IMPORT DUTIES ACT, 1932.

HC Deb 15 February 1934 vol 285 cc2117-207

3.50 p.m.

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton)

I beg to move, That the Additional Import Duties (No. 1) Order, 1934, dated the eleventh day of January, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the twenty-ninth day of January, nineteen hundred and thirty-four, be approved. The Import Order for which I ask the approval of the House deals with oats and oat products. The House will recollect that last November, the import duty was raised on oats and oat products from the 10 per cent. at which it then stood to 20 per cent. That duty had, in fact, been on since early in September, and, as the result of the experience of the duty which has been gained, the Import Duties Advisory Committee have recommended an increase to the figures which are now before the House and which have been in existence since the beginning of last month. I will not trouble the House in detail with the considerations which last summer induced the Import Duties Advisory Committee to recommend an increase of the duty from 10 per cent. to 20 per cent., but I would like to refer to what was then said in the Committee's Report. The Committee referred to the low price at which imported oats had been obtainable, to the decline in acreage and the production of oats in the United Kingdom, and to the importance of this crop, especially to the farmers of Scotland; and they said that in consequence they had had for some time under consideration a raising of the duty, but that they had felt that such a step depended upon an arrangement being come to with Canada.

It was not until the end of August that the arrangement was come to with Canada. The Canadian Government undertook to exercise its best influence to prevent the import of oats from Canada to this country exceeding for the 12 months beginning 1st September last an average of the last two years. Before I go further I may say that since September, when the 20 per cent. duty was put on, the Canadians have more than implemented that arrangement. The figures of imports from that Dominion for the five months, September to January, have been reduced from over 1,000,000 cwts. in 1932 to 321,000 cwts. in 1933. Therefore, the failure of the 20 per cent. duty to effect the result which the Import Duties Advisory Committee desired is not in the least due to any failure on the part of Canada to implement the arrangements upon which that 20 per cent. duty proceeded.

In the months September to January in which the import duty on oats was 20 per cent., the price of oats and oat products fell, and, in spite of the greatly reduced importation from Canada, the importation from all countries considerably increased. Despite the 20 per cent. duty, therefore, we have had for the last five months a steadily degenerating position. Despite the great fall in the Canadian imports, the imports of all countries have risen from 1,713,000 cwts. during September to December, 1932, to 1,899,000 cwts. during September to December, 1933. That is to say, the total imports have increased in the relevant four months by 186,000 cwts. There has also been a fall in the prices which has been steadily going on since September last year, until in January the price of Scotch, oats had reached the very low figure of 14s. a quarter. At the end of August, just before the 20 per cent. was imposed, it was 15s. It was clear to the Import Duties Advisory Committee that the rise of 10 per cent. had not effected their purpose. So, indeed, they reported. They said: Oats as a marketable crop are of primary importance to the agricultural interests of this country, particularly to the farmers of Scotland, and it is desirable in our opinion to take further steps to bring about a reduction of the very low-priced foreign imports. We therefore recommend the substitution for the existing ad valorem duty of a specific rate of 3s. per cwt. … The rates of duty on oats and oat products which we now recommend are high, but in our opinion they are necessary in view of present conditions. I think the House, having last November approved of these increases of duty to 20 per cent. with the specific object of assisting the home oat producer, will not be slow to continue that policy in a higher range of duty when it is so obvious that the lower range of duty failed to effect its purpose. May I add this with regard to the effect of the two duties—the 20 per cent. and the new 3s. per cwt. duty? The latter, which the House is now asked to approve, is being effective in assisting the price of oats. Let me take the last figures. The average price of Scotch oats in the five principal markets on 10th January, just before the duty was imposed, was 14s. a quarter. At the present time the average is 17s. 3d. A corresponding rise is noticeable in the price of all equivalent oats, both English and imported. Such a rise is notable in the case of Argentine and other foreign oats. That matter is of importance, because it shows that those importers who had stocks on hand when the duty was imposed are getting the benefit of the increased price, and that may well be a consideration that the House should keep in view if it is suggested that the present duty has been imposed too rapidly or has brought with it a disadvantage to importing interests. If they have unexpectedly to pay a duty on oats at sea, equally unexpectedly oats in their warehouses were getting a price of some 3s. 4d. more than they expected four weeks ago.

The general importance of oats as a cereal crop and as a crop the profitableness of which is necessary in order to maintain a wise balance in British agriculture is by no means confined to the agriculture of Scotland. It is undoubtedly, however, of special importance to the agriculture of Scotland, because of the total oats produced in England only some 25 per cent. come into commerce, whereas of the total oats produced in Scotland it is calculated that some 40 per cent. come into commerce. Further than that, in both countries, but particularly in Scotland, the class of oats which comes into commerce is grown in comparatively restricted districts on the Eastern coasts, and particularly in the North-East of Scotland. The figure which oats have been fetching in the market for some time past has been such as to bring almost to a state of collapse the general farming community of that district. I think the House will agree that up to date, as shown by the figures I have given, the increased duty of which I now ask the House to approve has done much to avoid a collapse which was becoming extremely imminent.

4.1 p.m.

Mr. T. WILLIAMS

While I shall oppose the Order which the hon. Gentleman has so carefully introduced, I think I ought to say at the commencement, that although we attach some importance to this Order, we feel that the Livestock Order which may follow later in the sitting, or on some subsequent day, is of primary importance, and might have held the field earlier in the day. For that reason, perhaps, our observations on this Order will be very few, and we shall reserve our general discussion for the Livestock Order as being more important. The Order before us is no surprise to me, and ought to be no surprise to any hon. Member who heard the speech of the Secretary of State for Scotland in this House on 15th November. It is the result of the very special political pressure brought by Scottish Members, and it was no surprise to me when this Order was made to apply, nor after proposals for hops, wheat, fruit, vegetables, bacon, beef, mutton and lamb can we complain that there is a Motion for oats to-day. I think it was the President of the Board of Trade who, on one occasion, referring to the fiscal question, said that once Protection starts, everybody will want their snouts in the pail, and I do not see why, as all other agricultural producers have had their snouts in the pail, the Scottish producer of oats, bearing in mind, of course, the effect on the general consumer, should not also have his snout in the pail. The justification for that, according to the hon. Gentleman, seems to be exclusively based on the question of price. We all recognise that price is of vital importance to the producer, but, apparently, no consideration appears to have been given to the consumers, or to importers of oats either in 1913 or any subsequent year down to the present time. The hon. Gentleman told us that some arrangement had been entered into with Canada, and that Canada religiously fulfilled that undertaking, but the hon. Gentleman did not tell us that last year Canadian oats increased in volume by 50 per cent. over and above the previous year. According to the Agricultural Statistics, 1932, page 108, the last two lines of the second paragraph, Canada supplied about 2,500,000 cwts., or nearly double the amount sent in the previous year.

Duchess of ATHOLL

If the hon. Member will look at the Board of Trade Returns for 1933, he will see that Canadian oats fell by fully one-half compared with 1932.

Mr. WILLIAMS

But the Noble Lady will observe that that makes no difference to my statement that in 1932 the imports were double those for 1931. The agreement, which the hon. Gentleman tells us they have entered into, that they shall not exceed the imports for the previous two years, includes 1932, which was an abnormal import year for Canada. I want, however, to come to the actual figures of imports over a period of time. The hon. Gentleman submits that it is the flooding of the British market by imports—and cheap imports at that—which has brought about this drop in prices. In 1913, we imported over 18,000,000 cwts. of oats, and for the six years ending 1932 we imported approximately an average of 7,750,000 cwts. a year. Taking the last three years the figures have been, 8,750,000 cwts. in 1931; 6,470,000 cwts. in 1932; and 5,613,000 cwts. in 1933. So that there is no increase in imports either from the Dominions or foreign countries, but rather has the decline been continuous from 1913 to 1932. If the Advisory Committee can find no better argument than the mere question of importation for this Order, which increases the duty to an abnormal extent, then, I think, they have a very poor case.

Sir BASIL PETO

Has the hon. Gentleman taken cognisance of the fact that in 1913 road transport was horse-drawn, and in 1933 petrol-drawn?

Mr. WILLIAMS

And the hon. Gentleman will observe that the decline in imports has been from 18,000,000 cwts. to 5,000,000 cwts. I do not, however, wish to dwell on the question of imports, whether they be large or small, but I do want to say that we have at the moment a Poultry Reorganisation Commission sitting, the ostensible purpose of which is to create an organisation whereby we shall increase very materially the production of poultry and eggs in this country, thereby minimising the imports of those commodities. It is fair to say that the Commission have met with all sorts of hostility to this proposal of the Government, and it is surely well known to the Under-Secretary of State for Scotland and the Minister of Agriculture that we have more small poultry-raisers to-day in this country than at any previous time. Oats form a large part of the foodstuff used by poultry-keepers, and many of these small producers of poultry have put in, not only their last penny-piece on their small poultry farms, but the men and women, sons and daughters are all doing their level best to extract a small livelihood from that source. It is the general desire in all parts of the House that we should encourage the idea of people becoming self-supporting, but this proposal of the Government, which is ostensibly designed to help the producer of oats in Scotland, is going, ultimately, to affect many small people producing poultry and eggs in this country, and to that extent, while helping one section of the community, is imposing very heavy burdens on another section.

Then, I think it is fair to say that stockbreeders will also feel this duty. The Advisory Committee tell us that the consumers of oats are supporters of the scheme. I think that evidence will be submitted during the afternoon which will show that, not only are a very large number of consumers not supporters of the proposal, but that they are hostile, and are protesting as violently as they can against this gross imposition on the poultry producers of this country. Having provided direct or indirect financial assistance to this, that and the other section of the agricultural community, one could not, however, expect Scotland to be kept out. Agriculturists and farmers are being paid their political debts. It is a form of bribery and corruption which is not going to be good for politics in this country, with all its implications, given at the expense of the urban population. While the urban populations at the moment are more or less dormant, I am convinced that they will begin to appreciate, sooner or later, the deadly effect of these burdens which are being imposed upon them. Once they do, then the political and reorganisation revolution in this country, referred to by the Minister of Agriculture, will take place, and that will be the end of the National Government.

4.12 p.m.

Mr. GRAHAM WHITE

I do not wish this afternoon to enter into any controversy, or to challenge the policy by and large of the imposition of this Order. I do not wish to raise the question whether it is wise or foolish, or whether it is, in fact, likely to achieve the purpose for which it has been imposed. But I crave the indulgence of the House to draw their attention, with the confident belief that I shall have their sympathy, to the case of a number of citizens who, as a result of this Order, are suffering very grievous difficulty, and labouring under a sense of burning injustice at treatment which is not in accordance with the traditions of this country or Empire. These people do not challenge the policy of the Government. They come to this House as Englishmen having a grievance to redress, as they have come for centuries past asking Parliament to give consideration to their difficulties, and they believe that the House will hear them sympathetically, and will agree to their grievances being redressed.

I am glad to see that we have the advantage this afternoon of the presence of the President of the Board of Trade. I think that his counsel in this serious matter will be very useful to the House. As I understand that there is a desire to proceed with business as speedily as possible, so that discussion on other important Orders may take place, I will confine my remarks to the smallest possible space consistent with the situation of these unfortunate people being placed before Members for their consideration. The raising of the duties from 20 per cent. ad valorem to specific duties, which are in effect, equivalent to increases of 90, and even 200 per cent., places the importers and traders in a position quite intolerable, from which there is no means by which they can extricate themselves. The result, so far as they are concerned is, that they are being deprived of their livelihood.

That is not a thing which would meet with the approval of any of us. The Under-Secretary of State for Scotland made a passing reference to the case of these individuals. For a moment his observations filled me with a feeling bordering on dismay. He seemed to treat the situation with something bordering on levity, but I came to the conclusion afterwards that I was glad to have heard what he had said, because it convinced me at once that he was not fully acquainted with the plight and difficulties of these people. These traders and importers of oats have contracted overseas for their supplies from various sources. They have made their sub-contracts with traders in this country, and with con- sumer farmers. There is no means by which they can get out of those contracts. They therefore find themselves faced with the most appalling losses. The oats are piling up on the quays, and there is no process of law by which they can obtain redress. I can more easily convey an idea of the position to Members of the House if I quote one or two communications which deal with the actual position of individual firms. Here is a letter from a firm of importers, who say: We have approximately 900 tons of German oat-goods on contract for shipment by the end of March. This quantity is sold to various country corn merchants. We do not see how it is at all possible to pass any of the extra imposed duty on to any of our buyers, as if we enforced this we believe that at least 75 per cent. would be unable to meet their liabilities. Those are farmers who are not financially strong at the present time: We ourselves will have to pay approximately £5,500 in additional duties, and if none of this were recoverable we would have to close down our business which has been in existence for well nigh a century. I do not propose to mention any other cases, although their number is large. They exist in various parts of the country, and I have no doubt that other hon. Members will be able to deal with cases of the same kind which are very much more serious than this one. There are numerous cases in which the actual irrecoverable losses range from £1,000 to £6,000, or even higher figures, and in some cases these people are faced with the bankruptcy court.

Of course, so far as the duty on oats is concerned the matter is not so serious. There the duty is 3s. a cwt. But when it comes to oat products, which include oatmeal, an important product which, on the authority of Dr. Johnson and others I understand is consumed by Scotsmen and other human beings, we find there is included also a vast range of treated oats which are used chiefly for animal feeding. It is in the case of oat products that the most serious losses have been incurred. These traders are simply aghast and bewildered. They cannot believe that treatment of this kind is possible in this country. They believe that if their case is fully known in this House the House will treat them with sympathy and say that some means must be found of meeting them. They do not, ask for the policy to be reversed. They ask to be let out and not treated in this grievous way. Of course it is not only the people in this particular trade who are bewildered and aghast. The trade, generally, is being brought to a standstill, and people who wished to buy goods for forward shipment are refusing to do so. Other traders in other commodities are standing still and wondering whether it will be their turn next. Under this system some method should be found by which the duty will operate justly in the interest of the whole community. The Under-Secretary for Scotland referred to the terms of the letter of the Advisory Committee to the Treasury. Those who are familiar with the text of the letter will remember the statement: It is to be observed that the application for a duty at that rate"— That is the rate now proposed in the Order— is supported by the agricultural interests concerned as consumers. That was an important statement, and I accepted it at its face value. But I am led to question very much where the Advisory Committee got their information. I find from all quarters in the farming community that there is great discontent at this particular proposal. Last night to my surprise I had put into my hand a letter signed by 1,800 farmers in close proximity to my constituency—a letter which I am asked to forward to the right hon. Gentleman the President of the Board of Trade. Let me quote from the letter: We, the undersigned, beg to say that as representing consuming farmers of the above products, considerable hardships will accrue to the already serious position of our section of the agricultural industry. As consuming farmers we represent the largest percentage of agricultural interests. While we do not desire to question the policy of the Government, we ask for an amendment of the duties imposed by the above Order. There has been an assumption that the traders affected can make some recovery under the provisions of the Finance Act of 1901. But the assumption underlying that provision was that if a duty was imposed the price of the products after the imposition of the duty would be the price before plus the duty. In this case they have no such recourse whatever. Here are goods worth £4 10s. a ton and the duty is £7 10s. As I have explained, the only recourse is to dump the goods on the farmers up and down the country. It would mean that some thousands of farmers would have goods delivered to them. Then it would be necessary to sue for the proceeds. The argument that recovery can be made under the Act of 1901 is not advanced by anyone who is conversant with the circumstances of the case.

There is really no precedent for the circumstances which have led up to the present position. It is suggested that there was a precedent in the imposition of a duty of 200 per cent. in the case of the importation of Japanese rubber goods such as children's shoes. There is no precedent whatever in that. In that case the price difficulty did not exist, and furthermore there was not a whole string of alternative products to which the rubber trade could turn in substitution, nor was there any alternative import from other quarters.

I pass now to another aspect of the matter to which great importance is attached, and that is that these traders and others dependent on them feel additional grievance because they were not consulted prior to the imposition of the duty. In April, 1932, the Import Duties Advisory Committee issued a notice to the effect that before considering applications for duties they would issue notices to those concerned and give an opportunity for making representations. In this case no such notice was issued. It may be said that this matter was dealt with in the House and that there traders might have been aware of the facts. We in this country who conduct business have not yet learned that it is part of our duty to guess at what Governments may propose to do in legislation overnight. Even if it were an argument, we know that Parliamentary proceedings are not reported in the Press.

As a matter of fact no responsible member of any corn exchange was consulted with regard to this matter. It is said that the Corn Trades Association of this country accepted the imposition of the duty of 10 per cent. originally and the subsequent duty of 20 per cent., and that that fact took away the right to further consultation or further protest against increased duties in the future. It would be a mere childish prevarication on the part of anyone to suggest that because a series of interested persons did not object to a duty of 10 per cent. or even a duty of 20 per cent., they would not wish to have an opportunity of making most important representations when it came to a question of a duty which would take away their very livelihood. The result of it all is that these unfortunate individuals who are losing their occupation and their money, are left with a burning sense of grievance in this regard as well. They do not ask that the policy of the Government should be reversed, but they do ask for sympathy and redress. There are plenty of precedents in the history of the country, and indeed of the Empire, whereby redress can and ought to be given to them.

I refer now to the question put to the Under-Secretary for Scotland regarding stocks. There are stocks in this country. I do not know the actual amount. These people do not say that they want to make profit on their stocks. They want to be allowed to complete these transactions and to be able to save what they have made in their businesses in the past. They say, "Let us have some modification and after you have taken into account any profit we may have on any stocks, we do not wish you to take that into account, but help us with regard to the balance if you can." I feel confident that Members in all parts of the House will feel that that is not an unreasonable request for the House to consider. There have been circumstances in which similar difficulty has arisen. I would draw attention to the position which arose as long ago as 1903 when the corn duties were repealed. On that occasion the Treasury issued this notice: Representations having been made to the Chancellor of the Exchequer that the remission of duty on 1st July, unaccompanied by special measure of relief, would cause hardship to those who hold duty-paid stocks, and would to some extent interfere with the course of business, His Majesty's Government now propose to refund the full duty paid on stocks held on the evening of 30th June next by importers, millers and other wholesale dealers in grain and meal. This applies to all grain, meal, etc., duties under Schedule I of the Finance Act, 1902, including flour made from imported grain. But no repayment will be made except in cases in which the stock represents duty of not less than £25; and the Board of Customs must be satisfied of the accuracy of the claim and of the good faith of the claimants. There would be no difficulty in this case in satisfying the Treasury, or the Board of Trade, or whoever the responsible body may be, of the accuracy of the claims and the bona fides of the claimants, and we see no reason why these unfortunate individuals should not receive similar treatment on this occasion. Coming to a more recent experience, we have further evidence of the intention of this country to secure fair dealing in these matters, in connection with the Russian embargo. It will be remembered that when an embargo was placed on the importation of goods from Russia, certain exceptions were made in relation to existing contracts where, otherwise, loss and inconvenience would have been caused. It was clearly the intention of the House of Commons that traders should not be hurt in this way.

Not long ago, Trinidad placed a prohibitive duty upon the importation of certain edible oils from this country into that colony. This would have imposed great hardship upon those who had stocks in bond in Trinidad, and upon those who had goods at sea as well as upon those who had made contracts. But in that case the Government took action such as everybody in this House, I think, would expect them to take in the interests of the people who would have suffered in the way I have indicated under that duty. They made representations to the Government of Trinidad with the result that an allowance was made for those goods which were in bond, for the fulfilment of contracts regarding goods which were then at sea, and goods which were under contract to be shipped within a certain limited period. That seems to provide a precedent for action in this case, and there is a similar instance in connection with the Colony of British Guiana. I think those instances clearly indicate what Parliament's sense of justice requires to be done in cases of this kind.

I should also refer to the fact that the Chairman of the Import Duties Advisory Committee in his report to the Treasury, seemed uncertain as to what all the effects of the duty were going to be, and he added in his report the statement that the Committee would watch the situation very carefully in order to see whether any modification was required. I do not know whether, in the circumstances I have described, there is here any possibility of making some modification in favour of those who are suffering. I cannot believe that it is the policy of the Government and certainly I do not think it is the policy of the House of Commons that traders should not have any rights at all against the State in matters of this kind. If that is the view taken by the Government, it is something entirely new to the political system of this country. The assumption that the citizen has no rights against the State in these matters is the basis of a political system which is being built up in some foreign countries, such as Germany, but we do not think it is a policy which this House would wish to see introduced into this country.

All over the country there is considerable feeling on this matter, and that is my excuse for having spoken at some length upon it. I have tried to show that the action for which we ask is in line with the traditions of Parliament, and the traditions of British justice. Those for whom I speak do not ask Parliament or the Government to reverse their policy. But they feel that they have been subjected to harsh treatment and injustice and they look to Members of Parliament, in all quarters of the House, to see that they receive some sympathy and redress.

4.37 p.m.

Mr. BARCLAY-HARVEY

I speak as the representative of one of the areas to which the Under-Secretary for Scotland has referred as being particularly interested in this question, namely, the North-East of Scotland. I do not wish to follow the hon. Member for East Birkenhead (Mr. White) in all his arguments, but, as he has put forward a strong plea on behalf of people who are, he says, being deprived of their livelihood, may I say that I am in sympathy with such people, because I represent a class of people who have been suffering in that way for a considerable time.

Mr. WHITE

In what I have said, I do not wish to be taken as putting forward a claim for one section of the community as against another section. Those for whom I speak fully recognise the disabilities under which the agricultural population has suffered, and for that reason they do not wish the policy to be changed, but they do ask that consideration should be given to their own case.

Mr. BARCLAY-HARVEY

As I have said, I do not wish to follow the hon. Member's argument too far. I merely wish to point out that there are people who for the last year, and for a longer period, have been suffering very acutely indeed. Farmers in the North-East of Scotland have been faced with ruin, because of the low prices which they have been getting for practically everything they had to sell off their farms. It is no exaggeration to say that agriculture in Scotland, and particularly in districts such as I have indicated, has been faced with the possibility of the collapse of their industry in the not distant future if something was not done to give them better prices for their produce. The hon. Member for Don Valley (Mr. T. Williams) suggested that small producers of poultry and eggs might be seriously injured by this policy. But there is another body, the force of whose appeal I think the hon. Member will recognise. I refer to the farm servants. It is well to remember that in Scotland during the last three or four years there has been a steady and a persistent fall in the number of farm servants employed, and a steady, persistent and regrettable reduction in the wages paid to those men who are working on the farms. There is no possibility of reversing that process unless we can check the fall in prices which has been going on for the last few years.

I, for one, welcome this proposal wholeheartedly, because I believe that it will assist the farmers—indeed it has already done so—enable them to pay better wages, bring more people into employment on the land, and encourage those who have land to plough a larger acreage than at present. A great deal of land in Scotland has gone out of cultivation—which we can ill afford—and I sincerely hope that the present policy of the Government will put an end to that unfortunate state of affairs. I ask the House to consider the psychological effect of the imposition of this duty. More than a year ago, the farmers in the North East of Scotland applied for an increase in the Oats Duty from 10 per cent. to 20 per cent. The whole of one agricultural year passed before any reply was given, and in the meantime a further application had been made for a still higher duty. I do not wish to enter into the reasons for that, but those are the facts. During that time the price of oats was falling steadily and continuously and the feeling among the farmers was one of absolute despair.

I have lived in that part of the country and I know the feeling of the people there, and I can say that there was a feeling among the farmers about this matter, such as has never been known, I believe, in that part of the world before. They felt that they were being deserted; that nothing was being done to assist them, and that their industry was going to be allowed to perish. We have at last got this satisfactory duty for which we are one and all most grateful, and I should like to take this opportunity of expressing my appreciation to the Government and the Import Duties Advisory Committee for what they have done in this respect. There is a fresh feeling of confidence and hope in the agricultural districts of Scotland, and that is one of the most valuable results of the imposition of this duty. I hope the House of Commons will not in any way go back on the lines which they have adopted, but that they will go forward and support the Government by giving effect to this Order. Others may look upon this subject from a slightly different, point of view, but it should be remembered that unless we assist our producers and particularly our primary producers, the whole of the industries of this country are going to suffer.

Let the House realise the losses which these people have suffered. Let it be remembered that every cwt. of oats sold off the farms of Scotland in the last year, has been sold at a heavy loss. I think that 20s. to 22s. a quarter is the generally accepted figure of the cost of production during that period, and in many cases the oats were being sold far below the average price suggested by my hon. Friend. Indeed I could give instances of oats being sold at 12s. 6d. a quarter. It is evident, therefore, that the farmers have been selling at a serious loss, and as regards use as foodstuffs they have not got any real benefit, because the prices which they have been getting until quite recently, for other things, have also been so low that they have not been able to recoup themselves in that way.

The hon. Member for Don Valley referred to the decrease in the amount that was being imported, but I think the hon. Baronet the Member for Barnstaple (Sir B. Peto) hit the nail on the head in what he said on that subject. If you have decreased importation, with a smaller acreage under cultivation, and decreased production in this country, the obvious deduction is, that there is a smaller demand, and if the supply exceeds the demand, even by a small amount, it has a very appreciable effect on the price of the article. One of the difficulties which we experienced last Autumn was that the importation of cheap oats from Germany, though not large in quantity, was having an effect on the price, quite disproportionate to its size. There is not the least doubt that the price at which the imported oats were sold was sufficient to maintain the low price and to lower it. There was this constant threat held over the home producer, which made the situation so serious, and I welcome this high duty because I agree that it may do something to check the importation of these very cheap oats and to do away with it. If we can prohibit the importation of all these foreign oats, we can still easily produce all that we require in this country. Let my last word be this, that I do not think the consumers of oats have any right to ask—and I have said this in the House before—that they should be able to purchase their oats at such a low price as to make it impossible for the producers of this country to sell at a profit and to make a living. There is nothing to justify one branch of an industry thriving and living on the losses of another, and I therefore hope the House of Commons will support the Government on this occasion, and that there will be no doubt about the size of the majority by which that support will be given.

4.47 p.m.

Sir IAN MACPHERSON

After the speech to which we have just listened by my hon. Friend the Member for Kincardine and Western (Mr. Barclay-Harvey), I feel that it is unnecessary to detain the House for more than a moment or two. My hon. Friend has put the Scottish case very clearly and succinctly. I think the House is in agreement with the plea which has been put forward by my hon. Friend the Member for East Birkenhead (Mr. White), and it appeared to me that the difficulty that he disclosed is not insuperable. He sought no reversal of policy, but merely redress of a grievance that had arisen. I am glad to welcome back my hon. Friend the Member for Don Valley (Mr. T. Williams). He was quite right when he said that Scotland could not be left out of this matter for long. He felt that. Indeed, there was a strong feeling in Scotland that the English farmer had had a great deal done for him so far as wheat was concerned. Oats in Scotland occupy the same high position in the agricultural world as does wheat in England, and the farmers of Scotland have been going through an exceedingly trying time.

I listened to the complaint being made by my hon. Friend opposite that the consumer is to be badly hit. We have very great sympathy for the consumer, but I have a great many men in my constituency—some thousands—who are agricultural labourers, and I have a duty towards them. If my hon. Friend or any other hon. Member of the House were in my position, and he had had a joint appeal from the agricultural servants in Scotland along with their masters in support of the duty or of some duty of this nature, to get them out of their doubts and difficulties, I am sure that even my hon. Friend, who is a very strong Free Trader, would support that appeal. The wages of the agricultural labourer in Scotland have in the past been fairly satisfactory, but, as my hon. Friend has just pointed out, during the past few years wages have had a tendency to come lower. That is a serious grievance, and those of us in the House of Commons who represent agriculture have a duty towards the men employed in agriculture. I support this duty because I believe, and so do my constituents, that it will be the means of maintaining wages at a high and respectable level. It was a sad sight to see so many acres of oats going out of cultivation, and I believe that with a duty of this kind those acres will again come under cultivation and that the general effect on the countryside, which is entirely dependent on the success of agriculture, will be reflected in the very near future through the passing of this duty.

4.50 p.m.

Colonel SHUTE

I desire to add my views to those already expressed by my hon. Friend the Member for East Birkenhead (Mr. White), protesting against the Motion before the House, not because I am antagonistic to the ideas underlying the Order, but because this is the only means we have of bringing before this House the resultant grievances from which our traders are labouring. When, on the 12th January, it was announced that it was the intention of the Advisory Committee to recommend this enormous imposition, the whole of the corn traders of the country became alarmed and asked that a deputation should be received at the earliest possible moment by those who represent the Government. The result of that request was that we were told that the Secretary of State for Scotland would receive a deputation. I must be perfectly frank and say that we were rather disappointed that he was the Minister chosen to receive our deputation, not, of course, for any personal reason, but for the obvious reason that his mind would naturally be biased in favour of those whose interests he is there to protect, namely, the Scottish farmers. Still, we had to take what was offered to us. I had on that occasion the privilege of introducing the deputation, and the whole case was put before the Secretary of State by one of the leading figures in the corn trade of this country, Sir Herbert Robson.

While I realize that many of those who have been engaged in the importation of oats and oat products may be put out of business for good, I, like my hon. Friend the Member for East Birkenhead, wish to confine my remarks definitely and clearly to one aspect of the question alone, and that is to the contracts which are at present open or were open either for immediate shipment or for forward shipment on the morning when this Order was issued. On going into the figures, one finds that there were afloat for this country on the morning of the 12th January to the various ports 581,000 cwts. of oats, and contracted for and not yet shipped 312,000 cwts. or a total of 893,000 cwts. For oat products, the figures were very much smaller but still considerable to those who had to deal in that class of trade. On that same morning there were afloat 14,800 cwts. to various ports, and bought but not yet shipped 96,400 cwts., making a total of 111,200 cwts. I am not in the corn trade myself, but I understand that those figures do not show in any sense anything abnormal in the matter of purchases.

When it was found that this Order was likely to be brought into effect the natural tendency of those who were committed to these forward contracts—and I speak with some knowledge, because my life has been spent in the cotton business, in which forward contracts are almost a fundamental of the business—was to take immediate steps to try to cancel some of the orders that had been booked. They have met with very little response up to now, and as far as the German importations are concerned, I understand that, owing to the special laws in Germany, there is practically no possibility of the cancellation of any of those contracts. I am concentrating on one item on which we are basing this case, because it stands out so preeminently, and that is with regard to oat products. On the morning of the 12th January oat products were being sold, broadly speaking, on the basis of about £6 per ton ex-quay from various ports of the country, and £7 10s. per ton has to be added, instead of, roughly, somewhere about 25s., which was included in the price which I have quoted.

It is obvious, first, that those who had contracted for the purchase of those products in this country are most unlikely to take them unless they are compelled by the courts of law; and secondly, but equally serious, is the fact that those importations which are now or were coming across either the immediate waterways or the Atlantic cannot be sold even to produce the amount of tax which is to be levied when the Order goes through.

I have made myself cognisant of the alterations in prices that have taken place since notice of the Order was given by the Advisory Committee, and I find, quoting those things that would approximate to oat products, namely, homegrown oats, that there has been a general rise—and in this I think my hon. Friend the Under-Secretary of State for Scotland will agree—of somewhere between £1 3s. as a minimum and a maximum of £1 10s. per ton on the products which are competing with the imported products. Therefore, what hope have these unfortunate traders of ever getting back the money which they are being called upon to pay once this Order goes into force? We were told by the Secretary of State, when we pointed this out, that there was no legislation that could be made effective to remedy the grievances which we put before him, but if that is so, I think it is time that the Law Officers of the Crown started to formulate legislation to deal with a matter of this kind.

I have, in connection with my work in Liverpool, the privilege of being the chairman of the United Trades Association. We had a meeting last Friday, not necessarily to discuss this point, but it came up as one of the principal items on the agenda, and round that table were members representing various trades in the Kingdom, such as sugar, corn, timber, cotton, fruit, canned goods, and so on. They were one and all afraid of what is going to happen at some time or another to the trades in which they are engaged unless we can get some declaration from the Government that when such alterations—which may be beneficial, let us agree, in potentia—are made those who are immediately engaged in business and part of whose legitimate business is the putting down of contracts for future delivery will, by some system which must be devised, be protected from these grave financial dangers and so enable them to carry on their trade. That is surely a matter for the Law Officers to deal with. As the hon. Member for East Birkenhead has said, Sir Herbert Robson stated quite explicitly that he did not desire any of the members for whom he spoke to benefit from this increased duty. All they wished was to see that their members were not seriously damaged financially by the position in which they would find themselves. I know of one case where a cargo of oat products is rotting on the quay at the moment. It will rot, and the end will be that the medical officer of health will throw the oats into the sea.

The hon. Member for North Aberdeen (Mr. Burnett), for whom I have the greatest sympathy, was not, I think, quite logical in regard to our particular complaint. We are not by any means unsympathetic to the woes of the farmer. I can say, as belonging to a trade which has had just as bad a time as the farmers for the last 10 years, that if I had any sympathy to spare I should give it to the farmer, but my sympathy goes to the great basic trades of the country in which some of us are engaged. It is not that we are unsympathetic to the farmer. The action which we know is likely to go through to-day is to be of benefit to the Scottish and other farmers in the future. We are trying to ascertain from the Minister what he is going to do for the people who legitimately have contracts at the moment and are faced with ghastly loss.

It is no answer to say that there is no method of dealing with it. The hon. Member for East Birkenhead has already said that there are precedents for dealing with this kind of case. There was a circular in May, 1903, when the Conservative Government was in power. Another case, which will be within the recollection of those who were here, occurred in 1920 under the Coalition Government. The latter issued an order which allowed traders who found themselves with stocks of depleted values, to go to an arbitration board to whom men with a real grievance could bring their case. That is all we are asking for to-day. Make any rules you like; work through the great corn associations of this country which have among them some of the most reputable and the highest class of men in the Kingdom; utilise all the machinery at the disposal of the Government through these associations and make the inquiry as stringent as you like. But do deal with the position of these men who entered into contracts in the course of their business and who by the action which this House is going to take this afternoon will be faced with a sacrifice, due to the altered policy and the country. They may have to go out of business, perhaps that cannot be helped, but you have no right to put them out of business and to ruin them in addition.

Another aspect of the question has already been touched on. Traders do not understand that orders of this nature should be brought into being without consultation with some of the great trade organisations of the country. We are not desirous of continually putting our noses into business for which the Government have to bear the responsibility; but it has been stated by previous speakers that in May, 1932, a definite statement was issued by the Advisory Board that when any great alteration was contemplated the trades concerned would be consulted. That order has never been withdrawn. In fact, I can go further back. I, as some hon. Members may know, succeeded as representative of the Exchange Division of Liverpool, a man who was previously my partner and who is now dead. I see that he himself in July, 1931, was also worried by the Corn Association on this problem of their being taken into consultation when orders were made. He saw the Chancellor of the Exchequer, and these are the words that were written to the then president of the Corn Exchange. I am editing the letter, not in any wrong way, but in order not to weary the House. "No plan," it said, "will be formulated and nothing will be done except after consultation with the trade." The statement adds, "The primary undertaking which you require as to consultation prior to any action is unreservedly given."

We have had, in relation to the corn trade, no notification at all that such an abnormal act as is contemplated to-day was likely to take place. We do make a most earnest appeal to the Government to deal with this matter by setting up an arbitration board. If the sequel to this Order is to be prosperity for the farmers we shall be delighted, but I claim that the greatest friends of the farmer would not desire to have that prosperity bought at the expense of those who have been his friends in the past and have come in contact with him as sellers. It will not help the farmers to ruin a portion of the traders of the community. There is a sense of irritation at the moment that alterations are being made in the most varied trades with little regard to those who have been engaged in those trades for years. I desire to say quite frankly that this sense of irritation may well grow into one of complete antagonism. Because I am a believer in the National Government—otherwise, I should not be standing in this place this afternoon—I desire with all the strength at my command to urge the Ministry to remember that the great trade organisations can be more helpful to them if they are given some consideration. We need not be afraid that they are not just as patriotic and desirous of seeing the country prosperous as those who are responsible for the alterations. I ask that an arbitration board, if that is the only way it can be done, should be set up at once to deal with this question of open contracts and to see that those who have legitimately kept them open are not ruined by the action that is likely to take place.

5.10 p.m.

Colonel RUGGLES-BRISE

The Debate so far has ranged rather round the hardships falling on certain importers of foreign oats than the actual merits or demerits of the Order itself. Before saying anything about the Order I too would like to say a word or two about the position of those traders who have suffered lass. It is clear, I think, that the loss actually suffered in this case is fortunately not very heavy, and it may not be too difficult for His Majesty's Government—

Mr. WHITE

I cannot accept that statement. Demands have come from Liverpool, Scotland, Bristol and all over the country and the losses range from £500,000 to £600,000. These are not negligible losses. I could quote people who have been in business for years, and I hope my hon. Friend will not depreciate what is a very serious matter.

Colonel RUGGLES-BRISE

On the contrary. I was reinforcing the plea and saying that the loss not being very great made it easier for His Majesty's Government to take it into consideration. But as my hon. Friend questions me I may say that I have a report from the Secretary of the Liverpool Corn Trade. He says: The losses entailed in connection with these oats and oat products amount now to a relative small sum. I am quoting that from the Secretary of the Liverpool Corn Trade.

Colonel SHUTE

Relatively small to the figures we deal with in this House, but in the aggregate it is very considerable.

Colonel RUGGLES-BRISE

I agree, but I have had some little personal experience in the trade myself, and, when my hon. Friend for the Exchange Division of Liverpool (Colonel Shute), talks of a consignment of oat products rotting on the quay, I think he would not ask the House to believe that that particular process will become necessary. These oats can at least be sold, duty or no duty.

Colonel SHUTE

This is the point. If the price is £6 ex-quay and, if to take them off, you have to pay £6 10s. you get no advantage, and, if it were my case, I should allow them to rot.

Colonel RUGGLES-BRISE

Surely the hon. Member would not allow them to rot on the quay when a certain amount could be recovered by the sale of them. I started my remarks desiring to reinforce the plea of my hon. Friend. If the actual losses are not very great in the aggregate, it may be possible for his Majesty's Government to consider whether there is some way whereby the loss may be lessened to those who have suffered.

On the general merits of the scheme, I wish to say that this Order is welcomed very warmly by the agricultural community as a whole. We have heard testimony from Scotland to the welcome given to it by farmers there, and in England also it is welcomed and supported. It is welcomed by the National Farmers' Union as a whole, even though it is agreed that certain farmers are purchasers and consumers of oats rather than producers. Those farmers have realised that there is in this Order a great principle which is of advantage generally to the industry, and for that reason they are not too critical. They welcome the Order as an earnest of good intentions, as showing that the Government intend to help their industry as a whole. If in this process of assisting agriculture any hardship should be created, such as we have just had instanced to the House, I am perfectly certain that the agricultural industry would desire to minimise and mitigate that hardship where possible. I may perhaps be drawn into making this remark, that I cannot remember any outstanding occasion in the past when the importers of foreign corn have shed tears over the plight of British agriculturists ruined by those importations; but now British agriculturists would desire rather to heap coals of fire on the heads of the importers.

I would invite the attention of hon. Members to the report of the Import Duties Advisory Committee to the Lords Commissioners of the Treasury. It is a very remarkable document, exactly what a document of this kind should be. It deals with the case for a duty, and seems to touch all the vital factors very shortly and very concisely. For instance, the second paragraph draws attention to the fact that there have been importations of foreign oats and oat products at very low prices, and that this has had a seriously adverse effect on the home industries concerned. As I understand things, it is definitely part of the agricultural policy of the Government that the home market should be restored to the home consumer, and on that broad ground we have justification for the Order. In the next paragraph the Report says: It is clearly established not only that the existing duty has failed to restrict the importation of foreign grown oats and oat products of foreign manufacture, but that these commodities are being imported in increasing quantities. That statement is important as showing that, in spite of the fact that a duty on oats and oat products has been in force for some considerable time, it has not had any effect in the direction of raising the price of the commodity. The Committee find that the action taken has been ineffective and say that it must be made effective, and I rejoice that the Government have accepted their recommendation. Then the Report goes on to say that in many cases the foreign oats have been imported at prices well below the cost of growing oats in this country. Surely that involves a principle for which many of us have fought. We have said that we do not see why we should permit the indiscriminate importation of articles which can be produced here at a price at which we are unable to produce them. Our claim is that when we are producing an article of such importance as oats—and in Scottish agriculture oats occupies the same position as wheat does in English agriculture, being the pivotal crop in the arable rotation—and find that foreign oats are being sent here at far below the cost of production in this country, and very often far below the cost of production in the country of origin, there is complete justification for an Order such as this.

The effect of this Order on the industry as a whole has to be considered, and to show the impartiality of the Import Duties Advisory Committee, there is a penultimate paragraph which says that the Committee are well aware that the new duties are high but that, in their opinion, they are necessary in view of present conditions. Surely that ought to be a conclusive reason why hon. Members should support the Government in put- ting this Order into force. We should welcome this Order—and I feel confident it has been welcomed by the whole agricultural community—as an earnest of the Government's good faith and of its agricultural policy. It is a definite step towards giving the agriculturist a firmer foothold in the home market. It provides an instance of prompt and definite action in redemption of a promise made, and I think the Government are entitled to claim gratitude from the farming community. It will give the farmers confidence in the good faith of the Government and, more than that, give them some faith in the future prosperity of their own industry.

5.18 p.m.

Sir ASSHETON POWNALL

I agree that our farmers, who have gone through hard times, should have a measure of justice given to them, but in doing that we ought to be careful not to cause a grave measure of injustice elsewhere. That is the complaint put forward by my hon. Friend the Member for Birkenhead (Mr. White) and my hon. Friend the Member for the Exchange Division of Liverpool (Colonel Shute). The London Corn Trade Association put, their case very strongly in the "Times" a few days ago, and if their statements are correct there has been a serious—I would almost say breach of promise, by the Import Duties Advisory Committee. On 28th April, 1932, the Committee made the following statement: The Committee will give notice of cases in which they are considering the question of the imposition or modification of duties in order that interested parties may have the opportunity of making representations. In other words, "no taxation without representations." Application was made for this duty last May. The London Corn Association were given the opportunity, to which they were entitled, of making representations. The duty was increased from 10 to 20 per cent. I am informed that they thought the matter was ended and stood there. They were not given the opportunity of making any further representations, although it seems that in the Autumn an application for a further duty was made, the 20 per cent. not having been found to be sufficient. Without the least warning a duty not of 10 or 20 per cent. but of 3s. per cwt., in the case of oats, was imposed.

When a duty is increased from 20 per cont. to 3s. it is obvious that there is no common denominator. I have been given the common denominator by the trade. This is not a case of the increase of a duty of 20 per cent. by another 10 per cent., but an increase of 70 to 90 per cent. in all. In the case of oat products the increase is much more; it is not an increase from 10 to 20 per cent., but an increase up to 160 to 200 per cent. In other words, the duty has been increased 4½ times in one case and in the other case 8 to 10 times the orginal duty.

With some knowledge of commerce I say that those duties are prohibitive. If the Committee were bound in honour, by their own words, to give notice of an increase in duty, it was all the more incumbent on them to do so when they were putting on a duty which was in effect prohibitive. If the facts are as stated to me by responsible persons—and the statement has appeared in the "Times" without bringing contradiction—then I say that on this occasion the Import Duties Advisory Committee have been very unfair in not giving notice to the trade, especially when they had in contemplation a duty of this magnitude. I am not quarrelling with the duty as such, but with the way in which this has been done. We shall make trade impossible if traders find that Government promises are disregarded and swingeing duties of a prohibitive character are put into force without the trade affected knowing anything about it. I am one of the few people in this House, probably, who during all his business career was engaged in selling a dutiable article. I know quite well what the feeling in the trade was as Budget Day approached. We were all wondering whether the Sword of Damocles would fall and cut off our heads—or, at any rate, a proportion of the profits in the business. The unfortunate traders here see a Sword of Damocles which, judging by what happened last month, may fall upon them at any moment.

It is common knowledge that the Baltic Exchange, where the London Corn Trade Association operates, is one of the best run mercantile organisations in this country or the world. I have been at pains to find out on what margin the traders in this particular commodity work, and I understand that it is at most 2½ per cent. What opportunity does a margin of 2½ per cent. afford for making arrangements with those with whom contracts have been entered into when a duty of this magnitude is put on at a moment's notice? I understand that transactions in flour and the other things dealt with on the Baltic are put through on extremely small margins, which is to the benefit of the British consumer. What chance is there of these mercantile transactions being carried through to the benefit of the community as a whole if what I have called the Sword of Damocles is to hang over those who trade on the Baltic and they are left with a feeling that the Import Duties Advisory Committee may allow it to fall upon them without the notice which the Committee are pledged, by their own statement, to give.

As regards the actual transactions, I understand the sum involved is not a very large one, although it may run into some tens of thousands of pounds. I refer to the cargoes actually on the water on the date when this Order came into force. Those who stand to lose some tens of thousands of pounds have a reasonable right to ask to be indemnified. The question has been asked, "Why cannot they pass this extra charge on to those who have bought from them?" The answer is, because the duty is so very much more than the goods themselves cost. A duty of 200 per cent. is twice what the goods are worth, and the buyer will refuse to take delivery. The brokers, it seems, deal with a large number of small people up and down the country. It is impossible to force them to pay the extra amounts involved. Therefore, we are going to inflict a monetary loss on a lot of individuals, and do what is even worse, if this action is allowed to pass without adequate protest and without compensation—going to dislocate one of the most important parts of our trading machinery, and cause considerable repercussions in the matter of food supplies, on which we live. I therefore ask the Government to realise that here is a grave case of hardship, not only, I understand, to Liverpool, but to Bristol, in regard to which another hon. Member may speak, and in regard to the London Corn Trade Association, and I ask them to give the matter their sympathetic consideration.

5.31 p.m.

Sir ROBERT HAMILTON

The case for the traders who have been hit by the manner of the imposition of this duty has been so ably put that I will not attempt to say anything further on the point, except that I think the case is one which the Government must answer. It is a case which has appealed to the sympathies of the whole House, and if the traders were left in the position in which they have been put without any redress whatever being offered to them, it would be an attitude that would be recognised in the country as entirely foreign to that to which we have been accustomed in this country.

Everyone must have the greatest sympathy with the primary producer who is unable to produce at a profit. That has unfortunately been the position of the producer of oats in Scotland and elsewhere in the country during the last year or two, and the position is obviously an impossible one. An effort was made to remedy it, first by the imposition of a 10 per cent. duty and then by the imposition of a further duty of 10 per cent. Now the Government have come along with this enormous duty of 3s. per cwt., which is obviously an emergency attempt to deal with an emergency. It is like putting a cement patch in a hurry upon a ship to stop a leak. It is an attempt to deal with a state of affairs with which we have never been confronted before in the history of our country. One or two statements have been made in the course of the Debate which, I think, are not quite justified by the facts, and those statements have not only been made by hon. Members, but I observe in the report of the Import Duties Advisory Committee that they say there has been a reduced production of late years in this country. The figures do not actually bear that out. I have had the official figures very carefully gone into, in regard to the last 14 years, and they are very important figures.

The average home production in Great Britain in tons for the last 14 years from 1920 was 2,174,000, and the net imports were 385,000, which means that of our total retained for home consumption, an average of 15 per cent. has been imported from abroad during that series of years. The average price in that period has been 9s. 8d. per cwt. The home production has varied from time to time, owing to the difference of seasons, and the amount imported has always varied to make up the deficiency required in the country which is not met by the home production. When you look over the series of years, you see that the years 1929–1930 and 1931 were all very considerably in excess of the average. It is true that 1932 was slightly below the average, but I do not think that that justifies the committee in what they said. I do not understand the grounds on which they said that there had been a reduced production of late years.

Colonel RUGGLES-BRISE

May I ask the hon. Member where that comes in the report?

Sir R. HAMILTON

These are figures that were given in answer to a question.

Colonel RUGGLES-BRISE

Those are not in the report?

Sir R. HAMILTON

"Reduced production" are the words used in the report. The committee say that there has been a reduced production in late years, and I do not quite understand the grounds upon which they base that, because it does not seem to be entirely in accordance with the facts. Imports have kept fairly steady, varying up and down relatively to home production. It has definitely to be borne in mind that we have not, except in one year in the series, produced enough at home to meet our home consumption. There has always been this import from abroad to make up the deficiency.

Therefore, it ought not to be said that the fall in prices, which everyone deplores, is due to a large increase in imports from abroad. The figures show definitely that that is not the case, especially as the net imports from abroad during the last two years are almost the smallest on record, and during those two years the price has fallen to the lowest point on record. In 1933 it fell to an average of 5s. 10d. a cwt. The inference clearly is that it is the break in world prices from which we are suffering, and not over-abundant importation. The oats that we have had to import have been at a very low price, and that has depressed the price in the home market. Now the Government have come to the rescue and are endeavouring to right the position by putting on a 3s. per cwt. duty. The result of that undoubtedly will be to put up the home prices, and, as an indication of that, prices have already shown an improvement.

In making these criticisms I do not want it to be thought that I should like to see, as one hon. Member has said, one portion of the agricultural industry benefiting to the disadvantage of another; far from it. We must not consider the agricultural industry as a whole but as portions; everyone acquainted with it knows that it is made up of a great number of different portions. In the constituency which I have the honour to represent, there are a very large number of users of oats and they buy a very large quantity of oats. It is very important to those people that oats should be cheap, although I am sure they do not desire that the oats which they buy should be bought from the home producer at a price which does not give him a fair return. We are concerned that this duty may unduly put up the price, and may cause a considerable reduction in the amount of the imports, and so give rise to scarcity. If that is the result, and that scarcity cannot be met by home production, prices may be unduly forced up.

If that be the case, there is another danger that we shall have to face, and that is that the consumer of oats will leave them and turn to something cheaper. That has definitely to be borne in mind, because competing feeding-stuffs will be so very much cheaper—or they may be—than oats. Therefore, I ask the Government to watch very closely the results of the imposition of this duty. The Import Duties Advisory Committee themselves thought that the results might be somewhat different from what they expected, and they have gone out of their way to say that they will watch very closely to see what effect the duty will have in case a necessity arises for varying the Order. Of course, this Order will go through, but I ask the Government to watch its effect closely and to assure themselves that, while they are endeavouring to secure that the producer of oats gains a proper return for his labour, the user of oats shall not be damaged by it.

5.41 p.m.

Sir B. PETO

I wish to refer to an aspect of this duty that has not so far been touched upon. First, in regard to the speech of the hon. Member for Orkney and Shetland (Sir R. Hamilton) it would be well to point out in justice to the Import Duties Advisory Committee, that in the second paragraph of their report they say that the importation of foreign oats and oat products at very low prices is exercising a deleterious effect. It is clear that the low prices of the recent importation was the reason that induced the Import Duties Advisory Committee to make their report to the Government. What I am particularly interested in is that the duty is not only an increased duty but, as the Import Duties Advisory Committee recommend, a specific duty, to take the place of an ad valorem duty. I have been advocating that in this House for a very considerable time. An ad valorem duty is the wrong kind of duty for dealing with the matter because the greater the degree of dumping, the lower the price of the article and of the duty charged on it. On the other hand, the lower the price of the imported article, the greater the effect upon prices all round and the greater the injury to the producer. With an ad valorem duty you have precisely the wrong weapon in your hands. Therefore I welcome particularly the fact that this duty is not only a high duty, but in the case of oats and oat products it is a specific duty. Commencing with a miserable figure of 14s. a quarter the price had already shown a rise of 3s. a quarter.

Like the hon. Member for Orkney and Shetland, but from an entirely different point of view, I would beg the Government to watch the course of prices as the result of this duty with the utmost care. I believe that in this duty they have the right method. It will be extraordinarily interesting, because of the other branches of agriculture, to observe the precise effect of what we have been asking for, which is that the Import Duties Advisory Committee should closely watch the effect of the steps that they have taken, and when they find that those steps are ineffective, should take further action. The action that we believe to be appropriate in the case of nearly every agricultural product, and in nearly all the other cases, is a duty, and a specific duty at that. This is a method of watching the effect of steps that have been taken, rectifying them rapidly when they prove to be in- effective, and putting on precisely the kind of duty for which we have asked, and we want the Government to watch its operation with the utmost care. They should study the question with an open mind and see whether this is not a very much better way of dealing with agricultural products than the method of quantitative restriction or regulation—whichever word the Government like to use—of imports, which involves so many complications with all kinds of different interests in different countries, and which has been found in the case of meat to be wholly ineffective to produce what the Government want, namely a reasonable price at which these products can be produced here at home.

We have heard a good deal in this Debate about the effect of these duties upon consumers, whether they be the poultry keepers to whom the hon. Member for Orkney and Shetland has referred, or the consumers of oat products in the form of porridge or oat cakes. I am convinced that it is not in the interest of any of these people, and I do not think that even the hon. Member for Orkney and Shetland attempted to make out that it was, that they should be consuming oats or oat products, either through poultry or down their own throats, at a price at which these products could not be produced in this country, and which would spell ruin to a large number of smallest agriculturists in the country. I am convinced that this Order is made and recommended in the national interest as a whole, and on these grounds I most heartily support it, and urge the Government to watch with the greatest care the effect of one of the most useful and sane Orders yet recommended to this House.

5.48 p.m.

Mr. RONALD ROSS

The question of the production of oats is sometimes treated as too exclusively a Scottish question, but Scotland is not the only area where oats are produced. I represent a very large constituency where the only cereal that can be grown is oats. It is always a pleasure to listen to the admirable versatility of the hon. Member for Don Valley (Mr. T. Williams), whom we are glad to see back in his place. His absence has been regretted by all of us, and our regret is only equalled by our wonder at the width of his knowledge. I was struck by the fact that he reproached the Government for paying their debt to the agricultural workers. He is a most loyal representative of the miners; I do not remember any occasion on which the miners' peculiar interests could be put forward when he has not been one of the most zealous supporters of their claims. He has suggested that this duty on oats may produce a revolution, and, hearing that from one who no doubt supported the policy of the General Strike to help the miners, it strikes me that perhaps the hon. Gentleman's view is not as wide as his knowledge. I suggest that he fails to appreciate how fundamentally different is the problem of the oat producer, and I think the same remark might apply to the hon. Member for Orkney and Shetland (Sir R. Hamilton).

The difficulty is that the oat producer is a man who is obliged to produce a certain type of cereal—which is all that he can produce on the land on which it is grown—for a falling market. It is true that the importations from abroad have decreased very considerably, but they have not decreased in proportion anything like so much as the consumption of oats in this country has decreased owing to horses going out of use. That is the fundamental point. Farmers in Scotland and in Northern Ireland are obliged to grow oats because they cannot grow any other cereal as part of their rotation, and the production of oats has remained relatively constant for that reason, except for the boom periods of the War, when oats were really a very paying crop, and many more acres were put under that crop.

As the years go by, however, the demand for oats decreases as horses go out of use. The type of horse which has decreased in the smallest proportion is probably the horse used on agricultural holdings. The figures are very interesting. Between 1913 and 1919, in Great Britain, there was only a drop of something like 6,000 in the number of horses on agricultural holdings, but between 1919 and 1932 the number fell from 1,600,000 to 1,067,000, or about one-third. That indicates the extraordinary fall in the consumption of oats, and the necessity for taking some special measures to assist the unfortunate farmer who grows oats. I have listened with interest to the case for the corn merchants which was put by my hon. Friend the Member for East Lewisham (Sir A. Pownall), by the hon. Member for East Birkenhead (Mr. White), and by the hon. and gallant Member for the Exchange Division of Liverpool (Colonel Shute). It has been put generally with moderation, and I certainly would not vote against any Measure which the Government might feel in a position to take to minimise the sudden losses which those merchants have suffered. But I think one may say this, that these forward contracts are a somewhat speculative business, and it has been admitted that the legitimate business of corn merchants was being carried on at the expense of an infinitely larger body of people in these islands, namely, those who grow oats.

Figures have been worked out for me in my constituency, by more people than one, as to the position in the winter before this duty came on. I have the figures here, but will not weary the House with them in detail. They all agree, however, in showing a loss per acre of from 5s. to 11s., and the men who grow oats are not people with large financial resources, so that their position was quite desperate. I think the position has now improved. The hon. Member for Orkney and Shetland appeared to me to show some degree of altruism—as I believe his constituents can only produce oats, and no other cereal—in being worried lest the price might go up too high, though it is still well below the average figure which he quoted. I do not think he need have the slightest anxiety in that direction.

I am particularly glad that in this case the duty is in the form in which it is, and I thoroughly agree with the hon. Member for Barnstaple (Sir B. Peto), because the ad valorem duty on oats was rather an encouragement to introduce extremely cheap oats, and it was the introduction of very low-priced oats and oat products that knocked the bottom out of the market and produced the present extremely serious position. It will, I think, be satisfactory to all who, like myself, represent agricultural communities who produce oats, to find that in the whole of this discussion there has never been a discordant note from those who like my hon. and gallant Friend the Member for Maldon (Colonel Ruggles-Brise) live in counties whose farmers con- sume oats. I think such farmers realise that it is bad policy to allow any crop to be produced at a definite loss, whether it be oats or wheat, but certainly, on behalf of my constituents, I am very grateful for the attitude which my hon. and gallant Friend took, and which I think the English Farmers' Union have taken, in regard to this matter. I support this duty as being one which is not only beneficial, but is vital to an important part of the agricultural community.

5.54 p.m.

Captain SHAW

I welcome this Order. I think I might say that nothing which has been done during the last few years has given so much satisfaction in my constituency. I was sorry to hear it characterised by the hon. Member for Orkney and Shetland (Sir R. Hamilton) as an emergency measure to deal with an emergency. I hope we may have an assurance from the Minister that this duty is to be kept on. We do not want a repetition of the position that we had under the Corn Prodction Act. When that Act was passed, a good many people in my constituency broke up more land, but in a very short time the policy was reversed, and they were left to "carry the baby." We do not want that to be repeated now, and I hope we shall have an assurance from the Government that these duties are to be continued for a reasonable time. If that assurance can be given, nothing will give more confidence to the agricultural community, and certainly nothing which will give more confidence in the constituency which I represent. During the past year we have had a very difficult time indeed. I think that with the exception of wheat, which, after all, is a relatively small commodity, in all branches of farming money has been lost. That has not only injured the farmers, but has injured the landlords—who get very little sympathy in this House because they are relatively few—and it has also injured the farm workers. In my constituency there is a considerable amount of unemployment among farm workers, and those who are fortunate enough to be employed have had to suffer a severe cut in their wages, a cut which, I may say, is greater than the cut suffered in 1931 by many civil servants, who have, quite rightly, been bringing their grievances before the Members of this House.

The farm workers in my constituency are suffering great privations, and they are bearing them with a patience and fortitude that is beyond praise. I hope, therefore, not merely that the House will pass this Order, but that we shall have an assurance that it will continue, so that all classes of the agricultural community may have the opportunity of making a reasonable living out of the capital employed in their industry. I hope, also, that we may have an assurance that this duty will not be undermined by the importation of subsidised oats from, say, Germany or Russia, and that the Government will also see that we are not allowed to be drowned out even by oats from any of our Dominions, should we be threatened in that way. It is essential that we should have such assurances in the interests of the farmers themselves. Numerous farmers have said to me: "Can you tell me if this duty is to continue? If it is not, I do not know whether I should break up more land; I do not know whether I should sow oats or barley next year." Therefore, in the interests of the agricultural community, I would urge the Minister to give us an assurance that these duties will be continued.

5.59 p.m.

Mr. PERKINS

I have listened to the whole of this Debate, and have gathered that there are three grounds of objection to the policy of the Government. The hon. Member for Don Valley (Mr. T. Williams) raises the objection that it would have some effect on the consumer; there is the objection that it would have an adverse effect on the chicken farmer; and there is the criticism that it will adversely affect the importers. I hold no brief for the importer; I have no sympathy for the importer of any agricultural produce into this country. For 80 years British agriculture has been sacrificed to the importing interests. For 80 years the importer has been batting on a good wicket, while agriculture has been compelled to do the fielding. Now that, at long last, the tide has turned, and British agriculture is going in to bat again, we find the importing interests coming down to the House full of squeal and grouse, complaining that they have not been given adequate warning. They have had too much warning. They have had 2½ years' warning that there was going to be an increased duty on foreign oats coming into this country. The Government were elected 2½ years ago. They had a mandate to put duties on imports, and for those 2½ years there has been in this House a continuous agitation from all the Scottish Members for an adequate duty on oats. They have tried every artifice to get this duty put on. They have asked innumerable questions, they have put down Motions, they have talked on every possible occasion urging the Government to do it. For two years they remained shivering on the brink, and at last they decided to do it. The importers say they have had no warning. To anyone with the intelligence of a woodlouse it is obvious that they have had more than ample warning.

Mr. WHITE

The hon. Member overlooks the fact that there was a regular procedure by which that warning was to be given. There were certain of these traders whose case has been represented here who were suspicious that some alteration might be brought about. They wrote to the people, to whom they looked for advice, the responsible secretaries of the Corn Association in London and elsewhere, and asked if they should make representations. They were replied to by the secretaries of the Corn Exchange and the Baltic, "Do not do that, because the Advisory Committee always issue a notice. Keep your representation until the notice appears in the Press, and then only is the time to make your representation."

Mr. PERKINS

I should like to ask the House to imagine what would happen if that procedure were adopted. Suppose the Committee were to give the industry notice that in six months they would put a duty on oats or anything else. The obvious result would be to have wholesale dumping and forestalling, in exactly the same way as when we gave foreigners three months' notice under the Import Duties Act. The effect of that Act was not felt for a year or 18 months, and in some cases we are only now beginning to feel the effect of it. If we gave the importers of foreign oats a year, or even three months' notice, we should not have any beneficial effects, as far as agriculture is concerned, for at least a year. I welcome the fact that the Government are beginning to act quickly, and that this whole policy of giving everyone warning has at last been scrapped. I do not see that we need really consider the consumers of oats. Very few people eat oats. Only a few Scotsmen eat them. The average Englishman does not eat them, but gives them to the chickens. If the price were to go up—I hope it will—I cannot help feeling that it will have practically no effect whatever on the cost of living in England or even in Scotland. It can be argued very fairly that this is going to hit the livestock industry. I have no doubt that they will have to pay more for their oats—I hope they do—but, on the whole, looking at it from the broadest possible point of view, it will ultimately benefit them.

During the last 10 or 15 years things have been so bad in the arable section of agriculture that large numbers of farms which ought to be arable farms have been put down to grass and, as a result, there is an increased amount of competition in the livestock and dairying industry. Anything that we can do to send back those arable farmers to their legitimate business of arable farming is bound to help the livestock and dairy industry. I am particularly delighted that the Farmers' Union, at long last, has begun to realise that and to realise that, by increasing the price of oats and wheat, you will do a great deal to restore the balance of British industry. I should like to ask the Minister if he will give some assurance on this point. We are going largely to stop foreign oats coming into the country. Has he considered the position with regard to Canadian oats? Has he the power to restrict imports of Canadian oats? Last year the Empire, particularly Canada, sent 1,250,000 cwts. and foreign countries sent 4,000,000 cwts. If we keep out foreigners, there is almost certain to be a big increase in the imports of Empire, particularly Canadian, oats. Has the hon. Gentleman the power to restrict those Canadian oats coming into the country?

6.5 p.m.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)

I rise to make an appeal to the House. There is a Parliamentary understanding that we should pass to the next matter on the Order Paper, the discussion of the position with France, at half-past six, and I am sure the House would wish to hear the Government's reply on the very important matters which have been raised in this Debate. If I were allowed to speak at a quarter-past six, we could fulfil the obligation.

6.6 p.m.

Captain ARCHIBALD RAMSAY

I hope the hon. Gentleman will not listen to any of the reasons that have been put forward why this duty is not vitally necessary. Oats are sold in this country many shillings below the cost of production in their own country. I have a letter here which bears out this month's Board of Trade figures, which show that oats imports this month have been double what they were last January or the January before. A Russian shipment of oats was landed at Leith on 7th February at a price of £1 13s. 4d. a ton, which works out at 5s. a quarter. I thank the Minister very much indeed, and I am sure the House realises that this kind of dumping of oats can only be met by a prohibitive duty. This will have to be prohibitive if it is to be of any use to us. I hope the hon. Gentleman will not weary in well-doing and, if the duty proves not to be prohibitive, that further steps will be taken.

6.8 p.m.

Lord SCONE

This Order is introduced in the interest of the producers of oats, and its complete justification lies in the plight in which those producers have found themselves for several years past. Tens of thousands of farmers in Scotland can only exist if they can make a living in oats. Although in most cases they have had reductions in rent ranging from 10 per cent. to 40 per cent., they have not been able to make both ends meet. Scores of them have been forced into bankruptcy, and hundreds more have been forced to go out of business. Those who have been able to carry on have not been able to enjoy a standard of living higher than that of an agricultural labourer a year or two ago. What of the agricultural workers themselves? Thousands have lost their employment, while practically all the rest have had to submit to reductions of wages reluctantly forced upon them by their employers. These reductions have lowered the position of the agricultural worker until in many cases he and his family are in a state of semi-destitution, and it must be remembered that there is no unemployment benefit for the agricultural worker.

This action of the Government has the support of all agriculturists in Scotland, including the great majority of those who consume oats as well as those who grow them, and although we wish no harm to the importers of oats, they ought to have realised that some such step was inevitable. I hope the duties will be continued for a reasonable period. The hon. Member for Orkney and Shetland (Sir R. Hamilton) suggested that the price might be raised too high. I have no doubt that in that case the Import Duties Advisory Committee will be amenable to suggestions from the industry itself. I wish to thank the Government on behalf of the oat-growing section of the farming community for the great and timely benefit that they have given us.

6.10 p.m.

Lord APSLEY

The case for the importers, of whom there are a fair number in my constituency, was so admirably made by the hon. Member for East Birkenhead (Mr. White) that there is very little more for me to add. The speech of the hon. Member for Stroud (Mr. Perkins) made me wish to get up on my feet to remind him that this case is still sub judice. I do not say I go the whole way with the hon. Member for East Birkenhead. It is a matter that must be discussed purely on its merits. I should like to ask, what in reality are the existing stocks of oats which have been imported during the last few months? Of course, the duty will benefit those traders who have large stocks and can sell them at a higher price. Again, what actually was the number of tons on the sea at the time when the duty was announced? That is a most important question which must be taken into account because, although it is quite possible that a large number of importers had a suspicion that the duty might be coming on, there are undoubtedly some who had no idea whatever of it and may have been placed in a most unfair position. I hope, therefore, that the Government will take these matters into consideration and, in case there has been any hardship on some of these importers who have been caught, perhaps through some delay abroad, with large shipments on the sea, on which they have suddenly had to pay duty, which may ruin their business, the Government will give them some assistance.

As far as the general question is concerned, it is an experiment which I shall watch with some interest. I am not wedded to prohibitive duties at all. In fact, I think they are a departure from the practice of scientific tariffs which a great many of us have preached for a number of years. This cannot pretend to be scientific Protection. It is a prohibitive duty put on very suddenly, and I shall be interested to see what the effect will be. There are many other alternatives, maize, wheat, barley and other materials, which can and will be used for feeding-stuffs in poultry districts. It will be interesting to see what effect the sudden imposition of a prohibitive duty will have on the producers of oats, particularly in Scotland, compared with the effect that might have been achieved by a more gradual duty which would not suddenly deprive the foreigner of his market.

Mr. CHARLES BROWN

Shall I be right in saying, judging by what has transpired up to the present, that the policy of the Government in regard to agricultural prices can be described as, Save the farmer, ruin the merchant and make the consumer pay?

6.15 p.m.

Dr. BURGIN

We have had an important Debate and, thanks to the co-operation of Members in all parts of the House, a large number of Members have been able to make their contributions in a short time. This is a producer-consumer Debate, and the Government make no apology for that part of their policy definitely including favourable consideration for the producer of an essential product. We have said time and time again that you do not bring about the consumer's prosperity by any course of action which would bring about the producer's bankruptcy. That is a perfectly plain line of conduct and policy. Of course, this Order does not apply to Scotland alone. It applies to oats and oat products, and interests farmers throughout the country.

I think that the whole House will agree that the hon. Member for Birkenhead, East (Mr. White) made a most effective and forceful presentation and illustrated a good case, very well met, by his speech. I want to deal with that in considerable detail towards the conclusion of the few remarks I have to make. I think that he is quite right in saying that the Government do not expect that merchants and directors of companies should have added to their daily duties the responsibility of reading the OFFICIAL REPORT of this House every morning. I think he was entitled to make that observation and to say that it was not likely that the trading community would find that something was mentioned in Parliament either casually or as an important matter. But I think that in these days, when the Import Duties Advisory Committee are dealing with applications from trade and industry, it behoves all those engaged in trade and industry to see that their own relations with their own organising bodies are such that they keep that organising body well informed of their own views. It is, obviously, impossible for the Board of Trade and other Departments of State to keep in touch with individual traders. You can only deal with organised associations of traders, and therefore I think that perhaps it is not unreasonable to say that business men and directors of companies should watch and see that their own organisation is fully aware of any points they may have to make upon any matter which is really practical politics at the time.

The hon. Member, in dealing with the particular problems which he raised, quoted various precedents as he called them. I think that none was quite on all fours with what we have to deal to-day, and probably he will recognise that fact. He mentioned, among others, the Russian embargo, and I would like to remind the House that in the Russian embargo where traders were able to satisfy the Board of Trade that goods covered by the embargo had been already paid for before the embargo was imposed, we allowed those goods to come in, but where a claim for licence was based purely on the fact that contracts had been made or that goods were on the water, the same rule did not apply. I only quote that, as I think that the hon. Member probably must realise that these matters are not actually on all fours.

The substantial points which have been raised in this Debate are two. They are the whole question of consultation between the Import Duties Advisory Committee and industry and the question of the effect on particular traders of the imposition of a duty. These are sub-stantially the important points. In this Debate we have had singularly little comment upon the actual proposals of the Government in the Order. Speaker after speaker has assured the House that there is no suggestion that the Order should be reversed or withdrawn. Indeed, I have been asked in some quarters that it should be imposed with much more effect. There is no disagreement in regard to the Order, but it is to the consequences of an Order of this kind that attention has been called.

I want to deal with the question of consultation. Let the House realise that hon. Members who say that responsible organisations in any industry ought to be consulted by the Import Duties Advisory Committee before any change of duty of an important degree is made, must realise that no amount of consultation will ever tell them the height of the duty or the day the duty is to come on. The height of the duty is a matter for the Import Duties Advisory Committee, as a judicial tribunal, to recommend. The amount of the duty, and the date when the duty shall come on is a matter for Treasury Order. All that an industry can know is that there is something in the wind. Did the corn trade know that there was something in contemplation, or did they not? Let us look at the facts. On 12th April, 1933, the Import Duties Advisory Committee gave notice of an application for an increase in the Import Duty on oats and oat products. That was in April. The London Corn Trade Association asked for copies of certain documents. One was the earlier application which had been made by the National Farmers' Union of Scotland when a duty of 20 per cent. was requested. Another document was an application from the same body for a duty of 3s. a cwt. on oats, and much higher rates than 20 per cent. on oat products, and an application from the National Farmers' Union for a duty of 33⅓ per cent. So that the Corn Trade Association were supplied at their request with evidence which brought very prominently to their minds the fact that there were others asking for the very duty which was, in fact, put on at a later stage.

They replied on 16th May that they did not desire to oppose the application in detail. They went on to say that in their view you did not raise prices by putting on an increased duty. That was the argument, but no reference whatever was made in any of those letters to any question of any shipment afloat or to outstanding contracts. The Corn Trade Association, who now put up this case and point out this hardship, did not have the foresight at that time to say, "Let us warn you that there will always, at any moment, be a certain quantity of goods on the water and a certain number of contracts outstanding. Do allow such intervals of time as will enable these to be run off." It was open to the Corn Trade Association to make some recommendation, but they did not, in fact, do so.

Mr. WHITE

Does my hon. Friend suggest that because they did not object to a 10 per cent. duty it must cover them for all time, and that some 12 months later they cannot make a further proposal? It it not merely a question of 10 per cent.—I dealt with the point in my speech—but a matter of life and death, that they should have the right to make further representations.

Dr. BURGIN

The hon. Member dealt with a point in his speech, and it was because the point he dealt with was not the point, that I dealt with one in my speech. I agree with him with regard to the 10 per cent. I do not quarrel with him. If he was right, I think that as a consequence he would have a grievance. But that is not the case. The point is that in April, 1933, they were informed of the application for making the actual duty which is, in fact, imposed.

Mr. WHITE

When the 10 per cent. duty was put on it finished the matter For the time being.

Dr. BURGIN

Oh, no. On 12th April, 1933, the Import Duties Advisory Committee gave notice that they had received an application for an increase in the Import Duty.

Mr. WHITE

rose—

Dr. BURGIN

I must be allowed to state the facts because I am pressed for time, and we can discuss the matter afterwards. In the remarks of the hon. Member for Birkenhead East raising the question of the importer, I would include the powerful observations made by the hon. Member for the Exchange Division of Liverpool (Colonel Shute). I come to the substance of the matter. The difficulty raised here is a real one. The case for the importer and for the merchant has been put. I think that many hon. Members connected with ports would know a further difficulty—the difficulty perhaps of a shipowner carrying the freight and having perhaps, as usual, a lien on the cargo. This would not represent an asset for covering any loss if you have a duty amounting to more than the cargo. You are confronted with an entirely separate set of circumstances. That is quite recognised.

Let me put before the House some of the difficulties which confront the Government, or any administration, in this matter. What are the practical points? The suggestion is not a new one. The idea that when a duty is imposed goods in transit or goods already under contract should be exempted, is not a new proposal. The matter came up when we were discussing the Ottawa Agreements Bill. An hon. Member from the Front Opposition Bench tabled an Amendment which brought forth a weighty speech from the Chancellor of the Exchequer which is reported in column 1635 of the OFFICIAL REPORT for 1st November, 1932. The Chancellor of the Exchequer pointed out some of the very great difficulties in administration in regard to the idea that you should exempt what was on the water and what was the subject of an existing contract. I will merely—because I am pressed for time—state one or two instances. The very goods on the water might include foreign subsidised goods at cut-throat prices that were coming to this country. They might defeat the whole object for which an Order was being imposed. If we were to exempt forward contracts, we might have everybody so conducting their businesses that their contracts were of the maximum duration in order that there should be no imposition of duties, knowing that they could be exempted by a forward contract. You cannot do that.

How are you to tell the difference between a bona fide contract and an artificial one? I make no reference to the particular facts to which the hon. Member for Birkenhead, East called the attention of the House this afternoon. I have no doubt that he could prove any specific case to be absolutely bona fide, but the particular time at which a shipment of goods left any port is a very intricate matter of proof. When it comes to a matter as to whether they are subject to duty or not it has, in practice—I have it on authority o the Department concerned in ascertaining these things—proved to be a matter of great difficulty. You cannot apply the reverse procedure. When you take the duty off you cannot make this mutatis mutandis. There are many administrative difficulties. What are bona fide contracts? Have there been any ante-dating of contracts in order to come within the provisions? What is the date of shipment, and what is on the water? These are matters which have proved in practice to offer great administrative difficulties. Those were the points given by the Chancellor of the Exchequer when the matter last came up in November, 1932, on the Ottawa Agreements Bill, and all these arguments are as valid to-day as they were then. They are the practical difficulties of making a duty applicable. I agree that whenever you draw a line—quite apart from the Einstein theory—it must be arbitrary. You must leave the matter to the Import Duties Advisory Committee. You must allow them to hear evidence on both sides and to make a reasoned recommendation and the Treasury to make their recommendation upon it and bring it in the form of an Order to the Houses of Parliament. You must have an executive body. An announcement too far behind invites forestalling. An announcement immediately the duty is put on provokes discontent.

What is the proper procedure? The answer is that you must try to ascertain the facts as well as you can and rely upon trade organisations to give as good information as lies in their power, and you must then balance the information and decide irrevocably and apply it to all without fear or favour. That is the broad rule. The House will appreciate that there are very real difficulties. You could not provide for it by general legislation. The whole matter has been canvassed, and I see no means by which you could provide for it by specific legislation. Can anybody tell me how you could distinguish one case from another? Is it not a matter of principle running through all this sort of thing rather than of specific argument? I think it is.

This case is quite different from others. It is not a question of principle which should govern for all time. It is not a question of principle which should tie the hands of the Government and involve loss of revenue for the future. It involves something more specific. If that had been able to be argued, one might have been able to give quite a different answer. As it is, if hon. Members have practical suggestions to make, I hope they will make them to the Chancellor of the Exchequer or the President of the Board of Trade. The real difficulty which I feel is that these difficulties are bound to arise; they are inherent in the very nature of what we are proposing to do. The House has been discussing the matter on the footing that it is a duty of 100 per cent. Suppose we were to grant the suggestion that in the case of a duty of 100 per cent. this will apply. Why should it not apply at 99 per cent., or 98 per cent., or 97 per cent.? Where is the line to be drawn? You must be careful when you make a precedent that you do not create as many artificial abnormalities as those you are attempting to remove. The whole matter is very difficult. It is a matter of principle.

The Government are sympathetic to the plea which has been made. The real difficulty is in devising means for dealing with the problem. For myself at this moment, speaking necessarily rather hurriedly, I confess that I do not see exactly what is the best step to take, but if hon. Members have suggestions to make which will avoid the Scylla and Charybdis which I have attempted to chart, and if they can evolve some principle, then let us have it, so that we may consider it. The hon. and gallant Member for Forfar (Captain Slow) asked me to give an assurance that these duties are not to be capriciously withdrawn and that the agricultural community is not to be flooded by imports from Germany and Russia. He can have the assurance, quite definitely, that this is a policy deliberately intended and introduced, and it is of an indefinite duration. I have endeavoured in a few fleeting minutes to cover a great deal of ground and to give as much information as I could. The Prime Minister announced at Question Time yesterday that at 6.30 to-night we are to proceed to deal with the position between this coun- try and France. Therefore I hope the House will now be good enough to give us the Resolution.

Sir HERBERT SAMUEL

Will the hon. Member say whether his last observation as to the permanence of this Order is to be regarded as an instruction to the Import Duties Advisory Committee?

Dr. BURGIN

The right hon. Gentleman is a shade too quick. I did not say "permanent." I said "indefinite."

Sir H. SAMUEL

My question is Whether this overrules any future decision to be taken by the Import Duties Advisory Committee?

Dr. BURGIN

If the right hon. Gentleman puts that question seriously, the answer is in the negative. If it is meant jocularly, the answer is well known.

Question put.

The House divided: Ayes, 246; Noes, 55.

Division No. 106.]	AYES.	[6.35 p.m.
Acland-Troyte, Lieut.-Colonel	Drewe, Cedric	Lockwood, John C. (Hackney, C.)
Adams, Samuel Vyvyan T. (Leeds, W.)	Dugdale, Captain Thomas Lionel	Lockwood, Capt. J. H. (Shipley)
Agnew, Lieut.-Com. P. G.	Duncan, James A. L. (Kensington, N.)	Loder, Captain J. de Vere
Albery, Irving James	Dunglass, Lord	Lumley, Captain Lawrence R.
Alexander, Sir William	Elliot, Rt. Hon. Walter	MacAndrew, Lieut.-Col. C. G. (Partick)
Apsley, Lord	Ellis, Sir R. Geoffrey	MacAndrew, Capt. J. O. (Ayr)
Atholl, Duchess of	Elliston, Captain George Sampson	McCorquodale, M. S.
Baillie, Sir Adrian W. M.	Elmiey, Viscount	MacDonald, Rt. Hon. J. R. (Seaham)
Baldwin, Rt. Hon. Stanley	Emmott, Charles E. G. C.	McEwen, Captain J. H. F.
Baldwin-Webb, Colonel J.	Erskine-Bolst, Capt. C. C. (Blackpool)	McLean, Dr. W. H. (Tradeston)
Balfour, Capt. Harold (I. of Thanet)	Essenhigh, Reginald Clare	Macpherson, Rt. Hon. Sir Ian
Bainiel, Lord	Evans, Capt. Arthur (Cardiff, S.)	Macquisten, Frederick Alexander
Banks, Sir Reginald Mitchell	Fermoy, Lord	Maitland, Adam
Barclay-Harvey, C. M.	Fielden, Edward Brocklehurst	Margesson, Capt. Rt. Hon. H. D. R.
Barrie, Sir Charles Cougar	Fleming, Edward Lascelles	Mason, Col. Glyn K. (Croydon, N.)
Benn, Sir Arthur Shirley	Ford, Sir Patrick J.	Mayhew, Lieut.-Colonel John
Bennett, Capt. Sir Ernest Nathaniel	Fraser, Captain Ian	Milne, Charles
Boothby, Robert John Graham	Fuller, Captain A. G.	Mitchell, Harold P.(Br'tf'd & Chisw'k)
Borodale, Viscount	Ganzonl, Sir John	Mitchell, Sir W. Lane (Streatham)
Bossom, A. C.	Gillett, Sir George Masterman	Moore, Lt.-Col. Thomas C. R. (Ayr)
Boulton, W. W.	Glossop, C. W. H.	Morgan, Robert H.
Bowater, Col. Sir T. Vansittart	Gluckstein, Louis Halle	Morris-Jones, Dr. J. H. (Denbigh)
Bower, Lieut.-Com. Robert Tatton	Glyn, Major Sir Ralph G. C.	Moss, Captain H. J.
Bowyer, Capt. Sir George E. W.	Goff, Sir Park	Mulrhead, Lieut.-Colonel A. J.
Bracken, Brendan	Goodman, Colonel Albert W.	Munro, Patrick
Braithwaite, J. G. (Hillsborough)	Graham, Sir F. Fergus (C'mb'ri'd, N.)	Nation, Brigadier-General J. J. H.
Brass, Captain Sir William	Granville, Edgar	Nicholson, Godfrey (Morpeth)
Broadbent, Colonel John	Grattan-Doyle, Sir Nicholas	Nicholson, Rt. Hn. W. G. (Petersf'id)
Browne, Ernest (Leith)	Greene, William P. C.	North, Edward T.
Browne, Captain A. C.	Gretton, Colonel Rt. Hon. John	O'Neill, Rt. Hon. Sir Hugh
Burgin, Dr. Edward Leslie	Grimston, R. V.	Ormsby-Gore, Rt. Hon. William G. A.
Burnett, John George	Guest, Capt. Rt. Hon. F. E.	Palmer, Francis Noel
Butler, Richard Austen	Hamilton, Sir George (Ilford)	Patrick, Colin M.
Campbell, Vice-Admiral G. (Burnley)	Hannon, Patrick Joseph Henry	Peake, Captain Osbert
Caporn, Arthur Cecil	Harbord, Arthur	Pearson, William G.
Carver, Major William H.	Hartland, George A.	Perkins, Walter R. D.
Castlereagh, Viscount	Harvey, George (Lambeth,Kenningt'n)	Peters, Dr. Sidney John
Cayzer, Sir Charles (Chester, City)	Harvey, Major S. E. (Devon, Totnes)	Peto, Sir Basil E. (Devon, B'nstaple)
Cazalet, Thelma (Islington, E.)	Haslam, Henry (Horncastie)	Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Chamberlain, Rt. Hon. Sir J. A. (Birm., W)	Headlam, Lieut.-Col. Cuthbert M.	Pickford, Hon. Mary Ada
Chapman, Sir Samuel (Edinburgh, S.)	Heilgers, Captain F. F. A.	Powell, Lieut.-Col. Evelyn G. H.
Choriton, Alan Ernest Leofric	Hepworth, Joseph	Procter, Major Henry Adam
Christie, James Archibald	Hore-Belisha, Leslie	Raikes, Henry V. A. M.
Clayton, Sir Christopher	Hornby, Frank	Ramsay, Alexander (W. Bromwich)
Cochrane, Commander Hon. A. D.	Horsbrugh, Florence	Ramsay, Capt. A. H. M. (Midlothian)
Colfox, Major William Philip	Howitt, Dr. Alfred B.	Ramsay, T. B. W. (Western Isles)
Colville, Lieut.-Colonel J.	Hudson, Capt. A. U. M. (Hackney, N.)	Ramsden, Sir Eugene
Conant, R. J. E.	Hudson, Robert Spear (Southport)	Reed, Arthur C. (Exeter)
Copeland, Ida	Hume, Sir George Hopwood	Reid, James S. C. (Stirling)
Cranborne, Viscount	Hunter, Dr. Joseph (Dumfries)	Reid, William Allan (Derby)
Craven-Ellis, William	Hurst, Sir Gerald B.	Remer, John R.
Croft, Brigadier-General Sir H.	Jackson, Sir Henry (Wandsworth, C.)	Robinson, John Roland
Crookshank, Capt. H. C. (Gainsb'ro)	James, Wing-Com. A. W. H.	Ropner, Colonel L.
Croom-Johnson, R. P.	Jamieson, Douglas	Rosbotham, Sir Thomas
Cross, R. H.	Jennings, Roland	Ross, Ronald D.
Cruddas, Lieut.-Colonel Bernard	Ker, J. Campbell	Ross Taylor, Walter (Woodbridge)
Culverwell, Cyril Tom	Kerr, Lieut.-Col. Charles (Montrose)	Ruggles-Brise, Colonel E. A.
Davidson, Rt. Hon. J. C. C.	Law, Sir Alfred	Runciman, Rt. Hon. Waiter
Davison, Sir William Henry	Leech, Dr. J. W.	Runge, Norah Cecil
Dawson, Sir Philip	Lees-Jones, John	Russell, Alexander West (Tynemouth)
Denman. Hon. R. D.	Lewis, Oswald	Russell, R. J. (Eddisbury)
Denville, Alfred	Little, Graham-, Sir Ernest	Rutherford, Sir John Hugo (Liverp'l)
Dickie, John P.	Lloyd, Geoffrey	Salmon, Sir Isidore
Donner, P. W.	Locker-Lampoon, Com.O. (H'ndsw'th)	Samuel, Sir Arthur Michael (F'nham)

Samuel, Samuel (W'dsworth, Putney)	Strickland, Captain W. F.	Warrender, Sir Victor A. G.
Sandeman, Sir A. N. Stewart	Stuart, Hon. J. (Moray and Nairn)	Wayland, Sir William A.
Savery, Samuel Servington	Sueter, Rear-Admiral Sir Murray F.	Wedderburn, Henry James Scrymgeour.
Scone, Lord	Sutcliffe, Harold	Wells, Sydney Richard
Shaw, Helen B. (Lanark, Bothwell)	Tate, Mavis Constance	Whiteside, Borras Noel H.
Shaw, Captain William T. (Forfar)	Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)	Williams, Herbert G. (Croydon, S.)
Sinclair, Col. T.(Queen's Unv., Belfast)	Thomas, James P. L. (Hereford)	Wilioughby de Eresby, Lord
Skelton, Archibald Noel	Thomas, Major L. B. (King's Norton)	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Smiles, Lieut.-Col. Sir Walter D.	Thomson, Sir Frederick Charles	Windsor-Clive, Lieut.-Colonel George
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)	Thorp, Linton Theodore	Winterton, Rt. Hon. Earl
Somervell, Sir Donald	Titchfield, Major the Marquees of	Wise, Alfred R.
Southby, Commander Archibald R. J.	Train, John	Withers, Sir John James
Spender-Clay, Rt. Hon. Herbert H.	Tree, Ronald	Wolmer, Rt. Hon. Viscount
Spens, William Patrick	Tryon, Rt. Hon. George Clement	Womersley, Waiter James
Stanley, Rt. Hon. Lord (Fylde)	Tufnell, Lieut.-Commander R. L.	Worthington, Dr. John V.
Steel-Maltland, fit. Hon. Sir Arthur	Turton, Robert Hugh	Young, Rt. Hon. Sir Hilton (S'v'oaks)
Storey, Samuel	Wallace, Captain D. E. (Hornsey)
Stourton, Hon. John J.	Ward, Lt.-Col. Sir A. L. (Hull)	TELLERS FOR THE AYES.—
Strauss, Edward A.	Ward, Sarah Adelaide (Cannock)	Sir George Penny and Lord Erskine.

NOES.
Acland, Rt. Hon. Sir Francis Dyke	Foot, Isaac (Cornwall, Bodmin)	Milner, Major James
Attlee, Clement Richard	Greenwood, Rt. Hon. Arthur	Moreing, Adrian C.
Banfield, John William	Grenfell, David Rees (Giamorgan)	Paling, Wilfred
Batey, Joseph	Griffith, F. Kingsley (Middieebro', W.)	Parkinson, John Allen
Bernays, Robert	Grundy, Thomas W.	Price, Gabriel
Bevan, Aneurin (Ebbw Vale)	Harris, Sir Percy	Rea, Walter Russell
Brocklebank, C. E. H.	Holdsworth, Herbert	Samuel, Rt. Hon. Sir H. (Darwen)
Brown. C. W. E. (Notts., Mansfield)	Janner, Barnett	Shute, Colonel J. J.
Buchanan, George	Jones, Morgan (Caerphilly)	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Cape, Thomas	Leonard, William	Smith. Tom (Normanton)
Cocks, Frederick Seymour	Lunn, William	Thorns, William James
Cove, William G.	Mabane, William	Tinker, John Joseph
Cripps, Sir Stafford	Macdonald, Gordon (Ince)	Wedgwood, Rt. Hon. Josiah
Daggar, George	McEntee, Valentine L.	White, Henry Graham
Davies, David L. (Pontypridd)	Maclay, Hon. Joseph Paton	Williams, David (Swansea, East)
Davies, Rhys John (Westhoughton)	Maclean, Nell (Glasgow, Govan)	Williams, Dr. John H. (Llanelly)
Debbie, William	Mailalleu, Edward Lancelot	Williams, Thomas (York, Don Valley)
Edwards, Charles	Mander, Geoffrey le M.
Foot, Dingle (Dundee)	Maxton, James	TELLERS FOR THE NOES.—
		Mr. U. Graham and Mr. Groves.

Resolved, That the Additional Import Duties (No. 1) Order, 1934, dated the eleventh day of January, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the twenty-ninth day of January, nineteen hundred and thirty-four, be approved.

6.45 p.m.

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

I beg to move, That the Import Duties (Foreign Discrimination) Order, 1934, dated the ninth day of February, nineteen hundred and thirty-four, made by the Board of Trade with the concurrence of the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the ninth day of February, nineteen hundred and thirty-four, be approved. I regret that it should be necessary to have to move this Order. Probably it would suit the convenience of the House if I gave a narrative of the events which have led up to this step. I would remind the House, in the first place, that what has happened recently must be traced back to a period of at least two years. In November, 1931, shortly after the present Government came into office, the French applied a 15 per cent. surtax on British goods, and we found it necessary, even at that far distant date, to protest against the discrimination. I mention that because one is bound to consider the general policy that has led up to this discrimination, and these taxes in which there was certainly a difference between the incidence of the taxes which fell upon us and our competitors in France. In February, 1932, the sur-tax was removed from coal, and this has, of course, particular reference to coal from South Wales. In April of the same year the French import turnover tax was increased. This turnover tax also became later a discrimination against our traders. When the Prime Minister, the Chancellor of the Exchequer and I were at Lausanne the discriminations to which we had been subjected were the subject of conversations and discussions, and ultimately towards the end—I think it was almost at the end of the Lausanne Conference when the Lausanne Declaration was drawn up—the French Government and His Majesty's Government both promised not to discriminate against each other. That undertaking is found in the papers on Lausanne which have been circulated.

There were at that time two special taxes which were imposed upon British commodities and had to be paid by British traders, namely, the sur-tax and the turnover tax. Do not let the House imagine for a moment that our objection to these taxes was on the ground of theory alone. Of course, we objected in principle to being put on worse terms than any other nation. We have most-favoured-nation rights in respect of prohibitions under the 1882 Convention with the French, and we expected them to respect those undertakings; but the sur-tax and the turnover tax operated against us so severely that only one or two instances need be quoted to show how unbearable our traders felt them. Here is an example of the effect of the 15 per cent. sur-tax and the turnover tax on, for instance, wireless apparatus. The taxes on the United Kingdom goods of this description covered a Customs duty of 22 per cent. ad valorem, an exchange compensation sur-tax of 15 per cent. ad valorem, and a further 8¼ per cent. ad valorem due to the turnover tax, making altogether 45¼ per cent. ad valorem.

That is, of course, a very heavy import duty, but we would have borne it with as much equanimity as we could command provided our competitors were on the same footing; but at that very time the French had granted to Belgium and Italy relief which they did not grant to us. What is the comparison between the 45¼ per cent. ad valorem duty on our goods and the Belgian and Italian cases? There was a Customs duty of 22 per cent. and an addition due to turnover tax of 2½ per cent., making a total of 24½ per cent.; so that in our case the duty was 45¼ per cent. and in the cases of Belgium and Italy it was 24½ per cent. I do not think the House will expect me to express an opinion as to whether or not that was fair.

I take another very important category of goods, namely, woollen and worsted tissues weighing up to 250 grammes per square metre. If these goods came from the United Kingdom they were under the 15 per cent. surtax and the turnover tax against which we protested; that is to say, taking an average value of 7,777 francs per 100 kilogrammes, they amounted to 1,500 francs for Customs duty, 1,167 francs for exchange compensation and surtax, and 627 francs for import tax, making altogether 3,294 francs, or, in per centages, 42¼. There again even if that had been the only tax with which we had to deal, we should have regarded it as heavy, but we should have had no right under the 1882 Convention or the mostfavoured-nation principle, to protest, and we did not do so until we found that in the cases of both Belgium and Italy a much lower scale was imposed. Against the 3,294 francs in our case it was 1,686 francs in the cases of Belgium and Italy; or, to take it in percentages 42¼ in our case and 21¾ in the case of Belgium and Italy. Exactly the same thing was found when we examined a further important category of goods under the heading of motor cars and parts. I give these to the House in order that it may see how we were affected by these duties which were the subject of conversations and ultimately of agreement.

I leave the imposition of the taxes at this stage to point out what was done by ourselves. I think, when I have told the whole story, the House will realise how patient we have been during a time when our traders were suffering. In August, 1932, that is to say within about a month of the signature of the Lausanne undertaking, the French import turnover tax was reduced in favour of Belgian goods in the manner and to the extent I have just mentioned, and we found it necessary to protest against this further discrimination. During that autumn and spring the matter was not raised either in London or in Paris, but in April of 1933 M. Bonnet, the Finance Minister of France, was in London, and we drew his attention to the subject of the surtax and the turnover tax. Later, semi-official indications were given to us from the French that the removal of the surtax would present legal difficulties. Nothing was done in May or June, but at the beginning of July I saw M. Bonnet, who said his Government were anxious to remove the surtax, but that this was not legally possible without a previous agreement.

The autumn holidays supervened, and on the 7th September we sent a warning note to the French Government that nothing had been done in the meanwhile in regard to the surtax and the turnover tax and we referred for the first time to the fact that we might be under the necessity of bringing into operation Section 12 of the Import Duties Act. Neither the surtax nor the turnover tax had been withdrawn by 3rd November. I saw the French Ambassador and told him that we must give a month's notice for the removal of the surtax and turnover tax, failing which a special duty would be imposed by us upon French goods in accordance with the Import Duties Act. I announced to him that we would denounce the Tariff Truce and that we could not in those circumstances regard ourselves bound by that Clause of the Lausanne undertaking. I think it was in November, 1933, that our Ambassador in Paris was asked to make representations to the French Government as to our most-favoured-nation rights in regard to the quotas which were then becoming a matter of importance. The French Ambassador saw me on the 10th November. It will be remembered that that was about a week after we had given notice of our decision to use the Import Duties Act. He proposed that we should withdraw our claim for the abolition of the surtax and that in return our quotas would not be reduced. We could not see our way to make that bargain. I, therefore, replied formally to the French Ambassador three days later turning down the suggestion which had been made by him.

There came then on 23rd November last year a statement by me in the House with the threat of retaliation against the surtax and the turnover tax which which had continued throughout the whole of this time unaltered and undiminished, although both Belgium and Italy, and it may be others for all I know, had obtained the advantage of a lower scale of duties. On the 4th December the French Ambassador called on the Foreign Secretary and myself and announced the decision of the French Government to remove the surtax as from the 1st January, and to legislate to remove the turnover tax. He hoped that no announcement might be necessary until the second half of the month, and we agreed to that condition. He expressed the hope that we might be able to enter into negotiations for the amendment of the Trade Agreement or for a new Trade Agreement, and we concurred in that desire. That was on 4th December. On 15th December there came the French reply to our Ambassador's note of a month before regarding quotas. In that the French declared that they did not admit the applicability of the most-favoured-nation clause to quotas, and they said if we insisted on our view they would have to denounce the 1882 Convention unless we agreed to revise it.

A few days after Christmas the draft announcement which had been arranged when the French Ambassador saw the Foreign Secretary and myself was agreed to with the French Government regarding the removal of the surtax and the turnover tax and there was agreement to enter upon conversations as soon as possible. The announcement was issued on 28th December. On that day our Ambassador in Paris was instructed to reply to the French note of 15th December expressing the hope that the French Government would not reduce the quotas in a manner which we held inconsistent with the 1882 Convention pending the proposed conversations; otherwise, a new situation would be created which His Majesty's Government would have to consider afresh. I hope the House will observe that throughout the whole of this period we were encouraging the French, and we ourselves were determined to enter into conversations with them on our trade relations, and we hoped that those conversations would develop in the most friendly way possible. On the last day of the year there came the French announcement of the removal of the surtax, and simultaneously of the imposition of new quotas, making a cut of £3,000,000 sterling in our exports to France. The French Government also announced an increase of the licence tax on coal. This came to us, I need hardly say, as something in the nature of a surprise; still more so when we found that a week later the French had agreed with America to restore all the American quotas to 100 per cent. and a day or two after that they bad agreed that they would also restore the Belgian quotas to 100 per cent. But there was no restoration for us.

The Foreign Office instructed Lord Tyrrell on 10th January to protest against this discrimination, and to say that in the present situation His Majesty's Government could not contemplate conversations, and that we should be obliged to consider retaliatory measures unless the discriminations against us were removed. On that same day the French Government promised within eight days to restore the quotas on a "very abundant list"—that was the phrase used—of United Kingdom goods. In the following week we received the abundant list, and found that it did not fully restore our quotas on numerous important goods, among other the valuable import of cotton goods from Lancashire into France. We made further representations to the French Government on 26th January, referring to this discrimination in favour of America and Belgium, and I am sure that the House will not be surprised to learn that we decided then to take retaliatory measures unless within 10 days the quotas were fully restored. In due course I made the statement to the House. The 10 days' notice was to have expired on 5th February, but the House will remember that at that time there was a good deal of political unrest in France, and in order to give time for the situation to clear up we held back the Order for a week. It did not come into force until 12th February. M. Doumergue's Government was set up on 9th February, our Order was published on the 10th, and on the 12th it came into force.

The question arose, having to deal with the matter by way of Order, how far were we to go? We had not the least desire to go beyond what the facts of the case necessitated. The original exclusion under the quota discrimination would have affected about £3,000,000 of our trade. By the "abundant list" the total amount of trade which was estimated to be affected would be something in the region of £500,000 per annum. It was impossible, of course, to arrive at an exact calculation. Having reached this figure of £500,000 per annum, we have so drawn our Order that it will not necessitate penalties on any goods in excess of £500,000, so far as we can estimate; in other words, the duties imposed under the Order are estimated to be as much in the aggregate as the amount of injury done to British trade by the exclusion from France under the discriminating quotas—so much and no more, as nearly as we can say to what is commensurate. I must, however, remind the House that the discriminatory turn-over tax is still in force on British imports into France.

At the same time, His Majesty's Government share with the French Govern- ment the desire to end the present difficulties as quickly as possible. We are therefore prepared to open discussions in regard to the trade between the two countries, with particular reference to the French quota on United Kingdom goods. It would have to be understood first of all that the French Government would carry out their undertaking at an early date not to differentiate against us in the matter of the turnover tax, and secondly that they would in the meantime take no further steps to reduce the quotas for United Kingdom goods, including coal, pending negotiations. That is to say, we can enter on conversations providing that we both start on the same level, and the lower that level is the better I shall be pleased. So long, however, as the French Government may maintain their discrimination, I am afraid that we must maintain our equalising duties. We are prepared nevertheless, to enter into conversations if the two conditions which we have set out here are complied with—and I see no reason in the world why they should not be complied with—by the French Government. In order that there may be no doubt about the position which we occupy, I should like to say that His Majesty's Government would suggest, for the most serious consideration of the French Government, that in order to create the most favourable atmosphere for discussion both sides should agree to remove the discrimination now in force on the one hand, and the retaliatory duties on the other, at any rate for the period of the negotiations.

I ask the House to sanction what has been done, with the full knowledge that we have exercised all the patience that the circumstances warrant and have been slow to take action. We have been moderate in the action that has been taken; we are prepared—and indeed are anxious—that the trade between the two countries should be conducted on the smoothest possible footing, but I must make it clear now, as I have done in the past, that we can only enter on negotiations at this time provided that we are in possession of equal privilege.

7.8 p.m.

Mr. ATTLEE

I recognise that the right hon. Gentleman has brought forward this Order with a sweet reasonableness which has differed considerably from the atti- tude which he has adopted at certain times. He did not seem to show that bellicosity which one might expect when entering upon a tariff war—for this is what the Order really means. The right hon. Gentleman may say that he is willing to have an armistice, but he is in a war, and tariff wars are apt to have very awkward political repercussions. He gave us something of the history of the negotiations, but I think he might have been a little more detailed. France is a close neighbour of ours, a very old friend and an ally in the last War, and one should have some regard to the difficulties from which a friend suffers. I imagine that, when the right hon. Gentleman was in business, if he had been in friendly relations of trade with another firm for many years and there was some matter to be cleared up between them, he would not have pressed the head of that firm just at the time when the firm's directors had been changed and they had a considerable strike on their hands. The right hon. Gentleman, however, had chosen to take certain steps, and that led him to launch an ultimatum, and eventually 10 days were given to the French Government to deal with that ultimatum.

A little of the history of those 10 days may enable us to see how far we could have expected the French Government to deal with the matter. On 29th January they had the ultimatum; it coincided with the resignation of the Chautemps Ministry. Before that date there had been a variety of Ministries which I cannot remember; they lasted a short time and there were a great many of them. On 30th January we had the formation of the Daladier Ministry, which took over on 31st January. They seem to have got busy, because on 1st February they were delivering a Disarmament Note. On 4th February we had the dismissal of the Prefect of Police; on the 6th two of the most important Ministers, of Finance and War, resigned; on the 7th there were riots and bloodshed; on the 8th there was the resignation of the Daladier Ministry; on the 9th M. Doumergue formed a Government; and by the 10th the Order had come into force. I maintain that any country suffering under those conditions cannot be expected to deal very effectively with questions of this sort.

I submit that you have to consider very carefully what you are doing when you embark upon a tariff war of this kind. One of the biggest factors in trade is good will. I do not believe that you can sell goods by means of an ultimatum. One has seen all over the world recently something that goes far beyond the actions of Governments, and that is the actions of consumers. Of late years we have had every kind of cry, from "Buy British Goods" to "Don't Buy Somebody else's," and the boycott of one sort and another. It is extraordinarily dangerous to embark upon warfare of this kind. You may extract something that you think is valuable, but you may do so at far too great a cost. You exacerbate the feeling between two countries which, not only on trade grounds but also on political grounds, should at present be standing very close together.

I do not suggest that the French have not been difficult. All nations are difficult in trade. But you must remember that there have been difficult positions to perplex us all the world over. The French have put forward—with what justice I do not know—matters of currency changes, rates of exchange, and so forth, in which they have claimed that they are only making good a loss. They are like our Government; they are engaged in chasing that interesting will-o'-the-wisp sometimes called balance of trade and sometimes called balance of credit. I note that in the course of the negotiations the plea of the French Government was that they were only trying to balance their credit.

We are here embarking on an extremely dangerous experiment. I will not preach to the right hon. Gentleman of the dangers of retaliation. This House must have often echoed to denunciations of this practice for a long period of years before I was ever a Member. Nevertheless, we have had a good many little tariff wars and trade wars of one sort or another on our hands. The Secretary of State for Dominion Affairs started off very gaily with a war and is still in the trenches, and a brisk game of beggar-my-neighbour is going on between this country and the adjacent island. We had the Foreign Secretary's advance on Moscow. Now we are having the retreat from Moscow, and we hope it will end this week.

Viewing the position generally it seems to me that this is the great stop-trade Government. We have had a constant succession of difficulties with traders. In the Debate that has just concluded one gathered that in future traders must not only read their trade journals but must read the OFFICIAL REPORT of this House, and from the questions and answers find out exactly where they stand from day to day. But when one looks at the matter broadly I ask, are we going to get much good by this kind of trade warfare? The right hon. Gentleman the President of the Board of Trade delivered his ultimatum. As a result I gather that the French are denouncing the 1826 Navigation Treaty and the 1882 Commercial Convention. Two can play at this game of tariff wars. Trade wars are just like other wars: In modern times the only result is that both sides are ruined. It seems to me that in all this talk, in these elaborate negotiations, we lose sight of what is really the basis of trade. In the long run all trade is bartering, the exchange of goods and services between one country and another.

I do not think for a moment that if by the passing of this Order the Government stop £500,000 or £1,000,000 worth of French goods coming into this country, that will do any good. It will stop an equal amount of goods going from this country. The President of the Board of Trade is like his colleague the Dominions Secretary. He comes down to the House and says he wants only just enough in the way of a duty, and a month or two later he wants it doubled, and a little later still he has to raise it to 80 or 90 per cent. The President of the Board of Trade, I believe, will travel very quickly along that road, because he has shown an extraordinary aptitude for tariffs. Considering his long record of Cobdenite rectitude, the way in which, after he first put his foot on the slippery slope, he has slid down, has been an example to anyone who goes ski-ing. He goes from the top of the hill to the bottom. For many months he has been the most enthusiastic tariffist I have seen in this House, with the possible exception of the right hon. Member for Sparkbrook (Mr. Amery).

I do not believe you will get a successful trading agreement with France by threats. I am not in favour of the old views on entirely unrestricted trade which the President of the Board of Trade ex- pounded so successfully for many years in this House. I believe in planned trade. But you do not get it with this kind of tariff war in which, as we heard just now, special interests use every kind of trick in order to get an advantage. When I look at this proposal I would like to know where all the trades stand that are to be affected. I think it will be found that this little Order will have repercussions in certain of our trades. I am not an expert, but I am told that people still like Paris models. There is a great deal of business in my part of London in connection with dress. You will not get your Paris models, but they will be imported by some other country. You merely hamper your own people. In all this kind of work the repercussions are always unexpected and always go a great deal further than anticipated.

We shall oppose this Order because we are entirely opposed to tariff wars. I have no reason to think that the Government will be in the least successful. We believe that the policy of the Government which has been all through a policy of restriction against the consumer on behalf of vested interests, has merely brought about a general reduction of trade in this country and in the world. This was the view put forward by the Government at the great inquest on the capitalist system that was held at the Geological Museum in the summer. Now that has gone and the tariff truce has gone, and the Government are going to join with all the other nations in playing the game of "beggar my neighbour." I think all these devices are lunacy. It is a kind of lunacy that will bring the world down. We do not believe in the old-fashioned Cobdenite capitalism, and we do not believe in this kind of retaliation and tariff war.

Brigadier-General Sir HENRY CROFT

Does the hon. Gentleman tell us that in the present position he would take no steps whatever?

Mr. ATTLEE

We do not believe that in this way you can get successful trade between the nations. As a matter of fact it is not trade between nations but between a number of profit-making units within the nations. We believe that it will be necessary to have a trade controlled in the interests of the plan which you have for the nation, and that you should negotiate with foreign countries on that basis. The right hon. Gentleman the President of the Board of Trade discharged an ultimatum and he has to put it through. He brought himself into a position in which he had to go on. But we regard the whole course as just another example of the hopeless breakdown of a system that is absolutely out of order.

7.22 p.m.

Sir AUSTEN CHAMBERLAIN

When I came here I had no intention of speaking. I intended only to listen to what might be said by others. But I cannot let the speech to which we have just listened pass without any comment. A most pertinent comment was made by way of interruption by my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft). He asked what would the hon. Member do, pending the coming of that new world which at some time, when other countries as well as our own are ready for it, he and his friends were going to create. The hon. Gentleman says that our present system, the whole economic system of the world, is rotten. But we have to live under it for a great many years yet. What would the hon. Gentleman do, confronted with such a case as this? The hon. Gentleman has given no answer to that question, and for the very simple reason that obviously he has no answer to give.

The opening sentences of the hon. Gentleman's speech raised an echo in my breast. He spoke of our long friendship with France. He reminded the House that we had been the Ally of France in the struggle in which the liberties and the system of both our countries were equally engaged, and he went on to say that all the more, in view of what has recently happened in Europe, it was important that our two countries should be friends. It is because I hold that faith as strongly as man can hold it, that I think it my duty to intervene for a few minutes in this Debate to say that you cannot treat your friends as the French Government have treated us in this matter. I cannot relate the policy of their fiscal authorities to the general policy of France, to a country which has been her Ally, to a country which is animated with the most friendly feelings towards her, a country which is incidentally an important customer.

It is a refusal of equal treatment with other countries in the French market. Respectful and friendly remonstrances have been made. Conversations are held; promises of redress are given. Still, in spite of all, the grievance continues. It is not redressed, and it remains the fact that the country with which we would like to be on the closest terms of friendship, for whose defence we have entered into engagements that we have undertaken with no other country except the two which are included in the same agreement—that that country should treat us, in spite of our Treaty, and in spite of the engagement made with us, with less faith than it treats others who are far less intimately connected with and far less bound to it by every interest in the present as by recent ties of the past, is something which I say makes an Englishman who has done all he could, and is still ready to do all he can, to promote good understanding between the two countries, almost despair of the attitude of a Government which in one part of its policy so flagrantly contradicts the other.

It is not because of the trade involved, but it is because I hold, with the hon. Gentleman opposite, that a good understanding between our two countries is necessary to our mutual defence, and is the only basis on which you will build peace and the reconstruction of Europe, that I say I can see no other course that the Government could have taken in a case such as this, except to make it clear to France that this treatment is resented in this country, is felt to be unfair and unjust and intolerable, and is really scarcely compatible with the good relations that we would like to have.

7.30 p.m.

Sir ARCHIBALD SINCLAIR

I share the sentiments which the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) has expressed as to the serious grievance which we have against the action of the French Government in the matter of these quotas. We have indeed two clear grounds of grievance against the French Government—first, the discriminatory turnover tax, and, secondly, their action in regard to the quotas. We on these benches have an especial hatred of im- port quotas, but unfortunately it is not against the imposition by the French Government of these quotas that we have any just ground of complaint. The President of the Board of Trade in his admirable and skilful speech skated rather lightly over that particular piece of ground. The French Government have adopted this lethal weapon of quotas, so deadly to international trade, as a method of bargaining. They have a right to do that, and against that right which they have claimed we cannot justly complain.

The French Government declared their intention to impose these quotas as long ago as September, 1933, and the President of the Board of Trade remained in close negotiation with them over the surtax and the discriminatory turnover tax and other matters, and we could not complain against the imposition of these quotas. We could not complain, because it was all part of that deadly quota system which we have adopted ourselves and which in some of our trade agreements we have even imposed upon other countries in order to gain advantages for our coal trade in their markets. It is important to realise therefore that our ground of complaint against the French Government, though real and serious, is relatively narrow and limited. It is the complaint which the right hon. Gentleman the Member for West Birmingham quite fairly stated of discrimination against us in favour of the United States and Belgium, because in the Trade Convention of 1882 the French Government bound themselves not to discriminate against this country in regard to restrictions on exports and imports.

I have endeavoured to understand the French case for these discriminations which they have exercised, in spite of their obligations under that Convention, in favour of the United States, Belgium and Holland against us. I cannot find any adequate explanation in the additional imports of wine which the United States have taken, for the complete restoration of the quota to that country while a comparatively small restoration was made in our favour. In the case of Belgium and Holland I understand that the French Government have reasons for not wishing to publish what the material considerations were which those countries gave in return for the restoration of their quotas. Moreover, the French Government's action hits us in this country at a time when our economic situation is still grave. They ought not to be misled by the speeches of Ministerial apologists here who make out that our finances are much improved, that we are breasting the wave of depression better than any other country and that unemployment is rapidly disappearing under a wise Government.

We, of course, know that that is largely propaganda for internal consumption. We know too well how slowly the stubborn evil of unemployment is giving way and how serious still is the predicament of many of our greatest industries. We all in this House have different industries in the welfare of which the people whom we represent are mainly interested. In my own case it is agriculture and fishing. In the case of many hon. Members on this side it is coal. In the case of other hon. Members it is shipbuilding. But we all know that the textile trade is among those which have suffered most severely and is most hard hit by the quotas which the present French Government have imposed. It is not surprising that the President of the Board of Trade, who has applied himself with so much patience, skill and industry to the problems of the textile trade, on returning from the stricken towns of Lancashire should feel real indignation which we all share at the untimely action of the French Government. Therefore, while I conceive it to be my duty to offer some criticism of the Government's handling of this controversy, I wish to say nothing which would add to their difficulties but rather to testify that the French Government would be making a tragic mistake if they thought that there would be acquiescence on the part of any body of opinion in this country in measures of discrimination against our trade in favour of other countries.

Nevertheless, if we in this House believe—as we do I think, unanimously—that the French Government is in the wrong in this controversy, we must realise that the French people with almost equal unanimity and resolve believe that they are right. Indeed the unanimity of French public opinion on this question is an astounding and disquieting symptom. I think it is due to the people whom we represent that we should try to under- stand from what this unanimity springs. It has not always been so in these controversies. There are bodies, for example, like the Consumers Co-operative Organisation and the Committee of Economic and Fiscal Action in France, to the activities of which in restraining previous French Governments in matters of this kind detached observers like the Paris correspondent of the "Times" and other journalists have borne testimony. In this instance those bodies are silent. Even the silk manufacturers of Lyons whose annual silk exports to this country, even in recent years of slump, have run into hundreds of millions of francs, who stand to lose most from the duties which we are discussing to-night, who have always tried to restrain French Governments for fear of reprisals in the British market—even they have now rallied to the French Government and denounced what they describe as the "intimidation" and "brutal policy" of the Government. Nobody listening to the President of the Board of Trade this evening would dream that anybody could apply to him such epithets as "brutal." He claimed indeed that he had shown patience throughout these negotiations, and I do not think anybody can deny that he has shown patience and many other great qualities in his dealings with the French Government on the surtax and the discriminatory turnover tax. The description which the right hon. Gentleman the Member for West Birmingham gave, "respectful and friendly remonstrance," was, if I may say so, a very accurate description of the attitude of the Government up till last December. But I am afraid that the situation has altered—oddly enough, since the French Government went so far as to remove the surtax. That was just before we rose for the Christmas Recess, and it was claimed and I have no doubt rightly claimed by the Government as a triumph of negotiation. But since then the controversy has been so conducted between the Governments of the two countries that instead of being treated as a matter of trade, a matter of the common interests, as the hon. Member for Limehouse (Mr. Attlee) said, of producers and consumers living in two neighbouring countries, the national honour has become engaged on both sides, and the policy of our country is described in Paris as "brutal" while Ministers here bid us to be prepared for "a trial of strength."

Indeed, the high-handed methods adopted in recent weeks by His Majesty's Ministers might almost have been designed to close the avenues of retreat both for the French Government and our own. The first move in that direction was made, no doubt under instructions from the Cabinet, by my hon. Friend the Parliamentary Secretary to the Board of Trade. In any remarks which I make about his speeches in Paris or in London I intend no attack upon him. I see in him merely the exponent of the policy of the Government in the handling of this controversy, which handling I feel it my duty to criticise. I have no doubt that he has been an exponent, as faithful as we know him to be brilliant and capable. He went to Paris on 24th January, and spent the evening at a banquet of the British Chamber of Commerce which was attended by the British Minister, on behalf of the British Ambassador, the President of the Paris Municipal Council, and the Minister of Commerce. The Parliamentary Secretary proceeded to tell the assembled company exactly what he thought of the official economic policy of the French Government, what they had done wrong, and what in his words we "would not tolerate." [HON. MEMBERS: "Hear, hear!"] To the opinions which he expressed I take no exception, but the manner of their expression, which he himself described as "brutal candour" and the time and the place could hardly have been more unhappily chosen.

Let us assume for a moment that the situation could be reversed and that a foreign Chamber of Commerce in London gave a great banquet to which leaders of political and social life in London were invited, including the Lord Mayor, and the President of the Board of Trade. Suppose that some French, German, or Italian Under-Secretary proceeded to deliver a speech on the iniquities of some aspects of British trade policy and told us what the French or the Italians were not prepared to tolerate, I should like to see the expression—an expression no doubt of meek and obedient resignation—on the face of the President of the Board of Trade. That was not a good start for the most serious phase of the negotiations. The strong hand may be all very well on the helm, but it ought not lightly to be brandished in the face of a friendly and proud nation.

They knew all about the difficulties of the French Government, as the right hon. Gentleman reminded us in his speech to-day, but in my submission they made inadequate allowance for those difficulties. Three days after the Parliamentary Secretary's speech, on 27th January, the French Government resigned. It was apparent to every observer that a crisis of the utmost gravity was at hand. There was rioting in the streets of Paris. On 29th January before any politician bad accepted the task of forming a Government—M. Daladier did not accept until 8 o'clock that evening—our ultimatum with a limit of 10 days was presented. On the 30th January the new French Government—I do not say that it was any measure of satisfaction of our claim—made what was at any rate a gesture of conciliation by cancelling the 10 per cent. coal licence duty. The situation in Paris grew worse. Tumult reigned in the streets. On the 7th and 8th February property was destroyed and blood was shed in the streets of Paris on a scale which shook not merely the Government but the existing régime in France to its foundations. On the 7th February the Government fell. On the 8th M. Doumergue returned to Paris and on the 9th formed a Government, in the political comprehensiveness of which is reflected the gravity of the crisis in France. That same day was the day unhappily chosen by our Government to intimate in Paris their intention of acting forthwith on their ultimatum.

Let hon. Members imagine what would have been the effect on British public opinion and feeling if in our country some foreign Government, however justified some of us might have thought its representations to be, had presented an ultimatum to us when a National Government was being formed on a certain day in August, 1931. Argument and reason would have been swept aside, it would have seemed to us like an effort to exploit our difficulties, the national honour would have been involved, and opinion everywhere would have rallied to the Government. In such an atmosphere, reason and conciliation are stifled, the only reality seems to be force, and we pass from "reasoned and respectful remonstrance" to reprisals.

Let the House pause before taking this momentous step. The Parliamentary Secretary to the Board of Trade said in a speech three days ago in London: If it is to be a question of a trial of strength between these two countries, then the quicker we get down to facts the better. Well, surely it would have been better to get down to facts before scattering ultimatums. Let the House ask the Government to make certain that every resource of conciliation is exhausted before we resort to such humiliating unwisdom as a trial of strength. I have often noticed that when there is a prospect of a great strike in industry, workmen and employers are lectured by wise and thoughtful men, many of whom I see sitting on the Government Front Bench, and articles are written in newspapers against such a policy. They are told that neither side will get everything, that they will have to compromise sooner or later, that it will be much better to come together and to realise that their common interests vastly outweigh the causes of the quarrel, and that they should seek agreement before instead of after the strike has impoverished their homes and damaged British trade and industry. Let hon. and right hon. Members who have written and spoken in that strain apply the same principle to this dispute.

Our recent experience shows that the tariff as a bargaining instrument is as futile as it is devastating. The big stick of tariff retaliation against Ireland has already destroyed more than one-third of our export trade to that country. Far from our tariff weapons enabling us to get foreign tariffs down, they have steadily risen against us in every country of the world since we adopted Protection. Even with the tariff weapon we have been unable in Spain and other countries to insist upon the advantages which we had secured under a Free Trade system. Most deadly of all is the policy of quotas, not only because of their lethal effect upon trade, but because of the bad blood and discrimination which their application almost inevitably involves. A trade war with France would be an expensive indulgence both for Englishmen and Frenchmen and would inflame, as it has in Ireland, that spirit of nationalism which is the irreconcilable enemy of trade and peace.

At Greenock in 1903 the father of the right hon. Member for West Birmingham made a famous speech describing the terrible plight of British industries, which, of course, he attributed to Free Trade: 'Sugar has gone,' he declared; 'silk has gone; iron is threatened; how long are we going to stand it?'

Sir A. CHAMBERLAIN

Is the right hon. Gentleman to-day contradicting those statements?

Sir A. SINCLAIR

I am. Within 10 years these and other industries had reached a peak of prosperity which they bad never before attained, and they had done so because in those days the prosperity of the country was broad based upon world trade and because we were the great free market of the world. We could then boast, with Antonio: The trade and profit of the city consisteth in all nations. Now Russia is gone, and it will take more than the signature of a treaty—much as I welcome that and upon which I congratulate the Parliamentary Secretary and the President of the Board of Trade—to get Russia back into full commerce with us. Russia is gone, Ireland is going, France is threatened. How long can Britain stand the loss of her customers? How little can we stand the loss of French trade and friendship, and how little can France stand the loss of British trade and friendship? If this loss, this offence, must needs come, woe unto the Minister or the Government by whom it comes, if they have not avoided every provocation and exhausted every means of conciliation.

It is necessary for the House to consider the effect of this Order upon the wider aspects of British and indeed European policy. It is at a moment when the swelling tide of Germanic nationalism is beating against the weakened frontiers of Austria, swirling round Czechoslovakia, and thrusting out towards Hungary and Bulgaria and the Balkans, that we are invited to engage in a quarrel with France. We see around us the forces of dictatorship and militarism, religious persecution and racial intolerance asserting themselves against the forces of reason and peace. Is there one other great State in Europe which stands for freedom and democracy? Yes, one, and at this moment of all others that is the very State against whose trade the Government are inviting us to engage in the deadly game of reprisals. If, as you gaze at the grim and threatening scene in Europe, you hear a noise as of thorns crackling under the pot, it is the voice of the Parliamentary Secretary to the Board of Trade telling us to give short shrift to, and to prepare for a trial of strength with, the only other great Power in Europe which is passionately devoted to freedom and peace.

Let the House as a whole demand that the Government, before appealing to force and reprisals, shall exhaust every resource of reason and conciliation and the almost illimitable resources of friendship between the two peoples.

Captain FRASER

Which are they?

Sir A. SINCLAIR

The hon. and gallant Member asks, "Which are they?"

Captain FRASER

The point of my interjection was to ask which resources had not been exhausted.

Sir A. SINCLAIR

I do not know how long the hon. and gallant Member has been in the Chamber, but I have been indicating quite clearly how the Government, far from trying to exhaust since January—I have praised the Government for their action before January; I agreed with it, and I paid a tribute to the President of the Board of Trade for his successful actions before then—but since then I have pointed out how, step by step, at a time when feeling and opinion in France were inflamed, we have chosen the wrong moment to intervene in the most unfriendly way. What is the alternative? Reprisals and counter-reprisals. One hon. Member beneath me who has now left the Chamber said, when the Leader of the Opposition was speaking, "What would your policy be?" I do not know what the policy of the Leader of the Opposition would be, and I cannot say that I feel that it was a very convincing exposition that he gave in his necessarily abbreviated remarks, but I would say, if the hon. and gallant Member were here now, or any other hon. Member in whose mind the same question might be, "Look at the record of the Governments before the War, Governments which, not only by reason and conciliation won a great position for British trade and industry in the world, but secured a position which under tariffs and by these methods of tariff bargaining we have been unable to retain intact." The Prime Ministers of those Governments, Mr. Asquith among others, made it clear that Free Trade is not in the last resort a policy of quakerism or quietism, but we always avoided the last resort by statesmanship, by reason, by conciliation, and we won advantages without the necessity of reprisals.

To what would these reprisals lead? Can we win? The President of the Board of Trade did not tell us that. Perhaps he will force the French to give way, but the President of the Board of Trade gave us no indication of his views on that point. If so, however, I would say that such a victory would not only be costly to achieve, but it would be hardly less disastrous than defeat. What prospect would there be for trade negotiations or for fruitful co-operation in those other things to which the right hon. Member for West Birmingham referred between these two great nations in an atmosphere of victory and defeat? There is only one way to seek a happy solution—forbearance, good will, and friendly discussion. We must end the struggle before feeling becomes still more embittered. I feel I must pay a tribute to the speech of the President of the Board of Trade, though I think it had one defect, the concealment from this House of the real seriousness of the situation, the seriousness and the depth of feeling of the French people; but I willingly concede that at the end he held out the prospect of negotiation. I hope he will go even farther. I hope he will press the French Government to come into conciliatory and friendly discussion with him. Let our Government do it now. Let our Government issue to the French a note or a declaration which will assure them of their real eagerness to come together in a spirit of real friendship, without recrimination, without banging the table and telling them what we will not tolerate. Let them assure them that we are coming in a real spirit of friendship, anxious for co-operation in trade and in world policy; and if the Government adopt that attitude, they will have the whole-hearted and unanimous support of this House and of the country.

8.0 p.m.

Mr. GODFREY NICHOLSON

I do not intervene in this Debate in order to ride my own particular hobby horse, party politics. So far it has proved a fertile and fruitful field for the old-fashioned warfare of party politics. Nor have I risen to indulge in post mortems or to prove that my party or even my nation has been right in these negotiations. I feel that we have this evening strayed a long way from the realities of the situation. It does not really matter in the slightest whether the French Government are wrong or right. It does not really matter very much whether the right hon. Gentleman has adopted a tactful or an untactful course; personally, I see nothing to criticise in his procedure. What does matter is the answer to the question: What next? I am profoundly worried about the present situation, and it seems to me that we are on the brink of a most fatuous and pointless deadlock. I would not have got up if I had not in the course of the last few days had an opportunity of discussing the matter with well-informed and influential French friends of mine, and I want to pass on to the President of the Board of Trade and to the country some of the points of view which they laid before me.

The whole French nation is longing for negotiation; it is passionately longing for negotiation. Secondly, at this particular moment, because of the very difficult political situation in France, no French Government—even the National Government they have got—dare lay itself open to the charge of yielding to outside pressure. I agree with the right hon. Gentleman who has just sat down. One of the most remarkable feature of this tragic situation is the unity of the French trading community behind its own Government. I want to place before the House another aspect. This is not a struggle or war that can be won by bickerings, reprisals or ultimata. We are faced with the fundamental difference between two nations, two totally different fiscal theories, two totally different ideas of methods of diplomacy, and, finally, two widely differing national mentalities which show themselves in the way we proceed in a dispute of this sort.

I beg the House for a moment to consider from the French point of view, not the actual dispute, but the attitude of the British Government. They see some- thing very insincere in our view of the British Empire. When it is a question of fiscal action, a question of getting concessions from the French Government, we say: "Oh, no, the British Empire is a family party, and Ottawa is superior to any most-favoured-nation clause." If it is a question of giving a concession to France from Australia or New Zealand, we say: "You must apply to them separately. They are totally independent States." Our rigid insistence on the most-favoured-Nation clause is compared in their eyes with our policy in regard to quotas. If the French Government have been stupid, impatient and even petty—I do not mean the word in any sense insulting to the French nation—but if they have been these things, can we not admit that our policy in the last few years must seem to them slightly disingenuous and rather anomalous?

I believe, as I have said, that the French Government are longing passionately for negotiation, but they will not enter into it with any conditions whatever. I think that if my right hon. Friend is to reach success in this difficult situation, he must realise that it is no good insisting on any concessions whatever from the French Government or any condition precedent to the opening of negotiations. I think we should be ready, if necessary, to start negotiations secretly so that neither Nation shall think the other nation is giving away to outside pressure. I finish where I started; I beg the right hon. Gentleman to re-open negotiations over the whole field of Anglo-French commercial relations, without any conditions whatever.

8.5 p.m.

Major GWILYM LLOYD GEORGE

I presume it is part of the policy of the Government of this country to increase the trade of the country, though one would hardly think so if one followed their legislative Acts since they have been in Office; and the situation they are faced with to-day is the inevitable result of the policy which the Government have deliberately embarked upon. I think we are entitled to criticise the Government for the manner in which this situation has been handled from the beginning. We were told to-night that after the quotas were reduced at the beginning of this year they were restored in full to the United States of America and to Belgium. Leaving out of account the depreciation of the exchange of the United States, and incidentally of our own, can the right hon. Gentleman say whether no concession was made by the United States and Belgium to the French Government? I understand that it was as a result of certain concessions to the French that they restored these quotas in full. Did we try to negotiate at all? Did we make any suggestions to the French Government as to what we might be prepared to offer in exchange? So far as I can make out, the only thing the Government did was to send this ultimatum, and it is obvious that from the spirit which that kind of action breeds, you are not likely to get any very concilitary attitude on the other side.

The supporters of the Government, and indeed the Government themselves cannot complain of the French action, because the French Government have given in to exactly the same kind of pressure that is constantly brought to bear on the British Government. Questions are asked in this House by hon. Members who say that if there is a country with a favourable trade balance we should take steps to penalise it. The French Government, I assume, had the same pressure put on them, and it does not surprise me in the least that they have given way in view of the trade position between France and Great Britain. I want the Government to put themselves in the place of the other party, because that is the best way to get the right atmosphere for a settlement.

Look at the figures of trade this year between France and ourselves. I saw them only to-day. The right hon. Member for West Birmingham (Sir A. Chamberlain) said it was monstrous the way our friends treated us. I say it is not too good the way we treat them. In 1931 before the duties were imposed, we imported about £40,000,000 worth of goods from France. By last year it had dropped to £19,000,000. Our imports from France dropped, in value at any rate by half, whereas the exports from this country to France were £32,000,000 in 1931 and 25,000,000 in 1933. We have a very favourable trade balance at the present time. We took last year about £19,000,000 worth and exported £25,700,000. I should think that would delight the heart of every supporter of the Government, but apparently it is a monstrous situation to be put right at once. We are told that by the quota, the French Government were cutting down £3,000,000 of our imports and have now, with concessions, brought it down to £500,000. But we have cut down by £20,000,000 since we started this policy, and I hope the Government, instead of wielding a big stick, for which they really are not adapted, will do things in a conciliatory way, realising that the other side has something to complain of just as much as we have. I think, then, they are more likely to get a satisfactory solution.

The French Government have simply taken an example from the majority in this House. It is another instance of the danger of starting this kind of thing, and—I am sorry to have to say it—whatever happens as a result of these negotiations, the barriers to trade will be a little higher than they were before we started. Before you negotiate you put on duties of 50 per cent.; as a result of negotiation you come down to 25 per cent. and everybody thinks it is a great triumph. But the tariff is 25 per cent. higher than it was before. That is the history of tariffs in Europe and throughout the world. I regard this as a very great misfortune, and I do hope the latter part of the right hon. Gentleman's speech represents the spirit in which these negotiations are to be entered upon. The only thing I am afraid is that there will be less trade afterwards than before, and this country cannot afford to lose trade in any part of the world. I remember the right hon. Gentleman some years ago saying what a remarkable thing it was that there were still so many Conservative Members in the House who thought you could increase the volume of trade by putting taxes upon it. The right hon. Gentleman I am afraid has forgotten those days. It is because I have not forgotten them that I shall vote against this Motion.

8.13 p.m.

Colonel GRETTON

It is evident from the speeches on all sides of the House that this Order will be voted to-night with the greatest reluctance. I share that reluctance; but I am not going to add anything, in what I say, to weaken the hands of the Government in the situation which we now have to face. The right hon. Baronet the Member for Caithness and Sutherland (Sir A. Sinclair) was very eloquent about tariffs and quotas. Those of us who have studied and advocated a moderate application of tariffs for a number of years do not hold the views which he does. He does not understand the fundamentals of the case. It is not for me to-night to enter on that discussion, but I would add that the Government have invented a new method which we have never advocated—the quota—and the application of quotas is leading to great embarrassment to us all. It appears that the negotiations with the French Government, though very dilatory and without energy were proceeding not without hope of arriving at an agreement which might be satisfactory to this country and to France. Since the quota the right hon. Gentleman has shown far greater energy, and acted with much more speed, than he has seen fit to employ during the long and, from his description, somewhat dilatory conversations which took place over a long period previously.

I am not here to criticise our Government to-night. We have a really serious grievance, and there is nothing to be gained by endeavouring to conceal it. There are grievances which will have to be remedied when friendly conversations are renewed, with good will and an intention on both sides to arrive at an understanding. I think it is extremely unfortunate that we should be asked to pass this Order to-night. The right hon. Baronet alluded to recent domestic difficulties which have occurred in France, and after the two years which have elapsed over the endeavour to get this question settled it seems to be quite unnecessary precipitancy to insist at this moment on embarking upon a policy of reprisals. The Government of France consists of statesmen new to this question. It is known to every one of us that they have had no time to give to this matter the attention which it deserves. They have been involved in great domestic difficulties, with rioting and a general strike, and yet almost on the day they took office they were informed that if they did not deal with this question of trade relations, and remedy our grievances in a manner satisfactory to the Government of this country, we should pass a Measure surtaxing certain French imports.

I do not wish to use adjectives or lurid phrases, of which we have had some examples from the right hon. Baronet, but it does seem to me that we have shown a great want of consideration for the statesmen of the French Government, and, if I may say so, an exhibition of bad manners on the part of the representatives of England which I greatly deplore. I trust, in common with others who have spoken, that the Government may find a way of remedying any mistakes which they may have made in manner or method, and will spare no effort again to open the door to friendly conversations and an understanding on both sides that agreement should be reached, and that we may find that the Order which the House is asked to pass to-night will be withdrawn at the very earliest possible moment.

8.10 p.m.

Mr. COCKS

I think almost everyone who has spoken to-night from the other side of the House has emphasised two points, and I also wish to emphasise them. First, we are all agreed that Britain should have fair play, and, second, that in this matter the Government, or the President of the Board of Trade, has acted with rash precipitation and has handled the matter very badly. Because I think that, and because I agree with what the Lord President of the Council said in his speech in the country yesterday—when he told us that far more could be done by getting together than by any amount of tariff fighting, and that if we realised the incalculable losses which come from a tariff war we should be fools not to come to a successful understanding—I ask the Government, even at this last moment, not to insist npon imposing these duties and embarking on such a tariff war. The President of the Board of Trade has acted very rashly in this matter. He tried to disguise that fact this evening by devoting almost the greater part of his speech to detailing all sorts of things which happened last year, and I think the year before last, all of which were really irrelevant to the present dispute. I say they were irrelevant for the reason that on 31st December last, only six or seven weeks ago, there was practically nothing separating the two countries. We had no grievance at all at that time, except, perhaps, in the small matter of the turn- over tax. On 31st December the French had removed the surtax and they had not yet, though they did so an hour or so later, imposed the quota. At that time there was no quarrel. The whole trouble has arisen in the space of six weeks.

The President did not tell us something which my hon. and gallant Friend the Member for Pembroke (Major Lloyd George) mentioned. He described what had been happening in the years from 1931 to 1933. English exports to France had been reduced only from 3,724,000,000 francs to 1,832,000,000 francs, whereas in the same period French imports to this country had been reduced from 5,043,000,000 francs to 1,329,000,000 francs. A trade balance which in 1931 was in favour of France to the extent of 1,319,000,000 francs had been converted to a favourable trade balance for Britain—and that means an adverse balance for France—of 503,000,000 francs. Britain had not much of which to complain in that respect. In spite of all the things which were happening, according to the President of the Board of Trade, during all that time the balance of trade was turning in our direction and against France. I have often heard supporters of the Government say that other countries ought to buy just as much from us as we buy from them. Therefore, they can hardly regard the French as unreasonable when they adopt that argument, and say, "We now have an adverse balance where formerly we had a favourable balance."

What has happened this year? On 1st January quotas were imposed affecting £3,000,000 worth of our trade. We protested on 10th January, and as a result the quotas were reduced—or extended, to put the matter in another way—until they affected only £500,000 worth of our trade. This small, paltry sum is all that is at stake. It had been reduced from £3,000,000 to one-sixth of that amount in about three weeks, but instead of continuing friendly negotiations with the French Government to try to bring the figure still lower, we hurled a 10 days' ultimatum at them. Considering that the whole matter at stake is now only a question of £500,000 worth of trade a year, considering that the French Government, as we understand, say they want to break through this vicious circle of retaliation, and con- sidering the difficulties that the French Government have had, I say that the action of the President of the Board of Trade is absurdly high-handed. It was his duty to use—I am very sorry that he is going out of the House; I will not keep him long—the most conciliatory methods, to build a golden bridge, if necessary, in the negotiations with the French, instead of hurling an ultimatum across the Channel, like some miniature Jove hurling thunder-bolts from the Olympus of Great George Street.

In the present state of the world, when tyranny is showing its hideous head in so many countries in Europe, and when already we hear the rumbling of threatening war, it is absolutely essential that this country and France should stand together, united by the closest bonds in defence of liberty and peace, and we should strengthen those ties in every way we can. We should not weaken them by such action as has been taken by the President of the Board of Trade. The friends thou hast, and their adoption tried, Grapple them to thy soul with hoops of steel. The President of the Board of Trade has not grappled France to his soul with hoops of steel. He has hit her over the head with a boat-hook. That seems an excessive form of filial devotion. I believe the parental injunction was that that weapon was only to be used in the first place upon his fellow members of the Liberal party, and not upon our Allies on the Continent.

We have had the Parliamentary Secretary to the Board of Trade, after visiting, I presume, the Alhambra Theatre, going down to the dinner of the coal factors and making a speech in which he practically said that if France wanted a fight she could have it. There have been people before him who thought they could imitate or play the part of Henry V, but when they came to enact the role showed themselves only fitted to play that of a second Tappertit. It is a curious thing that when lifelong Free Traders once begin to play about with tariffs, they are like lifelong teetotalers who start drinking wine; it goes straight to their heads. A celebrated English poet in an unpublished poem, a copy of which I happen to possess, said: When the clergyman's daughter is brought up on water, Look out when she gets the champagne. It seems as though the President of the Board of Trade, his Parliamentary Secretary and their fellow former Free-traders have got at the champagne of retaliatory tariffs, and that it has gone to their heads. They have brushed aside the feeble protests of the Foreign Secretary—we never expect anything strong to come from that quarter—that lath painted to look like a lath. They have brought in this mischievous policy which seems designed only to please possible pro-Germans that may happen to be in the Cabinet. Realising the seriousness of the position in Europe it is a wonder to me that the Conservatives in the Cabinet do not see to it that these mischief-making Liberals are not allowed to break up our ancient alliances and friendships for the sake of their admiration for other races on the other side of the Rhine. It was the Lord President of the Council who made the speech which I have quoted, and I chiefly appeal to him to exercise his authority to see that these duties are not imposed, and that a tariff war is not started.

8.31 p.m.

Captain FRASER

The right hon. and gallant Gentleman the Member for Caithness (Sir A. Sinclair) extolled the unanimity of the French in this matter, but did not hesitate to display the lack of unanimity of the British. I must say that I deplore that. I cannot help thinking that if there was a time when unanimity might help the President of the Board of Trade, this is such a time. I want to make just one observation. It is only natural that Free-traders should take what appears to them a Heaven-sent opportunity for pointing out the difficulties that lie ahead of us—no one can deny that there are difficulties—but none of those who have spoken against the proposals have shown what alternative there really was. It is difficult for the Government to come down and explain the many matters which must, quite obviously, be in the minds of most Englishmen at this time, without putting themselves into the position of possibly rendering negotiatons more difficult.

While the Government cannot say much more than has been said by the President of the Board of Trade, it must be clear to every Englishman that while England has been trying to negotiate, the other side have been trying to arrange matters their way so as to make negotiation more difficult for us but a little easier for them. Surely that is as plain as a pikestaff. Even the hon. Member for Broxtowe (Mr. Cocks) said that England must have fair play, and the right hon. and gallant Gentleman the Member for Caithness said the same. The only difference seems to be the manner in which this matter can be approached. I do not see any other way. If you are to sit still and let other men put this against you and that against you, and to load the dice against you before the negotiations, obviously when you come into the negotiations you will have that much leeway to make up before you start square. The matter will have been prejudiced in advance. All that the British Government have done is to try to make the thing level, so that fair negotiations can now proceed, and naturally all of us hope that those negotiations will be successful.

The President of the Board of Trade, in his closing words, expressed the hope that negotiation might begin forthwith. I am sure that that view will be shared on all sides of the House. He said that he hoped that the latest addition to restriction of trade made by the French might be removed simultaneously with the latest restriction made by the British, so that the negotiations might start in a more harmonious atmosphere. All of us must agree with that. I would ask the Parliamentary Secretary to bear in mind that the turnover tax, two or three times promised to be taken off, still remains. I hope that he will not lose sight of that, and that he will not start the negotiations prejudiced by the fact that the turnover tax still remains.

8.35 p.m.

Mr. DAVID GRENFELL

The Government have not been faced with such a difficult situation since they came into office more than two years ago. I feel sure that the House is very apprehensive in regard to the action proposed in these Orders. There is a feeling of apprehension which must come in some measure to each one of us. I feel that the Government have been hurried into this by their overwhelming majority in the House, and by their experience of the ease with which they have carried all and sundry proposals that they have cared to introduce. Their strength has become a weakness to them. They have been impatient and intolerant of opposition, and they have carried their impatience, and almost contempt, into their relations with other countries, because of the overwhelming strength which they possess in this House and the ease with which they overcome any opposition which we, in smaller numbers, offer from this side. I do not propose to bring extreme charges against the Government; rather do I seek an explanation, and I think the House must insist on finding a happier way of bringing this matter to a conclusion than the one suggested by the Government to-night.

The trouble with Ireland has lasted for some 12 months, and is causing considerable loss on both sides, because of our stubbornness and our refusal to recognise how stupid the whole quarrel has become. Now we have this trouble with France. These troubles arise one by one, I feel sure, because of the mistaken economic policy of the Government of the day. They have changed radically the economic system of this country. Their strength carried them in a headlong rush to adopt a new tariff system, and a new system of quotas and regulations, which have entirely changed the relations of the Government and the trade and commerce of the country. The danger arising from this change, of course, is evident everywhere. No one can change his course even on an open road without risk to himself and those who share the road with him. The same is true in navigation, and the danger is especially great when there is no guiding object by which people can know what road they are to take. There is the certainty of obstruction and the possibility of serious collision between this Government and other Governments because we have chosen to change our course, in our view to our own advantage, without full consideration of the difficulties of other people who sail the seas and share the problems of navigation with us.

This restriction which we have placed on our trade—which in the opinion of the Government is in the interests of this country—has placed a corresponding restriction on the trade of people who buy from and sell to us, and, while we have a public right to limit the amount of produce that we buy from other nations, they do not take it as kindly when we, by the same action, limit the quantities of goads which they are able to sell to us. We inflict injury and damage upon other people when our intention is only to protect ourselves. We must have regard to that natural reaction which we find in other countries as the result of our policy. We not only come up against traders and trade interests in other countries, but all other Governments have their obligations to protect the trade of their countries, and, therefore, we come into direct conflict with the Governments of countries with which we have no quarrel except that which arises out of a desire to improve our trade conditions and achieve our trade aims.

There is no ground of quarrel between us and France beyond this narrow ground of difference in ideas between us and France as to what measure of trade we should allow—what measure of goods we should buy from France, and what volume of goods France should buy from us. France and this country are natural allies. Our alliance is the most natural thing in the world. That alliance has been strengthened by the events of recent months and recent years on the Continent of Europe, and it is really stronger and more imperative than ever before in the history of our country. We should be very careful indeed not to attribute blame to one side. I am not blaming ourselves for a moment, but we should be all the more careful in this House against apportioning an undue share of blame to France. Therefore, we should make every effort to use conciliatory language. I do not think I can absolve the President of the Board of Trade on that ground. His language has not been the language of conciliation. He has allowed himself to use good English in its proper place, but not the right kind of English that should be used when we are face to face with the sort of problem that has arisen between France and ourselves. In looking at this problem we must try to adopt the most conciliatory attitude possible, and to look at the problem as it may appear to the French.

Figures have been given by my hon. Friend the Member for Broxtowe (Mr. Cocks), and by the hon. and gallant Member for Pembroke (Major Lloyd George), which throw a very clear light upon the difficulty from the French point of view. I have taken some of those figures, and I find that in the year 1929—a year of good trade, when we and France were fairly prosperous, when the trade of the world was very much larger than it is now, and when there was no special difficulty between the two countries, or between any countries which were doing a relatively large volume of trade throughout the world—our imports from France were £52,000,000, and our exports to France in that year were £31,000,000. In that year France had a favourable balance of £21,000,000. In 1930, her favourable balance had been reduced to £17,000,000; in 1931 it had gone down to £16,000,000, and in 1932 we bought from France hardly more than one-third of the quantity that we bought from her in 1929. Her favourable balance had entirely disappeared, and she had an adverse balance of £500,000 in her trade with us. In 1933, that trade fell still further.

Let us imagine that we are French people looking at this problem of the balance of trade, which has received so much attention, which has caused so many Debates in this House and great controversy in this country, and which has provided the excuse for two hon. Members whom I see opposite me to remain favourable to the National Government and to forswear their old-established Liberal principles in order to adopt this new system of Protection and regulation. If this dogma of the balance of trade is so well justified as to carry hon. Members from their friends into the camp of their political enemies, and allow them to sit there in comfort and content, why should not the French people be allowed the same measure of interest in preserving their trade balance? Why should not they be apprehensive when they find, for the first time in many years, an adverse balance in their trade with this country?

I represent the coal industry; I represent the men who live very largely upon the volume of trade that we have been doing year by year in the sale of coal produced in our South Wales coalfield. The French people have had occasion to complain that the competition from this country was not fair competition, and, as the Secretary for Mines will know quite well, the figures indicate that there is a good deal of justification for that assertion. Our economic level of costs in the production of coal was lower than the French level, and is to-day lower than the French level. We have been sending coal into France cheaper than they can produce it and the French people, anxious to find employment for their miners and to exploit their coal resources to the best advantage, limit the quantity of the cheaper British coal which pushed its way in and caused considerable unemployment there. The French, who took from us in 1929 coal valued at £48,000,000, took from us in 1933 coal only to the value of £21,600,000, a considerable drop, and I, representing as faithfully as I can the coal miners in my own division, cannot find serious fault with the action of the French Government when I know that their desire is to do the same as this Government want to do, to find employment for their own people.

The original action taken by the French was due to their claim that our going off the Gold Standard had placed them in an exceptionally difficult position. British coal, which in 1931 was being sold at less than the French cost of production, fell by 30 per cent. in value because of our departure from the Gold Standard. While we were able to compete more than adequately before we came off the Gold Standard, we could have swept the French coal miners off their feet afterwards. The French had to take special measures to protect themselves from competition due in large part to the depreciation of our currency. The same was true of our other industries. We must try to look at this from the French point of view. We have no desire to quarrel with them. We cannot afford to quarrel with them.

There are those who ask what we would do. It is a difficult problem. No one who starts on a controversy likes to give way and probably, if we were on that side of the House and had started on this ruinous road, as we believe it, should find some reluctance in giving way. We should find it very difficult to admit that we were wrong. I do not want the Government now to admit that they were wrong, but I should like them to review the situation. I should like them, above all, to keep calm. I know how easy it is to assume braggadocio and swank. I think the Government cannot afford the luxury of lapses in speech or in conduct. No lapse of any kind will be pardoned by people here or in France when the seriousness of the quarrel is realised. We have the best nerves in Europe. We have the reputation of being cool-headed people. Do not let us let that reputation down. We have no cause to be nervy or jumpy. We have everything on our side.

I should like us to talk to France not as people whom we are going to fight but as people with whom we are going to preserve the friendship of centuries, a people whom we admire and respect, with whom we have no intention of fighting on any cause or pretext whatever. A quarrel with France is unnecessary. It is an impossible thing at this time. We can to-night bring joy to France by refusing to pass this Order. Let the President of the Board of Trade try to interpret, not the narrow, superficial view of trade rivalry, but the profound and sincere desire of our people as a whole for the promotion of friendly relations with all other nations, not least of whom is our next door and friendly neighbour, France.

8.50 p.m.

Major PROCTER

I have followed very carefully the hon. Member's argument. The decline in our industry took place long before we had any tariff at all, and it was only by the pressure of circumstances existing in this country, when we had reached the stage when we were paying other nations for doing our work and paying our own workers for not doing it, that we became a tariff country and adopted a policy of Protection. I take it that what the Government desire is that we should have fair play and that there should be no discrimination, and I am very glad that there has been this exhibition of firmness. I have hoped for some time that we shall once more regard ourselves as a first-class Power and that we shall not, as the last Government did, simply allow ourselves to receive every kind of treatment without any firm or adequate reply. I trust that equally firm action may be taken against the Japanese, because we have the same lack of fairness in the way that they treat our imports into their country.

Mr. DEPUTY-SPEAKER (Captain Bourne)

I must remind the hon. and gallant Gentleman that this Order deals solely with certain taxes in France.

Major PROCTER

In so far as textile imports into France are concerned, I think there is a manifestation of unfairness such as we do not display in the imports of French textiles into this country. For instance, the French divide textiles into something like 500 different categories, and in that way impose duties ranging from 20s. to 6d. per 16 oz. I hope when the negotiations commence it

will be kept in mind by the President of the Board of Trade that in Lancashire we feel that this is unfair. In standing up for what we think right, just and fair we are consulting the interests of our workers. I am sorry that they are not with us in making a united stand so that our people may find work by asking the French to treat us in the same way that they treat America and other countries.

Question put.

The House divided: Ayes, 169; Noes, 44.

Division No. 107.]	AYES.	[8.55 p.m.
Acland-Troyte, Lieut.-Colonel	Gunston, Captain D. W.	Pybus, Sir Percy John
Adams, Samuel Vyvyan T. (Leeds, W.)	Hannon, Patrick Joseph Henry	Raikes, Henry V. A. M.
Aske, Sir Robert William	Harbord, Arthur	Ramsay, Alexander (W. Bromwich)
Baldwin, Rt. Hon. Stanley	Hartland, George A.	Ramsay, Capt. A. H. M. (Midlothian)
Balfour, Capt. Harold (I. of Thanet)	Headlam, Lieut.-Col. Cuthbert M.	Ramsay, T. B. W. (Western Isles)
Balniel, Lord	Hellgers, Captain F. F. A.	Reed, Arthur C. (Exeter)
Banks, Sir Reginald Mitchell	Hepworth, Joseph	Reid, William Allan (Derby)
Barclay-Harvey, C. M.	Hornby, Frank	Remer, John R.
Blindell, James	Horsbrugh, Florence	Robinson, John Roland
Bossom, A. C.	Hudson, Robert Spear (Southport)	Ropner, Colonel L.
Boulton, W. W.	Hume, Sir George Hopwood	Rosbotham, Sir Thomas
Bowyer, Capt. Sir George E. W.	Hunter, Dr. Joseph (Dumfries)	Ross, Ronald D.
Boyce, H. Leslie	Hunter, Capt. M. J. (Brigg)	Ross Taylor, Walter (Woodbridge)
Bracken, Brendan	Hutchison, W. D. (Essex, Romf'd)	Ruggles-Brise, Colonel E. A.
Braithwaite, J. G. (Hillsborough)	James, Wing-Com. A. W. H.	Runciman, Rt. Hon. Walter
Brass, Captain Sir William	Jamleson, Douglas	Russell, Hamer Field (Sheffield, B'tside)
Broadbent, Colonel John	Jennings, Roland	Rutherford, John (Edmonton)
Brown, Ernest (Leith)	Kerr, Lieut.-Col. Charles (Montrose)	Rutherford, Sir John Hugo (Liverp'l)
Burgin, Dr. Edward Leslie	Kerr, Hamilton W.	Sandeman, Sir A. N. Stewart
Burnett, John George	Law, Sir Alfred	Savery, Samuel Servington
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)	Leech, Dr. J. W.	Scone, Lord
Chapman, Sir Samuel (Edinburgh, S.)	Lewis, Oswald	Shaw, Helen B. (Lanark, Bothwell)
Chorlton, Alan Ernest Leofric	Lindsay, Noel Ker	Shaw, Captain William T. (Forfar)
Christie, James Archibald	Llewellin, Major John J.	Shepperson, Sir Ernest W.
Clarry, Reginald George	Lockwood, John C. (Hackney, C.)	Sinclair, Col. T. (Queen's Unv., Belfast)
Clayton, Sir Christopher	Lockwood, Capt. J. H. (Shipley)	Skelton, Archibald Noel
Colfox, Major William Philip	Lyons, Abraham Montagu	Somervell, Sir Donald
Colville, Lieut.-Colonel J.	Mebane, William	Sotheron-Estcourt, Captain T. E.
Cook, Thomas A.	MacAndrew, Lieut.-Col. C. G. (Partick)	Spens, William Patrick
Copeland, Ida	MacAndrew, Capt. J. O. (Ayr)	Steel-Maitland, Rt. Hon. Sir Arthur
Courthope, Colonel Sir George L.	McCorquodale, M. S.	Strauss, Edward A.
Crookshank, Col. C. de Windt (Bootle)	MacDonald, Rt. Hon. J. R. (Seaham)	Strickland, Captain W. F.
Crookshank, Capt. H. C. (Gainsb'ro)	MacDonald, Malcolm (Bassetlaw)	Sueter, Rear-Admiral Sir Murray F.
Croom-Johnson, R. P.	Maclay, Hon. Joseph Paton	Sutcliffe, Harold
Davidson, Rt. Hon. J. C. C.	McLean, Dr. W. H. (Tradeston)	Thorp, Linton Theodore
Davies, Edward C. (Montgomery)	Margesson, Capt. Rt. Hon. H. D. R.	Titchfield, Major the Marquess of
Dawson, Sir Philip	Marsden, Commander Arthur	Todd, Capt. A. J. K. (B'wick-on-T.)
Denman, Hon. R. D.	Mayhew, Lieut.-Colonel John	Train, John
Dickie, John P.	Molson, A. Hugh Elsdale	Tufnell, Lieut.-Commander R. L.
Duggan, Hubert John	Moreing, Adrian C.	Turton, Robert Hugh
Duncan, James A. L. (Kensington, N.)	Morgan, Robert H.	Wallace, Captain D. E. (Hornsey)
Dunglass, Lord	Morrison, William Shepherd	Wallace, John (Dunfermline)
Elliot, Rt. Hon. Walter	Muirhead, Lieut.-Colonel A. J.	Ward. Lt.-Col. Sir A. L. (Hull)
Elmley, Viscount	Munro, Patrick	Ward, Irene Mary Bewick (Wallsend)
Emmott, Charles E. G. C.	Nation. Brigadier-General J. J. H.	Ward, Sarah Adelaide (Cannock)
Erskine, Lord (Weston-super-Mare)	Nicholson, Godfrey (Morpeth)	Warrender, Sir Victor A. G.
Erskine-Bolst, Capt. C. C. (Blackpool)	North, Edward T.	Wedderburn, Henry James Scrymgeour-
Essenhigh, Reginald Clare	O'Donovan, Dr. William James	Wells, Sydney Richard
Fielden, Edward Brocklehurst	Ormiston, Thomas	Whiteside, Borras Noel H.
Ford, Sir Patrick J.	Ormsby-Gore. Rt. Hon. William G. A.	Williams, Herbert G. (Croydon, S.)
Fraser, Captain Ian	Palmer, Francis Noel	Withers, Sir John James
Fuller, Captain A. G.	Pearson, William G.	Womersley, Walter James
Gillett, Sir George Masterman	Penny, Sir George	Worthington, Dr. John V.
Glossop, C. W. H.	Percy, Lord Eustace
Goodman, Colonel Albert W	Peters, Dr. Sidney John	TELLERS FOR THE AYES.—
Gower, Sir Robert	Peto, Sir Basil E. (Devon, B'nstaple)	Captain Austin Hudson and Dr.
Grattan-Doyle, Sir Nicholas	Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)	Morris-Jones.
Greene, William P. C.	Procter, Major Henry Adam
NOES.
Acland, Rt. Hon. Sir Francis Dyke	Batey, Joseph	Brown, C. W. E. (Notts., Mansfield)
Attlee, Clement Richard	Bevan, Aneurin (Ebbw Vale)	Cape, Thomas
Cocks, Frederick Seymour	Hamilton, Sir R. W. (Orkney & Zetl'nd)	Rathbone, Eleanor
Cripps, Sir Stafford	Janner, Barnett	Rea, Walter Russell
Daggar, George	Johnstone, Harcourt (S. Shields)	Samuel, Rt. Hon. Sir H. (Darwen)
Davies, David L. (Pontypridd)	Jones, Morgan (Caerphilly)	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Davies, Rhys John (Westhoughton)	Lawson, John James	Smith, Tom (Normanton)
Dobbie, William	Leonard, William	Thorne, William James
Edwards, Charles	Lunn, William	Tinker, John Joseph
Foot, Isaac (Cornwall, Bodmin)	Maclean, Nell (Glasgow, Govan)	White, Henry Graham
George, Major G. Lloyd (Pembroke)	Mallalieu, Edward Lancelot	Williams, Dr. John H. (Llanelly)
George, Megan A. Lloyd (Anglesea)	Mander, Geoffrey le M.	Williams, Thomas (York, Don Valley)
Greenwood, Rt. Hon. Arthur	Milner, Major James
Grenfell, David Rees (Glamorgan)	Paling, Wilfred	TELLERS FOR THE NOES.—
Griffith, F. Kingsley (Middlesbro', W.)	Parkinson, John Allen	Mr. Groves and Mr. D. Graham.
Grundy, Thomas W.	Price, Gabriel

Resolved, That the Import Duties (Foreign Discrimination) Order, 1934, dated the ninth day of February, nineteen hundred and thirty-four, made by the Board of Trade with the concurrence of the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the ninth day of February, nineteen hundred and thirty-four, be approved.

9.2 p.m.

Mr. ANEURIN BEVAN

On a point of Order. Mr. Deputy-Speaker, are we not entitled, as a House, to receive a reply from the Government on the Debate on the last Order, before we proceed with the next Order? I submit that the House has been treated with grave discourtesy. I do not remember a similar occasion upon which an important Order has been considered by the House and in which all parties of the House have taken, part when no reply has been made by a representative of the Government. Now that the Lord President of the Council is here, I should like to ask him, through you, whether or not we can have protection against the scorn and contumely to which the House has been treated.

Mr. DEPUTY-SPEAKER (Captain Bourne)

The remarks of the hon. Member are beside the question. It is now obviously improper to continue the Debate on the last Order, and I would also remind the hon. Member that I have no power to compel any hon. Member to speak.

Mr. BEVAN

Has not the Lord President of the Council anything to say about it?