HC Deb 27 July 1934 vol 292 cc2163-238

11.7 a.m.

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

This occasion is not usually devoted to a consideration of Board of Trade matters, but it would be a pity if the House should rise without some brief survey being taken of our trade prospects and the record of the last two years. With that object, I open the discussion with a statement of my own covering some of the data as to the movement of trade in the first six months of this year as compared with last year. We can best see the position by comparing the one with the other. I would like at the outset, before I quote any figures, to say that the figures are as nearly accurate as we can make them, that they are not drawn with the object of proving any case, and that they really give a concise picture of our trade as we find it at the present time.

Let me draw attention, in the first place, to the figures of our domestic exports in the first half of 1934, compared with the first half of 1933; in 1933, our exports came to £175,000,000 and in the corresponding half-year of 1934 they have reached a total of £190,000,000, that is to say, £15,000,000 better. Simultaneously with that there has been a rise in our imports from £320,000,000 in the same period to £362,000,000, Those are figures covering the whole range of our trade. If we restrict ourselves to articles wholly or mainly manufactured, imports have gone up from £71,000,000 to £85,000,000, and exports from £135,00,000 to £146,000,000. Whether you take exports as a whole or only of articles wholly or mainly manufactured, there has been an unmistakable improvement. The increase of £14,000,000 in imports of manufactures is mainly in goods on which further processes have to be carried out. In fully finished goods, a great number are those which cannot be made 'at all in this country; for instance, machinery for which a licence is issued for duty-free importation on that ground.

I would like to point out what has been the position in some of our principal export trades. Among the increases, one of the most remarkable is the woollen and worsted trade, which is nearly £3,000,000 better than in the first six months of Last year. Exports of machinery are about £2,000,000 better, iron and steel about £2,000,000, and nonferrous metals and manufactures about £1,000,000. These are not in themselves sensational figures, but they show a tendency in the right direction and are unmistakable. There is very little prospect,' as far as we can see at present, of an immediate improvement in the cotton trade, which still remains one of the most unfortunate of our great industries. This is seen by comparison of the figures of the last three years. The exports of cotton yarn and manufactures in 1931 were nearly £57,000,000; in 1932, they were up to nearly £63,000,000, but in 1933 they fell back to £59,000,000. In the first six months of this year they came to only £29,000,000, that is to say, on the basis of about £58,000,000 for the year. This is by no means satisfactory, and it has given rise to la good deal of discussion, examination, and thought in Lancashire, as well as in London. We can only hope that the schemes which are at present being debated and examined in Lancashire may be productive of better results in the year to come.

With regard to iron and steel, there has been a steady increase in the production in the last 18 months. In the first half of 1933 nearly 2,000,000 tons of pig iron and over 3,000,000 tons of steel ingots and castings were produced; in the second half of 1933 the corresponding figures in respect of the one item rase to 2,200,000 tons, and of the other from 3,200,000 tons to about 3,800,000 tons. The improvement in the iron and steel trade has gone on steadily and the figures for the first six months of this year are about 2,900,000 tons and 4,500,000 in respect of these two items. I do not need to say that it was the change of national policy which led, in the first instance, to a revival in the industries which come under the heading of iron and steel. Exports of iron and steel manufactures in the first six months of this year were worth about £16,000,000, as opposed to £14,000,000 in the corresponding period of last year.

Everyone knows that in. such varied industries as ours the best index of the prosperity of our people is to be found in the figures of the unemployed. There has been. a decrease in engineering, for instance, of about 88,000 in the figures of the unemployed as compared with a year ago. The percentage of unemployed has decreased from over 23 to under 14. In an industry of this nature, which covers so many different articles and touches so many other industries, it is remarkable that there should have been this great improvement.

With regard to coal, the output of saleable coal in the first six months of this year was 112,000,000 tons, compared with 104,000,000 tons in the corresponding period of 1933. Export's rose from 18,900,000 tons to nearly 19,500,000 tons in the same period. Everyone who is well acquainted with the coal industry knows that we have a great deal of leeway to make up, but at all events the industry has taken a turn for the better, and in some of the districts there is no doubt that the improvement is likely to continue.


Can the right hon. Gentleman say whether unemployment has increased or decreased in the coal industry?


I am having to make a very wide survey in a very short time, and I am sure that the hon. Member, who always takes a very active part in our coal Debates, can find some other occasion upon which to go into that point.


The right hon. Gentleman mentioned a decrease of unemployment in the iron and steel trades, and he used figures, and I thought he might also be able to give the figures for the coal industry.


I did it in order to give a picture to the House. If my hon. Friend would like a complete survey of the coal industry, I should have to prepare that specially for him, but I can say this, that on the North-East Coast and the East of Scotland there has been a considerable and unmistakeable improvement. That improvement has spread to the Midlands, and the only district where prospects have not been as good as they might have been, though even there we are not without hope for the future, is South Wales. I hope that with that statement my hon. Friend will rest satisfied. I am fully aware of the fact—indeed, I am making it the basis of what I am saying this afternoon—that what really matters is the employment of our people. It is no use merely stating that there is a mathematical improvement in our trade unless we can also say that there has been an improvement in the employment of our people. I have just had put into my hands a single figure which I hope will give some comfort to my hon. Friend. Since a year ago unemployment among insured persons in coalmining has fallen by 26,500.

May I, having given a very brief survey of the figures, say where I think the improvement has been made? I do not believe that Parliament can give itself the credit for everything good that is done in this world, any more than for all the bad, but I will say this, that the main change for the better is due primarily to our merchants, who have shown increasing activity and enterprise abroad; to our manufacturers, who have been improving their processes here, and are certainly now relying more and more on research for improved processes; and to our workpeople, who, throughout the whole of this very difficult period, have shown a desire to co-operate which I think is most commendable, and which is certainly one of the bases upon which our prosperity alone can be built.

I wish that the whole of the credit for this improvement could have lain with our merchants and manufacturers and workpeople, but, in a world like the present, where all governments interfere with the normal channels of trade, it was inevitable that we also in this country should intervene in order to secure an equal opportunity for our exporters and workpeople. One of the examples of our most active work has been in the making of trade agreements during the last two years. I have already signed 13 commercial agreements, and negotiations are proceeding with four countries, and I hope that they will result, as the others have, in improved con- ditions under which we can sell our goods abroad, and reciprocal advantages for those who are to buy our goods. The important countries with whom we have made these engagements are Argentina, Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, the Netherlands, Norway, Sweden, the Soviet Republic, France and Germany.

It might be convenient to the House that I should give a short summary of the French Agreement, which is one of the most important that we have negotiated during the last six months. We secured three important things from the French Agreement. The first was the restoration of our full share of all quotas, including a guarantee of our full share of any new quotas which may be introduced in the future. That came on the top of the development of the quota system in France, which, if it had proceeded, would have led to a very serious reduction in our imports into France. In the second place, as regards coal, we have secured that the valuable trade which we enjoy outside the quota proper for coal shall not be interfered with in the future, and we had especially in mind the South Wales coal trade in gaining that concession. Thirdly, as regards manufactured goods and fish, the French quotas affect imports from the United Kingdom worth about £3,750,000 per annum, and for nearly all the more important of those goods we have secured guarantees that the quantities of British imports shall not be restricted below certain figures. That is in addition to securing our full share of such imports as may be admitted.

The coal provision is important, since it is likely to affect South Wales in particular. One of the reasons why the improvement has not been more marked in South Wales was that, in the earlier agreements we had been dealing with the Scandinavian countries, which naturally brought benefit to the North East Coast and Scotland, while the Argentine Agreement only maintained the position in which South Wales already had nearly the whole market. But I should like to say, with special reference to South Wales, that we are at present negotiating with Italy and Uruguay, and coal will play a prominent part in those negotiations. Furthermore, in the earlier agreements it was necessary to start some- where. The Government kept in touch with the Central Council of Colliery Owners and the British Coal Exporters' Federation, and those bodies were in full accord with the action which was taken by the Government. I believe that the only permanent cure in the distribution of these markets is to be found by international agreement between the owners in the various countries concerned, and it is in that belief that we have encouraged those who are in control of the Polish coal industry to carry on their negotiations with our own coalowners here at home. A memorandum has been sent by our owners to the Polish owners, and we are awaiting their observations on it at the present time.

A comparison has been made between the latest post-agreement period for which figures are available and the corresponding period a year ago, in the case of those countries with whom we have agreements which have been running for some time. Some of those agreements have only been running for a short period, and we cannot see their full productivity for some months to come. In other cases—Denmark, Iceland, Sweden, Norway, the Argentine and Finland—they show an increase in our exports into their countries. An interesting point in connection with these agreements, which I must mention in passing, is that of the "purchase arrangements" which are incorporated in them. The idea is comparatively new in the technique of negotiations, but the intention is that foreign countries agreeing that the United Kingdom should be the source of supplies for certain commodities have been prepared to enter into engagements, which we have encouraged and in some cases have initiated. The arrangements are normally between United Kingdom manufacturers and the users of the United Kingdom products in foreign countries. An example or two may make clear what I mean. The jute wrappers, for instance, in which bacon arrives in this country from Denmark, are to be made entirely of jute of United Kingdom manufacture. That is secured by a contract with the importers. In the Danish agreements there were arrangements covering iron and steel, jute, salt and saltpetre, and so on. In the case of Finland, the articles affected were wheat flour, jute, salt and saltpetre, iron and steel, commercial motor vehicles, creosote, and certain supplies for wood-working industries. It will be observed that we have not succeeded, in any of the countries I have mentioned so far, in securing any arrangement for textiles, but in the agreement with Lithuania we did for the first time succeed in getting a "purchase arrangement" for textiles incorporated in the agreement, and I hope that this may be extended from time to time.

I have mentioned to the House that during the last six months some notable contracts have been placed in this country, and there are more on their way. For instance, brakes for the Polish railways resulted in an order for £4,800,000. There have also been orders placed for locomotives for South Africa for £300,000 and rails and fish plates for South Africa, £150,000, the electrification of the Central Brazilian Railway which I am glad to say is in British hands, and that represents a contract of over £3,000,000. There is 'also boiler plant for Finland, sugar machinery for India, rails and fish plates for China., and so on. All these are contracts which are the first of a series.


A moment or two ago I understood the right hon. Gentleman to say he had certain figures comparing our exports to trade agreement countries in a recent period and then in a more distant period. Will he be able to give those figures to the House?


If they are wanted in detail, I shall be glad to give them. I said that in every case without exception they showed an increase in our exports to those countries.


Can the right hon. Gentleman give us some idea of the total amount?


I am afraid I cannot at the moment, but, if the hon. Member likes to have them before the House rises, I will let him have them in detail. I have no doubt he will find them useful during the Recess. The agreements have all led to increases and not to decreases. If I have not brought out exactly what hon. Members are asking for, they need not be alarmed about the state of British industry.


The House will be interested to know whether it is a question of £1,000,000, £10,000,000 or £50,000,000.


The whole of the details can be given in the course of the discussion. The report which has been given to me up to the present makes it clear that the home market, to which attention was first given when the National Government came into Office, has been doing rather well. It has provided a great deal of employment. There are signs that the home market is nearing saturation point. I have already drawn attention to the fact that it cannot be expanded without unduly endangering our export trade beyond certain limits. The last 18 months have seen a remarkable change for the better in the unemployment figures. There will, however, have to be a further reduction below the 2,000,000 point. That cannot be expected from an expansion of the home market alone. We must rely on an improvement in world trade for an improvement in the employment figures. World trade, unfortunately, is still in the stranglehold of restrictions hi many regions, and the best that can be said is that there are indications that the tendency of international trade to decline is being Arrested, although there are as yet no signs of any marked improvement. The share of this country in this restricted world trade has, however, definitely increased. The increase may in itself be small, but it is, nevertheless, significant, and we are ready for any lifting of the world depression.

World trade in these days is too much at the mercy of sudden political and economic disturbances for an optimistic note to be struck as to the future, but the essential conditions for a trade revival are present. If only it were possible to ensure a general restoration of confidence abroad as well as at home, we might look forward to a period of steady trade recovery in which this country would bear a leading part. The Government have secured the restoration of confidence at home. Their policy now is directed both to maintaining confidence here and, so far as lies in their power, to restoring confidence abroad. I do not believe there can be any very great improvement in the trade of the world until we reach somewhat calmer times. All the adjustments that we are making in the restrictions which are imposed in various countries are only alleviations and do not represent a permanent cure. I hold, as strongly as ever I held, that world trade is the least that we can rely on for the support of our people.

11.30 a.m.


The right hon. Gentleman's speech has been couched in terms of subdued optimism. He has not made any extravagant claims with regard to the activities of the Government. So far as one could gather from his speech, he attributes but little to the Government's own intervention, for he put as first among the factors to which such improvement as there has been is primarily due, the activities of the merchants, the new enthusiasm and the new processes of the manufacturers and the loyalty of the workers, and last and least in his opinion what the Government have done. In the Press there has been much cry about the commercial policy of the Government, but I think it is clear from the right hon. Gentleman's speech that there has been very little wool for, although he has registered the fact of an improvement in foreign trade due to the trading agreements, he has not told the House how large that is. He has told us of the industries where improvement has expanded, but he has not told us of other industries where employment has diminished. He has carefully chosen his figures. Had there been any substantial value attached to the improvement in trade 'as the result of these trade agreements, I have no doubt it would have been in the forefront of his speech.

I agree with him that perhaps the best test of the state of trade is reflected in the level of unemployment, which still remains very high, but I would combine with that another test. After all, unemployment is only one measure of prosperity. Destitution is another. If there be an improvement in trade, that improvement ought to filter down into the lives of the people. If the economic situation be better, it ought to be reflected in a higher standard of life of the people and in a diminution in the amount of destitution. Judged by those facts, no one can say that the economic position is substantially better than it was two or three years ago. There is an unwillingness on the part of employers, perhaps due to their difficulties, to raise the standard of life of those in their employment. Many of them would be prepared to do it if they could afford it, but the truth is that they have not been able to afford it. So far as those at the very bottom of the scale are concerned, the number of actually destitute people is something like 400,000 more than it was three years ago. If these facts are right, they dispose of the view that there has been any substantial improvement in the economic position of the nation as a whole. The right hon. Gentleman made the best of his story. I should like to give a picture of a rather different kind not taken from any wild paper. I quote from the "Financial News." In a long article dealing with the unemployment figures published by the Ministry of Labour, it says: A survey of the Ministry's figures seems to indicate that whatever is happening at home, which at present does not appear to be very much, in international trade things are getting worse. All the industries, with the possible exception of tailoring, which show decreases of employment are industries which to a greater or lesser extent are dependent upon foreign markets. Of the ten groups wherein employment is shown to have increased, five—the distributive trades, dock and harbour service, hotel and boarding-house service, road transport and printing, publishing and bookbinding—are for all practical purposes sheltered industries. The remaining five are, in a very large measure, dependent upon the home market. Engineering, for example, which comes second after the distributive trades in the list of increases, has doubtless profited from such domestic events as the decision to go ahead with the construction of the Cardiff-Dowlais steelworks. And even in the home market, increases such as those in the hotel business and in road transport, other than tramway and omnibus services, must be regarded as seasonal in a large measure. In sum, anyone who studies the figures may well he left wondering whether we are not approaching, or have not in fact reached, the point at which the net effect of tariffs upon employment becomes negative instead of positive. That is not what one would call an optimistic picture of the economic situation. An extract from a very informative and interesting article in the current issue of "Lloyds Bank Limited Monthly Review" says: Two commonplaces on the subject of the present and future economic situation of this country (and, indeed, of other countries, too) are current in every circle in which those matters are discussed. The first is that such recovery as has taken place from the trough of the Great Depression in this and some other countries has been overwhelmingly in home trade as distinct from external trade. The second is that if the Governments of most of the leading countries of the world, our own included, are to continue to develop their present nationalistic policies—and there is little sign of their doing anything else—the future progress of revival is likely to be very disappointing. The right hon. Gentleman rightly drew a distinction between home trade and foreign trade and made the astonishing statement that in the home market we have nearly reached saturation point. That is a most astounding statement. We do not accept that point of view at all. We regard the home market, I do not say as being capable of illimitable expansion, but capable of very large expansion, and had the policy of restriction been reversed, and more purchasing power have been available to the people here, the volume of home trade would have been larger than it is to-day. The home trade is not larger than it is because we have 400,000 more people destitute in this country than we had three years ago. The home market is not as good as it was because an enormous army of unemployed has been compulsorily impoverished by the Government through the reduction of unemployment benefit. The home market is not as strong as it should be because local authorities have been deliberately dissuaded from undertaking or forbidden to undertake, schemes of publik3 development which would have provided them with permanent assets and which would not have been waste expenditure but which would have provided employment. Therefore, the Government's own policy has been directed against the revival of the home market. In so far as there has been a revival in. the home market, I do not attribute it to the Government's own activities. I would attribute it to the activities of the merchants and of the other people who have been co-operating in the effort of restoring trade, and, of course, to the fact that, in the temporary absence of the Prime Minister at Chequers, this country went off the Gold Standard. That fact is conveniently forgotten now when we are dealing with such improvement of trade as has taken place in the last three years.

The reasons for the present serious state of foreign trade have been set out by people who are themselves adversely affected by it. I am not going to say that I agree with all their reasons. The right hon. Gentleman referred to the very serious state of the Lancashire textile industry. The Liverpool Cotton Association in a recent manifesto said: We are profoundly disturbed at the shrinkage of world trade during the past four years to one-half of its volume and one-third of its value. We consider that this shrinkage is largely due to economic nationalism, which, by tariff, quota, Lind exchange restriction, has made international trade more and more difficult. That note has been sounded by many business men and many organisations in the last two years. I could give a good many quotations on that very point, but it is clear that, the criticism of the policy of the Government centres on the phrase "economic nationalism". That is the Government's deliberate policy. The Government are deliberately flying in the face of all economic experience since the War, pursuing what they know to be a wrong policy, but what appears to them to be the only answer to other countries carrying on the same policy. In 1926 there was an international financial conference, at which were represented practically all the States in the world, whose conclusions were approved by the then Government of this country—the Conservative Government of 1924 to 1929. The chief conclusion reached was that what was needed was not more but less economic nationalism. What was wanted was not higher tariffs and more tariffs, but fewer tariffs and lower tariffs. What was needed was broad general understanding, and not these partial Trade Agreements, which by their nature are adding complications to the very difficult international trade machinery. It is eight years since that conference arrived at its conclusions. The right hon. Gentleman himself has deplored from time to time the economic nationalism of other countries, and yet his only way of dealing with it is to apply to them the same kind of medicine as they are making us swallow.

We have had in this country in three years a spate of tariffs, preferences, levies, quotas and subsidies, unparalleled in the history of this country, indeed, I should think unparalleled in the history of any country. It is a policy definitely designed as a weapon of trade war and one that cannot, in the long run, be successful. The view is now being expressed in commercial and financial circles, not that we are, as the right hon. Gentleman suggests, in the midst of conditions of trade revival, but that we are getting near the end of the present trade revival so far as foreign trade is concerned. I do not want to give too many quotations, but I could quote from responsible quarters statements showing that that is so. It means, therefore, that the Government's policy is not really producing the results which they anticipated. When we consider all the tariffs, the Ottawa Agreements, which have not increased our trade in the Empire but left us much as we were, and when we consider the preferences, the quotas, the levies, the lengthening list of subsidies to industry after industry, they become a mere jumble of heterogeneous unrelated proposals. It would be too much of a compliment to dignify these scraps of proposals as a national policy. They are not a national policy. They are a series of mutually contradictory oddments of policy.

Economic nationalism devotes itself to securing fewer imports coming into the country from outside. That policy ultimately means less shipping. Fewer imports inevitably result in fewer exports, and fewer exports again mean less shipping. When you have pursued this policy of limiting exports and have succeeded in it, you have to come to the aid of the shipping industry, which is passing through a time of great difficulty, due directly to the Government's own policy.




I am sorry to hear the hon. and gallant Member say that. If he will follow my argument he will see that what I say is true.




Let me explain it to the hon. and gallant Member. If the Minister of Agriculture succeeds in reducing the importation of meat and wheat into this country—


And sugar.


—or sugar, it seems perfectly obvious that fewer ships will be needed because the meat, the wheat and the sugar will not have to be brought in. If we buy less from abroad we shall not have to pay so much for meat or wheat but we shall not have to send out our exports in return. Therefore, again, there will not be so many ships needed to carry the goods out of the country. In both ways shipping is injured. It may be that you will have done something to develop some internal industry in the country and it may be argued that that will act as a counterbalance, but my point is that the shipping industry of this country is in its present state—and this is verified on the statement of some of the largest shipowners—because of the policy of economic nationalism pursued by the Government designed deliberately to limit imports and exports. This policy having succeeded, the Government have to come to the House of Commons first with a loan and later with a subsidy to help those people out of the difficulty in which they had been placed by the Government's own policy.

This, clearly, is a policy of huggermugger. It is not getting anywhere. If you are reviving one industry you are doing it at the expense of some other industry. I have no doubt that the Minister of Agriculture would be delighted to march over the dead body of the President of the Board of Trade. The Minister of Agriculture is not in the least concerned about iron, cotton, steel, or engineering. All he thinks about is bacon, wheat, meat, and so on. If he can help his farmer friends in this country he will do it at the expense of the heavy industries in which the President of the Board of Trade is specially interested.


Why not prohibit throughout the world any country using any but its own goods? We should have a wonderful world then.


That is a possible policy but I fear it is one that would lead to starvation instead of prosperity. But it is no more fantastic than the present policy of trying to prevent the people of this country consuming any goods but British goods. Such policies are absurd. Living as we do in an inter-related, inter-connected world, really one economic unit, these attempts to divert and dam the flow of trade by a tiny device like tariffs and quotas is bound to be harmful to the growing economic unity of the world on which alone, once it is fully realised, the real prosperity of the people of the world depends. That is what I was coming to before the hon. Member interrupted me. The President of the Board of Trade still appears to think that we are living in the world of 1914. He believes in what he calls adjustment. He thinks that if we go on making adjustments, everything will come right in time, that the old way of doing things can be restored and that we may get the old standard of prosperity. On these benches we do not take that view.

We believe that the world is changing, that the economic system is changing very rapidly under our eyes, that there is no stability in it, that the economic system has more and more to be shepherded by governments, that industries cannot stand alone, and that they have to he assisted by governments, as witnessed by the attempts of the present Government to assist industries in various ways. We see the ever increasing size of the economic unit and larger and larger scale operations. It is entirely a new situation. We are in the process a transition to a new economic system, and we have either to break any attempt to set up that new system or we have to help it. If we are to help it we must help it not by a series of odd proposals—I use the word "odd" in both ways—not by a series of isolated proposals but by a conscious national policy. I am not satisfied that our British manufacturers have yet achieved the acme of perfection as regards production. Some industries are far worse than others. Even in the best industries you find numbers of people who lag far behind in the standard of efficient production that has been set by their more able and more far-sighted competitors in industry. There must be a co-ordination of production on efficient lines, a squeezing out of every unnecessary item in the cost, and thus get down to rock bottom costs.

Then you are faced with the question of markets, and as regards exports, on which the future of this country so much depends, it is clear that we need a mass attack on the markets of the world through properly organised and powerful marketing boards. This "catch as catch can" method of getting markets will not do now. We shall have to deal, there are signs of it now, with organised forces in other countries who are prepared to make bargains with the organised marketing boards of this country. Having done that we must pursue two further policies. In the first place, we must get out of the monetary muddle into which we have been driven in recent years. I do not profess to be a financial expert, I do not know many people who are financial experts, and perhaps the plain man may help the experts out of their difficulties before we are much older. But it is clear that until we have a settled policy with regard to money and exchanges there cannot be that security which is a vital element in a revival of trade. We cannot have uncertain exchanges and uncertain standards.

This is a problem which has been funked for years. It might have arisen in this country but for the fortunate fact that we went off the Gold Standard, the best thing economically which has happened to this country since the end of the great War. It has relieved the Government of a, great deal of worry, but the problem is still there and is still affecting our foreign trade. Until the question of exchanges and monetary policy is faced there can be no certainty of expanding world trade. We would go further and develop economic co-operation on international lines on a much wider basis than the 13 trade agreements which the right hon. Gentleman has signed. The more complicated industry and trade becomes, the larger the units in industry and commerce, the more the State wild have to take a part in the formulation of international agreements. These agreements, in our view, ought not to be devoted to minor adjustments but should be a serious attempt to try and utilise the world's resources to satisfy the world's needs. That has never been attempted, but if we are to have a general revival of trade throughout the world it must be done in the future.

We do not believe that the prosperity of this country can be allowed to rest merely on our poaching the trade of other countries. That is not the way. The way out of the difficulty is to ensure a higher standard of wants—on the part of the people; the way out is to secure for the people higher standards of life and to enlarge the total volume of world trade. This policy of piney, which is what the Government are pursuing, this piracy on the high seas, stealing other people's trade, is a confession of failure on their part, and what is wanted now is not a policy of piracy, but a new policy of exploration in the region of a wider purchasing power by the masses of the people. If we are a little disappointed with the right hon. Gentleman it is because he has not appreciated the changing world in which we live and is being driven to this jumble of proposals, most of them self-contradictory and mutually destructive, and which hamper this country in its attempts to return to prosperity.

12 n.


I gather from the interesting speech of the right hon. Member for Wakefield (Mr. Greenwood) that he considers it would be better for the trade of this country and employment of our people to encourage or allow other nations to take our trade and make no effort to get it for ourselves. The right hon. Gentleman says that the policy of the present Government is one of piracy on the high seas, snatching trade from other countries. Those who have watched the improvement in the trade of this country and the improvement in employment in many of our industries, look upon it rather as getting back to Britain the trade of the world which we can undertake, and which the working people of this country have a right to expect. The right hon. Gentleman has suggested that the trade agreements which have been signed have not been of much use. If one studies the figures of various trades they will come to the conclusion that in many cases they have absolutely saved the situation and put thousands of our fellow countrymen into employment. Let me refer to a trade, not so large as the iron and steel trade or the mining industry, which has benefited enormously by the policy of the present, Government. I refer to the jute trade, which was included in many of the agreements which have been signed, Denmark, Finland, the arrangements come to with the Argentine, Lithuania and Latvia.

The results of the last two of these trade agreements have not been seen yet, but the results of those which have been concluded for some time are quite definite, and the figures which were given only last week to the senior Member for Dundee (Mr. Dingle Foot) prove in a startling way the improvement that has taken place in the industry. No doubt my hon. Friend will quote the figures himself, and if he does not congratulate the Government for having brought about that state of affairs at least he will express satisfaction that many of those whom he and I represent in this House who had been unemployed for many years are now finding employment. The figures given to my hon. Friend show the improvement that has taken place during the first six months of the year. In this particular trade, employment has been greater in the autumn than the spring so that figures are for the months when unemployment is greater. In January, 1931, there were 21,713 unemployed, in 1932 the number had gone down to 14,618, in 1933 to 14,026, and in 1934 the figure went down to 9,057. Month after month we see the same thing. Take the month of March. In 1931 the number of unemployed was 21,500, in 1932 16,329, in 1933 14,154 and in March of this year the number was 9,834. I agree that the test of the value of trade improvement is the employment of our people, and if we apply that test, at any rate to the jute trade, we must indeed be grateful for what has been done and the improvement that has taken place.

It has been said that the change in the fiscal system might perhaps give us a greater market for our goods at home, but it is also suggested that it might not benefit the export trade. Here we find that the new policy in this particular trade has again made startling improvements in the export trade of the country. For the six months of this year we find that the jute piece goods exported went up from 39,000,000 square yards to 57,000,000 square yards. That is the increase in the first six months of 1934 compared with 1933, and 1933 showed a startling increase over 1932. The raw jute imported also showed a great increase. When we are discussing what is the result on our shipping industry it is well to remember that in this case our mills and factories which were manufacturing more were in all eases importing more raw material. The increase of the raw jute went up last year, and again the increase has been greater this year. In 1933 the figure was 792,563 bales and this year the figure for jute arrived or afloat is 936,815 bales. We are getting nearer again to the million mark, and unless the unforeseen happens we shall reach it this year. That amount is reflected in the shipping and in the work given to men at the docks. The year for raw jute imports may be taken from August 1st to July 31st.

During the speech of my right hon. Friend the President of the Board of Trade questions were put as to the advantage that had been gained by any particular trade agreement. No doubt some of the figures will be given later in the Debate. I have looked up some of the effects of the Danish Trade Agreement on this particular industry. I was particularly interested to see the form that that Agreement took in respect of this particular industry. It provides that the cloth must be woven in the United Kingdom from yarn spun in the United Kingdom. Having got that into one trade agreement I can foresee that in future it will form a standard part of any agreement in which this industry is included. I wish that for home consumption also, and particularly in contracts for the Army, Navy and Air Force, such a provision could be included when contracts are being sent out. If we ask the foreigner to insist that cloth must be woven in the United Kingdom from yarn spun in the United Kingdom I do not think it would be too much to ask also from the Government that in contracts-those conditions are enforced.

Since the change was made in the fiscal system we have seen a change in connection with Denmark. In the first three months of 1932 our exports of jute to Denmark were double those of the first three months of 1931. The agreement was then arranged, and I think I am right in saying that the exports, all the wrappers on all the bacon coming into this country, are now of United Kingdom origin; and I notice that while the exports in 1929 to Denmark of jute goods were 3,600 cwt., in 1932 the figure had grown to 14,600 cwt. I give those figures as the figures of a particular industry's trade with one country with which a trade agreement has been reached. I think they are startling in what they prove. The agreement with the Argentine has brought to Dundee and to other towns manufacturing jute a great deal of extra work. But I am disappointed that the agreement did not go further. I believe that about 80 per cent. or 90 per cent. of our imports from the Argentine come in jute wrapping of some sort. I would plead that more attention might be paid to that particular subject.

I know it may be said that although we have increased our trade with those particular countries with which we have trade agreements our trade and our export trade as a whole still have some disappointing features. It is pointed out very often that our trade with America is not increasing. It ought to be remembered that we are at any rate holding our own with that country, but that in certain Continental countries they are increasing their exports enormously. But should we not increase our trade any further at this time with America we shall have to look to the Baltic States and to the Scandinavian countries, and to point out that in those countries an enormous increase has taken place. I think that one of the reasons for the difficulty with America is that now Continental nations are manufacturing the finer qualities of jute which hitherto they have not manufactured. I am told that of a particular type of onion sacking that the American import was almost entirely from Dundee, but that this sacking is now being made on the Continent and is being exported to America. But I believe the wider jute cloths are still to an enormous extent bought only from Dundee.

There are, however, one or two points to which I would draw the attention of the President of the Board of Trade. Having made such a good beginning, having made such strides, and having put back into work more than 3,000 people who were walking the streets unemployed, it seems to me that we can progress even further. I know that at the present time negotiations are taking place and I hope that in the Agreement concluded with Uruguay we may see 100 per cent. British jute being taken by Uruguay. I would also mention the vexed question of the export duty on raw jute from India. That duty has now risen to £2 a ton, but I realize also there is an export duty on the manufactured goods. I realise that it is purely a revenue tax. The Government of India collects part of its revenue in this way, but I suggest that as the manufactured goods of India are admitted free into this country there should be some preference given by India to the jute trade of the United Kingdom. A certain sum of money must be collected from the export of raw jute and manufactured goods, but surely it would be only fair that, in reply to the advantages that are given to the Indian trade, the greater part of that money should be collected from foreign customers rather than from those who are giving free entry to Indian goods in this country. To turn to another subject, it seems a strange arrangement that while we have a duty on imported new sacks and on sacks containing dutiable objects, if the contents of the sacks are not dutiable there is no duty charged on the sack. I realise that perhaps there may be difficulty in making a change in that direction, but I take this opportunity of drawing the attention of my right hon. Friend to that matter. If sacks are the containers of non-dutiable commodities, they come in absolutely free. It does not seem to me that that is logical. Further help could be given in that way.

I have mentioned that particular trade because it is a trade located in that part of the country which I and my hon. Friend have the honour to represent. In a district where you have as many as 40,000 people working in one trade it means that the whole life of the district is dependent on that trade. The improvement is very definite, but we want it to go further. One trade is dependent on another. The idea that the industrial area and the agricultural area are quite separate is entirely wrong. Each part of the country, each trade in the country, is dependent on the welfare of the others. If agriculture is not helped a great market of the industrial population is gone. If we assist the industrial part we also provide a market for agriculture. The improvement of one trade is reflected in the improvement of the other.

I often think that there is far too little attention paid to the difficulties of the small shopkeeper in some of the distressed areas. One of the greatest difficulties is that when a particular trade is in a bad way and unemployment increases the small shopkeepers cannot possibly continue their trade. Thanks to the policy of the Government, thanks to the scheme of trade agreements, thanks to having given up the idea that our markets could be the dumping ground for the whole world and that all would be well if we talked in the sacred name of Free Trade, having turned to more commonsense schemes, we see the result in this country to-day where there are thousands of people who are thankful for it and who are looking to the Government to go on and do more.

12.16 p.m.


I have really got on my feet because of some remarks made by the right hon. Member for Wakefield (Mr. Greenwood.) He entered into most extraordinary arguments about the old story of Free Trade and Protection, and gave us a lot of truths which he forgot to complete. He talked about the Government applying the medicine that we are making them swallow in the matter of tariffs, quotas and so on. He talked about the trade war, and made a tremendous song about what the Government were doing to the rest of the world, about a conspiracy on the high seas and so on, but he completely forgot that first and foremost in the Socialist programme are import boards. What are import boards but a controlling of the whole imports from overseas into this country? Tariffs and quotas, as everybody will admit, are things which are not in the interest of trade, but they are certainly no worse, and, to my mind, are a great deal better than an import board controlled, in all probability, by some academic brain with no idea whatever of the necessities of trade.

When the right hon. Gentleman started his speech, I thought that. we were going to be treated to a lecture on trade by an academic brain. Later on I seemed to be walking with Alice "Through the Looking-glass" and everything seemed topsy-turvy. He gave us no idea at all of what was happening. He told us, quite rightly, that if we exported less, we would be able to import less, or vice versa. He put it, however, the other way round, namely, that if we bought less from abroad we should be able to sell less, but he forgot to say that the opposite applies just as much. If we cannot export, we cannot afford to pay for imports. That was the position in which we found ourselves in 1931. We were buying a great deal more than we could afford. We were unable to pay either in goods, services or gold for what we were buying from abroad. It is that frame of mind shown by hon. and right hon. Members opposite who think only half-way round the problem that brought this country to the state in which it was in 1931.

I want to congratulate my right hon. Friend on the report which he has rendered to the House of his Department this year. It speaks for itself, but I want to add one or two little points. which, in all probability, his Department have brought to his notice, but which I want to bring to the notice of the House. One constantly hears criticisms from both Oppositions that tariffs and so on are ruining the shipping trade of this country. Let us look for a minute at the facts, and see what is actually happening. I have in my hand a very interesting industrial survey of Mersey side, and in it I find that in 1924 manufactured goods imported into the port of Liverpool were 3 per cent. of the total trade of that port. The figure rose in 1930 to 7 per cent.—not a very large proportion of the trade. Yet they say that tariffs, quotas, the policy of this Government are bringing ruin to the port of Merseyside. Suppose that 7 per cent. is brought back again by tariffs and quotas to 3 per cent., does that mean ruin to the Merseyside In the report for this year of the Mersey Dock and Harbour Board we find most interesting figures. Nearly 1,000,000 tons more cargo were handled in the last year than in the previous year, and 2,500,000 tons more shipping. Is that bringing ruin to the port of Merseyside because of the Government's policy?


Will the hon. and gallant Gentleman give the figures for 1924 and this year?


That is typical of the attitude and mentality of the Liberal party. They say that values were quite different in 1924, that we were on the gold standard, that world trade was different, that the situation in America was different, and that wherever you looked you had flourishing trade. The right hon. Gentleman asks whether the figures for 1924 and those for to-day bear comparison. Of course they do not.


The hon. and gallant Member was really misleading the House by taking 3 per cent. of manufactured goods then and 7 per cent. now, and saying that, therefore, conditions have improved on Mersey-side. The 7 per cent. is the percentage on a very much smaller total. Therefore, the figures are absolutely valueless.


I cannot have made myself clear, owing, I am afraid, to my want of experience in speaking, but the dates I gave were 1924, when it was 3 per cent., and 1930, when it was 7 per cent. The year 1930 was getting on for the worst year in this country. If I may enlarge upon this point, I would say that Merseyside is not a port for the importation of manufactured goods into this country. The large bulk of manufactured goods come on the short set route, and it is not true to say that the Merseyside trade is largely in manufactured goods, the trade in which has been ruined by the policy of this Government. Unfortunately, I have riot got the figures of manufactured goods for this year; I wish I had. I do not want the right hon. Gentleman to go away with the idea that I was trying to mislead the House because I mentioned 1924 and 1930. I made that quite clear. What I point out quite definitely is that the improvement is going on in spite of admittedly most difficult trade conditions throughout the world. In spite of that, this country has got back to a premier position, and the trade of the ports is even increasing. The right hon. Member for Wakefield said later on, talking about currency, that until we have a settled policy about money and exchanges, we shall not get very much further. I should like to ask him whom he means by "we"? Does he mean this country or the whole world?


I mean the whole world.


That is quite a different story, if the right hon. Gentleman is going to say to the world, "You are jolly well going to do what we tell you, and have a settled policy." This country took a very prominent part in calling the World Economic Conference. That broke down. Surely the right hon. Gentleman cannot, in honesty, blame this Government for the breakdown of the World Economic Conference. There is no stronger monetary policy than that of this country. Half the world is following; sterling simply because of the stability of this country.


That was not the policy of this Government; it was an accident.


Really, if the right hon. Gentleman considers that a large part of the world is following and basing their currencies on this country by accident, I am quite prepared to accept what he says.


The hon. and gallant Member knows what happened. It is an accident that we are on sterling and not on gold. It is not the fault or the achievement of this Government.


I do not agree with the right hon. Gentleman. It is largely because of the policy of his own Government in the years prior to this Government taking office, that we are off the Gold Standard. When he speaks of accidents, I would remind him that there are such things as criminal accidents. It was because of what was done by the Government which was in office from 1929 to 1931 that we went off the Gold Standard. The fact that a large part of the world is now following sterling which is being kept in its position by the skill of the Ministers of the Crown in this country to-day is a sufficient tribute to the work which the Government have done. I am glad to have the right hon. Gentleman's definition of what he meant by "we." That is one of the troubles from which we are suffering in connection with these discussions. The Opposition talk glibly of "we," and the word gets into the newspapers and the public think that they are talking about our Government. But they are not.

The right hon. Gentleman the Member for Darwen (Sir H. Samuel) also talks as though this Government were responsible for the tariff policy of other countries throughout the world and half the time he gets away with it. But he knows, as I think most Members of this House know, that this Government can only do a certain amount for this country and cannot control the rest of the world. But what they are doing for this country has been remarkably good and the figures which we have heard to-day, bear out that view very strongly. I am glad to have had an opportunity of intervening in this Debate, because much misrepresentation has been made throughout the country of the facts in regard to the Merseyside, and I am also glad to have the definition which I succeeded in getting from the right hon. Gentleman the Member for Wakefield.

12.28 p.m.


In spite of the fact that a great many hon. Members were in attendance here until four o'clock this morning, this has been an exceedingly interesting debate. I, for one, listened with deep interest to the all-toobrief statement of the President of the Board of Trade and with a great deal of pleasure to his peroration, which sounded strangely familiar to those of us who sit on these Benches. The right hon. Gentleman's speech was significant because he dealt with the future of the export trade of this country and gave us clearly to understand that for any future improvement in trade and employment, we muse look principally to the expansion of the export trade. I am glad to hear that that is still the right hon. Gentleman's view because I think it is not the view of a considerable section of those who support him in this House. The hon. and gallant Member for Bournemouth (Sir H. Croft), for instance, speaking on 16th July said: If we work out the facts—and I think this argument is germane to the Resolution—we must appreciate that our export trade accounts only for a negligible number of the people in employment in this country. I am not suggesting that we should do anything to hamper our export trade. Let us get all the export trade we can, but let us not do so at the expense of our home trade. If we go into the figures we shall find that in the palmy days of our export trade it was only giving employment to 10 or 12 per cent. of the people, and to-day that figure is much lower."—[OFFICIAL RRPORT, 16th July, 1934; cols. 862 and 863, Vol. 292.] That was the view expressed by the hon. and gallant Member for Bournemouth and, judging from their utterances, it is the view held by a considerable section of Members in the House. A very different view was expressed by the Balfour Committee which in its report stated: The twin problems of ensuring continuous employment and a satisfactory standard of life are inextricably bound up with the solution of the problem of exports. I was glad for one to see the statement made only a month or two ago by the Lord President. of the Council who said to a meeting of the Junior Imperial League: We must never forget that the export trade is the life-blood of this country. I should also have said that the Balfour Committee, so far from regarding, the export trade as being a matter of 10 or 12 per cent. of employment, stated that about one-quarter of our industrial production is exported oversea. That is why I followed with great interest the remarks of the right hon. Gentleman this morning about the saturation point in the home market which, apparently has nearly been reached. I think that most hon. Members who consider the question would agree that while only a minority of our people may be engaged in production for export, nevertheless the condition of the export trade makes all the difference in this country between prosperity and depression. The future of many industrial areas, including the constituency which I represent, and of many industrial cities in Scotland and the north of England must largely depend upon the extent to which we are able to recapture our oversea market.

I was sorry that the right hon. Gentleman did not give us a few more details about the effect of the trade agreements that had been made and about the trade agreements which he hopes to make in the future. I voted against both the Second and Third Readings of the Import Duties Act. I do not apologise for that vote and in the same circumstances I should give a precisely similar vote.; But one has to make the best of circumstances as one finds them, and I have always taken the view that, since the Government have adopted a policy of tariffs, the best thing they can do after that is to make a vigorous use of their powers under Section 7 of the Import Duties Act, and make as many bargains as they can for the mutual reduction of tariff barriers—preferably multi-lateral agreements but if not bi-lateral agreements. Bi-lateral agreements are better than nothing. There has been a great deal of criticism, from various quarters, of the trade agreements already made by the Government. It is true that bi-lateral agreements are subject to certain definite limitations. In the first place they take no account of three-cornered trade. In the second place, although they may divert a certain amount of trade from some other country to our own, and may stabilise and canalise trade, they do not, on the whole, increase very much the volume of world trade.

There are, however, two powerful arguments in favour of trade agreements which have not yet been put before the House or the country. The first is, that they constitute in themselves a denial of the doctrine of economic self-sufficiency. They constitute a recognition of the fact that for years to come we shall have to take a certain proportion of our bacon from Denmark and of our meat from the Argentine, and a good deal of our timber from the Baltic and Scandinavian countries. The second argument is that these agreements are in form and substance the antithesis of the Ottawa Agreements. A cardinal feature of the Ottawa Agreements was that a line was drawn below which tariffs should not be allowed to fall. A cardinal feature of these agreements, with all their shortcomings, is that a line is drawn above which tariffs shall not be allowed to rise. The right hon. Gentleman the Chancellor of the Exchequer, speaking on the 4th of this month, referred to the process of bargaining and said: We have begun the process of breaking down the barriers to trade by the series of commercial agreements which we have been able to make with foreign countries."—[OFFICIAL, REPORT, 4th July, 1931; col. 1963, Vol. 291.] I want to examine how far this process has gone, how far it is likely to go in the near future, and how much benefit our export trades are likely to derive. The whole House is aware of the enormous drop that there has been in the figures of our export trade for the past few years. Every hon. Member knows that between 1929 and 1932 there was a drop, in round figures, of no less than £364,000,000, and, after all, that drop must be the principal cause of unemployment in this country. The problem that we have to face is how we are going to recapture a part, at any rate, of those lost markets, and I want to examine how much has already been done.

The most important agreement that has been signed, I suppose, is that which was made with Russia. I do not intend to go fully into it, because it has been debated in this House, but the cardinal feature of that agreement, as I read it, is that in four years we are to reach an approximate balance of payments between Russia and ourselves. In 1932 our retained imports from Russia were £16,800,000, in round figures, and our exports of United Kingdom manufactures to Russia were £9,200,000, leaving a balance of between £6,000,000 and £7,000,000. I suppose that a certain allowance ought to be made for invisible exports, which are probably in our favour, and at a rough estimate it is probable that the difference between the amount that we purchased from Russia and the amount that we sold to Russia in that year would come to a little over £6,000,000. That, presumably, is the measure of the advantage which we may expect to derive by this process of levelling up or it may be levelling down. Which is it going to be? At what figure does the right hon. Gentleman expect this parity to be obtained? Does he expect it to be obtained, say, at the 1932 figure of Russian exports of £19,000,000, or does he anticipate that we shall allow in future a great increase of Russian imports so as to stimulate a great increase of British exports? I have read through the Debates that took place on the Russian Trade Agreement, but I do not think any sort of indication was given to the House as to the level at which the parity between the two countries was likely to be attained, and until we know that it is difficult to estimate exactly how much benefit we are likely to derive from the agreement with Russia. In any event, the Russian Agreement, whatever its intrinsic value, does not afford any precedent for the future, because hon. Members will appreciate that the conditions of trade in Russia are unique and that we can never expect to get a similar trade agreement with any other country.

The right hon. Gentleman referred this morning to the agreement that has been signed with France, and I suppose it is a matter of congratulation in all parts of the House that we have at last reached an end of the trade war with France, but does the agreement amount to very much more than the signature of peace? As far as I can see from the agreement, it means for the most part simply a restoration of the status quo. We are guaranteed that we shall have our fair share of all quotas that France may impose, and the one definite increase that we may look for under the French Trade Agreement is in the matter of coal. It was said a day or two ago by the Secretary for Mines, I believe, that under the French Agreement we secure 877,000 tons per annum more than we should have done but for the agreement. That is a rather vague statement, but assuming that to be the increase due to the agreement, I submit that that is the only substantial increase of British exports that we can look forward to as a result of the trade agreement with France.

I come to the rather more interesting treaties, from my point of view, which were made with Denmark and the Argentine. I listened with very great interest to the remarks of my hon. Friend who shares with me the representation of Dundee (Miss Horsbrugh). It is perfectly true—it would be churlish of me not to acknowledge it—that agreements were made between the Dundee Chamber of Commerce and certain industries in Denmark and other countries, and that those agreements have brought a certain amount of benefit—I do not wish to belittle it in any way—to the jute industry in Dundee and in this country as a whole. I think the arrangement made was admirable and is likely to meet with the satisfaction both of the Danish exporters and, of course, of the jute industry in this country, but I submit that the policy of the Government has to be taken as a whole, and that you not only have to look at what is done by the right hon. Gentleman the President of the Board of Trade or the hon. and gallant Gentleman the Secretary to the Overseas Trade Department; you have also to look at what is done by the right hon. Gentleman the Minister of Agriculture. The arrangement that was made between the Dundee Chamber of Commerce and the Danish exporters was that all bacon which came to this country from Denmark should be wrapped in a jute wrapper made in the United Kingdom.

It is obvious that the number of jute wrappers which we sell to Denmark must directly correspond with the amount of bacon which Denmark is allowed to sell to us. I have been looking up the figures of the bacon imports from Denmark, and I have found that, taking the figures for the month of June, 1932, Denmark sent. us 727,972 cwts. of bacon; in June, 1933, thanks to the operation of the quota, the amount had fallen to 495,690 cwts.; and in June, 1934, it had fallen still further to 366,125 cwts., so that the amount of bacon which we are taking at present from Denmark is only a little over half what it was two years ago. It is obvious that that must have a very considerable effect upon the value to the jute industry of the arrangement that was made in the Danish Trade Agreement, and while I always acknowledge the great efforts that my hon. Friend makes on behalf of the jute industry, I would suggest that she should add to those efforts by coming over to us and opposing the iniquitous policy of the bacon quota.


Does my hon. Friend wish to suggest that even with the very much reduced amount of bacon that is now coming into this country, the wrappers round that bacon are not enormously greater in amount than the wrappers bought from us by Denmark before the arrangement was made? I have here the figures for many years before, when we were fifth among the exporters of jute wrappers to Denmark, and even with a greater reduction of the bacon quota, if the wrappers are all from the United Kingdom, the number will still be greatly in excess of the amount exported by us to Denmark before.


That entirely depends upon the amount of bacon which the Minister of Agriculture is prepared to allow into this country, and if the policy of the quota be carried further and the amount which Denmark is allowed to send here be reduced again and again, it means, of course, that the concession to the jute industry becomes of progressively less value. With regard to the Danish and the Argentine Agreements, certain figures were given a few days ago to the hon. Member for South Croydon (Mr. H. Williams) showing the relative exports to those two countries in the twelve months ended 31st March, 1933, and 31st March, 1934. These two sets of figures show that the total increase of exports to Denmark and the Argentine taken together was £3,254,901. The increase for Denmark alone was £1,603,442. I agree that that is a substantial increase for a small country like Denmark, but I suggest to the Secretary of the Overseas Trade Department that the whole of that improvement in Danish trade cannot be ascribed simply to the trade agreement, and that some of it, at any rate, is due to the very remarkable spontaneous efforts that have been made by the Danes themselves to sell British goods, efforts which, as the hon. and gallant Gentleman very well knows, have been fostered and organised by the British Import Union, which is a purely Danish body. The most remarkable manifestation of those efforts was the British exhibition which took place in Copenhagen in September, 1932. That exhibition alone, according to an answer which the hon. and gallant Gentleman gave to me, secured £1,000,000 worth of orders for the manufacturers of this country. If I may be permitted one digression, I went to the British week in Copenhagen in 1932 and in Helsingfors in 1933, and I should like to pay my respectful tribute to the admirable way in which the hon. and gallant Gentleman represented the United Kingdom on those occasions. Although the exhibition in Copenhagen was arranged by the Danes, it was not confined in its effect to Denmark. I think, again, that the hon. and gallant Gentleman will agree that it gave a stimulus to the sale of British produce and manufactures throughout the Scandinavian and Baltic countries. I submit that even the increase of £1,600,000 in the case of Denmark is not wholly due to the trade agreement, but is in part due to efforts of the "Buy British" campaign of the British Import Union in Denmark. I would remind hon. Members that that movement cannot be ascribed to any change of fiscal policy on our part, because the beginning of that propaganda was in 1930, long before we changed our fiscal policy. Even in the case of jute wrappers, as my hon. Friend will know, there was a considerable increase in the purchases from this country in 1932 even before the trade agreement was signed.


I think my hon. Friend will agree that that was one year after the change in the fiscal system.


I agree that they were not under any obligation to purchase our wrappers, but I am suggesting that the increase which my hon. Friend admits was such that by September, 1932, Denmark was getting her supplies almost solely from us, was part of the general movement which, as I have shown, began in Denmark long before there was any suggestion of tariffs being imposed by this country. Although the Danish and Scandinavian Agreements are good as far as they go, they are not sheer gain. The principal commodity which has been affected, and which it was intended to he affected, by the Scandinavian Agreement is coal, and the principal feature of the agreement was that each country should take each year a certain percentage of its coal from this country. I think it is generally admitted that the effect of that and the effect of driving out Polish coal from the Scandinavian and Baltic markets has been to intensify the competition which our coal exporters have to meet in the Mediterranean markets. I have here a cutting from the "South Wales Journal of Commerce" for the 19th July, which says, after referring to the falling off in British sales of coal in Italy: German and Polish competition has been the chief cause of this decline and that competition has been greatly accentuated since Germany conceded an increased quota to British coal in the German customs area and large quantities of Polish coal were excluded from the Scandinavian and other Baltic markets by the trade agreements of last year. I submit that it is perfectly clear that even the increase of trade which we get as a result of the agreements in the Scandinavian and Baltic countries is not sheer gain, because we have to offset the intensified competition which he have to meet in the Mediterranean. I have not any figures comparable to those which I have quoted for Norway, Sweden and Finland. The treaties with those countries have not been long enough in operation to enable us to estimate how much additional trade they will bring in, but I submit it is unlikely that it will be as much as the addition in the case of Denmark and the Argentine taken together.

I have gone through the various trade agreements that have been made in order, as far as possible, to arrive at some sort of rough estimate of how much they are worth to this country. It is very difficult to calculate, and I have left out the German Agreement because no one can foresee at the moment the future of German trade. It is difficult to calculate exactly what these agreements are worth, but, if we take the balance of Russian trade and the figures that were given this week with regard to Denmark and the Argentine, it will not be far out to place the whole increase which we may export as a result of the trade agreements at somewhere round £12,000,000 or £14,000,000. I do not think it will be possible on present information to put it very much higher than that. I am not going to suggest, of course, that that is not a very welcome increase of our export trade, but this, after all, is the main policy of the Government. It is the one method they have adopted for increasing our export trade, and so we have to compare this achievement with the whole of the leeway that had to be made up. We had a leeway of something like £300,000,000 since 1929, arid when we compare the comparatively small gain which we may expect from the trade agreements with the enormous losses of export trade during the past few years, we appreciate how very small a contribution these agreements really make.

May I say a word about the future of trade agreements? It is not going to be quite so easy to make trade agreements with some other countries as it has been in the past. In our earlier agreements, particularly in the case of Denmark and the Argentine, and to a certain extent in the case of the Scandinavian and Baltic countries, we were dealing with countries that were dependent to a peculiar extent upon the British market. Denmark was sending to us 98 per cent. of her bacon, and if she had lost the British market she would have had to face an entire revolution in her internal economy. Therefore, when we were bargaining with Denmark, and to a great extent when we were bargaining with the Argentine, we were in a particularly strong position. In the case of Denmark one might almost say that we had all the cards in our hands. That position is not likely to recur in the future. There are very few countries which are so much dependent on the British market as Denmark and the others I have mentioned; and so if we are to get trade agreements in the future either we shall have to be content with smaller concessions, which I hope will not be the case, or we must be prepared to give larger concessions in return.

I would call attention to one remarkable omission from the speech of the President of the Board of Trade. He did not say anything about the breakdown of the commercial negotiations with Holland. I think the House is entitled to a word or two on that. Holland is a very considerable market. There, too, there has been a very considerable falling off in British exports in the past few years, and I am sure it must have been a disappointment to Members in all parts of the House when those negotiations failed to reach any useful conclusion. Perhaps the hon. and gallant member who is to reply will give us some indication of why it was not possible to arrive at a trade agreement with Holland. Was it because we were not prepared to make sufficient concessions? Finally, I want to put this point to the right hon. gentleman, and also to the hon. and gallant member the Secretary of the Overseas Trade Department. What is the position with regard to the United States of America? Two days ago I put down a question asking the right hon. gentleman what steps he was taking, or proposed to take, to effect a trade agreement with the United States of America. This was his answer. I do not think that His Majesty's Government could, at the present time, usefully propose such negotiations."—[OFFICIAL REPORT, 24th July, 1934; col. 1640, Vol. 292.] Will there be a time in the near future when, in the opinion of the right hon. gentleman, the Government can usefully propose such negotiations; or, in the alternative, if an invitation comes from the Government of the United States will His Majesty's Government enter into negotiations? I submit that this question is of first-class importance now in view of the powers recently given by Congress to President Roosevelt to enter into trade agreements and to reduce tariffs by as much as 50 per cent. It is a golden opportunity for British industry, and a heavy responsibility would rest upon any Minister or any Government which neglected that opportunity.

There is no need for me to emphasise the enormous value and the enormous potentialities of the American market. If I, too, may be pardoned for referring to the particular industry of the constituency which I represent I would give one example to show the potential value of the American market to us, particularly if we could get preferential terms through the negotiation of a trade agreement. I have figures showing the American purchases of jute cloth in 1929, 11932 and 1933 in pounds weight and also in percentages. In 1929 our share of the American market—and America is one of our largest markets for jute; I think my hon. Friend opposite will agree that it is probably our largest export market—was 7.96 of the whole. The figure for all the rest of Europe was 6.56. There was a very considerable increase in our exports of jute cloth to the United States in 1932 and 1933, and I think that was one of the contributory causes to the reduction in unemployment, on which my hon. Friend and I have only one view. Even with that increase, however, it does appear that we are not entirely holding our own in that market, because in 1933 we had only 6.3 of the American market, while the rest of Europe had 9.51. It does appear that although there is some increase in the American purchases of jute from this country there is not quite the share that we are entitled to expect. The real deduction I want to draw from these figures is this. As I have said, the United States is one of our principal markets for jute cloth, yet we supply only 6.3 per cent. of American needs. That is sufficient to show the enormous possibilities of the American market, and if we could get only 10 per cent. or 12 per cent. there would be a still more remarkable reduction in the figures of the unemployed in the jute industry in this country.


The hon. Member said he thought the increase in the export of jute to America was probably the cause of a great deal of the increase of employment in Dundee. I think the increase is £497,000. Would that account for 4,000 people in Dundee getting work?


I think I said it was a contributory cause. In connection with trade agreements I would draw attention to the resolutions which were adopted some months ago at the Monte Video Conference. That Conference advocated the general maintenance of most-favourednation treatment, but with two highly important exceptions. The first exception is special arrangements between contiguous or neighbouring countries, and the second, which is more significant, is that collective conventions should be permitted between numbers of countries designed to create larger and more important markets. A few years ago the United States led the way in the direction of crazy and extreme economic nationalism. Now, when we look at the resolutions of the Monte Video Conference, and the views expressed both in speech and writing by Mr. Wallace in the United States, and the powers taken by President Roosevelt for the reduction of tariffs and the negotiation of trade agreements, it seems the time is ripe for a movement the other way.

If anything is to come of this movement a great deal must depend upon the attitude of His Majesty's Government. I hope the President of the Board of Trade and his colleagues will think a very long time before they reject the opportunity of commercial co-operation with the United States. I hope he will be prepared to take his courage in both hands, to ignore the protests of the economic isolationists both in this House and outside, and to go forward with the United States in lending his support to this movement. If he will do that, not only will it be of the greatest possible benefit to British industry, not only will an agreement with the United States be worth all his other trade agreements put together, but he will be assisting, as I know he would like to do, to give a lead to the whole world in a return to economic sanity.

1.5 p.m.


I was not Anxious to take part in to-day's Debate, because I am not used to late sittings, but certain remarks made by the right hon Gentleman the Member for Wakefield (Mr. Greenwood) have induced me to detain the House for a few minutes. The right hon. Gentleman accused the President of the Board of Trade in the last sentence of his speech of not appreciating the changing world in which we live. That sentence appeared to me to apply to his own speech. Many of his remarks And arguments carried my mind back to my early days, when the old dogmas of Free Trade were universally accepted, and when it was generally accepted also that we, Germany and the United States were to supply, for ever and ever, manufactured goods to the agricultural nations of the world. In the circumstances of today, it is of no use regarding economic nationalism as a kind of measles which the world will have to get over, or even as a leprosy, as has been suggested. Leprosy is not curable. Economic nationalism is bound to develop, if by that term we mean that every nation will more and more strive to increase the per capita output of wealth. Agricultural nations such as Rumania and the Argentine have realised that for 30 years they have been exchanging the labour of five of their men for the labour of one Englishman, one German, or one United States man. They have realised, further, that modern machine production And scientific mass production enable them without skilled artisans to produce the wealth which hitherto they have bought. In the new world, we have to face that fact. It is no use thinking that economic nationalism will die out. Nations will more or more produce the greatest amount of wealth they can, although there will always be international trade. Anybody who realises that must congratulate His Majesty's Government upon dealing with these new factors in the only way in which they can be dealt with, by bi-lateral trade agreements, made with nation after nation.

The second point on which I disagreed with the right hon. Member for Wakefield—although in some respects I rather agreed—was in regard to shipping. He said that an improved agriculture meant less shipping trade. If you grant that the level of consumption of the nation remains the same, an improved agriculture of course means less shipping. That is unavoidable, but is there not a bigger counter-balancing gain? Our agricultural production to-day is worth about £200,000,000 per year. Suppose that we doubled that, and that we produced £200,000,000 worth more foodstuffs, and assume that the national consumption remained the same—I believe it would go up—we should have to import £200,000,000 less of our food and, therefore, we should export £200,000,000 less goods to pay for it. Shipping would suffer, but think of the gain. We should gain a double production of home wealth. Instead of exporting £200,000,000 worth of manufactured goods in exchange for £200,000,000 worth of imported food, we should produce £200,000,000 worth of food at home, and home manufacturers would produce £200,000,000 worth of goods which they would exchange for food, but for home food instead of for foreign imports. The total production of wealth would be as follows, as a result of the increase of the home agricultural production: £200,000,000 worth more foodstuffs produced at home; £200,000,000 worth more goods produced at home to pay for the total national wealth production of £400,000,000. Under the present system, £200,000,000 worth of goods are created in this country to be sent abroad in exchange for £200,000,000 of wealth.

I submit that the argument of the Member for Wakefield is not conclusive. If the argument were carried to its logical conclusion he should say, "Let us destroy our agriculture, or reduce it to a minimum production, because the less foodstuff we produce at home the more we will have to import and the better it will be for our shipping." That is the logical deduction from his argument. He also stated that you only revive one industry at the extent of another. I agree to a certain extent, if he refers to the export trade, but there is a limit to the export trade. The limit is conditioned by the amount we import and the amount we lend abroad. Those factors impose a fixed limit to our export trade. You may have your home exporting trades fighting to get what portion of the export trade there is, because of the limit fixed by your imports and by your foreign loans. Looking ahead, that means that we shall have to plan more and more our export trades and to decide which trades, and to a large extent which imports, we want. The only object of exporting is to import the goods which we require.

There was an extraordinary contradiction in two phrases used by the right hon. Gentleman the Member for Wakefield at the end of his speech. In one he said that the Government's policy was one of piracy on the world's trade and of stealing portions of the world's trade, and then he himself used this phrase: "We need to make a mass attack on the markets of the world". Warlike, that. Not piracy nor the stealing of small portions, but a mass attack on world trade. I suggest that those words reveal the waste places and the dangerous places to which we are led by the obsession of export trade of all costs. A mass attack on the markets of the world is being carried out by Japan; it must be made by Germany in order to import food for her people. Those manufacturing countries are talking that language about a mass attack being made on the trade of the world. I submit that at the beginning it would lead to international friction, and it would lead to lower standards of living in all countries—this desperate fight, this mass attack on the markets of the world, to use the language of the right hon. Gentleman. That would be at the beginning, but I submit that that mentality and that process, once it were carried on, would have this grave danger, that when all the great manufacturing nations were engaged in what the right. hon Gentleman called a mass attack on the markets of the world, it might lead, after international friction, to real war.

1.16 p.m.


I intervene only to say a word or two on the trade agreements which have been referred to so largely in the course of the Debate. I do not propose to follow the senior Member for Dundee (Mr. Dingle Foot) into the wide field over which he ranged, nor do I propose to enter into the domestic quarrel between the junior and senior Members for Dundee. There is no quarrel more bitter than a domestic one, and none into which it is more dangerous for a stranger to enter. I think it is strange, however, that, during the course of a somewhat long speech, the senior Member for Dundee had not a single helpful or constructive suggestion to make as to how this country was to face its economic and industrial difficulties, until he came almost to the end of his speech, and then he actually suggested to the President of the Board of Trade that he should enter into a trade agreement with the United States of America on the very lines of the trade agreements which previously he had been condemning.


No; I did not say that.


That was the sense in which I understood the hon. Member's observations.


I advocated a trade agreement with the United States, but I said that I hoped it would go very much further, and would involve a much more drastic scaling down of tariff barriers than any of the trade agreements that we have had.


The hon. Member seems to loose sight of the fact that the whole policy of the trade agreements, and of the majority of Members of this House, is to utilise the tariff for the purpose of bringing down the tariffs of the world. That is the declared policy, not only of the Government, but of the Leader of the Conservative party, who stated it at a period prior to the general election. That was a declaration of faith, a declaration of policy which, so far as I as Free Trader was concerned, had a great deal of influence in inducing me to change my views at that period.

There has been a great deal of criticism of these agreements, some of it ill-founded, some of it justifiable, but a great deal of it not inspired by any desire to help trade or industry or employment, but merely directed against the policy of the Government in the hope of embarrassing the Government. For my part, as a representative of a district which has benefited substantially by these agreements, I should like to point out that they have been a contributory cause, at all events, of the continued and steady improvement that we have seen during the last two or 2½ years. The chief purpose of the agreements is to maintain or improve our position as an exporting nation in the markets of the world, and I think the Government are to be congratulated on the fact that we are regaining to-day our position as the leading exporting nation in the world.

Speaking for a mining area, I would like to remind the House that, in the coal industry, the export section of the trade plays a very important part, not only because of its value, but because of its importance to shipping—because of the value of the outward cargoes and the effect on freights on the homeward run. I would also point out that these agreements were carried through at a period when the spirit of economic nationalism had taken almost complete possession of almost every country in the world, when the doctrine of self-sufficiency had become almost an obsession, and when each and every country in the world was endeavouring to export as much as it could and to import as little as it could. As regards the mining industry, that period followed on the aftermath of the long-drawn-out stoppage of 1926, when we lost some of our most valuable markets, which it is safe to say we should never have recovered by the ordinary processes available, but which we have to-day very largely recaptured as a result of these trade agreements.

In the case of the North East Coast, the results of the agreements, and particularly of those arrived at with the Scandinavian countries, can only be regarded as highly satisfactory. The figures speak for themselves. The senior Member for Dundee said that we had not the figures for the Scandinavian countries, but they are here in the Trade and Navigation Accounts; and, if he compares the period prior to the signing of the agreements with the similar period after the agreements, he will find that in some cases the import of coal has been doubled, and in others has been increased by 50, 60 or 70 per cent. Those are results which speak for themselves. Shipments from the Tyne and other North East Coast ports are higher this year than they were in 1932 or 1933, and, as a result, our pits are working very much better, and our miners are getting much more regular employment. We have a long way to go, of course, before we regain anything like our former prosperity in the export coal trade, if, in fact, we ever do so, but the vital test in this matter, so far as export coal is concerned, and so far as the trade agreements are concerned, is, where should we have been if those trade agreements had not been made? Having regard to the European economic situation, to the decline in world trade, to the extension of the system of quotas and licences and exchange restrictions, there can be but one answer to that question, and that is that we should have been infinitely worse off but for the agreements so far as the export trade in coal is concerned.

I would ask the Secretary to the Overseas Trade Department, when he replies, to take note of one thing. I hope that the Government will see that we derive the whole benefit from those agreements which have already been concluded, and that, as regards those which are under consideration, we shall take an even firmer stand as to the terms and conditions under which, in this topsvturvy, tariff ridden, economically chaotic world, we give the right of access to the most valuable market in the civilised world. I hope that, in the new agreements which are now under discussion, more attention will be devoted to the question of shipping. We have seen in this House during the recent discussions how serious the position of shipping is, and particularly of the tramp section of the industry, which is, after all, the backbone of the British Mercantile Marine; and I would ask the Board of Trade to avail themselves of the opportunities provided by the making of these agreements to stipulate that the goods under the agreements should be carried, to some extent at all events, in British bottoms.

It may be that in dealing with some countries there may have to be a little mutual give-and-take, particularly in the case of maritime nations, but I can see no reason why we should allow a third party to step in and reap the benefit, so far as transport is concerned, of an agreement which has been arrived at between two others. This is what happened in the case of the Argentine agreement. After agreement had been arrived at between the contracting parties, the field of maritime transport was left open, with the result that the Greeks, placed in a very favourable position by British shipowners selling their ships at scrap prices, were able to capture a large amount of the trade between this country and the Argentine and by their competition depress freights for the remainder. I hope some effort will be made to correct that in future agreements.

There is another aspect of the trade situation on which I should like to say a word. There is, I think, no better indication of the prosperity of an industrial country than the position of the iron and steel industry. That industry is to-day doing better than it has done for years, certainly since 1929, and the recovery is mainly due to the general policy of the Government but has been considerably helped by the trade agreements that we are discussing. That improvement is general. It has taken place all over the country, and in the depressed area of the North-East we are sharing in it. More blast furnaces are in operation to-day than there have been for years, mill after mill is being reopened, and thousands more workers are being restarted. In Middlesbrough one firm alone has taken on thousands of men since the agreements came into operation, and since the general policy of the Government has given them a fairer chance to compete in the markets of the world. One ounce of practical experience is worth £100 of the theory of which we have heard so much from the benches opposite. In that part of my Division where the iron and steel works are, the unemployment figures have ranged from 18 to 27 per cent. To-day it is reduced to 8.4, and we hope to see it reduced still further. The maintenance of our export trade in coal in face of enormous difficulties has only been made possible by these agreements. The improvement in these industries brings in its train inevitably an improvement in subsidiary and ancillary industries. I hope the Government will persist in their policy and will make more of these agreements to the advantage of the trade and industry of the country as a whole with a view to ending the tragic spectacle of 2,000,000 of unemployed.

1.29 p.m.


I only propose to speak in relation to cotton, the one industry in the country which shows no sign of improvement. The President of the Board of Trade gave us figures which showed a slight rise and fall ending with 1934 being a little less than 1933. Even in those figures he did not go far enough back. When one thinks of the figure of 7,000,000,000 yards compared with the present figure of,2,000,000,000 yards, one realises what a tremendous collapse there has been, and we must be the more astonished at the slowness with which those concerned have tackled this most important matter. I could never understand why so many industries have been helped, as they have been, and why this great industry, which has in the past earned so many millions for the country and helped it to develop, should have received apparently so little consideration. It is no use for those who work in cotton to be told that the iron and steel trade is better. It is very little use to have time spent in a family quarrel in Dundee about jute. We are concerned with cotton, a great industry which seems from the lack of anything constructive being said about it to-day, to have a very blank and drear future indeed. I should like to ask what the Government really think about the state of affairs in cotton for the future. After the great drop that has taken place, is there ever any hope of getting back again? Do they see any real hope of getting back, say, to a half of the 7,000,000,000 yards about which I have spoken? If they do not, is it not time that someone had the courage to speak out and say that the cotton industry can never get back to those conditions and to propose measures to deal with the populations throughout Lancashire that are affected?

The lack of fighting for the foreign markets on which cotton depends always seems strange to anyone who has been connected with the industry in the past. It always seems strange to me that in the White Paper so little regard should have been paid to Lancashire trade. This foreign trade issue is such a large one that I should like a reply dealing particularly with it from the 'Secretary for Overseas Trade. We are thankful for the quota that has been introduced into the Colonies. We feel that at last something has been done, but we wonder why it took so long to bring this about and why we have had to ask questions of the President of the Board of Trade for nearly two years before this vigorous action was taken. It surely did not need us to ask questions. The importance of the cotton trade is recognised by everyone. One would have thought that all these things would have been done beforehand, and that I and a few others would have been able to join, at any rate to a small degree, in the paean of congratulation which we have heard to-day.

I do not want to dwell too long on this subject, but I will end by asking whether it is the determination of the Departments concerned to pursue a much more active policy in the future in agreements and in any steps which they may take? Do they also contemplate in the near future helping the industry by some form of bounty such as has been done for agriculture, and such as, indirectly, is done in all import duty tariffs? Is there any serious and deep consideration being given to tackling the cotton difficulty in a bigger, wider and more satisfactory way than it has been tackled up to the present, or are we to go back to our home town and tell them that the case is hopeless, and that all they can look forward to is a slight increase in the internal markets, and that those great markets abroad are never to come back to us? Is that the spirit in which we shall have to return home? I hope that the Secretary to the Overseas Trade Department will be a little more inspiring.

1.37 p.m.


It was not my intention to take any part in this Debate, but, in view of the references which have been made to the Lancashire cotton industry I wish to make one or two observations which I feel justified in making in view of the fact that I happen to be a Manchester man who was brought up and lived in the cotton area for nearly 30 years. I fully appreciate the remarks of the hon. Member for Platting (Mr. Chorlton) that something should be done for the Lancashire cotton trade, and, although I hope that I may not be accused of being brutal, I would ask the members of the Lancashire cotton trade, "What have they done for themselves" Many years ago the Lancashire cotton manufacturers were told to attune their spindles to the taking of Indian cotton supplies. They were warned to put their house in order, and yet I can give instances which are even in operation today where they have antiquated engines running cotton mills which were made in the year 1845. They have never taken the slightest notice of anybody who has told them to get a move on and to anticipate that wonderful genius of the Japanese competitor. Only a matter of ten years ago—and I can vouch for this—in one of the largest cotton mills in the world, I will not give the name of the mill but it is in Great Ancoat Street, Manchester, a gigantic flywheel flew out and was carried across the canal which is opposite and for a quarter of a mile beyond where it demolished two cottages. The engine was made in 1849, and the mill was held up for a week until they got the flywheel back again.

When you tell the Lancashire man—and I am proud to be one—that he ought to get a move on in connection with this matter, he simply laughs. At the present moment nobody is grumbling more than the Lancashire man about Japanese competition. Lancashire has always been Free Trade. The Free Trade Hall in Manchester is a memorial to that wonderful disciple of Free Trade called Cobden, and as long as Manchester enjoyed that wonderful humid atmosphere which nature had provided, Lancashire was always bound to lead the world and say that it would never be open to competition. But when the latest condensing machinery was invented and it was proved that the Japanese could make cotton goods just as good as the Manchester man, they began to scream like fury for protection, and they are screaming to-day. Take the case of the Indian Empire of 318,000,000 people. The Indians are very anxious to buy our cotton goods in the ordinary way. Has Lancashire ever troubled to buy the Indian cotton? She has left it to Japan. Japan, being on a silver standard, has purchased raw cotton from India, and has made up cotton goods and sent them into India because the rates of wages paid to her workers are from 2d. to 4d. per day, and they can live on curry and rice and work from 16 to 18 hours per day. We are therefore handicapped with regard to the Lancashire cotton trade. It is impossible to compete against this kind of thing, and the only way to deal with the situation is to prohibit all goods which have been made beneath the standard of living of the British working man from coming into this country. I am anxious to see the Lancashire cotton trade look up, but you might as well talk about reviving the old handsome cabs in London as talk about reviving cotton in this world. Artificial silk has taken the place of cotton, and every housewife would tell you that it is cheaper, cleaner, more endurable, and, as a matter of fact, more adaptable for every purpose than cotton. I suggest that the Lancashire cotton industry should just sit down for about three days and examine themselves and find out what they can do in Lancashire in order to keep nearly 11,000,000 people alive. I am fully aware that no nation can live by taking in its own washing. We are all alive to the fact that our export trade is perhaps most important of all. We want to get markets, if we can, all over the world, but we have to show enterprise and initiative. All the Governments in the world cannot save any industry It must be prepared to save itself.

We have rather more than 2,000,000 people unemployed spread pretty well over every branch of industry in this country, and yet we are willing to allow sweated-made articles from every part of the world to be dumped here while our own people are out of work. I will not go into the question of liquid eggs from China or bacon from China, or the question of boots and shoes coming from Sing Sing in America, while we have people out of work at Northampton and Kettering. Although I have heard grumbles about tariffs from Members opposite, they have never yet brought to this House any sensible suggestion for the safeguarding of British labour in this country. It has always struck me as one of the most contradictory things in the world that the Labour men opposite, financed by their unions to safeguard the interests of the British working man and to protect his standard of living, at the same time make a plea in this House for the unrestricted imports of goods from all parts of the world, whether they have been produced under trade union conditions or not. It is nauseating to me to listen to hon. Members opposite talking about imports from Russia, while our own people are out of work. I hear them say that there are things that we must import. Of course, there are. No man by the widest stretch of the imagination could conceive that we could grow tobacco at Surbiton or tea on Wimbledon Common, but the articles that can be made at home ought to be produced by British labour and British capital.

I want to see the day dawn when this Government will be national in the true sense of the term, and act accordingly. I did not wish to intervene in the Debate, and perhaps my contribution has not helped very much. We are perfectly willing to have free trade in this country for all nations if they are prepared to follow our good example, but when they are putting up tariffs in America against us, and when even our own Dominions are putting up tariffs against us, it is a waste of the time of this House and of patience of the country to go on talking nonsense about free trade. Self protection is the first law of nature, and the first demand upon every British citizen is to safeguard our own people first and to think about the foreigner afterwards. With recent months we have done too much thinking about the foreigner. We have played the fool in the true sense of the term, because we have become a glorified milch cow for the rest of the world. All over the world people are looking to Great Britain to see how much they can get out of us. They ask: "How much is Great Britain going to give us? How far is the British Empire going to sacrifice herself in order to please us?"

Neither Germany, France, Austria nor any other country possesses anything like the potentialities that we possess. I am very proud to be a supporter of the National Government, but I think it is nearly time that we talked of the British Empire and forgot about the foreign countries. The British Empire covers one-fifth of the habitable globe, and has a population of 448,000,000, pr one-fourth of the world's population depending upon British rule. When I remember that we have 125 different languages in the Empire and 121 different religions, with potentialities illimitable and beyond the dreams of avarice, I think of the wonderful things that we could do if we fully realised those potentialities. In Canada we have a Dominion with territory as great as the United States of America. We have Australia, which is larger than the whole of Europe, we have Africa, and all our other Dominions and Colonies, and yet we have 2,000,000 unemployed, and we set ourselves according to the standards of Belgium, Czechoslovakia and the Balkans.

There is no nation which has such opportunities as we possess, and it is up to us to give a lead to the world. We ought to be able to do it if we have vision, imagination, and power, and if we stick to the reins and do not allow the horse to run madly down the streets of Empire. If any other nation had the same possibilities that we possess they would not be satisfied with the position that we occupy in the world's history. Neither France, Germany, nor the United States have such wonderful resources as the British Empire. The world is looking to us and if there is any meaning in the British Empire it is this, that the world expects us to give them a lead. In a recent tour through the United States of America I had the pleasure of visiting 35 of the 49 States, and I heard nothing but praise of the British Government and the British Empire. If America had what we have to-day she could not do anything like we can do. We are the envy of the world. The world looks to us to give them a lead and a start.

When we go to our distressed areas we are asked what the Government have done. When I go to my Division, I am asked what the Government are doing. The Government have done wonders. They have been a wonderful Government, but have they advertised the fact? Have they told the electorate what they have done? Propaganda has been made this morning by the right hon. Member for Wakefield (Mr. Greenwood), and during the Recess every Labour platform and pulpit will be quoting his words against the National Government. What are we doing? Taking it lying down, as usual. We are not saying a word, instead of telling the people definitely what we have done and what we can do. This country has lived on its export trade but we are not to-day exporting to the same extent as we are importing. Our imports are up, I think, by £42,000,000 and our exports by £15,000,000. It is our duty to provide British work for British hands. I appeal to the President of the Board of Trade to sit down and think of all the things that lie before his Department and see how far he can prevent work coming into this country from foreign hands which can be better done by British labour in British factories.

I know that we have to import many manufactured articles and that under the International Patents Act we are bound to accept certain manufactured articles which we cannot prohibit. Let me give an illustration. If I were to invent a new type of lens and patented it, it could not be manufactured in America, and for that reason America would be compelled to import it. There are many articles in the way of machinery, etc., which come in under those conditions from the United States and elsewhere. The National Government is now in its third year of office, and we are about to take a vacation. We have three months to think things over. Let the Government come back with a determined policy, the policy of the British Empire for the British people; no more entanglements in Europe. Let us seek to bring our own people together and to develop the great resources of the Empire. Let us have reciprocal agreement with our own people in the Empire. If only we can take advantage of one half of the possibilities of the wonderful Empire which lies at our disposal, then by the time this Government have completed their term of office we shall have no unemployed in Great Britain.

1.54 p.m.


I rise in order to call attention to certain points which have emerged from the discussion to-day. The President of the Board of Trade began his observations with a review, in outline, of the statistics relating to the external trade of this country during the first six months of this year and a comparison between that trade and the same trade in the corresponding period of the previous year. There is one feature in the right hon. Gentleman's review to which I should like to refer. He pointed out, in the comparison between the import trade in the first six months of this year and the import trade in the first six months of last year, that there was an increase in the value of articles wholly or mainly manufactured of over £13,500,000. He then went on to use some expressions which, I think, were intended to indicate that this increased importation of manufactured articles was a circumstance which need cause no alarm to the House or the country, for the reason that at least a great part are articles which it is good for this country to import, either because they are subjected to further processes in this country or because for some other reason they are necessary to the industries of this country. That argument certainly applies to some of the articles to which I am referring. It certainly applies to non-ferrous metals and manufactures thereof, and to chemicals, to the category of goods which is included under the head chemicals, drugs, dyes and colours; it applies also to the category of goods which is included under the head oils, fats and resins, manufactured. But this point requires further examination. Upon the assumption that the importation of the articles which I have just mentioned is beneficial to our industrial system certain circumstances still have to be borne in mind. The increased importation of these articles does not by any means account for the whole of the increase under review. I have made a calculation which, though I am no arithmetician, I think is correct, of the vaule of the articles I have mentioned, and I find that it is about £4,000,000, the precise figure being £4,195,584. I subtract that from £13,675,272 and I find that what is left is £9,479,688. That is to say, that, excluding those articles which it is necessary to import, there is still an increased importation of manufactured articles into this country in the first six months of this year as compared with the trade in the first six months of last year of about £9,500,000. I would observe at this point that in the Board of Trade Journal for the 26th July, it is stated that the volume—I have been dealing only with the question of value—of retained imports of manufactured articles in the first six months of this year was 21 per cent. greater than in the year before. A friend of mine, an hon. Member of this House, has been good enough to make a calculation for me, and from this I find that, excluding non-ferrous metals and oils and chemicals, the quantity of retained imports of manufactured articles for the first six months of this year was 23 per cent. greater than for the corresponding months of last year.

I mention these circumstances to the House in order to call attention to a situation which, I think, was not fully revealed by the review which was given by the President of the Board of Trade. I am not suggesting that the right hon. Gentleman deliberately concealed from the House information which the House ought to know, but in the argument which he put before the House he did to a certain extent, though no doubt unwittingly, veil the true state of affairs. I must place upon record my deliberate opinion that at least a considerable part of these additional imports represents goods which can be and should be manufactured in this country; that a considerable part of this importation is of goods the manufacture of which should be providing employment for our own people. This aspect of the matter is one which I think should engage the serious and increasing attention of His Majesty's Ministers.

I should like for a few moments to comment briefly on one or two observations which have fallen from hon. Members in the course of the Debate. The President of the Board of Trade used an expression to the effect that there were signs that the home market was approaching saturation point. I cannot help regretting a little that the President of the Board of Trade should have expressed himself in that sense. I know that that is an opinion which is held and has been voiced by economists and by a number of eminent persons who concern themselves with these matters, but it is an opinion which is not by any means universally held and there are many men of light and leading in this country who strongly dispute the correctness of this view. It is at least a somewhat discouraging message to go forth to the country from the President of the Board of Trade on the eve of the rising of the House. I do not myself understand, and I do not propose to examine in detail, the precise grounds upon which that view is founded. It seems to me that with the fortification and development of our national agricultural system, with the fortification and development of our national industrial system—a process now continuing and one which may be relied upon to continue during the coming months—it seems to me that we are far from reaching the point of saturation. It seems to me that this very process involves a continuous postponement of the point of saturation; for the reason that with the development of your industrial and agricultural production you have new needs, new desires, and an extension of the capacity to satisfy those desires.

When the right hon. Gentleman for Wakefield (Mr. Greenwood) addressed the House, he denied the correctness of this view. He, speaking for his party, said that he did not accept the saturation argument. I was delighted to hear him express that opinion, because I thought At that point that we might be able to claim a new ally for the principle of Protection. Here, I thought, we have a new supporter of the policy of the protection and fortification of the national powers of production. This being the essence of the system of protection it is quite reasonable that the right hon. Gentlenian should refuse to accept the view that at any stage saturation point has been reached. I was delighted to welcome a new friend. But the right hon. Gentleman disappointed me greatly, because he went on to develop his argument in this way. He did not place his advocacy at our disposal, but he went on to urge that if the purchasing power of the people had been increased our trade would be better. I was sorry to hear him go off upon that line. It is the old purchasing power fallacy. How often we have heard it in this House. The right hon. Gentleman and those who think with him seem to be obsessed by a view of the nature of purchasing power which I believe to be wholly fallacious. They seem to carry their analysis of the matter only a very short distance. They only consider purchasing power as money or what passes for money. They never go on to ask themselves from what purchasing power is derived. Purchasing power is derived from things which pass into exchange. It is dependent upon the proper operation of a system of agricultural and industrial production. At that point in the right hon. Gentleman's argument he left his course, and he omitted entirely to explain how, by any methods other than those which have been used by His Majesty's Government, the purchasing power of the people could have been increased. I say that it is precisely by the development of the national agricultural and industrial system that purchasing power has been increased.

The right hon. Gentleman went on to criticise in sharp terms the whole principle and policy of tariffs and other examples of what he described as economic nationalism. He characterised these devices as parts of a thing which he roundly condemned as economic war. But I was interested to observe that at a later stage of his argument he himself resorted to a phrase of the most pugnacious and indeed militaristic tendency. He said that we must make a mass attack on the markets of the world, though by what means he did not in detail explain. Now to use such an expression, and at the same time to complain of the use by His Majesty's Government of a system of tariffs and protection as constituting economic war, seems to me to be a course that is open to the charge of inconsistency.

I have only one further point to which I wish to refer. The right hon. Member for Wakefield said in criticism of the Ottawa Agreements that they have not increased our trade within the Empire. Now that statement is refuted by facts which are set out in the Board of Trade Journal of July 19th last. Those who are curious may find on page 87 of that publication a comparison between our trade with the Empire in the first six months of this year and our trade in the first six months of last year. In the first six months of last year imports into this country came from British countries to the value of £124,000,000 sterling. In the first six months of this year imports came into this country from British countries to the value of £141,000,000 sterling. There is a great increase in value. Then consider exports. In the first six months of last year exports of produce and manufactures of the United Kingdom went to British countries to the value of £77,000,000 sterling, while izt the first six months of this year exports of the same articles went to British countries to the value of £85,000,000 sterling. In my respectful submission those figures completely dispose of the assertion made by the right hon. Gentleman that the Ottawa Agreements have not increased our trade within the Empire.

2.12 p.m.


Those of us who occupied our places in the House till 4 o'clock this morning will be glad to see this day concluded. I make no apology for saying that I shall be very brief in my remarks, not that the subject under discussion does not warrant the fullest attention and consideration that the House can afford. But these Parliamentary accidents occur from time to time, and after to-day's short release we shall welcome the longer release that comes next week. The right hon. Gentleman the President of the Board of Trade brought in a great wealth of figures to demonstrate, and did demonstrate to his own satisfaction, that things were very much improved and that the prospects for this country are very much brighter than they were a few short years ago. The facts require consideration and examination before one can pronounce upon the right hon. Gentleman's self-satisfaction. He did refer to one or two things which I shall mention. He spoke of the improvement in employment in mining. If the right hon. Gentleman will consult with the Secretary for Mines he will find that there has not been any improvement at all in the volume of employment in the mining industry. There are people who disappear from the register of unemployed for various reasons, such as removal, transfer to other employment and old age, and there are those who are struck off because they are no longer entitled to unemployment benefit. There are some explanations for the fall in the number of those who can claim to receive unemployment benefit.

The right hon. Gentleman referred to the trade agreement with France. I have examined that agreement, and there is some ground for discussion of it. There is a guarantee that the existing per- centage, the present quota, shall remain, and that supplementary trade, which consists of special qualities of coal known to those familiar with the French trade shall not be interfered with. Then there is the agreement, which is also of some direct value, providing for the exchange of nearly 500,000 tons of coal for 300,000 tons of pitwood in the proportion of three tons of coal for two tons of pitwood. We have to examine the right hon. Gentleman's case from its effect on the trade of the country and of the world, of which we form a part. We were told that the immediate purpose of the Government in 1931 and 1932 was to redress the balance of trade. We were told that there were abnormal importations, and that steps must be taken to maintain exports to the value of imports. We then warned the Government flat they were embarking on a very dangerous course, that if there were attempts to regulate and unduly to restrict imports, there was the risk of damaging the exporting interests of this country.

It is well that it should be mentioned in this House once again that this country holds very widespread foreign investments, which have brought in a very large income to this country year after year for the last 70 or 80 years. Any attempt by this country to alter the direction of trade which would restrict the opportunities of paying interest and the repayment of those foreign investments would work infinite harm to the collective economy of this country at the present time. It is full of all kinds of dangerous possibilities not only for this country and for the people who have borrowed from us, but for the holders of our foreign investments in all parts of the world.


Do I understand that the hon. Gentleman is now defending the rentier interest against the producers of this country?


Like the right hon. Gentleman, I recognise that we are involved in the capitalist system and have to accept conditions as they are. We have to recognise that the capitalist system produces great inequality between persons and between economic units in the countries of the world, and I say that we run risks of great shock and injury to others if we suddenly cut off the obligations of countries to repay the investments to us. We fear very much the poli- tical repercussions of a policy of this kind. While we are working with everybody to reduce the volume of international debts which have been responsible for a, great deal of the economic confusion to-day, we hesitate about injuring the balance of world investments and world liabilities which give rise to trade and maintain the economic position. Those who speak of economic independence have not given sufficient thought to the subject. Economic independence for the 50 or 60 nations associated with the League of Nations is just as fantastic an idea as is political independence in the world to-day. It is quite impossible. Even if it were possible, it would be a terrible prospect to have complete economic independence in every country of the world.


Can the hon. Member mention any nation which desires complete economic independence?


I do not know of any, but I know that individuals in this House are talking that way, and I deplore the tendency. There is this conflict between two Government policies. One policy is manifested in everything the Government have done in regard to the Ottawa Agreements and the very large number of treaties for which the right hon. Gentleman opposite is responsible, and the other is the maintenance of world trade by trying to build up purchasing power. My right hon. Friend was criticised because he said that prospects of improved social conditions would disappear if we reach a position of economic saturation, but let the hon. Member who is a supporter of the National Government ask himself whether we have not imposed economic saturation upon the world by a refusal to extend the purchasing power of the people of our own country and of other parts of the world. This idea of economic saturation and the idea that you can raise the general standard of production and consumption in your own country quite independently of other countries is a subject I would like to examine in more leisure with Members of the House who differ from me.


The hon. Member will appreciate that that was not at all my argument.


We have 50,000,000 in these islands, and one can imagine many difficulties preventing 50,000,000 people from serving fully each other's needs. The bulk of the world trade to-day is done by 500,000,000 people. Less than a. third of the world's population in Europe, America and Japan conduct the greater part of the world's trade. It is worth noting that those are the people who play the largest part in the maintenance of our trade and who enjoy the highest standard of living in all parts of the world. The idea that you can arrange a standard of living by independence will not bear examination. This saturation point will certainly be reached if we fail to provide opportunities for free exchange of goods between communities in all parts of the world. There is no one-way market in the world at the present time. There is no possibility of it. There must be two streams of trade if the world it to enjoy the fruits of learning and progress in political science. The right hon. Gentleman said this morning that in the condition of the world to-day where was so much interference with trade, we were compelled to adopt methods of promoting our own trade interests. I would point out that restrictions are dangerous.

In to-day's newspaper we read that Australia may take measures to stop the importation of all British steel, because she wants to develop her own steel industry. That kind of thing happens in all parts of the world and thus we find how foolish are these restrictions. Restriction breeds restriction. Trade measures of the kind which have been adopted recently are like boomerangs—they recoil unerringly on those from whose hands they have been delivered. Tariffs do not provide revenue if they give protection and you find all kinds of inconsistencies arising in these restrictions and tariffs. They contradict each other and destroy themselves, as one sees when one follows closely their effects. But I think the greatest folly on which this Government has embarked is the policy of subsidies. There, we are doing nothing to protect our market. What we are doing is to bolster up unnecessary industries, to add to production where there is already surplus production. We are spending public money lavishly on unwanted and unnecessary production in the beet sugar industry, the wheat industry, the milk industry, the meat industry, the shipping industry. One could understand the encouragement of production where our own production was not sufficient but in each of the subsidised articles or trades there is already overproduction.


But the hon. Gentleman must be aware that the greatest market in the world for agricultural produce is in Great Britain.


Does the hon. Member really consider that agriculture is an unnecessary industry?


I do not, but I consider that it is the greatest folly in the world when there is a large surplus of agricultural produce, to pay out public money in order to subsidise the further production of things that are not wanted. It is the final and conclusive evidence to me that our economic management and direction in this country is suffering from what I would call the "peep show view" of world trade. We are looking at world trade through a small aperture, singling out one industry after another and dealing with each from a limited point of view. I am afraid, too, that the President of the Board of Trade and the Minister of Agriculture each has his own private peep show. They do not look through the same aperture. The President of the Board of Trade sees one vista and says: "That is where I shall go." The Minister of Agriculture looks upon what comes within his own particular range of vision and takes his own line and goes his own gait. The net effect is that we are not increasing production at home. Indeed there is no desire to increase production at home. The Minister of Agriculture is working to restrict production in his way, and the President of the Board of Trade is restricting home production in his way by restricting the importation which is necessary in order to increase production for the foreign markets. Everything is being done to restrict production and yet we are paying subsidy after subsidy in this stupid and contradictory way, undoing with the right hand what we are attempting to do with the left hand.

We on this side have the greatest doubt as to these 13 agreements which have been signed up to the present. It is an ominous number, by the way, but we understand that four more agreements are in hand and will soon be ready for signature and that still more are under consideration. This is an attempt to cook trade conditions. The President of the Board of Trade is the chef, choosing one ingredient here and another ingredient there and trying to manage the trade of the world from the offices of the Board of Trade. One is reminded of the five and twenty blackbirds, who sang before the king. When all of these agreements are completed we shall have an opportunity of saying, "What a lovely dish the right hon. Gentleman has prepared for us." We doubt very much whether, despite all the business experience of the right hon. Gentleman and those who work with him, this country's trade policy is going to succeed on the present lines. We are trying to put the world into trade leading strings and to organise world trade "on our own." As an hon. Member has just pointed out, this country is the best market in the world, not only for agricultural produce but for general purposes and the fact that it is a good market gives a considerable power of initiative to this country. The fact that we are prepared to import into this country large quantities of goods from other parts of the world gives us an advantageous position when we come to negotiate with other countries.


Hear, hear: and we are using it.


I say, do not let us make a foolish use of that advantage. I am not sure that this difficult problem is being handled in the right way and the League of Nations return dealing with international trade seems to support that view. The distribution of trade between the United Kingdom and the other countries of the world has varied very much during the last five years. We have managed to increase the percentage of our trade with British countries oversea, from 29.4 per cent. to 36.9 per cent. That is a considerable improvement in the percentage of our total trade which is done with our own sister countries. But our trade with European countries has dropped from 35.8 per cent, to 33.1 per cent. and the proportion of our trade with foreign countries elsewhere has gone down from 34.8 per cent. to 30 per cent. Those figures which I have just given refer to imports. The figures of exports show almost a corresponding variation and a corresponding decline in our trade with foreign countries.

One finds that with all these attempts to deal with world trade, attempts which are so largely centred upon this country, the tendency is for trade to decline rapidly. World trade has fallen to about 36 per cent. of the figures of some years ago. The decline is steady and continuous and applies not only to values but to quantity. I have some surprising figures before me as to the changes in European trade, measured both in gold prices and in quantum figures. Taking 100 as the datum in 1929 the imports into Europe have fallen to 47 in gold prices and to 81 in quantum. Thus, there has been a large drop in the volume of imports but a more considerable drop in the value. These figures are a startling revelation of the situation. Again taking the figure of 100 as the datum for 1929 exports from Europe have dropped to 55 in gold prices and to 67 in quantum. There is a continuous and concurrent fall in volume and in prices and if it continues it will soon only be possible to trade by giving away the commodities.

I am not sure that the restrictions and regulations which are operating already in, 13 countries will have any good effect. This country being the principal customer for the whole world is specially concerned, and if we take credit for these agreements and regulations it means that in the same measure we must accept responsibility for their ill-effects. I think the figures I have given show conclusively that we are unduly regulating the flow of trade in the world. We are setting up barriers and obstructions and all the time, outside these tariff walls, prices tend to fall lower and lower. The flood of goods accumulates outside and the goods become cheaper and cheaper in price until they reach the point of being almost worthless. The producers are driven nearer and nearer to bankruptcy, and so, like a snowball, your conditions continue to deteriorate by the effects of the regulations and restrictions that you impose. We would like to know, in the face of these figures, what is the idea of this Government. We always assume that it is profitable to buy cheaply and to sell at a good price. That has always been supposed to be good business, but is it good business to-day? Is that the aim of the Government? Do we desire now to buy cheaply and to sell at a high price? No, we do not. We find that all the ordinary canons of business are broken down, and even on paper the whole thing breaks down.


Does not the hon. Member agree that if we insist on buying from abroad cheaply, finally we must sell just as cheaply and so lower the standard of life?


The main element in our case is that we want labour to be well paid. Labour is always the largest consumer. Those who labour are the producers, and also the largest consumers of the goods produced, and we urge against this present system that this idea of cheapness based on cheap labour is self-destructive. By building these tariff walls and using the slender resources of your impoverished countries, you cannot escape the difficulty. We are not against a planned economy, but we want it to have a wider aspect than a mere nationalistic one. We are against this economic nationalism and this idea that one section of the world can benefit by itself. That must break down at some time or other. There must be a planned world economy. There must be selective trade in a world that is properly organised. We stand for a world trade system and a world order of trade in which this country must play a very prominent part.

I would appeal to the President of the Board of Trade. I do not doubt the technical ability and skill of the right hon. Gentleman and his colleagues. Indeed, it is the business of many hon. Members of this House to understand business, but we are indeed very apprehensive that in their skill and capacity to mind their own business, they are unmindful of the larger business in which we are all shareholders and partners. We should like the Government to reexamine their policy once more, and to see whether these artificial restrictions and conditions which they maintain with the authority of the strongest Government, numerically, that this country has known for very many years are the best possible in the circumstances. Let them by all means plan our domestic economy and our relations with the larger economy of the world, but do not let them place dependence upon their skill and upon the manipulation of conditions which may give them a temporary advantage, but which must, in the long run, bring injury and hardship upon all the peoples of the world with whom we should be in friendly and co-operative relations.

2.40 p.m.

Lieut-Colonel COLVILLE (Secretary, Overseas Trade Department)

I think the hon. Member for Gower (Mr. D. Grenfell), who has just wound up the Debate for the Opposition, must have found his task of attacking the Government's trade policy rather a difficult one, because he must have felt all the time that in a world where conditions Are exceptionally difficult, and where international trade is still at a low ebb, the fact that Great Britain has been able to make headway is not a mere chance, but is due to the wise and level-headed policy pursued by His Majesty's Government. Indeed, my hon. Friend began simile about a pie in which there were four and-twenty blackbirds, but he stopped too soon. He should remember that when the pie was opened, the birds began to sing, so I hope that when my hon. Friends who are supporters of the Government go down to their constituencies at the end of the month, they will also begin to sing and will adopt no apologetic note for the doings of His Majesty's Government in matters of trade.


But not in the same key.

Lieut.-Colonel COLVILLE

In harmony. My duty is, after this Debate, to gather up the fragments, and they may fill many baskets because of the many points that have arisen, but I want to refer to one or two points in the speech of the hon. Member who wound up the Debate for the Opposition. He spoke of the coal trade and paid a frank tribute, which I think the House Appreciated, to the French Agreement and the fact that it had secured a really valuable market which, unless some such steps had been taken, would undoubtedly have dwindled. I think the whole House is glad that we have reached a satisfactory agreement with France whereby our differences are settled and we are no longer in the position of discriminating against each other, and that that settlement gives a feeling of goodwill, which I hone will expand and find its expression in increased trade. With regard to the coal provisions of that agreement, I should like also to pay a tribute to the Mining Association and to the coal exporters of South Wales, who found it possible to enter into a reciprocal arrangement to take a certain quantity of pit-props in return for coal.

My hon. Friend says that trade must not he one-way trade. I quite agree, and here is a good example of profitable reciprocal trade. We do not want to see one-way trade, but our complaint is that before we came into office it was much too much a case of one-way trade. I would assure my hon. Friend that as regards the coal trade we have made, are still making, and will make every effort to see that in the agreements that we negotiate we do the very best we can for the British coal trade. We are at the present time in discussion, as has already been mentioned, with Italy, where the interests of the South Wales coal trade will be borne prominently in mind. As my right hon. Friend the President of the Board of Trade mentioned, an important development is taking place just now, and that is the discussions which have been entered into between the Polish coal industry and our own coal industry on the subject of the competition which exists between them. We are anxious to facilitate these discussions. We have indicated this to the industries concerned, and we have also indicated to the Polish Delegation which is in London at the present time for the purpose of negotiating a trade agreement that we should regard such an agreement between the industries as of very great importance. I would like to assure the House that the development of discussions between the exporting industries of two great countries which might result in an understanding is one which we regard as of considerable importance. I should also like to mention, in connection with the coal industry, a figure which has just been handed to me, because it is a new one, and that is that the number of wage-earners on the books to-day—that is, this week—is 5,000 up on the number for the same week last year. It may not be a great number, I agree, but it is a tendency which we welcome and which we wish by every means in our power to encourage.

Now, if I may turn from the hon. Member who wound up for the Opposition to the right hon. Member for Wakefield (Mr. Greenwood), who opened for the Opposition, his attack was even more vigorous, but I had the feeling that he was whistling to keep himself cheerful, because he knew that he had a difficult case to make. He said he regarded the home market as capable of almost unlimited expansion, yet during the time when his party were in office, they completely neglected the home market. At a time when a world blizzard was blowing, which was having devastating effects on trade in all countries, the right hon. Gentleman and his party left our home market completely unprotected. Had that policy been continued to-day I shudder to think what would have been the position in the home market. The right hon. Member for Wakefield described the Government's policy as a heterogeneous jumble of unrelated proposals. At any rate, it works and it has produced more employment at home and an increased export trade to the Empire and foreign countries. The right hon. Gentleman spoke about shipping and said our policy was simply hindering the shipping trade. I should like to correct him on certain points. There was an increase in. imports in the early part of this year and some hon. Members have expressed anxiety about the nature of certain of them. The greater part are raw materials for the use of our trades and they have to come in ships. Is it not a good thing that we should be importing much larger quantities of raw materials —in the main from those countries with which we have made trade agreements? So that again, therefore, our policy has had a healthy reaction on the shipping trade.

Our agreement with Russia has brought about an increased chartering of vessels by the Russian Government. In the first five months of this year 179 steamers earning £748,000 were chartered, as against 26 earning £150,000 in the same period last year, and I believe that can be increased. I would like to assure the House that our policy in regard to trade is directed towards helping our shipping trade. In the recent trade agreements with Estonia and Latvia a new Clause was inserted for the specific purpose of safeguarding our shipping industry. In the negotiations now taking place with Poland we are alive to the same question.

I was interested to hear the valuable tribute paid by the hon. Lady the junior Member for Dundee (Miss Horsbrugh) to the value of the agreements in the jute trade, and I can assure her that the policy will be continued. That applies to other industries as well. We are extending our policy of encouraging agreements between consuming and producing industries because without qualification they have always worked satisfactorily. The hon. and gallant Member for West Birkenhead (Lieut.-Colonel Sandeman Allen) gave some illuminating figures with regard to.shipping on the Merseyside which the House was interested to hear.

The senior Member for Dundee (Mr. Dingle Foot), who had a good long innings and made a number of runs, left me in doubt for which side he was batting. He expressed approval in general of the Government's trade agreement policy and he wished us to extend it and to pursue it more energetically. I should like to take up some points which he made in his speech, because they may be of general interest to the House. He raised the question of the Russian agreement, among others, and drew attention to the balancing provisions which provide that during a period of four years there should be an increasing scale of payments, the ratio in 1934 being 1 to 1.7, in 1935 1 to 1.5, in 1930 1 to 1.4 and in 1937 1 to 1.2, and thereafter 1 to 1.1. He said that we may reach a, balance of payments, but at what level? The value of the agreements, he said, would depend on the level on which we reached that balance, and he asked me to say what the level would be. It is impossible to answer that because the level must depend on the amount of goods that this market can absorb during any one year. If there be a demand in the timber trade, for instance, for an increase of imports of timber, Russia will share in that demand, as she has been sharing in the recent demand which has been due to the expansion in the building trade in this country, I cannot answer the hon. Member in figures, but I give him the assurance that we expect from this agreement a really valuable increase in our export trade to Russia on account of the balancing provisions in the agreement. Already the figures show that some useful orders are being placed which will translate themselves into exports when the goods are manufactured. I have been asked once or twice to give a catalogue of the orders, and I have explained that that is not possible because firms do not have to give me particulars of every order received from Russia, or indeed from anywhere else. I cannot set up such an inquisition, and it would be resented by firms if I did. I have some figures from the Russian Trade Organisation in this country, and I believe them to be accurate. They show the total orders placed by the Soviet Government in Great Britain for the half-year ending June of this year was £4,761,000 as compared with £1,894,000 in the same period last year. That is the result of the agreement and it is capable of expansion.


Will the hon. and gallant Gentleman remind us when the embargo was on Russian trade?

Lieut.-Colonel COLVILLE.

It was during part of that period.


Then what is the use of comparing present figures with figures during the period of the embargo?

Lieut.-Colonel COLVILLE

After the position last year there was an expansion, but the figures also compare favourably with the average trade done in previous years. I hope that the right hon. Gentleman does not attempt to belittle the efforts which the Russian Government are making to place orders in this country.


I only wish to protest strongly against the method of choosing selected periods which are not a fair and proper comparison to make. The hon. and gallant Member is certainly entitled to compare present figures with the average of two or three years ago, but to compare them with the period when there was an embargo on the whole Russian trade is not a proper comparison.

Lieut.-Colonel COLVILLE

The embargo did not cover the whole period. It was not imposed until the end of April of that year. If the right hon. Gentleman will average the figures, he will find there is a considerable increase. During those years when the Government which he supported were in office, the average orders made by Russia in this country were considerably less than we anticipate will be placed under the balancing scale of this agreement. The senior Member for Dundee said that the Scandinavian and Baltic countries had increased their purchases in this country but that that was not entirely due to the trade agreements, but to the spontaneous good feeling in those countries towards Great Britain. Without any offence to those countries, I think I can say frankly that there are very good business people in them and that they are alive to the fact that we are good customers who might not always remain so unless there were a greater measure of reciprocal trade. It is true that in those countries there is respect for the fact that we have changed our fiscal policy.

I come to the question of Holland. The House will be aware that there was an Exchange of Notes a few days ago by which it was provided that there would be reciprocal treatment for Dutch goods coming into this country and for our goods going into Holland, and that there should be no discrimination. The importance of this Exchange of Notes is that it definitely means the establishment of the United Kingdom's claim that this country must receive its full share of all quotas without giving additional compensation in return. The point was that we were likely to be subjected to reduced quotas, as happened in the case of France, while other countries were getting a full share. By this Exchange of Notes we get, without additional compensation, the same treatment as before—that is, we get the recognition of our claim to a full quota. My hon. Friend also asked why we did not reach a full tariff agreement. We can only reach a full tariff agreement when we can demonstrate to the House and the country that the concessions we are asked to make are compensated by the benefits we receive in exchange. It became evident in the negotiations that the Netherland Delegation—I am sure they will not take offence at what I say, because it was purely a matter of business—regarded the agreement which they wished to secure as one which should give considerable concessions to their horticultural industries, and they were not ready on their side to offer commensurate advantages which would justify any such concessions. I am sure the House would not wish the Government to conclude an agreement in such circumstances. Therefore, after a very careful and close examination, conducted on a most friendly basis—I wish to emphasise that—it was decided that we should not at the present time be able to conclude a tariff agreement, but that we would provide for an Exchange of Notes which would avoid discrimination on either side, and would recognise the claim we have made to a full share of all quotas allotted.

In his concluding remarks the hon. Member for Dundee said he wished us to proceed with our trade negotiations, but be prepared to make larger concessions. The possibility of that must be measured by whether we are shown commensurate advantages by the other side. It would be folly on the part of the Government to endanger home industries which are of very great value, and which have given very great employment to our people, unless we get commensurate advantages which will put more men into employment in the export trade. We have no intention of making fools of ourselves in that regard, and we shall proceed with our policy.

The hon. Member for the Platting Division (Mr. Chorlton) spoke of the cotton trade. We know the very difficult times which that trade has passed through. He suggested that in our trade agreements policy we had not, perhaps, brought the. cotton trade so much to the fore as we should have done. I would like to assure him that that is not the case. In every agreement we have put the cotton trade right in the fore-front, and in every agreement we have made we have secured advantages for the cotton trade, and these are now beginning to be reflected in the exports to the countries concerned.


Not in the earlier agreements.

Lieut.-Colonel COLVILLE

Yes, I can assure the hon. Member that that was so. He has been misinformed. He may say that we have not yet touched the largest markets, but we have dealt with some very important markets, which will grow. I will show by figures that our exports to those countries with which we have made agreements are moving upwards. In the first six months of 1932 the export of cotton piece goods to Denmark were valued at £490,000, and in the first six months of this year at £637,000. I do not know whether those figures are satisfactory to the right hon. Member for Darwen?


Could the hon. and gallant Gentleman give the volume?

Lieut.-Colonel COLVILLE

I am sorry I have not the figures as to volume. In Finland, in the comparable period, there was an increase from £42,000 to £108,000. In the case of Norway the figures are practically the same, but show a slight upward tendency. In the case of Sweden there is also an upward tendency, though the bulk is not great. In the case of the Argentine the comparable figures are £1,135,000 and £1,498,000, quite an appreciable rise. Taking the percentages of cotton goods and comparing the year from July, 1933, to June, 1934, with the previous similar period, there is an increase in exports to Denmark of 21.5, to Sweden of 40 per cent. and Norway of 15 per cent. That is not quite the same period as I quoted in the case of the previous figures. Those facts show that last year there was an increase in exports of cotton goods to the countries with which we have made trade agreements. We shall pursue that policy. As the hon. Member probably knows, negotiations are now pending with the Government of India with the object of bringing the Indian protective duties within the Ottawa Agreement. I was recently in Manchester and discussed that point with the Manchester Chamber of Commerce, and those negotiations will be pursued. The object will be to stabilise the settlement which was adumbrated in the negotiations that took place earlier. These negotiations are of very great importance. May I stress the importance of preventing unwise political utterances from affecting important negotiations with that great Empire country?

The hon. Member for Springburn (Mr. Emmott) showed anxiety about the imports of articles classed as wholly or mainly manufactured. He will agree, of course, that if we were to analyse this subject further, which I grant is a laborious task, it would be found that a great many of those articles are further processed in this country, and that therefore the tendency of which he complains is not quite so pronounced as he may fear. The Import Duties Advisory Committee has been set up to deal with cases in which there is a real fear of the effect of fully manufactured imports, and they are able to proceed in such a wav as to give assistance to the industry if a case is made out.

In conclusion, I should like to say a word as to the general effect of our trade agreement policy. The President of the Board of Trade indicated in his opening speech that the total increase in exports from this country in the first six months of this year, including re-exports, amounted to a little more than £18,000,000. In relation to the total of our trade that may not be an enormous figure, but it is very significant when you consider the conditions under which we are making headway, and it is not a figure which is to be minimised. The point arises as to how much of the increase is due to the direct negotiating policy of the Government. I have been endeavouring to analyse the figures in order to answer that question, but it is difficult to get the answer out exactly. Hon. Members will know that the detailed figures for the first six months of this year are not yet fully available, but so far as I have been able to extract them from the trade returns—the conclusions will have to be checked, but I would like to tell the House this remarkable figure—out of the £18,000,000 increased exports and re-exports no less than three-quarters was to Empire and foreign countries with whom we have made trade agreements. Somewhere in the neighbourhood of £14,000,000 worth out of that £18,000,000 went to those countries—to Empire countries, as a result of the Ottawa Agreements, and to foreign countries with whom we have trade agreements. I hope that when supporters of the Government are dealing with the Government's trade policy they will bear in mind the direct relationship of the negotiating policy which we have initiated with the total increase in our export trade. It is our desire to continue in that effort.

The Board of Trade have received advice from all quarters during the Debate as to how we are to conduct our business Many methods of an extreme nature were suggested, both from the extreme left and the extreme right. We are seeing in some countries to-day demonstrations of the disorder which results from extreme methods in political matters, and what is true of politics is true of trade policy. We are gaining in this country by the fact that we are proceeding in a level-headed and deliberate way with our trade policy. That we have reversed our national policy with so little disorganisation is due to the fact that we have done it in a deliberate and level-headed way, and I believe that a continuation of such a policy will be of great benefit to manufacturers and the trade of this country.


The hon. and gallant Gentleman has answered a large number of questions; may I put one more? I addressed to him a question about the prospects of a trade agreement with the United States.

Lieut.-Colonel COLVILLE

I should have mentioned it. If we received an invitation to negotiate with the United States, that invitation would receive very careful consideration from the Government.

3.8 p.m.


I do not propose to continue the Debate, but I wish to make only one observation. The hon. and gallant Gentleman in his extremely interisting and comprehensive speech said that the policy of the Government and the agreements which they have made at Ottawa and with foreign countries, had resulted in £14,000,000 out of £18,000,000 of the total increase of our export trade. In the last five years, our exports have gone down by £360,000,000, and consequently at this pace, it will take 20 years at least for us to get hack to the position in which we were as recently as five years ago.

Lieut.-Colonel COLVILLE

We are now moving in the right direction. Before we changed our policy we were moving in the wrong direction.

3.9 p.m.


Whatever figures may be brought forward by the right hon. Gentleman the Member for Darwen (Sir H. Samuel), may I remind him that he may congratulate himself that for a short time he took part and supported a Government—not for very long—who have brought the British export trade back to a position in which we are the greatest exporting nation in the world. At a time when the whole of the trade of the world of every sort is diminishing, we have been able to go up in proportion while other countries have gone down, and I think that that is a complete answer to the right hon. Gentleman. It will have been noticed that, with the exception of the Minister who opened the Debate, almost the whole of the Debate has been confined to north country Members, but a considerable amount of trade and business is done in the south country. I think it is only fair that, while we still have south country Members in the Rouse of Commons, we should be allowed to express our point of view from time to time.

I want particularly to refer to the Dutch agreement. While I have spent all my life since I have been grown up in working and fighting for a tariff, I have always realised that it is impossible to close up the different countries, or even the different Empires, into small boxes and not have any international trade. I am one of those who welcome enormously the idea of trade agreements with Holland, France, or any other countries, but it is only right that certain very real dangers should be pointed out. It has been pointed out already that the Dutch agreement will affect the flower trade. Since the economic revolution which was brought about in this country and in the world by our discontinuing the system of free imports, there has been built up in this country a natural flower industry, and another industry which is not quite so natural, namely, the glass-house industry; and very often, when I hear about coal not going to Holland, I reflect that it does go to the glass-houses, and I think of those selected figures which are so dear to the heart of the right hon. Gentleman the Member for Darwen and others like him, who have lived on them for generations, but who now see their voting power going down.

The glasshouse industry is a very important branch of the trade affected by the Dutch agreement. It is strongly organised, and has developed considerably in Scotland, where some people have done very well out of it. But the people who get left behind in this matter are the smallholders with the natural climatic conditions for growing early flowers. The months in which I desire to see the home grower protected are not only January and February—the winter months, which are the glasshouse months—but also March and April. No doubt the President of the Board of Trade, if he had been freer and more independent, would have liked to put this point himself. It is essential in these negotiations to remember the smaller people as well as the rather more highly organised portion of the industry.

With regard to the present Dutch competition, while I do not wish to handicap the negotiations, and hope they will come to a successful issue, I would like to remind the House that for many years the Dutch have used this market purely as a dumping ground. In this industry, with which I am in some ways fairly closely connected, we do not mind seeing reasonable prices, but what we object to is that when, say, lettuce are selling at 3s. or 3s. 6d., and anything over about 2s. 9d. gives a fair return, suddenly, when frost or something of that kind occurs, the Dutch should swamp the market, with the result that the price goes down to perhaps 20, 30 or 40 per cent below the cost of production. It is against that kind of sudden import over a short period, such as a week, that I think the home market, whether glasshouse or otherwise, ought to be protected. We do not mind the Dutch having a share of the market; that must be so if there is to be international trade; but we object to their share suddenly pouring in in a very short time and absolutely killing our trade. That is a point that ought to be borne in mind.

I was very much interested when the President of the Board of Trade referring to the French trade agreement, mentioned fish. I hoped we were going to have something that would bring some comfort to South and East coast fishermen, but nothing else came. It is as essential to keep our fishermen in work as our coalminers. It does not matter whether a man is out of work here or there. The essential thing is to get the largest possible number back to work. Those who put up a sort of bogy, as the Socialists have done one after the other, and try to make out that the Government, or this party, or even certain members of it, are trying to make little closed rings of trade are doing a great deal of harm to the whole of the trading position. We realise that this country is dependent, not only on its own home markets, but on having the largest possible amount of world trade. For that reason, if the Government never said anything else except that we have regained the position of being the greatest exporting nation and that we intend to go on with the policy that gave us that position, they would earn a great deal of confidence in the country.

In dealing with foreign trade, we should realise that we have the most extraordinary power behind us that we have ever had in our history. We have our Dominions, with their limitless markets, and the time may well come when, with them and with India, we shall be very much more near being one unit than we are to-day. Other countries have used tariffs for years. They know their value. Many of us two or three years ago thought they were horrid, nasty things which would only hurt ourselves. would urge the Government to remember in their trade negotiations that they have a really powerful and effective weapon in their hands which, if efficiently and courageously used, will go on doing the work that they are doing to-day, and I would urge them to use it to the fullest of their power, not to be diverted on to silly side issues like subsidies, but to use more tariffs rather than go to the taxpayer on every occasion because they are not strong enough on some occasions to force the hands of the foreigner.

3.19 p.m.


It always puzzles me to understand why the right hon. Gentleman the Member for Darwen (Sir H. Samuel) and many of his colleagues seem to go out of their way to paint a gloomy picture of everything that happens in this country. The right hon. Gentleman suggested just now that we had lost £300,000,000 of our export trade and that it would take us 20 years to recover it. Surely it has occurred to him that there has been a fall in prices during the period that he is speaking of and that, if we could get back to the old price level, the loss would not be so great as he suggested.

There is another point to which I would like to draw the attention of the House. It is something which is often lost sight of when we examine the present day conditions of trade. The principal thing in good international trading conditions is a balanced production. The fact, is that it has always been lost sight of that there was a certain date in 1918 when the production of the world suddenly and definitely, in a period of 24 hours, became unbalanced. I refer to the date on which the Armistice was signed. Up to that time a certain percentage of the production of the world was being sunk at sea and otherwise destroyed. That production was partly the exchangeable production of the world and constituted part of the balance of production. The moment the Armistice was signed that production for the time being became surplus, and in my view ever since it has constituted one of our greatest difficulties and has impeded the trade recovery of the world. I believe that the policy which is now being pursued by His Majesty's Government tends definitely to redress, especially throughout the Empire, and to a large extent throughout the world, what one might call the balance of production. I believe that by doing that it will hasten the day when we shall come to the arrangement of a balanced trade.

3.22 p.m.


I would like the President of the Board of Trade to take note of the fact that many business men think that our Trade Agreements are a little too rigid, and that there is not that flexibility which will gradually lead to ultimate improvement unless we have power to exchange in volume and in value the same amount of goods. I commend that fact to the President of the Board of Trade and would ask him particularly to apply his mind to what has been done in the Russian Agreement. I should like it to be definitely laid down in the future when we make these agreements that the desideratum of both countries should be to get nearer as we go on in exchanging quantitative value in a balancing way. If that were done, I believe that the efforts of foreign countries in regard to trade agreements would bring together those countries definitely associated with each other and tend to bring about trading between ourselves and them. I believe that, if that matter were honestly dealt with and interpreted, it would result in a great growth of our export trade.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill committed to a Committee of the Whole House for Monday next.—[Captain Margesson.]