for Bodmin (Mr. Isaac Foot) was that I thought he was going beyond what I could have allowed even in the discussion on the original Resolution.

Mr. HANNON

On that point of Order. Would it not facilitate the progress of the Debate if the President of the Board of Trade could indicate to the Committee now whether he would accept this Motion?

The CHAIRMAN

That is not a matter for the Chair. I can only say, as I have already said, that, so far, I have not seen any reason, nor do I anticipate any reason, for making the discussion narrower on the Motion that is now before the Committee than I should have done on the original Resolution.

Mr. FOOT

The Government armed themselves to the teeth with tariffs; they invested themselves with the full panoply of Protection; and, after 18 months of anxious negotiations, carried out, I suppose, by some of the ablest men in the world, the result is that, in the one industry that has any advantage at all, we are actually worse off than we were before the proceedings commenced. As for the other industries, I remember that many years ago the famous father of the right hon. Gentleman the Mem- ber for West Birmingham (Sir A. Chamberlain), in the great fiscal Debates which took place in those days, would say, "Now, what about wool? What about cotton?" And those questions were then debated in many centres of population in this country. Are we not entitled to ask now, in spite of the limitation that was set by the President of the Board of Trade, what about the other industries? If the other industries are not to be discussed, why were they not brought within the ambit of this discussion? Are we to understand that the other industries which are affected by German tariffs are not to be brought into consideration, such as the cotton industry, the textile industry, and the fish industry. I have received only to-day from my right hon. Friend beside me a most fervid and indignant protest from those who represent the fish industry of this country. They say that since this tariff trouble started there has been an enormous increase in the tariff upon fish sent to Germany, and now no relief is to be offered to them, although they have been involved in the general struggle, and a penal tariff has been imposed upon their commodity.

My right hon. Friend expressed apprehension as to what might happen to the World Economic Conference. If it is to be conducted in this spirit, I have apprehensions regarding it myself. No one is to get increased trade as a result of this agreement; no more coal is to be sold throughout the world, and no more coal is to be consumed. It simply means that, in an impoverished world an effort is being made on the part of the famished survivors to snatch an advantage one from the other.

Now we are having the protests of disappointed industrialists. Such a protest has been expressed bitterly by the National Union of Manufacturers, who complain that they have not been called into consultation. The shipping industry sent an urgent request to the President last week asking that at least the licensed coal tonnage of 420,000 per month should be restored as the result of the negotiations. The "Daily Telegraph," a very loyal supporter of the Government, discussing the matter said they could only regard this agreement as being fragmentary and temporary. The "Morning Post" on Saturday spoke of the general disappoint- ment throughout the country. The mining industry can hardly find language in which to express the bitterness of their disappointment. What is the reason for this failure? The main reason is the limited field in which the President had to operate. We told him that, when he came to these agreements, as the result of the Ottawa settlement he would find a very limited field in which to operate and indeed when the field becomes so limited mouth organs become important and powder puffs loom large on the fiscal horizon. That is why we have such a small result, because there was very little room in which the President could move. We are not disappointed.

I believe there is someone else in the House, who does not sit on these benches, who is not disappointed with the result and that is the President himself, because we had not only had his speech to-clay. We had the speech that he made at the dinner of the Chamber of Commerce on Thursday last in which he spoke of the success of these agreements and said he had now got into his stride. He declared that he was a Free Trader. We are glad to know that this Daniel in the tariff Babylon now and then still opens his windows toward Jerusalem. He went on to ask what was the objective of the Government in these agreements, and the objective, he said, was Free Trade. I am sure I can accept his word, but is it the objective of the Government? Is it the objective of the right hon. Gentleman the Member for Sparkbrook or the hon. Baronet the Member for Bournemouth (Sir H. Croft) and the other Protectionists of this House? Achilles ponders in his tent, The kings of modern thought are dumb. I well remember when I was allowed to make a few disjointed remarks at that Box in protest against the Import Duties Bill, the Chancellor of the Exchequer said they had heard from me the passionate, despairing cry of the man who had seen the last of Free Trade, and he rejoiced that they had seen the last of Free Trade. Now the President of the Board of Trade says that this rejected Free Trade is the objective of this Government.

When I wars a boy at school, I read how in the early days of Roman history two Consuls had to go out to lead the Roman Army. One of them believed in attack and swift action and the other believed in strategy and retreat, and they solved the difficulty by giving to each Consul command of the Roman army on alternate days. I suppose that was their method in those days of maintaining the semblance of a National Government. It is that double-minded policy that has produced all the bitterness that has recently been expressed. I have been reading with more diligence than usual the Beaverbrook Press. They say, "How can you expect Free Traders to carry through a Protectionist policy?" It is a fine thing for the Voiscians to have Coriolanus, with all his prowess and skill, but the worst of Coriolanus is that you can never be quite sure at what awkward moment he will recall his Roman ancestry and respond to the obligations of his Roman upbringing. My advice as a discriminating supporter of this Government is that they should get rid of this double-mindedness and decide which way they intend to travel.

I should like to make my appeal to some of the young Members of the other party. They came in as supporters of the National Government, and I have had my education greatly improved by association with them. They came in determined to try this policy out. We have seen under it unemployment growing. If the figures of unemployment had gone down regularly and steadily month by month, we should have heard of that vindication of the tariff policy from every Protectionist. I will not further associate cause and effect, but you have seen that it has not solved your problem of unemployment. You have seen what has happened as far as the relations with the Dominions are concerned. The Ottawa results were negligible. You have seen our trade going down. Now you have seen the latest result of what was the strongest argument for Protection, and I ask whether in the light of this experience they are not prepared to cast this exploded policy entirely on one side, remembering the words of Shakespeare "The time has been that, when the brains were out, the man would die." I spoke just now of the President's difficulties. No one has warned us in past days more eloquently than he against the futility of this policy. Speaking on 13th November, 1930, he said: We cannot regain our foreign trade by any fiscal dodges. There are no means of getting an entry into the Argentine or Central Europe on a larger scale than at present by anything that you may do with 'the Budget here at home. He made those declarations and, if there is anyone who has made similar declarations, it is the Foreign Secretary. It is a very remarkable thing, and one of the ironies in politics, that these two great protagonists of Free Trade have now carried through this agreement. One carried it through and the other signed it. I suppose the part that these two distinguished men have played in the matter will occupy the mind of historians in years to come, and perhaps a Walter Savage Landor of the future will give us an Imaginary Conversation of what took place between the two Ministers when the President asked the Foreign Secretary to put his signature to it, and he had to explain what the results were. I think the Foreign Secretary, before he signed, or after he signed, turned to his friend, when all the secretaries and colleagues had departed, and said: "Walter, you always said this policy would fail, and now you have proved it."

5.55 p.m.

Brigadier-General Sir WILLIAM ALEXANDER

I make no apology for intruding in this Debate. To-day, of all days, I should be prepared to be absent, because I have just returned from performing the last ceremony in a family bereavement, but so much is involved in this German agreement that I have had to sink my own personal feelings in order to address the Committee on an aspect of the arrangement with which, I think, I am competent to deal. I have asked myself whether it has been made from the true, level-headed commercial point of view or whether it has been clouded by political considerations. The first speech that I made in this House was in the Debate on the Budget in April, 1924, and I pointed out where we should drift to unless we sacrificed party politics for common sense, business procedure. From that day every one of my prophecies has come true. Financial and economic commitments without thought of the morrow have contributed very largely to the detriment of trade and industry. Since the War, party politics have brought serious trouble both to this country and to America, so much so that the citizens of both countries put politics out of office in order to obtain a businesslike Government. If recent events are forerunners of what we are to expect, the sooner we face reorganisation the better.

As President of the National Union of Manufacturers, an association embracing between 2,000 and 3,000 members, manufacturers of every class of goods, and irrespective of my own associations in commerce and industry, I wish to put a few views before the Committee. I have no hesitation in stating that the implications of this tariff agreement have caused the widest apprehension and fear throughout the whole of manufacturing industry. Duties imposed as a result of our Ottawa Agreements, and also on the recommendation of the Import Duties Advisory Committee, seem to be very seriously prejudiced. This agreement has been made without the slightest consultation, so far as I am aware, with any of the associations connected with industry or with any of the firms. The only industry that receives consideration is the coal industry. The President of the Board of Trade has stated definitely that there was no other consideration—that this is a coal deal. I do not blame the Minister of Mines. He was not concerned with the sacrifices which other industries had to make and which were being offered for the benefit of his Department. If I have a criticism to make, it is that the Minister has obtained a very small contribution for the enormous concessions which have been given. British interests have again been let down by the refusal of the Government to take advice or to consult with the best commercial brains in the industries affected.

After considerable inside knowledge of Government methods and practice, I entered this House in 1923, like many other men of commercial experience on the back benches, free from political ambition, but hoping, with my technical training, coupled with lifelong business experience, to contribute something useful in this House to the national service. I have been long since disillusioned and convinced that it is about the last place where industrial agreements should be made or where industrial firms in this country can get the fairest deal. Since the War I have had some experience in negotiating trade pacts with Germany. France and Germany are past-masters in the art of bargaining, but their Government delegates never go to important meetings or discussions or conferences, and they never adopt or accept decisions until they have been O.K'd. by the best commercial experience and brains which they can command and which are behind the conference people.

I will outline for the Committee the irreparable damage which has been done in the past by one or two contracts with which I have had the closest association; one, at any rate, in which I was largely interested. During the discussion on War Debts and Reparations with our Chancellor of the Exchequer, the German delegates had here in London a body of the best commercial brains they could obtain in Germany for consultation and advice, and as the result our legislators were out-manoeuvred. I have another glaring example in mind where politics have influenced and handicapped sound business. In 1921 I assumed the task of trying to retrieve the fortunes, as chairman and managing director, of the British Dyestuffs Corporation, which, owing to the failure of our Government to maintain an Act of Parliament for the benefit of the dyestuffs industry, had got practically into bankruptcy. That agreement, which was, through faulty drafting, evidently illegal, was allowed to lapse, and this valuable industry to this country was left at the mercy of Germany for over a year before the Government were compelled to introduce the whittled-down Dyestuffs (Import Regulation) Act.

I was urged by our own Government to come to terms with Germany because they feared that they would be unable to hold the Dyestuffs (Import Regulation) Act on account of Free Trade protagonists' opposition, and after two years' hard bargaining with the Germans we obtained a very important agreement, the Protocol of which was signed. Under that agreement the dyestuffs industry in this country would have been working seven days a week, and we should have been working every dyestuff which Germany made as well and as efficiently as sine. What happened? That agreement was turned down by the then President of the Board of Trade on purely political grounds because of the opposition from Free Traders and Free Trade consumers, and the only criticism against the agreement was that they did not understand how we had obtained it, because it was much too favourable an agreement for the British Dyestuffs Corporation. If the agreement had been confirmed by the Government there would have been no necessity in recent times to debate in this House whether the Dyestuffs (Import Regulation) Act should be continued or not—none whatever. The industry would have been established under the agreement without it.

I want to speak on the chemical side especially. The German agreement which we are considering to-day singles out few industries to furnish the concessions for an illusory advantage in coal. Why the birthright of these industries should be sold for a mess of pottage is beyond the comprehension of business men. But, most surprising of all, is that on the chemical side, of which I am qualified specially to speak, the whole range of chemicals, or even a comparatively small range, has not been accepted. It has been limited to a group of four, which are the particular products manufactured by the largest chemical organisation in Germany. I propose to limit my remarks to three of these products—acetic acid, acetone and formaldehyde. Let me examine the history of these important products, which were of comparatively small amount before the War and were then entirely in the hands of the foreigner. One of the largest contributors to national revenue in this country has over the past few years had its manufacturing business very seriously prejudiced by almost prohibitive excise duties. I refer to the distillers and suppliers of alcohol. To develop fresh outlets for their products and maintain employment in their distilleries, the Distillers Company decided to embark on the most up-to-date synthetic chemical processes for the production of acetic acid, acetone and other solvents from alcohol, and involved themselves in a very large capital sum of expenditure on buildings, plant, machinery, etc.

Imperial Chemical Industries have also committed themselves to the expenditure of large sums for the manufacture of new products in this country, one of the most important of which is acetic acid. These industries have been started and developed during a period of crippling taxation, fierce world competition and other handicaps, but, with the assistance given to them by the Import Duties Advisory Committee of 33⅓ per cent. on these specific products, they have progressed. But what is the position? These two companies, dealing first with acetic acid, have a capacity of 12,000 to 15,000 tons per annum. German material is still coming into this country, notwithstanding the 33⅓ per cent. duty, and these factories to-day are only working at 25 per cent. of their capacity. I next refer to acetone. It has recently been manufactured on quite a large scale in this country as an outlet for alcohol. It is a large national asset for defence, which I know from my experience during the latter part of the War, and its production ought to be encouraged. Notwithstanding that the prices of these products have been reduced since the 33⅓ per cent. duty went on, they are cheaper to the consumer to-day than they were before the duty. Germany to-day is importing into this country acetone to the extent of 25 to 30 per cent. of the monthly consumption.

I will deal with the next item—formaldehyde. This also is a comparatively new industry to this country since the War, and I have interested myself in the largest factory in the country. Owing to fierce competition from Germany and the dumping of this product, the company was compelled in 1932 to approach the Imports Duties Advisory Committee for assistance, and, with promptitude and business efficiency, that body, which, thank Heaven, is not influenced by any political bias or motive, and has already commanded the approbation and respect of every manufacturing industry and firm in the country for straight dealing and sound commercial ability, decided to recommend a duty of 33⅓ per cent. But, as happens with the Import Duties Advisory Committee, our trade was consulted, and before the 33⅓ per cent. duty was placed upon the imports of this product, which, by the way, the Germans are still sending and absorbing the duty themselves, certain guarantees were obtained from the company. The guarantees were as follow: (1) that the duty would not be used for the purpose of raising prices to the consumer; (2) that the company would involve itself in any further capital expenditure on buildings, plant and machinery to ensure that the British demand would be met to the extent of 100 per cent. of its requirements; (3) that if increased production and continuous working of the plant improve efficiency and reduce costs, the benefit shall be passed on to the consumer.

Those were definite obligations of a sound business nature and all have been fulfilled. I cannot do better than read a copy of a letter which was written to the Secretary of the Import Duties Advisory Committee by the manufacturers in October last, less than five months after protection had been granted: Formaldehyde. We feel that it will be of interest to your Committee to know the result of placing formaldehyde in the 33⅓ per cent. Import Duties category. When we made application, in our letter of the 9th April, 1932, for this duty, we stated that we would undertake by early expenditure to increase plant capacity to meet any increased demand, and we also stated that in our opinion increased production would lower costs so as to avoid any increase of price to the consumer. We have pleasure to report that we have found it necessary, due to increased business, already to increase our plant capacity in two stages by 60 per cent., and we are now considering further extensions, as our plant is working 24 tours daily, seven days a week. Our costs have been reduced accordingly, and we are to-day selling our products below the prices ruling when we met intense foreign competition and before the duty was placed upon the commodity. We believe our experience is also that of other British manufacturers of the product. This growing industry has encouraged the company to go a step further. The company has got plans and schemes under consideration at the moment for the erection and equipment of another factory, thereby ensuring more employment, but if this German agreement is ratified in its present form those schemes will be abandoned as a result of Government folly.

I have given the Committee details of three chemicals singled out for slaughter in an agreement which is unsound, unfair and detrimental to national interests. Others selected for ransom call for the same argument. The Chancellor of the Exchequer is looking for revenue from increased trade to assist his Budget. The Minister of Labour is pressing for relief from the tragic figures of unemployment. The Government have professed to be anxious to do everything to assist industry. What incentive have industrialists to launch out in new ventures when the security given by the recommendations of the Import Duties Advisory Committee is whittled down without any consideration of or consultation with those industries? The principle involved in overruling the recommendations of a non-political Import Duties Advisory Committee by politicians who cannot have the same knowledge, seems to me to be a weakness which is the keynote of this whole agreement.

Nothing has happened, however, that was not apprehended months ago by the National Union of Manufacturers, for in February that Association approached the President of the Board of Trade, through a Member of this House, asking that in any foreign discussions before any commitments were made the industries interested should be consulted. A very courteous reply was received from the President of the Board of Trade, but it was very unsatisfactory from the manufacturers' point of view, and now we find that our worst fears have been confirmed. The manufacturers of this country who, under the heavy burden of taxation, are competing with foreign nations have to find the bulk of the wherewithal to meet the requirements of the National Exchequer, and if instances such as we are discussing to-day, to the prejudice of the manufacturing industries of this country, are to continue it will be a sad story for this country. All the benefits of the Ottawa Agreements, all the benefits of our bargaining power in protective duties and the security given by the recommendations of the Import Duties Advisory Committee, look like being frittered away by weak administration and weak commercial bargaining policy.

When the restriction to our coal quota was put on by Germany, power was asked and authority was given to retaliate by taxing German commodities up to 100 per cent. I make bold to say that if that intention had been carried out and if duties had been increased against Germany on the very articles on which to-day we are reducing the duties, we should not have been troubled with our discussion to-day. We should have got the whole of our coal quota, not the trilling quantity we are going to get now, but we should have got back to the 420,000 tons per month level, and we should have had to sacrifice nothing. I should like to offer the Committee my apology for the length of my address, but I hope I have said something of a constructive nature. I should like to finish on a constructive note. By the results of our Empire policy as laid down at Ottawa, and by our protective policy we have weapons for bargaining with the nations who must have access to our markets, beyond the dreams even of a few years ago. Let us treat this Empire as a single unit for reciprocal trade, debiting foreign nations with the value of the goods they ship to the Empire and in return crediting them with all the goods they buy from the Empire, irrespective of from what part of the Empire they come, insisting that imports and exports relative to each nation of the Empire shall be upon an equitable basis. That is a system far removed from the present indication as disclosed by the ridiculous and prejudicial agreement that we are asked to confirm to-day.

We had great hopes and great anticipations in placing the President of the Board of Trade in office. We hoped that previous politics and political views would have disappeared. We hoped from him of all men to get sound commercial agreements. This example is not sound. If this policy is going to continue, if this is the forerunner of what we are going to obtain by national agreements in the future, then I can only say that the office is in the hands of one who is a, wolf in sheep's clothing. I for one will not vote to confirm any such agreement as this. If the proposal to defer the Debate for proper consideration and for proper investigation is not conceded, I shall certainly go into the Lobby against the Government.

6.13 p.m.

Mr. McENTEE

It is remarkable that all the speeches from supporters of the Government have been extremely critical of the Government's action. I have not heard one kindly word said by any supporter of the Government, and I have heard some very unkind words said by one half-hearted supporter of the Government, who gives them the support that he described as a limited support. I would ask the Government to give that consideration to the agreement which the right hon. Member for West Birmingham (Sir A. Chamberlain) asked them to give. I have always been a Free Trader in its fullest sense, not in the limited sense that some of our Liberal friends put forward their ideas of Free Trade; but quite outside my views or their views I am considering this agreement, and I want to consider it from the point of view of its fairness.

I have received a letter from a firm in the town in which I live which has its principal works not in my constituency but in the other half of the borough which is represented by a supporter of the Government. In that letter they make some statements that I consider to be somewhat remarkable. They say that since the imposition of the 25 per cent. duty on the goods they manufacture they have been able to increase the number of their workmen from 100 to over 500. It may be said that that is a proof of the effect and value of tariffs. If I were arguing that point only, it would be easy to show that while this particular firm may have increased the number of their workmen as a consequence of the tariff other firms have been compelled to reduce the number of their workmen as a consequence of a tariff. They go on to say that in the agreement which we are now considering the tariff has been reduced from 25 to 15 per cent. on the goods they produce, and that, as a consequence of this reduction, the 500 persons whom they now employ have been placed on half time. The reason they give is the uncertainty in the matter, and the refusal of people who have previously given them orders to give them orders until they are quite sure what the policy of the Government is going to be. They say: We must say that if this is to be the procedure that is going to be adopted by the present Government we cannot see that it will in any way stimulate trade or induce manufacturers to spend money on extending their plant; as it must be in their thoughts that although it is toys to-day it may be something else to-morrow. Therefore, the uncertain conditions under which we are living we are afraid will cause more unemployment. In a night, without any warning, an industry which has grown from 150 to 500 employés in a few months finds itself reduced to such a state that its employés are placed on half time. Is it fair that any industry or any set of people should be treated in this way? This industry, like every other industry, had to appear before the Commissioners and prove the necessity for a tariff, and also prove the actual tariff which ought to be placed on their goods. I am willing to agree that the Commissioners were perfectly honest in the matter and gave the fullest consideration to all the arguments put before them for and against any particular percentage. They fixed 25 per cent. as the duty which was essential in the interests of this particular industry, and, having done that, one would imagine that no Government or Minister with the slightest desire for fairness would seriously alter the conditions without giving the firm an opportunity of going back to the Commissioners and putting their case why an alteration should not be made. That is how the matter presents itself to me.

But there is also something else at stake in this matter. Only a few months ago we were told that it was ridiculous for anyone to argue against the imposition of these tariffs; that they were fixed by qualified men, men who, by experience and knowledge, were the best people to examine these cases and give a decision. The Government told us that the Government were the last people who should be asked to fix the amount of the tariff to be imposed. Speaking in that Debate, I said that the commissioners were not the best people and that the final decision ought to rest with the Government. The Government said, "No, you are entirely wrong. The Government are not the people who ought to fix the percentage of these duties. They should be fixed by people who are entirely independent and removed from all political influences and, who, therefore, would be able to view the matter fairly and dispassionately." If that argument be true, the action of the right hon. Gentleman and the Government to-day cannot be right. My own view is that it is grossly unfair to manufacturers and to men who have been placed in employment, and who would still be in employment but for the decision of the Government. It is also a serious admission of the ineffectiveness of the policy brought forward by the Government a few months ago. If their policy then was correct, how can they argue that a partial reversion of that policy in this agreement can be justified?

The President of the Board of Trade is going back to Free Trade by stages. He does not like to go all the way at one time. He is going back 10 per cent. to-day, possibly another 10 per cent. in a few months time, and by the end of the year he may possibly take off the remaining percentages and become an advocate of the type of Free Trade he was a few years ago. But the uncertainty of it all upon trade, the uncertainty of the policy of the Government, is something about which we should protest. If we are going to be a tariff country, if we are going to impose these import duties, then let us stick to them sufficiently long to be able to prove whether they are effective or not. On the other hand, if the right hon. Gentleman is going back to Free Trade, then frankly he should clear out of the position in which he is now and openly admit that his policy has been wrong; then perhaps someone with more interest and more faith than he himself appears to have in it will administer it in the future. The uncertainty brought into the matter by the action of the Government is wrong and cannot be justified either from the tariff point of view or the Free Trade point of view.

So far as the coal industry is concerned, upon which we are supposed to have gained a little, it only amounts to a stabilisation of the minimum in the export of coal. We had reached a minimum far below the quota we had a right to expect, and now the right hon. Gentleman comes along and makes an agreement with Germany stabilising that minimum, and pays a price which is out of all proportion to the actual advantages which he says he has secured for this country as a consequence of the bargain. I do not think that anything has been gained, and certainly the Government will be well advised, if they desire to avoid defeat, to accept the Motion of the right hon. Member for West Birmingham. If speeches are any indication of the feeling in the House, they will be defeated. Personally, I do not want, to see them escape defeat. I should like. to see them defeated on a matter like this, but I am not quite sure whether hon. and right hon. Members who have spoken will be prepared to go into the Lobby against the Government if the Government Whips are put on. The right hon. Member for West Birmingham and the right hon. Member for Sparkbrook (Mr. Amery)—I exempt the hon. Member for Bodmin (Mr. Isaac Foot) and the hon. Member who spoke last—and all the other full-blooded supporters of the Government would prob- ably come to heel if the Government Whips were put on. I do not know whether it is intended to do so, but I should like to see the Government test the opponents and critics of their policy in the Division Lobby.

6.42 p.m.

Captain ARTHUR HOPE

I should like to associate myself with the remarks of the right hon. Member for West Birmingham (Sir A. Chamberlain) and to support the Motion he has moved. When we became a tariff country one of the objects was to have trade bargains with foreign Powers, and we were perfectly prepared to see bargains made with foreign countries. My idea of bargaining is to get as much as you can and give as little as you can, but in this agreement we are doing exactly the reverse. We are getting little and we are giving a great deal. The argument put forward by the President of the Board of Trade is that on balance it will employ more men in this country than were employed before the agreement was made. Three thousand eight hundred more miners are to be employed, and, on the other hand, we have a very vague estimate of a decrease in employment of 1,800 men among those industries which are to have their protective duties reduced. I wonder how these figures were arrived at? I wonder whether we shall have an increase of 3,800 in the number of miners employed? My experience as a representative of a mining constituency is that many of the people who are now employed working four shifts in the week will be put on an extra shift, and that nothing like the addition of 3,800 more miners will be employed in the exporting industry.

But how can you estimate the numbers who will be affected in the other trades? The right hon. Gentleman has admitted the difficulty quite frankly. Some are special trades—the jewellery trade, for instance, which is largely associated with West Birmingham, the next constituency to mine. Many of these workers live in my constituency. Before the War the jewellery trade did very good business, but in later days it has been in great difficulties because of foreign competition and the great increase in the price of gold, but it has been carrying on, although reducing the number of people employed. When the duty of 30 per cent. was put on, the jewellery trade really thought that it was going to have, a chance. It gave it some hope of bringing the apprenticeship system into the trade again—a system which had almost disappeared.

It has been said, how can a reduction of 5 per cent. affect a trade I Many trades are now working on a very small margin indeed, and 5 per cent. may make all the difference between a loss and a profit. What consolation can it be to the people working in that trade to be told that while the 30 per cent. has been reduced to 25 per cent., it is now going to be stabilised at that figure? We thought that it had been stabilised at 30 per cent. but now that it has been reduced there is no guarantee that when the right bon. Gentleman comes to make agreements with Italy or Czechoslovakia or any other countries, this trade or similar trades, will not be chosen for yet further reductions. Another Birmingham industry which was very prosperous when I was a boy at school there was the toy industry. That was an industry which employed a number of people but which declined as a result of foreign competition for many years past. Directly a duty was put on imported toys that industry was given a chance of employing more people, of bringing in apprentices, of introducing fresh people into the trade and it is an industry which, since the duty was put on the imported article, has been "pulling its weight" in the country. Now the duty is to be reduced by 10 per cent. to 15 per cent.

I was speaking the other day to a manufacturer of cheap toys who told me that if all the manufacturers of this country were doing as well as the manufacturers of toys were doing at that time, under the duty, then indeed Protection had proved a great thing. He said that the industry was then employing people who obviously would not have been employed in that trade or in any other trade, had it not been for the duty. It is rather hopeless for the small trader if he is to be at the mercy of these rises and falls in the rate of duty. We must have some form of stabilisation. What chance has the small trader with only a certain amount of capital, if he instals new plant in the hope of protection, may on the promise of the Government to give him protection for some time, if he finds that protection taken away, not on three months, or six months, or a year's notice, but literally over the week-end? Most people did not know until Saturday what was happening about this matter, and to ask us to accept this agreement and put it into operation within a week is to ask rather much even of the most loyal supporters of the Government.

I am anxious about the outlook which the President of the Board of Trade appears to have in these matters. It is certainly very important that the coal industry should be put on its legs again and I would support any reasonable and legitimate means of doing so. But when we come to future trade agreements, is coal going to he the only consideration again? This may be only the beginning. We may have a series of three agreements which will pick out small trades, apparently uninfluential, which cannot say too much for themselves, and, while the big trades will not be touched, these small trades may be attacked in this way. We may find, if this system goes on, that in another year or 18 months all these small and comparatively hopeless trades will have been picked out for this kind of treatment in order to facilitate agreements with foreign countries in support of some of the great industries—it may be coal or cotton or wool or something else.

Birmingham is a rather remarkable city, industrially, because it has an enormous number of small industries. I think there are between 1,200 and 1,300 totally different industries there. Other Members from Birmingham will agree that, as things are, we are not doing so badly there at the moment and Birmingham has its present comparative prosperity largely because these small traders have put their capital into their own businesses, and have made their own businesses by themselves, without reference to big national organisations. What applies to Birmingham applies to the South of England generally. At Slough many small industries are being formed employing perhaps 40 or 50 or 100 or 300 people each—not great numbers. Along the Great West Road we find new factories each employing comparatively small numbers. We have all the people who have put their money into these industries; we have the people who have come South to get em- ployment; we have the people who have brought their factories South in order to escape high rates or other conditions in the North. Are they to be penalised in order, permanently, to support a comparatively dying industry like the coal industry in this country? [HON. MEMBERS: "Oh!"] I say "comparatively" dying because whatever prosperity there may be in the future, the coal industry will never again employ the same number of men as it did before the War.

The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) said the only good thing about this agreement was that it could be denounced at three months' notice, but that is going to be no consolation to these unfortunate industries, because by the time the agreement was denounced whether in three months', six months', or a year's time the damage would have been done. These people will lose heart and will not put any further money into their industries or employ any more people. I think the Government ought to reconsider this matter. I do not speak as one who is generally a critic of the Government. I have consistently supported the Government, even to the dismay at times, of some of my hon. Friends in our own party, but at this time it is impossible for a Member representing an industrial city which is going to be vitally affected to support the Government and I shall certainly support the Motion of my right hon. Friend the Member for West Birmingham and I hope and trust that the Government will accept it.

6.51 p.m.

Major LLOYD GEORGE

One useful purpose has been served by this discussion. It has shown the Committee the various ideas held by hon. Members as to the purpose for which tariffs were introduced. They do not seem to have any idea as to what the policy of the Government is with regard to the future of tariffs and I cannot altogether blame them, because I am not certain that the Government themselves know what they want to do. I believe that the uncertainty in the minds of hon. Members is another instance of the complete uncertainty or indeed absence of policy on the part of the Government. We have hon. Members who supported tariffs for revenue purposes; others who supported them for bargaining purposes; and others still who frankly supported them for protective purposes. Their views are contradictory because the more you succeed in using a tariff for bargaining the less you get from it in revenue, and I believe also that the more successful it is as a protective measure the less you get in revenue. But let us see what has been the record of the tariff as used for bargaining purposes. I am grateful to the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) and the hon. and gallant Member for Aston (Captain A. Hope) because they have made clear to the Committee what many of us who opposed these tariffs in the first instance tried to make clear then—that it is all very well to refer to a tariff as being purely for bargaining purposes, but when you start your bargaining every industry affected immediately says, "Why pick on me?" This afternoon we have had examples in more than one speech. We have had right hon. and hon. Gentlemen speaking quite rightly from the point of view of their constituents saying, "The coal industry may be very important but why should the industries in my constituency be affected in order to get this agreement?" That is what is going to happen in every instance in which bargaining is resorted to and every industry which is used as a pawn—as they will call it—will naturally protest. I agree with an hon. Member who spoke earlier and who said that the agreements which we had already reached made it difficult for us to use the bargaining weapon with regard to a, large range of commodities. Let us look at this agreement. It is hailed as a great success, not by the whole Committee, but by the Members of the Government. They point to the increase that will take place in the export of coal to Germany. That would be all right if we were content to have British exports of coal to Germany at the figure to which they have dropped since the tariff came into operation. But surely a truer thing to say would be that, as a result of the agreement, we shall export to Germany half what we used to export before we became a tariff country.

When this country was being "ruined by Free Trade" we exported, in 1931, an average of 300,000 tons a month and in 1930 something like 400,000 tons a month. If British coal exports to Germany are to get back to the figure at which they stood before tariffs were introduced I estimated that the consumption of coal in Germany will have to go up to about 12,500,000 tons. I base my figure on the assumption that the figure of 7,500,000 metric tons which is used in the agreement is more or less what is consumed to-day. The agreement says that the percentage of British coal will go up as consumption goes up in Germany, and if that be so, then on the basis of the figure I have mentioned, for British coal exports to reach the figure at which they stood before any tariffs were introduced, German coal consumption will have to go up from 7,500,000 tons to 12,500,000 tons. Here is an example of what tariffs have done for this country. The President of the Board of Trade referred to the fact that 3,800 more miners would be employed but how many tens of thousands have been put out of employment owing to these duties? It is very small consolation to the coal industry to be told that 3,800 will be put into employment, when we know, as a fact, that as a result of the policy which this country has pursued, many more have been thrown out of employment in this very industry.

To say that the policy which the Government have pursued has nothing to do with the cuts in quota which Germany imposed upon us is nonsense, because the first cut took place in October, the second in February and the third in April, and it seems absurd to suggest that that very drastic cut in the British quota had nothing to do with the changed fiscal policy of this country. [HON. MEMBERS: "It had not."] Obviously it must have had something to do with it. I am informed that when we protested to Germany at the drastic curtailment of our exports, the Germans replied that our fiscal policy had hit some of their industries very severely. [HON. MEMBERS: "It had not."] I am not saying that it had or that it had not. I am saying, to support my argument, that the German policy of curtailing our exports to Germany had a great deal to do with our changed fiscal policy. [An HON. MEMBER: "Pure assumption!"] That is shown not to be a mere assumption when we find that the Germans replied to our protest by saying that the duties which were being put on by us, severely hit their own industries. Further, I would refer hon. Members to the statement which was made on this point on behalf of the Mining Association and which has not been contradicted. Germany had to export a surplus because of her debt situation and when we curtailed her imports to us as severely as we did, it was natural that, in order to make her balance as favourable as possible, she should curtail our exports to Germany.

Mr. DICKIE

Will the hon. and gallant Member permit me to point out that the ex-Secretary for Mines in the House of Commons on 1st October of that particular year gave the reasons—exchange restrictions, depreciation of currencies, abandonment of the Gold Standard—and never mentioned any question of tariffs at all?

Major LLOYD GEORGE

If the hon. Member says that the ex-Secretary for Mines stated in October that it was due to exchange fluctuations I am prepared to accept that, but exchange fluctuations did not continue, and twice in 1932 we suffered cuts—in February and in April —which had nothing whatever to do, in my judgment, with any exchange situation in this country. I say again, it is obvious that the curtailment of trade with us is due to our tariff policy. I understand that there is a World Economic Conference coming in June, and I should like to know what part this country proposes to play at that conference. The Government are acting as if they had never heard of the World Economic Conference. I suppose it is due to this absence of policy—

The DEPUTY-CHAIRMAN (Captain Bourne)

The greatest latitude has been given in this Debate, but I must point out that the question of the World Economic Conference cannot arise even on the original Resolution, which is confined to a specific agreement with Germany.

Major LLOYD GEORGE

May I with respect point out that we are dealing with an agreement which is going to affect the position of this country at that conference, when it comes, and would have a very peculiar effect on what we can do at that conference? I am taking that in conjunction with the agreements already come to.

The DEPUTY-CHAIRMAN

I think the hon. and gallant Gentleman can argue that it is undesirable because it might tie the hands of the Government at the World Conference, but he cannot go further on this Resolution.

Major LLOYD GEORGE

That is just what I was going to say. It seems to be due to the absence of an effective objective by the Government—as to whether to use the tariff for bargaining purposes, or protective purposes, or for what. I must point out that the Prime Minister says one thing, and the Ministers do the opposite. That may be because they do not see the Prime Minister as often as they would like. But they really ought to make up their minds. The communique issued after the Washington Conference says: There should be a constructive effort to moderate the network of restrictions of all sorts by which commerce is at present hampered, such as excessive tariffs, quotas, exchange restrictions, etc. It then goes on to refer to the need for "concurrent and simultaneous action" in the international field. I presume that the Prime Minister agreed to the need for "concurrent and simultaneous action." In this agreement you are definitely making it more difficult for this country to make a general proposal to that World Economic Conference. You present to this House, with evident satisfaction, an agreement which, in effect, is perpetuating the very thing the Prime Minister said at Washington must be wiped out before there is any hope for a return to prosperity in the world. I feel that this is going to put us back to a worse position and to stabilise that position. The result is that after these great negotiations we shall go back to about half the coal exports we had before the tariff came into operation. I can see little help for British industry in any agreement of this kind. If we have many more agreements of the same character it will convince a large proportion in this country of the great mistake made in 1931.

7.4 p.m.

Mr. MARTIN

I would like to say how much I sympathise with the President of the Board of Trade and the Secretary for Mines, who have put themselves into a difficult position. Loyal supporters of the Government will be glad that the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) has asked the Government to state whether or not they can carry on this agreement, or abandon it in favour of further negotiations. The Debate has resolved itself, as the Trade Agreement does, into two divisions: (1) dealing with coal and (2) dealing with the Schedule. I think a great deal of nonsense is talked in this House on the subject of coal, and a great many statements are made which are obviously inaccurate. I would like the Secretary for Mines to tell us, specifically, the truth about one thing. What was the course of events which led up to the negotiations? We understand that Germany began by curtailing the imports of British coal into that country. We understand that protests were made by the British Government. We understand that Germany said that the restrictions were not made as a discrimination against this country. Further protests were made, and then—I believe the hon. and gallant Gentleman who has just spoken was right —Germany turned round and said, You first broke your part of the agreement with us by putting on certain duties against our imports." If that is true, it would be better at this stage to say so. If arbitration was suggested, why did we not go to arbitration? If we had a sound case we would have won, and this extraordinary Debate would have been unnecessary. I think it is most unfortunate that in this House we should have seen once more, as we saw in a former Debate on the duties on imports, right hon. and hon. Members getting up and arguing in favour of industries in their constituencies—rather indicating the weaknesses of the whole of the rampant protection argument. That does not mean to say that I agree with the more than rampant speech of the hon. Member for Bodmin (Mr. Isaac Foot) which contained a wealth of Biblical allusion, and an opulence of fiscal illusion. He went so far as to appeal to the young men who have come into this House ready to support anything to bring back prosperity and trade. He endeavoured to persuade them to go over to the blind Free Trade policy which, we had thought, was no longer an issue on the Floor of this House. He argued that, when he was Minister for Mines, it was made quite clear that the German action against our coal was directly as a result of duties imposed by this country. He should know some of the true facts of the case regarding the state of the coal industry throughout the world. It always amazes me, when coal is discussed in this House, that so many absurd statements are made.

The whole of the world trade has dropped in the last 10 years by two-thirds and the world consumption of coal has therefore naturally declined enormously. I would like to quote a few figures which give a very good example of what I mean. Here are the figures of the apparent consumption of coal in Germany during the last two years. In 1929 it was 130,500,000 tons; in 1930 it was 105,500,000 tons; in 1931 it was 91,500,000 tons, and in 1932 it was 83,250,000 tons. There has thus been a continual decline in the apparent consumption of coal in Germany during these years. The imports from Great Britain into Germany during these years were: in 1929, 5,500,000 tons; in 1930 nearly 5,000,000 tons; in 1931, 4,000,000 tons; and in 1932 2,000,000 tons. The percentage was in 1929, 4.4 per cent.; in 1930, 4.7 per cent.; in 1931, 4.5 per cent.; and in 1932, 2.9 per cent. With the continuous decline in consumption, how can we possibly blame our tariff policy for the Germans taking action to prevent our coal coming in?

Major LLOYD GEORGE

Is the hon. Member referring to the proportion of British imports to German consumption? If so, the drop last year was greater than the year before.

Mr. MARTIN

Yes, last year it was 2.9 per cent. and the year before 4.5 per cent. The argument of these figures is entirely forgotten in this Debate, and every other coal Debate. On this point I would ask if it is a fact that coal exporters could, without this agreement, really sell more coal from our exporting districts to Germany? Could they sell it now or six months hence? Because I represent a mining constituency I sincerely hope they could, but, with that qualification, I would say that the President of the Board of Trade has hastened on the amount of coal we can sell by two years. I doubt very much whether, in the present state of the trade, we could sell more coal than is contained in this agreement, and I doubt whether we could get to that figure in the next 18 months.

Having said that, to some extent in support of the Trade Agreement, I must say I am exceedingly disappointed that this form of bargaining weapon has been used in this particular way. As I have said, we have seen Members interested in the various industries affected springing up in all parts of the House to protest that a particular industry has been "sacrificed" in order that coal might obtain a better position. I think that that is quite justified. These industries should have been given some opportunity to present their case. I would mention—since so many others have been mentioned with such eloquence, and particularly have the voices of Birmingham (the Home of Protection) been eloquent in protest—just one of these articles in the Schedule. It is "hollow-ware, wrought enamelled, of iron, steel, etc." I mention it for a special reason. It is an industry where oil is used very largely in the manufacture of the article, and it is particularly unfair that the tariff should be reduced by 5 per cent. when already the Chancellor of the Exchequer has put a colossal tax on the raw material used for making these goods. On heavy oils the Chancellor of the Exchequer has put on what he called "merely 1d. per gallon," which I hope will be very heartily resisted by the House when the time comes. It means almost a 50 per cent. tax, and it is put on part of the material of this industry where prices are competitive. And now there is to be added to that a 5 per cent. reduction of duty on the foreign imported article. That reduction seems absolutely unfair. I presume that I cannot go into the question of heavy oils because that would not be in order.

Such an industry should not be taxed without an opportunity of putting its case to the Board of Trade, the Ministry of Mines, or some other Department. The proposal is absolutely indefensible. I believe that if the Government have sufficient good will behind them, they will find, if they accept the Motion of the right hon. Member for West Birmingham, that the House will be very tolerant of the Trade Agreement which they will produce as a result of further negotiations. I think a great many fears will be allayed when the industries concerned have had a chance of discussion, and I hope the President of the Board of Trade will see his way to accept the Motion, as I, for one, will have very great difficulty in going into the Lobby in favour of the Government.

7.16 p.m.

Mr. LUNN

We have seen to-day the kind of scrap that I think we shall see many times in the future when these tariff agreements, or these agreements with foreign countries affecting tariffs, are brought before the House of Commons. I believe that on each such occasion we shall find something similar to what we have seen this afternoon. To-day it is Birmingham; to-morrow it may be Sheffield or some other part of the country. I have listened to the whole of this Debate, and it seems to me that what was anticipated when tariffs were introduced into this country has happened; and we have had a kind of discussion which is not creditable to the House of Commons. I had imagined when I saw the lowering of these duties and that puff boxes, mouth organs, and cheap concertinas figured largely in the list of articles dealt with, that it was to rehabilitate Petticoat Lane after the boycott that was imposed a few days ago, but the right hon. Member for West Birmingham (Sir A. Chamberlain) has shown that it is more than that and that it has a serious effect upon his constituency and other constituencies in Birmingham.

I am concerned with the coal trade, and I suppose it is safe to say that there is no industry in the country that has paid so dearly for the tariff policy of this Government as has the coal trade. I will quote figures which I hope will be accepted by the Government, because they are taken either from the "Ministry of Labour Gazette" or from the "Trade and Navigation Returns" of the Government, from which it appears that the numbers employed in the coal trade on 24th October, 1931, were 831,688, but on the 25th March of this year they were 793,532, or a reduction of 38,000. Now the President of the Board of Trade has told us to-day that he expects from the agreement that he has obtained with Germany that it might employ 3,800 more miners. I must say that I very much doubt his estimate. I know that there are thousands and scores of thousands of miners in this country to-day who are working two, three, or four days a week, and it might be that many of those miners might work an additional day as a result of the agreement rather than that there should be additional miners employed. At the same time, I am bound to say that anything that will bring employment to the mining industry is welcomed by me.

I noted that the right hon. Gentleman the President of the Board of Trade said that the import of coal into Germany was a matter of very material importance to our coal trade. I want to show that it has been so in the past, but that it does not seem likely to be so good a proposition in the future, as a result of this agreement. There was one thing in the right hon. Gentleman's speech that I did not quite understand. He said that there had been a rapid decline in German coal production. If that is so, I do not see that we are benefiting very much from the decline in coal production in Germany. The Labour party wishes for international agreements and understandings, but we do not believe that this is a good one, and we are satisfied that it is not possible to get a good trade agreement with any country so long as the policy pursued by the Government is what it is to-day. This agreement is a proof that tariffs are destroying our export trade and increasing unemployment among our fellow-countrymen.

What has been done by the Government in their tariff policy has had a serious effect upon our coal exporting districts. It is they which have suffered most perhaps, and it is vital to the trade of this country that we should export a large amount of coal. I should like to see us in the position that we occupied many years ago, because it would mean many men employed in the industry who are now walking the streets and have been doing so for years past. Take the year 1913. We exported per month in that year to Germany 750,000 tons, or 9,000,000 tons in that year. This agreement provides for the export of 180,000 metric tons, or about 177,000 tons, of coal and coke per month, and coke is not associated with coal, I understand, in the returns given by the Government. The Secretary for Mines will perhaps tell me whether that is so or not, but I understand that that is the position, so that under this agreement we are to export about 2,124,000 tons of coal and coke per year to Germany, with a very doubtful addition if Germany should consume more than 7,500,000 tons in any month.

Compare this agreement with the years 1928, 1929, 1930, and 1931. I have the figures here, taken from the "Trade and Navigation Returns," of all classes of coal exported from this country to Germany—steam coal, gas coal, house coal, small coal, and so on. In 1928 we exported 5,367,000 tons, or 450,000 tons per month; in 1929 we exported 5,520,000 tons, or 460,000 tons per month; in 1930 we exported 4,926,000 tons, or 410,000 tons per month; and in 1931 we exported 3,769,000 tons, or 314,000 tons per month. I agree with the, hon. Member for Bodmin (Mr. Isaac Foot) that if we could go back to the position as it was when the Government came into power, it would be twice as good as this agreement is likely to make it for the mining industry. According to the "Trade and Navigation Returns," in the month ending the 31st March, 1931, we exported 305,443 tons of coal to Germany, in March, 1932, we exported 235,057 tons; and in March, 1933, 182,776 tons.

There is nothing in this agreement that seems likely to take us back to that position, nor are we likely to get back to the pre-tariff days with regard to coal, so that the coal trade has very little to thank the Government for in the agreement that has been made. Hundreds of thousands of miners are unemployed just now, and if this is the best that the Government can do for the coal trade, I suggest that the outlook for the future is bad. I would rather see the Government tackling the possibility of utilising our coal in other directions, and in manufacturing from our coal some of the, other things for which we are dependent upon foreign countries to-day, and that could be made from our own natural supplies in this country. That, I think, would be the better way of finding work for unemployed miners.

Take the schedule of the reduced duties. Who are these modifications of duty going to please? We have before us at present a Motion to report Progress, and we have been taking the course in this Debate, that I have never seen before in my 15 years' experience in this House, of debating the general question fully and widely upon a narrow Motion of that kind. The supporters of the Government are very dissatisfied with what is happening and are showing how it will injure the trades in their con- stituencies. They are threatening to oppose the Government and, I suppose, go into the Division Lobby against them, with associates who are opposed to tariffs and who will ever vote not only to lower tariffs similar to those in this agreement, but to abolish them altogether, as I would on every occasion that might be presented to me; and it may be that the Government will be defeated upon this agreement to-night. The full-blooded Protectionists are not satisfied, nor are those who are opposed to Protection. We are seeing to-day that the Government are in a fix, but it may be, as on the last occasion, that they will be able to extricate themselves.

While we wish to see international agreements and understandings, we are convinced that this is far from being satisfactory, especially to the coal trade, which has been so vital a part of our economic life in the past. There is only one question that I would like to ask the President of the Board of Trade to answer when he replies. Will the Most-Favoured-Nation Clause apply if other countries seek to obtain agreements similar to this? If Italy, for example, wishes to import musical instruments, will they be able to have these lowered duties? I think the right hon. Gentleman might tell the House where we stand, because we ought to know where we are going, what is to be the position, and what is to be the end of this agreement.

7.29 p.m.

The SECRETARY for MINES (Mr. Ernest Brown)

I rise to say a word or two on the coal side of this problem. It has been very interesting this afternoon to listen to various points of view as to the effects of the agreement and to the varying reasons that Members have given inside this House, as compared with some that have been given outside the House, for the drop in the export of British coal to Germany. The hon. Member for Roth-well (Mr. Lunn) understood the difficulty of Members who take the Trade Returns for the purpose of making an estimate in order to belittle the present agreement. He quoted figures for the month of March in 1928, 1929, 1930 and 1931, but he was quoting from the total figures. This agreement does not refer to the total figures at all. The licence system never has from 1924, when it was introduced—not for the purpose of restriction, but from the point of view of the German coal control inside the German Customs area—applied to the whole importation of coal into Germany or the exportation from this country. Many of the comparisons that have been made in the Committee this afternoon fall to the ground because Members have failed to understand that the coal trade from this country to Germany falls into two specific parts. There is the part used for bunkers of both German and foreign ships in various ports and free port areas on the one hand, which is never affected by the licence system, is not now affected by it, and will not in future be affected by it.

Any examination of the total figures must always take account of a calculation for the importation at a given moment of coal outside the German Government Customs area. The real issue is the amount inside the German Customs area, and I want to deal with that. The Committee will have noticed that it has been put in rather a different way in the Committee. If the Committee had followed the speeches of the right hon. Member for Darwen (Sir H. Samuel) which he delivered on the Adjournment before Easter, the speech he delivered last week, and the speech which he made in his constituency—rather a different speech—on Friday, it will have noticed that he puts the case in its extreme form. Hon. Members will also have noticed that my predecessor, the hon. Member for Bodmin (Mr. Isaac Foot), was much more careful than his leader. Nevertheless the net effect is precisely the same. I preferred the blunt plain way in which it was put by the hon. Member for Roth-well. He has no illusions about it. He says boldly in the House what he says outside, that the whole of the drop in our coal exports to Germany since October, 1931, is due entirely to the tariff policy of the Government. I understand a man holding that opinion who does not know the facts of the whole of the operations of the Government from October, 1931. I prefer that because it is an opinion—not a fact.

Mr. LAWSON

It depends on what your opinion of the facts is.

Mr. BROWN

The hon. Member knows that I have rather a mania for stating all the facts. For the moment, I am saying that I prefer the attitude of the hon. Member for Rothwell to that of the right hon. Gentleman the Member for Darwen, because the right hon. Gentleman was a Member of the Cabinet at the time when these events happened. He was a, Member of the Cabinet during the whole period up to and including the decision of the Cabinet to enter upon negotiations. He knows, but what does he do? He states the position in an extreme form, leaving it to my predecessor to put it more gently, tactfully and subtly. He says by implication—always by implication—that the drop in our export trade to Germany since this Government came in is due to tariffs. He did not state that in terms. If the Committee desire, I can produce the actual facts, but any hon. Member listening, as I did with some impatience, to the right hon. Gentleman's speech, would have gathered the opinion that the drop of our export trade in coal with Germany was entirely due to tariffs. When he was corrected by my right hon. Friend the Foreign Secretary with the reminder that the Gold Standard and the events surrounding the operations about the Gold Standard had something to do with it, he referred to "complacent attitude of tolerance."

I was rather startled at that because I should have thought that a very fitting description of the right hon. Gentleman in the unconscious attitude that he has taken up. He accepts what the Foreign Secretary says, again by implication. He does not in terms admit that the Gold Standard had anything to do with it, but he brings it in to show that he has taken note of it. Then he goes to Darwen. In the House he had won a strange ally, and he quotes a communiqué giving the views of the Mining Association of Great Britain. I was startled that he quoted from that authority. I wonder whether he would attach as much importance to the association's views about the Welfare Fund, shall we say, or even about Part II of the 1930 Act? I want to say a word or two about that communiqué because disappointment in the most extreme form based upon that communiqué has been expressed by the right hon. Gentleman. I am sure that it was a hasty communiqué. I am not at all certain that it was a considered communiqué. I will add that it was a misleading communiqué, and the conclusion come to in the drafting of the Darwen speech was inaccurate. Let us put the case in the extreme form, and see what the right hon. Gentleman says in his constituency on Friday: In 1931 Germany was buying at the rate of 420,000 tons a month. It was reduced to 100,000 tons per month. Leading up to that the whole implication is that it is due to tariffs. Then he says: Following upon our new tariffs on German goods severe restrictions were imposed on the purchase of British coal. The right hon. Gentleman does not say that it was due to tariffs, but he leaves the electors of Darwen to assume that it was.

Sir H. SAMUEL

So it was!

Mr. BR OWN

I would remind the Committee that this afternoon the right hon. Gentleman's colleague, my predecessor, did not say that. He only offered his opinion, not based on anything he knew while he was in this office, that it was due to that—a very different thing. I will proceed to show in what particulars the difference lies. I will deal with the alleged fact as to the 420,000 tons a month. Of course, the right hon. Gentleman has been studying the total trade returns and has based himself upon the Mining Association's communiqué. I said that that communiqué was misleading because the association itself happens to know what is the figure upon which we ought to argue.

The situation is that in October, 1931, before any tariff had been decided upon there had been restrictions in other countries than Germany. Germany then altered its control system from a conventional or theoretical figure of 420,000 tons a month at which it was fixed in 1924, and which has never been effectively operative; they altered that figure, applying only to the Customs area—not to the total exports from this country or the imports into Germany or into German ports—a lower quota, namely, 300,000 tons. Later on when we began to negotiate, the first thing we had to try to establish was what was our actual performance inside the German Customs area preceding October, 1931, when the figure of 300,000 tons was fixed as the control figure. I will give the Committee the figures. After the German and British experts had been working on the figures for some weeks, they came to the conclusion that, taking the eight months previous to October, 1931, when the alteration from the conventional or theoretical figure of 420,000 tons was made, our average monthly performance inside the German Customs area was 246,000 tons a month. That is a very different figure from 420,000 tons.

If it be considered desirable to go further back and begin on 1st January, 1930, the experts on both sides have agreed—and the Mining Association is fully aware of it—that the average for the 20 months preceding 1st October, 1931, was 295,000 tons inside the German Customs area. Therefore, I say that anyone who discusses this matter in terms of 420,000 tons a month and omits from calculation the figure for bunkers and free ports, is trying to do his best to belittle the trade agreement because he cannot in any degree allow that any good can come out of tariff negotiations. That is putting the case at its very worst. I will not say the very worst, because the very worst was a statement in a propagandist paper this morning that compared metric tons with statute tons and took the trouble to degrade metric tons to statute tons for the purpose of their argument. The right hon. Gentleman the Member for Darwen may say this is true, but he is not backed up by his follower, may predecessor. He states that in his opinion tariffs had something to do with it, but the whole basis and conclusion of the speech will leave the Committee to believe that there was no other factor operating in the world in order to cause that drop in our coal export trade.

The history of the thing is that there has been and, alas, still is, a drop in the total world production of coal. Comparing last year with the year before, there is a drop of international exports of 11 per cent, and of European exports of over 9 per cent. We were fortunate in having a drop of only just over 7 per cent., but from the beginning of the negotiations and from the beginning of the fixing of the new quota at 300,000 tons, to 1st February, when it was cut down to 200,000, to 1st March, when it was cut down to 150,000, and to 1st April when it went down to 100,000, what did the Germans contend? They contended that it was solely due to the effect of the world situation upon their own internal coal trade. That is a fact. When every one of these successive cuts in our quota in the German Customs area was made, no word was said or no claim was made on behalf of the German Government. That is why I draw a distinction between the opinions of the hon. Member for Bodmin and the facts of the right hon. Member for Darwen. That is a fact, and any fair-minded man, with a desire to do justice to a particular argument, would be bound to admit it in making up his opinion. From the first, and not only for some weeks, the German Government contended that their action was solely dictated by the needs of their own internal coal trade. If the Committee turns to the figures of German coal production, it will see that there is a weighty reason behind that assertion. The monthly average of German coal production during 1930 was 11,891,000 tons, the monthly average in 1931 9,887,000 tons. For November, 1931, the quantity was 9,614,000 tons; December, 1931, 9,021,000 tons; January, 1932, 8,703,000 tons; February, 8,380,000 tons and March, 8,462,000 tons. There was a continual drop in their internal production, and I suggest that in order to make a case against tariffs, which they believe are the end of all things, it is disingenuous for the right hon. Member for Darwen to come to the House with his alleged facts about 420,000 tons a month and for the hon. Member for Bodmin to come with the "opinion" implied in his speech.

Mr. ISAAC FOOT rose—

Mr. BROWN

I did not interrupt the hon. Member. I have been asked to state this, and I will state is as frankly as I know how. After these events had taken place, and the German Government had come to the conclusion that they must restrict their imports of coal, what happened? Quotas were imposed—200,000 tons on 1st February, 150,000 tons on 1st March, 100.000 tons on 1st April. The hon. Member for Bodmin knows quite well that in March a strong protest was made against these restrictions. He also knows that the German Government replied, later in the same month, and said the restrictions were based solely on the critical state of the German coal industry. In the course of the Debate on the Consolidated Fund Bill, on 23rd March, in reply to the hon. Member for Abertillery (Mr. Daggar), who had stated that the curtailment of the purchases of United Kingdom coal by Germany was a retaliation for the Government's tariff policy, it was then stated, on behalf of the Government, on the basis of facts as presented to this Government by the German Government, that the reasons given at the time these restrictions were made were the depression in the German coal industry and their concern about obtaining foreign exchange. Subsequently, at the end of May, 1932, when the complaint with regard to the United Kingdom purchases was first related by the Germans to our complaint about coal restrictions, their complaint was not against the introduction of a tariff system in this country, but was an allegation that an assurance that we made to Germany that no duty specially injurious to Germany would be imposed had not been adhered to. After that the Government agreed that rather than spend a long time over arbitration they would enter upon negotiations, and the Debate to-day is the result of those negotiations.

I am not going to chop words. I am going to say this: that the net effect of this agreement on the coal industry is to introduce the possibility of sending 1,000,000 extra tons of coal to Germany, an end which could not have been secured in any other way. No doubt there is no Member sitting for a mining seat who would not have liked to see the quantity 2,000,000 or 3,000,000 tons, just as there is no Member for a mining seat who would not like to see the total world production of coal increase steadily instead of decreasing. I beg the Members of the Committee not to allow themselves to be biased against the agreement merely because it is their opinion that tariffs can in no case do good, but to accept the agreement, as we do, as one stage in a great process. We cannot discuss now the agreements with Norway, Sweden and Denmark, but this agreement means that for the first time for several years there is a turn the other way in the possibilities of the export of British coal. Because of that turn I beg the Committee to see how important this agreement is. At.a time when German coal production is falling, at a time when world production of coal is also falling, at a time when we have had nothing but a drop in the exports of coal from this country, the fact that we have achieved this 1,000,000 tons here, and that we shall achieve several other million tons in the other agreements with Scandinavia, should be regarded as a heartening step, and I beg hon. Members not to dishearten those who are working for this end, but to give them their full support.

7.51 p.m.

Sir H. SAMUEL

I had not intended to intervene in this Debate, as the case has been so admirably put by my hon. Friend the Member for Bodmin (Mr. Isaac Foot), and I do not propose to enter into now any of the larger aspects of the case, but the speech of the Secretary for Mines prompts me to say a few words in reply to him. He has been exceedingly vehement, and has put a case which he evidently feels is absolutely conclusive, and thinks there is no case to be maintained on the lines which I have submitted in this House and also outside it. I will give one or two facts which, I think, will show that the hon. Member has not been quite so frank or so comprehensive as he would lead the Committee to believe. In the first place, I have based myself upon the statements of those who are most keenly interested in this matter, Lamely, the Mining Association of Great Britain, who comprise the coal-owners of this country, and whether the hon. Member demurs to my action or not —because he said that I had had differences with the Mining Association on all sorts of matters of policy relating to the Mines Act—is absolutely irrelevant to this issue. I quoted the Mining Association because they are the authority who have followed most closely the details of these negotiations, who understand the position absolutely, and who approach the matter without any bias on general political grounds. The hon. Member said that my view was coloured and biased by the fact that I could see no good in any agreement which was supposed to be the outcome of tariff negotiations. That is one reason, among others, why I quoted the Mining Association, who are a body entirely apart from all these political matters.

As long ago as 12th March, 1932, the Mining Association sent a statement to the Press, which was published in the "Times" newspaper of that day, in which they referred to the German state- ment that these restrictions were due to considerations of internal German economy. They said: The German official statement denies the suggestion that the coal restrictions may have dictated"—

Mr. E. BROWN

I have read that statement carefully and it referred to a statement by an official unnamed.

Sir H. SAMUEL

The hon. Member has interrupted me rather prematurely. It referred to the German official statement, which is quoted in full, and was published on behalf of the German Government. It denies the suggestion that the coal restrictions have been dictated by considerations of general tariff policy. It adds: Impressions to the contrary received support from a statement made a fortnight ago by a German official closely connected with the matters in question. They give the statement in German and translate it: It is a counter measure to the tariffs. It is a purely political measure designed to force England to the conference table. The Mining Association gave that as the opinion of an important German official, but obviously were not in a position to give his name, and I can do no more than quote what was stated. Then they go on to say: Whatever the motive may be, it is clear that the action of the German Government is inconsistent with its obligations in regard to British coal arising out of the Anglo-German Commercial Treaty, and, further, that it discriminates against this country. It may be, I do not know whether it is the case or not, that the German Government, in their official declarations, may have been influenced by their own legal position under certain Anglo-German Commercial Treaties and were not in a position to state frankly to all the world the real reasons which prompted their action; but when, later on, our Government protested against this procedure, and asked for arbitration, saying that the German action was illegal under the treaty, the German Government insisted that the two matters should be taken together. They were unwilling to accept arbitration on the legal point unless the British tariffs on German goods were taken into account. The present Foreign Secretary was asked a question on this point on 13th July, 1932, and, as the hon. Member has challenged the matter, and has endeavoured to destroy the authority of the observations that I have made, I will read in full the answer given by the Foreign Secretary. He was asked to state the present position regarding the restriction imposed by the German Government upon British coal imports, and he said: I am glad to take this opportunity of informing the House before it rises of the position reached on this important question. The German Government have proposed that the question of the German restriction on the importation into Germany of United Kingdom coal, together with the question whether the Customs duties at present in force in the United Kingdom, are compatible with the assurances contained in paragraph 2 of the Protocol to the Anglo-German Commercial Treaty, should be submitted to a court of arbitration consisting of one German, one British and one neutral arbitrator. His Majesty's Government have accepted this proposal to arbitrate in respect of coal, but correspondence is still proceeding between the two Governments as regards the best manner of dealing with the question raised by the German Government in respect of the United Kingdom Customs tariff."—[OFFICIAL REPORT, 13th July, 1932; cols. 1267–8, Vol. 268.] So that the two questions were intimately connected by the German Government. As soon as we protested against coal, they protested against our tariffs, and said the two matters could be taken in conjunction, and that is, in fact, what has now been done.

Mr. E. BROWN

The right hon. Gentleman is not entitled to say "as soon as." It was much subsequently to that.

Sir H. SAMUEL

Although it was not the case at the outset, yet a little later in the course of the events, that was the fact. I never stated that the action of the German Government was solely due to the action of the British Government in imposing tariffs. [HON. MEMBERS: "Oh!"] Never—at no time. I said it was a main consideration, and that I repeat, and that is the whole basis of my case, and the Government have now admitted that the two are connected together, because instead of insisting that our case about the coal trade should be taken to arbitration, instead of dealing with that, alone, they have agreed to the German Government's contention that the whole question must be taken as one, and the very agreement before us is an agreement which makes concessions to German trade in order to secure concessions to our trade. That very fact proves the case.

Further, the hon. Member says that the statement made in the public Press a day or two ago by the Mining Association, which I have quoted in this House, was a hasty and an ill-considered statement. That statement says in terms that the restrictions were originally imposed by Germany by way of retaliation for our tariff policy. That is not my statement, but that of the Mining Association. I communicated with the Mining Association to ask them if they could supply any further evidence in support of that statement beyond what had already been given, and if there were anything that they could properly communicate to substantiate, not my statement, but theirs. I received to-day from the Secretary of the Mining Association a letter in reply which refers to the statement published in March, 1932, which I have already quoted. He says: We quoted textually in the last paragraph a statement made by a responsible German official, and we also quoted that restrictions were applied only to British coal. The hon. Member who has just spoken said that this action was due only to Germany's distressed circumstances, and that the decline in German production compelled the Germans to apply restrictions also to the importation of foreign coal. How is it that, by a strange coincidence, only British coal is subject to these special restrictions, which are supposed to be in the interests of German industry and not by way of reprisal? The quotation continues—this paragraph is important, and I will ask the attention of the Secretary for Mines to it: And they further add that in the autumn of 1931 the German coal controller had given an understanding to the coal importers that the quota would be maintained at 300,000 tons for at least 15 months, commencing on the 1st October. That was the undertaking that was given to them, and the Association was vitally concerned, for they were the persons who had received this undertaking.

Major PROCTER

"Had given an understanding."

Sir H. SAMUEL

The words are: An understanding that the quota should be maintained at 300,000 tons for at least 15 months, commencing on the 1st October, 1931, and that the tariff issue which arose shortly afterwards with this country was the only circumstance which occurred to explain the alteration in the position. That is not a declaration by some Free Trade propagandist who can see no good in any tariff agreement, such as the hon. Member suggests. That is the Mining Association of Great Britain, in a letter written by Mr. Lee, its secretary. It is clear that we should have had, in the view of his Association, 300,000 tons a month sent to Germany if it had not been that the tariff issue was raised and the quota was cut down as a measure of reprisal. I repeat with emphasis the assertion that I made on a previous occasion, and which the hon. Member who has spoken has done nothing effectively to refute.

8.5 p.m.

Mr. HANNON

My right hon. Friend die Member for Birmingham, West (Sir A. Chamberlain) moved to report Progress in order to give the House an opportunity for a full examination of the implications of the agreement. We had hoped for a considerable time during the progress of the Debate that the President of the Board of Trade would indicate to the Committee whether he was prepared to accept this Motion or not. Surely, if the Government come to a conclusion in relation to any foreign matter of this kind, which means the reduction of duties of a protective quality already existing in this country and imposed under the ordinary operation of the Import Duties Advisory Committee, there ought to be some time given for consideration before an important and decisive step of this kind is taken by the Government.

I hope that I shall have the attention of my right hon. Friend the President of the Board of Trade for a few minutes, if he will be kind enough to listen to me. I ask him this: Is it the policy of His Majesty's Government, in relation to any particular industry in this country which has received a protective tariff at the instance of the Import Duties Advisory Committee, to take a step to depart from that decision and revise that tariff as a Government Measure on their own responsibility? Every single duty that the Government propose to reduce in the Schedule attached to the correspondence which has taken place between the Foreign Secretary and the German Ambassador, is a duty which has been im- posed in the interest of increasing the employment in the particular industry. I am sure that the Committee ought to know whether His Majesty's Government regards itself as being entirely free, at its own instance and on its own responsibility, from time to time, to revise decisions arrived at by the Import Duties Advisory Committee and to limit the application of an Order which has been made by the Treasury on that recommendation.

It happens, unfortunately, that in this particular instance the series of duties which it is proposed to reduce affects a large number of industries in Birmingham. I should like to say that my right hon. Friend the President of the Board of Trade enjoys the profound admiration of the citizens of Birmingham. We regard him in many respects as one of the most interesting examples of modern political conversion to high principles. He has shown this House and the country that he is not tied down by old shibboleths and by old attachments; that as the occasion demands he is prepared to revise his former views and assist this country in its economic difficulties. But surely, if he is making an arrangement of the quality set forth in. this agreement with Germany, it is extraordinary that he should have settled upon a whole series of industries with which we in the Midlands are particularly concerned. Take the toy industry, for example. Hon. Members may view the toy industry with a certain amount of indifference and levity, but the toy industry to the people of Birmingham is of very great importance. [HON. MEMBERS: "Hear, hear."] I am delighted to have the cheerful support of the right hon. Gentleman on the other side of the House.

Mr. LANSBURY

When I see you like this, I am enjoying it.

Mr. HANNON

I am afraid that, in the many appeals that I have made in. this House in the past for the protection of the toy industry of this country from German competition, I have not had much support from hon. Members opposite. For years we have been pleading with the Government to give us an opportunity of developing the industry, and under the measure of protection which we have received the industry has been steadily expanding. But here comes the Motion to-day, representing the desire of His Majesty's Government to take away just that margin of protection which has enabled us to continue, develop, and expand. My right hon. Friend the Member for Sparkbrook (Mr. Amery) referred to the jewellery industry. I am not, in my own constituency, directly associated with the jewellery industry in this country. It has developed during a long series of years, and until it received some measure of protection it was constantly face to face with the calculated assault of the producers of jewellery in. every part of the world.

I want to ask my right hon. Friend whether, in introducing this revision of the existing protective duties which operate in the jewellery trade, he contemplates the application of the most-favoured-nation Clause to similar products made, for example, in Switzerland. He raised the subject of that most dreadful and embarrassing process of international agreement known as the most-favoured-nation treatment. This country has suffered for generations from this burden of having to consider every single international agreement in the light of its incidence in relation to the most-favoured-nation Clause. I want the President of the Board of Trade to tell us whether, in the case of clocks and watches and jewellery, the revision of this treaty means that the same facilities will apply for, say, Switzerland to send in its products to this country and compete with us in the home market.

Mr. SLATER

And Japan.

Mr. HANNON

And Japan. We have not the least objection to competition on fair and reasonable lines, but the kind of competition against which we have to fight in the jewellery and the clock and watch industry, and in every industry covered by this agreement with Germany is that of productive enterprises abroad working at a wage level 50 per cent. to 60 per cent. lower than the wage level in this country. My right hon. Friend the Member for Sparkbrook alluded to the immense opportunity of increasing employment in the jewellery industry if this measure of protection were to continue. I do not know if any hon. Members of this House have seen the jewellery industry. There is a whole series, street after street, of small concerns employing numbers of people from 20 to 100, aggregating 13,000 or 14,000 persons—all highly skilled, carrying on their industry from day to day and from week to week. Now, to destroy their recent hope of seeing some opportunity of making it more successful and prosperous than it has been in the past, along comes the President of the Board of Trade with his German agreement and strikes a deadly blow at the continuity of that outward prosperity which these poor people, the jewellery workers, have enjoyed.

I am quite certain that the action of the Government in dealing with this agreement—as indeed with other agreements—has been deplorable in itself. Are we to understand that the President of the Board of Trade and the Treasury are to arrange conclusions with foreign countries, one after another, for trade agreements, without any consultation of any sort or kind with the interests concerned in the organised trade of the country? I asked my right hon. Friend this afternoon whether he would state to the House what consultations took place between any of the great federations or trade organisations in this country before the Government decided to adopt this agreement. Did he meet a representative of the British Association of Chambers of Commerce, or any representative of the Birmingham Chamber of Commerce, who are most intimately concerned in this agreement?

Mr. HOLFORD KNIGHT

Or of the Federation of British Industries?

Mr. HANNON

Or any representative of the Federation of British Industries? The Government—which, of course, has a monopoly of economic wisdom in the world—arrived at its own conclusion in its own way. Believe me, if the policy of His Majesty's Government is that, without reference to the industries concerned, without consulting the organised bodies capable of answering for the industries with which they are associated, they are to arrive at international agreements, it will be a bad outlook for them when they have to face the country in the course of a few years. This agreement is bad from beginning to end. It strikes a severe blow at our future international relations with regard to trade.

Take the enamel hollow-ware trade in Birmingham referred to by my right hon. Friend the Member for Sparkbrook. We have fought in this House year after year to put that trade in a position in which it could fairly compete against imported commodities. What does the President of the Board of Trade immediately do? He takes away just enough to reduce the competitive power of the industry as against the foreign article. Nobody in this House has a greater respect for him than I have, but I have been associated with a whole series of industries in this country for many years and I have fought for all I am worth in this House and outside in order to enable British industry successfully to compete with its foreign rivals, and now I believe that this agreement is striking at the very root of all that we have done for many years past.

What is to become of the Ottawa Agreements if we are to make agreements of this kind without considering the interests concerned? The President of the Board of Trade has great qualities, but he is, in my judgment, making a profound mistake in the action that he is now taking. We have to consider not the number of people who are employed in the coal industry, although that is an object with which we are all desirous of associating ourselves, but the number of people who will be displaced from employment in the small industries in our great centres. Take as an example an industry which has secured some small measure of protection, the hollow-ware industry. An hon. Member in whose constituency this industry is represented has given me certain figures. They show that before we gave protective facilities to that industry to help itself, in one firm there were 500 hands in employment. In the course of 11 months, following the introduction of Protection. 1,000 hands were employed. Will the President of the Board of Trade take the responsibility of putting a large proportion of those people upon the street or upon part-time? I hope that he will very carefully consider the arguments that we have brought forward this afternoon in favour of a more prolonged, careful and sympathetic consideration of this Anglo-German Treaty.

We all desire friendship with Germany; we desire friendship with every country in Europe. I have acted as a sort of bagman all over Europe for many years, and have tried to protect the interests of British trade. The first duty of this House and the first obligation of His Majesty's Government should be to protect the industries of this country and to enlarge the opportunity of employment of our own people. We cannot take the risks which I see embodied in this agreement without a very serious responsibility resting upon us. I have received from the Birmingham Chamber of Commerce a long Resolution asking me to submit to the President of the Board of Trade their profound feeling of dissatisfaction and anxiety with regard to this agreement. I have received from the jewellers of Birmingham a similar Resolution. An hon. and gallant Member has spoken on behalf of the National Union of Manufacturers; from them I have received a long telegram. I have received several telegrams to-day from the smaller industries, not immediately or directly affected by this agreement, but dependent upon the continuance of the success of the industries which are affected. A man of such practical common sense, wide views and constructive and statesmanlike qualities as the President of the Board of Trade, should not commit his Government and this House to the policy of this agreement without consulting every interest in the country concerned, and above all the interests which affect the immediate and continuous employment of our people.

8.20 p.m.

Sir H. SAMUEL

I ask the Committee to allow me for one moment to make an addition to my observations of a little while ago. I read from a letter from the Mining Association of Great Britain, and I read from it all the paragraphs that were in any way relevant to the point to which I was addressing myself. I was speaking without preparation, and it has occurred to me since that the Mining Association might perhaps feel aggrieved if I did not add their final paragraph which, let me repeat, is not in fact relevant to the point that I was then discussing. With the permission of the Committee I will read it. It is quite brief. The Secretary says: You will appreciate that in complaining of the disappointing results of the negotiation with Germany the Mining Association is not opposing in principle the policy of the Government, but what it is concerned about in the particular case of Germany is the failure, in face of Germany's large positive balance of trade with this country, to protect the rights secured for British coal in connection with the Anglo-German Treaty of 1924. I thought that it was only right, in justice to the Mining Association, to add those words, and I thank the Committee for allowing me to do so.

8.21 p.m.

Mr. ATTLEE

I want to occupy the Committee's time for only a very few moments, to explain the attitude of myself and my friends towards the Motion of the right hon. Gentleman the Member for West Birmingham (Sir A._ Chamberlain). We intend to support it. I have a very great deal of sympathy with the points that have been put by the hon. Member for Moseley (Mr. Hannon), by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), and by my hon. Friend the Member for West Waltham-stow (Mr. McEntee). The right hon. Gentleman the Member for Sparkbrook and the hon. Member for Moseley are Protectionists, and a short time ago we saw them in the full flush of joy of Protection, no doubt with the applause of the jewellers in Birmingham, who thought that they had got protection. As a matter of fact they had only to look at the Government Front Bench to see that it was full, not of Protectionists, but of people who a very short time ago, despite the remarks of the Secretary for Mines, were eminent Free Trade propagandists. I do not want to enlarge on the differences between the Free Trade propagandists of a few years ago and the Free Trade propagandists of the present day, hut the hon. Gentleman who represents Moseley did not realise that the President of the Board of Trade has never been converted to Protection.

The President of the Board of Trade always said that he was using the Protectionist weapon to get Free Trade. The result is that the jewellery and the toy trades are catspaws in the hands of the President of the Board of Trade. They are a sprat to catch a mackerel. They are only a bit of bait. They got protection for their trade and they put their money into the trade because they thought they were getting protection; but they find that they are to be sacrificed because the President of the Board of Trade thinks that it is better to get something for the coal trade and not for the jewellery trade. When these experiments in dealing with tariffs were embarked upon, a strong point was made in this House that the proper way to deal with tariffs was by an independent tribunal. The Lord President of the Council said that there could be nothing worse than having the kind of Debate that we have had this afternoon, the kind of Debate that I have heard in this House pretty frequently since he spoke, the kind of Debate in which we set off the merits and advantages of this district against that, and of this group of capitalists against that group of capitalists.

In this Debate we are being asked to try to evaluate ale advantage of employment for some 3,000 people, mainly on the North-East Coast in the Durham and Northumberland minefield, as against a number of people who are going to be unemployed in Birmingham, Waltham-stow, and various similar places. The Lord President of the Council told us that the House of Commons was not a fit place in which to discuss those matters, that they ought to be handed over to three just men for their decision. I think that the hon. Member for Moseley is quite justified when he comes down and says, "We went before the three just men; we made our case; we got our verdict from them on the canons laid down in the House for adjustment as to whether protection shall be given to a particular industry. We have come out with a clean sheet; we have been awarded full protection." But then we have an entirely different method. The President of the Board of Trade comes down, throws over the three just men altogether, and says, "Oh, no; all this elaborate system of tariffs that we set up on the pure 'merits of the cases put before the three just men must go by the board, because now I am taking in hand the organisation of world trade by a method of bargaining with separate countries."

I can understand the point that has been made that this has been done very hurriedly, very roughly for the interests concerned, and that it is going to cause alarm and despondency among the whole flock of those chickens who have been thinking themselves so snug under the Protectionist wing. What tariffs are going to stand after this? What is the good of saying to the investor, "Now is your chance to put your money into our industry. We have the kind of Govern- ment we want; they are giving us anything we want; we have been before the Committee, they have given us protection, and yon are quite safe"? That is all upset now, because at any time they may find that they are the chosen sacrifice. It is true that Birmingham has pride of place; she, in the first instance, is the sacrifice offered to Germany. But who is going to be offered to the Argentine? Who is going to be offered to Norway? Who is going to be offered to all these other countries? We are guiltless in this affair—

Sir JOSEPH LAMB

Does the hon. Gentleman recollect who was offered before? It was everyone in his case.

Mr. ATTLEE

Not by this particular method.

Sir J. LAMB

It was a wholesale slaughter in your case.

Mr. ATTLEE

I will leave that matter, but I am quite willing to deal with the hon. Gentleman, because he is, if I may say so, the lamb next for the slaughter. The next trouble is going to be over the arrangement with Denmark, and, while we have Birmingham on the altar to-day, I understand it is to be the hon. Member next week. He must not anticipate the speech that he is going to make on that occasion.

Sir J. LAMB

You must not anticipate my slaughter.

Mr. ATTLEE

I never wider-estimate the strength of vested interests in the House, and I know that the agricultural interest is very strong, but the hon. Member will agree that, if he had managed to get some protection for his farm produce, and if he had started on his business and laid down the whole working of his land on that basis, and then suddenly found that the exigencies of international bargaining were going to leave him exposed to the competition of which he has previously complained, in order that some other trade might be benefited, he would feel a little unsettled. That is now the case, and we pointed it out at the time when this tariff legislation was brought in.

I have never taken a strict Free Trade view in the House; I have always stood for a properly ordered economy. I welcome this kind of arrangement, because I think we have got to have an orderly trade throughout the world, but the point that emerges is that you must have planning. The House of Commons is now asked to decide on a single thing. On the merits we may say that it is right, seeing how hardly the coal trade is hit, that these 3,000 men should be put into work in the coal trade and that Birmingham should suffer. We may say that, but Birmingham Members would say the contrary. We have, however, brought before us this one little item, quite detached from any consideration of the economic future of the country. We say that, if this Government were a real National Government, they would never have started handing out all kinds of Protection to this interest and that interest through the three just men. We moved, at the time when the three just men were set up, that they should consider the planning of the whole country, and that is what the present Government ought to be deciding. They ought to be deciding what forms of economic activity in this country should be assisted, what should be repressed, and in what way the country should be organised. They have not done that. On the contrary, they have always clung to the idea of leaving it all to private interests, and the result is that the House of Commons is seeing to-day, as it has seen before, a struggle between interests.

I am not complaining in the slightest degree that hon. and right hon. Gentlemen stand up for their constituents, and they will not complain in the least if mining Members stand up for their miners; but this is a matter which should not he decided in the House by the eloquence or voting of this side and that, without any reference to principle whatsoever. We claim that there is an urgent need that an industry like the mining industry should be properly organised, that the export of coal should be properly organised. In the same way, we believe that the whole of that great industrial conglomeration round about Birmingham is a vital part of this country's life, and that it also requires organising. Everyone in the House, when a matter like this is being dealt with, should have before them an idea as to the amount of coal trade that this country wants, the amount of small trade that this country wants, whether the country should devote itself to producing raw coal, or to pro- ducing piccolos, flutes, clarionets, bassoons and cornets, whether it should produce coke or concertinas—

Mr. HANNON

Why not produce both?

Mr. ATTLEE

Quite. The hon. Member thinks, quite properly, that we might produce both. I agree. If only we could get away from a Government that is not out for developing production in this country, but is in the grip of narrow financial interests, there is no reason why, with a proper control of the imports and exports of the country, we should not have a full production of coal and of these other things as well. But that does not mean a haphazard bringing down of a tariff here and making a trade agreement there by an ex-Liberal President of the Board of Trade with no particular conception of the future of this country except as a bundle of competing interests. It should be brought about as part of an organised and definite plan. We see this afternoon the Nemesis of a Government that does not know its own mind. I think we should have done better with a whole-hearted Protectionist Government than with a piebald Government; we should have done better with a wholly Free Trade Government than with a, half-and-half Government; but we could have done best of all with a Socialist Government, which would treat this as part of an economic plan and, when we came to considering with Germany, Norway, the Argentine, Canada, Australia or any other country the matter of trade agreements and promoting the best conditions for all concerned, it would go in as a united country, as an economic whole, with a clear idea of its economic future and not a bundle of competing interests, with the result that every bargain that is made, while it pleases one, offends another, and we are going to have this House again and again become a mere huckstering place.

Mr. HANNON

Does the hon. Gentleman seriously tell the Committee that he can conceive in any circumstances a Socialist Administration as a united economic whole?

Mr. ATTLEE

Certainly.

8.36 p.m.

Mr. BOULTON

We have heard a good deal about Birmingham to-day. I want to remind the President of the Board of Trade that there is such a place as Sheffield, and I want to draw his attention to a trade which, unfortunately, has not escaped' his attention in this agreement. In principle, I whole-heartedly support these agreements. No one has preached the principle of arranging agreements for reduction of tariffs more than I have in my constituency. I also realise that any trade that is selected for attention naturally feels that it is the one trade that ought not to be touched. I am going to appeal to the right hon. Gentleman as to why the safety razor and razor blade trade should not have been included in this agreement. It is an entirely new trade in this country. It is a new branch of the cutlery trade and, when investigation was made into it, the Advisory Committee went very exhaustively into the whole question of the cutlery trade, including the razor blade business, and on 29th June, 1932, made a recommendation to the Treasury in which the following views were expressed: In the case of a mass produced article of this character, successful competition is dependent on the maintenance of a large output, and, in order to justify the capital outlay necessary to secure sufficient output, some assurance of the continuance of the duty is required. The degree of assurance must necessarily vary with the circumstances of each case. In the present instance, subject to the adequate development of the industry and the pursuance of a strongly competitive policy, we do not contemplate recommending any alteration in the rate of duty now proposed for a period of five years. With that recommendation, and on that assurance, the trade spent considerable sums of money in putting down plant and new buildings. The security given to the home trade, which enabled the industry to make remarkable strides, also enabled it to proceed on mass production lines, which has enabled it again to obtain a. very considerable amount of export trade. The export trade of the safety razor blade business accounts for rather more than half the total export trade under the heading of cutlery, which shows the progress that the trade has made with the assistance of a tariff. I think that is the reply to the hon. Member for Bodmin (Mr. Isaac Foot). Sheffield has secured for the first time the War Office contract for shaving the British Army. It is profoundly grateful for that assistance. But that has meant spending a consider- able amount of money in enlarging premises, on new machinery and so on, and if this contract is not to be renewed on account of increased competition, and, if the duty is reduced as proposed, there is bound to be increased competition. The industry also is absorbing a considerable amount of that very large number of unemployed cutlers who can never hope to get back to their old jobs after the introduction of machinery, and I want the right hon. Gentleman to bear that point in view.

Anyone who has studied the history of the cutlery trade, one of the oldest industries in the country, since the time when the McKenna Duties were imposed and the way it has been treated ever since then, will realise that it has had a very rough voyage. In fact, it was left almost a wreck. But, just as this new trade is getting established and getting on to its feet, having made such progress, we have this setback. It is bound to upset all their calculations. I have a sheaf of telegrams from some of the largest firms and from the associations of the trade calling for emphatic protest. In view of the recommendations of the Advisory Committee and the assurance that they then gave, as far as they could, that in their view they did not contemplate reducing the duty for five years, I appeal to the right hon. Gentleman, if it is too late to consider this industry.

In my constituency as much as any Member of the House I have advocated Tariff Reform and agreements with foreign countries with a view to reducing tariffs but, in view of this recommendation of the Advisory Committee, what is going to be the effect as to security in trade circles of similar recommendations in the future? I am not appealing only for a trade in which my constituency is interested. There is a principle at stake here. I think I am speaking on behalf of the trade as a whole, and I again urge that if the right hon. Gentleman can see his way to reconsider this trade, if for no other reason that that it is a new trade, that it is making enormous strides and that it is helping the cutlery trade, of which it is a new branch, to absorb many of the unemployed, and that if it is allowed to get established, it will be a very big trade in this country.

8.45 p.m.

Mr. KNIGHT

The hon. Member for Central Sheffield (Mr. Boulton) has spoken powerfully on behalf of particular interests, as have other hon. Members who have taken part in the Debate. I have sat throughout these proceedings and I desire to express a general view to which these particular interests should he related. I came down to the House of Commons prepared to support the proposals of the Government in the belief that they were the best conclusions that could be reached in the course of negotiations with the German Government. I was astonished at the course taken by the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain), and I am sorry I have to speak in his absence and in the absence of certain other hon. Gentlemen from whom I differ. I was astonished that his object in asking the. Committee to report Progress was that the Government should have a further opportunity of reconsidering those negotiations.

The hon. Member for Limehouse (Mr. Attlee) is too experienced in the principles and processes of public administration to be taken seriously in the view which he stated in a very interesting and effective debating effort. He failed for the occasion to draw a distinction between the processes of approaching the Advisory Committee and the arrangements which the Government are recommending to-day. It is not a case of whether a particular interest made an application to the Advisory Committee on which they were certainly entitled to be heard, but a matter which has been negotiated by the Government with a foreign Government. Does the hon. Member for Limehouse, with his experience of public work, suggest to the Committee that it would be competent or right, or to be expected, that this or any other Government, during negotiations with a foreign Government, should stay the proceedings in order to consult particular interests concerned?

Mr. ATTLEE

I did not make that point. I made the point that if you were to make tariff bargains with other countries in the interests of particular industries, you should not at first have led those industries to think, after they had laid their case before the Tariff Commission and had been given a tariff, that they were reasonably safe and protected.

Mr. KNIGHT

I understand that point to be connected with another part of the observations of the hon. Gentleman to which I am coming. At the present moment I am within the recollection of the Committee when I say that he suggested that some privilege should be allowed to certain persons, inasmuch as, having been dealt with by the Advisory Committee, some further arrangement had been made without consulting them. I am bound to point out that when a Government undertakes negotiations with a foreign country it does so with the full authority of the Parliament which it represents, and it is not to be expected that the particular interests concerned in the negotiations should be consulted, because no Government would stay negotiations for that purpose. Further, what considerations which should be present to the mind of the Government in negotiating the instrument now before us were neglected by the Government in the German negotiations? Does the hon. Gentleman suggest there is any relevant information concerning the trades affected which was not before the Government during the negotiations? The Government pursued the negotiations with all the resources of the Board of Trade and of the other Departments concerned. Frankly, I suggest to the Committee that the reason the Government did not consult particular interests concerned was due to the fact that it was a process which could not be carried out, and that, in fact, no harm was done to the interests concerned. The right hon. Gentleman the Member for West Birmingham and the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) lodged a complaint which has been the foundation of the discussion during the last four or five hours. The complaint was of a twofold character. First that certain Birmingham interests had been prejudiced by the result of this arrangement with Germany—

Mr. AMERY

I think that the hon. Gentleman has forgotten that I was not only thinking of Birmingham interests, but that on balance what was given was a great deal more than what was secured.

Mr. KNIGHT

Perhaps my observations apply more directly to the complaint of the right hon. Gentleman the Member for West Birmingham. The Committee were not surprised to hear the complaint because they know that the particular interests operate in his constituency and that he has a constitutional right to come and present the complaint of the interests of his constituency who feel a grievance. The right hon. Gentleman presented the grievance that particular interests in West Birmingham affected by the negotiations were prejudiced by the results as embodied in the Resolution, and that they had not been consulted during the course of the negotiations. As to the major complaint of the right hon. Gentleman, I would ask the Committee to reflect as to the intention of the Government in entering the negotiations. The object of the negotiations arising out of trouble in the coal trade was to come to an arrangement with the German Government. On that view of the matter, which I suggest to the Committee is the true view, the Government were compelled to grant certain concessions to the German Government in respect to the new arrangement which the German Government granted.

When it is contended here that the Government, having authorised the Advisory Committee to recommend to the House arrangements affecting a particular industry, and these having been accepted by the House, thereafter the House is precluded from considering any arrangement which may conflict with the arrangements of the Advisory Committee, I submit that it is a matter which cannot possibly be supported by anybody who has had experience in public matters. The recommendations of the Advisory Committeee accepted by this House are subject to review by this House. They are not permanent arrangements. It is the duty of the Advisory Committee to reconsider from time to time the economic situation in which duties have been allowed. Therefore, the view that because a particular interest seems to the Advisory Committee to be in need of assistance such an arrangement should not be interfered with, has no justification whatever. Surely—and this is the main burden of what I rose to say—it is the duty of the Government to place the general interests of the country before the particular interests of any industry. That is their main function. If on a review of the matters under negotiation with a foreign Government His Majesty's Government come to the conclusion that such a revision is necessary in the public interest, although it may involve the suspension or the ending of an arrangement come to on the recommendation of the Advisory Committee, surely that is not a. circumstance which should be opposed, except on the view that it is the function of this House to promote any particular interest which can find sufficient, advocates in this Assembly to promote that particular interest.

Mr. CAPORN

The hon. and learned Member is well aware that there has been a persistent rumour in the Midlands that the Government were arranging to give concessions in regard to hosiery for concessions on coal. Would the hon. and learned Member be making such a speech if this agreement had been giving away hosiery instead of Birmingham jewellery?

Mr. KNIGHT

I do not know what there is in my public conduct that should cause the hon. Member to ask me such a question. That circumstance would not affect in any way my action or the argument which I am advancing. It is the duty of the National Government to place the public interest before any subsidiary interest.

Mr. CAPORN

What is the public interest?

Mr. KNIGHT

The public interest is the principle which has justified the Government's representatives, on a review of the matters connected with the negotiations, to put forward in the national interest the recommendations which they are submitting to the Committee to-day in connection with their arrangement with the German Government. I regret to have received such a representation from one of my colleagues from the city of Nottingham. In my view, it opens up the vice of this discussion, which I hope we are going to avoid, and that is that the National Government are to be regarded merely as an instrument to push the interests of those subsidiary industries which can find sufficient support in this House to effect that purpose. On the contrary, I hope the Government will preserve their national character and unremittingly carry out the commission which they received from the country. That commission was to adopt such means as were necessary to meet the economic requirements of the State. Men in all parties, divided as they had been on economic theory, came together on that general commission to the Government. From time to time hon. Members who have taken a very prominent part in the Tariff Reform agitation and others who have taken a very prominent part in the Free Trade agitation, assert their views, but, in my submission, they have no relevance to this matter.

I see two Members of the Liberal party present. I have sometimes wondered what was the intention of some hon. Members when they took part in that commission which was received from the country, giving the Government a free hand to do whatever was necessary. No one expects hon. Members opposite to help the Government in these matters, but I do not understand how it is that from time to time when the Government apply themselves to the difficulties which confront them hon. Members who were elected to support the Government may be found continually criticising and even opposing the action which the Government take, on the ground that that action involves an interference with or violation of Free Trade principles. The revelation of this discussion and the assertion of private interests, even from the city of Nottingham, as against the general interests which it was the commission of this Government to carry out, has filled me with astonishment. The only question that can remain is whether or not the Government have done their best in the circumstances. On that I only desire to say that we have not all the information in regard to these negotiations. We have not the data or particulars on which these conclusions with the German Government were reached.

The simple question in my mind, which I submit with the greatest respect, is whether we are satisfied that the conclusion which the Government came to with the German Government was a right conclusion, and whether we have sufficient personal information to warrant us in opposing such a conclusion? I am satisfied that this arrangement with the German Government was come to in a very difficult international situation, in a falling market which called for some reconsideration of our relations with Germany, and that those negotiations were pursued by the most skilful negotiator and the most experienced businessman in the adminstration—the President of the Board of Trade. In the circumstances, I am satisfied that the Government have done the right thing, and that the country takes that view.

9.4 p.m.

Sir MURDOCH McKENZIE WOOD

This is the first Resolution that has been placed before us to confirm a trade agreement under our new tariff bargaining policy, and it is a remarkable thing that the speech we have just heard, leaving out of account those from the Government bench, is the only one which has been delivered in commendation of the agreement. That is a very extraordinary fact, and it is not a happy augury for the new policy from which we were told to expect so much. The President of the Board of Trade, presumably, commended the Resolution, but he did so with a lack of enthusiasm which has rarely been seen on the part of any Minister commending a Resolution. The objections which have been urged against the agreement are those which we forecasted long ago would be brought forward against any agreement entered into under a protectionist policy. One objection that has been urged is that it is causing uncertainty; that the changes necessary to implement the agreement are causing uncertainty in the realm of industry. A year or two ago we were told that tariffs would bring certainty into the realm of industry. As a matter of fact, it is only under a Free Trade system that everyone knows that it is no use going to a Government Department to ask for a favour; that industry knows exactly where it is and is in a position to enter into firm contracts. The policy of bargaining is always a policy of give-and-take. Every industry wants to take, but never to give. It has been suggested that the industries which under this agreement have been called upon to give should have been consulted beforehand. It is no use consulting beforehand an industry which has been marked down to give. If you are to have tariff bargaining at all, you must have industries from whom concessions are to be asked.

We have had the criticism that the Advisory Committee have made recommendations upon which the Government have acted and that now the Government are changing the duties. We were told that the Import Duties Advisory Com- mittee know what is required much better than the Government. If you are not going to have any change of duties you cannot have bargaining, and it is no use particular industries squealing because they happen to be called upon to make concessions. I think that the Government on this point might give us some information as to the procedure. Is the Import Duties Advisory Committee consulted at all in these negotiations? If they have recommended a duty of 30 per cent. on any particular commodity and the Government have acted upon that recommendation, is the Advisory Committee consulted when the Government propose to alter the duty by reducing it to 20 per cent., because they can get some concession from a foreign country? Do the Government go to the Advisory Committee and inform them of what is proposed and ask their opinion before a change is made? There should be some collaboration between the Government and the Advisory Committee in cases of that kind.

Most of the Debate has dealt with the general question of the Agreement and the large question of coal. It is a great pity that in all these discussions Member after Member, by the very nature of things, is bound to be placed in the position of advocating special interests. I make no apology for arguing and advocating a special interest. It is not an interest which has been badly dealt with in the agreement; it is an interest which has been entirely left out and neglected. Certain questions one would have taken for granted would have been dealt with in making a, trade agreement with Germany but the particular industry with which I am concerned has been entirely left out. It is the herring industry, of very great importance to the country as a whole, and of special importance to Scotland. I must explain at the beginning the extent to which this particular industry is an exporting industry. Before the War, only 15 per cent. of the herrings caught in Scotland were consumed at home; all the rest were pickled and sent abroad, mainly to Russia and Germany.

There has been a marked fall in the export in recent years. During the last two years it has fallen practically by one-half, from £4,500,000 to £2,500,000. Several reasons may be given for this fall, but there is one special reason which makes the herring industry a subject germane to this discussion. In the case of Germany there is ample evidence to show that it has been used for definite reprisals against this country. Last summer the German Government announced what they called their new economic policy, and said that they were going to set aside a large sum of money to build boats to make Germany independent of the imports of herrings from this country. On the top of that they trebled the duty which was levied on cured herrings going into Germany. It is impossible to deny, in all the circumstances, that this trebling of the duty, raising it from 3 marks to 9 marks, or from, 4s. to 12s. 6d. a barrel, was not a definite reprisal against this country. It has had the most disastrous effect. That is not the whole story, because the duty was imposed only on cured herrings and not on fresh herrings—

The CHAIRMAN

I am unwilling to rule the hon. Member entirely out of order in what he is saying, but I hope he will not go further into the question of an industry which is not mentioned in any way in the Resolution. He can deal with it so far as regretting that it is omitted from the Resolution, but there must be some limit to the discussion of an industry which is not mentioned.

Mr. LESLIE BOYCE

It is the red herring industry.

Sir M. WOOD

I understand that there must be a limit to the discussion, but I understood from the Ruling which you gave at the beginning that we were entitled to refer to industries which had been left out.

The CHAIRMAN

The hon. Member has misunderstood me. What I did rule was that any industries which were referred to in the Agreement, although not set out in the Resolution, could be discussed. That is where the hon. Member has made a mistake.

Sir M. WOOD

I do not want to enter into an argument on the point, but several industries have been referred to as having been omitted from the agreement. I will not pursue it any further, because I have said all I want to say. The herring industry have been looking forward to this agreement hoping and believing that their case was to be dealt with. They have had the duty on their commodity trebled, which is a very serious matter. The method by which it has been effected has also had very serious results. The duty has only been on the cured and not on the fresh article and it has enabled Germany to do a great deal towards setting up a curing industry in Hamburg. If there ever was a case which might have been the subject of tariff negotiations such as preceded this agreement, the herring industry is one and yet it has been entirely ignored. I wish to tell the Government that the fact that this industry has been left out, after the high hopes which were aroused in respect of it, will be received with bitter disappointment. It is a very important industry and if something is not done to protect it from reprisals such as it has been subjected to recently, then that industry will soon go down and become utterly ruined.

9.16 p.m.

Mr. LEWIS

I do not propose to pursue the red herring which the hon. Member for Banffshire (Sir M. Mckenzie Wood) has just drawn across the trail of this discussion. I rise to oppose the Motion of the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain), and I do so for these reasons. I have always thought that the best thing to be said of any tariff system was that it was a necessary evil. I have supported the introduction of our present tariff system, because I have been convinced that it was rendered necessary by the actions of the other Governments of the world but I always hoped that the ultimate result, no doubt after a period of change and disturbance, would be that the tariffs of the world would be lowered. Holding those views, I have felt it to be a good thing for the country that agreements such as this should be negotiated on our part, by a President of the Board of Trade holding the particular views and with the particular experience of the right hon. Gentleman the Member for St. Ives (Mr. Runciman). As the Committee know he is second to none in ability to expound the advantages of a Free Trade system, and, in connection with the shipping trade, it is common knowledge that all his life he has had wide experience of the effect of various restrictions of trade upon our commerce with different countries.

This afternoon he has put before us a trade agreement with Germany. It is an agreement which covers a very small field but I venture to think that it is of an importance and a significance greater than the small field which it covers would lead one to expect. It is significant of what we may expect in the way of such agreements from our present Government and it ought to be so regarded, both by those who like it and by those who do not. To my mind, it shows clearly that in this matter the Government are not going to be afraid to make full use of the bargaining power of the tariff. I confess I have been a little puzzled by the attitude of some hon. Members. Surely it is clear that if a tariff is to be used for bargaining, it means that if you succeed in accomplishing your bargain some industry in your own country will get less protection than it would get otherwise. Clearly, if you want something from the other side, you must give something in exchange. In a case like this where we have sought a benefit for the coal industry, quite obviously we have had to be prepared to give something in some other direction.

Naturally, the particular industries affected by the reduction in tariffs are disappointed. Equally, naturally, we have heard from various Members who represent constituencies particularly affected, about the industries in connection with which tariffs have had to be reduced. I do not think anyone can object to that. It is an unfortunate thing that there should be attached to the tariff system that identification of a particular Member for a particular constituency with the desire to get as much protection as he can for the industry in which his constituents are keenly interested. It is an unfortunate circumstance connected with tariffs, but it is understandable, and I do not think that anything has been said by any of those Members of which reasonable complaint can be made, except perhaps a remark of the hon. and gallant Member for Aston (Captain A. Hope). In the course of his speech he presumed from this agreement that we should, on future occasions, pick out and attack various small trades, as, he said, had been done in this case. Of course that is grossly unfair. The President of the Board of Trade has not picked out any industries to reduce their tariffs. The industries on that side of the bargain have been chosen by the German Govern- ment. The German Government have asked for concessions in industries in which they are interested. It is not that we have tried to sacrifice comparatively small or unimportant industries at all.

Admitting that it is reasonable to expect that those Members whose constituencies are directly affected should object to that part of the agreement, then on what lines are those of us who are not immediately concerned in that way, to come to a decision whether the agreement is good or bad? For myself, I answer the question in this way. I think the test is one of the amount and the incidence of employment. I think that in a case of this kind the Government should endeavour to promote an agreement, the net result of which will be that there will be a greater total number of persons employed in this country than there would have been if the agreement had not been made. I do not think that is all. The Government should also have regard to the fact that it is desirable that employment should increase, if there is to be a choice between two industries, in the industry which is capable of standing on its own feet rather than in the industry which needs the protection of a tariff. The only possible exception which I can see to that rule is where it can be shown that an industry is of national importance for other reasons, but is not, owing to special facilities in other countries, capable of standing on its own feet. Judged by that standard, I think the right hon. Gentleman has made a good bargain. His figures have not been seriously challenged and without straining them to get an exceptionally favourable view for himself, he has shown that there will be a net increase of employment as a result of the agreement.

Mr. SLATER

Might I remind the hon. Member that the President of the Board of Trade was informed that that was not so?

Mr. LEWIS

Moreover, the incidence of the employment is satisfactory, in that the increase will be in an industry which can stand on its own feet, and the decrease will be in industries which even to-day must have 20 to 25 per cent. tariff. Even so, doubts are expressed about how these particular industries can carry on. Those are the vital considerations which the Committee should keep before it this evening, the type of employment affected and the incidence of that employment. We shall never attain to the ideal, under which each country produces that for which it is best fitted and there is a free interchange of goods. Although that ideal may be beyond our reach, I see no reason why we should not strive to get as near to it as we can. I regard this agreement, small as it is in itself, as an indication that the Government propose to endeavour to use this new and powerful weapon put in their hands in the form of tariffs to get as close to that ideal as possible—in other words, to make arrangements with other countries whereby we get the greatest facility in the industries most suitable for ourselves, and we give them the greatest facility in the industries most suitable for them. That is a course of action which, though it is bound to offend sectional interests here and there on every occasion, will in the sum total be very much for the benefit of the country as a whole.

9.28 p.m.

Sir B. PETO

The hon. Member who has just spoken is a very partially converted Free Trader and an only partially baked Protectionist. He spoke about a reduction of tariffs, but let me remind him that there is nothing in this agreement about a reduction in tariffs except a reduction of tariffs in favour of a reduction of employment in this country, and nothing in favour of a reduction anywhere else. He quoted the President of the Board of Trade in support of his argument, which he put before the Committee as that of a dispassionate supporter of this particular agreement. He said that the right hon. Gentleman was, of course, conversant, as a shipping man, with what was best for shipping and the general exchange of commerce between different countries of the world. The Eldorado of the shipping man would be a state of affairs in which no country produced anything for itself, but in which the shipping man was required to carry everything overseas produced in some other country. I do not attach very much importance to the opinion of the shipping man, qua shipping man, when it is quoted in this House in a controversy of this kind, which concerns the interests of the nation as a whole.

The hon. Member referred to the list which he found in this agreement. I would remind him that it was a German list and not a list put forward in the interests of his country. The President of the Board of Trade, in his opening speech recommending this agreement, made it clear that this was a list prepared by the Germans of the particular duties which they found affected them most. Why should that be so? Some of these duties have been in force since 1915, such as those on musical instruments and clocks and other Safeguarding Duties, which are the special subject-matter of this Resolution. When these duties were imposed in 1915, it was done in the first instance in order to limit the importation of what were regarded as quasi-luxury goods from abroad, when the country was in a state of war. Why? Because those were the particular industries which we had neglected in this country to such an extent that, although perfectly capable of producing them ourselves, we had allowed those goods to be produced almost entirely by Continental countries, especially Germany.

That is where the shoe pinches, and that is why the Germans put these duties on their list. When you consider that that is the basis for this particular agreement, I cannot see anything in it except what is in the interests of Germany and not in the interests of this country. I. am making somewhat detailed reference to the hon. Member's speech because, apart from the speech of the hon. Member for South Nottingham (Mr. Knight), it is the only support the Government have had in the Committee in a Debate from half-past three to half-past nine.

Mr. KNIGHT

The explanation is that by the accident of the Debate the supporters of the Government have not been called.

Sir B. PETO

The hon. Member was speaking about industries which can stand on their feet, and he said that the coal industry was an industry that could stand upon its feet. I know very little of the coal industry, but I have heard speech after speech this afternoon from Members specially connected with that industry, who have all pointed out that it is an industry steadily going down in this country. It is now proposed, in order to holster it up, to sacrifice the interests of certain small but important industries employing very skilled labour.

In the brief time I shall detain the Committee I wish to put a point of view not adequately represented in this Debate. I want to question the whole basis of the starting-point from which the Government have entered into these negotiations. What is the state of affairs of the trade between this country and Germany at the present time? Let us take that as a starting-point. I find that three years ago, in 1930, when the exchange trade of the world was comparatively prosperous, we were receiving from Germany about £65,500,000 of goods a year, and we were sending to Germany £28,800,000 of goods, considerably less than half what they sent us. In 1931 the export trade of Germany to this country dropped by only about £1,000,000, but our exports to Germany dropped by over £10,000,000 in that year. In 1932 the exports from Germany to this country were divided by more than two and dropped from £64,000,000 to £30,000,000. That was the year when what has been represented from the benches below me as the disastrous period of the tariffs commenced. There was a drop of German imports into this country of over £30,000,000, but to Germany our exports dropped from £18,500,000 to £14,500,000; and the present position is that at the end of 1932, when the Government were negotiating this treaty, we had a trade position which showed that Germany was sending here £2 worth of goods for every £1 worth that we sent her. I suggest that that forms a natural basis of negotiation.

It has been pointed out by various speakers more competent than I am to deal with the coal question and its history, and it has been admitted by the Minister of Mines, that the whole question of these rapid reductions in our quota of coal to Germany was held by the Government to be a breach of the 1924 agreement. Therefore, the Government ought to have started on these negotiations, I maintain, from the basis, first of all, that Germany was sending to us £2 worth of goods for every £1 worth that we sent to them, and, therefore, if there was to be any revision, it ought to be a, revision in favour of this country, not in favour of Germany; and, secondly, if there was to be any revision of the coal quota, it needed no tariff con- cessions from us, but it should have been done on its merits as a breach of the treaty already in force.

There is a further point. We have started these negotiations after we have abandoned the major part of our negotiating power. At the beginning of last year, we had the Abnormal Duties Imports Act in force, which on a great many articles of importation from abroad where we were specially subject to dumping we wisely, through the policy of the President of the Board of Trade at that time, put on duties of 50 per cent. If we had kept those duties on, and perhaps extended the list, we should have had something with which to bargain. We should have started from that point and said, "We will give you a concession on this and a concession on that," and still have been able to maintain employment in this country. But what did we do? We abandoned these duties months before we attempted to begin the bargaining business, and we started from a miserable level, in many cases of barely more than a Revenue duty, and, in return for what has been held by Members representing coal constituencies, like the hon. Member for Blaydon (Mr. Martin), to be an almost illusory concession to the coal industry, we have abandoned parts of duties which, according to the history of the industries concerned, have been barely sufficient and in many cases not sufficient to maintain our own position in our own home markets.

That is the position, and if I may take it a step further, I should say that not only have we abandoned our position before we commenced bargaining, but we are offering something which is not exchangeable. We are offering, on our side, the interests of certain industries which are permanent and skilled industries, once they have been established in this country, such as that of clocks, for example, quoted by the right hon. Member for Sparkbrook (Mr. Amery), which only last year and the year before, for the first time in 18 years, were taking a definite step forward, and which, I believe, has now got an application before the Import Duties Advisory Committee for an increase in tariffs. The position is that under this treaty, without any notice to the industries whatever, without consulting them in any way, without even investigation as to the numbers of people employed, a whole industry is offered to the Germans in return for a possible increase in our coal exports. It is not only offered to the Germans, but it is offered to our great competitors the Swiss, and to everybody who has the Most-Favoured-Nation Clause.

I cannot conceive of an agreement of this kind being made by business men in any country, either inside the country or between one country and another, because I can see no justification for it whatever except the one fact that you can abrogate it at three months' notice. That is the only thing that can be said for it. I would like to point out to the House the curious parallel that there is between the Government's method of negotiating, as illustrated by this, the first agreement and, I believe the worst of the lot—and I am surprised that they have brought the worst first before the House. Perhaps they are keeping the good wine to the end, and we may get something a little better on some other occasion. But I am surprised that the basis of these negotiations is such as it is. We have got into a position in which we are told that we must negotiate with foreign countries. I quite agree. Reciprocal reductions in tariffs are something with which nobody would quarrel, but even, that you may carry too far. If you are to compare the position as it is to-day, with all the world manufacturing, and the position as it was 30 or 40 years ago, when we were the principal manufacturing country in the world, I am not so sure what the result of universal Free Trade would be, if we could accomplish it.

But apart from that, I say that it is a monstrous thing that these small industries in this country—and some of them are not really very small—should be sacrificed in this way in order to achieve some supposed advantage, and when, as far as I could ascertain by my intervention when the Minister was speaking this afternoon, there has been no responsible or adequate investigation of the numbers of people employed, whose interests the Government ought to hold in view. The President of the. Board of Trade spoke about a hypothetical 1,800 on the one side as against his 3,800 coal miners on the other, but the figures that have been given to me show that in four of the trades referred to in this Motion alone you have a, total employment of 32,000 men—clocks, musical instruments, hollowware, and toys. I am leaving out jewellery. I do not know the numbers in jewellery, and I have left out all the people engaged in the clock industry who are, I understand, not engaged in the making of clocks as generally understood, but in the making of time recorders and things of that sort.

The clock industry is very difficult to investigate as to the exact number of employed, but the total in these four industries is certainly between 30,000 and 40,000 men, and I think that we ought to have something better put forward by the Government in favour of this Resolution than the figures that were given by the President of the Board of Trade. On the assumption that it is between 30,000 and 40,000 men, if we get a diminution of employment of only one-eighth, and the figure is the lower figure of 32,000, we entirely wipe out the whole of the 3,800 coal miners and a couple of hundred in addition. As these reductions of duty are very substantial, I believe, from what I am told of the position in these different industries, that it is very possible the result of what the President of the Board of Trade is proposing to do in this treaty may reduce the employment in those trades by one-quarter. If it reduces it by one-quarter, instead of gaining employment for 3,800 coal miners, he will lose double that amount in unemployment in other industries.

I do not want to decry for a moment the skill and the other qualities of our coal miners, but I do put this last argument before the Committee. We are dealing here with an exchange for a supposed increase in coal export of the interests of permanent, and, it may be, growing skilled industries in this country, and it is a very serious sign of the trade position of the country if the best we can do is to sacrifice the interests of productive industry in this country in favour of the export of the raw materials of the country. I have detained the Committee long enough to show that I believe that we are proposing to make a bad bargain. I recognise the fact that I was returned to support the Government, but, much as I should like to support them, I cannot possibly support them on this occasion.

9.48 p.m.

Mr. SLATER

I should like to emphasise that I regret very much to have to stand against the Government with regard to this agreement, although I have such a great interest in the coal trade. I must say in defence of the President of the Board of Trade that, as one who has en intimate knowledge of the export of coal to Germany, in which trade I have been engaged more or less all my life, I feel that all the statements which have been made by them in regard to that trade since 1929 are substantially true. Germany's policy in regard to the quotas on the import of coal has undoubtedly been demanded as the result largely of her economic position. Those who, like myself, have very large interests in Germany and have an intimate knowledge of the trade that has been going on there, know that it must have been a matter of the greatest possible anxiety to the German Government to maintain the equilibrium in their financial position internationally in the last two years. Therefore, in tackling this particular subject the President of the Board of Trade has undoubtedly had great difficulties to meet.

There are many circumstances which have not been mentioned in to-day's Debate of which the Committee should be informed before it comes to a decision on this important matter. I will refer first to the quantity of coal which we imported up to 1929, the gradual reduction since that date, and, what is perhaps more interesting, the possibility of our getting a better bargain than we have got in regard to the tonnage which the German Government have undertaken to import or license. There has been since 1926 a great increase in the Polish coal exports into Germany, as well as into Scandinavia. In fact, it might be said that the Polish prices have largely determined the bulk of the trade in that particular area. Those of us who have made pledges to our constituents are thinking what we are going to get for this particular concession which we have given to Germany. I say boldly that the diminution of demand for coal from Germany during the last three years is exactly co-relative to the reduction in industrial activity. Immediately there is any recrudescence of business activity in Germany, they will not only desire but they will need to have British coal again, if they are to recreate activities in industries in which their great export trade lies.

I know that the President of the Board of Trade has a proviso that if the consumption of coal does increase in Germany, the import licence for British coal will be increased. That is so much to the good, but I have great fears that in these negotiations the German Government have undoubtedly a weapon in their hand and that a little later this increase, if it does arise, will be used in an entirely different way from what the President of the Board of Trade thinks. Two months are to elapse when the consumption increases before we can go forward with a demand that the quota shall be increased. We have chosen, as the hon. Member for Barnstaple (Sir B. Peto) said, a time when there is a very favourable trade balance on Germany's side—last year it was £14,000,000—to agree to this increase of 1,000,000 tons. I will tell you what 1,000,000 tons mean. In value, on the basis of 14s. per ton f.o.b., that may mean some £700,000.

Mr. DICKIE

May I point out that it does not mean that only, but means direct employment for 4,000 men, and employment for others in the ancillary trades? It means employment for dockers, trimmers, and all engaged in the transport of the coal. If the hon. Member will make a simple calculation he will find that it means employment for no less than eight steamers carrying 2,500 tons each.

Mr. SLATER

I was coming to that point about the increase in the number of persons employed. I will point out to the hon. Member, however, that, they may not necessarily be British steamers but German steamers. May I tell the Secretary for Mines, however, that I agree entirely with the hon. Member for Bothwell (Mr. Lunn), that this agreement will almost certainly not mean the employment of an additional 4,000 men? Most collieries are now working short time, and orders for an additional 1,000,000 tons might not mean the addition of one man to those who are working, though it would mean more employment and more wages for the men at present working. It is a great mistake to assume that 4,000 men will be employed in the British coal trade who are not working there to-day.

Mention has been made of the various trades in this country which will be penalised by the lowering of the tariffs. I would remind the Conservative Members of the National Government that we were sent here to provide work for British workmen. British industry has been sorely tried. In its fight with foreign competition it has been battling against countries where the wages are sometimes five times less than ours, and it has the handicap also of higher taxation. In their efforts to create industry our people want security. The position was very well put by the hon. Member who reminded us that in the case of razor blades the Imports Advisory Board hid said that they did not propose to interfere with that industry for five years. What is to be the position of those responsible for employing our people if the humbug of the Government in regard to this matter is to continue? Friends of the Government will tell them quite straightforwardly, "You continue that policy long enough, and the next time you appeal to the country you will get its verdict in a very emphatic way, but it will not be the verdict you want." Certainly it will not be a verdict to benefit the rank and file. I have always told the Labour people that if they intend to buy cheaply then, in an honest world—and it is only honesty that finally prevails—they have got to sell cheaply.

Our statesmen seem to lack appreciation of the troubles and trials through which we are passing in our endeavours to market the produce of British workers. We have only to look at the position in Japan. In the case of the works with which I am associated, comparable works in Germany pay little more than half the wages we pay. Under those conditions what chances have our people when we pull down these tariff barriers? In one year from now it will not be £14,000,000 which will divide our trade balance, but perhaps another £6,000,000 or £10,000,000 will have been added to it, to the benefit of Germany. If Germany had great obligations to pay abroad, some consideration might be shown to them in the economic structure of the world, but we know that their internal debt is wiped out, we know that they have practically no external debt, and that if the present reparations agree- ment is revised we shall be up against great odds. I assure the Government that if they pursue the policy which is reflected in this agreement they will only need to wait a very few months before finding that the British manufacturer not only loses his own market, but is ousted by German manufacturers from other export markets. I appeal to the Government to reconsider the agreement before it is too late, and I am grateful to the right hon. Member for West Birmingham (Sir A. Chamberlain) for having put forward his proposal.

10.3 p.m.

Mr. RUNCIMAN

The Debate has ranged over a very wide field, and I am glad the Committee has made clear to us exactly what is the general view, and what are the particular complaints which are made against the German agreement. I do not propose to waste any time over the purely personal questions which have been before us during the day. I have no interest in the example set by Coriolanus, and have no intention of opening my windows towards Jerusalem. The truth is that we have got much more serious business to deal with. As for my own fiscal record, it seems to be able to take care of itself. I have no misgivings about the course I am taking, because in every case, from the beginning of the crisis of two years ago to the present time, I have based whatever views I have expressed or whatever course of action I have taken on purely practical considerations. It was in that spirit that we dealt with the Import Duties Act when, in 1932, we were passing it through the House. The Import Duties Act set out in practical form the programme which we had every intention of following, with the support, as I understood, of the House as a whole.

Let me remind the House what the Import Duties Act was intended to achieve. We definitely and quite emphatically embarked on a system of revenue duties—the 10 per cent. duties. The revenue duties have proved productive; they have been a great relief to us at a time of great fiscal and financial need. Then, in addition to that, there was the whole scale of the additional duties imposed on the advice of the Import Duties Advisory Committee. Let me say at once that we have never at any time embarked on these negotiations or outlined any of these tariff schemes with- out close consultation, private consultation, with the Import Duties Advisory Committee. They have been kept informed of what our objective was and of the means by which we hoped to reach it. I hope I have satisfied those of my lion. Friends who were asking how far we had consulted the Import Duties Advisory Committee when I tell them that that has been the course followed from the first. That is the first point that I wish to make as regards the system.

Sir A. CHAMBERLAIN

I am sorry to interrupt my right hon. Friend. I do not know exactly what he means to tell us. He says that he "informed the Advisory Committee," "kept in close touch with them." Did he consult them, and has he acted upon their advice?

Mr. RUNCIMAN

If my right hon. Friend had given me due time, I was going to develop the relationship between the Board of Trade and the Advisory Committee. We have at no time been committed, either when the Act was going through the House or since, to accepting the advice of the Advisory Committee. The final voice in all questions rests with the Government, and it still rests with the Government and must so rest. That is certain. The second point I was asked by my right hon. Friend is: "Have you consulted them?" We have obtained from them all the information which we required for our executive action. They had some information which was not available to us; we had a good deal of information which of necessity had not gone to them. But we pooled our resources and, having pooled our resources, we felt that we were equipped, quite consistently with the machinery set up under the Import Duties Act, for arriving at a decision which we could recommend to the House.

Sir A. CHAMBERLAIN

I am reluctant to interrupt my hon. Friend, but he said, "We pooled our information; we were then in a position to arrive at a decision." The first "We" is clearly the Government and the Advisory Committee. Is the second "we" the Government and the committee or the Government alone?

Mr. RUNCIMAN

If it becomes a matter of responsibility, I say without the very least hesitation that there is no necessity whatever to extend the meaning of the word "we." The Government must accept the responsibility for the action which it takes, and does not shirk it. But if my right hon. Friend thinks that I am endeavouring to throw responsibility on the shoulders of the Advisory Committee, let me tell him at once that he is mistaken. I have no such intention whatever. I say that the responsibility rests upon the shoulders of the Government. If the House disapproves of what the Government has done, of course it must take what steps are right. If it does not disapprove, I hope it will give us the authority to go forward with this agreement.

Now I come to the second part of the programme that we set out in the Act. From the very first, men like myself brought up in the Free Trade tradition, who believe that in normal times, before we got to the present stage of our political history, Free Trade had rendered great services to the country, formed a view as a result of experience that, on the basis of actual Free Trade, we had no bargaining material. I remember that, in the first speech I made in the House during the present Parliament, I pointed out that, unless we had a tariff, negotiations were bound to be futile. Let me remind the House of what happened before we came into office. Mr. William Graham endeavoured—unhappily, at the expense of his health—to urge a tariff truce at Geneva. He would have been very glad to see the lowering of tariff barriers everywhere, but he had nothing to give away. There was no concession that he could make to enable him to do a bargain with anybody. He came back from Geneva, after he had urged the lowering of tariffs with all the power at his command, a disappointed man. Why? Because he had had nothing with which to bargain.

We knew that very well, and when we embarked upon the Import Duties Act we made it quite clear that part of the object that we had in view was to provide the Government of the day with the material by which it could conduct negotiations. This object was very well expressed by my right hon. Friend the Chancellor of the Exchequer. I make no apology for reading his exact words to the House. He was describing the first and the second objects that he had in view. The first is not pertinent to our discussion at the moment, but the second is. The second provision is designed to facilitate the lowering of tariff barriers in foreign countries by offering to reduce our own in return for an advantage of that kind. In this case also the initiative lies with the Board of Trade, which will conduct the negotiations and, on a recommendation from the Board of Trade, the Treasury will have the power to direct the removal or the fixing of a lower rate on any goods from the particular country concerned which may be specified in the order. We attach a good deal of importance to this provision as a bargaining factor, out I should like to take the opportunity of stating clearly that we do not intend to conclude any arrangements of this kind with any foreign country until we have made our agreements with the Conference at Ottawa. My hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) then asked: Does that apply to the revenue tariff only, or to the higher duties? And the Chancellor of the Exchequer replied: To both."—[OFFICIAL REPORT, 4th February, 1932; cols. 294–5, Vol. 261.] But there, in explicit terms, was declared one of the principal objects which the Government had in view. The House knows in every quarter that from the very first we have regarded bargaining power as essential for the well-being of our industry. We still regard it as essential. But you cannot make omelettes without breaking eggs. Concessions must be made in some quarters if we are to carry out the programme to which this House is pledged, and IA e must prepare to make some concessions. Let the Committee not forget that less than two years ago it was cheering to the echo what was said by the Chancellor of the Exchequer.

I beg the Committee not to become nervous in adopting a policy to which at that time is undoubtedly adhered and to which it will adhere to the end. I would rather devote attention to the points that my right hon. Friend has put than to those of any other Member. What are the two points that he put to the Committee? The first is that he was afraid we had paid twice over for our coal trade. Let us see what the position is. It was described by the Secretary for Mines this afternoon, and there is no harm in repeating exactly how we stand. I will take the facts. The quota had gradually gone down and down until it looked as though our coal trade with Germany was likely to be restricted merely to shipments made to the free ports. We protested against the quota being run down to these very low figures, and we declared that it was our view that the quota was in fact a discrimination against us. It hurt us far more than it hurt Belgium, for instance. We also claimed that it was an infringement of the commercial Treaty of 1924.

That was not the view taken in Germany. In Germany they declared that they were not in any way infringing the Treaty of 1924. The result of the clash of our views was that Germany suggested that we should go to arbitration. If we had gone to arbitration, I have no doubt that we should have had an impartial court, but we should have had to wait 12 months at least for a decision. Meanwhile I do not doubt where our coal trade would have gone. It would have gone down to a very low ebb. There was very little doubt in our view that the method of deciding by way of arbitration whether what had been done by Germany was or was not within the Treaty of 1924, was going to be a very cumbersome way, and that it would be solved much better by negotiations. When we talked about arbitration, Germany said, "If you talk about arbitration, let there be arbitration on another point simultaneously, namely, upon the duties imposed in the United Kingdom which have especially hit some German industries." I need not say that we could not tolerate such a suggestion in reference to our right to put a tax on goods without interference from any quarter. That was a right which we are bound to maintain. If we had left the situation as it was then, we should have done a very great injury to a very important industry.

When we talked about discussion, the Germans were ready to discuss with us. We had discussions first of all in Berlin, and then over here. What we aimed at was raising the quota to a higher figure. Naturally, 180,000 tons was not the only figure we mentioned. We had to bargain. Every man who has sold a horse knows that. What we actually did was to ask for a great deal more than we expected to get, and I have no doubt that the Germans were ready to give us a great deal more than they disclosed at first. We had to drive a bargain, and driving bargains, as everybody knows, can be a very slow business. The effect at the end of our negotiations was that we reached this figure of 180,000 tons a month, with a dead stop so that it could not go lower, and an automatic arrangement by which it might go higher. The point we had to consider was whether it was worth while to make the arrangement. The point in my right hon. Friend's speech was as to whether it was a good arrangement or was not. I am a little sensitive on that. Nearly every man is a little sensitive as to whether he has a sense of humour. I have a feeling that I can drive a bargain as well as most people, and I have no doubt that we all feel that in regard to ourselves. I am a little sensitive when it is suggested that we have not driven a hard enough bargain with Germany. I can only say that I had the most hard-hearted assistants, and I had ample and full stores of advice of the Mining Association, who have now become one of the allies of my right hon. Friend the Member for Darwen. We were told by them exactly what they would desire. They were exactly like the other industries that are represented here to-night—they wanted more, and still more. They would, naturally, have liked to have gone right back to the original figure of 600,000 tons a month, or to 420,000 tons a month. That they regarded as quite a reasonable and moderate figure. Of course they did. They would not have gone on for very long as an industrial organisation if they had been prepared to give away their case. I will not say that they were greedy, but they thought that they could conduct a very active export trade with Germany, for the benefit of Germany as well as of themselves, and could do it on a very much larger scale than we were contemplating. But, when we came to compare figures, it was impossible to get agreement with the Germans on their basis. As time went on, we gradually came nearer and nearer to the figure which has now been arrived at. The Germans came up a little, we came down a little, and eventually we reached the figure of 180,000 tons a month, with the various conditions which are attached. If that is a bad bargain, all I can do is to tell the Committee that I do not think they would have done any better with 'anyone else at the Board of Trade. [HON. MEMBERS: "Hear, hear!"] My right lion. Friend also suggested—or rather, I am not sure that he actually suggested it, but he apparently thought—that we had acted with levity. What he meant by that was that we had seen the Import Duties—

Sir A. CHAMBERLAIN

I did not use that word, though some Members of the House have since used it.

Mr. RUNCIMAN

I apologise to my right hon. Friend; I wonder whether it was not his neighbour, the right hon. Gentleman the Member for Sparkbrook (Mr. Amery). What was meant by acting with levity was that recommendations had been made with regard to import duties by the Import Duties Advisory Committee which had been set aside by the Government as a whole, and that, indeed, in one case in this agreement we had actually gone so far as to suggest a diminution of the duty, although the Advisory Committee had said that they themselves, speaking only for themselves, did not propose to make any further recommendation for a period of years. We did that because in our view—I am referring to the case of safety razor blades —the protection which was still in force was sufficient for the purpose. We could not expect any one safety razor blade manufacturer to agree with that, nor is it natural that those who would speak for them in the House of Commons would agree with it, but that was our view.

Sir A. CHAMBERLAIN

May I say that I had no communication with the razor blade manufacturers, either in my constituency or anywhere else?

Mr. RUNCI MAN

I was not specially referring to my right hon. Friend. It is only natural that there should be objection to these duties being reduced, but we were reducing these duties because it was part of our statutory duty to undertake the whole of this investigation and administration, and that within the four corners of Section 7 of the Import Duties Act, 1932. We were carrying out the statutory obligation which was laid upon us of exercising our judgment to the best of our ability, and I hope that my right hon. Friend does not think one is guilty of levity because one does what is imposed upon one by Statute. Certainly, we have regarded all these industries as being very serious matters. I think of them in terms of employment, whether of actual workmen, of managers, or of proprietors. I am quite conscious of the fact that the arrangement we are making must to some extent affect their trades, and, it may be, affect their employment, but one has to weigh in the balance these points as against what has been happening in the coal trade.

I do not want to put too strongly the rights of the coal trade, but I am sure it is unnecessary to remind the Committee that the district where unemployment is at its worst is the coal area, especially in the North-East corner of England. There have twice been interruptions by the hon. Member for Consett (Mr. Dickie) as to the ancillary trades which are affected, and, when you take into account these ancillary trades, coal mining as a whole and everything that hangs upon it, you are really touching an immense number of people in the districts which at present are suffering more than any others. I know it must be a little hard for some industries which feel that they are losing 5 per cent. of their protection, but that is nothing compared with the state of these desolated coal areas and, if we can do anything to assist them, we shall be conferring a benefit not only on the industry but on the populations which are dependent upon it.

Let me put another aspect to the Committee. There is probably no subject that is causing more anxiety among a larger number of people—investors as well as employes—than the state of the railways. Think what happens? Nowadays every week's returns show a continuous drop in railway traffics, and particularly in mineral traffic. If, as the result of this agreement, we add 1,000,000 tons to the export of coal, the whole of it has to be carried on the lines flat are passing through the most desolated areas. The company that will get the largest amount of traffic returns is the London and North Eastern. I need hardly say that any addition to their traffic—and this will be pure addition to their traffic—will be an unmixed blessing not only to the proprietors of that railway but to everyone who is directly or indirectly dependent upon it.

The third point that was put by my right hon. Friend was the one on which, I think, the Committee has been most uneasy. I should like to talk quite frankly and candidly about it. It is the subject of consultation. How far is it possible to carry on consultation with regard to bargains of this kind before they take shape in a treaty, and certainly before they come down to the House? Let the Committee imagine what would be our position if we had to go to any one of the organisations whose prime duty is to look after the interests of their trade. I do not mind which one you take—cotton, copper or any in the list to be found here. Of course, the association must look after the interests of its members. That is what it is created for. It is quite right that it should do so. It is very often the only way in which the grievances of an industry can be made public or impressed upon Parliament. I was quite ready at one time to embark upon discussions with some of the organisations that were concerned, and I had one experience of that which shows the truth about the statement that I have just been making.

A very important industry was likely to be affected by arrangements in another trade agreement. I was very anxious to know what their view was. There were many technical considerations and I was very anxious to get the assistance of technical men. They were good enough to come and see me. We discussed the matter as between them and our officials. I sat in the chair, I heard the case which was put on both sides, and then I made an appeal. I said, "We are contemplating making some of these changes, but we do not wish to do it in conflict with those who are engaged in this industry." They said that that was a very proper view. Of course, it was a very proper view, but when we came to the end, and I said, "Have you any suggestions to make with regard to it?" they were not prepared to agree to any reduction in the protection which they were then receiving, and quite naturally. I did not complain of that. I said that I should be very glad if they would go away and think it over, and that if they had any suggestions to make I would lend a ready ear, and my colleagues would be informed of what they had to suggest. They went away, and in the days that followed all I received from them was a refusal to agree themselves to a reduction by one penny of import duties which concerned their industry. It is only natural. I do not complain of that. If I had to do that with every one of the industries, how could I possibly conduct negotiations?

May I point out to the Committee that we are discussing here to-night engagements into which we enter with foreign countries No one has had a longer or a more honourable connection with the Foreign Office than the right hon. Gentleman, but I am sure that he will agree with me that if these negotiations had to be conducted from the housetops, and if everybody likely to be touched by foreign engagements was, first of all, consulted, it would make it almost impossible for executive Government to carry on. We were very ready indeed to hear all that could be said. We should have been very glad indeed if it had been possible, within the four corners of the rules of efficiency, to have accepted the views put forward. I know that now, as then, there would be no chance whatever of getting those engaged in those industries to agree that there should be a reduction in their protection. With one accord they would say, "Let some other trade make the sacrifice and not us." If they had said that, where would our consultations go? It means that we would have our consultations and would have to come back to Parliament again. If the suggestion which my right hon. Friend made to-day was carried out and we had had consultations with the eight or 10 industries represented in the Schedule, I am quite sure that they would not have agreed to a reduction. I am sure they would not. Why should they? If they did not agree I should have to come back to Parliament and ask for exactly the same Motion for which we are asking to-day.

That is really not the way in which we can carry on negotiations of this nature, and we are bound sooner or later to come to Parliament and say, "To authorise the Government to carry out the duties imposed upon it, and, which were passed by an overwhelming majority, we regard bargaining as an essential part of our tariff policy. We believe that the powers which are being given to the Government by this House, the long Schedule of duties which have now been imposed, must be used for this part of our tariff policy as well as Protection, and we cannot abandon the duty which is by this means placed upon our shoulders. I regret very much that I should be in the position to-night of having to disagree with the views put to the Committee with such persuasive powers and personal in- fluence as those of my right hon. Friend, but I regret to have to say that we cannot accept his Motion. If we were to accept his Motion, I cannot see how it would be possible for us to continue negotiations which have culminated, in some cases, in agreements already signed but not yet ratified. If this agreement goes, what is to prevent the others going, too?

Sir A. CHAMBERLAIN

Do their merits count for nothing?

Mr. RUNCIMAN

It is on their merits, and on their merits alone that I commend them. I ask nothing from the Comittee on the grounds of personal pride. Please do not imagine that I regard my own feelings as being at all at stake. That is not the point. The point is, that we have deliberately in this Parliament embarked upon a tariff policy of which bargaining was an essential part, and, as far as I am concerned, I am prepared to say that I made a good bargain. If you do not like the bargain that I have made, then you have to get. someone else to bargain for you. Unless we can retain the confidence of the House in dealing with these tariff negotiations, unless we can be assured when we have entered into engagements that they will be ratified by the House, it will be impossible for us to carry on the work which we have undertaken. We are doing the work to which the House is deeply pledged. We have undertaken work which is extraordinarily difficult. There are great benefits accruing, or we hope they will accrue, to the industries of the country by what we are doing. The appeal that I make is not on the merits of one agreement only, but on the national policy that we should really as a great industrial people be prepared to bear one another's burdens, and in bearing one another's burdens to enrich our own folk.

10.37 p.m.

Sir JOSEPH NALL

The speech of the right hon. Gentleman to which we have just listened seems to be a complete reversal of the procedure which was enacted in the House at the time the Import Duties Act was passed. According to the right hon. Gentleman, when an industry seeks protection because it

Division No. 153.]	AYES.	[10.41 p.m.
Acland-Trcyte, Lieut-Colonel	Alexander, Sir William	Applln, Lleut.-Col. Reginald V. K.
Adami, D. M. (Poplar, South)	Amery, Rt. Hon. Leopold C. M.S.	Atholl, Duchess of

is unable to carry on, it is to go to the Advisory Committee, it is to state a. case to that Committee, those who object to it may be heard, and upon the recommendation of that Committee the Treasury may or may not ask this House to impose a duty. The industry in that case is supposed to be given some sort of security in order to carry on production. My right hon. Friend now says that if for some other reason, which has nothing whatever to do with the original applicant, he now finds it convenient to enter into some sort of bargain, which may or may not be good—in this case it is supposed to be not good—without any advice from the Committee, he will come to this House and, without any consultation with the people who have been given what they believe to be some security in their business, he will ask the House to whittle away or abolish the protection which only quite recently has been accorded to them.

If the procedure of application and opposition, consideration and recommendation is to be the basis upon which any duty is imposed before it is enacted by this House, the same procedure ought to be observed before those duties are removed. It seems to me that if the policy which has just been presented to the Committee by the President of the Board of Trade is to be pursued in future in relation to these import duties, then no industry which has so far been accorded protection can rely upon that protection being continued, no industry Which is depending upon that measure of protection can continue to function with any degree of confidence, and no other industry can really think it is worth while making application for any sort of protection, because, without any further consideration, it may be cut away in a night through some bargain to which the original applicant is in no way a party. When the right hon. Gentleman says that if this House thinks that the bargain he has made is not a good one we can find someone else to make the bargain, I hope we shall quickly proceed to do so.

Question put, "That the Chairman do. report Progress, and ask leave to sit again."

The Committee divided: Ayes, 80;

Attlee, Clement Richard	Grenfell, David Rees (Glamorgan)	Remer, John R.
Balfour, George (Hampstead)	Gretton, Colonel Rt. Hon. John	Salt, Edward W.
Batey, Joseph	Groves, Thomas E.	Salter, Dr. Alfred
Beauchamp, Sir Brograve Campbell	Grundy, Thomas W.	Sandeman, Sir A. N. Stewart
Bird, Sir Robert B. (Wolverh'pton W.)	Hamilton, Sir George (Ilford)	Sanderson, Sir Frank Barnard
Bower, Lieut.-Com. Robert Tatton	Hannon, Patrick Joseph Henry	Simmonds, Oliver Edwin
Boyce, H. Lesile	Hepworth, Joseph	Slater, John
Boyd-Carpenter, Sir Archibald	Hirst, George Henry	Somerville, D. G. (Willesden, East)
Broadbent, Colonel John	Howard, Tom Forrest	Spears, Brigadier-General Edward L.
Brown, C. W. E. (Notts., Mansfield)	Jones, Sir G. W. H. (Stoke New'gton)	Templeton, William P.
Brown, Brig.-Gen. H. C. (Berks., Newb'y)	Jones, Morgan (Caerphilly)	Tinker, John Joseph
Cape, Thomas	Knox, Sir Alfred	Todd, Capt. A. J. K. (B'wick-on-T.)
Chamberlain, Rt. Hon. Sir J. A. (Birm., W)	Lansbury, Rt. Hon. George	Todd, A. L. S. (Kingswinford)
Chorlton, Alan Ernest Leofric	Latham, Sir Herbert Paul	Turton, Robert Hugh
Cocks, Frederick Seymour	Lawson, John James	Weymouth, Viscount
Courtauld, Major John Sewell	Levy, Thomas	Whyte, Jardine Bell
Craven-Ellis, William	Lunn, William	Williams, David (Swansea, East)
Cripps, Sir Stafford	McEntee, Valentine L.	Williams, Herbert G. (Croydon, S.)
Crooke, J. Smedley	Maclean, Nell (Glasgow, Govan)	Williams, Dr. John H. (Llanelly)
Davies, David L. (Pontypridd)	Nail, Sir Joseph	Winterton, Rt. Hon. Earl
Davies, Rhys John (Westhoughton)	Parkinson, John Allen	Wise, Alfred R.
Emmott, Charles E. G. C.	Perkins, Walter R. D.	Wolmer, Rt. Hon. Viscount
Fielden, Edward Brocklehurst	Peto, Sir Basil E. (Devon, Barnstaple)
Graham, D. M. (Lanark, Hamilton)	Price, Gabriel	TELLERS FOR THE AYES.—
Greene, William P. C.	Purbrick, R.	Captaln Arthur Hope and Lieut-
Greenwood, Rt. Hon. Arthur	Ralkes, Henry V. A. M.	Colonel Sir Mervyn Manningham-
		Buller.

NOES.
Acland, Rt. Hon. Sir Francis Dyke	Culverwell, Cyril Tom	Henderson, Sir Vivian L. (Chelmsf'd)
Adams, Samuel Vyvyan T. (Leeds, W.)	Davidson, Rt. Hon. J. C. C.	Heneage, Lieut.-Colonel Arthur P.
Albery, Irving James	Davies, Edward C. (Montgomery)	Hills, Major Rt. Hon. John Waller
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)	Davies, Maj. Geo. F.(Somerset, Yeovil)	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Allen, William (Stoke-on-Trent)	Denman, Hon. R. D.	Holdsworth, Herbert
Apsley, Lord	Dickie, John p.	Hopkinson, Austin
Aske, Sir Robert William	Donner, P. W.	Hore-Belisha, Leslie
Astor, Viscountess (Plymouth, Sutton)	Drewe, Cedric	Hornby, Frank
Baillie, Sir Adrian W. M.	Duckworth, George A. V.	Horobin, Ian M.
Baldwin, Rt. Hon. Stanley	Duncan, James A. L. (Kensington, N.)	Horsbrugh, Florence
Balniel, Lord	Elliot, Major Rt. Hon. Walter E.	Howitt, Dr. Alfred B.
Banks, Sir Reginald Mitchell	Ellis, Sir R. Geoffrey	Hudson, Robert Spear (Southport)
Barclay-Harvey, C. M.	Elliston, Captain George Sampson	Hunter, Dr. Joseph (Dumfries)
Barrie, Sir Charles Coupar	Elmley, Viscount	Hunter-Weston, Lt.-Gen. Sir Aylmer
Beaumont, Hn. R. E. B. [Portsm'th, C.)	Emrys-Evans, P. V.	Hurst, Sir Gerald B.
Bernaye, Robert	Entwistle, Cyril Fullard	Jackson, Sir Henry (Wandsworth, C.)
Bird, Ernest Roy (Yorks., Skipton)	Erskine, Lord (Weston-super-Mare)	James, Wing-Com. A. W. H.
Borodale, Viscount	Evans, R. T. (Carmarthen)	Jamieson, Douglas
Bowyer, Capt. Sir George E. W.	Everard, W. Lindsay	Jesson, Major Thomas E.
Braithwalte, Maj. A. N. (Yorks, E. R.)	Fleming, Edward Lascelles	Jones, Henry Haydn (Merioneth)
Briant, Frank	Foot, Dingle (Dundee)	Jones, Lewis (Swansea, West)
Brocklebank, C. E. R.	Foot, Isaac (Cornwall, Bodmin)	Ker, J, Campbell
Brown, Ernest (Leith)	Ford, Sir Patrick J.	Kerr, Hamilton W.
Buchan, John	Fox, Sir Gilford	Knight, Holford
Buchan-Hepburn, P. G. T.	Frater, Captain Ian	Lamb, Sir Joseph Qainton
Burghley, Lord	Fremantle, Sir Francis	Law, Sir Alfred
Burgin, Dr. Edward Leslie	Fuller, Captain A. G.	Law, Richard K. (Hull, 8.W.)
Burnett, John George	Ganzoni, Sir John	Leckie, J. A.
Butt, Sir Alfred	Gilmour, Lt.-Col. Rt. Hon. Sir John	Leech, Dr. J. W.
Cadogan, Hon. Edward	Glossop, C. W. H.	Leighton, Major B. E. P.
Campbell, Edward Taswell (Bromley)	Gluckstein, Louis Haile	Lennox-Boyd, A. T.
Campbell-Johnston, Malcolm	Glyn, Major Ralph G. C	Lewis, Oswald
Caporn, Arthur Cecil	Goff, Sir Park	Liddall, Walter S.
Cassels, James Dale	Goodman, Colonel Albert W.	Lindsay, Noel Ker
Castlereagh, Viscount	Gower, Sir Robert	Lister, Rt. Hon. Sir Philip Cunliffe-
Cazalet, Thelma (Islington, E.)	Graham, Sir F. Fergus (C'mb'rl'd, N.)	Little, Graham-, Sir Ernest
Cazalet, Capt. V. A. (Chippenham)	Grattan-Doyle, Sir Nicholas	Lloyd, Geoffrey
Chamberlain, Rt. Hon. N. (Edgbaston)	Grenfell, E. C. (City of London)	Locker-Lampoon, Rt. Hn. G.(Wd.Gr'n)
Chapman, Col. R.(Houghton-le-Spring)	Griffith, F. Kingsley (Middlesbro', W).	Loder, Captain J. de Vere
Christie, James Archibald	Grimston, R. V.	Lovat-Fraaer, James Alexander
Clarke, Frank	Guest, Capt Rt. Hon. F. E.	Lumley, Captain Lawrence R.
Clarry, Reginald George	Guinness, Thomas L. E. B.	Lyons, Abraham Montagu
Clayton, Dr. George C.	Gunston, Captain D. W.	Mabane, William
Cochrane, Commander Hon. A. D.	Hacking, Rt. Hon. Douglas H.	Mac Andrew, Lt.-Col. C. G. (Partick)
Collins, Rt. Hon. Sir Godfrey	Hales, Harold K.	MacAndrew, Capt. J. O. (Ayr)
Colman, N. C. D.	Hamilton, Sir R.W. (Orkney & Zetl'nd)	Macdonald, Sir Murdoch (Inverness)
Colville, Lieut.-Colonel J.	Hanley, Dennis A.	McEwen, Captain J. H. F.
Cook, Thomas A.	Harris, Sir Percy	McKeag, William
Cooke, Douglas	Hartington, Marquess of	McKie, John Hamilton
Cooper, A. Duff	Hartland, George A.	Maclay, Hon. Joseph Paton
Cowan, D. M.	Harvey, George (Lambeth, Kenningt'n)	McLean, Major Sir Alan
Craddock, Sir Reginald Henry	Harvey, Major S. E. (Devon, Totnes)	Makins, Brigadier-General Ernest
Crookshank, Capt. H. C. (Gainsb'ro)	Haslam, sir John (Bolton)	Mander, Geoffrey le M.
Cross, R. H.	Headlam, Lieut.-Col. Cuthbert M.	Margesson, Capt. Rt. Hon. H. D. R.
Crossley, A. C.	Heilgers, Captain F. F. A.	Marsden, Commander Arthur

Martin, Thomas B.	Reid, James S. C. (Stirling)	Stanley, Lord (Lancaster, Fylde)
Mason, David M. (Edinburgh, E.)	Reid, William Allan (Derby)	Stanley, Hon. O. F. G. (Westmorland)
Mason, Col. Glyn K. (Croydon, N.)	Renwick, Major Gustav A.	Stewart, J. H. (Fife, E.)
Mayhew, Lieut.-Colonel John	Rhys, Hon. Charles Arthur U.	Stones, James
Merriman, Sir P. Boyd	Roberts, Aled (Wrexham)	Strauss, Edward A.
Molson, A. Hugh Elsdale	Robinson, John Roland	Strickland, Captain W. F.
Moore-Brabazon, Lieut.-Col. J. T. C.	Ropner, Colonel L.	Stuart, Hon. J. (Moray and Nairn)
Moreing, Adrian C.	Rosbotham, Sir Samuel	Stuart, Lord C. Crichton-
Morris-Jones, Dr. J. H. (Denbigh)	Ross, Ronald D.	Sugden, Sir Wilfrid Hart
Morrison, William Shepherd	Ross Taylor, Walter (Woodbridge)	Tate, Mavis Constance
Moss, Captain H. J.	Runciman, Rt. Hon. Walter	Thomas, James P. L. (Hereford)
Muirhead, Major A. J.	Runge, Norah Cecil	Thompson, Luke
Nation, Brigadier-General J. J. H,	Russell, Alexander West (Tynemouth)	Thomson, Sir Frederick Charles
Nicholson, Godfrey (Morpeth)	Rutherford, John (Edmonton)	Thorp, Linton Theodore
North, Captain Edward T.	Rutherford, Sir John Hugo (Liverp'l)	Train, John
Nunn, William	Salmon, Sir Isidore	Tryon, Rt. Hon. George Clement
O'Donovan, Dr. William James	Samuel, Sir Arthur Michael (F'nham)	Vaughan-Morgan, Sir Kenyon
Patrick, Colin M.	Samuel, Rt. Hon. Sir H. (Darwen)	Ward, Lt.-Col. Sir A. L. (Hull)
Pearson, William G.	Samuel, Samuel (W'dsworth, Putney)	Ward, Irene Mary Bewick (Wallsend)
Penny, Sir George	Sassoon, Rt. Hon. Sir Philip A. G. D.	Ward, Sarah Adelaide (Cannock)
Percy, Lord Eustace	Savery, Samuel Servington	Wardlaw-Mllne, Sir John S.
Peters, Dr. Sidney John	Selley, Harry R.	Warrender, Sir Victor A. G.
Petherick, M.	Shakespeare, Geoffrey H.	Wedderburn, Henry James Scrymgeour
Peto, Geoffrey K.(W'verh'pt'n,Bilston)	Shaw, Helen B. (Lanark, Bothwell)	Wells, Sydney Richard
Pickering, Ernest H.	Shaw, Captain William T. (Forfar)	White, Henry Graham
Potter, John	Shepperson, Sir Ernest W.	Whiteside, Borras Noel H.
Powell, Lieut.-Col. Evelyn G. H.	Shute, Colonel J. J.	Wilson, Clyde T. (West Toxteth)
Pownall, Sir Assheton	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)	Wilson, G. H. A. (Cambridge U.)
Preston, Sir Walter Rueben	Smith, Bracewell (Dulwich)	Windsor-Clive, Lieut.-Colonel George
Procter, Major Henry Adam	Smith-Carington, Neville W.	Womersley, Walter James
Ramsay, Capt. A. H. M. (Midlothian)	Somervell, Donald Bradley	Wood, Sir Murdoch McKenzie (Banff)
Ramsay, T. B. W. (Western Isles)	Somerville, Annesley A. (Windsor)	Worthington, Dr. John V.
Ramsbotham, Herwald	Soper, Richard
Rankin, Robert	Southby, Commander Archibald R. J.	TELLERS FOR THE NOES.—
Rathbone, Eleanor	Spencer, Captain Richard A.	Captain Austin Hudson and Mr.
Rea, Walter Russell	Spens, William Patrick	Blindell.

Original Question put:

The Committee divided: Ayes, 285; Noes, 33.

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.	Margesson, Capt. Rt. Hon. H. D. R.	Sassoon, Rt. Hon. Sir Philip A. G. D.
Holdsworth, Herbert	Maraden, Commander Arthur	Savery, Samuel Servington
Hopkinson, Austin	Martin, Thomas B.	Selley, Harry R.
Hore-Bellsha, Leslie	Mason, David M. (Edinburgh, E.)	Shakespeare, Geoffrey H.
Hornby, Frank	Mason, Col. Glyn K. (Croydon, N.)	Shaw, Helen B. (Lanark, Bothwell)
Horobin, Ian M.	Mayhew, Lieut.-Colonel John	Shaw, Captain William T. (Forfar)
Horabouqh, Florence	Merriman, Sir F. Boyd	Shepperaon, Sir Ernest W.
Howitt, Or. Alfred B.	Mitchell, Harold P.(Br'tf'd & Chisw'k)	Shute, Colonel J. J.
Hudson. Robert Spear (Southport)	Molson, A. Hugh Elsdale	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Hunter, Dr. Joseph (Dumdries)	Moore-Brabazon, Lieut.-Col. J. T. C.	Smith, Bracewell (Dulwich)
Hunter-Weston, Lt.-Gan. Sir Aylmer	Moreing, Adrian C.	Smith, Sir Jonah W. (Barrow-In-F.)
Hunt, Sir Gerald B.	Morris-Jones, Dr. J. H. (Denbigh)	Smith-Carington, Neville W.
Hutchison, w. D. (Essex, Romf'd)	Morrison, William Shepherd	Somervell, Donald Bradley
Jackson, Sir Henry (Wandsworth, C.)	Moss, Captain H. J.	Somerville, Annesley A. (Windsor)
James, Wing-Com. A, W. H.	Muirhead, Major A. J.	Soper, Richard
Jamieson, Douglas	Nation, Brigadier-General J. J. H.	Southby, Commander Archibald R. J.
Jesson, Major Thomas E.	Nicholson, Godfrey (Morpeth)	Spencer, Captain Richard A.
Jones, Henry Haydn (Merioneth)	North, Captain Edward T.	Spens, William Patrick
Jones, Lewis (Swansea, West)	Nunn. William	Stanley, Lord (Lancaster, Fylde)
Ker, J. Campbell	O'Donovan, Dr. William James	Stanley Hon. O. F. G. (Westmorland)
Kerr, Hamilton w.	Parkinson, John Allan	Stewart, J. H. (File, E.)
Knight, Holford	Patrick, Colin M.	Stones, James
Lamb, Sir Joseph Quinton	Pearson, William G.	Strauss, Edward A.
Lansbury, Rt. Hon. George	Percy, Lord Eustace	Strickland, Captain W. F.
Latham, Sir Herbert Paul	Peters, Or. Sidney John	Stuart, Hon. J. (Moray and Nairn)
Law, Sir Alfred	Petherick, M.	Stuart, Lord C. Crichton-
Law, Richard K. (Hull, S. W.)	Peto, Geoffrey K.(W'verh'pt'n, Bilston)	Sugden, Sir Wilfrid Hart
Lawson John James	Pickering, Ernest H.	Tate, Mavis Constance
Leckie, J. A.	Potter, John	Thomas, James P. L. (Hereford)
Leech. Dr. J. W.	Powell, Lieut.-Col. Evelyn G. H.	Thompson, Luke
Leighton, Major 8. E. P.	Pownall, Sir Assheton	Thomson, Sir Frederick Charles
Lennox-Boyd, A. T.	Preston, Sir Walter Rueben	Thorp, Linton Theodore
Lewis, Oswald	Price, Gabriel	Tinker, John Joseph
Liddall, Walter S.	Procter, Major Henry Adam	Train, John
Lindsay, Noel Ker	Ramsay, Capt. A. H. M. (Midlothian)	Tryon, Rt. Hon. George Clement
Lister, Rt. Hon. Sir Philip Cunliffe-	Ramsay, T. B. W. (Western Isles)	Vaughan-Morgan. Sir Kenyon
Little, Graham*, Sir Ernest	Ramsbotham, Herwald	Ward, Lt.-Col. Sir A. L. (Hull)
Lloyd, Geoffrey	Rankin, Robert	Ward, Irene Mary Bewick (Wallsend)
Locker-Lampson, Rt. Hn. G.(Wd. Gr'n)	Rea, Walter Russell	Ward, Sarah Adelaide (Cannock)
Loder, Captain J. de Vere	Held, James S. C. (Stirling)	Wardlaw-Milne, Sir John S.
Lovat-Fraser, James Alexander	Raid, William Allan (Derby)	Warrender, Sir Victor A. G.
Lumley, Captain Lawrence R.	Renwick, Major Guatav A.	Wedderburn, Henry James Scrymgeour-
Lunn, William	Rhys, Hon. Charles Arthur U.	Wells, Sydney Richard
Lyons, Abraham Montagu	Robinson, John Roland	Whiteside, Borras Noel H.
Mabane, William	Ropner, Colonel L.	Williams, David (Swansea, East)
MacAndrew, Lieut.-Col. C. G.(Partick)	Rosbotham, Sir Samuel	Williams, Or. John H. (Llanelly)
MacAndrew, Capt. J. O. (Ayr)	Rosa, Ronald D.	Wilson, Clyde T. (West Toxteth)
Macdonald, Sir Murdoch (Inverness)	Ross Taylor. Walter (Woodbridge)	Wilson, G. H. A. (Cambridge U.)
McEntee, Valentine L.	Runciman, Rt. Hon. Walter	Windsor-Clive, Lieut. Colonel George
McEwen, Captain J. H. F.	Runge, Norah Cecil	Womersley, Walter James
WcKeag, William	Russell, Alexander West (Tynemouth)	Worthington, Dr. John V.
McKie, John Hamilton	Rutherford, John (Edmonton)
Maclay, Hon. Joseph Paton	Rutherford, Sir John Hugo (Liverp'l)	TELLERS FOR THE AYES.—
McLean, Major Sir Alan	Salmon, Sir Isldore	Sir George Penny and Captain
Maclean, Nell (Glasgow, Govan)	Salter, Dr. Alfred	Austin Hudson.
Makins, Brigadier-General Ernest	Samuel, Sir Arthur Michael (F'nham)

NOES.
Alexander, Sir William	Hepworth, Joseph	Sandeman, Sir A. N. Stewart
Amery, Rt. Hon. Leopold C. M. S.	Hope, Capt. Hon. A. O. J. (Aston)	Sanderson, Sir Frank Barnard
Atholl, Duchess of	Howard, Tom Forrest	Simmonds, Oliver Edwin
Balfour, George (Hampatead)	Knox, Sir Alfred	Somerville, O. G. (Willesden. East)
Beauchamp, Sir Brograve Campbell	Latham, Sir Herbert Paul	Todd, A. L. S. (Kingswinford)
Bird, Sir Robert B. (Wolverh'pton W.)	Levy, Thomas	Turton, Robert Hugh
Bower, Lieut.-Com. Robert Tatton	Manningham-Buller, Lt.-Col. Sir M.	Weymouth, Viscount
Courtauld, Major John Sewell	Nail, Sir Joseph	Whyte, Jar dine Bell
Craven-Ellis, William	Perkins, Walter R. D.	Williams, Herbert G. (Croydon, S.)
Emmott, Charles E. G. C.	Purbrick, R.
Fielden, Edward Brockiehurst	Remer, John R.	TELLERS FOR THE NOES.—
Gretton, Colonel Rt. Hon. John	Salt, Edward W.	Mr. Hannon and Sir Basil Peto.

Resolution to be reported To-morrow.

Committee to sit again To-morrow.

The remaining Orders were read, and postponed.