HC Deb 25 May 1933 vol 278 cc1375-410

8.59 p.m.


I beg to move, in page 10, line 33, to leave out the words "the general ad valorem duty or."

This is designed to limit the bargaining power of Governments—not of this Government, but of any Government. The proposal is that, in any trade agreement that we may enter into, the Government will be debarred from abolishing the basic duty of 10 per cent.; in other words, that their negotiating power will be limited to the duties in excess of the 10 per cent. The conception under the Import Duties Act of the general ad valorem duty was to provide, in the first place, a revenue duty. That phrase has been used by the Chancellor of the Exchequer or the President of the Board of Trade—certainly by one and I think by both. Their conception of the 10 per cent, duty is that it is primarily for the purpose of revenue and that it is incidentally mildly protective. I am inclined to think, if that is the conception, that that Tevel of protection ought to be left outside any question of commercial agreement with foreign countries. There may well be instances where in our own interest we ought to place articles on the Free List. In a number of up to now minor cases goods which were origiNaily dutiable at 10 per cent, have been transferred to the Free List on the very proper ground that investigation shows that those goods were either not produced in this country at all or not produced adequately, and, in addition, that there was no effective duty-free supply from Empire sources.

No Protectionist desires to have a duty which may be nomiNaily Protectionist in character on an article where there is no duty-free competition and where, quite obviously, the price must be increased by more or less the amount of the duty. That we understand. But, under this power which the Government will have if we pass this Clause, they will be entitled to agree to remit the very moderate duty of 10 per cent., not because the article is unavailable from United Kingdom or Empire sources, but on the grounds that, for some reason, the foreign nation with which we are negotiating thinks it should enter the country duty free. My view has always been that, so far as these negotiations are concerned, we should have a general tariff applied to all the foreign world in general except those who treat us badly. In their case there would be a higher tariff—that, of course, is contemplated under the Import Duties Act—but in addition there should be an intermediate tariff which any nation could obtain the advantage of on proper terms. If we are going in some cases to whittle away all of it, I tee no reason why we should whittle away the whole of the protection that we give to our people, because the only cases in which the general ad valorem duty will continue in operation will be those where the Import Duties Advisory Committee see no reason to recommend its abolition; in other words-, where they think the genera] circumstances of the production of the article are such that there is no case for its transfer to the Free List. That we should ever bargain away that moderate amount of duty represented by 10 per cent, seems to me an absurdity, and I should like all the world to know that, when our Ministers or our diplomatic representatives enter into trading negotiations with foreign countries, the 10 per cent, in any event is sacrosanct.

My view with regard to the commercial negotiations up to now is that we have not played from strength. We have played all the time from weakness. I am a little distrustful of the general attitude of the Government to these foreign negotiations. It seems to me that, instead of telling the other fellow that if he does not behave himself, he will find against him a tariff very much higher than he now has, we have gone into negotiations with countries with which we have a very large adverse balance and we have given them concessions in order to obtain bare justice. I think we ought to say to those people, "Unless you put your tariff on a more moderate basis than it has been in the past we, who have the whip hand because our purchases from you are much greater than yours from us, will impose on you duties so prohibitive that you will suffer and, as a consequence, you will be reasonable and offer us fair terms. I fear that the Government have not been negotiating in this rather more brutal manner if I may use the term. The duty of the British Government is to look after Britain. The duty of foreign Governments is to look after their own countries. I have the greatest respect for countries which state their needs plainly. The Government which I desire to support do not take this line. They take the line of undue weakness in these negotiations. I want to protect them against themselves. I want to lock the safe. I want to padlock the 10 per cent, duty so that they cannot touch it. I very much hope that the Government will accept the Amendment. I know that I have not encouraged them to accept the Amendment because I have not been too kind to them in this matter. Nevertheless, in the national interest, and in the interest of getting the world back to a greater degree of sanity in the matter of tariffs, I hope they will accept the Amendment. I do not believe in universal Free Trade and never have done, but I believe in universal sanity in the matter of tariffs, and if we are to get it we must not be too willing for the sake of minor advantages to sacrifice our own tariffs.

None of our manufacturers and agriculturists should, by means of any commercial agreement, be deprived of the rights of the general ad valorem duty. I am not certain what the interpretation of the Amendment would be in respect of meat. As far as the agreements with Denmark and with the Argentine are concerned, we have undertaken to give them duty free admission of meat. In one sense the general ad valorem duty would apply to meat but for the fact that at the moment it is on the Free List, but it can be transferred from the Free List at any moment on the basis of a recommendation of the Import Duties Advisory Committee. It is conceivable, though I am not certain, that if my Amendment were passed it would prevent the Government from giving an undertaking to continue on the Free List those things which, for reasons of policy, are on the Free List. We know that meat is not on the Free List on any grounds of merit, because when we debated the issue in the House of Commons a year ago, we were told that the reason it ought to be on the Free List was that the Government were terrified that unless meat went on to the Free List the public would revolt, or words to that effect. When, nine months later, we again pleaded that meat should be taken off the Free List, we were told that it was no use putting a duty upon meat, because the only way to raise prices was by means of quota. I have never been able to reconcile those two entirely opposite arguments. I am not clear on the strict legal interpretation whether, if the Amendment were carried, the undertakings which the Government have given, so far as they are not yet ratified —and I think that none of them are ratified—to preserve meat on the Free List would be invalidated. I do not want the country to be deprived of any of its reasonable free bargaining powers. I wish the power at all times to be safeguarded, and that we should at least be entitled to preserve the duty of 10 per cent, ad valorem on any goods coming from foreign countries if we think it is in our own interests to do so.

9.10 p.m.

Lieut.-Colonel COLVILLE

The purpose of the Amendment, as the hon. Gentleman who moved it has fairly said, is to padlock the 10 per cent. duty. I regret that the Government cannot accept an Amendment which would so limit them in their power. In point of fact, as I think the hon. Gentleman himself has admitted, in a number of cases the 10 per cent, duty refers to articles which are really not controversial to any extent, and yet, none the less, are important in bargaining with a foreign country. In the agreements recently concluded, with examples such as calcium carbide, certain grades of ferro-silicon and charcoal smelted iron and steel, felspar, rock crystal quartz and cyanamide, and several other types of commodities, there is no real controversy as regards the removal of the 10 per cent duty. None the less, they were articles in which these particular countries were very much interested in securing a free entry. Therefore, as the 10 per cent, tariff covers a large number of articles of that type, the Government would not have the necessary freedom—the freedom they must have—if they accepted the Amendment which padlocks the whole 10 per cent. rate. Another reason why I cannot accept the Amendment1 is that the advantage of the method of adjusting duties proposed in this clause is that it enables duties to be reimposed quickly, if for any reason an agreement is determined. It is advisable to have power to enable the duty to be quickly reimposed, and not only that, to revert to what I said earlier in relation to our most-favoured nation treatment, we cannot continue indefinitely to give most-favoured-nation treatment to those countries which do not afford favourable treatment to our goods. I therefore ask the Committee to reject the Amendment and to give the Government the Clause which appears in the Bill.

Amendment negatived.

9.13 p.m.


I beg to move, in page 10, line 45, at the end, to insert the words: Provided that no additional duty shall thereby be reduced by more than one-third. This Amendment raises a different point from that which was raised just now. It is confined to those cases where there is an additional duty; in other words, a duty recommended by the Advisory Committee. The object is to deal with the very difficult position in which the Advisory Committee and industry generally have been left by the treaties which have been recently negotiated. As my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) pointed out in a very forcible speech when these matters were discussed before, if the I recommendations of the Advisory Committee are to be modified as the result of trade agreements, there ought to be some margin and elasticity for such modifications without destroying, at any rate, the minimum of essential security which, in the opinion of the Advisory Committee, industry should receive. In the Amendment which I am putting forward for the favourable consideration of the Government, the scope for the reduction of the duty on an article which enjoys an additional duty would be confined to a reduction of one-third of the additional duty-In other words, if the Advisory Committee had recommended an additional duty of 15 per cent, so that the article had a total duty of 25 per cent, upon it, negotiation downward would be confined to reducing the duty to a 20 per cent. duty. There would be no objection to the Government negotiating by threats to raise the duty upwards, but so far as reduction of a recommendation of the Advisory Committee is concerned, it would in the case of a 25 per cent, duty not exceed a reduction to 20 per cent. The knowledge that that power would be exercised by the Government would undoubtedly leave the Advisory Committee in case of doubt to give a slight preference for a somewhat higher duty, knowing that if that higher duty were reduced by one-third in the course of negotiations, that then the eventual duty, if it were perhaps a little on the low side, would still not be so low as seriously to imperil the situation of the industry affected.

The Amendment would, therefore, give a margin ample enough for effective negotiation and yet at the same time not so wide as to put the position of the industry in complete uncertainty. Industry would, at any rate, know that if it got a recommendation of 25 per cent, from the Advisory Committee that in the opinion of the Advisory Committee that 25 per cent, was an ample protection, and that it could at a pinch, in case of some big issue of national interest involving a reduction of duty, be cut down to 20 per cent. This is an Amendment which I should like very earnestly to press upon the favourable consideration of the Government. I do not lay stress on the actual fraction of one-third; the Government might prefer one-fourth. Nor do I stress the particular wording of the Amendment. I do lay great stress upon the principle that a recommendation of the Advisory Committee should not be scaled down beyond a certain point. Then industry would know, more or less, where it stood. Coupled with the assurance of the Parliamentary Secretary to the Board of Trade as to the weight the Government attaches to the recommendations of the Advisory Committee, the knowledge that these recommendations while they have a certain amount of elasticity cannot be recklessly brushed aside and invalidated, would mean a great deal to industry at the present time. It would help the Government's position with industry in the country very substantially if they could see their way to accept the Amendment.

9.18 p.m.


I think we all agree that tariffs are essentially valuable as a bargaining counter, and it is also necessary to remember that we must leave a minimum of protection for manufacturers at home in any bargains we make; but, what is even more important, we should not in the various treaties which we undertake produce a continual variation and fluctuation in the amount of the general level of protection given to manufacturers. I represent one of the largest firms of ball bEarlng manufacturers in this country, The ball bEarlng industry is a very re markable instance of the way that a firm or an industry can be subjected to continual variation in their protection. That particular industry for many years had a 33J per cent, protection for ball bEarlngs used by the motor car industry. The rest of the ball bEarlng production had no protection, but after the election that particular section of the industry was given a 10 per cent, protection. It was then pointed out to the Board of Trads and the Import Duties Advisory Committee that, from an administrative point of view, it was most undesirable that you should have two different rates of import duty on an identical article, varying only as to the eventual destination which the article found. It was pointed out that it was extremely difficult to prove the destination, and that in no case were articles which had only paid the lower rate of duty destined to the motor car manufacturers in this country. The Import Duties Advisory Committee agreed with that contention and raised the whole scale of duties to 33⅓ per cent. Now, hardly a year afterwards, we again, as a result of the Swedish Treaty, find half the industry again lowered in their protection from 33⅓per cent, to 20 per cent.

It is almost impossible for manufacturers in this country to carry on their business if the Government are going continually to chop and change their Protective policy. The hon. Member who represents the Department of Overseas Trade is, or was, a business man, and I am convInced that if he had been in his business subjected to this kind of administrative treatment he would have been the very first person to come to the Board of Trade and ask them what they thought they were doing. But at the present time he happens to be in a somewhat different position, and possibly he has forgotten his former attitude on the subject. I do not pretend for a moment that it is not necessary to vary duties because of Trade Treaties. It is in the general interests of the country that it should be done, but we must have some minimum level of protection, and manufacturers must be given to understand that whatever Trade Treaties may be made in the future, they can always count upon a certain level of protection and make their contracts and carry on their business accordingly. The sooner the Government recognise that fact, the better it will be for industry as a whole. I am glad to support the Amendment.

9.22 p.m.


I hope the Government will not accept the Amend- ment. I have for many years listened with admiration to the way in which the tariff policy of the Conservative party— I suppose I ought to say the Government now—has been described by the Lord President of the Council. He has an unfailing formula, and my admiration for the Conservative party is always increased by the way they are willing to swallow that formula, namely, that the object of the Protectionist policy of the Conservative party is simultaneously to give protection and to give bargaining power in regard to our industries. Now that policy is beginning to come home to roost. The absolute irreconcilability the two parts of the same sentence, which the Conservative party have always swallowed quite complacently until they see how it works, is now becoming manifest. They have made their bed and they have to lie on it. The Government, to do them justice, are doing their best to carry out the policy they laid down, namely, to use the tariff for two irreconcilable purposes, that is, to put it on one day and take it off the next. That is what is happening, and that is what is causing this slight friction. If either side of that policy is to be disturbed, either the giving of protection or the taking of it away, I would rather that the emphasis were laid on the taking away of the protection. How on earth we are going into the World Economic Conference unless we are going to have our hands free to reduce tariffs, I do not know. That is the only hope of the world at the present time. To make it more difficult by passing this sort of Amendment, and to say that whatever happens certain definite measures of protection once they have been given must always be maintained, is a terrible expression of want of confidence in the policy which brought the Conservative tariff party into power.

After all, the possibility of duties once given being reduced by a larger proportion than the recipients of those favours hoped is not the worst; of this sort of trade agreement. You make them and you can never be sure what is going to happen. One was made with Sweden, who was to get more of our coal. I do not think the question of the duties on paper ever came up. As a matter of fact, an agreement which gives special assistance to Swedish industries in regard to our coal without giving any particular assistance to our own industries has the effect of enormously increasing the power of Sweden to produce paper. That is one indirect effect, leaving our own paper manufacturers in the cart. That is the sort of thing which happens as soon as the Government's declared policy of using Protectionist powers in opposite directions takes place. It is only an illustration of how fatal it is to interfere with things you do not understand, and of how, quite inevitably, it is going to have effects which you do not foresee.

As a matter of fact, the structure of British trade is so extraordinarily complicated that when once Governments begin barging in they find, almost before they know where they are, that the consequences of their action are driving them in all sorts of direction they never expected. They have deliberately embarked on that policy, and there it is. The only thing they can reasonably do is to do the best they can with what they have got and, so far as the power of giving protection and taking it off by making special bargains is concerned, to keep the lists fair between putting on and taking off. They keep industry, as they are bound to do, in constant uncertainty as to what they are going to do. The moral is that they had very much better not have started on that policy at all.

9.27 p.m.

Lieut.-Colonel COLVILLt

: Perhaps I may at this point explain to the Committee the reasons why the Clause has been inserted and why we cannot accept the Amendment. Before doing so I wish to reply to the right hon. Member who has just spoken about the Swedish Agreement. His method of dealing with trade and avoiding uncertainty was to afford no protection at all against foreign imports of any kind. Let us now apply ourselves to the serious argument put forward by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) that there should be a limit placed on the amount by which a duty should be reduced. Let me point out that this Clause really repeats the policy which was decided upon when the House passed the Import Duties Act. Section 7 of that Act gave the Treasury powers to make an order, on the recommendation of the Board of Trade, providing for the reduction or removal of the general ad valorem duty or any additional duty charged under the Acts in respect of goods consigned from and grown, produced or manufactured in any foreign country specified in the Order.

We have powers at the present time to carry this out, but we are inserting this Clause in the Bill for certain administrative reasons with which, I think, when explained, the? Committee will agree. On examination, we find, in the first place, that in the present state of our commercial relations with foreign countries, involving general most-favoured treatment in 42 Treaties, any Order made will have to specify all or nearly all of the foreign countries. Further, reductions could only be made in respect of goods which were consigned direct to this country from a country specified in the Order and the original duty would therefore remain on goods which were consigned through an entrepot.


Is not that what we have already in respect to Imperial preference? We do not permit Canadian goods to enjoy Imperial preference if they are shipped through American ports?

Lieut.-Colonel COLVILLE

Then there is the question of imported goods—if a reduction of duty were made—which came from Empire countries not it present entitled to preference under the Ottawa Agreements, as for example, from the Irish Free State. These goods would be chargeable with a higher duty than if they were produced in foreign countries. Goods made in other parts of the Empire but consigned to us from foreign countries would also be liable to higher duties. That is one reason why we want to have this change, but there is another reason. I think when my hon. Friends who have some apprehension about our procedure in the matter of negotiations with foreign countries and, in particular, the question of the most-favoured-nation principle, hear this point they will agree with the wisdom of seeking this power. It is that the powers of the Import Duties Act would not have-the advantage which is sought in this Clause, because a reduction of duty could not be withheld from any country from which it was desired, for particular reasons, to withdraw most-favoured-nation treatment. Therefore, we ask for the powers contained in this Clause. That is not a reversal of policy. It would be a reversal of policy if the Amendment were adopted, and therefore I ask the House to continue in the policy adopted in the Import Duties Act and to give the Government not only similar powers but to give them the additional powers which the Clause contains to withhold if necessary a reduction of the duty from any country from which we desire to withdraw most-favoured-nation treatment because of their treatment of our goods.

9.33 p.m.


I am sorry that the President of the Board of Trade has not found it possible to be present for this discussion in which he is directly interested by reason of his official position as the Member of the Cabinet specially in charge of these matters. In saying that, I hope the right hon. Gentleman who has just spoken and the Parliamentary Secretary to the Board of Trade will not think I am intending any discourtesy to them. I think the difficulty is illustrated by the speech to which we have just listened. The hon. Gentleman said he had, in fact, these powers under the original Act, but administrative difficulties had arisen which he desired to avoid by the Clause. Will he forgive me for saying that we here are not interested in the administrative difficulties which we are quite certain the Government are capable of finding the right way of dealing with, whether by legislation or otherwise, and that we shall not offer opposition to any proposals the purpose of which is to make the Act more effective. But we want to challenge the question of principle. The hon. Gentleman may say that the House gave all these powers to the Government by previous legislation, but I think the way in which the Government have used those powers has come as something of a shock to a number of hon. Members in this House. They do not feel that a decision taken in other circumstances and without prevision of the present situation ought to remove this question from discussion as nothing but a mere piece of administrative machinery, but that it must be reviewed again on its merits.

Once again, I ask the Government, are they quite happy in their supporters? Here is the right hon. Member for North Cornwall (Sir F. Acland) who supports the Government because, as he says, the course which they are pursuing will keep in constant uncertainty the traders of the country and will show the country that they had better never have embarked on a policy which is the common policy of the supporters of the Government. Are the Government quite comfortable in their alliance? Are they sure that a cause which can be defended by any opponents of their policy on such grounds as that is sound? Does not the argument which the right hon. Member for North Cornwall has addressed to them for their comfort and support cause them to think that a little more reflection might have led them to adopt more suitable methods for carrying out a policy upon which they and we are agreed, but to which the right hon. Gentleman is a declared opponent?


Some of them have declared themselves as being free-traders like ourselves—the President of the Board of Trade.


That does not affect anything I have said. The President of the Board of Trade supports a policy to which the hon. Member for Bodmin (Mr. Isaac Foot) and Members below the Gangway are declared opponents, and they support the President of the Board of Trade because they think he is destroying his own policy. [HON. MEMBERS: "Hear, hear!"] They agree. Will the Parliamentary Secretary make a note of the attitude and convey faithfully to the President of the Board of Trade the reasons for which his enemies are going to support him—I do not mean personal enemies, I am talking in terms of politics. I have spoken on this subject already on the German Agreement, and I illustrated my contentions by reference to particular trades of which I have some knowledge, and where, therefore, I felt sure of my ground. Amongst others I alluded to the jewellery trade. A little earlier this evening the hon. Member for South-West Bethnal Green (Sir P. Harris) with what I must call a smug complacency contrasted the attitude of hon. Members like myself, who defend the interests of their constituents, with the noble attitude of the hon. Member for South-West Bethnal Green, who would gladly, any day, sacrifice the interests of his constituents to the wider interests of the country but for the fact that the interests of the country always Colncide with the interests of his constituency. I am not ashamed to defend the interests of my constituents or to express their views, and I will only say in reply to the hon. Member that I hope if the occasion requires I shall have courage enough to oppose my constituents and defend before them a line which may be unpopular if I think that it is right.

I am not going to repeat the error I made of distracting attention from my arguments to-night by using any illustration. I am going to speak in general terms. I thought that the Government were on strong grounds in opposing the last Amendment. A general ad valorem duty was commended to this House primarily as a duty for revenue, and if the Chancellor of the Exchequer can afford to sacrifice some of that revenue it is a matter of using that for bargaining purposes. Moreover, a general ad valorem duty was a very rough and ready emergency instrument put into operation pending more careful examination and treatment, and it therefore stands on a wholly different footing from these duties, which have been imposed as the result of searching inquiry by the Import Duties Advisory Board. I would not have gone into the Lobby in support of the earlier Amendment after listening to my hon. Friend, but I beg him to give further consideration to she Amendment which is now before the Committee. Why did we establish a Tariff Advisory Board? Not all of us wished for it, or thought that it w is the best way to proceed. It was a rather novel idea which came into existence in consequence of the formation of the National Government, and the Government justified it on the ground that traders required security, that there must be a tribunal or board to examine each case on its merits and see that the interests of the individual trader were not allowed to bear down or overcast the interests of the general community. Every duty put on at the advice of the Import Duties Advisory Board has gone through that test. Traders have to prove necessity. They have to show that what they ask for would not be injurious to the national interests as a whole, and they have to meet the objections of competitors.

But more than that, the Government had another object. They wished to take the details of tariffs away from the Floor of this House, to remove them from political pressure, and, if my memory serves me right, one of the earliest acts of the Tariff Advisory Board was to issue a notice to Members of Parliament warning them off. I do not mean individuals. It was a public notice published in the Press. If my memory is playing me false I beg the Government to correct me, but if my memory serves me it was a notice that the Tariff Advisory Committee would be ready to hear authorised trade representatives, and would be glad to hear them, but that it was not desirable to have representations from politicians. I thought that was very wise. I dare say that even within the last few days I have had some reason to be grateful to the Advisory Committee for issuing that notice, as it has enabled me to say to my correspondents, "The Tariff Advisory Committee is there to prevent political pressure and political interference with the real solid trade interests of the country. It is not I who can take up your case. The Tariff Advisory Committee will not listen to me as a Member of Parliament. Go to your Chamber of Commerce, or your trade association, and they will give you the fullest and fairest consideration."

Yes, all that. But then the Government come down and ask for general power, after the Advisory Committee has decided on certain duties as not more than are required to enable a trade to be successfully carried on, to transfer the issue from the serene sphere of the Advisory Committee, where politics do not penetrate, on to the Floor of this House, where every discussion takes a political tinge. The Government take them away from the commissioners, who will listen to the authorised commercial bodies, and throw them open for discussion by Members of Parliament. In this respect I do not think that the Government have really thought out their policy or its consequences. I plead for further consideration of the matter.

There must be in the policy of the Government—not for the policy of right hon. and hon. Gentlemen on these benches —some minimum of protection which, not every industry but certain industries, ought to (have generally; there are special cases, not all, which are to have their security and their protection not through a duty but through a quota. But where there is a duty there will be a certain minimum which is necessary to enable the industry to be successfully established or developed or carried on. Is that necessary minimum to be the figure with which you bargain? If so, esc hypothesi, every time you make a bargain you ruin, or partially ruin, some industry. If you have a tariff which is fixed not as a bargaining tariff but as the minimum necessary for the existence or development of an industry, and then begin to whittle that away in a series of negotiations, which at present are conducted with one country, though we have been reminded that every concession is applicable to 41 other countries, though that may be ultimately changed—if you do that, then you1 destroy the efficacy of the tariff from the point of view of developing home production.

I am by this time a pretty old Tariff Reformer. We have pleaded for security. We have said that we did not desire a very high tariff, but we have pleaded that a measure of security and preference in his own market should be given to the British producer, to put him on some comparable footing with that of every man and every other manufacturer with whom he competes in any single part of the world. I do plead that there ought to be given to the traders some measure of security, and that the Amendment of my right hon. Friend which would leave you free to deal as you wish with the general ad valorem duty which is imposed by rule of thumb primarily for revenue— and allows you to deal with a third of any duty imposed on the advice of the Tariff Advisory Committee, gives you ample latitude for negotiation, provided you do not give notice to all the world— I do not think that that was the intention of the Board of Trade—that this which is your minimum is also your maximum.

A right hon. Gentleman below me has made merry about bargaining under these conditions. Those to whom he stands the political heir and who shared his views in the years far back—did they find it easy to negotiate or to obtain tariff concessions from other countries? When offering Free Trade, an open door and open ports to all competitors, did they have a great success in reducing foreign tariffs? Did they break down the walls that surrounded other countries either by their example or by their sweet persuasiveness?


Trade was no worse in those days than now.


That is about as foolish an interruption as I have heard in 40 years' experience. The late Lord Salisbury, in a speech on this subject of negotiations with foreign countries, gave an explanation many years ago, and it is a simple one. He said that "those who go to market with an empty pocket come home with empty baskets." When you have given all that you have to give and are not in any circumstances prepared to refuse anything, you do not meet with the gratitude which in a better world no doubt would lead every other country to put you in a more favourable position than any of your competitors. But if you must use your tariff, there ought to be a minimum which gives security to the home producer. That minimum, be it one of two-thirds of the duty, be it three-quarters, or whatever it is, will govern the action of the British producer in entering on new enterprises and putting in new Capttal into business and making developments and in continuing to fight where he is making little profit in the hope of better days to come.

That minimum security is the basis on which he can plan, and, if you destroy that basic security, then is your tariff very much use? It is an incident of today; it is gone to-morrow. That is what the right hon. Gentleman the Member for North Cornwall desires; that is why he supports the present action of the Government—because he believes it to be fatal to their considered policy. It is because I believe it, if not fatal, at least profoundly injurious to their declared intentions, and to their policy, that I beg them not to wrap themselves up in the negative which has been given to us so far, but to consider afresh whether they cannot do something to meet the necessities of traders who are not yet affected but who feel now that at any moment the basis on which they have entered into business may be cut away from under their feet, not because any new inquiry by the impartial Advisory Committee has shown that the duty was miscalculated or that they have abused the protection given to them but because somebody—to-day my right hon. Friend the President of the Board of Trade, to-morrow perhaps the right hon. Gentleman the Member for North Cornwall—because somebody feels it convenient to sacrifice them in order to make a bargain about which he is keen as we are all keen when we try to make bargains. You destroy the whole purpose of your duty if you do not leave your manufacturer a settled measure of protection which gives him security and enables him to plan his operations on a considered and lasting scale.

9.58 p.m.


The Committee has listened to a very powerful speech from the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) who has a very great influence in certain quarters in the House of Commons and whose speech must, necessarily, greatly embarrass the Government in carrying out their trade policy. The difficulty is that there is a great difference between the policy of the Conservative party and the policy of His Majesty's Government as we understand it. Conservative Members find themselves in the position of attempting to impose on the Government a policy which is profoundly inconsistent with what the Government may find themselves compelled to do in the negotiations which are bound to take place at the World Economic Conference. I remember the President of the Board of Trade making the situation perfectly clear when this Import Duties Advisory Committee was set up, and the right hon. and distinguished brother of the right hon. Gentleman the Member for West Birmingham also made it clear. They said, in effect, that it would be an excellent thing if we could have universal Free Trade, and as I understood the position of the Conservative party, they also have said "We do not believe in Protection as a world system. We believe in Free Trade as a world system." The attitude of the Conservative party was we understood that they were arming themselves with the device of tariffs in order to protect British industry against the tariffs which existed elsewhere. Indeed, I have never yet met a 100 per cent. Protectionist except the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) who believes that we can secure the maximum export trade and the maximum home production at one and the same time. All other Conservative Members are really 100 per cent. Free Traders, but they argue that the only means of accomplishing Free Trade in the world is to arm the Government of this country with the same power to impose tariffs as that possessed by every other Government in the world.

What do the Government desire to secure? They desire to use the tariffs which have been imposed on the advice of the Advisory Committee, in an attempt to secure the maximum reduction in tariffs throughout the world. Is that Conservative policy or do the Conservative party desire to maintain Protection in Great Britain independently of what happens in the rest of the world? The President of the Board of Trade is, I understand, entering into negotiations with many other countries and is attempting to secure reciprocal trade agreements between Great Britain and other nations. He desires to be armed with the power to reduce tariffs, in order to secure reciprocal bargains from other countries-Does the right hon. Gentleman the Member for West Birmingham object If, as he says, this policy introduces insecurity into trade and commerce, that is the inevitable accompaniment of this type of fiscal arrangement. If you are going to impose tariffs so as to have a bargaining weapon, you cannot expect security. If you are going to have Protection because you are a 100 per cent. Protectionist believing that Protection qua Protection is best, then set out to impose it but do not try to have both. That is the difficulty of the position of the right hon. Gentleman the Member for West Birmingham. He wants to make the best of both worlds. That is the difficulty of a National Government attempting to carry out a sensible and enlightened fiscal policy in relation to other countries—the difficulty of feeding the voracious maws of private interests at home.

There is an even greater objection to the speech of the right hon. Gentleman. Who is ultimately responsible for the imposition of tariffs, the House of Commons or the Import Duties Advisory Committee? The right hon. Gentleman said that the Advisory Committee issued instructions, or issued a request, that they should not be bothered by repre- sentations from politicians. We, at the time, took exception to this arrangement, because we said if the House of Commons believed in a policy it ought to have the courage to impose it and it ought not to attempt to shelter behind any body set up in this way. The Advisory Committee has recommended a series of tariffs upon a wide range of British industries, but it is this House which imposes them. What does the right hon. Gentleman suggest? That when representatives of His Majesty's Government enter into negotiations with a foreign nation for the organisation of British trade and commerce they should be dictated to by a body that has no electoral responsibility. What he said in effect was that you should not take a tariff off, unless the Advisory Committee have advised that should be done.


Would the hon. Member mind reading the Amendment which we are discussing and he will see at once that it is not that.


The right hon. Gentleman says that, as to two-thirds of the tariff that is the suggestion, and the principle remains the same if it is only one-tenth of it. The House of Commons is the master as to whether tariffs should be imposed or not, and I would have much more respect for the right hon. Gentleman and for the Conservative party if they argued the merits of the tariff case on the Floor of the House of Commons, and said that in their judgment it was desirable that the House of Commons should give the maximum protection to British industry and the maximum security to the British trader, and that no matter what happened in the rest of the world, those tariffs should be imposed. But what I cannot sympathise with, and what I am sure the country will not countenance, is this cowardly method of running behind the Tariff Advisory Committee and throwing away the trust which this country imposes in this House. I hope this profoundly anti-democratic attitude of mind will be resented by this Chamber. There is not a Member here who would dare to go to his constituency and say, "Elect me to the House of Commons, and I will give your power away." He would say, "Elect me to the House of Commons, and I will do my best to protect your interests there." Democracy dare not ask democracy to give its power away. [An HON. MEMBER: "Except in Russia."] Please do not let us have this juvenile talk. If you have such a love for those methods that you wish to imitate them, say so.

We are defending the right of the President of the Board of Trade to speak on behalf of the House of Oommons, to declare the policy of the Government, and to secure, if he can, in a perfectly free manner, the free flow of trade and commerce in as large portions of the globe as possible. It would be disastrous, it would be hypocrisy, to enter the World Economic Conference after having admitted an Amendment of this description. The Government have agreed with President Roosevelt and declared that among the principal contributions to the world crisis are these restrictions on the commerce of the world, and yet the right hon. Member for West Birmingham and these loyal patriots in the Conservative party, who are supposed to be supporting a National Government and anxious to secure the restoration of world trade, are suggesting that we should say to the Import Duties Advisory Committee, "We allow you to tell us that if you wish to take two-thirds of a tariff off, we will accept your instructions."

Sir George May and his Committee have been appointed by this House, and this House remains the master of the situation at the moment. I hope it will be said that the kind of case put up by the right hon. Member for West Birmingham, who, behind his desire to thwart the plans of the Government and to secure for certain industries of Great Britain the maximum protection, but who is not anxious to argue it on the Floor of the House of Commons, where it may be seen, but wants it sent to a Committee, where it can be hidden. [HON. MEMBERS: "Oh."] Look over the history of the last few years in this House. Is it suggested for a moment that the Orders that have gone through have been properly discussed? They have had to be taken as a whole, and their merits have not been discussed. We have been thwarted and gagged—[HON. MEMBERS: "Oh"]—at 11 o'clock at night; and, as a matter of fact, the right hon. Member for West Birmingham said that the Advisory Committee was appointed in order that we might be gagged.

So impartial is that Committee, that the right hon. Gentleman has perfect confidence in it. He knows very well that it is so impartial that it can be trusted not to take tariffs off. [HON. MEMBERS: "It has taken them off."] It has taken them off in certain very small instances, but the policy of tariffs was carried out on the recommendation of the Import Duties Advisory Committee, and we had no opportunity of examining the evidence. The right hon. Gentleman opposite accuses the Liberal Members of desiring now to reject this Amendment because they are Free Traders. He wishes to carry the Amendment, because he knows that the Import Duties Advisory Committee is Protectionist. This House is, as I understand it, whatever it may suit the industry of the country to be at the time of negotiating. It has declared itself neither 100 per cent. Protectionist nor 100 per cent. Free Trade, and if it wishes to escape the restrictions of either of those two positions, it will leave the President of the Board of Trade free to conduct negotiations with other? countries without restrictions imposed by the Import Duties Advisory Committee.

10.13 p.m.


It would be no unfair description of the speech of the hon. Member who has just sat down to say that it reminds one of someone who is pressing at golf. He is dealing with an Amendment that he has never read, he is dealing with a subject of which he has obviously insufficient knowledge, and he is assuming an economic authority which he certainly does not possess. So much for the hon. Member.

I rose only for the purpose of putting one or two questions to the President of the Board of Trade, and may I say, Captain Bourne, through you, to the President of the Board of Trade how pleased we are now to have him with us, because he not only occupies one of the most important offices in His Majesty's Government, but he is admittedly, in the opinion both of his political enemies and his political friends—he has no personal enemies in this House—one of the most distinguished persons who has ever occupied that office. Therefore, it is a little unfortunate, with all the authority and the knowledge that he has, that he could not find it possible to be here earlier to hear the speeches of two ex-Cabinet Ministers—three, I think—and two other ex-Ministers, that have been delivered on this subject. We all know the multifarious duties which Members of the Government have to carry out nowadays, and I am making no complaint about his not being present, but he will recollect the early days in this House, the old, far-off days, when it was considered that the first duty of a Minister when an important question affecting his Department was under consideration was to be in the House, however important his outside duties might be. [HON. MEMBERS: "Oh !"] Hon. Members may not like the reference to the past, but it is true. However, we have him with us now, and I am sure he will answer with facility—


Make the most of him.


It is not for the right hon. Gentleman the Leader of the Opposition to defend the President of the Board of Trade. The Leader of the Opposition is, as a matter of fact, extremely assiduous in his attendance.

Lieut.-Colonel COLVILLE

It is only right to say that the President of the Board of Trade has made three long speeches on the subject of this trade negotiation policy.


Really, my hon. and gallant Friend's intervention is most unfortunate and if he had had long knowledge of the House of Commons, he would not have made it, but would have known that it is the duty of a Minister to be present when matters affecting his Department were under consideration. I have something unfriendly to say about the right hon. Member for North Cornwall (Sir F. Acland). The right hon. Gentleman delivered a very pleasant homily to all of us who support the Protectionist policy, but I thought that it was of a somewhat paternal character. The intellectual superiority which Members of the Liberal party —[HON. MEMBERS: "Oh !"]—invariably adopt about these fiscal questions is one of the causes why their numbers are so small. He attempted to deal with what I regard as the one serious argument which he brought against my right hon. Friend who moved the Amendment. He began by making the charge that we, the Government supporters on the Back Benches, had supported the bi-lateral policy which he said was a hopelessly illogical one and which had been put forward so constantly by the Lord President of the Council, namely, that on the one hand we were in favour of a protective tariff, and that on the other hand we wanted to use that tariff only for bargaining purposes. That was the charge which the right hon. Gentleman made, and it has been more or less supported by the hon. Member for Ebbw Vale (Mr. A. Bevan).

May I say, as one who has taken part in fiscal controversies in this House for a good many years, that this is not a true statement of the attitude which has always been taken up by those who make plain cause, as we do—and we are not ashamed of doing it—with the Protectionist party. We have said it is necessary for this country, above all other countries, which has a far higher standard of living than any of its business competitors to have a tariff to protect that standard of living. Nobody would dispute that that is the historic attitude which the Conservative party has invariably taken up. Neither in the present controversy nor in the old days of the controversy led by Mr. Joseph Chamberlain, have we ever denied that, having obtained our protection, it could be used to a lesser or greater degree as circumstances permitted for retaliatory or bargaining purposes. There is nothing in the least illogical in that attitude. We have always said, as has been so ably and clearly stated by the right hon. Member for West Birmingham (Sir A. Chamberlain) to-night, that there must be a basic protective tariff, but that that tariff should be of such a nature that it is possible to add to it or detract from it as circumstances necessitated for either bargaining or retaliatory purposes. There was nothing in the least illogical in the attitude we took up, and we who have been pressing these measures on the Government, though we are supporters of the Government, must not be held responsible for everything that the Government have said on the subject.


The Noble Lord will remember that the right hon. Member for West Birmingham (Sir A. Chamberlain) said that a tariff had been imposed on the advice of the Import Duties Advisory Committee to prevent certain industries in Great Britain from being either wholly or partially ruined. If the tariff is reduced, that obviously is done to permit goods to come in, and if they come in then they prevent certain goods from being produced at home, and in that way must necessarily lead to the ruin wholly or partially of some industry which he wants to support.


No, that is not the point at all. For the benefit of the hon. Gentleman I will restate what has been our historic attitude in this matter. We have said it is necessary to have a protective tariff for the industries of this country. In that, of course, we differ from the hon. Gentlemen on the front two benches below the Gangway. We have been fighting for this for 25 years, and everything that has happened in those 25 years has strengthened our position argumentatively and logically and has weakened theirs. But we have always said from the days of the distinguished father of my right hon. Friend the Member for West Birmingham that we must have powers for addition to or subtraction from a tariff for the purpose of carrying out either a policy of retaliation or for obtaining concessions. That is perfectly clear, and there is nothing illogical in that.

I will mention one thing which I hope the President of the Board of Trade will reply to. I do not want to refer to an incident which produced, shall I say, some disturbance in the Committee, but the Secretary for Overseas Trade referred to previous speeches made by the President of the Board of Trade on this subject. It is quite true he has made speeches, but to my mind, and to the minds of all of those who think as my right hon. Friend the Member for Spark-brook (Mr. Amery) and the right hon. Member for West Birmingham think, he has never answered this point, which has been put again and again in the course of these Debates. It has always been held that you can have one of two things. You can have a Free Trade system or a Tariff system, but you cannot have A system which changes from one day to another. An industry can carry on under Free Trade or under Protection, but it cannot carry on in this way. When it is granted a protective tariff on its merits by the Advisory Committee—and I did not quite follow the hon. Member for Ebbw Vale, in what he said about the Advisory Committee; I do not know whether he was in favour of it or not—naturally the industry thinks the tariff is going to be continued; but then, suddenly, not as the result of any merits or demerits of that particular industry, but because the Government want to come to bargaining terms with some other country, it finds itself deprived of that Protection. We say that is an impossible system. [HON. MEMBERS: "Hear, hear!"] Free Traders and Protectionists alike are agreed about that, and the gravamen of the charge against the Government is that everybody is agreed that that is an impossible system.

It may be the answer of the President of the Board of Trade to say that the danger has been greatly exaggerated by hon. and right hon. Gentlemen, and that that is not the effect of what we are doing, but we are afraid that it is the effect, and that is why I earnestly hope the Government will accept this Amendment moved by my right hon. Friend. It cannot be called an extravagant Amendment; on the contrary, it allows a very substantial alteration to be made, but it gives this basic Protection, and I hope that the right hon. Gentleman with that courtesy which he always shows to opponents, and the care he always takes to answer a case, will tell us hew he meets the case put up by my two right hon. Friends. In conclusion never was a truer thing said in this House than was said by my right hon. Friend the Member for West Birmingham. One of the most damning indictments of the Government's policy in this particular is that they have received support from the very people who hate the duties and who left the Government because of their fiscal policy. They have given their support because they think that it is going 1o kill the very fiscal policy which the Government are putting forward.

10.25 p.m.


I do not rise in order to take part in this domestic controversy I think, as has been said several times, that the position is quite an impossible and illogical one. The only way out is to get rid of the trinity that has been set up, and to bring the whole business back on to the floor of the House of Commons. Hon. and right hon. Gentlemen, almost before the Committee had got to work, were bringing forward matters which they wanted dealt with. [HON. MEMBERS: "Oh!"] I will refer hon. Members to the OFFICIAL REPORT, in confirmation of what I have been saying.

I have got up to remind the Committee that the controversy which has arisen has brought us, at this late hour, to the position that very few of the large number of Clauses that we are told are to be got through have been dealt with. With the overwhelming Majority of Tories in this place, it is so easy for them to oppose their own Government that they have erected a second, a third and a fourth opposition, and they take up much of the time quarrelling with one another. The manner in which those Tories love one another is beyond words. I can never get down to the sort of language that they use to each other. I have risen to make a protest against so many speeches, on the same subject and taking the same line, made by hon. Members who are supporters of the Government. I do not think that we ought to have been lectured, quite in the fashion in which the noble Lord has taken it into his head to lecture us, on behaviour and procedure, and all the rest of it. We are all very indebted to him, but we would rather he did not do it at this time of night. We are all the better for it, no doubt.


Will the right hon. Gentleman allow me to say that I have never lectured him in my life? I have a far greater regard for him. It was his supporters.


My supporters are me, and I am them. Honestly, it is too bad that we have had to listen to so many Conservative Protectionist speakers trying to make clear what can never be made clear, and that is that their kind of Protection can work. I want to ask the Patronage Secretary either to keep them down or to give us another two or three days.


There have been three speeches in support of this proposal to-night, and the right hon. Gentleman's is the third speech against it.


I have been watching the Debate. The right hon. Gentleman himself made a fairly long speech on the subject, while the right hon. Gentleman who moved the Amendment spoke for not quite so long. The Noble Lord the Member for Horsham has given us his version, and there has been one speech from here and quite a short speech from the right hon. Gentleman the Member for North Cornwall (Sir F. Acland). Whether we are few or many, the Opposition are asked, because of circumstances which, we admit, the Government are unable to control, to help to expedite the business, and I do not think that hon. Members who support the Government should take up the time that they do.

10.30 p.m.

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

I need hardly say that, had I received notice that I should be required here, I should certainly have cancelled my engagement in order to hear what was said by my right hon. Friends and by our colleagues behind me on this Amendment, but I was informed that the Parliamentary Secretary to the Board of Trade and the Secretary to the Overseas Trade Department were both fully prepared to deal with the points that were likely to arise, and, having some very intimate experience of them, I was quite prepared to entrust them with the duty; but, had I had the least idea that I should be required in this Debate, I would have cancelled my engagement beforehand, and should, of course, have been at the service of the Committee.

The point which has been discussed is a comparatively simple one. This Amendment does not deal with purely technical considerations; those were discussed, admirably I am told, by the Secretary to the Overseas Trade Department, who pointed out the administrative difficulties which it was sought to overcome. That, however, was not the principle that was under discussion. The principle under discussion was whether or not it was advisable to reduce duties in order to obtain a tariff bargain with some other countries. That was the main point that was put by my Noble Friend the Member for Horsham (Earl Winterton), and I understand that it was also put with great force in other quarters of the Committee. May I point out—


If my right hon. Friend will pardon me, it will not answer my point, or that of my right hon. Friend, if he states the case exactly in that way. The Amendment admits of a reduction of the duties fixed on the advice of the Tariff Board and approved by the House of Commons, but our contention was that there ought to be a minimum below which reductions should not be carried, and that, if further bargaining latitude was required, it should be obtained by raising the duties against the parties with whom it was not possible to come to an agreement, and not by reducing that minimum.


I am aware of the argument of my right hon. Friend, and was going to set out, as the second, and perhaps the subsidiary point, the means of achieving the end that he had in view. Let the Committee consider what would be our position if we entered into negotiations limited in that way. We might find, on some matter of comparative unimportance—unimportant to us, perhaps, but of considerable importance to the country with whom we were negotiating —that it would be advisable to go a little further than that hard-and-fast limit, and it would be a great pity to spoil the negotiations for the sake of that small differentiation. There is an old saying that it is not worth while spoiling the ship for a ha'porth of tar, and one might easily spoil agreements for the sake of points which are of, perhaps, larger importance in other countries, although comparatively unimportant here.

I do not think that the Government are unreasonable in asking that there should be considerable latitude in the conduct of these negotiations. Let the Committee remember what has been the intention of this Parliament from its earliest days. One of the earliest Measures introduced here was the Import Duties Bill, which is now enshrined in the Import Duties Act. Section 7 of the Import Duties Act lays it down as a duty on the Government to deal by way of negotiation with these very problems with other countries. It provides the means of doing it. If hon. Members will turn to the Section 19, on which we are working, they will find there set out quite plainly the means by which it is to be done, namely, by a lowering if necessary, or modification, of tariffs. That is not unreasonable. Indeed, it was accepted by the great Majority of the House as being the normal way and one essential element in our fiscal policy. That was expounded not only in the course of the Debate by other Members, but a description was given of it by the Chancellor of the Exchequer which I once before brought to the notice of the House. It is expressed in such good words that I beg the House to allow me to read once more exactly what he said on that subject. He was dealing with this very point of lowering tariff barriers in order to secure the lowering of tariff barriers elsewhere. 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, but 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. The hon. Baronet the Member for Bournemouth (Sir H. Croft) asked: Does that apply to the revenue tariff only or to the higher duties?"—[OFFICIAL REPOKT, 4th February, 1932; col. 295, Vol. 261.] We have been debating to-night the higher duties, the additional duties, as they are called in the Act. To that the Chancellor replied "Both." It was made perfectly clear in that Debate, it remains on record, and it was accepted by the House without the slightest demur. There were no misgivings and no reservations. It was not in the least necessary for the Noble Lord to say anything about it because he was satisfied then, and I believe in his heart he is still satisfied. The really important point that agitates his mind is that he is a little afraid that, in making these tariff negotiations, we shall whittle away the element of protection which is no inconsiderable comfort to the industries that he represents. That, I know, is his Major point. May I point out to my Noble Friend, who, I have no doubt, speaks with considerable authority, when he says that when I have to deal with these matters at the Board of Trade I should consult with bodies outside, that in the Debate on the 1st or 4th of May I was adjured by many of my Parliamentary colleagues to consult organisations outside. The last time I had a consultation with an organisation outside, the very last letter that I received on. this subject from the Association of British Chambers of Commerce contained this very important sentence, which I should like to communicate to the House, as being the considered recorded view of the Association of British Chambers of Commerce: My council also realise that the Import Duties Advisory Committee would at once become involved in party politics if they wore made responsible for trade treaties. As it is of supreme importance that the Import Duties Advisory Committee should remain free from party ties, my council agree that the decision to reduce or cancel tariff protection must rest with His Majesty's Government alone. They ask more than that. I do not ask the Committee to consider that that is quite sufficient for their purpose. They want assurances as to what we intend to do, and the course that we are likely to take. I am only too glad to repeat the assurance which I believe has already been given by the Parliamentary Secretary to the Board of Trade. He has stated categorically that we attach the greatest weight to the opinion of the Import Duties Advisory Committee and, within the limits of the functions which are laid down, for us by Act of Parliament, and which have been announced and enunciated by the Chancellor of the Exchequer, we intend continuously for the future, as we have done in the past, to attach weight to the recommendations of the Import Duties Advisory Committee. I go further than that and say that, when we are conducting any negotiations, we attach far more weight to the opinions of that Committee than we do to the sporadic opinions which may be picked up haphazard, which might be the result of all sorts of pressure from organisations. We would rather accept the view of the Committee which scientifically examines the conditions of the industry with which it is concerned.

When that committee has made those recommendations which we find are related in some way or another to the negotiations we are having to carry on, we must, as the Act contemplated, have the power to vary them. I admit that there are some instances where those who are intimately connected with an industry and whose sole attention is concentrated upon the industry regard whatever may be done in lowering the protection of that industry as of more importance than its effect upon trade as a whole. One of my hon. Friends frankly and plainly stated in the course of our Debates that he attached far more importance to the industry of the constituency he represented than he did to the trade of the whole of the country. That is an extreme view, but the fact remains that it illustrates a very natural tendency. It is the duty of the Government to take the broadest possible view of our trade and commercial relations and of our trade and commercial interests. It is in the course of that duty that I would plead with the Committee that they will trust us with the duties which have been imposed by Act of Parliament and not be suspicious of our trying to get rid of a policy of which we are the authors. I need hardly say that I have not modified my views in the course of these discussions or of these negotiations. They remain what they were. I believe that the negotiations have been of very great benefit to the trade of the country as a whole. I ask that we should be left with full powers to make the best bargains we can on behalf of the whole of the interests of this country, and, if in course of time it is thought necessary by the Committee or the House to make a full examination of all we have done in the light of results, which, I hope, are going to come very rapidly, we shall only be too ready to hear the criticism and do what we can to defend our policy.

10.42 p.m.


May I make an appeal to my right hon. Friend? If he feels that he cannot accept the actual wording of the Amendment, is it impossible for him to give some assurance which would satisfy, not only the Committee, but, what is far more important, industry in this country? Could he tell us that, except in very exceptional circumstances, he will not in fact consider reducing the duties recommended by the Advisory Committee by more than one-third of the additional duty. If he could tell us that that was a general principle which was not to be departed from, except in very special circumstances, he would give to the industry of this country a measure of assurance, which, I would earnestly ask him to accept from me, is desired by industry, and without which it is not in a position to carry on with any confidence.

Amendment negatived.

10.44 p.m.


I beg to move, in page 11, line 8, after the word "made," to insert the words, "for imposing a duty of customs."

The Amendment, if carried, would make it necessary that, when duties are to be reduced as a result of a trade agreement, an Order providing for the reduction must be submitted to this House by means of an affirmative vote moved by the Government. As the matter stands under the existing provisions of the Import Duties Act, such an Order lies on the Table, and, unless private Members pray against it, it automatically comes into operation at the end of the statutory period. We take the view that in these matters the final decision as to the extent to which duties should be reduced ought to be a decision taken by the House of Commons. Accordingly, we desire to apply to the reduction of a duty the normal procedure which applies to the increase of a duty. In the ordinary way, the negotiating power of the Government, the right of the Government to enter into ordinary contractual relationship with ether Powers, is an administrative act, and when that administrative act affects taxation it seems to me that the House of Commons should not abandon its immemorial rights in the matter of taxation. Accordingly, the administrative power of the Government ought to be circumscribed to the extent I am proposing in the Amendment, namely, that when they propose to reduce duties those reductions should be submitted to this House, and unless this House within 28 Parliamentary days approves of those reductions, the Order should lapse.


I must ask the Committee to resist the Amendment. Under Section 19 of the Import Duties Act there is already power to reduce or remove additional duties by an Order which does not require an affirmative Resolution. Surely, the object of the Amendment is to see that an agreement with a foreign country is debated in the House of Commons. The appropriate time for that Debate is when the agreement itself is presented to Parliament, and before it is ratified. There is hardly any doubt that if the House showed a great desire to discuss any particular trade agreement arrangements would be made and time found for it, and it seems to me that another Debate on an Order putting the agreement into force would only be a repetition of the main question. On these grounds I ask the Committee not to accept the Amendment.

Amendment negatived.


I beg to move, in page 11, line 10, at the end to add the words: Provided that the provisions of this Section shall not apply to the commercial agreements signed prior to the passing of this Act. After the long Debate we have had on this Clause it would be inconsiderate of me to delay the Committee more than a few moments, but I should like to protest against the attitude adopted by the Leader of the Opposition when he wished to muzzle the supporters of the Government and not allow them to speak on important questions of this kind affecting their constituents. It must have been apparent to the President of the Board of Trade that the industry of this country is much concerned as to the methods under which the trade agreements which have so far been signed were conducted. Three of those agreements, the one with Argentina, the one with Germany and the one with Denmark have been discussed on the Floor of the House. The object of my Amendment is to allow the two agreements which have been signed but not yet ratified, those with Norway and Sweden, to be discussed on the Floor of the House. By doing that we should comply with the idea expressed by an hon. Member who spoke from the Labour benches by giving the House of Commons further power to express its opinions on the agreements.

One of the reasons why industry is very much concerned about these negotiations is not that it has not complete confidence in the industrial and business ability of the President of the Board of Trade, but because it feels that the agreements are not being negotiated in the same business manner which he would perhaps use in the great industries over which he has had control. In other words, there are two methods in which you can negotiate an international agreement. You can do it in camera, with officials of the Board of Trade meeting officials of the Ministry of Commerce of a foreign country. Everything is kept secret and the decision rests entirely between those two parties who are negotiating, and then, having come to a decision, they announce that decision and agreement to the world. On the other hand, you can make an agreement between the President of the Board of Trade and his officials, with trade consultants, and the Minister of Commerce of a foreign nation, with their trade consultants, and, as the result of these negotiations, you can make a satisfactory agreement. But you cannot make an agreement where, on the one side, you have complete secrecy and, on the other side, a foreign nation which has trade consultants who are all the time passing that information on to their country and to the traders behind them.

We have found in these two agreements—which I shall not be allowed to discuss to-night—the effect has been that in both Norway and Sweden there was prior knowledge of what was in the agreements, with the result that great advantage has been taken over certain trades in this country. The hon. Member for Chelmsford (Sir V. Henderson) mentioned the case of ball-bEarlngs, and there is also timber and the question of paper. All these trades have suffered, not so much because of the agreements, but because what was in the agreements has been anticipated. I hope it will not be necessary for me to press this Amendment, because I trust the President of the Board of Trade will give an assurance that we shall have a day for the discussion of the Norwegian and Swedish Agreements, which affect very seriously a large number of industries. If that assurance is given, it will not be necessary for me to press the Amendment.

10.53 p.m.


The hon. Member is, of course, aware that a discussion will take place on the agreements relating to Norway and Sweden provided there is any demand for it and the ordinary steps are taken. Had he pressed his Amendment I should have asked the Committee to resist it, because there are powers under Section 19 of the Act, as it is, to enforce reductions in additional duties; but this Section is necessary to reduce general ad valorem duties. Consequently, I must ask the Committee to allow the Clause to-pass.

Amendment negatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

10.54 p.m.


I think some of the Amendments moved during the discussion on this Clause show a complete misunderstanding as to the basis on which negotiations with foreign countries must be conducted. It is not of any great importance to foreign countries negotiating with us whether a duty be raised or lowered by a specific percentage. The only thing which really matters is whether the percentage by which the duty is lowered is going to allow them, to sell a greater quantity of goods in this country. Therefore, to endeavour to base negotiations on or to limit negotiations by any specific percentage is to destroy all power to negotiate. The foreign countries negotiating with us will readily accept a reduction of 5 per cent, if it enables them to sell a larger quantity of goods in this country. On the other hand, they will not accept a reduction of 20 per cent, or negotiate on that basis, if it does not enable them to sell more of their goods.