§ 11.5 a.m.
§ The PRESIDENT of the BOARD of TRADE (Mr. Runciman)
I beg to move:That the Additional Import Duties (No. 18) Order, 1934, dated the seventeenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said seventeenth day of May, nineteen hundred and thirty-four, be approved.This Order concerns the iron and steel industry and is, therefore, of great interest not only to those who are engaged in the production of iron and steel, but to those who are interested in the production of coal. The iron and steel industry still remains of great importance to coal mining. I have only to remind the House of the fact that in 1932, the latest date for which we can obtain figures, the amount of coal used in the production of iron and steel was nearly 12,000,000 tons, out of a total output of 209,000,000 tons. Any diminution in the demand for coal for the production of iron and steel would, of course, mean to the coal mining areas not only a reduced demand for their outputs, but would undoubtedly be another nail in the coffin of the coal trade in some areas which are largely dependent on iron and steel for their prosperity. On the other hand, any increase in the demand for coal, I need hardly say, would be of great advantage not only to the coal mining areas, but to everybody who is concerned with the industrial prosperity of this country and the employment of our people. It was with that trade largely in our minds that we devoted ourselves early in this Parliament to dealing with the problem of iron and steel and the severe competition with which it was meeting from abroad.
I would remind the House that during the period 1929–31 the Continental steel makers were capturing an ever-growing share of the United Kingdom market. The United Kingdom production of pig iron, for instance, went down from a monthly average of 632,000 tons in 1929 to the startling figure of 314,000 tons in 1931. There was a somewhat similar decline in the United Kingdom production of steel ingots and castings, which fell from 803,000 tons in 1929 to 433,000 tons in 1931. If I may add the figure of steel products of great importance, the decline is from 635,000 tons in 1929 to 390,000 tons 1244 in 1931. That meant, during that period, almost a halving of the consumption of domestic coal used for the production of iron and steel. This was due not only to shrinkage in the trade, of which we were all conscious, but was largely due to the competition of the iron and steel manufacturers of the Continent, who had obtained a larger share year by year of the production which would otherwise have been native to us. There was at the same time a very heavy fall in value. The average declared value of imported sheet bars, for example, fell from £5 3s. per ton in 1929 to £3 7s. per ton in 1931. This was due undoubtedly to operations which for want of a better term are called dumping, and dumping in a literal sense; that is to say, sales at prices far below the home price and even below the cost of production went on continuously during this period.
When, therefore, we were taking the heavy industries under review it was clearly necessary that something should be done to prevent this undue competition in this country on a scale which had led to such a very severe reduction in the output from our own works. With the object of checking this dumping we imposed an import duty of 33⅓ per cent., which was much heavier than would be justifiable on materials of some other industries, but which was barely enough to give us breathing space while the reorganisation of the industry was undertaken. During the last two years there have been various changes made in the import duties which we are now imposing without time limit. First of all, in April, 1932, we imposed import duties on the scale of 33⅓ per cent. for a period of three months. In July of that year we extended the period for a further three months. Then, in order that time might be obtained for the reorganisation of the industry, we extended the period, to expire in October, 1934, to a period of two years.
During that time the Import Duties Advisory Committee, which had recommended these various extensions, had also been asking from the industry assurances of a most definite character that they were prepared to proceed with the organisation of their industry and bring it up to date not only in organisation but in equipment. When we proceeded with 1245 the consideration of programmes for equipment one difficulty with which we were always met was that it was impossible to obtain the necessary capital for this industry if the periods for which import duties were imposed were the short broken periods of three months, six months and even two years. Certainty was of the very essence of this business, and if it was not secured it would have been impossible to have proceeded with the reorganisation of works, the establishment of new plants and the concentration of the production of iron and steel in districts which were best suited for it. A National Committee was set up by the iron and steel industry and a report from them was received in March of last year which outlined a scheme, for a new central organisation. The National Committee stated that the scheme mightperhaps be more correctly described as a scheme for establishing machinery whereby the reorganisation of the industry may be carried out, rather than a scheme of reorganisation itself.We encouraged them to proceed and the scheme has since been exhaustively discussed with all sections of the industry and in its present form it has been adopted by a large majority. The view taken by the Import Duties Advisory Committee, as hon. Members will see on referring to the White Paper, is that it isa piece of machinery presenting great possibilities of usefulness to the industry and to the nation at large … and its ultimate success will entirely depend upon the vigour and single-mindedness with which that machinery is used.Having reached that stage, we came to the conclusion that there was nothing further to be gained by prolonging uncertainty as to the future and it is with the object of bringing that to an end that I am moving this Order to-day. I would like to point out, however, to the House that the absence of a time limit which this Order will provide for, does not mean that changes cannot be made if the need arises and if there are fresh circumstances, whether those fresh circumstances are connected with the reorganisation or otherwise. I would also like to point out that we have in the new scheme provision for the appointment of an independent chairman who shall not himself be one of the steel producers. The chairman should have authority arid status sufficient to apply the requisite 1246 drive to the Federation as an organisation and enable him at the same time to influence appropriate amalgamations and regroupings and also to secure the necessary finance for them. The selection of a chairman who will fulfil all these qualifications is by no means easy. You must have a man in whom the industry has confidence. He must be acceptable to the interests which will be asked to find money for reorganisation and extension. He must also have the confidence of the Government, not only that this work will be done but that he will keep a strict eye on the activities of the Federation—the new organisation—and take whatever steps are necessary to bring to the knowledge of the Government and, if necessary, of the Import Duties Advisory Committee, whatever may be of importance.
This has, of course, a direct bearing on the position of the consumers. I have pointed out in this House more than once how important it is that consumers of iron and steel, who include nearly every important industry in the country, should not be penalised. There are two considerations which must be borne in mind when we approach this subject. The first is that an incompetent iron and steel industry cannot do its duty to the consumer. An industry which is in a precarious position, at one time with a fairly large output, at another time scarcely able to keep its head above water and at all times finding it difficult to get capital, must be not only harmful to its own interests but harmful to the interests of the consumers as well. Therefore, the first thing that must be done for the consumer is to bring about, as far as possible, from within and from without, the stabilisation of the industry itself. The second point is that the consumers will retain the right of appealing to the import Duties Advisory Committee if they are of opinion that their interests are being unduly hampered in the work of the new organisation. They can appeal to that Committee and it is the statutory duty of the Committee to go into all the questions which are so brought to their notice.
I need hardly say that we would not feel justified in going on with these proposals unless the task of modernising plant and lay-out and so reducing the cost of the production of steel were proceeded with vigorously by the industry itself. This point was emphasised in the official 1247 letter sent by the Chancellor of the Exchequer to the Import Duties Advisory Committee on 8th April, 1933. The Chancellor of the Exchequer made it clear that we did not regard the progress which had been made up to the present as fulfilling the whole needs of the case and I believe that this is the view held by those responsible for the industry itself. They recognise that the new organisation will have to go further than has at present been outlined and that the qualifications of the independent chairman, who is such an important link in the chain, should be commensurate with the duties which fall upon him.
§ Mr. GEORGE HALL
The right hon. Gentleman has referred to the appointment of an independent chairman. Will he inform the House who is to be responsible for the appointment and payment of the independent chairman?
§ Mr. RUNCIMAN
The independent chairman must of course be selected by the organisation itself but I need hardly tell the House that the Government will have opinions to express on that subject and that they could not regard any and every nomination put forward with complete satisfaction.
§ Mr. RUNCIMAN
He will be paid by the organisation. We cannot place the salary of the independent chairman upon national funds. May I then mention the point that was made by the Chancellor of the Exchequer in his letter—which has been made public:We recognise that only the first stage has been reached and that much remains to be done before the industry can be said to be properly equipped and organised.That is a view which I understand is held within the industry itself by all its progressive elements. The Chancellor of the Exchequer goes on to say that he trusts—and there he is speaking for the whole Government—that the industry as a whole and all sections of it will press on with the work which they have so well begun. While the Government must necessarily reserve complete discretion as to the precise action, legislative or otherwise, they may deem it expedient to take in any circumstances which may arise, I desire to assure you "—that is the Import Duties Advisory Committee—and the industry that so long as the Government are satisfied of the determination 1248 of the industry to set its house in order they will be ready to give such support to its efforts as may from time to time appear necessary to enable this great enterprise to be brought to a successful consummation.That, briefly, is a narrative of the events which have led up to the present Order. The Order itself is limited to removing the time limit which had been placed on the Import Duties to which I referred in my opening remarks. At the present time the industry has the assurance of the Government, which I have no doubt the House will endorse, that the import duties at present imposed are not to be limited to the period ending in October, 1934, but will be continued into the future, always reserving the right and the proper right of the Government, and particularly of Parliament, to review from time to time the way in which the organisation is operating and the effect it is having on the industry.
I do not think I need go into the constitution of the new organisation to-day, though naturally it must develop in the normal way, and I have no doubt that in the course of time the full constitution will be made public. It is certainly the subject of very active discussion at the present moment, and I hope it may be possible either for the Chancellor of the Exchequer or for me to announce to the House at an early date that the organisation is on a footing of which we can approve, and that the real test of the new Federation, that is to say, its success in promoting the further changes which are necessary for the improvement and the reorganisation of the industry, will be attained under its inspiration and with its full force behind it. One of the considerations that we had in asking for this Order to be passed to-day is that those who can provide capital for the iron and steel industry should be induced to do so, and to do so at the earliest possible moment.
I am very glad to see that there have been some important developments during the last few months. Some works have been very largely overhauled, arrangements have been made for the concentration of some of these works in districts where they are more likely to succeed, and some entirely new works, like the new works of Messrs. Guest, Keen, and Nettlefold in South Wales, will now go on a very large scale; and I have no doubt that this will only be a precursor to further developments which will ensure 1249 to the industry success in the future and will maintain for this country a business without which not only its own trade but the coal trade and the general industry of the country cannot prosper.
§ 11.27 a.m.
§ Mr. G. HALL
The House has listened, as it always does listen, with interest to the statement which the right hon. Gentleman has made on something which he rightly said is a very important matter. We share with him the view that the iron and steel industry of this country, together with the coal industry, is of vital importance. I wish we could share with him his optimism that this scheme is going to do all that he has described to the House this morning during the course of the very near future. He referred to the history of the protective duties which have been given to the iron and steel industry during the last two or three years. I regard the fact that the duties which are enjoyed by the industry are to be given for an indefinite period as a very great victory for those who have been pressing the Government for these duties during the last eight or 10 years. We can see nothing in the scheme included in the recommendations which we are considering this morning to give us any optimism that the industry is going to benefit to any great extent. The right hon. Gentleman rightly said that is simply machinery, and the success of the scheme will depend very largely upon the vigour which the industry will put into it.
The right hon. Gentleman must know that the position of the iron and steel industry of this country has been unsatisfactory for many years. There was a Board of Trade Committee in 1916–17 considering what could be done to reorganise this industry after the War; applications for safeguarding this industry were made in 1925 and 1927; there was the Committee on Industry and Trade in 1928, when recommendations were brought in; there was the inquiry by the Economic Advisory Committee of 1930, the report of which was not made public; and then from 1931 till the advent of this Government there was the pressure which was brought to bear to enforce duties upon the import of foreign iron and steel. The import duties in the first instance were imposed upon the condition that the industry should not merely 1250 produce a scheme of this kind, but should take effective steps for the purpose of reorganisation.
That has been going on for two years. In March, 1933, as the right hon. Gentleman rightly said, the National Committee of the industry drew up a framework of machinery within which the future reorganisation of the industry might be undertaken. This scheme provided for the formation of a national body, which was to be called the Iron and Steel Corporation of Great Britain, and which was to replace a large number of the sectional bodies that now exist. This Corporation, in accordance with the scheme of 1933, was not to own or control the industry, but merely to co-ordinate the existing concerns and to promote amalgamations. Even this small instalment of reorganisation was watered down in the lengthy discussions which followed, and in January of this year the Import Duties Advisory Committee had almost to issue a threat that, unless reorganisation was undertaken without delay, the duties would not be renewed. The employers organisation and the industry remain hopelessly divided, and even under this scheme they are divided, a large section standing out against any reorganisation at all.
Finally, at a meeting in April of this year, the National Federation of Iron and Steel Manufacturers adopted a revised constitution which is even more feeble than the one which was originally proposed in March of last year. The Federation in its new form is proceeding to draw up proposals for improving the reorganisation of the industry, but the Government have decided to continue the duties indefinitely, without waiting to see whether the Federation is really in earnest. I am inclined to think that the Government share the view of the right hon. Gentleman the President of the Board of Trade, for he does not now consider that the iron and steel industry is a depressed industry. It is earning profits, and I am not sure that he is not of the opinion that all that ought to be done is being done, for in a speech which he delivered to the iron and steel manufacturers he was very complimentary to them about the condition of the industry, and he even asked permission of the chairman to describe the industry as not one which was depressed.
1251 I am not sure as to whether the right hon. Gentleman regards the success of an industry by the test of whether it is a profit-earning industry or by that of whether it is giving all that it ought to give to the nation. I have recently looked at the returns concerning the percentage of unemployed in the iron and steel industry, and from the latest returns which have been issued by the Ministry of Labour I find that the percentage of unemployed in all the industries in the country on the 23rd May of this year was 16.7 per cent. In the iron and steel industry on that date the percentage of unemployed was 26.4; in the pig iron industry 25.8; and tinplate industry 35.2. The comment made by the "Ministry of Labour Gazette" was that there had been some slight improvement in the iron and steel industry but that conditions were still bad; in the pig iron industry that it was very bad; and that in tinplate employment showed a slight decline and was still very bad. I cannot share the view which the right hon. Gentleman gave to the Iron and Steel Association that the industry is not still a depressed industry. One must, of course, admit that some progress has been made with regard to production in the course of the last year, but the increase which has taken place does not put the industry in the position in which it was in 1929. We are still far below the production which took place during that year. I think that the Import Duties Advisory Committee themselves are conscious that this scheme is not all that it might be. The right hon. Gentleman rightly gave us the history and quoted from the Memorandum which has been issued, but he did not refer to the comments of the Import Duties Advisory Committee in their Report on page 4, in the last paragraph of which they said:The present scheme, of which a copy is appended to this recommendation, while of a less compelling character than the outline scheme submitted in March, 1933, is substantially on the same lines.The Chancellor was only prepared to accept that as a preliminary, as the machinery, but as far as the President of the Board of Trade is concerned, he is quite prepared now to accept the declaration which has been given by the industry that they are going to put their house in order in the very near future. As a matter of fact, the Import Advisory 1252 Committee itself repeated what was said by the right hon. Gentleman. It remains in essence a piece of machinery representing great possibilities of usefulness to the industry and the nation at large. Its ultimate success will depend on the vigour and single-mindedness with which that machinery is used. That is the position.
We want to impress on the right hon. Gentleman and the Government that all is not well with this industry and that this scheme is just an indication that the manufacturers have only toyed with the proposals for reorganisation. All that it asks is that this reformed Federation should call upon the Executive to give earnest attention forthwith to measures to promote the maximum manufacturing and commercial efficiency throughout the industry. That is what the industry was pledged to do two years ago. Is there the slightest reason to think that this voluntary organisation will achieve, without pressure, what it failed even to attempt under an apparent threat? The National Federation itself is not united behind this scheme, feeble as it is. When it was submitted to the members there was a substantial minority against it, and it is interesting to read some of the comments of active members of the Federation concerning the scheme. The right hon. Gentleman referred to the fact that all the interests were consulted concerning the scheme. May I put it to him that there is one very important interest which was not consulted, namely, the trade unions, which have during the last 30 years taken a large share in considerations of reorganisation of this industry. The workers of this industry were not consulted by the employers at any time during the discussions which have taken place on the question of reorganisation. The employers have acted as if the re organisation of the industry were no concern of the workers at all.
This scheme is merely a glorified employers' federation and will have little effect along the lines of reorganising the industry on sound scientific and comprehensive lines. One of our criticisms of the present scheme is that it leaves the ownership and real control of the various sections of the iron and steel industry still in the hands of the individual companies and the individualism and sectionalism which has been one of the main obstacles to the progress of the industry 1253 is still left practically where it was. The industry is having a slight revival at the present moment, but the orders that are coming in are not being divided in any organised manner and even to-day we have the spectable of works running full time and asking the trade union organisations for permission to work overtime, while there are others, capable of executing the same orders, which are running only half time. Indeed, in a number of cases, such as Dowlais and Ebbw Vale, they are closed down altogether.
The present scheme of reorganisation, we say, will do nothing to prevent this as it leaves the getting of orders entirely in the hands of the individual firms. With regard to the fact that the trade union organisations were not consulted, the right hon. Gentleman must be aware that in 1931 the Iron and Steel Confederation went into this question of organisation very thoroughly, and it may be said that a complete scheme was produced. We on this side of the House say that no scheme of reorganisation should be acceptable without the trade union organisations having the opportunity of expressing their views. Not only is there a complaint from the trade unions concerning consultation and the effect of the scheme, but a statement has been made by Sir William Firth, Chairman of Richard Thomas and Co., which has large interests in South Wales. Sir William Firth expresses the fear that the new federation will fail to produec an economic scheme for the same reason that the National Steel Committee failed. He added,Private and individual interests block all possibility of progress being made on a basis of national efficiency.and he asked that statutory power should be given. He also said.The fundamental raw materials of the whole industry are ore, coke, pig-iron, ingots, blooms, billets and sheet and tin plate bars. The manufacture of these products is in the hands of what is termed the heavy steel section—a section consisting of companies owning a combination of coke ovens, blast furnaces, and steel plant, varying in efficiency and capital structure, and jealous of each others activities.He went on to say:Another section of the trade is called the re-rollers, i.e., works unattached to the heavy steel producers—works not owning a steel-making plant, but small bar and rod mills and sheet and tinplate mills. All these re-rollers complain bitterly of the prices charged them by the heavy steel section 1254 for their raw materials, which, previous to protection, they bought largely from the Continent. (It is this diversion from the Continent to the British heavy steel makers that represents the expansion in demand in iron and steel about which we have heard so much in recent months.) If the heavy steel makers were forced to reorganise and to pass on to the re-rollers the benefit of the economies effected, then the re-rollers would have some reason for satisfaction. … But under a quota, rebate and fixed price system such works are actually compelled to close down 30 to 40 per cent. of their finishing plant, and to deliver their surplus steel to distant re-rollers, paying up to 15s. per ton railway carriage on the raw material that could have been finished in their own adjacent plant. The re-rollers, receiving this heavily-freighted raw material, converts it with great inefficiency because, even if his plant is up to date (which in many cases it is not), under the quota system-he is only allowed to work to 50 per cent. of capacity.Here he makes a very striking statement:So long as private interests only are concerned so long will genuine economic reorganisation be delayed. Not until it is realised that the community will not continue to protect an industry that is in efficient from a manufacturing cost point of view will the industry submit to a pooling of financial and manufacturing interests on an economic and efficient basis. Under the present system, in the absence of amalgamation of financial interests, the least efficient plant, by keeping idle and drawing, compensation, can earn more than an efficient plant in production. Thus the owners, ask an unreasonable high selling price when approached with a view to amalgamation.He said also:To leave the problem for solution by the industry itself would involve loss of valuable time. It would be just as intelligent to allow the industry to decide for itself what taxation it should pay.There we have a statement from a person who is actively conencted with the steel industry and was, I think, consulted on this question of amalgamation. Notwith standing the self-satisfaction of the President of the Board of Trade concerning what is likely to be done as a result of this skeleton scheme, there, from the industry itself, is one of the strongest expressions against this scheme that I have heard for some time. The right hon. Gentleman must know that all the industry is concerned about is to get a continuation of the duties which have been imposed. Some of the leaders of the industry have said that if only the Government would double the duty and leave them alone they would be all right. I do not know whether the pressure which, I understand, is to be exercised as 1255 the outcome of a private meeting of Conservative Members held last week upstairs to advocate an increase in the duties on some of the iron and steel imports has already been effective and whether the Government have been guided in some way by those representations.
We on this side of the House are pleased that there has been an increase in the production of iron and steel in this country. Some hon. Members attribute that increase to the new duties. The hon. Member for West Swansea (Mr. Lewis Jones) when advocating the duties, expressed the view that they would give a big impetus to the iron and steel industry, and since they have been imposed he says they are almost entirely responsible for the increase in production. We say that whilst the duties have, perhaps, contributed slightly to the increase, it must be remembered that the production of iron and steel in this country last year, and in the first quarter of this year, has not reached the rate of production of the year 1929, when no duties were imposed upon imports of foreign iron and steel. I am of the opinion that the attempt to make up the lee-way of the two and a half years of unprecedented depression when no orders for replacements or new equipment were given, is what has really given the impetus to iron and steel production. The railways have been giving orders for new rolling stock. As I came into London on Monday I was very pleased to notice a whole train of 20-ton steel wagons. There was not a single wooden wagon in the whole train. That is an innovation, because I think the first steel wagon was introduced only three or four years ago. Now the old wooden wagons are being replaced. Further, steel sleepers are being used in the place of wooden sleepers; and those associated with the coal industry know that steel arches and steel pit props are being used in place of timber on the main roads and at the coal face. These new uses of steel assist to make a home market for the products of this country, and I think some tribute should be paid to those who have advocated the changes.
At the same time that there has been an increase in the production of iron and steel in this country there has been an increase in all the iron and steel producing countries in the world, and the increase abroad has been very much 1256 larger than the increase here. Take the case of America—although I admit frankly that in the depression in America in 1932 the production of iron and steel fell very low; and the same thing might be said of Germany. Last year the production of iron and steel was 72 per cent. higher than in the previous year, as compared with an increase of about 33 per cent. in this country. That increase went on in the first quarter of this year, as compared with the first quarter of last year. In America the increase in the production of pig iron is 146 per cent. and of steel 131 per cent., whereas in this country, while there was an increase in the first quarter of this year, we are still below the production of 1929.
It cannot be that it is entirely owing to the imposition of these duties that there has been this increase in iron and steel. We are all pleased at the increase in the demand for those goods in this country, but it is necessary that we should have a fair share of the world's trade if the iron and steel industry in this country is to live. We are faced with formidable obstacles to an expansion of our export trade and to international trade, because all the nations are adhering to a policy of economic nationalism. There was a slight expansion in the export trade last year, as compared with the year before, and there has been an increase in the first quarter of this year, but we are still well below the export figures of the pre-crisis year.
Manufacturers in the country are faced with an ever-growing competition from foreign countries which are producing from highly efficient plants. I understand that interesting progress has been made in iron and steel production in Russia during the past two or three years. Russia is becoming a formidable competitor with the other iron and steel producing countries. The same thing may be said of America and Japan, as well as of France and other countries; nor can we continue to look for the export of iron and steel goods from this country to some of the larger Dominions. I read the address which was given by Mr. Lysaght, President of the Steel Institute in this country. He has recently visited Australia, New Zealand and South Africa, and the comments which he made upon the efficient developments 1257 in those Dominions were amazing. He said that he had visited the Broken Hill plant in Australia, where pig iron is being produced at less than £2 per ton, which is very much below the cost of production in this country. That plant is producing all the iron and steel requirements of the Dominion. He said that he saw a plant which was one of the best and a model for the world. The same thing was said of some of the plants in South Africa which he visited.
The right hon. Gentleman referred to the importance of the consumer and the user of steel. I am wondering whether in this scheme, or this skeleton of a scheme, sufficient consideration has been given to the position of the user. I have referred to the apprehensions of Sir William Firth, and there are others connected with large steel-using industries who share the same apprehension. The right hon. Gentleman must recognise that those industries are almost as important to the nation as the iron and steel industry itself, taking into account the number of workpeople employed and the amount of wages paid. In the tinplate, hardware, chain, nail, wrought tube, wire, tool, implement, cutlery, needles, pins and small arms industries, there is almost as much employment of labour and capital as in the iron and steel industry. I am sure that the right hon. Gentleman is aware of the difficulties with which some of those industries are confronted in the export market. Take tinplate, for example. I am not going to speak much about them because the hon. Member for Pontypool (Mr. T. Griffiths) will, I have no doubt, deal with that aspect of the question. The right hon. Gentleman must know that about one-third of the tinplates produced in this country are for home use and two-thirds are for export purposes. At one time we, in South Wales, had almost the monopoly of the production of tinplates, but at the present time tinplate industries are growing up in almost every country in the world.
Our market in Europe is only 40 per cent. of what it was a few years ago. Germany, which had an export trade of 30,00 tons a few years ago, is exporting at the rate of 150,000 tons per annum, a trade which was almost entirely enjoyed by the South Wales tinplate producers. The same thing can be said for Japan and Italy. Italy did not have a 1258 tinplate works a few years ago, but she is now not only producing almost all her own requirements but is producing sufficient to export and is becoming a competitor in some of the markets which were essentially South Wales markets. The irony of it is that the reason given by some of the tinplate producers, and even by some of the responsible producers in this country, is that there has been an impetus to intensive competition in the tinplate industry owing to the fact that the bars which were formally imported into this country are now being sent into those countries that are producing tinplate. Instead of our having the bars, Italy and other countries are receiving them, and are turning them into finished articles, and putting out of employment a very large amount of the plant and many of our workpeople. We started the cry, "Buy British." The Americans have taken up the cry and they say "Buy American," and the Japanese say, "Buy Japanese," and the Italians say, "Buy Italian." That cry unfortunately has gone throughout the whole world, and no country is suffering more than we are at the present time.
I have dealt at some length with the position of the industry; we are concerned on this side of the House about the effect of any reorganisation which is to take place under this scheme, from the point of view of the position of the workpeople. The right hon. Gentleman has referred to the need for centralising plants at a point at which they can be employed more economically. We have heard so much about that that we are a little tired, especially when we see the result of reorganisation of this kind in some of the derelict areas of the country, particularly in South Wales, where the suffering has been as much as, if not more than elsewhere, because schemes of reorganisation have been put through without any thought being given to the communities which were dependent upon the works in those areas. Neither those who have made huge profits for generations out of those works nor the Government, have given consideration to the social effect upon the communities from which those works were to be removed.
In South Wales we are faced with that problem. The hon. Member for Ebbw Vale (Mr. A. Bevan) will deal with the position in Ebbw Vale during the course of this Debate. It is not sufficient that 1259 these matters should be left entirely in the hands of a few industrialists and bankers. I do not know how far it is true that industry has the final word in deciding what is to be done. I am not sure that the banking trust, which is now looking after the industry to a very large extent and which appears to be very much more powerful than the President of the Board of Trade, are not dictating industrial policy, not only to the nation but to a Government which ought to be sufficiently strong to give more protection to the people who are suffering as the result of the changes which are taking place. I hope that the Government will give more consideration to the communities affected by these schemes of reorganisation. It is of no use to send down commissioners, either to South Wales or to Durham, or to any of the other areas which will be faced with problems if the Government allow a few industrialists and a few bankers to decide not only what is to take place in the reorganisation of industry, but as to where the new plant is to be, without any consideration being given to the social effects of the change.
Those of us who live in close proximity to such areas know that there we have these festering sores, and a feeling of injustice—a feeling that the difficulties of these people, upon whom the industrial greatness of this country depended in the past, are given no consideration by the Government and by the industrialists who have made huge profits as a result of their work. I say without hesitation that this scheme will not either affect those districts or give much impetus to the industry itself. As it stands, the scheme is just a means of providing machinery, the principal part of which is a national representative body whose functions are designed to secure some degree of co-ordination of the activities of a diversified industry on a strictly private capitalist basis. So far as the workers in the industry are concerned, we find that not the slightest attention has been given to their interests or their position. We take no exception to securing effective organisation, the control of uneconomic competition, the elimination of waste in all its forms, and the promotion of an efficient and healthy industry; but we are unable to appreciate 1260 any scheme of organisation designed in the national interest which has a provision for compensation to owners of redundant and inefficient plant, the existence of which is presumed to be an obstacle to progress, but entirely disregards the legitimate claims of the workpeople displaced in the process.
We are of opinion that this scheme is simply trifling with the problems of the industry and an excuse for the indefinite continuation of the duty, and that at its best it is not more than the first stage in the reorganisation of the industry. Many manufacturers themselves are convinced that a reorganisation effective enough to secure really efficient production and distribution, while safeguarding the interests of the workers and consumers, is not possible without some statutory control. There is nothing in the scheme which calls for any response from the people of this country, especially the workpeople in the iron and steel trade, and I believe that time and experience will show that the proposals of Members on this side of the House, for ownership and control by the nation for the nation, offer the only means whereby this great industry can be made to serve the national interests. We shall oppose this Order, because we are not satisfied that it gives to the industry what the industry and the nation should get.
§ 12.9 p.m.
§ Mr. MALLALIEU
Like the hon. Member for Aberdare (Mr. G. Hall), I am afraid I am unable to share the optimism—I will not call it the easy optimism, because I must do it the justice of saying that it was an exceedingly difficult optimism—of the President of the Board of Trade with regard to this scheme of reorganisation, on the strength of which he is proposing to render permanent the protection which was introduced some time ago for the iron and steel industry. The right hon. Gentleman referred, not in very great detail, to the history of the events which have led up to this dénouement of making the protection permanent. I would like, also, to refer in some detail to the history of the matter, but I do not suppose that, if I mention any of the dates mentioned by the President of the Board of Trade, I shall draw the same inferences as he drew, or look at quite the same aspects of the events which occurred on these dates.
1261 I will start at a date rather earlier than the right hon. Gentleman did, namely, January, 1932, for it was at that date that the National Federation of Iron and Steel Manufacturers issued their memorandum, in which they clamoured for a tariff upon iron and steel products, and at the same time indicated that, if the necessary tariff were forthcoming, they would proceed at once to developments involving heavy capital expenditure. In April, 1932, the President of the Board of Trade stated that for three months a tariff of 33⅓ per cent. was to be imposed, and the Import Duties Advisory Committee said on that occasion that the duty would be quite insufficient to place the industry in a position to play its proper part in the national economy unless it were accompanied by a considerable measures of reorganisation. In June, 1932, Sir George May called together the representatives of the industry and suggested the appointment of a Committee there and then to prepare a scheme of reorganisation such as he (had in mind when he recommended the imposition of the duty. The National Committee was formed, and, on the strength of its formation, the duties were continued for a further three months. In October, 1932, this Committee produced its report, which, of course, was merely a survey; it did not suggest any real scheme of reorganisation; but, on the strength of it, the Import Duties Advisory Committee recommended the prolongation of the duties for a further period of two years.
I think it is only fair to the Import Duties Advisory Committee to say that they were then showing a very definite uneasiness about the furtherance of the scheme of reorganisation which they hoped would come into operation shortly, and Sir George May—so it is reported, at any rate—suggested that, if someone did not do something in the industry, perhaps someone outside the industry would step in and do something for the industry. In April, 1933, the National Committee's scheme was published. It was, as the right hon. Gentleman has said, a scheme to set up a central body really to supervise and control some of the aspects of the trade associations hitherto in existence, and there was a certain curtailment of the numbers of those trade associations. The objects of this body were said to be to facilitate amalgamations, to do away with redundancy 1262 of plant, and generally to promote re-equipment; but the President of the Board of Trade has very properly stated to the House what the view of the Committee was then, namely, that this was really machinery set up to prepare a scheme for reorganisation, rather than reorganisation itself.
In June, 1933, as a result of pressure, I suppose, by the Import Duties Advisory Committee upon the industry, and it being apparent that there was not sufficient support in the industry for the scheme as then proposed, two new committees were set up, sub-committees of the National Committee, which produced two schemes, A and B. I need not trouble the House with Scheme B, because that scheme was not even discussed, but Scheme A is really the basis of this reorganisation of which we have heard a little from the President of the Board of Trade. It called for a conversion of the National Federation of Iron and Steel Manufacturers into a Corporation, the British Iron and Steel Corporation. The scheme was exceedingly like the original scheme of the National Committee, but nevertheless it was just mechanism for discussing reorganisation at some later time. In April, 1934, the National Federation approved the scheme with a slight extension of the original scheme, and charged the executive of itself, now transformed, of course, into a Corporation, to work out the details and attend specially to exports. That was the reference of the Committee itself; it had to attend to a scheme of reorganisation, but with special reference to the export trade. On the 21st May, 1934, this sub-committee produced its report. I do not think it can be incorrect to say that the scheme amounts in effect to a taking over, with a slight extension, of a scheme which was already in existence under the British Steel Export Association. It was a scheme which involved a central selling organisation and the taking of quotas for the home market. But, the point about the scheme as now produced is this. The scheme still retains the idea of having quotas for certain products, and with regard to other products—the cheaper products—
§ Mr. MALLALIEU
The scheme proposed by the sub-committee of the national committee, and published in 1263 May, 1934. It deals with exports only, as far as I understand it, and the scheme is that there shall be a tender for a certain class of goods—the cheaper class of goods, as I understand it, but maintaining the quota for the dearer class of goods.
§ Mr. MALLALIEU
I am suggesting that it was a scheme proposed, but I am not suggesting that it has been accepted, of course.
§ Mr. MALLALIEU
By the subcommittee of the national committee set up originally at the instigation of the Import Duties Advisory Committee. I would like to say that it is a great advance, of course, to have a tender among the members of the association for certain classes of goods without relying entirely on quotas, but this re organisation, applying as it does to a very limited class of goods, surely cannot be described as a reorganisation sufficient to warrant the President of the Board of Trade asking this House to make the protection permanent for the steel industry. This industry took 22 months to produce some sort of scheme—a scheme of machinery—and even so there was considerable opposition to the scheme within the industry, as was pointed out by the hon. Member for Aberdare. Now we have the far more difficult task of working out a detailed plan of reorganisation which is not even so much as begun, except in a small field of certain types of exports—not by any means all exports—and the new export plan is not really a tremendously great advance on that in operation under the Steel Exports Association.
Does the right hon. Gentleman think that optimism with regard to reorganisation is justified, having regard to the fact that the scheme here adopted is really one which has been in operation to a certain extent already? All the other vast fields of organisation at present untouched have no such scheme to look for as a precedent. They have to start, as it were, from scratch. I do not think 1264 that, in view of the time taken to pro duce this scheme, when there was a, precedent, that he is justified in saying that there will be any real measure or reorganisation in any future that we are likely to see in this Parliament, at any rate, or even in the next Parliament. I, myself, think that the scheme, which has been produced by the iron and steel industry shows quite definitely that it is hopeless to expect a tariff to be of use in bringing about real reorganisation. That idea is surely exploded, in view of the fact that so small an attempt at reorganisation has been made in these months in a comparatively small field of industry. The House should not prolong indefinitely in this matter a tariff which was definitely stated by the Import Duties Advisory Committee to be dependent upon a scheme of reorganisation being put into force. That was the definite statement of Sir George May and his Committee at the time.
With very few words the President of the Board of Trade comes to the House apologetically, as though he were only too keen to get himself extricated from any connection with the iron and steel industry, and asks the House to prolong this indefinitely, merely saying, of course, that future Parliaments may reverse the tariff policy with regard to the industry. He laid stress upon the appointment of an independent chairman. It was not quite clear whether he was to be a sort of Oliver Twist to come and ask for more from the Advisory Committee, or a sort of sneak paid by the industry to tell them that the industry was not doing all that it should do. I think that it will be very unwise to be optimistic about the reorganisation of this industry, and we should make a protest, by not passing this Order, against the extraordinary delay which is taking place.
§ 12.21 p.m.
§ Sir FREDERICK MILLS
I am not now connected with the industry, but I am still interested in its progress, and, indeed, the industry itself has still employed me in certain capacities. I would like, first of all, to thank the President of the Board of Trade for his speech, and for his courage in seeking the confirmation of this Order indefinitely. I would also like to thank him for his blessing. I do not know whether it was quite whole hearted, but I believe him to be genuine 1265 and honest in his blessing on the reorganisation scheme which has so far been submitted. I hope that his words will, at all events, convince the minority who have attacked this industry on the score of inefficiency, largely from the absence of knowledge of the industry itself. The speech to which we have just listened from the hon. Member for Colne Valley (Mr. Mallalieu) is a very good example of what has been taking place for many years. Quite clearly the hon. Member does not know anything at all about the scheme or about the industry.
I suppose it is well known that I have been an advocate of tariffs for a great many years. I believe that it is 90 years, or nearly as long, since the country adopted so-called Free Trade, but which I call free imports, and for at least half that time I have seen the error of it. It has been stated that Lord Beaconsfield used to say that Protection was not only dead but damned. Lord Beaconsfield was never a Free Trader, and he did say many years ago that the interests of the country some day would demand that that policy would have to be reversed. It is a very unfortunate fact that we have had to wait so long until this industry got into such a terrible state before Protection has been adopted. I do not want to give very many figures to-day, as there are others to follow me who will give figures of particular details of the industry, but the main facts are quite clear and simple. During last year output increased by one-third, unemployment went down from 45 per cent. to 28 per cent. of the people employed. The industry is now working to 80 per cent. of its capacity, a larger capacity than any other steel industry in the world with the exception of Luxembourg, and we have actually increased exports by 12 per cent. over 1932. The hon. Member for Aberdare (Mr. G. Hall) said that we had not yet reached the output of 1929, but, as a matter of fact, we are so close to it that you can say that we have actually got to that state, and the industry is improving every day.
It is only since the autumn of 1932 that the industry has had real protection, because obviously a protection granted for three months was of no use at all. The intelligent foreigner was not going to be' deterred by a protection which might last only three months. Therefore, at any cost he went on with his imports into this country, the only free market to 1266 which he could export. You must give time for an industry of this magnitude, of this complexity to bring itself to that state of output and efficiency, and people must not run away with the idea that, because the output has increased only by 33 per cent. up to this stage, that is the end of the scene. I am glad to think that the industry all through is advancing steadily and satisfactorily. Of course, that last 20 per cent. takes a lot of bringing into action. A great deal of it is due to financial reasons. If you take the place with which I was associated for so many years, it will take more than a mere resolution to restart it. It has been denuded of all its capital. During the last 10 years I was there Imperial and local taxation drew no less than £3,500,000 out of that one industry, and a great deal of that had to be paid out of an overdraft at the bank. In a case of that kind, it will take some time before such an industry can be re-established.
I come to the question of the reorganisation scheme, with which I have had something to do, because my late colleagues in the industry asked me to be the Chairman of the small committee which was set the task of trying to meet the views of the greatest number of the people in the industry. I gather that the hon. Member for Aberdare complains that Labour was not brought into the consultations in setting up this new scheme. I do not think anyone ever thought of asking Labour to come in to take part in the discussions of a scheme of this kind, any more than I presume trade unions would dream of asking employers to come in and take part in their discussions. But it is a very unfortunate thing that the leader of the trade union mostly associated with the industry, the Right Hon. John Hodge, who was a Member of this House for many years, did not accept the invitation of my company to become a full and complete director and so take part in the industry itself from the inside. We are living at present under a capitalist system, and the only way in which Labour can take part in the con duct of the industry itself is the way that everyone has to adopt—to buy shares and seek seats on the boards of the various companies. When we come to the point of adopting the methods proposed by the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps), you will 1267 get something quite different and, when you get it, I hope you will like it.
I am of opinion that it is a pity that reorganisation was pressed so quickly after the introduction of the protection that was given to the industry in 1932. After all, the only people who could produce such a scheme were the very people who had to get the work started again and, with my knowledge of what that means, they would have all their work cut out to get the wheels running again. It is not surprising, in an industry where people are distinctly individualistic in their ideas, that there should be a great many differences of opinion, but the scheme was finally passed by something like 80 per cent. to 90 per cent. in numbers. If you take tonnage, there was over 90 per cent. in favour of the adoption of the scheme.
The hon. Member for Aberdare read some extracts from a speech made by Sir William Firth. Sir William Firth himself voted for the scheme. The only difference of opinion between him and other members of the industry is that he wants some kind of Governmental control. He thinks there may be recalcitrant members of the industry who will not do what the new Chairman and his Council recommend. The industry, at the moment at all events, is wholly opposed to Governmental control, but, should there be a sufficiently large minority which will not play the game, I do not think the industry will hesitate for a moment in coming to the House and asking for an enabling Bill along the lines of the Bill passed the other day for the cotton industry. I do not think hon. Members need have any fear about this being an active scheme. The members of the industry mean business. It will take time to work out an organisation which will at the same time take care of the distribution of orders and of the home trade and the export trade, as well as the grouping which may be found necessary to produce efficiency in the industry. But I think, owing to the imposition of tariffs and the fact that certain works at all events are working at full pressure, we have now got works producing steel at as low if not a lower cost of production than any works on the Continent of Europe, which is by no means a small 1268 achievement having regard to the snort time that they have had to produce any results whatever.
Mention has been made of the consumer. It is always very difficult to know who is a producer and who is a consumer. The producer of steel is not confined to the actual producer in the works themselves. There are all sorts of people required to produce iron and steel in addition to the people who are actually running the blast furnaces and the steel works themselves. There are the people employed in coal, in electrical equipment, and in the limestone quarries, manufacturers of bricks, engineers, and a whole host of people who are producers in the sense that they precede the actual production of steel in the works. Then the consumers are equally interested, and, so far as this country is concerned, in my judgment we have only begun to use steel. The hon. Member for Aberdare instanced a great number of cases where steel is now taking the place of wood and other materials, and everyone must rejoice that this improvement has taken place.
May I conclude with a rather personal word. I regret that this much needed tariff has come five years too late for the concern with which I was associated for over 30 years. I had the highest regard, amounting I think to affection, for the workpeople employed there, and I believe that affection was reciprocated. During the struggle in 1929 to keep the place running they readily waived the greater part of their trade union regulations and rules, particularly in regard to working at the week-ends, pending the introduction of certain classes of machinery, and I wish to pay tribute to the marvellous manner in which they, one and all, tried to help to keep that place going. I say I regret very much indeed that this tariff has come five years too late to keep that place going. I hope that a new St. George may arise to slay the dragon of unemployment in that neighbourhood and in other districts. There is one thing about which I am convinced, and that is that this tariff has come to stay. I do not mind what Government comes in. They may probably call it by a new name. I have known it in my time by six names. I think it started when I was a young man by being called Protection, and then it became Fair Trade, next Reciprocity, afterwards Safeguarding, and now it is 1269 back to the good old-fashioned term of Protection which I hope it will long retain.
§ 12.37 p.m.
§ Mr. ANEURIN BEVAN
I do not propose to trouble the House by repeating the history of the tariff which many Members have done, but to ask the House to appreciate the central problem with which this industry was faced a few years ago. I believe that some hon. Members have lost sight of the circumstances with which the steel industry was faced and with which this House has to deal. The hon. Baronet who has just sat down rebuked my hon. Friend below the Gangway for charging the industry with inefficiency, and yet the hon. Baronet himself in the latter portion of his speech indicated what steps should be taken in order to remove the inefficiency which exists. It is not Members on these benches who have charged the steel industry with inefficiency, but the leaders of the steel industry themselves. It is true to say that there are units of production in the steel trade as efficient as any abroad. No one has ever denied that fact. The same thing is true also of the coal industry. What is true of the coal industry is true of the steel industry, namely, that the War left it with a productive capacity in excess of the dimensions of the market. That was the problem, and in those circumstances concerns trying to keep themselves alive in a market of continually falling prices, and having to market their products out of loans in many instances, could not obtain money for capital development. In consequence of that fact we have all sorts of variations of technical efficiency inside the steel trade, from up-to-date modern plants to plants that have had very little money spent upon them since the War. That is the position. Therefore, I do not think that hon. Members are entitled to rebuke us when we point out those evidences of inefficiency. We are not saying at the outset that the steel masters themselves are mainly responsible for it. They were caught, like the coalowners, in a set of circumstances over which, individually, they had no control.
What was one of the problems with which the industry was faced? It was to try, if possible, to bring the productive capacity of the industry nearer to the reasonable dimensions of the market. In 1270 other words, to eliminate over-production. That was also the position with regard to the coal trade. They had to try and eliminate redundant collieries which were producing or able to produce 100 million tons of coal per annum in excess of what the market could take. What is being done? It was suggested by the industry itself that it was impossible to reduce the number of units of production to somewhere in the region of 9,000,000 or 10,000,000 tons per annum capacity without protection from foreign dumping. Perhaps the right hon. Gentleman will give me his attention for a moment.
§ Mr. BEVAN
This is the last occasion on which evidently we are to have a chance of debating this very important matter. Sir George May said "I do not propose to give you protection permanently, because, if I do so, I shall put out of my hands the power of imposing discipline upon the industry." First of all, he put on a tariff for a year, and then it was suggested that that made the situation far too precarious, and he said, "We will put it on for two years, and in the meantime a scheme of re-organisation must be prepared." In other words, Sir George May and this House decided that an impermanent tariff was the only way to bring about re-organisation. It was suggested here that the policy was ludicrous and that you should not present the industry with conditions of such appalling uncertainty. Nevertheless, that was the position. It was only by keeping the tariff on the floor of the House within the control of Parliament and of the Tariff Committee that the steel masters could be coerced into agreeing to a scheme of re-organisation. Now we are told the opposite, and that only by having a permanent tariff and putting the power in their hands can the steel industry be re-organised. Hon. Members may say that it is easy to be wise after the event, but they will give us the credit of saying that we were wise before the event. We told the House very plainly at that time that that was the wrong way of going about business. Nevertheless, it was done.
Now we are faced with this scheme. I have looked through it very carefully, and I listened to the speech of the right 1271 hon. Gentleman this morning, and I must say that I have not for some years heard him speak with such a lack of assurance. The right hon. Gentleman was afraid perhaps that I might quote his speeches against him, but I assure him that I do not propose to be so unkind. Hon. Members in all parts of the House are perfectly seized of the right hon. Gentleman's apostasy, and I do not therefore propose to face him with a quotation from some of his speeches. I think that he was really under-estimating the intelligence of the House in the observations which he made this morning. It may be that we are not entitled to very much respect now after the events of the last few years, but he should treat us with a little more respect than he treated us this morning, because he suggested that the scheme of re-organisation would enable amalgamations to take place and the Federation to discuss the technical equipment of the trade, and that means would be found to provide finance for schemes of re-organisation. I cannot find a single word about it. I have looked very carefully through the scheme. There is nothing at all about it. There is not a single word providing the Council or the Federation with the right to say a word about it.
If hon. Members will look at the Order they will see that it is simply a codification of existing practice in the industry. The industry already carries on a number of activities with which the new Federation is to be charged. There is the British Steel Exports Association, the Trade Association, the British Steel Works Association, the Iron and Steel Industrial Research Council and the Heavy Steel Industries Committee. All these different organisations are at present carrying on activities with which the new body will be charged, so that the House is provided with nothing new. All that it is provided with is a piece of machinery which will be extremely useful for the steelmasters themselves. So far from Sir George May and this House having protected the consumers of steel by imposing efficient reorganisation upon the industry, all that this scheme does is to assist the steel owners in organising a lovely cartel for themselves, so that they may prevent any dishonourable person in the industry from rigging prices. It 1272 is to assist the steel industry to make an instrument of coercion for succeeding governments. It is:To arrange with Governments, Government Departments, whether British or foreign, other industries, authorities, organisations or persons in regard to any action which may be proposed by them or any of them or desired by the Federation in relation to the Industry or allied trades.To promote, support, oppose or influence legislation, Government orders, regulations, and other matters affecting the Industry or allied trades.That is splendid for the steel industry. A good many industries would like to have Government intervention in order that they might be so organised as to bring political pressure in that way. This is a cartel. There is not a word in the objects of the scheme to provide us with what the right hon. Gentleman said was necessary, namely, the regrouping of industry, the concentration of production on efficient plants and the elimination of redundancy. If there is any such pro vision, will the Tight hon. Gentleman tell the House where it is? I cannot find it.
I suggest that the May Committee and the President of the Board of Trade have surrendered in a shameful manner to the pressure of the iron and steel masters for permanent protection without having secure any of the important objects that even many supporters of tariffs themselves desire to secure What do they desire to secure? First of all, the contraction of the productive capacity of the industry to the dimensions of consumption and concentration of production upon existing plant brought up to date. The President of the Board of Trade told us that we ought to rejoice because new plants had been constructed. Chaos has become more confounded by producing new plants in an industry whose output is already in excess of what the market can take. It is as if we were asked to rejoice because somebody had discovered a new coalfield in Sussex and had started sinking new pits to produce coal in an industry which already produces 100,000,000 tons per annum more than is necessary. I never heard such an astounding proposition. An appalling feature of this proposal is that at this moment when we are supposed to have reorganisation schemes brought about, an entirely independent authority, independent of the Ironmasters' Federation and 1273 independent of this House is proceeding to finance sections of the industry which will rapidly change the whole structure of the industry in a few years. The construction of the Cardiff Dowlais Works, and the construction of steel plant towards the middle East of the country, so far as we know, have no relationship to any comprehensive scheme of steel reorganisation. If it has, we have not had it. We do not know what part they are to play in the new industry. All that we know it that if this thing develops it will have murdered some of the existing steel units without any reference at all to the social consequences involved. We were hoping that we might have a scheme presented in which regrouping would take place and that the communities that have been depending upon steel production would know their fate. The hon. Member for Leyton East (Sir F. Mills) has mentioned Ebbw Vale and his association with it. It is not the Ironmasters' Federation that has sentenced Ebbw Vale to death, it is not this House that has passed sentence, but it is the B.I.D.T., the Bankers' Industrial Development Trust, a quite independent and new organisation which is advancing money for the construction of the Cardiff Dowlais Works, and for Stewart and Lloyd, sentencing a community of 34,000 people to death. Are we not entitled to know something about it?
If industries are going to be reorganised they must be reorganised in accordance with some comprehensive plan. There is this difference between industry to-day and industry in the old days. In the old days man was more mobile than industry. He did not settle down then on the banks of a river and could not shift, as is the case to-day. A great change has taken place in the last 150 years, and now industry is more mobile than man.
§ Mr. BEVAN
I said that industry is more mobile. I said that in the past man was more mobile than industry but to-day industry is more mobile than man. I think I made myself clear. To-day, when a community settles down it settles down with the most complete apparatus—sewers, drains, schools, all the things that a modern community needs. Such 1274 communities have been established in places like Ebbw Vale, Dowlais, some parts of the North East Coast and in Scotland. Now, a few years afterwards, those communities are having their economic conditions cut from under them by the movement of industry just a few miles away. If we were a vast continent shifting the sites of our industry a thousand miles something might be said for that state of things, but is there any justification for shifting industry 20 miles? Does that 20 miles make all the difference? Are we being reduced to such a shocking margin of prices that we have to shift industry 20 miles?
Hon. Members have not started to look at this problem yet, and the Government have run away from it. It is much easier to make it appear that these industries are closing down because of some obscure economic reason rather than as a consequence of a lack of some bold scheme. Ebbw Vale is being sacrificed, a whole community ruined. A secret sentence has been passed, they have not been told. All the shopkeepers and workers have gone on living and hoping from day to day, and the Government have not had the courage to tell them that they have been sentenced to death by a secret sentence, passed in London by a body of irresponsible persons. No wonder that the House of Commons is falling into contempt. It exercises no real power. It refuses to take power. The power is exercised by politically irresponsible persons. By the construction of these works 20 miles away a whole community is being ruined. What justification is there for this shifting of location? If it goes on for another 20 years England will not be worth living in. The Prime Minister sends a Commissioner to South Wales to make an investigation into the conditions and report as to what can be done, but at the same time the Bankers Industrial Development Trust makes it impossible for him to present any report, because, obviously, if you are going to allow your heavy industries to shift their location there is no hope—
§ Mr. LEWIS JONES
I do not quite understand the hon. Member when he talks about shifting the heavy industries from Ebbw Vale to Cardiff. Is it not the fact that the new plant being erected at Cardiff is replacing plant already there 1275 and that Ebbw Vale has been totally idle for many years?
§ Mr. BEVAN
Ebbw Vale has been idle since 1929. The Guest Steel and Nettle-fold Works at Cardiff are to be an effective substitute for the plant at Dowlais and will add to the productive capacity of the steel industry in South Wales. It will leave no place for Ebbw Vale in the market. That is the whole point. I may be told that I am arguing a special case. There may be a case for the closing down of plant at Ebbw Vale and for the concentration of steel construction at Cardiff. We are quite prepared to consider that matter, but we maintain that an inquiry should have taken place, that all the factors should have been considered, and that the people at Ebbw Vale should have had an opportunity of making their representations. No such opportunity has been provided. There is no tribunal before which they can appear, no scheme has been presented. It may be said that it will mean a decrease in the costs of production, but I maintain that in addition to the cost of producing steel at Cardiff must be added the cost of transplanting the whole community. You must not leave that out of calculation.
§ Mr. L. JONES
I am sorry to interrupt the hon. Member. I am anxious that the House should not get the impression that what is taking place in South Wales at the moment is the transfer of plant fron one place to another. What is taking place at Cardiff is this, that the company are simply modernising the plant they already have, putting in new plant, to take the place of plant that is already there, and I cannot see how this is going to effect Ebbw Vale.
§ Mr. BEVAN
The hon. Member has sufficient knowledge of the steel trade to know that the Cardiff plant is to have an enormously increased capacity of output and that it is, in fact, a substitute for the plant which exists at Ebbw Vale. It may be that Ebbw Vale will still be able to secure a place in the market, but, never theless that is our fear. All I am saying is that if you are going to argue that the cost of production in the new plant at Cardiff is lower than the cost of producing steel at Ebbw Vale, you must add to the cost of production certain social 1276 costs which have not yet entered into the calculation, the cost of transplanting your population, the cost of building houses, laying sewers, building schools, and so on. That is an item which never appears on the balance sheet but society has to pay it; these new steel works, ultimately, will have to carry it, its product will have to carry it. Therefore ought we not to have an opportunity of representing these considerations to a tribunal.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
May I put a question to the hon. Member? We are discussing an Import Duties Order which seeks to remove a time limit for the imposition of Duties on iron and steel. Is it part of the hon. Member's argument that Ebbw Vale will be helped if there are no Duties on iron and steel?
§ Mr. BEVAN
The hon. Member either has not been in during the whole of the debate or he has not been listening to what I have been attempting to put before the House. If you are going to have a scheme of reorganisation as a condition for an impositon of tariffs these are some of the considerations which should be taken into account. I am not arguing the narrow point of a time limit, the President of the Board of Trade has asked us to accept it because he is satisfied with the promise of reorganisation contained in the scheme. I suggest that there has been no opportunity given to anybody in the industry in this House or anywhere else to put before Parliament or any Committee any of the considerations I have advanced this morning, considerations which, I contend, are absolutely vital to any future comprehensive plan of national economic life.
If the basic trades are to be shifted from one point to another the light industries are bound to follow. They must follow the market. Sir Wyndham Portal's difficulties will be half solved if somebody will say in what centres in South Wales the basic trades will be situate. Nobody knows; the steel masters least of all. The steel masters do not know; they dare not commit themselves. They have had a dog fight in order to keep alive, in the hope that others would go to the wall. That always happens where the capacity exceeds the market-So we were to have planning. We were told that behind the protection of British industry against the tides of world commerce 1277 we were to lay the foundations of permanent prosperity on comprehensive lines. Where are they? The Government have run away from every single one; not an iota of courage or foresight has been displayed by the Government. How are you going to organise unless you have the courage to say that the basic industries are to be situated at A, B or C, and nowhere else? Then you could group your lighter industries and your population around them. But you cannot say that. It is just chaos and uncertainty all the time, and uncertainty is made all the worse because the decisions are made by secret bodies, to which the public have no access.
It is a very sad thing that this House is discussing on a Friday afternoon, with a very small number of Members present, an industry which lies at the very basis of all British industries. I see the hon. Member for Kilmarnock (Mr. K. Lindsay) here. In the country and in the House he has been an advocate of planning. I hope he is satisfied with the contribution that is being made by his Government this morning. I can only say that this Debate will be read by the people of Merthyr and Dowlais, and by some on the north-east coast and in Scotland, with a sinking heart. They still perhaps hope that rescue will come, but where it is to come from I do not know. I believe that this House is going to have retribution for the frivolity with which it is dealing with these problems, for there is nothing more frivolous than parting with these powers without insisting upon the conditions upon which the trade is to be reorganised. When the time comes hon. Members who are now frivolously throwing away these powers will have to pay the penalty. I cannot speak with bitterness because I know how foolish it is to attempt to be bitter in this House. What is in my heart will be expressed outside. I have never listened to a Debate which has filled me with more bitterness and disgust than this Debate to-day.
§ 1.9 p.m.
§ Mr. L. JONES
I agree with my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan) that it is a pity that the discussion of a subject of such great importance, which concerns the planning of a great basic industry, is not listened to, or taken part in, by a larger number 1278 of Members. This morning s discussion, opened by the President of the Board of Trade, followed by the hon. Member for Aberdare (Mr. G. Hall) in his usual very fair method, has covered two aspects of the question. In the first place the President of the Board of Trade endeavoured to justify what has already been the effect of the policy which the Government have adopted and put into operation in the iron and steel trade. The hon. Member for Aberdare, on the other hand, tried to disprove that protective duties had done anything at all, and that other causes had led to the increased production of the iron and steel trade. I was very sorry to hear the hon. Member for Aberdare say definitely that he and his party were going into the Lobby against the confirmation of this Order. I assume that the party for whom the hon. Member for Colne Valley (Mr. Mallalieu) spoke will follow suit.
I remember that on many occasions during the last two years, when these duties were under discussion in this House, certain promises and prophecies were made, and certain fears expressed as to the dire results that would follow the duties. The very fact that this morning the hon. Member for Aberdare has tried to prove, at any rate to his own satisfaction, that they have been in effective, makes it necessary that one should give the House two or three figures of some importance as to the effect of this tariff. It is obvious to me that in the discussions that have taken place about steel and iron one or two Members have not appreciated the diverse character of the industry and its products. We generally talk of the iron and steel trade merely as if it was an industry responsible for two main products. While it produces mainly pig iron and steel it is an industry so diverse in its character that within a single year it produces goods to meet 400 and even morn different specifications.
Take pig iron and steel. The increase in the production of pig iron in the last 12 months has been very surprising. In the first four months of this year the pig iron output has been increased by 2,500,000 tons. Some people may say that that is all very good for the pig iron industry, but how about labour? Mr. E. J. Fox, the chairman of the Stanton Iron Company, one of the most up-to-date 1279 works in this country, said some time ago that for every ton of pig iron that is produced in this country British labour handles five to six tons of British produced material. So that for every additional ton that was produced in this country either in 1933 or 1934 the railway companies were handling seven tons of material. Then remember that 38 per cent. of the selling price of pig iron goes in railway freights, and that nearly 60 per cent. of railway freights goes in wages to railway workers. I do not want to impress on the House that when we talk of an increase in the output of the pig iron industry the indirect benefits are surprising.
I wonder whether hon. Members who represent mining districts quite realise what the effect is on the coal industry. It was computed by someone that the fall in the output of pig iron from 1927 to 1931 meant a reduction in the consumption of coal of 6,000,000 to 7,000,000 tons. That represented a loss to the miners of this country of between 6,000,000 and 7,000,000 working days per annum. That is the cumulative effect.
§ Mr. A. BEVAN
But the hon. Member must not forget that Welsh coal was also used in producing pig iron on the Continent and that that market has been closed.
§ Mr. JONES
That is obviously another side of the argument. I accept that as a part of the argument but on balance I suggest that the advantage is on the side I have suggested. Producing pig-iron on the Continent, does not give us a corresponding advantage to the six or seven tons of material carried on our own railways for every ton of pig iron produced here. The increase of pig-iron production in the first four months of this year meant an increased consumption of coal of from 1,250,000 tons to 1,500,000 tons. Then take the case of steel production. In 1931 this country produced 5,200,000 tons of steel ingots. In 1933 the production increased to 7,000,000 tons, an increase of 31 per cent. If we consider the first few months of this year January to April, our output has so increased as in that period to show a 62 per cent. increase on the first four months of 1932. Yet the hon. Member for Aberdare would have us believe that the 1280 protective duty given to the iron and steel industry has had no effect whatever on the output. He suggested that the increased output was mainly due to the new uses to which steel has been put. It is estimated that by the end of this year if steel production continues to progress as it has progressed from January to April we shall reach an output of 6,000,000 tons this year and that improvement will react on the coalminers to the extent of 8,000,000 tons of coal.
It is always strange to me how in this House Members are prepared to give the blue riband in anything, to any country except our own. Having studied the statistics carefully, and followed the course of steel production throughout the world for some years, I was satisfied in my own mind that the progress of the British industry during last year was greater, in proportion, than that of any other country in the world. Therefore I was surprised to hear the hon. Member for Aberdare say that America and other countries had done better than this country. What are the facts? It is true that if you take the production in America for 1933 and compare it with the production for 1932 the percentage increase is very much in excess of ours but any statistician or economist knows that that is not a fair method of calculation because the depression in America was so marked. The year 1929 was the peak year of production throughout the world. We find that, whereas in 1933 the pig-iron production of the whole world was only 50 per cent. of that of 1929, the output of Great Britain in 1933 was 54 per cent. of our output in 1929. The steel production of the world in 1933 was only 56 per cent. of that of 1929, whereas the steel production of Great Britain in 1933 was 72 per cent. of our 1929 production. We have to consider the production of this country in relation to the world output.
The hon. Member for Aberdare was concerned about our export trade. I think everybody in title industry is concerned about the tragic state of the British iron and steel export trade. We realise that we have to face these tragic facts. Someone suggested this morning that we have only begun to make use of steel in this country. That may be true as affecting the home market, but so far as the export market is concerned the position is so serious that it can be said that we have no hope of ever again getting back even 1281 to 50 per cent. of our best year of exports. These are some of the reasons. In the first place, the iron and steel export trade, not only of this country but of the world, has been decreasing substantially during the last few years. A great number of steel producers have grown up in other parts of the world. Countries which formerly provided us with markets are now producing their own steel, and satisfying their own requirements. Not only that, but they have surplus steel to dispose of in the world markets in competition with us.
Then, if we look to the continent of Europe or indeed to steel producers all over the world, with the exception of America, we find that steel is being produced under conditions which would not be tolerated either by the trade-union movement or the employers in this country. These are some of the difficulties. Our total export of iron and steel in 1913 was nearly 5,000,000 tons. In 1933 it was under 2,000,000 tons. I have suggested that there is little hope of regaining our lost markets. The fact is that we are losing markets all over the world, while other countries are producing. Reference was made to production in Russia. Russia bought from us last year 21,000 tons. In the previous year she took 188,000 tons.
§ Mr. JONES
There may be two reasons. The difficulty in connection with our Trade Agreement may be one reason but another is the fact that Russia at the present time has some of the most modern steel manufacturing plant in the world. In 1913 Germany purchased from us nearly 200,000 tons of steel. Last year she purchased only 15,000 tons. Belgium which, in 1913, purchased from us 125,000 tons of steel last year purchased under 20,000 tons. France, in 1913, took 203,000 tons and last year only 23,000 tons. Italy, which used to purchase 143,000 tons in pre-War years, last year only purchased 25,000 tons. The astounding development however has been in Japan which purchased 238,000 tons in 1933, and last year as a result of her own production, only purchased 40,000 tons, and whereas the United States was a customer of ours to the extent of 176,000 tons in 1282 1913, last year she only plrchased 8,900 tons.
The last example is that of India, which in. 1913 purchased from Great Britain 896,000 tons of iron and steel, while last year she purchased from us 186,000 tons. The amazing thing is that, whereas Japan used to buy huge supplies from us, she is to-day a very successful competitor with us in all the markets of the world. India used to purchase from us pig iron, but is now sending her surplus pig iron into this country. The hon. Member for Aberdare was very concerned about the export trade, but I cannot for the life of me understand why, if we are losing our export trade, in the first place, because the steel export trade of the whole world is dwindling, and, secondly, because countries are now producing their own requirements and selling their surplus in competition with us—I cannot understand why we should open our own doors to foreign markets and thus spoil our own home market. It is from that standpoint alone and from that of the representatives of those constituencies where steel works exist and where miners work that I appeal to hon. Members opposite. If we are losing our export markets as a result of the increased production all over the world, let them support us in maintaining for our own workpeople at any rate our own home market.
The hon. Member for Ebbw Vale referred to a speech that he made in this House some time back, in which he said that the iron and steel trade could not be thrown open to the archaic competition of world economic affairs without disaster to British industry. There is no reason in the world why the British market should again be thrown open to that archaic competition.
§ Mr. JONES
I will deal with the question of reorganisation later. It has been argued that Great Britain, as a result of these duties, has been placed at a disadvantage in the export trade. We have to bear in mind that the world export trade in iron and steel has decreased at a considerable rate, but the fact still remains that whereas in 1931 Great Britain had 13.8 per cent. of the export 1283 trade of the world, in 1933 she had increased that to 17.9 per cent. I want to assure the House, seriously, that the iron and steel trade is wide awake in dealing with this problem. The hon. Member for Colne Valley (Mr. Mallalieu) tried to get away with an attempt to pour scorn on everything, but I can assure him, even in his innocence, that the iron and steel industry is fully wide awake to the responsibility of dealing with this important question of our export trade.
The hon. Member for Aberdare raised another point, as regards unemployment in the iron and steel trade. The unemployment figure is still much too high, but I would ask hon. Members to remember the very argument used by the hon. Members for Ebbw Vale and Aberdare, that the iron and steel industry, with its lopsided development owing to war requirements, resulted in an increased capacity of the iron and steel trade of 50 per cent., and that 50 per cent. increased capacity attracted to the industry a large body of workpeople who up to that time had had no connection with it at all. That is exactly the same practice as was common in the coal industry. Therefore, when examining the figures of unemployment in the iron and steel trade, the House must bear in mind that there is a substantial percentage of that unemployment that will never find its way back to the iron and steel trade, just as is the case with the coal industry.
Again, the hon. Member for Aberdare pointed out that in 1929 the unemployment in the iron and steel trade was 19 per cent. of the insured persons in the industry, yet we have nearly reached our peak year of production this year, and we have an unemployment figure of 28 per cent.; but it is important to look at our figure of 28 per cent. in relation to the figure of 45 per cent. which we had in 1931 before the duties were put into operation. The hon. Member for Aberdare tried to point out that the duties had had no substantial effect on increased output, but may I point out what has happened in areas which I know very well? Within a radius of 12 or 13 miles of my own constituency there are situated 10 or 12 works, mainly engaged in producing steel bars and sheet iron. In 1931 there were imported into South Wales 321,000 tons of foreign bars from the Continent of Europe, but as a result 1284 of the duty there were imported in 1933 only 24,491 tons, and from the Continent of Europe only 8,000 tons, the remainder coming from India. The effect of that was that in 1933 our own increased production amounted to 330,000 tons of steel, which, even on the lowest calculation, means a consumption of well over 600,000 tons of coal, and it means that the railway companies in South Wales and in the country generally were taking 1,500,000 tons of raw material which they would not have been carrying if this steel had been imported from abroad. That was the effect on any own district, and in my own constituency a steel works that had been completely idle for many years has never lost a shift since the beginning of January of last year. Nobody would dare go down to my constituency, I am sure, and suggest there that the imposition of this tariff on foreign steel had not been of some benefit to them.
§ On the question of reorganisation, I know that when these duties were given to the iron and steel trade, it was on the understanding that the industry would sooner or later face the question of reorganisation, and all the steel makers in this country quite appreciate the importance of their obligations in this matter, but it seems to me, from the remarks that have fallen from the opponents of this order to-day, that they look upon reorganisation as merely something that can be set down in a paper scheme. I want to assure hon. Members that any scheme that is now suggested is only another milestone along the path of the reorganisation which has been going on in the industry for the last 12 years.
§ Mr. JONES
The hon. Member for Aberavon (Mr. Cove) knows very well that no man should be more delighted with the re-organisation that has taken place in the iron and steel trade of South Wales than himself, because it has had this effect: It has closed down the Cardiff iron and steel works and made the works in his own constituency work 100 per cent. and he is getting a little bit annoyed because he thinks that the rebuilding of new works at Cardiff may have some adverse effect on employment in his own constituency. No one knows better than the hon. Member for Aberavon what has been done by reorganisation up to date, because he knows that 1285 his own people are 100 per cent. at work. I said a few moments ago that there was a danger that people would look upon the iron and steel industry as a dual industry. It is composed, in fact, of 14 or 15 separate industries, and it is not easy to reorganise an industry of that kind. The hon. Member for Ebbw Vale questioned the President of the Board of Trade as to where in this Memorandum there was any reference to amalgamation. There are two schemes—scheme A and scheme B—and unfortunately for the hon. Member it is not possible merely for those schemes to predict any of the implications of the other draft schemes. I think, however, that the connection between Scheme A dealing with reorganisation and the draft scheme dealing with amalgamation is seen in paragraphs (h) and (i), particularly in (i), where they talk of promoting the efficient organisation of any section of the industry. That has reference to amalgamation and the closing down of redundant plants.
The House should realise what has taken place in the industry in the last few years. The suggestion of the hon. Member for Ebbw Vale is that the industry should be dealing with amalgamation. Let the House realise what has taken place in that direction during the last 10 years. It is not necessary to remind hon. Members that there is the Vickers amalgamation, Beardmore, United Steel, Dorman Long, Guest Keen and Nettlefolds, Richard Thomas & Co., and the Lancashire Steel Corporation. All over the country there has been taking place during the past few years a series of physical amalgamations as the first step to the closing down of redundant or less efficient plants. Hon. Members will know that in South Wales in particular we have a number of instances where these physical amalgamations have taken place, resulting in the closing down, unfortunately, of a number of redundant and less efficient plants. Really that is in accordance with the suggestion made by the hon. Member for Ebbw Vale when he spoke a year ago. He said that the first job which the reorganisation committee would have to face would be to close down or to do away with surplus capacity. I have here his speech, in which he was very definite about it. He said:The Reorganisation Committee's first duty must necessarily be to reduce the productive capacity of the steel trade according 1286 to a reasonable calculation of the market of the industry."—[OFFICIAL REPORT, 11th November, 1932; col. 712. Vol. 270.]That was the hon. Gentleman's own statement, and that is what has been going on.
§ Mr. A. BEVAN
I never suggested it should be done by amalgamation by the owners of the industry itself, because that would take no account of the relationship between one and another. It must be done by a comprehensive scheme which takes account of the relations which should exist between the various parts of the industry.
§ Mr. JONES
I agree that our method is not on the same lines, but I said that he himself envisaged that in any scheme of reorganisation of the iron and steel trade the surplus capacity of 13,000,000 tons as against 9,000,000 tons to which he referred in his speech had to be isolated and had to be dealt with by closing down surplus plant. That has been taking place all over the country, and the hon. Member himself this morning expressed his concern—it is a tragic circumstance—that the whole of the Ebbw Vale steel works have been closed as a consequence of this scheme. Here you have your surplus work dealt with. We have had these works closed down, and it is assumed that the inefficient plant has been closed. That has been going on in South Wales and all over the country. That is the first step to reorganisation. We are not just starting to reorganise with the paper scheme that we have before us to-day.
Take the question of efficiency of plant. Some one was kind enough to say—I think the hon. Member for Ebbw Vale—that we have in this country as efficient a plant as there is in any part of the world. That is quite true. It is a common thing in this House to attack the efficiency of British industry. At one moment it is the efficiency of the coal industry, and at another moment it is cotton, and to-day, I suppose, it is the inefficiency of the iron and steel industry. It is a pity that in the British House of Commons, Members should from time to time so loosely attack the efficiency of British industry. Henry Ford said somewhere that people who set about to show how an industry should be run should at any rate be expected to know something about it. The people who generally discuss the inefficiency of individual industries in this country are 1287 the people who have never been inside a plant in that particular industry. Take the efficiency of the iron and steel industry. Point to efficient plant anywhere in Europe and I can show you its equal in Great Britain. Point out an efficient plant in the United States, and I can point out its equal in this country. I think the trade unions will agree with that. The Iron and Steel Trades Confederation in their memorandum and in their very scheme of reorganisation were definite in pointing out that the charges about the efficiency of the iron and steel trade were unjustified and that we had plant in this country equal to any on the Continent.
Take the efficiency of the works managers. I say that you cannot find in any part of the world a finer body of technicians than we have in control of the practical side of the iron and steel industry to-day. From the research point of view, the Iron and Steel Institute and the Iron and Steel Research Council of this country are the envy of the whole metallurgical industries of the world. There is nothing to touch them, and work is continually going on. On the commercial side reorganisation has taken place in the last few years, and we have formed out export association. We have organisations trying to develop British steel all over the world and in this country particularly. I want to assure hon. Members that, while we have a scheme to carry on and codify and set up a separate organisation it is the first step in a much bigger organisation which will set out a productive organisation throughout the country. Although that is partly a new scheme, reorganisation has been taking place in this country ever since the War, and our problem has been much more difficult than in any other industry.
The hon. Member for Ebbw Vale has pointed out that we increased our capacity in this country by 50 per cent. during the War, but that was a lop-sided increase. It was not an increase in production to meet ordinary commercial or competitive needs. It was an increase in capacity to meet the War emergency and, therefore, was an irrational increase. Once the War was over it was useless. It was a lop-sided development, which had placed heavy financial burdens on individual concerns. What happened all 1288 over the world? America developed her home market behind tariff walls. On the Continent of Europe Belgium and Luxembourg re-equipped and re-built steel plants out of reparations, France received a free gift of all the huge concerns in Alsace-Lorraine, and the Germans built modern plants out of paper marks, which were devalued later at the fall of the mark. That is the competition—in addition to low paid labour working long hours on the Continent—which the British iron and steel industry has had to fight since the War. It has been fighting a rear-guard action. It has been doing its utmost to regain its position in the world market.
Reference was made this morning to the scheme which was submitted to the Board of Trade by the Iron and Steel Trade Confederation, the principal union in the iron and steel trades. The hon. Member for Ebbw Vale referred to it a year ago and the hon. Member for Aberdare spoke of it to-day. I am surprised to note the enthusiasm displayed by both those gentlemen, especially by the hon. Member for Aberdare, for this particular scheme because although it proposes reorganisation and suggests the adoption of the principle of public utility concerns, it is a sine qua non of the scheme that the State should protect the industry against unfair competition from the Continent. That is a definite part of the scheme. The hon. Member for Aberdare is respected and loved as a great miners' representative, but when that scheme of the Iron and Steel Trades Confederation was submitted to the Trade Union Congress it was only adopted by a majority. Shortly afterwards Mr. Arthur Pugh, the general secretary of the Confederation, writing in their own journal with reference to the scheme, said:Although it was opposed by the Miners' Federation and the A.E.U. on the ground that part of the Resolution implied protection for the industry, the majority of the Congress showed a less prejudiced grasp of the proposals, and the Resolution was carried.I would like to know when the hon. Member for Aberdare got rid of his prejudice as a miners' representative and when he took it upon himself to advocate the adoption of this scheme, although protection of the industry remains a part of the scheme. On the question of price, great concern has been expressed lest the 1289 iron and steel trade should ignore the needs of the consumers and force up prices. For the last ten years the iron and steel trade has had a very bad time, and I am sure that nobody assumes that it was the intention of the iron and steel trade, when it got Protection, to go farther along the path of bankruptcy. Obviously, one of the first things the iron and steel trade would do was to secure a price which gave them some fair return in relation to the cost of production. Nobody is in business for any other purpose.
Hon. Members opposite cannot complain if the price of steel has gone up a little. The Liberal Opposition, when they voted for the wheat quota, knew that it would put up the price of bread. The last Board of Trade index figures show that the price of steel in April, 1934, was to be reckoned as 109.4 in relation to the index figure of 100 in 1913. That is a rise of 9.4 points. In 1933, when things were really bad in this country, the figure was 112.7, so that in relation to 1930 we are down 3.3 points. That figure is based on an investigation into 26 different steel products. On those figures I do not think anyone can complain that the iron and steel industry has taken an unfair advantage of the protective duties given to it. It is surprising that such a complaint should come from the miners' representative. The manufacture of steel involves the use of many materials, including coal. Whereas the figure for steel is only 109 compared with 100 in 1913, the figure for coal in April, 1934, was 127.3. I cannot understand why the miners' representatives should complain of the figure of 109 for steel when their own product, coal, is represented by the figure of 127.3. The hon. Member for Aberdare—I am sorry that he is not in his place—was very much concerned a year or so ago when the hon. Member for Consett (Mr. Dickie) proposed a Resolution dealing with Part I of the Coal Mines Bill, then before the House. The strongest opponent of that Resolution was the hon. Member for Aberdare, and the argument he used was that if we got rid of Part I and had not a fixed price for coal the price of coal would go down and reduce the earnings of miners. Surely the Members of the Labour Opposition must realise that if there is a serious reduction in the price of steel it will have an effect upon the earnings of the workmen in this industry, including those 1290 in the constituency of the hon. Member for Aberavon, whose wages are fixed on a sliding scale corresponding with the price of steel.
Coming back to the question of re organisation, I want to assure the House that the industry is facing the problem of reorganisation very seriously. Numerous meetings are held weekly, many conferences have taken place between consumers and producers. They are dealing with questions of marketing and international trade. In the last 12 months the iron and steel trade has taken part in eleven commissions which have gone abroad in connection with the export trade side of the matter. At the moment a committee of the industry is considering actively the next development following upon the central scheme which is before us to-day. The industry is determined that this organisation shall go forward, and the House can with confidence look to the industry to set its house in order on the lines desired by Sir George May, when he said that reorganisation ought to have the effect of supplying the consumers of iron and steel in this country with the right material, of the right quality, at the right price.
§ 1.55 p.m.
§ Mr. R. T. EVANS
The speech of the hon. Member for West Swansea (Mr. L. Jones) will make extraordinarily interesting and valuable reading when we receive the OFFICIAL REPORT to-morrow. The statistics and facts presented to us in that speech will be very valuable as presenting a bird's eye view of that situation in the steel industry. My brain simply reeled under the tornado of facts which he launched upon us. I am not concerned with the more or less academic point as to whether the undoubted improvement in the productivity in the steel industry is due to the operation of the tariff or not. I have no doubt that the import duty has had some beneficial effect, which must be incapable of statistical demonstration, and the extent of which no one can estimate. There was a large void to replenish. The world's production of steel was reduced from 118,000,000 tons in 1929 to 49,000,000 tons in 1932, and our own production was reduced from something like 9,500,000 tons to 5,250,000 tons in that period. Obviously, the world depression had taken its toll of the steel industry. The 1291 trend of technical development is in the direction of greater utilisation of steel, and sooner or later demand was bound to be stimulated for more iron and steel goods. It is significant that this increased production of steel is not unique to this country, but is common to practically all large iron and steel producing countries, with the exception of Luxembourg. The production of steel all the world over is increasing, demand is increasing, and we have taken our share. The import duty has preserved for us the home market, but no one can estimate the relative potentcy of those factors.
I invite the attention of the Minister and of the House to a matter of vital importance, the reactions of reorganisation upon certain steel-using industries of this country. The one in which I am most interested, and which affects my constituency most, is the tinplate industry. The hon. Member for West Swansea (Mr. L. Jones) rather suggested that the market had ceased to expand, and that he could envisage a situation in which no possibility of further expansion could be realised. I am not sure that he is altogether right there us take the example of Japan. I am speaking only of tinplates.
§ Mr. EVANS
I am now speaking of the future of the tinplate industry. In 1913, Japan imported something like 26,000 tons of tinplates, of which South Wales supplied 22,500 tons. The importation of tinplates into Japan has expanded very considerably. Canning has developed, and Japan's imports last year were 80,000 tons. We acquired very little of that increased demand, and we sent to Japan very little more than we sent in 1913. The increased supply was divided between Germany and America. We were, I think, alone last year in showing a shrinkage of exports in tinplates. Germany increased her exports from something like 90,000 tons to 128,000 tons and both France and the United States increased their exports. Italy began exporting. It would be a very disastrous thing if we became obsessed with the idea that there were no export markets yet to be gained. Other countries are taking them. I realise that competitive conditions must become much intensified.
§ Mr. L. JONES
The hon. Member made a statement which I am sure he did not mean. He stated that the tinplate exports showed a diminution last year.
§ Mr. EVANS
Yes, that is so and I also said that even America showed an increase last year. I have the figures here. America increased her exports from 40,000 to 95,000 tons. These are I assume, official figures. It is a small point really, but I want to protest against the assumption that there are no more worlds to conquer for British exporting industries. What alarms me is that I feel certain that this reorganisation will mean closing down a number of works in South Wales. Vertical integration is bound to take place. In South Wales, 300 of our 500 tinplate mills are controlled by three firms, and the tendency is for that to continue. Richard Thomas have absorbed Melingriffith and Gilbertsons, and Messrs. Baldwins, Guest, Keen and Nettle-folds are negotiating amalgamation with Messrs. Byass. That integration is going on. I want the President of the Board of Trade, whose knowledge of these matters is so profound and extensive, to realise the implications to those of us who live in these areas. Our works are producing only up to 55 per cent. of their capacity; need there be a scramble by steel concerns to take over tinplate works? What is the point and what is the purposed Is it that greater producing facilities are required? Our capacity is now very much greater than our output. Why should it be desired to acquire those tinplate works? Obviously to secure their quotas. What then? I am not censuring these concerns for doing what they are doing, but I am warning the President of the Board of Trade and the House of the possible consequences.
To concentrate production in a few of the most efficient works is a very desirable thing from the purely theoretical, academic and economic point of view. Considering only the commercial factors, by all means concentrate production in your most efficient works, but we have to remember the social costs. It may be an advantage to Messrs. Richard Thomas to take the quota of Melingriffith, but what is to happen to the community, which may be ruined by that reorganisation?
1293 I have no doubt that competition is going to become keener. Japan is laying down plant to supply anything from 50 to 75 per cent. of her needs. Germany, France, Italy—all these countries are increasing their production of tinplate. I have no doubt that competition will become more acute, and it may be that our output will shrink. It may, I think, quite reasonably be assumed that we have reached saturation point in the home market. Possibly canning has been over-stimulated; there are very few canning factories that are paying to-day. What is going to happen as competition becomes more and more intense? Are you going to retain the principle which now operates, or has operated for some time, of spreading production through a pooling arrangement over a number of works by means of quotas; or is it going to be an integral part of reorganisation to concentrate production on a few of the most efficient works?
No doubt it would be much cheaper for Messrs. Richard Thomas to lay down, say, new strip mills at Redbourne and concentrate production there. No doubt they could hold their own in the markets of the world against any competitors if they did that. But I also suggest that this House has an obligation to those people who are going to be rendered destitute, and to those communities that are going to be made derelict. I would ask the question that the hon. Member for Ebbw Vale (Mr. A. Bevan) asked: Can we stand idly by? To-day we are giving carte blanche. We have no further voice in this. The type of reorganisation will be determined by the industry. I have no doubt that it is possible to make out a very sound economic case for this concentration, but the House of Commons has a responsibility to those communities. It is not purely a matter of economics; it also has its sociological implications. We know very well what happens. I have no doubt that it would be possible to justify on economic grounds the closing down of Dowlais, the dismantling of Ebbw Vale; but this House has to take into account considerations other than purely economic considerations.
It seems that we have in some respects appreciated the significance of this kind of thing in certain categories of legislation. 1294 Take, for example, the bacon scheme. I am not going to talk about bacon, but am simply going to discuss for just a few moments the principle involved. I am very anxious to have a bacon factory in my constituency but the Minister of Agriculture, probably very rightly, says, "You cannot, because you must wait until the existing factories are working economically, and they cannot work economically without being assured of a certain supply of pigs." A new principle is involved, something, perhaps, which has never been enacted in this House before, where the State steps in and says, "You shall not have a factory." I want some sort of assurance that this House, that the State, through the Minister, will have some representation to ensure that whole communities are not rendered derelict by reorganisation. That is a glorious word, like "planning," which can mean so many things. It may mean efficiency, but it may also mean havoc for very many areas. I would like to hear the opinion of the Minister as to whether the State itself cannot secure some sort of direct control of reorganisation, it may be by setting up a steel development board such as has been set up under the bacon scheme—I do not know, I have not thought the matter out. But the one thing I want to do is to raise my voice here—a voice of warning that we should not allow reorganisation schemes which may be essential to-day to re-act in such a way as to destroy communities as they have been destroyed by the blind play of economic forces.
§ 2.11 p.m.
§ Mr. BOULTON
These duties, when they were originally introduced, were strenuously opposed by hon. and right hon. Gentlemen opposite, and a large volume of criticism and evil forebodings was loudly proclaimed at the time by that section of the Liberal party who still revel in old and decayed theories. It is somewhat significant that we have listened so far this morning to a somewhat timid and, I was going to say, almost apologetic opposition, without bearing anything of a constructive nature from those protagonists of free imports. The real answer is of course that, since these duties became operative, there has been an enormous increase in production in this industry, unemployment has decreased, 1295 and prices have shown but a very moderate increase—not even, I believe, commensurate with the increased cost of raw materials. Measured by the Board of Trade index, it is not more than some 4 per cent., and this in spite of a substantial increase in the cost of essential raw materials such as coal and scrap and of ancillary services.
To-day I wish, speaking on behalf of the Sheffield steel trade, to offer a word of appreciation to the Government for having ended a period of uncertainty, and thus permitting the trade now to proceed with the work of reconstruction and re-equipment, which many firms up to the present have been almost afraid to do because of the uncertainty that existed with regard to the future. I do not wish to be accused of following the example of many hon. and right hon. Gentlemen opposite, who so often indulge in generalities which lead us nowhere. If confirmation be needed of what I have said, the returns can, of couse, be obtained from the official reports upon the home industry. If the House will permit me, I should like to give a few facts and figures from the area which I know best, as I believe that Sheffield can give an overwhelming and conclusive reply to all the criticisms that have been levelled against these duties, and the reason why it is necessary that they should be extended. Most of the criticism this morning, and especially that of the hon. Member for Aberdare (Mr. G. Hall), has been based on the reorganisation scheme. Hon. Members opposite have hardly touched the other side of the question; they have carefully skimmed over it and avoided it. But I propose to base my arguments on the practical results that have been obtained since these duties were imposed, because that, I believe, is the crux of the situation and the justification for the continuance of these duties.
The production of steel in the Sheffield area has fallen since the year 1929, when it was about 1,220,000 tons, to 768,200 tons in 1931 and 758,000 tons in 1932. It will be remembered that, when the tariffs were first imposed in 1931, they were only 10 per cent., the 33⅓ per cent. duty being imposed in the first quarter of 1932. It is significant that, following the imposition of the 33⅓ per cent. the steel trade in Sheffield did not undergo any change; in fact, it kept at a low level until the 1296 tariffs were, in October, 1932, confirmed and stabilised. Immediately that was done an upward trend took place, and almost every month, except the holiday months when the works are closed, shows a steady increase of production. I hope that the House will forgive me referring so much to Sheffield, but it is the great steel trade district. Sheffield to-day is breaking old and making new records. In March this area produced 124,500 tons of steel, against 79,100 tons in March, 1933, and 56,000 tons in the corresponding month of 1932. The output to-day—mid-May—may be taken as at a rate of 1,500,000 tons per year. An important point and one that is interesting to note, is that this large increase has been achieved even in spite of the export trade being limited by foreign tariffs higher than ever, by foreign import restrictions unprecedented in their severity, and by difficulties unparalleled in securing money for goods actually supplied.
I can given an even more striking example as to how these duties have been working if I take the case of one of the largest steel companies in Sheffield. Their works are almost exclusively employed upon the manufacture of basic billets, which, as the House may know, is steel in its semi-finished form, and it is in that form that most of the foreign imports reach this country. If we take the average production at those works for a period of four weeks, in 1930–31 it was 17,232 tons; in 1931–32, 24,287 tons; in 1932–33, 26,487 tons; and in 1933–34, 34,349 tons, and none of that steel is for armament purposes. What does this mean on the wages side of the question? The figures I am going to give will show the wages paid out during the years preceding and following the tariffs. Taking the wages in 1930–31 as 100, in 1931–32 the figure was 120; in 1932–33, 121; and in 1933–34, 153. That will show the House that the actual wages paid out have increased by over 50 per cent. That, of course, is due to more men being employed and to men formerly on short-time being put into full, employment.
That is not all. We have to remember the ancillary trades, of which there are a large number, and all of which have shown considerable improvement in my locality. New industries are being developed, such as razor-blade making, which has been developed on a large 1297 scale. This has all meant more employment. We have a population of over 500,000 people, dependent either directly or indirectly on the iron and steel industry. The highest peak of unemployment was 60,681 in June, 1932; to-day it is 36,000. The hon. Member for Aberdare (Mr. G. Hall) gave some figures with regard to unemployment, but I can assure him that the total of unemployment in Sheffield was due to the depressed state of the iron and steel trade, and the anciliary trades dependent upon it, and that improvement in employment is entirely due to the improvement which has been taking place in the iron and steel industry. These facts cannot be disputed, and I say, without hesitation or fear of contradiction, that this welcome improvement is traceable almost entirely directly to the protection which has been given to this industry.
Effective as these duties have proved to be, foreign importations on a fairly considerable scale are still taking place, and throughout the years 1929, 1930 and 1931 the imports of steel into this country were at an average rate of about 200,000 tons per month, but, following the confirmation of the 33⅓ per cent. tariff in October, 1932, the imports contracted sharply to about one-third of their previous rate. Latterly they have been again increasing, and to-day they stand at something rather over one-half of their pre-tariff rate. That position will require careful watching, and I think that it cannot be too strongly stressed that under a protectionist system you must have elasticity, and our machinery should be such that immediate action can be taken to reduce or increase duties as the interests concerned prove to be necessary. Even the delay of a few months may easily undo for a considerable time the benefits previously derived. I do hope that the Government will take careful note of this matter, because it is extremely important.
That is the substance of the case I put before this House for the continuation of these duties, but I want to know, and I think that this House and the country have a right to know, where hon. and right hon. Members opposite stand in this matter. We have had no real indication from the front Opposition bench or from the speeches to which we have listened. The whole of their case has been built 1298 upon a problematical question as to the re-organisation scheme. Are hon. and right hon. Members opposite still anxious and prepared to scrap these duties, and, if so, are they quite sure that they have the trade unions whole-heartedly behind them? From indications which I have seen, it seems to me that the trade unions are rather sitting on the fence, but with a distinct tilt to the right. That is a welcome sign, if it be so, but we want to know, because this question is one which will not permit of uncertainty, and I challenge hon. and right hon. Members opposite to say where they stand to-day in this matter. If they are going to vote to-day against these duties being continued, does it mean, in their view, that they are voting for scrapping the duties entirely? That is what we want to know.
I should like to know, also, whether Members are prepared to come down to the iron and steel and coal areas and advocate the scrapping of these duties and returning to the evil days of free imports. If so, I wish for nothing better. If they are prepared to do that, we should like to hear something from their Members who represent the coal areas. We have not heard whether they are prepared to advocate the scrapping entirely of these duties. We should also like to have heard more as to their reasons. Now is their opportunity to declare their position, which the country wants to know, and, if they do not, we can only draw our own conclusions and the country will judge accordingly. The continuation of the duties is, of course, a business matter, but it is more. It is a national question of supreme importance and, to my personal knowledge, a very large number of people who support ail political parties are whole-heartedly behind the continuation of the duties. The action of the Government is not only bringing welcome relief, but it is essential if the depleted financial position of the great companies is to be restored. I am convinced that they are fully alive to their responsibilities with regard to reorganisation, and I believe the Government are giving a new lease of life to this great basic industry on which the country so largely depends.
§ 2.27 p.m.
§ Mr. BANFIELD
In all the speeches that we have heard lately nothing has been said about the users of iron and 1299 steel. I notice that in the Report, Sir George May says:In this matter we have, of course, a statutory responsibility not only to the iron and steel industry but also to the innumerable industries in this country, consumers of iron and steel products, on whose prosperity the fortunes of the iron and steel industry so largely depend.It is to that point that I want to direct attention. These duties were imposed in 1932 subject to satisfactory progress being made in the preparation of a scheme of reorganisation. We have heard very little of a practical nature from those connected with the industry as to the proposed scheme of reorganisation. I want to know what reason there is to expect that this voluntary organisation will achieve without pressure what it failed even to attempt under an apparent threat. The real objects of the scheme are to promote the maximum manufacturing and commercial efficiency throughout the industry and to expand the export trade in iron and steel products. We have had two years' experience of this 33⅓ per cent. duty. The hon. Member who spoke last presumably considers that, provided you get a good thumping duty on iron and steel, one that can be increased according to the imports, everything in the garden is quite all right, everyone in the industry is quite satisfied, and everyone will live happily ever after. I want to bring to mind the position of the consumers. I have here information sent me by a firm in my constituency employing 3,000 workpeople—not an inconsiderable number. They say:We are afraid advantage is being taken of the protection that the Government afforded them, which was not, however, intended to give them bigger profits but to give them bigger order bookings for their mills and increased employment. We were told by certain rolling mills some considerable time ago, when trade was very bad that if only they could fill their mills they would be able to bring down overheads and reduce prices, but the reverse seems to have been the case.I want the hon. Member to note the next statement, made not by Labour people, but by a big firm of the same political persuasion as himself and a supporter of this Government.We have naturally tried foreign sources of supply in our experiments. We are not necessarily suggesting that this is the right course to adopt, but it cannot he expected 1300 that consumers of materials can be left at the mercy of British rolling mills who have been guaranteed Protection.There is a definite case to answer. Let me compare the actual prices now ruling with even 12 months to go. Iron and steel are the raw materials of employers in my constituency. Out of iron and steel they make their profits. They will attempt to sell them in the markets of the world. If the price of their raw materials is too high, obviously in the long run it comes back on the iron and steel trade. If you cannot take iron and steel because it is too dear and as a consequence cannot sell your products in the markets of the world, everyone suffers accordingly. In July, 1933 the price of high tensile 28/32—that is a technical term—was £6 7s. 6d. per ton. On April, 1934, it was £7 12s. 6d. a ton—an advance of 25s. The next grade advanced from £6 10s. to £7 17s. 6d. per ton and the next grade from £6 12s. 6d. to £8 7s. 6d.
§ Mr. BANFIELD
The first I quoted was 28/32, the second was 30/35 tensile. The one I am quoting now is 35/40, and 38/42 tensile has increased from £7 7s. 6d. to £9 2s. 6d. These prices have been supplied to me, and I have every reason to believe that they are the market prices ruling at the moment.
§ Mr. BANFIELD
I am sorry I have not got them, but they can be obtained. I want further to draw the attention of the House to what has happened as far as the motor car industry is concerned since the 33⅓per cent. tariff was put on. I emphasise this point, because I want Members to realise that it is not sufficient to have protection of this character for the iron and steel trade or any other trade without due regard being paid to the people who buy the particular product 1301 or article. We have been congratulating ourselves in this House upon the progress which has been made in the motor car industry. Everybody recognises and declares what a very fine thing it is that our motor car trade should expand and grow as it has done, but the basis of the motor car industry is, of course, steel. From a report which I have in front of me supplied by one of the greatest motor car manufacturers in the country, I find that, although the 33⅓ per cent. may have been a good thing for Sheffield and for Sheffield manufacturers, yet, on the other hand, in respect of motor car manufactures and those who are responsible for supplying motor cars, the effect has not been quite so good. I am sure that Members in this House, interested in this industry and in other industries, will be interested in the example I am about to give. They say:Up to a few months ago we were able to obtain supplies of chassis frame plates and wheel strips and strips for small stampings generally in a week or a fortnight, but latterly this time has been extended to as far as six to eight weeks and sometimes longer and even then our orders have had to be dealt with on a priority basis, although we have spread them over several rolling mills, particularly in connection with the frame plates, which, as you are probably aware are rolled by a limited number of mills on account of the extreme dimensions in relation to gauge.They have given me the names of the firms which I have no intention of quoting. They go on to say:In addition there have been distinct advances in price for which we have not been covered, as they would not contract sufficiently far ahead, and these advances have been particularly heavy on the more special classes of material for tube drawing and for the strips, to such an extent, in fact, that their selling prices are bound to advance substantially for new business.Then they say:We certainly feel the time has come when something should be done by the powers that be to bring the rolling mills to a reasonable state of mind in the interests of the nation.They say that frame plates have advanced from 20s. to 26s. per ton; strip bars have advanced, especially motor wheels, by £2 per ton; and steel bars for bolts and nuts 22s. per ton. When I discussed this matter with the employers and big manufacturers in my constituency when the order came out they said, "We want to know, and we think that you should ask the President of the Board of Trade, 1302 what guarantees and what security he has provided the users of iron and steel. Are we to be left to the mercy of the iron and steel manufacturers? Are we to be squeezed and put into the position that we shall be obliged to pay whatever price they like to demand, and must await deliveries until they had a mind to send them to us? Are we, in short, to be sacrificed and slaughtered for the purpose of making an iron and steel Order?" They are very anxious and very worried about the matter. If the iron and steel trade wants to know where it stands, so also do the users of iron and steel want to know where they stand, so that they may carry on with their business. I represent a constituency which is engaged in the manufacture, among other things, of nuts and bolts.
§ Mr. BANFIELD
I am not arguing whether they are benefiting very much or not, but pointing out, as I have a right to do, that these people as users of steel should have some protection and some guarantees that their interests will not be lost sight of. Let me take the example of nuts and bolts. The price of raw material has gone up anything from 22s. to 32s. a ton. Nuts and bolts are exported from the Black Country to all parts of the world. In consequence of the advance in the price of their raw material, together with the facts in other directions, competition has been extremely severe, and since the beginning of this year the imports of foreign nuts and bolts have steadily increased. As a matter of fact, the position now is that it is cheaper to import a certain type of bolt from Germany, bring it into the Black Country and re-export it, or sell it in the home market, than to get the particular bolt made, as it should be made, in the works at Darlaston and Wednesbury. I emphasise the point because it is of vital importance. The products of the raw material of iron and steel extend their ramifications all over the country, and these manufacturers have a right to ask the President of the Board of Trade to have regard to their interests. He cannot be unmindful of the fact that very strong representations have already been made to the Tariff Advisory Committee on the point which 1303 I am now raising. The right hon. Gentleman said this morning that the users of iron and steel would still have the right to go to the Tariff Advisory Committee and put their case before that body.
§ Mr. BANFIELD
"Hear, hear" says the hon. Member for Kingswinford (Mr. Todd), but my point is that it is no use at all sending these people to the Tariff Advisory Committee unless they receive some sympathy when they get there. Their complaint has been that up to now they have not received much sympathy for their point of view.
§ Mr. BANFIELD
I am only telling the right hon. Gentleman what I have been told. I did not go with them.
§ Mr. RUNCIMAN
This is a very important point, but the hon. Member should not cast aspersions upon the Tariff Advisory Committee. I am quite certain that the Tariff Advisory Committee hold the balance evenly. I have had numberless instances of that, and I have never heard a single complaint from any quarter of their having dealt unfairly with any industry.
§ Mr. BANFIELD
Of course, I accept what the right hon. Gentleman has said, but however evenly the balance may have been held, and however sympathetically they may have been received, the fact remains that under this Order their position is open to the possibility of rather grave exploitation at the hands, possibly, of some ruthless combine or other in the iron and steel industry. They have a right to have this point put in the House, that their interest should receive consideration, and that the iron and steel industry should not receive protection unless it is prepared to play the game and give them a square deal. Having said that, I am content to leave the point in the hands of the House and of the right hon. Gentleman.
Mr. G. BRAITHWAITE
As one who has listened with great interest to the hon. Member's speech, may I ask whether he is advocating the abolition or the retention of these duties?
§ Mr. BANFIELD
I am not advocating the abolition of the duties. I think, having regard to this Order, it would be a stupid thing to bring about abolition. I am only putting the point that our opposition to the Order is based, at any rate so far as I am concerned, on the fact that I am not satisfied with the guarantees that are given to the users of steel.
§ 2.46 p.m.
§ Mr. PEAT
I am sorry that the debate is not staged in a more important atmosphere. Many hon. Members who would have liked to have spoken have not had an opportunity of doing so, and I shall only detain the House for a short time. The hon. Member for Wednesbury (Mr. Banfield) raised an important point, namely, the question of the increase of prices which has taken place since the duties were imposed. As the House will remember, the average increase is only five per cent. over the whole area of sales of steel. On the other hand, the cost of raw materials so far as the steel industry is concerned has increased. I think the general statement holds good that the steel industry, or any other well organised industry, cannot afford to have its customers dwindling because of high prices, and I can assure hon. Members, as I can assure the hon. Member for Wednesbury, that if there is any sub stance in the case he has put forward, either as regards motor manufacturers or particular firms, if he will put the details before the industry as an organised body they will have the very closest attention, because the policy of the industry is not to reduce its sales by increasing prices. Obviously, we must have production if we are to have prosperity.
The discussion this afternoon seems to have divided itself into a competition amongst those who have spoken against the Resolution as to whether they were going to deal with the industry as an industry or as a part of a scheme for the derelict areas. In the first place, we must deal with this industry from the point of view of reorganisation strictly on an industrial and an efficiency basis. If we find that works in parts of the country, like Ebbw Vale and on the north-east coast, are becoming disused and new works are being built elsewhere, that is a separate matter and must be dealt with by the Government separately and quite apart from the reorganisation of the 1305 industry. There may be a question later on of controlling the sites which are to be taken up by our basic industries, but whether or not we are going to stop Mr. Ford from building his works at Dagenham and to say to him that he must build them on the north-east coast, does not come within the purview of this discussion.
Another point in regard to which the Opposition have been somewhat confused relates to the scrapping of redundant plant. On the one hand, we are told that the present reorganisation scheme is not adequate because gentlemen like Sir William Firth and Members of the Opposition say that we must immediately pro duce, a plan to scrap redundant plant. On the other hand we have other hon. Members saying that we cannot do this because of the social consequences. I think the middle line is the one that we should take, because it is impossible for any member of the steel industry to take pen or pencil and say what are the units in the industry which are at present redundant. That is impossible. You may have small units operating with considerable success at the moment and you may have large units doing the same, and nobody is going to take the responsibility of saying "These works are redundant; they must go out of operation, and we must concentrate manufacture somewhere else." I maintain that the redundancy of works can only be truthfully arrived at by the lapse of time, and I think that the scheme before the industry at the moment for dealing with that problem will bring about the desired result.
The scheme is a system of elastic quotas. It is a quota system under which production, saleable production, is divided among the members of the steel industry. That quota system is made elastic so that at different periods it can be revised and an opportunity given to get the quotas into the most efficient works. That, in my opinion, will have the effect of gradually transferring production to the most efficient units without the immediate and drastic consequences of labour upheaval which would follow from doing the thing too quickly. The export industry has been referred to by Members of the Liberal party, and I should like to put their minds at rest as to the position of the industry in that respect. For some years now we have had an organisation which has been operating in various export 1306 markets and concentrating the efforts for the sale of British steel in those markets through a central sales organisation. I admit that it does not cover the whole range of steel products, but it does cover an important range of the heavy steel industry. I think the plans for the future will be satisfactory because they envisage a separate organisation which will deal practically with the whole range of steel products, which will go through a central selling organisation. I am outlining the plans but I do not say that they will be carried out immediately. I am explaining what is foreshadowed and what is before the industry at the present moment.
We have been told that the industry is depressed at the moment and that the increase of production has not been due to tariffs. The industry certainly is not at the top of its form. It is operating at 80 per cent. of its possible production of steel which is much better than the American production, which is only 50 per cent. That statement partially answers the question whether it is depressed or not. Prices are low at the moment, but I think production is increasing. The industry must have tariffs to maintain its increased production. It is ridiculous to say that the new purposes for which steel is used are the reasons for the increased production. Obviously, if we had no tariffs those new requirements would be met from foreign sources. We are told that some works are running full time and others at 50 per cent. Obviously, that is what is bound to happen. We are bound to have more production in the efficient works and the less inefficient works slowing down. We must face this problem with courage and without blinking at the dangers which may come along. We are going to have production concentrated more and more in the efficient works. We cannot avoid it; but I hope it will be done slowly not suddenly. May I say one or two words with regard to the reorganisation scheme which is after all the other part of the problem; whether the scheme put forward by the industry is adequate and whether the Government are right in continuing the duties without any time limit. The reorganisation scheme now before the industry merely provides machinery. I have had the privilege of being on the Committee which redrafted the scheme and went through the objects 1307 of the scheme with very considerable care. From a lawyer's point of view it may be said that the objects clause is drawn very broadly, but that was our intention, because we wanted to cover the whole industry, the whole future of the industry, from the point of view of efficiency, the scrapping of redundant plant, exports, and the making of international arrangements. With all respect I think the scheme covers those points. The President of the Board of Trade has already referred to a resolution which was passed by the National Federation, I want to stress that Resolution. After the Federation had passed the Resolution accepting the new constitution the following Resolution was unanimously passed:That this general meeting of the National Federation of Iron and Steel Manufacturers gives a special direction to the Council and Executive Committee to be appointed under the revised Constitution that, in carrying out their duties there-under they should give their earnest attention forthwith to the measures to be taken in collaboration with the associations in the industry:That indicates the point of view of the industry and the way in which it proposes to use this machinery. The constituent elements which existed prior to the new constitution were the trade associations and the National Federation of Iron and Steel Manufacturers. The trade associations are not purely price rings. They are more than that, they are always in touch with their customers, with shipbuilders, bridge and constructional engineers, rerollers and other consumers of a primary character. The steel industry could not consult every consumer who uses the final products of the industry, but it can go to its primary consumers and keep in touch with them, and that is what the trade associations have been doing. A tremendous amount of this work has been going on parallel with the efforts to produce a complete reorganisation of the industry. Do not let any hon. Member think that this document is the finish of reorganisation, it is merely the beginning, and parallel 1308 with it has been going on, these big efforts for reorganising the industry in a way which has been attempted for some time past with considerable success.
- (1) to promote the maximum manufacturing and commercial efficiency throughout the industry,
- (2) to expand the export trade in iron and steel products,
- (3) to obtain the affiliation of associations."
We are getting into touch with our opposite numbers in other countries and arriving at that most important stage when industries combine and work together on an international basis. The Federation has in the past concentrated largely on political aspects and on research. There has been a costing committee which has evolved a national costs system for the whole industry, a very important matter which may have far-reaching results in the future. The reorganisation scheme brings the trade associations and the National Federation together in one body, focussing the whole of their efforts and giving them wide powers. As one who is anxious to see the industry planned, I appreciate that we have everything in front of us. We have the machine in our hands, and the industry, from my observations, is resolved to prove to this country and to this House that it desires to reorganise itself.
I believe that the threat to withdraw tariffs was a mistake. The rain falls on the just and on the unjust, and if you take tariffs away from the industry because of a refractory minority you will hurt the great majority who are anxious and willing to put the reorganisation scheme through to its logical and final conclusion. Indeed, a threat to take tariffs away was an idle threat, because the repercussions in the country would have been disastrous. It would also have been unjust to the industry. In conclusion, let me say that I think the industry has got to reorganise, and, if we come to a point where reorganisation is held up by a refractory minority, I would ask the Government to give statutory powers to the majority so that the policy may be safeguarded and the industry reorganised on the most efficient basis.
§ 3.1 p.m.
§ Mr. RUNCIMAN
The Debate has been enriched by speeches such as the one just delivered by the hon. Member for Darlington (Mr. Peat) and the speech of the hon. Member for Swansea West (Mr. L. Jones). There is no doubt that the House is fully alive to the importance of the decision it is about to take. I only 1309 wish it had been possible for all parties in the House to have said that they were prepared to give an assurance to the iron and steel industry, without which there is very little hope of permanent amelioration of their lot, of permanent assistance by those who control finance to the spirit of enterprise without which you cannot carry on this or any great industry. The desire to obtain that assurance led me to speak in a rather quiet manner at the opening of the Debate. I had no intention of making points against hon. Members opposite; and I am prepared to listen to quotations from my stale speeches of the past. But that is no good. What we want now is to see whether we can make a contribution, through the Government and through Parliament, towards a re-establishment of the steel industry in this country. I believe we can.
The Order now under Debate shows that it is possible for the steel industry itself to renew its strength. The hon. Member for Darlington and his colleagues could not have got their conference to have reached, not terminated, this happy stage but for the fact that they felt that the future was going to be secured. Nobody knows what the future holds in store, but I trust that hon. Members opposite are not going to take such a short-sighted view of the condition of the steel industry that they will say here and now by their vote that they are not prepared to allow the Import Duties now imposed to go on without a time limit. We are not asking, under this Order, that these shall be the duties for all time. We have not got as far as that. All we are asking is that the time limit imposed upon the industry should now be lifted. That leaves us in a position where it is possible to reach a flexible conclusion. The whole point of the speech of the hon. Member for Darlington was that you must leave the reorganisation to the new bodies which are set up as a live thing; not as something which can be done immediately and which is to remain for all time.
The whole operation of this business must be of a flexible nature. You must have a power of expansion, there must be the possibility of modifications, and it must be done by complete sympathy between the Government and the industry itself. It is the maintenance of that sympathy which I believe to be necessary. It is very easy for anyone in this House 1310 to get up and make attacks on those who have iron and steel industries in their constituencies. I have never seen anything wrong in a man speaking very warmly in advocacy of the industry of his own constituents. That is what he is sent here for. I never expect to hear a Debate on iron and steel without hearing the hon. Member for Ebbw Vale (Mr. A. Bevan) talk about the misfortunes of Ebbw Vale, and the hon. Member for Aberdare (Mr. G. Hall) take the whole of Wales under his wing. Then there is my hon. Friend the Member for Consett (Mr. Dickie), which is the one bright spot on the north-east coast.
These are very natural developments of our duty here, and I think they ought to be dealt with. I do not want to embarrass anyone, but, if any one here, after this Debate, were to sit down quietly and make up his mind that he would give a secret vote in the ballot, there is not a single member in this House who would not say that this Order is better than its predecessor, for it does provide the flexibility which is necessary. That is all we ask for. The House can bring these matters under review whenever it likes. The Import Duties Advisory Committee is there at the disposal of any interests that think they are being wronged. I can assure them of my own personal knowledge that there will be no care that will be too great to be devoted by that Committee to investigation of any case.
Let me say a few words on the subject of the consumer. We know perfectly well that it is possible, even with the best intentions in the world, for organisations in business to ask for a little more than those who have to pay feel to be quite right. But there has not been evidence of that up to the present in the steel industry. I can certainly say of one side of the industry, shipbuilding, that there has not been a particle of complaint to reach us from anywhere. There have been one or two people who have been a little alarmed about the rising prices, but that rise is one that ought to be watched and is being watched, and I have no doubt that with the increasing business brought to the iron works in the last two years, they can by getting a little nearer to the 100 per cent. capacity, actually reduce their working costs so that they can make larger profits at lower prices. What more do 1311 you want? In these circumstances, I hope the House will give us the Order.
That the Additional Import Duties (No, 18) Order, 1934, dated the seventeenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said seventeenth day of May, nineteen hundred and thirty-four, be approved."—[Mr. Runciman.]
The following Notices of Motion stood upon the Order Paper:
That the Additional Import Duties (No. 15) Order 1934, dated the tenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import
§ Question put.
The House divided: Ayes, 121; Noes, 23.
Duties Act, 1932, a copy of which was presented to this House on the said tenth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 16) Order, 1934, dated the fourteenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said fourteenth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 19) Order, 1934, dated the twenty-eighth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of
which was presented to this House on the twenty-ninth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 20) Order, 1934, dated the thirtieth day of May nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said thirtieth day of May, nineteen hundred and thirty-four, be approved."—[The Chancellor of the Exchequer.]
|Division No. 274.]||AYES.||[3.8 p.m.|
|Adams, Samuel Vyvyan T. (Leeds, w.)||Hartland, George A.||Peto, Geoffrey K. (W'verh'pt'n, Bllst'n)|
|Agnew, Lieut.-Com. P. G.||Harvey, Major S. E. (Devon, Totnes)||Ramsay, T. B. W. (Western Isles)|
|Albery, Irving James||Haslam, Henry (Horncastle)||Reld, William Allan (Derby)|
|Allen, William (Stoke-on-Trent)||Henderson, Sir Vivian L. (Cheimsford)||Remer, John R.|
|Applin, Lieut.-Col. Reginald V. K.||Howitt, Dr. Alfred B.||Rhys, Hon. Charles Arthur U.|
|Aske, Sir Robert William||Hudson, Capt. A. U. M.(Hackney, N.)||Rosbotham, Sir Thomas|
|Baldwin, Rt. Hon. Stanley||Hume, Sir George Hopwood||Runciman, Rt. Hon. Walter|
|Balniel, Lord||Hunter, Capt. M. J. (Brigg)||Runge, Norah Cecil|
|Benn, Sir Arthur Shirley||Jackson, Sir Henry (Wandsworth, C.)||Russell, Alexander West (Tynemouth)|
|Blindell, James||Jones, Lewis (Swansea, West)||Russell, Hamer Field (Sheffield, B'tslde)|
|Bossom, A. C.||Kerr, Hamilton W.||Rutherford, John (Edmonton)|
|Boulton, W. W.||Keyes, Admiral Sir Roger||Salmon, Sir Isidore|
|Braithwalte, J. G. (Hillsborough)||Lamb, Sir Joseph Quinton||Sandeman, Sir A. N. Stewart|
|Broadbent, Colonel John||Lambert, Rt. Hon. George||Savery, Samuel Servington|
|Brockiebank, C. E. R.||Law, Richard K. (Hull, S. W.)||Smith, Sir Robert (Ab'd'n & K'dine, C.)|
|Brown, Brig.-Gen. H. C. (Berks., Newb'y)||Lockie, J. A.||Somerville, Annesley A. (Windsor)|
|Browne, Captain A. C.||Lindsay, Kenneth (Kilmarnock)||Sotheron-Estcourt, Captain T. E.|
|Burgin, Dr. Edward Leslie||Locker-Lampson, Rt. Hn. G.(Wd. Gr'n)||Strauss, Edward A.|
|Burnett, John George||McConnell, Sir Joseph||Sueter, Rear-Admiral Sir Murray F.|
|Campbell, Sir Edward Taswell (Brmly)||McCorquodale, M. S.||Sugden, Sir Wilfrid Hart|
|Castlereagh, Viscount||McEwen, Captain J. H. F.||Sutcliffe, Harold|
|Clayton, Sir Christopher||McKie, John. Hamilton||Tate, Mavis Constance|
|Cochrane, Commander Hon. A. O.||McLean, Major Sir Alan||Thomson, Sir Frederick Charles|
|Cooke, Douglas||Macquisten, Frederick Alexander||Todd, A. L. S. (Kingswinford)|
|Copeland, Ida||Maitland, Adam||Touche, Gordon Cosmo|
|Croft, Brigadier-General Sir H.||Margesson, Capt. Rt. Hon. H. D. R.||Wallace, John (Dunfermline)|
|Crookshank, Col. C. de Windt (Bootle)||Mayhew, Lieut.-Colonel John||Ward, Lt.-Col. Sir A. L. (Hull)|
|Crossley, A. C.||Mills, Sir Frederick (Leyton, E.)||Ward, Sarah Adelaide (Cannock)|
|Denman, Hon. R. D.||Moore, Lt.-Col. Thomas C. R. (Ayr)||Watt, Captain George Steven H.|
|Denville, Alfred||Moreing, Adrian C.||Whiteside, Borras Noel H.|
|Dickie, John P.||Morgan, Robert H.||Whyte, Jardine Bell|
|Duncan, James A. L. (Kensington, N.)||Morris, Own Temple (Cardiff, E.)||Williams, Herbert G. (Croydon, S.)|
|Edmondson, Major Sir James||Morris-Jones, Dr. J. H. (Denbigh)||Wills, Wilfrid D.|
|Emmott, Charles E. G. C.||Munro, Patrick||Windsor-Clive, Lieut-Colonel Georgs|
|Fox, Sir Gifford||Nation, Brigadier-General J. J. H.||Wise, Alfred R.|
|Fremantle, Sir Francis||Nicholson, Godfrey (Morpeth)||Womersley,-Sir Walter|
|Graves, Marjorie||Nicholson, Rt. Hn. W. G. (Petersf'ld)||Young, Ernest J. (Middlesbrough, E.)|
|Griffith, F. Kingsley (Middlesbro'. W.)||O'Donovan, Dr. William James|
|Grimston, R. V.||Peake, Captain Osbert||TELLERS FOR THE AYES.—|
|Hacking, Rt. Hon. Douglas H.||Peat, Charles U.||Captain Sir George Bowyer and|
|Hanley, Dennis A.||Percy, Lord Eustace||Sir Victor Warrender.|
|Hannon, Patrick Joseph Henry||Petherick, M.|
|Acland, Rt. Hon. Sir Francis Dyke||Greenwood, Rt. Hon. Arthur||Rea, Walter Russell|
|Attlee, Clement Richard||Gardner, Benjamin Walter||Thorns, William James|
|Banfield, John William||Hall. George H. (Merthyr Tydyll)||Tinker, John Joseph|
|Batey, Joseph||Hamilton, Sir R. W.(Orkney&Zetl'nd)||Williams, Edward John (Ogmore)|
|Bevan, Aneurin (Ebbw Vale)||John, William||Wilmot, John|
|Cove, William G.||Jones, Morgan (Caerphilly)|
|Daggar, George||Lawson, John James||TELLERS FOR THE NOES.—|
|Davies, David L. (Pontypridd)||McEntee, Valentine L.||Mr. Groves and Mr. G. Macdonald.|
|Edwards, Charles||Mailalieu, Edward Lancelot|
§ Mr. SPEAKER
It seems to me that as the next four Orders on the Paper have been discussed on previous occasions, we might take the discussion on all four together.
§ 3.16 p.m.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
I beg to move,That the Additional Import Duties (No. 15) Order, 1934, dated the tenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said tenth day of May, nineteen hundred and thirty-four, be approved.Order No. 18 has just been passed by the House. Order No. 17 is one that reduces a duty and, therefore, does not require an affirmative Resolution. The last Order that the House approved before to-day was No. 14, so that these are all consecutive. Order No. 15 deals with tennis rackets and deals particularly with importations that have been coining in from Japan of a very cheap type of racket, and it is desired to have a specific duty on those. Order No. 16 deals with aluminium oxide, hydrated, and puts a duty of £3 per ton, or 20 per cent. in value, on these goods, whichever is the greater. The refined quality of aluminium oxide hydrated comes from Belgium and France and is used for printing ink. It is worth about £50 a ton and is made in the United Kingdom at the mouth of the Thames. I do not know that there will be any specific question that will be raised on that.
Order No. 20 deals with iron or steel shelf brackets. British manufacturers have the most up-to-date machinery and methods, but have been utterly unable to compete with foreign prices, and the higher prices that they have been compelled to charge have resulted in a falling off of their sales, so that now a duty is proposed that will, with the ad valorem 1314 duty, amount to a penny a pound. These brackets are not separately classified in the trade returns and it is difficult to give detailed information as to the imports.
We then come to the Order upon which I think the House would probably like a little more information, and that is No. 19, a comprehensive Order dealing with a very large number of different kinds of glass. The Order is a long one, and hon. Members will already have made themselves familiar with it. It is subdivided into a great number of different classifications. The effect of the Order is to make substantial changes in the duties on glass and glassware and to give further protection to most branches of the industry. We can sub-divide the matter under one or two principal headings. As to plate and sheet glass, hitherto the plain glass and the worked up glass have both been subject to the same duty, and now the duty is to be increased from the 15 per cent. level to 20 per cent. so far as the worked plate and sheet glass are concerned, and it has been extended to articles like mirrors, shelves, and table tops, which are made mainly of that glass. With regard to illuminating glass, the previous duty was 20 per cent. on globes and shades, and it is now increased to a specific duty of 3d. per pound, and other illuminating glass has for the first time been given an additional duty, which makes, with the ad valorem duty, a duty of 20 per cent. The duty on domestic glass has been increased from 20 to 30 per cent., except in the case of the rougher types of public-house stemware. On bottles and jars the duty of 20 per cent. is increased to 25 per cent., except in the case of syphons, such as soda syphons, which have not been increased.
Taking the industry of glassware as a whole, the number of people employed by firms employing more than ten people is just under 40,000, and the output is just under £13,000,000. We are therefore dealing with a substantial industry, and, according to the Ministry of Labour figures, the unemployed are about 17 per cent. of the number of insured workers. The number unemployed this year compared with last year is some 900 fewer out of just over 7,000 people. The Continental manufacturers have with certain kinds of glass natural advantages in raw materials, cheap labour and long experience of large-scale production, 1315 which enable them in the cheaper classes to compete with us. The Import Duties Advisory Committee say that, although the existing duties have materially helped in checking large-scale imports, these imports are still substantial and have shown a recent tendency to increase. In many directions, the productive capacity in our own country is not fully employed. Low-priced foreign competition is a real obstacle to further expansion, and that expansion, of course, would tend to lower costs of production. Going back to plate and sheet glass for a moment, the figures for the first quarter of this year show a pronounced upward tendency, so that the call for an increased duty there appears to be obvious.
Illuminating glass and a lot of what comes in is valued at prices much lower than the prices of comparable articles of British make, and Continental manufacturers are apparently prepared to indulge in price cutting to keep a hold on the market. Oil lamp chimneys and miners' lamp glasses are exempt from these increased duties because there is only a comparatively limited production here. Blank bulbs for electric lamps are excluded so that the lamp manufacturers will not be placed at the mercy of any large combine. Of glass rod and tubing there have been large imports, chiefly owing to the growing popularity of tubular lighting devices. I have the detailed particulars of employment, but I do not know that these need be gone into at this stage. In large capacity coarse glassware the home manufacturers supply the market almost entirely; that refers to bottles and jars. I have a full documented brief here dealing with a large number of points which may be raised in the House. I do not think at the moment, unless any hon. Member wishes to ask any specific question, that I need do more than ask the House to give me these four Orders.
§ 3.26 p.m.
§ Mr. HERBERT WILLIAMS
I wish to raise two points. I raise one of them at the request of my hon. and gallant Friend the Member for The Wrekin (Colonel Baldwin-Webb), who could not be here. He is concerned with the increasing imports into this country of lager beer, which apparently does not come under 1316 these Orders, but it comes in in bottles and not in barrels. The position under our Customs administration is that when a duty is by way of value, the value includes the cost of the package. Therefore, if a thing comes in in a wooden case, or brown paper and string, or in a can, the value of the package is included with the contents. In the case of that kind of packing it is a matter of indifference, because it does not represent substantially any competition with any industry in this country. In the case of bottles, the matter is rather different. From what my hon. and gallant Friend tells me, I understand that after the bottles have been, put to their proper purpose, that is, emptied, the bottles then have a circulation analogous to currencies. There are bottle exchanges, and ultimately these empty beer bottles get to these bottle exchanges, and people who want to fill the bottles again get supplies from the exchanges. The bottles which are not broken—and the bulk are not—come in that way into circulation in this country, in competition with British bottles.
As the duty on beer is not a duty on value, but on quantity, the bottle pays no duty, and I am just wondering whether the Order is quite satisfactory as it stands. I cannot move an amendment of the Order, and am only asking the Parliamentary Secretary to consider the point, because the other day my hon. and gallant Friend put a question on the subject and when he was informed that when the bottle came in as the container of a substance which was liable to duty its value was included in the value of the article he asked, "Suppose the bottle is filled with water?" It is not then an empty bottle but a filled bottle, but water is not dutiable, though if a few salts were introduced into the water it might come under the category of a table water. But, quite seriously, a considerable number of bottles containing lager beer are coming into the country and they represent a measure of competition. My hon. and gallant Friend is not primarily concerned with the bottles, but with their contents, and he was hoping that possibly the administrative interpretation of the duty would be such that there would be some protection afforded to his friends who are producers of lager beer in this country.
1317 Another point I wish to raise is one, perhaps, of greater substance in connection with this duty. Under Item (IV, a) it is provided that globes and shades, etc., are in future to be liable to a duty of 3d. per lb. instead of 20 per cent. A manufacturer called to see me and showed me a silvered reflector he makes from glassware which at the moment he imports, because he tells me he cannot get any glassware which is quite satisfactory in this country. When the duty was 20 per cent. the duty on the glassware which he has to import worked out at 2¾d. per article. Now that the duty is by weight and not by value the duty on this imported article is 4½d. I am told that more than a million of these reflectors are sold in this country, and in the last two or three years my friend has been successful in building up a business which supplies about 200,000 of those reflectors. Now apparently the duty on foreign reflectors is also going to be by weight, with the result that the duty on them will fall from about 6d. to 4½d. Therefore, whereas formerly the duty on this man's raw material was 2¾d. and the duty on the imported foreign finished article was 6d., the position now will be that the duty on this man's raw material will be about 4½d. and on the competitive article about 5d. I am not quite certain of the proportions, but the net effect of the change is that the bulk of the protection which he enjoyed is to be wiped out—at least, as he reads the Order.
I wish to make this suggestion to the Parliamentary Secretary. Under item IV there are two sections (a) and (b). Section (b) concerns illuminating glassware and lighting panels, and if this glass which is silvered and fitted into a metal holder, is put under the illuminating glassware and lighting panels section the duty will remain at 20 per cent. and the prejudice which this manufacturer fears will not arise. My own view is that that would be a proper and reasonable interpretation of this Order, and I hope that the Customs authorities will act accordingly. But if the Customs authorities find that they cannot take that view I sincerely hope that at an early date the Import Duties Advisory Committee will find it possible to introduce an amending Order, slightly modifying these provisions, so that this manufacturer shall not have his industry destroyed, as he very much 1318 fears will be the case unless an administrative change is, made or some new Order introduced.
§ 3.30 p.m.
§ Dr. BURGIN
I can only speak again with the leave of the House, but perhaps I may be allowed to answer the two-points that have been put. I will take the latter first. I do not know the details of those silvered aluminium reflectors, but experience in the building up of the administration of Import Duties Orders has satisfied me that there is such a variety in every industry that it, would be possible, whatever the form of words we adopted, to find an anomaly somewhere. I cannot tell, from what the hon. Member for South Croydon (Mr. H. Williams) said, whether he has put his finger on an actual anomaly or whether it is a matter that can be dealt with by way of interpretation. If it is, an anomaly, the importer concerned would have his remedy by calling the attention of the Import Duties Advisory Committee to it. If it is a matter of interpretation, the Commissioners of Customs and Excise, who will be aware of this Debate, will form their own opinion whether it is possible to bring the interpretation within the words used. There, I think, we must leave it for the moment. There-is nothing irreparable done by passing an Order framed as accurately as possible-after representations. What a manifold business industry is, when the refinements come down to such miscroscopical things as these.
As to the lager beer in bottles, let me give the hon. Member for South Croydon the facts. He is not quite right in saying that it depends upon whether the article in the bottle is subject to a duty on value; the point is whether the duty is calculated ad valorem. The law on the matter is that in the case of goods liable to ad valorem duty, any necessary packing is regarded as includable in the value of the goods for the purpose of assessment of duty as defined by law. In the case of goods liable to specific duty or free from duty, the practice is not to charge the duty on the ordinary necessary container. For instance, with a bottle containing wine or spirit the duty is levelled on the con tents of the bottle and not on the con tents plus the value of the bottle. This practice should not be extended to a 1319 case in which the container was in reality the article imported and in such a case, the bottles would be separately assessed as if they were empty glass bottles. Therefore, if a glass bottle liable to duty were sought to be imported in this country filled with something as a substitute, in order that it might be alleged that it was a container, whereas it was the container itself that was being imported, the duty would be charged on the container. Having given those answers, I ask the House to let me have the Order.
§ Question put, and agreed to.
That the Additional Import Duties (No. 15) Order, 1934, dated the tenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said tenth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 16) Order, 1934, dated the fourteenth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was
presented to this House on the said fourteenth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 19) Order, 1934, dated the twenty-eighth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the twenty-ninth day of May, nineteen hundred and thirty-four, be approved.
That the Additional Import Duties (No. 20) Order, 1934, dated the thirtieth day of May, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said thirtieth day of May, nineteen hundred and thirty-four, be approved."—[Dr. Burgin.]
§ The Orders of the Day were read, and postponed.
§ Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.
§ Adjourned at Twenty-five Minutes before Four o' Clock until Monday next, 11th June.