§ Motion made, and Question proposed, "That this House do now adjourn."— [Captain Margesson.]
§ 7.38 p.m.
§ Mr. BAILEY
I desire to raise a matter which, to us who represent Lancashire Divisions and the people of the whole county, is a matter of urgent and grave importance. The question to which I refer is that of the competition to which our industry, the great staple industry of our county, has been subjected with increasing severity for several years. In 1913 the Lancashire cotton trade exported 7,000,000,000 square yards of cotton piece goods. The figure at the present time is in the neighbourhood of 2,000,000,000 square yards; in other words, something like two—sevenths only of that great industry remains on its export side, which is its primary side, and that is why some of us to-night are venturing to detain 422 this House on what is considered to be a matter of primary importance, not only to our county of Lancashire, but to the country as a whole. I should like to say how much I appreciate the presence of my hon. and gallant Friend the Secretary to the Overseas Trade Department to deal with this matter.
The position is this: In the first place, the Japanese are flooding markets which, in our view, rightly should be ours. Take our Colonial markets. I do not want to weary the House with a great many figures, but I will give one or two instances which are typical. Let us take the case of Ceylon. If we take the year 1924, Ceylon consumed 42,800,000 square yards of cotton piece goods. The United Kingdom supplied 20,000,000 square yards, or roughly 50 per cent., and Japan 3,100,000 square yards of those goods. We will take 1928 next. The consumption of goods as a whole had gone up from 42,800,000 to 55,400,000 square yards. The United Kingdom then produced 23,800,000 and Japan had gone up from 3,100,000 to 7,200,000 square yards. She had doubled her production, and we had slightly increased ours. Now take the last year that we have on record, 1932. In that year the consumption in Ceylon had gone up to 68,600,000 square yards. Our share of that consumption had gone down from 23,800,000 in 1928 to 15,800,000 square yards, but the consumption of Japan had gone up from 7,200,000 to 40,400,000 square yards. In other words, in the course of less than 10 years, Japan had increased from 3,000,000 to 40,000,000 square yards in that market, and we had decreased from 20,000,000 to 15,800,000 square yards.
I could give other figures of a similar character, but I do not propose to weary the House with a recital of figures like that, because it is very difficult to make figures interesting. I might mention in passing that we are still taking 80 per cent. of Ceylon's exports in this country, and yet that is what is happening to our cotton trade in Ceylon. Those figures are not very interesting, because I know there are not, possibly, many Members here who understand much about the cotton trade, but those figures have a significance behind them. Thousands of men are walking the streets in Lancashire to-day because of those figures, because in our own Colony, which we have 423 brought to its present constitutional and material prosperity, cheap goods are being dumped whereas our goods are not being bought. If you take foreign countries, such as China, the same story can be told. The figures for India are particularly illuminating. In 1913 we sent something like 3,000,000,000 square yards to India, and Japan sent something like 7,000,000 square yards. To-day Japan is sending as much as, or more than, we are. There again you have the reason for the plight of a county which used to be one of the most prosperous parts of England and which to-day has 6,000,000 or 7,000,000 people.
The point, that we have to consider is, What can be done to remedy that position It is no use merely stating it. In the first place, not only are our markets being flooded, but the prices we are being paid for our goods are being broken. I will give an instance of what I mean. I was talking the other day to someone high up in the trade, not a person given to exaggerating figures, and he told me that on the average line of goods that Japan is producing they are selling at prices 30 per cent. below the mere cost of production in this country, let alone the cost of salesmanship; and they are sending coloured prints to Lancashire to be sold in England at less price than we can produce the plain gray. That is due to a disparity which is too wide to be bridged for many years between the standards of life, the social conditions, wages and so on, which exist in Japan and those which exist in this country. When I say that I am casting no reflection on the standard of life of the Japanese people. East is East and West is West, and that position is likely to remain for very much longer. What may be a perfectly proper standard of life in Japan is not a proper standard of life here.
How are we going to tackle this question? The right hon. Gentleman the Leader of the Opposition, whose sincerity of heart I admire, was the other day in Salford, which is one of the hardest hit areas, and his suggestion was that we must try to persuade the Japanese people to accept a better standard of life. In the same speech he said how impossible it was to persuade British employers, who are giving a far higher standard of life, to do their duty by their employés.
424 How does he think that, if with all his persuasive powers he cannot persuade British employers, he can persuade the Japanese employers? We in Lancashire realise that of all the criticism on this question the worst comes from the Socialist party. It would be a tragedy for Lancashire if a, Government came into Office that had no constructive policy on this question. It is because we are afraid that the people may go from bad to worse that we are endeavouring to persuade the Government, to take a rather stronger line than we think they are taking at the present time. We appreciate the sympathy which the Government have for Lancashire on this question. The things which are most worth while in life are those very often for which we have to wait the longest, and I tell the President of the Board of Trade that we in Lancashire are deeply appreciative of the sympathetic words which were used about Lancashire in a speech the other day. If we might venture a humble suggestion to him it is that it will not take quite as long for action to result as it has done for the expressions of sympathy that he made, which we do value very highly indeed.
The real difficulty is simply this: You can have no good wages in Lancashire—I do not care whether the industry is nationalised or not—and there can be no profits for masters unless we can get first of all a reasonable proportion of the markets which we used to have, and markets which can take our goods at a price which we are prepared to sell them at and which will give us a reasonable profit. We shall get neither of these two conditions while Japan, which the Leader of the Opposition in another connection called "an international pirate," has most of our markets, and there will be no possibility of Lancashire being prosperous again unless we secure for her markets at prices at which she can produce. We will not do that until there is an apportionment of markets between this country and Japan, whether these markets be imperial or markets of the very good customers who are not in our Dominions.
The most-favoured-nation clause bangs, bolts and bars the door, in the opinion of many of us, to any substantial revival in our cotton trade. I say "in our cotton trade," but I would go further than that, 425 because the peril through which the cotton trade is passing is going to be faced by the great prosperous centres like Birmingham and the iron and steel manufacturing trades in 15 or 20 years' time. It is our turn to-day, but it will be the turn of others to-morrow. Therefore, I feel that this is a question which does not concern only Lancashire, although at the moment we have to bear the forefront of the battle. The solution is only by an apportionment of markets—Japan, say, taking 40 or 50 per cent., and we taking 40 or 50 per cent. We in Lancashire recognise the right of our neighbours to live. We hope that conciliation may produce results. We do not for a moment think that a great expanding country like Japan can be deprived of its fair share of the trade of the world. I go further and say that we do not think it ought to be so deprived, but we say that Japan has no right to deprive us of markets which were built up by foresight and prudence in the past, markets to which we are entitled on business and moral grounds. If Japan can live on cheaper standards, it ought not to deprive our people of their work and living.
It is not a, question of having a preference against Japanese goods; the margin is too wide. We say, in the first place, that the most—favoured—nation clause ought to go; at any rate, if it does not go, Japan should voluntarily concede to us a proper share of the markets. If you take our Trade Agreements with Denmark, Finland and the Argentine, it is true that we can point to small agreements in thousands of yards. You can quote them in Debate where many people do not understand precisely what they mean, but when you take the broad fact of 2,000,000,000 square yards as our present rate and 7,000,000,000 as our pre-War rate, it will be seen that we cannot get a great improvement until we have a quota from the various countries with whom we trade. With regard to the agreement with the Argentine, a merchant from that country called at my office the other day and told me that opinion in business circles in the Argentine is that, so far as the textile trade is concerned, the Agreement will do harm rather than good, for it does nothing for the Lancashire cotton trade. He said that the duties have been lowered on some forms of textiles, but they are being 426 lowered on Japanese as well as on ours. He said that the duties on the lighter counts are remaining more or less the same, but the duties on the heavier counts are being greatly lightened.
The result of that, if it be true, would be that the heavier counts would be cheaper, whereas the lighter counts would have the same price, and the heavier in relation to the lighter counts would be better value, and the sale of the heavier counts would rise and those of the lighter would fall. Japan specialises in the heavier counts, and we specialise in the lighter. That man was not interested in producing a single yard of cotton goods, but he was speaking on sentimental grounds for what he believed to be the interest of the whole country. Ho may be wrong. It may not be that the duties have been lowered on the heavier counts. We ought to be able to say to a country from whom we buy £40,000,000 worth of goods and. which buys only 210,000,000 from us, "You want to sell £40,000,000 worth of beef to us and we are anxious to buy, but we cannot buy from you until you buy from us and, therefore, we suggest that you buy £4,000,000 or £5,000,000 worth of textile goods from us at a price at which we can sell." If that is unreasonable, I shall be glad if the President of the Board of Trade will explain why.
Until we have quotas giving us the right to a specific share of the markets at a price at which we can produce without sweating our people; until we have that in all our imperial and foreign markets, there will be no prosperity in Lancashire. The only question is how are we to get what we want. That is perhaps where some of us are most widely apart, but our hearts are in the same direction in this matter. There is the method which the Government are employing, of conciliation and talking in as friendly a way as possible and asking for as much as possible. That is a very good method if it produces results. It may be asked to-night, as negotiations are going on, why we raise this matter. If when the Government came into office they had dealt with this matter at once, it would have been unreasonable for us Members from Lancashire to have done anything that might embarrass them, but we have seen our people suffering and we have waited for two years before raising this question. We feel that we are now 427 entitled to ask for haste and expedition. I hope with all my heart that negotiations with the Japanese representatives may be successful. I believe them to be as patriotic, as honourable and as capable persons as those who are representing us. I hope that the negotiations are successful, and that is the desire of everyone in Lancashire.
We do not want to embark on a trade war with Japan, but the negotiations will not be successful if they do not result in giving us substantial, not paper concessions, concessions which will bring back some of our trade and enable us to retain it on a profitable basis. It is only right that we should let those with whom we are going to deal know that that is our feeling. What is the good of letting them think that certain lines of concession will satisfy us when we know they will not? Japan will be wise if she meets us. The fundamental feelings of Lancashire are unchanged on this matter. Every operative and employer who does not agree on details is agreed on the essence of what he wants. We want the same thing, and you will get what happened 70 or 80 years ago, when Lancashire forced her policy on the country, if she does not get what she is entitled to.
I do not want to say anything unkind of the Government, because I realise how much they have done in many respects. I realise that in some respects the cotton trade has reason to be grateful to them. They have done far more than a Labour Government ever would have done, but the great problem still remains. We feel that it must be made definitely clear to Japan that we should have what is, in effect, a quota. If we can get that by negotiation, well and good. If we cannot, then we call upon the Government to abrogate the Most—Favoured—Nation Clause and take steps to use our powerful bargaining weapons as a counter in the effort to bring about that state of affairs.
This is my last word, and I apologise for having taken a long time, though the question we are discussing is a far more vital one than 9 out of 10 questions which we consider here. I hope I have said nothing discourteous to the Government or anything to embarrass them, because I have tried not to do so. I realise their difficulties and their anxieties, but 428 we ordinary, humble Members, seeing the lack of prosperity among our people, realise that it is up to us, if we can, to impress upon the Government the urgency of the problem. At any rate they know it now, and we await the results of these negotiations, and if they fail we hope that other and drastic action will be taken.
§ 8.16 p.m.
Sir NAIRNE STEWART SANDEMAN
My feeling, having just come back from Lancashire, is that the people there are rather tired of sympathy. We have had expressions of sympathy for the last 10 years, with very little done. I had a good deal of experience of sympathy over India. Tariffs were put on against Lancashire and we were told, "Wait a little. It will be all right. If you make a row at the present moment you will be interfering at a bad time, and it is going to be worse for Lancashire." It is always going to be "worse for Lancashire," but now Lancashire has got to the state where, certainly as regards the heavy counts, things cannot be worse for Lancashire, and sympathy is net going to help very much. I was asked by somebody to be discreet if I spoke to-night, and not to say anything which would make it harder for the Government. I find it very difficult to follow those instructions. I will try as hard as I can, but, as I have said, I have just come back from Lancashire, where we see so many fellows who cannot get a job and mills closing down. The mills are being sold, and the second—hand machinery is going to our competitors. That is one thing that is definitely had for the country. We are putting machinery which is not 10 years old into the hands of foreigners, some going to Japan and some to other countries which are definitely competing with us, and we are not keeping Platt Brothers, and firms like that, in employment. I do riot say that the owner of the machinery has not a perfect right to sell it in the best market, but surely it is not beyond the wit of the Government to devise some way by which that machinery does not go into direct competition with the people of Lancashire.
We are told that trade in Lancashire is getting better. Perhaps it is, but that is in fine cotton spinning, a trade which Japan has not yet got hold of, though as sure 429 as day follows night, Japan will be after the fine cotton counts trade very soon. She has an extraordinarily able lot of workpeople, who will soon be able to make both qualities. I was presented with a pair of scissors by a poor fellow in Lancashire. I could sell them to Wool—worths and make 100 per cent profit; the price of them was only 3d. Japan is going to get our other trades. I admire Japan, because the Japanese have shown all along that they have courage and are not afraid, yet here are we, the biggest Empire in the world, rather afraid to say anything. Perhaps we shall get over that attitude. Perhaps we shall realise that it would be better for the working people in this country that we should not be so afraid and should assert our authority.
I know something of the methods of Japan, and I will tell the House a story. On Saturday night I was in a club, and one of the managers of a big printing concern told me this. He said they had spent a great deal of money on getting out a very fine design, which they sent out to the East. Two or three months later a friend of his in the market showed him a bit of printed cloth. He said, "We make that." The other man said, "Are you sure?" And the manager replied, "Yes, there is even our name on it." Then his friend said, "I will sell it to you at half the price you are asking for it." Is that fair? That is the sort of thing which must be stopped in the case of higher—class stuffs. When the Government are treating with Japan I am sure Japan will respect them all the more if they say, "We are going to have no more of this, we have had enough." If you are going to have a bargain, very often it is better to tell the other people straight out what you mean. I have done a lot of bargaining, and I have always found that it is better to say exactly what you think and feel about a subject, and then the other side know that you are in earnest, and are not afraid of them. I hope that will be the attitude adopted by our people who are treating with the Japanese over here. It is not a case of give and take; we want fair play.
We know that we cannot knock Japanese competition out altogether but we can get a very great deal if we go about it in a brave fashion. I know that Japan is a very good customer of this country, but what about the Empire? If we take the Empire as a whole and consider what 430 Japan buys from the Empire as compared with ourselves, and what Japan sells to the Empire, there is an enormous difference. I know that in the case of this country the balance of trade figures are not so bad, and that if we do something which puts up Japan's back the Government may find other trades coming down on them, but we have to take that risk.
There is only one thing which is rather comforting, so far as the political point of view is concerned, and that is that all the Socialists are Free Traders. I heard one of them say yesterday—he did not say it in so many words, but he inferred it—that he would let all the Japanese shirts come into this country. Shirts at a "bob" a time! That is pretty cheap. We cannot make them in Lancashire at under 6s. We cannot blame the working men for buying them, but we pay trade union rates. The Socialists insist upon trade union rates, but what about getting work? It is work that we want for the people, and I think they are getting pretty sick of their trade unions and their trade union rates. They want to get back to jobs. It is work they want in Lancashire. We hear talk about people being "work shy." I know a great many workpeople and if it were said that that description applied to five per cent. of them it would be overstating it. But they are getting into a condition in which they have lost their skill. Spinning is an extraordnarily skilled trade, and if a person is off work for a year he cannot be expected to take up mule spinning again with all his old dexterity. He is going to be very slow for a bit, because he has lost his skill.
I hope this question will be taken up very strongly by those who are interested in Lancashire. I am perfectly certain that the President of the Board of Trade wants to help us all he can, but we are going to insist upon a good big "can." There are a great many Members who will not allow this subject, which affects the lives of tens of thousands of people in Lancashire, to lapse. Practically everybody in Lancashire is vitally interested in it. People in the South cannot grasp what it means to Lancashire. People who go to Manchester may not grasp it, but let them go out to places like Oldham and Middleton and see what a rotten time the people are having there. They are beginning to wonder what the 431 politicians are doing for them, and I do not wonder that they are getting sick of politicians.
§ 8.10 p.m.
§ Major PROCTER
I rise to intervene in this Debate because throughout the whole of my life I have had first—hand experience of conditions in Lancashire, and, with the exception of the brief period when the last Labour Government were in office, I can say that the condition of the Lancashire cotton industry has never been worse than it is to-day. The last speaker said that people in the South of England have little understanding of the conditions obtaining in some of our cotton towns. The prosperity policy of the National Government, which has greatly assisted the South of England, has not yet reached the North with the full tide of prosperity which we hope eventually to see. We see towns in the North with silent factories and empty smokestacks, and the streets are no longer filled with the clattering clogs of the operatives going to work. There is hopelessness on the faces of our operatives. Their trust in us to do something for them compels every Lancashire Member to be active in this mater.
I am sure that every Lancashire Member is trying to tackle this problem, and we are all looking to the Government for guidance and help in securing the objects at which we are aiming. We have been at work now for two years. Two years is not a long time in the life of a Government, but it is an eternity in the minds of the unemployed. When we go through our towns and speak to our manufacturers, as I have been doing during the last week, we find some of them are hopeless, some of them have optimism, and some of them trust that out of these negotiations there will at length emerge a programme and a policy which will bring back something of that prosperity which was the glory of Lancashire and the wonder of this country.
We have been told to-day that we must be courteous in our speeches. We have in this country five wise men from the East who are negotiating with our own people about the apportioning of Empire markets which they have done nothing to build up. They have made no sacrifices for them whatever. It seems to me that we are afraid of this new 432 Power—a, Power which has put its fingers to its nose to England and to America and walked out of the League of Nations —and therefore we must share the markets of our Empire with her. We called this a menace two years ago, but to-day we have got beyond that; to-day, it is a calamity.
Look at the position to-day. The first hon. Member who spoke on this Motion showed how Japan developed her cotton industry far beyond any expectation. I am not going to weary the House with figures, but, in addition to the figures for Ceylon, we must remember that from 1930, and up to the end of 1931, this country exported to the Colonies 30,700,000 yards, while Japan exported to those same Colonies over 89,000,000 yards. Formerly we exported 0,500,000 yards of cotton goods abroad; to-day we are only exporting 2,000,000 yards, and Japan, for the first time in her history, is exporting a yardage equal to our own. It seems to me that the time has come when this National Government should devote its energies, its power and its wisdom, and the tact of the President of the Board of Trade, at the very outset of the new session, to including the plight of Lancashire in its programme.
No one should stand here and say that the Government should do something without indicating in some way what the Government can do. I suggest that the problem resolves itself around markets. The policy of the British Government, as the centre of the British Empire, should be to preserve and conserve the textile trade of the Empire for Lancashire, which is the manufacturing centre of textiles in this country. What have we done? When Jamaica, one or our oldest Colonies, wished to give a preference to this country and to impose a depreciatedcurrency tax, we said: "Hush, we do not want to hurt Japan. We cannot put into operation what we would like to do, and we are going to negotiate." I am sure that the President of the Board of Trade knows full well that the whole British Empire wants to help this country, and if the persuasiveness of the Government were used with the Dominions, we could say to Australia: "When you buy Japanese cottons you may be buying the shrouds of your own Australian soldiers." The Dominions 433 should realise that this attack on our markets may be the beginning of a larger attack upon the Empire itself. It is the Empire we have to consider, and it is not a tariff that should be put on but a complete embargo throughout the British Empire, until the standard of life of the Japanese workers at least equals that of the British workers.
This competition means that there has been a scramble for the remaining trade. Manunfacturers cut one another's throats, agreements are Made to he broken by unscrupulous manufacturers, operatives want work and take less and less wages. If we are able to denounce the various treaties which entangle us, I am confident that we should have more trade, and should stop this insane internal competition. We should prevent the standard of life of the British operative becoming the rice standard of the Japanese. There is another thing that I suggest the Government might do, without pointing a weapon at Japan. Is it impossible for us to put on a depreciatedcurrency tax in our own Colonial possessions? How does France, for instance, run her colonies and her textiles In the first place, she has 500 different classifications for cotton goods entering her colonial possessions. She puts a tax, ranging- from 20s. to 6d. on the lb. on textiles.
§ Major PROCTER
Into every one. Between France and her colonies there is free trade, but upon those who are not French duties are imposed. Those duties range from 20s. to 6d. per lb. and, in addition, there is a depreciatedcurrency duty of from 11 per cent. in the case of Canada, to 25 per cent. in the case of Japan. This country pays 15 per cent. Why cannot we have a depreciated-currency tax? Once they were enabled to compete with a depreciated yen, British manufacturers right away would have a preference that might range from 40 per cent. to 62.1/2 per cent.
A third thing I suggest. Lancashire to-day is suffering from immoral competition, by reason oft the violation of what may be called common decency. The Japanese are stealing our designs. There was a time when Lancashire had a 434 monopoly in cotton manufacture because of her climate, but artificial humidification of factories has done away with that. We had inherited and unrivalled skill, but the automatic loom has ruled that out. To-day, we are left only with fine designers and the Japanese are stealing their work. I ask the Government if they can make representations to the Indian Government and to the Colonial Governments that these pirated designs should be confiscated at the ports of entry. If we are able to do that, we shall at least have fair competition.
It may be said that we cannot do this, because we are tied with treaties dating from our Free Trade days. There is the most-favoured-nation clause, and there is this treaty and that treaty. It never was contemplated, when these treaties were made, that Japan would arrogate to herself the most-favoured-nation position in the British Empire because of her depreciated currency, but that is the position that she occupies to-day. I ask that, in the new Session, this Government will set up an ad hoc committee composed of men who are in the trade, so that, if the Government do not know what to do, those trained experts will tell them, and will help them. This country cannot afford to let Lancashire fall. I am certain that, in their heart of hearts, every Member of the Government wants to see sorely-stricken Lancashire revive, and prosper as she did in the days of our past.
§ 8.24 p.m.
§ Mr. J. P. MORRIS
I feel deeply indebted to the hon. Member for Gorton (Mr. Bailey) for having raised this question on the Motion for the Adjournment. I feel particularly pleased, for the reason that I hope to be able to extract from the Government a declaration of policy, and in that hope, I beg to inform my right hon. Friend the President of the Board of Trade, during the course of my speech I will put leading questions to him, and I hope that his answers to those questions will show the position as it really is. The question of Japanese competition is occupying and exercising the minds of a large number of people in Lancashire. They have the opinion that the Government have done nothing for the cotton trade, and they also have the opinion that in the South of England 435 people are entirely ignorant of the appalling conditions obtaining in Lancashire. That may be so, but it is idle and useless for anybody to criticise the Government on the manner in which they have dealt with this question unless they are able to inform the Government what is the best line to adopt. I ask myself this question: What is it that the National Government have not done that they could have done? What is it that the National Government have left undone that they ought to have done, arid in regard to which part of the British Empire can effective action be taken here in the House of Commons?
The general impression in Lancashire is that we can in this House enact legislation which will affect the competition in the Dominions and India. That, to my mind, is an idle suggestion, because the Dominions have full fiscal freedom, and, in my opinion, so also has India. India, up to the Ottawa Conference, had full fiscal freedom subject to the qualification of an impracticable veto in the possession of the Secretary of State; and at Ottawa we signed an agreement which gave to India not only the right to impose duties for revenue purposes, but also for the purposes of protection. Therefore, it is impossible for His Majesty's Government to do anything that will affect the question either in the Dominions or in India. Indeed, I would say that any action by His Majesty's Government dictated in the interests of the cotton industry would do no good at all unless it had the co-operation and sympathy of the Governments of the Dominions and of India. To attempt to force the Governments of the Dominions and the Indian Government into action of that kind would destroy the bonds of friendship on which any powerful Empire must rest.
Then let me take the question of the African Colonies. The area covered in Africa is governed by the Congo Basin Treaty and the Anglo—French West African Convention, and I would suggest to His Majesty's Government that, in connection with those two treaties, some effective measures might be brought about to deal with Japanese competition in the African Colonies. I would like my right hon. Friend either to deny or confirm this: Is it a fact that the late Mr. 436 William Graham, in 1930, extended the period of operation of the Congo Basin Treaty until 1935? If that be so, of course nothing can be done until the expiration of that time. But I would suggest that His Majesty's Government might have a conference with the Governments of Belgium and France in order that there might be a reconsideration of these two treaties which govern those areas in Africa, and, if possible, in reconsidering those two treaties, try to find out if we can eliminate Japan from those areas. I think that on that line we can deal successfully with Japan in the African Colonies.
I want now to deal with the question of Ceylon. According to the Ottawa Agreement, Ceylon promised to extend preference to our exports of textiles. That she has failed to do, although I believe Ceylon exports enjoy free entry into this country. The question was raised some few months ago, and my right hon. Friend the Colonial Secretary said that the matter was under notice, and that he had sent a telegram to Ceylon. Is it not possible, in a case of that kind, when Ceylon refuses to implement an agreement signed at Ottawa, for some action to be taken in this House? Would it not be possible, in the next Finance Bill, to introduce some Measure whereby we could impose a tariff on the exports of Ceylon to this country? If Ceylon will not give us a preference, I maintain that that is the only possible way to deal with Ceylon.
With regard to the Anglo-Japanese Treaty, there is a large consensus of opinion in Lancashire that that Treaty ought to be denounced, but we want to bring to bear a certain sense of proportion. Let us not forget that, since the War, we have enjoyed a favourable balance of trade with Japan, amounting to £153,000,000, and far be it from me to suggest the denunciation of that Treaty unless one is prepared to realise all the implications arising there from; but I would like to hear from my right hon. Friend the President of the Board of Trade if what I have outlined has not been the case since this Government came into power. To me and to other Members from Lancashire this question of Japanese competition has been a positive nightmare. We have had it morning, noon and night, and we have had to stand 437 the brunt of hostile criticism and considerable baiting by people who are not aware of the true facts and of the position as it really is. Therefore, I hope that my right hon. Friend will not forget, in his reply, to point out that the Government have done everything that they possibly can to deal effectively with this question of Japanese competition, and that, outside the two cases which I have mentioned, it was impossible to have done anything else; but I hope also that he will not forget that in the African Colonies there is, on the lines I have suggested, a possible way of dealing with this competition other than by negotiation with Japan.
§ 8.32 p.m.
§ Lieut.-Colonel Sir WALTER SMILES
When I raised this question last year, it was impressed upon me by the speaker from the Front Government Bench how much the Government had the interests of Lancashire at heart. I am reminded of a film which I saw last week, in which a young boy was telling a girl how much Ire loved her, and, after he had told her half a dozen times, "I love you, my darling," the girl turned round to him and said, "Well, what are you going to do about it, then?" That is the position in which Lancashire is at the present time. We quite admit that the Government loves Lancashire very dearly, but we want to know now, "What are you going to do about it?" Of course, the question how the cotton trade in Lancashire is getting on is not a front—page feature; you do not see it in the front pages of the London papers; but in my own constituency every week the papers put in a statement that so many mills are running that week. Last week I saw in the "Blackburn Times":69 mills runningThat is out of about 136. I, unfortunately, have to endorse what was said by my hon. Friend the Member for Middleton (Sir N. Stewart Sandeman) when he spoke about mills being sold up. Only this week two mills are up for sale in Blackburn that will never work again, and will never give any more wages to the people of the town. There may be different ways of getting these Lancashire mills back to work again. There may be something in what Lord Beaver—brook and the "Daily Express" say, namely, that they want to put a ring 438 round our Colonial Empire and give a preference to the raw material coming here from our Colonies, in return for a preference on our manufacured goods. I do not think the solution is as easy as all that. We have to get foreign nations and the Colonies also to take goods from us, because I do not think our Colonies alone will absorb the full production of the Lancashire mills. Fifty years ago Japan was not a competitor of ours. She used to produce artistic goods which took years to complete and sold for very high prices, but the bread and butter things, like the manufacture of cotton, were entirely confined to Europe.
It looks as if the position is going to change and in the future England will have to produce these artistic goods, and the cheaper things of every day use will be produced by the people who work under cheaper conditions abroad. Of course, in Lancashire the people realise that Free Trade has gone for ever. Forty or fity years ago they used to say, "Give us cheap food and, with our efficiency and our lead in machinery and engineering, we will produce goods cheaply enough to capture the world markets." They realise that it is a different matter to-day. Like every one else, they realise Japanese efficiency and we look to the Government for help. The employers here realise that wages cannot be cut down, hours cannot be increased, coal cannot be got any cheaper, you cannot buy raw cotton cheaper, and the only hope of these millowners and their employés is for Government assistance.
§ 8.37 p.m.
§ Mr. PIKE
I have no desire to distract the right hon. Gentleman's attention from the very important requirements which have been submitted from the representatives of Lancashire and the cotton trade in general, but I would beg him to take notice that cotton is not the only industry that is suffering very severely from the effects of Japanese competition. I represent a division of Sheffield which is very severely affected by competition in light tools, cutlery, scissors, razors, razor blades, needles and pins, safey pins, and novelties. I have no desire to encroach on the division of my hon. Friend the Member for Penistone (Mr. Glossop), but a very severe attack is being made there on the old 439 established industry of umbrellas and umbrella frames. Umbrellas which can be sold at from 5s. to 7s. 6d. can be bought in Sheffield for ls. 6d. Against that no British firm can compete and, irrespective of what the hon. Member for Limehouse (Mr. Attlee) interjected, that the condition of the cotton trade was largely due to the wages paid——
§ Mr. ATTLEE
The hon. Member is entirely mistaken. The hon. Member who was speaking asked how you could get markets for your goods, and my remark was that you could not get markets unless the workers had adequate wages.
§ Mr. PIKE
I am sorry if I misinterpreted the hon. Gentleman, but the inference appeared to me to be that the cotton manufacturers were underpaying the workers. Hence my interjection that they were paying trade union rates. The interest of the Opposition in the question of trade and the wages of Lancashire workers undercut by Japanese workers is shown only too clearly by the absence of at least 52 of their members during this discussion.
§ Mr. BAILEY
The absence of Lancashire Members is due to no fault of their own. They are engaged more usefully elsewhere.
§ Mr. PIKE
I said Labour Members, not Lancashire Members. I want to ask the opinion of the President of the Board of Trade on importations, originally from Japan, which are coming from other countries—what may be regarded, for instance, as the re—export trade of Czechoslovakia. These goods are coming into this country via other countries, and they give Japan the excuse that she is not directly exporting them into this country. Any overtures that we might make to her may be considerably weakened if she can put in that plea with any great force. I ask the right hon. Gentleman to make sure, before these 440 agreements are actually reached, that he will not be defeated in his plea by the excuse that Japan cannot be responsible for the re-exports of some other nation with which she is trading.
It has been suggested by an hon. and gallant Gentleman opposite that Lancashire was never in a worse position than she is at present. But, as the result of Government action, I believe that Lancashire's position to-day is slightly better than it has been, and, if this anomaly can only be eliminated, she will be able to give a greater measure of industrial security to her people than she has been able to give for a considerable period. The message that the House, and especially the Government, have received from Skipton is surely one of faith and confidence in them to carry their full policy into effect, and, if the right hon. Gentleman will reflect upon the message of the Prime Minister to the people at the last election, I am convinced that he will see the necessity of immediately removing the barriers that exist for equitable treatment as between the workers of this country and the workers of Japan, because Sheffield and the industrial area are at the moment, if not wholly, certainly sectionally disturbed at the rate at which Japanese goods are coming in and the price at which they are selling on the market. I hope he will at least assure the House that the Government are doing everything they possibly can to eliminate the menace to our general existence.
§ 8.44 p.m.
§ The PRESIDENT of the BOARD of TRADE (Mr. Runciman)
The Debate that has arisen on die Adjournment tonight naturally follows on the anxiety felt throughout Lancashire during recent years, and particularly during the last two years, the result largely of Japanese competition. The hon. Member who opened the discussion, and who was very anxious to avoid anything that might embitter feelings either in this country or in Japan, took, I think, too gloomy a view of the course of our trade during the last two years. It is true that the foreign trade of Lancashire has suffered severely. No one could be more conscious of that than we who are responsible for Government policy, and who have certainly given evidence of our desire in a practical way to deal with the 441 grievances of our traders wherever they arise. But do not let us imagine that Lancashire is completely defeated. I doubt very much whether any good service is done by taking such a gloomy view of Lancashire prospects as has been taken in some quarters here to-night. There is a great deal of latent ability in Lancashire upon which she can call. There are men of great influence in the Lancashire trade who are quite ready to give of their ability and time in dealing with Lancashire problems. They have been giving us assistance during the last two years in almost unmeasured quantity.
I should like to point out a few cheering facts since so many of our hon. friends have taken such a gloomy view of Lancashire. Let me point out one or two things which show clearly that the volume of trade has indeed grown during the last two years. Perhaps the best way of measuring it is to survey the importations of raw cotton and the deliveries to spinners. These returns provide a fair index of the demand for the raw material. In the season 1931–32 between August and October the imports of raw cotton amounted to 279,000 bales. In the season 1932–33 these imports had risen to 458,000 bales, and for the season of 1933–34 there has been a further increase to 571,000 bales. If the deliveries to spinners is to be a gauge let us see how that matter stands. In the season 1931–32 the deliveries to spinners between August and October came to 510,000 bales, and in the following season it had fallen, it is true, to 455,000 bales, but in the season 1933–34 all the leeway of the last two years has been met by the deliveries to spinners amounting to 547,000 bales. Simultaneously with that, I agree, there has been a drop in our foreign trade in many directions, yet it is a fact of which we can take note—and it certainly gives point to the Debate in which we are engaged to-night—that the only cotton exporting countries of importance which can show a general upward tendency in cotton exports since 1931 are the United Kingdom and Japan. Do not let us overlook these facts when we are endeavouring to assess the state of Lancashire at the present time.
I do not for a moment wish to discuss the facts with which we are all familiar. You can go to any of the Lancashire 442 towns and look below the surface and see what is happening there. There are many quarters where it is clear that recovery, if it comes at all, is likely to be slow. There are some of the Lancashire towns with a huge proportion of unemployment, a state of things to which they were not used, 10, 20 or 30 years ago. These people are our chief concern. We want to see them back again in regular work. It is our desire to do everything we can within the four corners of Government policy and Government powers to provide employment for these people. The only way in which there can be a very rapid and considerable recovery in Lancashire trade is through an expansion of her export trade. I presume that this was what was uppermost in the mind of my hon. Friends who have taken part in the Debate to-night. They are very conscious, as we all are, of the depression which hangs over many of the Lancashire towns. Of course, they cannot see above the surface all that has been done by the Government in the last two years, and they are a little inclined to infer that nothing at all has been done.
When this subject was last debated in this House my hon. and gallant Friend the Secretary of the Overseas Trade Department made a speech in which he pointed out what had been done in the Trade Agreements in favour of United Kingdom exports of cotton. I think that some of my hon. Friends must have forgotten what he said on that occasion. We have heard nothing of the Trade Agreements to-night, except the reference made by my hon. Friend who opened the discussion to the Argentine Agreement. I would like to repeat to the House what actually has been done in those Trade Agreements in order to help the cotton industry. In the case of cotton piece goods, which are of special importance to the trade of the United Kingdom with Argentina, the Customs Duties on bleached and printed tissues weighing over 80 up to 160 grammes per square metre have been reduced by 31 per cent., and the duty on dyed tissues, over 80 up to 130 grammes, by 22 per cent. That is proceeding along the right lines. It is reducing the trade barriers which affect us here and which have been erected in Argentina, and now under our 443 new Agreement there are these reductions.
What is the criticism offered of these reductions? It is that they apply, not only to goads which come from this country, but to other cotton imports into the Argentine. That is perfectly true, but if we get anything like fair play in Argentina—and this is proceeding in the direction of fair play—we are quite prepared to hold our own. I am assured by those who have kept in the closest touch throughout these negotiations that reductions such as these are of material benefit.
§ Mr. RUNCIMAN
The Agreement has only become operative, as my hon. Friend knows, during the last day or two, so that I am afraid that we cannot yet show any improvement in the returns as a result of it, but if my hon. Friend will put down a question to me, on the lines of that which he put to me a moment or two ago, six months hence, I will tell him then; and I shall be very much disappointed if they do not show that there has been a material increase of United Kingdom goods into Argentina in the course of those six months. There have also been reductions of 15½ per cent. for certain other cotton piece goods. The Customs Duty on cotton yarn counts over No. 40 has been reduced by 25 per cent., and still more substantial reductions have been secured for cotton sewing, embroidery and other threads. Other cotton manufactures will benefit by reduced Customs Duties, and they include quilted coverlets, kerchiefs, terry towels and machine belting and so on. The present Customs Duties have been conventionalised in respect of various cotton tissues and other manufactures, so that we shall not be subject to a rise in these duties during the period of the Agreement.
If I turn from the Argentine to Denmark, I can tell a tale which is very much of the same kind, nothing sensational but all working in the right direction, and the accumulative effect is bound sooner or later to place the Lancashire trade in a stronger position. The duty on printed cotton piece goods imported into Denmark from the United Kingdom was 444 reduced by about 11 per cent., and a similar reduction was obtained in the duty on lighter weight unbleached piece goods. A reduction of nearly 40 per cent. was obtained on certain piece goods of mixed cotton and artificial silk. The existing import duties on heavier unbleached piece goods and on bleached, dyed and coloured woven piece goods mere stabilised. In Sweden pretty much the same changes have been made, all to our advantage. In Norway, and finally in the Agreement with Finland, which was signed during the Recess, there have been similar reductions in the duties imposed upon cotton goods from this country.
I hope that my hon. Friends in making an examination of the conditions of Lancashire will not leave these facts out of account. They all work in the right direction. They do not, however, touch in any very material degree the points of discussion which are now engaging the attention of the representatives of the Lancashire and the Japanese cotton industries. It was at my initiation, early this year, that Lancashire selected some of her most prominent and public-spirited men from the cotton trade to go out to India to confer there with the Indian industrialists and the Japanese representatives of the cotton industry, who went to India for the purpose of the discussions. It is our view—a view which I am glad to think is supported in most quarters—that in the competition between the United Kingdom and Japan it is very much better that we should regulate our relationships by agreement than that we should involve ourselves in anything in the nature of tariff wars. Tariff wars are a very costly way of solving trade problems, and we want, if we can, to avoid them.
By agreement between the Japanese interests and our own we may be able to obtain a better allocation of business for ourselves, assuring us of some degree of security in the future. I hope that the progress made in the discussions which have taken place in India will be continued over here in the conference which, I understand, is to resume within the next few days in London. The representatives of the Japanese cotton industry have recently been in Manchester and have already expressed their views with frankness and candour to our friends in Lancashire. Knowing Lancashire men as I have done for the 445 whole of my life I have no doubt that they are still capable of expressing their views with equal candour and fairness. I have not the least doubt that the representatives will be able to understand each other completely as a result of the conference; but do not let us do anything at the present time which is likely to impede negotiations and bring friction where we desire to see nothing but harmoney and co—operation.
I do not think we need detain the House very long to-night in a discussion of this question, because other opportunities will arise, and I am sure that my hon. Friends will not expect a declaration of first class policy on a Motion for the Adjourment, taken after dinner. We shall have to choose some later and better occasion for that. I hope that when next we have an opportunity of discussing this matter in the House we shall be able to do it in the light of an understanding reached by the Japanese and ourselves. One thing is quite certain and that is that we do not intend to leave the situation exactly where we found it. It is just as well that all the world should know that this Government take a live interest in the conditions under which our industries are conducted here at home as well as in the sale of our products in commercial channels abroad. I cannot say anything at the present time as to the means we may have to adopt in order to secure what we think to he necessary for our well—being, but I will say at once that if we can arrive at a favourable result by agreement in any quarter I would rather do it by agreement than any other means.
I daresay that some of my hon. Friends may think that it is not very wise on our part to ask them to exercise their patience at the present time, but I would remind them that these are not very simple problems. It is far easier to abrogate a most-favoured-nation clause than it is to build up a prosperous business. My hon. Friend the Member for Middleton and Prestwich (Sir N. Stewart Sandeman) said that Lancashire was sick of politicians.
§ Mr. RUNCIMAN
I have no doubt that if they thought that the whole of Lancashire's trade was to depend upon poli- 446 ticians that they would have every reason to despair. I believe that Lancashire is quite capable of producing from her own people sufficient ability to enable her to survive the stresses and strains under which she is labouring. All that the Government can do is to give them a fair chance, and it is with the object of giving them a fair chance of extending their markets that the whole of our policy has been directed during the last two years, and will be directed in the future.
§ Mr. RUNCIMAN
I do not think that I can commit myself to any statement on that subject now as there are a good many interests which are concerned in that subject. The hon. Member is no doubt well aware of the suggestions which have been made in Lancashire from time to time for rationalising the industry and getting rid of superfluous spindles. I am not able at the present time to give a full answer in this Debate to the question my hon. Friend put to me.
§ Mr. RUNCIMAN
I should be very glad to give my hon. Friend as much information as we have at our command. If he will put down a question—an un—starred question will be best, because the answer will be in tabular form—we will give him such information as we have at our disposal.
§ Mr. THORP
I do not rise to take up the time of the House at any length, but in a concluding observation the right hon. Gentleman suggested that there were matters in connection with the cotton trade that he did not think ought to be raised on the Motion for the Adjournment, as he considered that they were too complicated and required too careful a study for them adequately to be dealt with upon 'an occasion like this. I would ask the Government if the Lancashire Members can be assured that in the near future they will be afforded an adequate opportunity to enable them to go into this question when the time of the House can be spared to discuss it, because the 447 opinion prevails in Lancashire, perhaps rightly, perhaps wrongly, but none the less it undoubtedly prevails, that the cotton trade is not getting the time and attention of this House or of the Government that in view of its position in the world it really deserves.
§ Major PROCTER
In the trade agreement the right hon. Gentleman has made, although he has secured a reduction of 448 15 per cent. in the tariff, he has not met the case of the Japanese competitor who gets 621 per cent. advantage through the depreciation of the yen.
§ Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)
The hon. and gallant Member has exhausted his right to speak.
§ Adjourned accordingly at Five Minutes after Nine o'Clock.