HC Deb 18 July 1935 vol 304 cc1247-365

Motion made, and Question proposed: That a sum, not exceeding £160,912, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1936, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade, and Subordinate Departments, including certain Services arising out of the War."—[NOTE: £79,000 has been voted on account.]

4.14 p.m.

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

It has been customary for some years past on the Board of Trade Vote in Committee of Supply for the President to give a survey of the great interests with which he is charged. I propose to-day to take some of the salient features of our British industrial and commercial problems, and to say something about the volume and description of our trade, its growth, the direction in which it is now expanding, the policy which has led up to the events of to-day and the outlook for the future. The total figures of our trade are remarkable, for they show now, year after year, and month after month, continuous growth. It is true that we have still a long way to go before we reach the large figures of 1929, but the improvements that have taken place in the trade conditions at home and to some extent in foreign countries is so remarkable that we may take note of these facts before we proceed to a detailed discussion of our trade affairs. It has become customary to measure trade in this country largely in terms of exports—exports of food and drink, of raw materials and of partially manufactured goods, and, finally, as a better indicator than any other of the position of our industrial activities, the exports of articles which are wholly or mainly manufactured. I will take a few simple comparisons.

In the export figures of United Kingdom goods in 1935 we naturally have the satisfaction of noting that the total for the first six months reached over £206,000,000, in comparison with £189,000,000 for the previous half-year. That growth has gone on month by month, and I have no reason to believe that we have come to the end of this good movement. In the total exports of wholly or mainly manufactured articles the increase is not only marked, but appears to me to be thoroughly healthy. The first six months of 1934 produced exports of wholly or mainly manufactured articles of over £145,500,000, as compared with the first six months of this year of £160,500,000. These figures in themselves are not wholly expressive of the position of our industry and commerce if we take them alone, but if we take them in conjunction with an analysis of the classes in which the increases have been most marked, the Committee may be interested to observe that in nearly every category there has been an increase in trading activity. Wearing apparel was the only important group to show a smaller value in exports this year than in the corresponding period of 1934. Very substantial increases have been recorded in the exports in machinery, in the vehicles group and in iron and steel, and, even in spite of the severe depression, in Lancashire cotton yarn and manufactures; non-ferrous metals and manufactures, electrical goods and apparatus all alike showing continued increases.

Let us look at some of these classes, and we can see the type of trade which we are doing with success. Coming first to manufactured goods, the most important trade is to be recorded in the machinery class, which covers every kind of machinery—agricultural, textile, and machinery used in processes of manufacture or household convenience in almost every walk of life. The versatility of our manufactures has been so great that, whereas other countries have shown a decline, we are able to record a very substantial increase in this category. In the vehicles group the increase is very nearly £3,000,000, and the exports of iron and steel goods are more than £2,000,000 above the figures of the corresponding period in 1934. Cotton yarns and manufactures show an increase during the same period of over £1,250,000. That increase, however, occurs mainly in some of the classes of goods which have not been traditionally of Lancashire manufacture, and I regret to say that in some branches of the cotton trade to-day there seems to be very slow, if any, marked recovery. In the other classes for nonferrous metals and manufactures the increase is well over £1,000,000, and electrical goods and apparatus show an increase of very nearly £1,000,000.

Among the exports of raw materials much the most important, of course, is that of coal, which during the first half of this year shows a slight decline of about £200,000. It is difficult to say why there should have been such a slow recovery in the coal trade abroad. It is due to a variety of causes. For instance, in some countries it has been difficult for our coal exporters to obtain payment for their goods, and the use of coal in the coaling stations has gone down steadily as the consumption of oil has gone up. A great many of our customers are too poor to take the same volume of coal which is necessary for their comfort, manufacture and transit as in years gone by. All these conditions combined tended to reduce the demand for British coal abroad. We have done our best to meet this decline by entering into new trade agreements. In every instance the object of those agreements was, plainly and simply, to add to the demand for British coal and, if possible, to keep open to us some of the foreign markets which we appear to be losing, and some of which we have practically lost. I am glad to say that in the case, for instance, of the coal agreement made between the coal masters of Poland and of Great Britain, we succeeded in recovering a very large area of coal business which had passed out of our hands and might, unless we had made some arrangements similar to those made in the case of Poland and the Scandinavian countries, have left us short of customers abroad.

The exports of coal showing the largest increases are to be found in the north country—in Northumberland, some parts of Durham, a very large part of the Yorkshire coalfield, and to a remarkable degree, the east of Scotland. The coal trade has always been very difficult to conduct. Coal business has been difficult to obtain, and for three or four generations past the coal exporters have been among the most enterprising of our commercial travellers. Without assistance now from the Government it it doubtful whether they will be able to retain the business which they still hold, and they certainly will be unlikely to obtain new business in future. One reason why we have devoted ourselves to a certain extent—exclusively in some agreements, and to a very large extent in others—to the coal trade is that coal is one of the commodities which employs the largest number of people compared with the value of the total production. It was in attacking that problem of the employment of the people that we felt it necessary to lay ourselves out first and foremost to the recovery of the coal trade which was vanishing, and in building up a new demand and new markets for the coal which we export from Welsh, English and Scottish mines. In spite of that, however, there are some of the districts in our big coal areas that are never likely again to regain their foreign sales. Either mines have been worked out, or the quality of coal is not such as is required abroad, or the method of production has gone out of date. The fact remains, whether for good or for ill, that a certain amount of the export coal trade in some districts in Durham and in some parts of South Wales has gone and I am afraid it will be a very long time before there is an increased demand for that which is lost.

I may say, although it does not directly concern the Board of Trade, but rather the Mines Department, that in those areas a great many people who are looking ahead are placing their faith largely in the development of the system of hydrogenation of coal. If coal can be turned to liquid fuel, there is no doubt that it will regain a good deal of the custom which it has lost in recent years. For instance, a good deal of the shipping traffic is conducted almost entirely on oil. There are very few passenger vessels which burn anything but oil nowadays, and they are never likely to return to a demand for coal. The kind of oil which they use is just the sort of liquid fuel which can be produced from some classes of coal, and we hope that it may be one of the main uses to which coal may be put, even in the derelict areas, in future. For that reason, although I am not anxious to see artificial aid given to industry, I welcome any money which is expended on that form of invention and adaptation in a great industry, in order that we may get full benefit out of what appears to be now almost a vanishing asset.

I will give one test of the way in which the internal trade of ths country has responded to the demands made upon it. A year ago when I was addressing the Committee I expressed the fear that we were almost reaching saturation point in our home trade. I am very glad to say that I was unduly depressing in making that statement, for the home trade has gone on steadily expanding throughout the whole of this year. One of the ways of measuring that is to be found in the value of retail business which is done here. The value of the retail sales last year was actually 3 per cent. higher than in 1933, an increase being recorded for every month except April. That increase applied to food and general merchandise, and there was an increase in all the five areas of Scotland, Wales, North of England, South of England and Central and West End of London and Sub-urban London. The expansion is continuing during the current year, and the sales during the first five months were very nearly 4½ per cent. higher than in the corresponding period of 1934. I only put that point to show the increased home demand which I hope will be maintained throughout the coming year.

I should like to point out to the Committee some of the causes which have led to the expansion of our trade. I am afraid that I may be led into the sphere of controversy in doing it, but I must give as full and complete an account of our trade as possible. I will lead off by pointing out the effect which our tariff system has had upon the employment of our people and the production of goods. Whatever may be said about the conditions under which we built up our trade in the past, the fact remains that the stimulus given by our tariff during the last three years accounts to a very large extent for the prosperity of the whole internal trade and has provided us in some direction with returns in foreign markets as well. Not only have our tariffs had a beneficial effect upon employment in the home trade, but they have also provided a revenue of £20,000,000 a year for the Exchequer, a very substantial amount which could scarcely be found with ease from any other quarter. But there are not only the tariffs which are applied here and mainly for the benefit of those who trade in our home markets.

I would also draw attention to the direct effect of the Ottawa Agreements upon our trade. Whatever may have been said in the past about the Ottawa Agreements, I hope that everybody will agree, in making a survey of the trade of this country with the Dominions, that every one of those Agreements has come up to expectation, and that they have tended to stimulate Empire trade by reducing Empire trade barriers. In that connection I think it is only right that I should repeat what is too often forgotten, sometimes even forgotten by Dominion statesmen, and that is that we do provide in this market for the free entry of Dominion goods. With the exception of the McKenna duties and what I may call the revenue duties, the Dominions have the advantage of a free market here, an advantage which they cannot find in any other part of the world and which, incidentally, they do not give to us. What has been the effect of the Ottawa Agreements on our trade? Between 1931 and 1934 imports from the countries which entered into agreements with us at Ottawa have increased by more than £29,000,000, a very substantial volume of trade. The exports from this country to the Ottawa countries increased by more than £24,000,000, and that improvement has been of very great benefit to almost every one of our principal industries. Of course one never expects an exact balance between the two, but trade is, after all, both inwards and outwards, and the fact remains that on those figures we are able to show a most substantial increase in turnover which would not otherwise have come so easily to this country.


Would it be possible to give us the exports to Australia, New Zealand and Canada for last year?


I am afraid I have not got the figures with me at the moment, but perhaps my hon. and gallant Friend who represents the Department of Overseas Trade will be able to fill up the gaps which I have left. What are the main benefits which have come from those trade agreements? First of all they have led to a reduction of tariffs; secondly, they have led to the purchase of a much larger amount of United Kingdom produce. If we go outside the area of the Dominion agreements into the region of the foreign trade agreements, some 17 of which have already been signed, it can be shown that we have secured something which is of considerable advantage to this country in connection with the arrangements for the recovery of old trade debts. I regret to say that as debt collectors our progress has been rather slow during the last 12 months, but we have not ceased to make efforts to help our traders and merchants to call in moneys due to them on trading account from many countries in Europe and South America.

The fourth benefit, which I should mention as applying mainly to the foreign trade agreements, is the provision of exchange for current trade. That comes almost under the same category, but gives me the opportunity of saying that the present exchange system of Europe is likely, if it continues, to lead to grave disaster in many trading quarters. I should like to observe, if what I say obtains currency elsewhere, that our traders should be very careful in making contracts for the future to see that they make provision for payment and do not have to depend upon the Board of Trade or some other Government Department to collect debts for them and get them out of difficulties which might have been foreseen. A great deal can and ought to be done by Government Departments, but holding the views I do I feel that I can emphasise the fact that if good sound business is to be created and continued it will be the business which is conducted by business men themselves without Government assistance.


We have passed beyond that stage.


My hon. Friend must not be too sanguine about that, because progress in the direction of the economic doctrines he holds is not as great as he may imagine. In this country there is still a strong strain of individualism and so long as that lasts I have hope for the future.


Is it not a fact that there is not an industry in this country which has not come to this House for assistance, including the right hon. Gentleman's industry?


I very much regret that that should be necessary.


But you should give the facts as they are.


I was pointing out that what has been of the greatest benefit to our industries are the trade agreements which have been arrived at without any assistance from the Exchequer, but by negotiation between other countries and our own, exchanging facilities in our markets for a demand which ought to be created in theirs. I have here some figures with regard to agreements covering trade generally. In foreign countries as a whole the increase in our overseas trade works out at about 5 per cent.; or, giving the exact figures for those who do not like percentages, between 1932 and 1934 there has been an increase from £199,500,000 to £210,500,000. In the case of the Empire countries, which of course are affected by the Ottawa Agreements, the rise has been from £165,500,000 to £185,500,000, a rise of about 12 per cent. In the case of the foreign countries with whom we made agreements in 1933, the rise is not 5 or 12 per cent. but 33 per cent. Those are benefits which are patent to all the world.


What are the actual figures? My right hon. Friend did not give the actual figures in the last case, as in the other two cases.


I am afraid I have not got the figures at the moment. If I come across them I will circulate them. But the calculation is all right.


But the question is how much it amounts to.


It amounts to a very considerable volume in the case of some countries. In the case of Finland it is a very large fraction of their total trade.


But how many millions?


A considerable number of millions, and I do not despise any millions.


What is the increase in the trade between this country and Russia owing to the Russian trade agreement?


I had not intended bothering the House with Russian trade, but I can tell the hon. Member one satisfactory fact. Under the agreement made with the Russian Government, they were bound, as he knows, to take an increased quota of our exports in return for their imports, and they have far exceeded their undertaking—a most remarkable fact. In particular as regards the chartering of British vessels, which was one of the important items in that agreement, they have chartered this year nearly twice as many vessels as last year.


Can the right hon. Gentleman give us the figures of the exports to our Dominion markets?


I gave the figures for all British countries, showing there was a rise from £165,500,000 to £185,500,000.


That includes the Dominions?


Yes. These figures are reassuring. It is true they have not gone ahead as fast as some people would wish, and we shall never be thoroughly satisfied till we get back a greater volume of trade, and a Europe in which there are fewer obstacles to international trade than there are to-day. But although there have been occasions during the last 12 months when the progress of our trade has been checked, those checks have only been temporary, and the upward movement continues apparently without a break. There was a welcome and wholly satisfactory improvement in the export trade in 1934. It has continued in 1935, and the general course of trade seems to indicate that the improvement will continue throughout the whole of the present year, in the absence of any major international or economic disturbance. I qualify everything I have to say this afternoon by the statement that we in this country are more subject to the evils which come from international, political and economic disturbances than any country in the world, and it would be a thousand pities if our progress were to be checked by any of these disturbances, whether at home or abroad.

The outlook for trade with countries in the sterling area remains, I am glad to say, very hopeful. Elsewhere there is rather a stagnation in world trade, and no real improvement can be expected until the difficult currency questions which are facing some countries have been solved. I therefore approach the coming year with restrained optimism, but it is certainly optimism. I see no reason why there should be any check or slowing up in the expansion of our iron and steel trade. I am glad to say that the new arrangements made with the Continental cartel are likely to assure to us a much larger share of the world's foreign markets than we could have got by any other means, and we should never have got into the cartel on favourable terms if we had not used the tariff. The engineering industry, I am glad to say, shows every tendency to expand. I gather from the reports which come to us from time to time that the order books are still fairly full, and there are good orders to hand. There is, however, one section of engineering which is, unfortunately, depressed. My hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) always looks after the interest of the marine engineers as well as of the shipbuilders, and I am sure he must have seen with some regret the slight fall in the tonnage under construction on the Clyde during the last few months. There is every hope of those gaps being filled, and I trust that both on the Clyde and on the Tyne and on the Wear there will be an increase of construction of cargo vessels, which after all are the backbone of the British Mercantile Marine.

In the textile group the woollen and worsted trades are not so well occupied as they were about 18 months ago—but they are fairly active, especially in the home market. The cotton trade, I regret to say, remains dull and every effort to meet with the necessities of the cotton trade has been checked, sometimes by small and sometimes by larger events. I still hope that before the House rises we may be able to pass the Second Reading of the Cotton Spinning Bill which aims at the reorganisation of that section of the cotton trade. This step was recommended by a most influential Committee presided over by Lord Colwyn and is supported by four-fifths of the cotton spinning section of the Lancashire trade; and, if the recommendation is acted upon, I have no doubt that we shall see a much healthier state in that section of the cotton trade as the years go by.

I wish to say a word about one of the most important of our industries. The outstanding feature of the shipping trade during the last 12 months has been the initiation of a subsidy system which has combined and disciplined that trade to a degree that appeared only two years ago to be practically impossible. Minimum rates in many parts of the world have been agreed to not only by the mercantile marine of this country but by the mercantile marines of other countries. Ships of all classes are now sailing out of the River Plate and some of the Australian markets—and I believe in some of them the most active trade is through the Suez Canal—on minimum rates, which have prevented that cutthroat competition which during the depth of the depression made it almost impossible for our cargo companies to keep their heads above water. I offer no comments at all on this transaction to-day. It is too soon to do so and I can only say that so far as the actual working is concerned there has been no hitch. We have been able to proceed throughout the whole of this year, with the assistance of the Tramp Shipping Advisory Committee and a committee of our own, and the progress which has been made in that trade alone gives a great deal of hope that there may result benefits which may be of service not only to the shipping community but also to the shipbuilders and to the marine engineers, who are always on the look out for new orders from enterprising shipowners.

But it is not that aspect of the shipping trade which I would ask the House to consider particularly this afternoon. I am thinking particularly of safety of life at sea on which we have received some rude shocks during the last winter season in the North Atlantic. The House will remember that earlier in the year we discussed here four at least of the disasters which have overcome our seafarers, three of them in the North Atlantic—the cases of the "Usworth," the "Blairgowrie," the "La Crescenta," and the "Millpool." It became clear as the facts concerning these vessels were disclosed bit by bit that we must institute Board of Trade inquiries as a preliminary to examination of these cases by a Wreck Commissioner. I am glad to say that immediately I asked Lord Merrivale to act as the Wreck Commissioner he undertook this very responsible task, and he has already completed the inquiries in, I think, three of the cases. The findings of the court with respect to each one of these vessels ought to be put on record in our proceedings. I take, first of all, the "Usworth" and the "Blairgowrie." There we have in full detail the elements of the problem by which the inquirers were faced. I am glad to say that in the report on both of these two cases the "Usworth" and the "Blairgowrie"—the only two that are finished—there is no reflection on the Board of Trade in either of the judgments. We have, I am glad to say, one of the best technical staffs in the world, and we retain our confidence both in our engineer surveyors and in our ship surveyors in the way they have performed their duties. There has been nothing in the inquiry to lead one to believe that that confidence has been misplaced.

There is one general point. The responsibility for seeing that a ship is in a safe and seaworthy condition rests primarily not upon the classification societies or on the Board of Trade but on the owners and masters, under Section 457 of the Merchant Shipping Act, 1894. All measures must be taken, in every case, to ensure the effectiveness of whatever system of survey and control there is; but no system of survey or inspection, by whatsoever authority, can replace the control and supervision of owners and masters. In his inquiry into the fate of these vessels Lord Merrivale arrived at certain conclusions which were concurred in by the assessors who assisted him. There are four main points on which the court issues very solemn opinions; first, with regard to steering gear; second, with regard to manning; third, on surveys and the way in which they are conducted; and fourth, on entries in logs. I will go through these various recommendations and point out what action immediately I have taken on the decision of the Court. In the case of the "Usworth" and in connection with steering gear, Lord Merrivale reports: Whether steering gear operated as was the main steering gear of the "Usworth" ought to remain an accepted type of gear for ocean-going vessels seems to us, upon the evidence, to call for full consideration with all possible help of expert witnesses. He believes that the loss of the "Usworth" was due to the failure of her steering gear and that the gear is of a kind which involves special risks. Immediately I obtained that finding from the court I set to work to find which was the best way of dealing with this purely practical and technical problem. I came to the conclusion that we must at once have it fully examined by experts, and I have asked a Committee consisting of:

Mr. H. N. Gresley (Chairman), chief mechanical engineer of the London and North Eastern Railway.

Mr. Maurice S. Gibb, marine engineer.

Mr. Denham Christie, naval architect.

Captain R. E. Thomas, marine superintendent of the Furness Lines, who has had extensive experience in the North Atlantic.

Mr. W. R. Spence, general secretary of the National Union of Seamen, to consider in the interests of safety of life at sea the types of main and auxiliary steering gear fitted in the steamship 'Usworth' and the steamship 'Blairgowrie' and to make recommendations. We have lost no time, therefore, in obtaining the best advice that can be obtained in this country on what is purely a technical and mechanical question. As soon as we receive the advice of this Committee we shall consider it, and, if necessary, we shall act upon it.

Then I come to the next category of questions referred to by Lord Merrivale, which relates to manning. In the case of the "Usworth" the report says that with safety of life and well-being as dominant considerations the "Usworth" would have had three mates in addition to the Master. She only had two. The deck manning complied with the law but there was no apparent margin for safety. The court could not express a competent opinion as to whether the existing regulations do everything possible to ensure sufficient manning to face the varied perils of the sea, and whether any regulations could do this at a practicable cost, having regard to business conditions. In the case of the "Blairgowrie" the court were not satisfied that as a practical matter, the "Blairgowrie" had a sufficient complement of efficient deck hands, though in a technical sense she had. The court criticised the failure to keep a look-out, and the use of deck hands to a large extent as day workers as in breach of the Board of Trade regulations, i.e., Circular 1463. The court recommended that evasion by ship owners of the manning regulations—amended, perhaps, with due regard to the objects in view—should be provided against by due penalties. Having received this recommendation—a very serious one—I at once asked the Merchant Shipping Advisory Committee to take into consideration points raised in these inquiries. That committee consists of representatives of shipowners, naval architects, deck officers, engine room officers, seamen, underwriters and pilots, so that the Committee will see that it covers practically the whole range of the technical organisations of merchant shipping.

The present requirements for the minimum numbers of efficient deck hands were laid down in a Circular to the Board of Trade's officers of March, 1909, and they were based upon the Merchant Shipping Advisory Committee's recommendations. They have not been altered since that time. As a result of the examination which is to take place, and which is indeed taking place now, I have very little doubt that we shall find that some modifications have become necessary. If so, we shall endeavour to enforce them at the earliest possible moment.

In the case of surveys, the court appeared to throw some doubt on the efficacy of some of the surveying. They felt that existing provisions fall short of what is necessary. For instance, they suggest that load line surveys should have due regard to the general condition of the ship—and I need hardly say that I heartily endorse that. They feel that instructions to surveyors which are in existence should be made practically effective; that steering gear and hatches should be practically and carefully examined; and that the default of a surveyor in respect of matters such as these should entail direct and, if possible, prohibitive consequences.

There are three classes of surveys of cargo ships undertaken. There is the survey of the Board of Trade which covers a large number of these technical questions and which is largely concerned with load lines. There is the survey of the classification societies which is concerned with the efficiency of the equipment provided, the quality of the material used in the vessel concerned, and the general mechanical provisions for safety. Then there is the special survey which is made by the surveyors of the great companies themselves. If it is necessary as a result of our inquiry that the surveys should be tuned up, I need hardly assure the Committee that we shall do everything that is possible to see that those provisions apply, and that the Acts of Parliament and the orders issued by the Board of Trade are carried out.

There is only one small further point to which I would refer in passing, and it is that the court commented, in the case of the "Blairgowrie," upon the false statements in logs, in ship's reports, ship's papers and surveys, and said that the matter should be so dealt with that the reliability of such documents will not readily be tampered with. There are logs which are in use throughout the world. The first is what is known as the scribbling log and is the record which the officers keep for their own purposes. Then there is the official log in which only very important matters are recorded. As the Committee knows, a master mariner is not only the master of his own ship but is judge in its court, and can perform the ceremonies of marriage and baptism and all the rest of it on board ship. The document in which he records what he has done in those proceedings is the official log. I do not think that it is the official log to which the reference was made, but that it was to the scribbling logs and the other records which are kept for instance for the purposes of marine insurance. If we are to make use of those logs, we must be absolutely certain that they are literally accurate and that they are never tampered with, and that they express a true record of what has proceeded on board ship and that their time and material are absolutely beyond question.

I have made a rather rapid survey of our trade affairs for the past year partly with the object of showing what can be done by Government action. Although for my own part I would gladly see a return to a situation in which there was not too much intervention of Government or of Parliament, we cannot shut our eyes to the fact that the results shown during the last 12 months have been most remarkable, and I have no doubt that we shall see them continued during the coming year and in the coming winter. In making this survey I have done nothing to plunge into the most controversial arenas which occasionally enliven our discussions. I assume that hon. Members on the other side are anxious to say something about the effect of tariffs on trade at home and abroad. I do not intend to make any reply in anticipation, but I would point out that the welfare of business is the concern of all classes in this country, not only those who are engaged as employés but those who have their capital invested in British industry and commerce. None of our public and national services could exist were it not for the welfare of industry and commerce, because they are all built upon a foundation of trade. If trade declines we become a weaker people; we become less capable of supporting the unfortunate members of our community, and we find it more and more impossible, if trade does not prosper, to support the millions of people who are crying out for outlets.

I hold the doctrine that health in business is not a struggle for existing work, but is an organised system of co-operation in producing and exchanging desirable things. Labour and capital are both required in modern industry. Workers of every grade, and the equipment with which they do their work, are essential elements. The greater the facility for production and exchange, the greater will be the benefits conferred upon all classes and groups participating in the system. To humanise, fertilise and stimulate the system should be the aim of sound business and good Government.

5.5 p.m.


I beg to move to reduce the Vote by £100.

The President of the Board of Trade has given us to-day in the earlier part of his speech a broad survey of many of the facts of our trade. In the latter part he has dealt with one point of detail, the recent wreck inquiry. The Committee will have listened with interest to his statement. I have not observed any signs of undue excitement during the course of it. My own observations will be directed to one topic only, namely, the connection between unemployment and our trade which can properly be raised upon this Vote. Week after week and year after year, this House devotes itself to the main question of unemployment. When hon. Members above the Gangway wish for the discussion upon that subject they usually put down, or ask to have put down, the Vote for the Ministry of Labour, or else a Vote of Censure. It is quite proper and right that the Committee should discuss the question of unemployment on those occasions, and we are grateful to hon. Members above the Gangway for giving us the opportunity of joining in the discussions on those days. On these benches we hold that the question of unemployment can most properly be considered on this Vote for the Board of Trade, and in connection with trade as a whole in this country.

The main difficulties that arise in regard to unemployment are undoubtedly due to the decline in our export trade. The Commissioner for the special areas, whose report is published to-day, states in a brief sentence that the present state of the special areas is due in the main to economic and international factors which he says are beyond control. By "beyond control" he means beyond the control of agencies such as his or beyond the sole control of the Government of this country. No one would suggest that they are beyond human control. The main point of his conclusion is that the great problem of the special areas is due in the main—these are his own words: to economic and international factors. The President of the Board of Trade on a previous occasion told the House of Commons the same thing. He said: We are well aware of the fact, as everybody is who looks into this subject, that the distressed areas are mainly the export areas."—[OFFICIAL REPORT, 12th April, 1933; col. 2632, Vol. 276.] Then he gave particulars of the trades which are specially concerned.

The Chancellor of the Exchequer, who adopts what he himself has described as an attitude of dogged and persistent cheerfulness, says that it is only the Liberals who adopt a mournful attitude and who wear weepers while everybody else is happy. Everybody else is happy: that is the formula of the Chancellor of the Exchequer. The percentage of the population unemployed in Glasgow is 25.5; in Cardiff 26.8; in Blackburn, a cotton area, 32.3; in my own neighbouring constituency, 30; in Sunderland 44.9 and in Liverpool 28.7. Those are the figures of the unemployed in those towns which are the main factor in building up the colossal total of 2,000,000 unemployed; with their dependants, a population of 4,000,000. Of that population, about 1,000,000 are unemployed continuously and not for brief periods. "Everybody is happy," says the Chancellor. Those who have first-hand acquaintance with those areas will challenge his observation. As to the attitude of the Government to unemployment, the Prime Minister, in his first speech on resuming that office, said a few days ago: Perhaps by the time the term of this Government is over we may be able to say that at least we have made a start on this baffling and crippling problem. He was referring to the problem of unemployment, with special reference to the distressed areas, and I assume he had in mind a period of three, four or five years. At the end of that period the Government hope to be able to have made a start in dealing with the problem.

Listening to the speech of the President of the Board of Trade to-day I was wondering whether he was going impartially to survey the whole situation, taking all the facts into account in order that the Committee and the country might arrive at an impartial and judicial view of the situation, or whether he would adopt a mere debating or partisan attitude, picking out the favourable facts and saying very little with regard to the rest. I am sorry that, in the main, he has adopted the latter course. He has given the Committee every fact which he could pick out which supports the policy adopted by His Majesty's Government, and he has omitted facts which would justify and give rise to criticism. He has compared the present situation with the position either last year or the year before, which was in the trough of the depression. He mentioned, by the way and incidentally, and in a single parenthesis, that, of course, we had to go a long way to get back to 1929. He did not give a judicial survey either of the causes of the improvement which has happily taken place in the last two years or of the reasons which now make the continuation of that improvement so slow and partial. Undoubtedly an improvement has taken place, due not to one but to a number of causes. As in all great economic movements, the causes are multiple rather than single. There has been an improvement throughout the world, and our markets have somewhat improved. Those who were quite unable to purchase our goods, or, if they did purchase them, to pay for them, have, in some instances, found themselves in a better situation, and there has been an expanding trade.

The Prime Minister, in the speech to which I have referred, used an observation which surprised me and surprised most people who have followed the facts with regard to world trade. He was comparing the exports in the first five months of this year with the exports of the same period two years ago, and he said: It is enormously to the credit of the Government that they have made it possible for this country and this country alone to increase their exports during this time. One of my friends on these benches put down a question, inquiring what countries, during the period taken by the Prime Minister, had increased their exports, and which had suffered a loss of exports in that period. The answer given by the Government on 8th July showed that, taking the principal commercial countries in the world, 24 in number, no fewer than 13 had increased their exports while 11 had decreased them. Exports had increased in the United Kingdom, the United States, Japan, Canada, British India, Argentina, the Union of South Africa, Australia, Sweden, British Malaya, Czechoslovakia, Denmark and Brazil, so that when the Prime Minister told his audience and the country that this country alone had increased its exports in that period, he was in error. I am somewhat surprised, since the matter has been pointed out in an answer to a question, that the Prime Minister has not taken an early opportunity of correcting his statement. I am afraid that he has been having too large a diet of the posters of the Minister of Health.

In the case of the 11 countries which have suffered decreases, this remarkable fact is apparent, that eight of them are countries which are still on the Gold Standard, either actually or formally, namely, Germany, France, Belgium, the Netherlands, Italy, Switzerland, the Dutch East Indies and Algeria; so that the countries of the world can almost be divided into two classes at the present time. Those which have increased their exports are countries in the sterling area, or else they are countries with depreciated currencies; while those whose exports are not increasing, but diminishing, are countries which still form part of the Gold Bloc or are more or less attached to it. The three exceptional countries are China, the Soviet Union, and Spain, all of which, according to this reply, have suffered decreases in their exports. That is an important factor in this connection.

When we are examining the reasons for the trade recovery in this country, I should say that the first is the general world recovery and the improvement in markets; and the second has been the fact that we have gone off the Gold Standard. There is another side to that factor, to which I shall refer later, but it seems to me to be quite plain that, if we had remained on the Gold Standard, or if we were now speedily to return to the Gold Standard, the improvement in British trade would quickly disappear, or at least would be diminished. I think that everyone, or almost everyone, agrees that that is so. The Home Secretary is an exception. He said some time ago, referring to a speech which I made, in December, 1933, but to which I have not previously had an opportunity of referring, that I had said that these improvements in British trade had nothing to do with controlling the course of trade—I have never said that—but were due to the fact that we were off the Gold Standard. I repeat that I have not said that. I have always said that the question of the Gold Standard was one factor among many. The Home Secretary went on to say: That is a perfectly good argument if it happened to be true, but going off the Gold Standard has no more to do with it than the alleged monster of Loch Ness. Practically every Member of the House who has followed these matters knows that, whether for good or ill, a depreciation of national currency does have an effect on national trade, and it is an amazing statement for the Home Secretary to make that the one has no more to do with the other than the alleged monster of Loch Ness.

The third factor which has led to a recovery in British trade and business is without question the return of financial confidence at home—the fact that the Budget has been balanced and that our finances are in a more stable condition owing to the combined action, not only of present Ministers, but also of Lord Snowden, who was the Chancellor of the Exchequer principally concerned, and those of us who then formed part of the Government. That recovery in financial confidence is undoubtedly one of the principal factors in the general improvement; and, consequent upon that, the possibility of obtaining cheap money for trade and manufacture is unquestionably another of the important factors. We see an improvement in employment in the building industry, not so much on account of any housing legislation, whether passed by this Government or by previous governments, but owing mainly to the cheapness of money. The building industry is one in which capital goods are almost entirely concerned, and, if the undertaker can obtain his money at 3 per cent. instead of 5 per cent.—or rather, I should say, if the standard rate of interest for Government securities has been reduced from 5 per cent. to 3 per cent. throughout the whole country, the corresponding rate of interest in the whole of industry is lower, and that makes an enormous difference in the profitableness of building and in the inducement given to building undertakers.

Then, again, the restoration of cuts in salaries and unemployment allowances, and the small reliefs that have been given in taxation, have helped to some extent in the recovery, for the restoration of cuts and the relief in taxation have set free a larger economic demand for consumable goods, which has encouraged trade and industry in general. Another factor is the enterprise of our manufacturers, to which the right hon. Gentleman has paid due tribute, and the reorganisation of some industries, the establishment of new plant here and there, the greater skilfulness of salesmanship at home and abroad, and the fact that, happily, there have been few labour disputes in industry in the last year or two. All this has contributed to the restoration. Further, particular industries have derived benefits from other measures that have been taken. No one denies that a protective tariff gives advantages, though they may be only temporary or partial, and may be offset by disadvantages. Nor does anyone deny that the expenditure on armaments which is now proceeding keeps certain industries busy, and that, of late, has been one of the factors in the improvement.

Finally, there are the trade agreements, to which my right hon. Friend has referred, and which, so far as they go—I am afraid they have only gone a little way—have been of use to several particular industries. I was sorry that my right hon. Friend was not able to answer the question that I put to him across the Floor. No doubt the Minister who replies later will be able to do so. He gave us the actual figures showing the growth of exports to the Ottawa countries, and the growth of exports to foreign countries in general, but, when he came to those countries with which we have made trade agreements, he only gave percentages. I hope that that discrepancy will be remedied.

What do these agreements amount to on the whole, and what has been the upshot of all these operations which the right hon Gentleman has undertaken? The Chancellor of the Exchequer said some time ago that, taking the world as a whole, the obstacles to trade have increased rather than diminished. The President of the Board of Trade himself gave an answer on this point in March last, when my hon. Friend the Member for Colne Valley (Mr. Mallalieu) put a question to him as to what were the results on the whole of the changes in tariffs and quotas in countries all over the world. My right hon. Friend said that this year, in most countries, the general tendency was in an upward direction. He said that in Empire countries, and in some countries where there have been trade agreements, there were reductions; but his conclusion was that it was unfortunately true that in recent years the general tendency throughout the world had been to increase customs duties. Therefore, in spite of all his efforts, in spite of the tariff weapon, in spite of retaliation, the upshot has been that duties now are worse than they were at the beginning

With regard to quotas, the Chancellor of the Exchequer, in his Budget statement, precisely confirmed what I am saying, namely that, in spite of all that has been done, the obstacles to British trade are worse now than they were previously, and appear to be continually increasing. The President of the Board of Trade, in the reply to which I have just referred, said, with regard to quotas, that "the general tendency of the changes made abroad had been to reduce imports from this country of the articles affected," although he said that there were certain exceptions, particularly in the case of countries with which trade agreements had been concluded. The important question is: what is the total of trade as a whole, and what are the present tendencies? My right hon. Friend has limited himself in the main to a comparison with last year, and, as we know, there has been an upward movement, but what the House of Commons and the country are interested in is the effect of this great world movement as a whole, from normal times, say until 1929, down to the sinking into the trough of the depression, and how far we have now emerged from that lowest position.

Our exports of domestic produce reached, at one time, about £800,000,000 a year. That was in the days of high prices, in 1924. If we take the year 1929—which was a good, but not an exceptional, year — our exports were £729,000,000. Even then we had 1,000,000 unemployed. Three years later, our exports had fallen by exactly one-half, to £365,000,000. Since then there has been a very slight increase. Having fallen from £729,000,000 to £365,000,000, they rose in the following year to £368,000,000, and in 1934 to £396,000,000. For the first six months of this year the figure is £206,000,000, so that, if the same progress continues in the latter part of the year, there will be in 1935 an export of £412,000,000, and possibly it might be even a little better if exports go on increasing—say, possibly, £420,000,000. But that £420,000,000 has to be compared with £729,000,000 six years ago. That is the true comparison to make, rather than seizing upon the small upward tendency of this year as though that were the whole picture. We must look at these upward tendencies of the last year or two in relation to the enormous drop of 50 per cent. in that short period. With regard to cotton, my right hon. Friend mentioned that cotton had shown a small increase this year, but the cotton exports this year are even less than they were only two years ago. With regard to re-exports—

Lieut.-Colonel CHARLES KERR

The right hon. Gentleman has referred to the exports in 1929. May I ask him what is the comparison between prices in 1929 and prices to-day?


Of course, there has been some fall in prices. That has been a feature of the depression, and a consequence of the depression, and it unquestionably affects the whole situation, because there is less money to spend in the country by some £300,000,000 or £400,000,000, which makes a great difference in the amount of effective demand in the country. I have not as yet seen any figures for the volume of exports this year, and I do not think any have been published, but the volume figures for last year show a decline, if I remember rightly, of about 25 per cent. as compared with 1929.

I was coming to another branch of our trade, the re-export trade, on which our ports very largely live. Commercial men, insurance companies, and other agencies in this country derive their livelihood from the re-export trade. There again there has been a catastrophic decline, largely due to tariffs, because tariffs unquestionably lead people, wherever it is possible, to send their goods direct to the ultimate destination, rather than sending them, as they used to do, to an intermediate country like Great Britain to be unloaded, re-handled and despatched in smaller quantities in different directions. I know there has been some diversion of trade to bond, which does not appear in these figures, but that does not give nearly so much employment as the other trade that we used to have. The re-export trade was always rather over £100,000,000 a year—usually £120,000,000. In 1929 it was £109,000,000, last year it was £51,000,000, and for the first six months of this year it was £28,000,000, indicating an annual figure of £56,000,000, compared with double that in the time before the depression. That is a very serious matter for our ports. All these things contribute, although the Chancellor of the Exchequer says that everyone is happy, to the grave discontent in our ports, evidence of which was seen to-day when a Member took his seat, having been returned by the West Toxteth Division of Liverpool largely on this issue, where the Government candidate received only half the votes that his predecessor received at the last general election. These are the main factors—I think I have stated them quite fairly—in the improvement.


Why did not the right hon. Gentleman take 1931, the last year of Free Trade, instead of 1929 as the year of comparison?


Because 1929 was before the trade depression, which is the principal factor in all this. I never have asserted that tariffs are the main cause of the depression in this country, and, therefore, my argument is perfectly legitimate that you have to take into account a large number of factors.


Can the right hon. Gentleman tell us what is happening to other exporting countries? Is not the same thing happening?


I gave the facts, as stated in the House, showing that there has been a general recovery in exports in 13 countries out of 24 this year. In the world in general unquestionably trade has been reviving in some degree, and the figures of unemployment in many countries have been declining in the last year or two. There has been an improvement, but the improvement is slow and partial and, as the President of the Board of Trade said, we are very far indeed from having recovered the ground that we have lost.

What are the causes why the recovery is slow, and why is it that we have only recovered this comparatively small amount of trade in relation to what has been lost? Here again there is not one cause but a group of causes. One is the continuance of high taxation. There has been some relief of taxation, but very little. Taxation is exceedingly burdensome on the population, and the increase of expenditure upon armaments and upon subsidies of various kinds will prevent any such sweeping relief of taxation as would have been possible, resulting in a much greater acceleration and improvement of trade. The continuance of unemployment itself on this great scale is one of the chief causes why taxation remains so high. The direct charge on the State for unemployment is about £70,000,000 a year and, in addition, there are the charges on the Unemployment Insurance Fund and other charges amounting to a total of £100,000,000 a year, or £2,000,000 a week. That enormous burden paid out to people in very small sums gives an effective demand as far as it goes, but it is much less than would be available if these people got full wages and were able to spend up to their normal standard. The fact that you have to take from the nation £100,000,000 in order to maintain men in idleness is a factor in keeping trade and industry at a comparatively low level. Secondly, the instability of exchanges is one of the main reasons why it is impossible to restore the trade of the world as a whole, and that is one of the consequences of our having been forced off the Gold Standard. I greatly regret that the Government are taking no steps, and obdurately refuse to take any steps, to arrive at a stabilisation of currency, although the United States has on more than one occasion intimated a readiness to negotiate upon it.


How can we take steps before we know what the President of the United States is going to do about the dollar, and how can we be convinced that the next United States Government will not alter its value at the first opportunity.


Of course, we cannot act by ourselves. The right course would be to negotiate with the United States. As the Secretary to the United States Treasury has publicly announced that they are prepared to consider entering into an arrangement, and as the French are undoubtedly willing to do so with regard to the franc, it seems that an opportunity is open for dealing with the question, but the Government make no response of any kind. If that is not so, I hope some Minister will say so to-day. It would be a great relief to the commercial and financial community throughout the country if they thought that steps were being taken to end the fluctuations of international values and of currencies which are so greatly detrimental to trade.

The other great factor which prevents world recovery of trade, and the recovery of this country in particular, is the existence of the restraints on trade in this country and elsewhere—tariffs, quotas and exchange restrictions. The right hon. Gentleman said that Ottawa had been a step in the right direction because it had reduced tariffs. That, again, was only a partial statement. It is a half truth. When referring to Ottawa the Government continually emphasise the fact that certain reductions have been made in inter-Imperial tariffs, but they never mention that, as the result of Ottawa, tariffs were raised all round our Colonial Empire and raised and maintained here at a certain level, thereby increasing world tariffs and world trade restrictions. It would be very interesting to know—we have never had any figures—what volume of trade as the result of Ottawa has suffered an increase of duties, and what volume of trade has benefited by a decrease? I should suspect that the volume of trade which suffered an increase is very much greater than that which suffered a decrease, but no figures have been made available on that head.

With regard to these restrictions, there is now an overwhelming body of opinion in this country that they are the chief hindrance to our industrial and economic recovery. Hon. Members opposite who regard me with suspicion as being the advocate of old-fashioned ideas will not take the same view with regard to the authorities that I am about to quote. I have an envelope full of extracts from declarations and speeches which I have come across within the last few months. I will not trouble the Committee with the actual quotations, because it would take far too long and would weary Members. I will merely state the authorities. The first, which is familiar to every Member of the House, is the report two years ago of the experts summoned to prepare the agenda for the World Economic Conference, who, in the most emphatic terms said, that unless these restrictions were reduced the world could not possibly be restored to prosperity. Now with regard to more recent declarations, the International Chamber of Commerce met in Paris last June and passed a comprehensive and most emphatic resolution in that sense. Herr Hitler, in his famous speech of 21st May, said that these restrictions which had been forced upon Germany were ruinous and, if they proceeded, could not fail to cause disaster. The Prime Minister of France in November, 1934, used very similar language. President Roosevelt said the same thing of late, as did Mr. Cordell Hull, the Secretary of State in the United States. The chairmen of the British banks at their annual meetings have almost all used similar language, declaring with emphasis that tariffs, quotas and exchange restrictions were ruinous to British commerce and that recovery even to the figures of 1929 would be impossible unless they were removed. For example, the chairman of the Westminster Bank, Mr. Rupert Beckett, the chairman of Barclays Bank, Mr. Tuke, and Mr. Beaumont Pease, the chairman of Lloyds Bank, have all used language of that kind. The hon. Member behind who regards me with suspicion will, perhaps, have read their speeches.


I entirely agree. I know perfectly well the difficulties that we have to face in regard to restrictions and quotas, but I am still of the opinion that the right hon. Gentleman is one of the out-of-date Free Traders of whom there are so few left in the country.


I will finish my argument and then come to a policy which, I hope, may receive the hon. Member's approval. Among these other authorities are Sir Josiah Stamp speaking on behalf of the railways, the Chamber of Shipping, the Shipowners Parliamentary Committee and a number of individual captains of industry, as they are called, such as Sir Percy Bates, Chairman of the Cunard Company; Sir Richard Holt, Chairman of several shipping companies; Mr. Hichens, Chairman of Cammell Laird; Sir Herbert Lawrence, Chairman of Vickers; Sir Eric Geddes, Chairman of Dunlops; Mr. Herbert Lee, Chairman of the Fine Cotton Spinners' Association; the Chairman of Unilevers, the Joint Committee of the Cotton Trade, the Liverpool Corn Trade Association and very many more, all using almost precisely the same words. If anyone wishes to see my batch of quotations, I have them here, and they are entirely at their disposal. I will quote only one more authority, and that is the Chancellor of the Exchequer: I believe there is still room for considerable expansion, he was speaking about the expansion of domestic trade— but I am quite prepared to admit that the possibilities in this direction are not comparable with those that might be derived from a great revival of international trade. I have here now the quotation that I was anxious to give earlier from the Chancellor of the Exchequer: The channels through which that trade"— that is, British trade— formerly flowed so freely are still blocked, and indeed the passage seems to become more difficult as the spirit of economic nationalism continues to spread. We see new obstacles to international trade continually raised."—[OFFICIAL REPORT, 17th April, 1934; col. 906, Vol. 288.] That was in his Budget speech of last year, and that is the outcome of the Government's efforts to secure a reduction of tariffs by retaliation.

Lieut.-Colonel COLVILLE (Secretary, Department of Overseas Trade)

My right hon. Friend was not speaking of the countries with which we had made trade agreements.


He was speaking of the world as a whole. I am not denying that the trade agreements have been of some advantage, but what has happened in most of these cases is this. We put on tariffs or quotas and other countries respond by raising their tariffs and quotas. We go to them and say, "This is very absurd. Let us make an agreement." They say, "Certainly," and they alter their quotas, and the Government say, "See how splendidly we have done." But the outcome of the whole process is that the restrictions on trade are higher than they were at the beginning, and that is exactly what the Chancellor in effect has said.


The right hon. Gentleman is very fond of quotations and he has quoted President Roosevelt. I wonder whether he will quote the reply that President Roosevelt gave to the Economic Conference when he was asked to submit to a reduction in tariffs.


I am not sure that the tariff question arose. The monetary question did arise and President Roosevelt refused to take any action in the manner desired at that time, and that was one of the two main causes of the breakdown of the Conference. Now I think President Roosevelt has learnt from experience, and the effect of these changes in currency there and elsewhere has been such that his own Minister, the Secretary to the Treasury, has declared that they would be willing to enter into an arrangement.


Did he offer to reduce any tariffs?


He has obtained power from Congress to reduce any of the tariffs to the extent of 50 per cent., and within the last few months agreements have been made with Sweden and with Belgium, and with other countries in special relation to the United States, namely, Cuba and Haiti, which have effected some small reductions in tariffs. They do not amount to very much—they are very much like my right hon. Friend's agreements—but there is a tendency in that direction. Whether the President will be able to effect any large sweeping reduction of tariffs I do not know; political conditions may not allow. I am sorry to detain the Committee for so long but there have been many interruptions and I have endeavoured to reply to every one. As to the course which is right to be taken, speaking in this House the other day, the hon. Gentleman the Member for Cardigan (Mr. D. Evans) used these words: Of course, we have been told that you cannot have Free Trade, because other countries do not have it, but Free Trade, at any rate, when it is universal, is the best thing for the whole world."—[OFFICIAL REPORT, 5th July, 1935; col. 2162, Vol. 303] [HON. MEMBERS: "Hear, hear!"] That was received on that occasion with general cheers, as it has been received with partial cheers at this moment, but that is not the view of the Chancellor of the Exchequer. The right hon. Gentleman does not hold that doctrine; in fact, he definitely repudiates it, and at the time of the Economic Conference in 1933 he said at Birmingham: For my part it seems to me that so long as we have to live in a world in which any nation by the use of modern machinery can produce anything it likes, but where so profound a difference exists between rates of wages and conditions of labour, we cannot go back to Free Trade, not even if all the world adopted it. That is the view of the Chancellor of the Exchequer. I do not hear any cheers now, because hon. Members are accustomed to go to their constituencies and say that Free Trade is a magnificent ideal but it cannot be attained, but here the Chancellor of the Exchequer says that it is not an ideal at all, but a thing to be avoided. Speaking at a dinner of bankers recently he used exactly the same language, and he based it on the principle that you have different standards of living in different countries, and therefore you must have tariffs. That, of course, is a principle that no one has attempted to apply. For example, the motor industry in this country suffers severe competition from the United States. In the United States wages are higher than they are here, and, if anything, the standard of living is higher and certainly not lower, but no hon. Member who has been applauding this sentiment would take off the duties on American motor cars for the reason that the standard of living in England is lower than it is in the United States. We import goods from India without duty, although a few of them compete with the goods of this country. The standard of living in India is much lower than it is here. Nevertheless, we do not tax those goods. If you were to apply this principle it would mean that you would have to adopt a tariff that would affect the goods of each separate country differently according to whether the standard of living was high or low. The United States adopted that principle and found it unworkable. It would not only be a differential tariff between one country and another, but a differential tariff between various industries of the same country according as they pay good wages or low wages.

Hon. Members may say that at all events this is a purely academic discussion, and that in any case other countries will not lower tariffs, and therefore we must have our tariffs. That is also the view of the Chancellor of the Exchequer. Why should you trouble, everybody is happy, according to him, so why should we have any measures to remove any of these trade restrictions or make any effort to secure greater freedom in international trade? At the World Economic Conference that was the view of the Chancellor of the Exchequer. He was the head of the British delegation and the World Economic Conference broke down, to the great disaster of all countries, for two reasons, one, because the American President refused to agree to any currency arrangement, and, secondly, because the British Government refused to agree to any abolition of tariffs or large reduction of tariffs, mainly because they had just signed the Ottawa Agreement which compelled them to maintain tariffs no matter what any other nation might do. At the present time there is a continuous pressure against any attempt to make any comprehensive or effective agreements with other countries involving a large reduction of duties here.

A few months ago 237 Members of this House, a very large proportion, signed a memorial to the present Prime Minister and the Chancellor of the Exchequer urging that restrictions upon imports both of manufactures and agricultural products should be increased in this country. So far from paying the slightest attention to all those authorities all over the world who have urged reductions and greater freedom of trade, these 237 Conservative Members of this House—I absolve the National Liberal and National Labour Members from participation—have urged the right hon. Gentleman to increase duties. How is it possible, in face of a volume of opinion such as that, for the Government to take any really effective measures to make large agreements with great nations like the United States, France or Germany in order to secure comprehensive reductions of tariffs? It is all very well to make agreements with Finland or Denmark, not unimportant, though comparatively small countries, but the great markets of the world are practically untouched by agreements which have been made. There is a hard core of unemployment in this country, and there is a hard core of Toryism in this House, and the one is very closely connected with the other. When the Government claim credit for having brought 1,000,000 workers who are unemployed into employment, they must bear the discredit for their share in keeping 2,000,000 workers still out of employment.

I am asked by the hon. Gentleman behind and other hon. Members—and this is my concluding point—what would I or my hon. Friends do differently from what, the Government are now doing to deal with this situation. Our action would be different in two respects. In the first place, we should adopt at home a very active policy of national development along lines which have been continually expounded by Members of the Liberal party and also by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) who, of course, has been taking a leading part in advocating these policies for five or six years—we do not pretend that they are new, and many of us co-operated with him at that time—and some of the policies which have been advocated even to-day by the special commissioner appointed for distressed areas. We should carry out with vigour and energy a policy of that kind, but that, however, does not arise on this Vote, and I can deal with it only by the way. With respect to trade, the policy that we would adopt would not be to rely merely upon bilateral agreements. We are convinced, and have frequently stated, that the policy of merely making an agreement with one country at a time is futile. When I say futile I mean that it gives certain advantages but they are very small. We should endeavour to arrive at an agreement with a group of nations, as many as possible, for mutual tariff reductions and the abolition of quotas, to make a general effort over a wide area. We have expressed this view again and again, and always hon. Gentlemen say that the Liberals have no suggestions to make, that they hark back to old Free Trade, and that their policy is negative. Yet on nearly every occasion, in and out of this House, we have offered this policy which is known as the policy of the Ouchy Convention.

It will be remembered that in 1932 at the time of the Lausanne Conference, Belgium and Holland agreed together and signed a Convention precisely of that character. It was a Convention that was not limited to them, but was open to every other country. The purport of that Convention was that they would reduce their tariffs on each other's goods by 10 per cent. per annum for a period of five years until those tariffs were reduced to one-half, and in no circumstances would they increase their tariffs, and there were certain agreements with regard to quotas as well. That Convention came to nothing because it ran counter to the most-favoured-nation clause in the Treaties of Holland and Belgium with other countries, and our Government took the lead in blocking this as inconsistent with international law, as it certainly was, by contravening the most-favoured-nation clause. But now there is a strong movement in favour of a policy of this kind, coupled with an agreed modification of the most-favoured-nation clause in order to make it possible.

Since I have quoted various authorities previously, I will quote a few authorities now in favour of a Measure of this kind. The first is the International Chamber of Commerce which sat in Paris a few days ago, and which passed a comprehensive resolution and declared that bilateral agreements were of value as far as they went, but also declared that it would be far better if they were enlarged into multilateral agreements, and if we could get together groups of the Powers to agree on the lines I have suggested. A conference was held in London last March consisting of representatives from many countries, including the present Prime Minister of Belgium, and many leading economists and statesmen from this country and other countries, under the auspices of the Carnegie Endowment for International Peace. It was a very representative conference and various Members of this House were present. That conference unanimously agreed as its first resolution, in order to get rid of the present impediments to international trade, that an effort should be made to arrive at a convention on the lines of the Ouchy Convention. Two or three days ago a memorandum was published signed by various leading economists of different countries who had been brought together by the Chamber of Commerce at Antwerp to discuss these matters. The British representatives were Mr. Keynes, Mr. H. D. Henderson, who was the Secretary of the Economic Advisory Council of the Government, and Mr. Harrod. All these gentlemen of the various countries unanimously agreed to a recommendation, in these terms: Multilateral agreements designed to foster trade within certain groups of countries, provided that they are open to every country on equal terms, should be made possible through the acceptance of appropriate exceptions to the most-favoured-nation clause. Another authority, not a commercial one, who has just made a declaration in the same sense, is the Director-General of the International Labour Office. Dealing with the question of unemployment in his last report, Mr. Butler said that this matter of international trade was of extreme importance and the right line of advance was to form groups of countries with similar ideas on international trade. The hon. Member for the City of London (Sir A. Anderson), whom we are very happy to welcome here, when President of the Association of Chambers of Commerce, in his presidential address last year, used these words: Seeing all this we"— that is, the Chambers of Commerce for whom he was then speaking— have said to His Majesty's Government that the principles on which the world's market flourished have been forgotten and must be restored, that axioms of commercial mathematics"— I do not know whether that is the word my hon. Friend had in mind when he referred to the opinion of Liberal Free Traders— are peremptory rules, and that the British Empire and those nations which agree to these axioms or principles should bind themselves together by the mutual grant of the most-favoured-nation privilege; and, pending the happy day when the world market once more includes the whole world, should show in a smaller circle that commerce can to-day, as in the past, sustain both buyer and seller, and spread employment and demand and happiness throughout the circle. The larger the circle the better, but let us at all events agree to the principles and join the circle and make a start towards recovery. I hope that my hon. Friend still holds those views, and as Member for the City of London will press them effectively upon His Majesty's Government. It is necessary, in order to carry that out, that there should be modification of the most-favoured-nation clause. The Manchester Chamber of Commerce appointed a special committee which has recommended the modifications that are necessary. The United States of America agreed at the Pan-American Conference at Montevideo that it would accept any modifications of the most-favoured-nation clause that were necessary in order to bring about an agreement of this kind. That is a most important declaration to which sufficient attention has not been called.

That is the policy which we advocate, and that is the measure which we should adapt as different from the measures which have been pursued by His Majesty's Government. We consider that His Majesty's Government are blameworthy, first, in not attempting at home a vigorous policy of national development and, secondly, in not taking any effective steps—they were themselves largely responsible for the breakdown of the World Economic Conference—to raise again this question of modification among as many States as possible. How many would join we cannot say until the proposal has been made. Certainly Belgium and Holland would join. Although they are small countries, they have large Colonial possessions. In all probability the Scandinavian countries would join, and there is every reason to anticipate that their interests might lead many South American countries to join. As for the rest, we do not know until they have been asked. Our complaint against the Government is that they have resolutely refused to take any steps. They have relied upon their faith in the most-favoured-nation Clause. In spite of all the recommendations from various authorities, they attach so much importance to the most-favoured-nation Clause that they will not consider any Amendment. When the Manchester Chamber of Commerce pressed them, they said that they would not themselves make any inquiry, and that the Manchester Chamber of Commerce, if they thought it necessary, might make an inquiry themselves. They have done so and have issued a report along the lines that I have suggested, but still the Government take no step. In these circumstances, we on these benches must move a reduction of the Vote and press it to a Division.

6.3 p.m.


The right hon. Member for Darwen (Sir H. Samuel) has given us a very interesting and comprehensive lecture on Free Trade, of which he is so sturdy a champion, in moving a reduction of the Vote. We shall support the reduction, but for other reasons than those given in the main by the right hon. Gentleman. He quoted a very large number of people outside this House in his support, and gave a list of distinguished people with whom he finds common ground on this question of Protection versus Free Trade. But perhaps the right hon. Gentleman will be the first to admit that the great majority of those people are stalwart supporters of the National Government. Therefore, we do not find very much comfort from the list of distinguished people that he quoted. Others are leaders of more obnoxious national governments elsewhere.

We do not approach this question as Free Traders, but from our own point of view I should like to examine the figures presented by the President of the Board of Trade. He took courage and confidence to himself in giving us certain percentages. He said that in regard to trade between ourselves and foreign countries the average percentage of trade both ways was up by 5 per cent. He said that trade between this country and Empire countries had increased by 12 per cent. in the last few years and that the increase of trade with the countries with whom we had trade agreements was 33 per cent. No one is fonder of figures than I. Figures, rightly used, will never mislead, but figures incompletely given can he very misleading, and I question some of the figures given, just as I question the most astounding claim of the Chancellor of the Exchequer when he said that we had gained 80 per cent. of the way towards complete recovery. There is not much advantage to be derived by bandying about percentages unless we have the whole of the figures. I do not say that the President of the Board of Trade was anxious to conceal the figures, but I hope that the Parliamentary Secretary will supply the missing figures and give the whole story before the Debate ends.

The President of the Board of Trade said that he did not want to indulge in controversies. He gave a very elaborate survey. I think he would qualify as a first-class surveyor of the Board of Trade. In a speech which occupied a fairly long time he left out much more than he brought in. While I do not charge him with any attempt to mislead the Committee—certainly the right hon. Member for Darwen was right in saying that the right hon. Gentleman was not guilty of that—I do say that with the facts at his disposal he used his figures very cleverly, and made what would appear to the casual observer as a very good case. Having all these facts at his disposal he has not the complete confidence that one would expect. To use a nautical term, he has been in the crow's-nest. He has had a vantage point well above those standing on the deck or the Floor of the House of Commons, but from that exalted position he failed to find the open channel for British trade which he anticipated. His outlook was rather gloomy. He spoke with restrained optimism. The figures given do not inspire us with much courage. They show that the situation is not as good as one would imagine from a superficial examination of the speech of the right hon. Gentleman. There is really no sign of improvement in trade, by which I mean the trade in the exchange of desirable things. I do not mean licences to export aeroplanes and war materials. That is not ordinary trade; it is an unhealthy condition of things. There is no sign of improvement in the exchange of desirable and necessary things. That fact cannot be challenged by anyone acquainted with world conditions.

The right hon. Member for Darwen, whom I regard as one of the most skilled debaters either in this House or elsewhere, has a marked capacity for turning a blind eye to palpable economic facts, and he did not point out the very grave dearth of purchasing power in this country. What is the use of talking about free trade and selling goods if people are not allowed the money with which to buy them? Money restriction is fatal to trade, whether you have tariffs or not. We have come to the astounding condition in this country that we have 2,000,000 people unemployed, all of whom have low purchasing capacity. We are failing to send our people abroad and we are failing to find a market for the other parts of the British Empire with whom we desire to be on the most friendly terms.


I have referred to that on more than one occasion.


The right hon. Gentleman might have made more use of it. Unless that position is fully understood and acknowledged we shall not get very far forward with our periodic surveys, our lamentations about loss of trade and our provisions for the gloomy future that still lies ahead. It has been reported that we have £2,000,000,000 of bank deposits in this country not used. That really does not represent money, because it is not being used for the purpose of money. It is vitally essential that we should increase the purchasing power of our people, and until we do that we shall not get very far. The other day I attended a conference of the Empire Parliamentary Association and heard speeches from Empire delegates bewailing that they had goods to dispose of which they could not sell. They said that they had to destroy their crops because there was no market. These people all agreed that the one good market they had were the 50,000,000 of people in this country. They said to us: "Give your people more wages, more spending power, so that they will buy more from us. We shall then be able to increase our production and we shall call for more men. That will solve the migration problem for you." That is the position in which the Empire countries find themselves and the European countries are in the same position.

The average standard of living all over the world is declining. Trade is being restricted. I am glad that the President of the Board of Trade is now present. I made reference to him in his absence. I should like to say of him, not in any offensive way, that his optimism consists largely of philosophic self-assurance. He is skilled even in his optimism. In referring to the inquiry into the loss of the four ships he referred to the official log and a scribbling log. One might say that in his speech to-day he has given the House of Commons the official log, while the scribbling log has been concealed from our view. We propose to return to the subject of the Board of Trade inquiry in regard to the ships, for which we are grateful. It is the most important thing that has happened for some years in the interests of merchant shipping and the men who follow the sea as a profession. Another question that we desire to discuss is the position of the coal trade. We shall come back to that on Tuesday of next week, when we hope to say a great deal about it.

I wish this afternoon to refer particularly to a matter with which the right hon. Gentleman is very familiar and with which he must be very much concerned. It affects me personally as a Member of this House. I represent a constituency in which three forms of production are almost equally balanced, coal mining, steel production and tinplate production. These three industries are the main industries of my constituency and the industrial area to which I belong. There has been a pronouncement this week which has brought consternation to the whole of South Wales. I want to give the setting, as we see it, of this problem. The President of the Board of Trade is familiar with it, but the House and the country may not be familiar. This industrial area is about 1,500 square miles in extent, almost equal to the South Wales coalfield. It has a population of 1,750,000, nd their main activities are in coal, steel and tinplates. We have been an industrial people in that area for 300 years, commencing with iron over 300 years ago followed by tin about 250 years ago, an industry which was brought from Germany to South Wales, but which has found a home there and now produces 90 per cent. of the whole tin produced in this country.

Up to the present moment it has remained the home and centre of this highly skilled and important industry. We have trained generation after generation of our people to roll steel sheets and coat them with tin. We have the most highly skilled workers in the world in this industry. We have sent men east and west, to the far ends of the earth, to the United States, to Japan, to India, to Australia, who have built up what are now rival industries producing tinplates on a large scale indeed. There have been many technical changes in my lifetime which have called for a very high standard of skill from the work-people. It has had its vicissitudes, its ups and downs. One of the earliest recollections of my boyhood days was the advent of the McKinley tariff. The United States, having learned the trade from Welshmen, determined to make a trade for itself and closed its doors to the Welsh exporter. I remember the idle works and the idle people. It was my first experience of unemployment on a large scale. We still have memories of those days, and we do not wish to have that experience repeated. We will do everything in our power to prevent a repetition of the tragedy which overtook the tinplate industry in those days. I want to convince the President of the Board of Trade of the importance of this industry and the steel industry to South Wales. We debated this subject on 12th April last, and I want to quote one or two things which the right hon. Gentleman said in that Debate: We have felt for some time past that in the case of a great industry like this, which is the foundation of so many of our big trades, and matters so much to the coal trade among others, it was impossible for us to continue our approval of a system under which no attempt was made at the organisation of the industry either in Wales, in England or in Scotland. Further on he said: In Wales, however, very little progress has been made, but I hope that the new signs of enterprise which are now indicated in various directions will be productive of better organisation worked on a basis likely to secure permanent profit to the industry and permanent employment to those who are engaged in it. Then the right hon. Gentleman went on to refer to the steel negotiations, to the conferences which he had had with the steel people and to the conferences with representatives of other countries. Since the imposition of tariffs and the insistence of the right hon. Gentleman himself upon a better organisation he said: Since then we have had a number of conferences with the representatives of our own industry, and the impression which I have gained, confirmed by all the facts which are known, is that a genuine effort was made on our side to arrive at a new arrangement covering all the principal categories of the iron and steel products. Our representatives are indeed going to resume conversations with the Continental delegates, I think on the 16th of this month, and I hope that then it will be possible for them to arrive at an arrangement satisfactory to both sides."—[OFFICIAL REPORT, 12th April, 1935; cols. 1494–7, Vol. 300.] These conferences have taken place, and the right hon. Gentleman knows much more than I do of their nature and proceedings. He insisted on these conferences. The last tariff of 50 per cent. was conditional on the result of these conferences and the agreements made between us and producers in other countries. I am told—I hope I shall be corrected if I am wrong—that they came to an agreement at Paris to reduce the quota of tinplate exports, one of the steel products, from 12,000,000 boxes to 8,000,000 boxes. Imagine a conference in Paris bargaining in the dark in the absence of representatives of the work-people. They were bargaining not only in regard to tinplate boxes but with the homes and lives of the workpeople, the businesses of struggling shopkeepers. These were pawns on the table in these negotiations between those who met at Paris. I wish to restrain sentiment if I can this afternoon, but I know what is involved in this to South Wales, and what is implied in what has taken place last week. The chairman of the firm of Richard Thomas and Company, speaking at the annual meeting, made a reference to certain political aims and wishes—perhaps I had better read the reference to the Committee because it is significant that these people who claim to be the champions of private enterprise, who insist upon non-interference by Government and Government Departments, who desire to have their own way, have their political designs and purposes which they closely follow. This is what the chairman said: How different would be the picture if, in the interests of progress, reorganisation and efficiency, the Government were willing to grant statutory power to organised sections of old industries if the owners of 80 per cent. of capacity in such sections were unanimous in their request and able to prove to the satisfaction of a Government appointed committee that their application was a just one and it was their sincere intention to reorganise and bring up to date their plant, and that they were willing to jointly buy up on a reasonable and generous basis redundant plant and recalcitrant minority interests, and at the same time protect consuming interests. There is a plan and a purpose, an attempt to compensate only those people who are owners of redundant plant. There is not one word about the claims of the community or the interests of the workers. They want statutory powers to compose their differences to enable them to scrap their plant and machinery, but there is not one word about the homes and lives of thousands of people and the community services which are involved. He also said: Similar conditions apply in many other old and great industries, as indicated by the influential support from other industries given to Lord Melchett's enabling Bill. Sir William Firth has a political purpose in view. I do not know how far he was actuated by political motives in the speech he made last week, but the Committee is entitled to know his intentions and how far it can permit this firm to do what they propose to do. In order that I may not be considered biased and that I have nothing against this firm, let me say that I do not know Sir William Firth and that I have no ill-will against him. I represent the working people in this industry, I am their political representative in this House, and I wish to give them full and adequate representation. I do not wish them to be neglected and ignored whenever political measures are considered which affect their lives. I ask the President of the Board of Trade before any proposal emanating from this company, Richard Thomas and Company or from Sir William Firth, is dealt with, seriously to consider setting up a full Government committee to inquire, on which the interests of all people concerned will be represented and to which the people in South Wales will be able to put their claims for compensation if their livelihood is disturbed. Let me quote from a report of Mr. Malcolm Stewart. It was put in our hands yesterday. Hon. Members will find the reference on page 8. I appreciate very much certain passages in this report. It is not our report, and we shall criticise it very strongly indeed before it is disposed of, but there are features in it which are very encouraging to one of my political creed and ideals as to how working people are treated. Mr. Malcolm Stewart says: South Wales is in essence one economic unit, and it is impossible, in my view, to determine the prospects of mining valleys irrespective of their relation to large industrial centres nearby. It is no use shedding crocodile tears over the miners in these valleys. South Wales is one economic unit. It hangs together. Its coal mining, its steel works, its railways, its tinplate works are one economic unit. Every single section of industry fits into another, and if you take one away you will disturb the harmony and balance of this economic machinery which has been built up during a century. Its population has been brought together from all parts of the country. It has multiplied 10 times in 100 years, while its production has multiplied 100 times. There is a huge equipment for production of all kinds, and all are a part and parcel of an economic unit which has taken a very long time to build. We are obliged to have regard to the economic results. We know what the company hopes to achieve. Its desires are very simple indeed, and I will paraphrase them. The chairman of the company declares that it is faced with financial difficulties—not an uncommon thing in the steel industry or shipbuilding industry or coal industry. It is faced with very heavy payments on debenture and loan interest. He said that £1,250,000 of money borrowed at rates varying from 4½ to 7 per cent. was a permanent heavy burden, and he added: We could lessen that burden very considerably if we exchanged loans at 4 per cent. for the loans at 4½ to 7 per cent. He proposes to borrow £2,500,000 at 4 per cent., to pay off the £1,250,000 at the higher rate of interest, and to provide a margin for new developments which he detailed in his speech. This gentleman is asking the public—myself, if I were a fortunate person capable of investing—he is asking Members of this House and the public outside to find new money. The firm is to go to the public for money to build up business which, it is said, will return interest on the money borrowed, but which is dependent for success upon the removal of industries established 250 years ago in the South Wales area. Those industries are to be transferred 200 miles across the width of England to Redbourne, in Lincolnshire, and it is there that the chairman of Richard Thomas and Company is to find a return for the money that he desires to borrow.

Not one word is there in Sir William Firth's speech about the loss to the people who have all their capital in South Wales—the workpeople. They have been well paid, but the work is exceedingly arduous. There is no work done anywhere in the world that calls for more physical effort and more skill than the work in the tinplate industry. The workers have been well paid, but not too well paid, having regard to the nature of their work. They have bought their own houses and they live in them. Compared with the average working man these people live comfortably, but they need constant physical efficiency to do their work. A very high standard of intelligence and occupational efficiency is necessary also. Richard Thomas and Company say, "Let us borrow money from the unsuspecting public, who think that this is going to be a great and glorious enterprise for producing tinplate more cheaply." There is a promise in the speech to which I have referred to save £200,000 a year by producing tinplates at a cheaper price than the present. Let us see what the speech said about the present cost of production. This statement will astonish the House. Here is what Sir William Firth said: It will interest you to know that the home price for tinplates is lower in this country than in any other country where tinplates are manufactured, despite the fact that the advance in price of tin from £106 in 1931 to £230 a few weeks ago added nearly four shillings per box of 28 × 20 to our manufacturing cost .… The present price for tinplates only carries a profit approximating 7 per cent. on the gross price, and it is probably not realised that less than half of our total profits in the year under review were derived from the manufacture of tinplates, charging steel at a bare market price. There is no complaint that tinplate is expensive to produce in South Wales, no charge of inefficiency of any kind, but because of special features, the main feature being the presence of cheap low grade ore which has been found to be workable in recent years in Lincolnshire and Northamptonshire and Oxfordshire, there is said to be justification for taking this industry away from South Wales. This proposal to save £200,000 a year can be achieved only by borrowing immediately £2,500,000. It is necessary to borrow 12½ times the amount that will be saved annually. There is no suggestion anywhere in this speech of compensation of the people who are to be abandoned, those who have built up this industry, whose fathers, and grandfathers and great grandfathers made this industry possible.

I do not want to claim that this is a purely Welsh industry. That would be a wrong note to strike. I want the matter to be examined on an assessment of the various factors involved. It is no use taking the narrow view that one firm which can show a miserable profit of £200,000 is entitled to cause losses of millions of pounds. If only 20 per cent. of the tinplate production of South Wales were concerned it would mean a loss of employment by about 4,000 men engaged in tinplate manufacture. There would be more than that number affected. There would be about 6,000 additional persons employed in the steel and coal industry, and a due proportion would have to be added of transport workers and other people engaged in the various services which form the community life of a tinplate town. You would have the unemployment in South Wales of from 12,000 to 15,000 people. If we reduce the production in South Wales by another 10 per cent., in coal or steel or tinplate, I warn the House that a social catastrophe is ahead. If we add those unemployed to the 175,000 already unemployed, the burden and the loss of income will be the last straw to break the backs of the people in that part of the country.

Someone will say, what do you propose, do you propose maintaining an inefficient industry, an expensive industry in South Wales for traditional or sentimental reasons? No. I hope that no one supporting the Government will suggest that argument. This Government has been bringing forward a policy of tariffs. What are tariffs for? They are meant to protect producers from cheapness. They are a battle against cheapness, against cheap production abroad. Subsidies at home are a device to raise the wages of those who earn their living in unprofitable forms of employment. This country is subsidising wheat and beet, throwing out a challenge to the sun, stupidly and perversely bolstering up forms of production for which this country is not suited. That is being done by a National Government which believes that cheapness is a crime and plenty an offence against civilisation. I hope that no one will charge me with wanting to prevent efficient production being carried on in this country. I do not believe that this industry cannot be made to pay. In consequence of the imposition of tariffs the tinplate industry has been denied cheap raw material. It has had to pay a high price for raw material, and manufacture is more expensive now than it was three or four years ago. So long as we interfere with the industry and deny it the easy transport facilities which the open sea offers in that part of the country, so long this House has a responsibility to see that the industry is not killed.

It would be taking an extreme view to say that the House has a responsibility for keeping up a tinplate industry that cannot earn its own keep. The proof that the industry can be made to earn its own keep is that two large firms have put in new machinery. One of them bears the name of the Prime Minister—Guest, Keen and Nettlefold and Baldwin's. They are putting in new machinery to manufacture the same kind of tinplate as Richard Thomas and Company propose to manufacture. Another firm, at Briton Ferry, is putting in new machinery for the same purpose. Suppose that Richard Thomas and Company find that they can manufacture at a 1d. to 6d. per box cheaper at Redbourne, that the market for tinplate does not expand, and that the more cheaply produced tinplate gets whatever market there is. That will destroy even the most efficient plant in South Wales, and in destroying the efficient tinplate industry in South Wales you destroy the steel industry too, and destroy a large part of the coal and transport industries also. All for a few miserable coppers economy in producing a cwt. of tinplates.

I ask the House to look with me at South Wales as it is after 14 years of depression. In 1920 we produced coal, steel and tinplates valued at £221,000,000. In 1934 the production of those three industries was valued at £52,500,000. That is a reduction of 75 per cent. In other words, the money value of our labour has been written down to 25 per cent. of what it was 14 years ago. Year by year we have seen this scaling down of the assessment of our services to the British and the world community. We have given generously to Britain in production, but our earnings have gone down. Wages have fallen. The Committee may be surprised to learn that in the coalmining industry to which I belong the total wages paid in 1920 amounted to £66,000,000 and in 1934 the aggregate wages only amounted to £15,000,000, a loss of £50,000,000 a year or £1 million a week in one industry. We are not responsible. The right hon. Gentleman complained of world forces. World forces have struck us. Coal has fallen to less than one-third of its former price. Tinplate has fallen from £61 10s. a ton in 1920 to £17 10s. a ton. Our earnings have been reduced to 25 per cent. of the nominal figures of 1920. But we have kept up our heads and we have maintained decency by a great effort. We are, however, nearing the danger point in this area. We have a public debt of £40,000,000, and houses, streets, reservoirs, schools, hospitals and public works, upon which this debt is secured are threatened with depreciation almost to the point of a complete breakdown. Rates will necessarily be raised on a diminishing rateable value. It is along this road that bankruptcy will come upon these communities as it has overtaken hundreds of industrial concerns and private citizens.

That calamity can be averted by timely action. The responsibility devolves upon the State. Its first duty is to resist deterioration in the localities. It must bring forward a well-considered plan for comprehensive industrial reorganisation on new lines and for fully utilising the facilities and resources of this area. The essentials of industrial success are there—coal and power easily transported, civic amenities and an industrial population which is second to none. Have the Government an answer to the claim of South Wales? Is it to go forth that all the experience, the energy, the civic effort and the community pride of that area is to be sacrificed in order to enable private firms to find a minimum level of cost and a maximum level of profit. Is this Government a National Government? If the answer is "Yes," they are under an obligation to show it in this matter.

6.48 p.m.


I did not propose to speak in this Debate, but I should like to be allowed to add a postscript to the interesting speech of the right hon. Gentleman the Member for Darwen (Sir H. Samuel). The right hon. Gentleman quoted a number of resolutions passed by various bodies, all very much in the tone which he favours as regards international trade. I wondered whether he was going to quote me. I thought perhaps he would spare my blushes and omit me but he did quote me, and that was quite right, because I have shared in these various Debates which have stretched over many years. Indeed, I only came back from one a fortnight ago. We, the organisations of commerce in this country and all over the world, are pretty well agreed on what is wrong and what is necessary in order to put it right. We agree that it is necessary to restore the principles on which debts can be settled between nations. We agree that currencies have to be stabilised in order that trade may continue. One might almost suppose that those statements issued by various bodies, all of which favour reductions of tariffs and quotas and more freedom of trade, were insincere if they did not go the whole distance, and followed the same track as that which the right hon. Gentleman the Member for Darwen has adopted. They are not in the least insincere. Many of us started believing that it was possible to restore the principles of trade without imposing tariffs. We, the British Members of these international gatherings, have gone year after year to our foreign colleagues and explained to them that unless they corrected their principles of trade they would force us off the Gold Standard and off the principle of the free entry of goods into this country. We could not get any of them to believe it. In the result we found that it was bound to happen. That being so, we generally adhere to the views that have been so eloquently expressed and we believe that the way to carry them out is to support His Majesty's Government in what they are doing, and we believe that we see great signs of improvement from the action which they have already taken.

6.50 p.m.


We have heard a moving speech from the hon. Member for Gower (Mr. D. Grenfell) on the proposal to establish at Redbourne certain plant which in our judgment will inevitably mean the closing down of plant in South Wales. The hon. Member's presentation of his case makes it unnecessary for me to speak at great length but there are certain additional points which are relevant to this issue and to which I would direct the attention of the Committee. We in South Wales had come to believe that we had touched rock-bottom in the abyss of our depression—that we could not possibly sink any lower. We have seen our coal industry being bitten into and market after market being lost. We have seen the incoming tide of substitute fuels. We had, more or less, come to regard ourselves as the unhappy victims of an inexorable fate. We felt that here was something inevitable and that we must face it.

It was with considerable consternation, then, that South Wales heard a few days ago that the firm of Richard Thomas & Company proposed to establish at Redbourne a strip mill capable of an output of some 150,000 tons. The suggestion in the speech of Sir William Firth was that this mill would operate by taking over the quota now allocated to that firm's plant in South Wales, unless there was a considerable expansion in the market. It is obvious that the market in tinplates is not expanding. One could understand a departure of this kind if we were back in the old conditions, when Wales had a virtual monopoly in the manufacture of tinplates, when the colonies were expanding, when foreign countries were becoming more industrialised, and when there was an almost limitless demand. One could understand a concern, in conditions of free competition, when we enjoyed a monopoly in the world market, taking its plant to wherever production was most economic. But the conditions have changed entirely as the President of the Board of Trade must know.

We saw, first, the growth of the production of tinplates in many other countries. We saw the industry adapting itself to those changes. Some 12 months ago I spoke on this subject and I then warned the right hon. Gentleman of the possibility of this development. I do not propose to weary the Committee with figures as to production in Germany, France, Italy and other countries. But Italy which, until 1930, did not export a single tinplate and was one of our best customers, has irrupted into our Mediterranean field and taken away a considerable part of our trade in Spain. To-day, we share roughly only 50 per cent. of the world export trade. The international agreement alloted us something like 52 per cent. of the world export trade. But the industry, facing the competition of foreign countries, had adapted itself to the changing conditions. This industry, spread over a wide area and covering parts of three counties, rather than arbitrarily close down plant and render townships derelict adopted a pooling arrangement allocating to each plant its quota. If the plant exceeded the quota it paid so much into the pool. If it was under the quota it took out so much. Indeed it has become a profitable form of investment to buy a mill, to stop production, and to draw out of the pool. But as I say the industry was seeking to adapt itself to the new conditions.

The pressure was becoming greater and greater and last year at the instigation of Sir William Firth himself we had an international agreement allotting to this and the other main exporting European countries, and to America, a certain percentage of world export trade. The effect of the Government's tariff policy has been to make this industry a sheltered industry. The steel industry in this country and the subsidiary processes of tinplate manufacture, and sheet manufacture constitute to-day are a sheltered industry. One can imagine companies, under the pressure of competition, fighting for world markets in the teeth of bitter opposition, resorting to the proposal put forward by Sir William Firth and taking advantage of such economic or natural features as can be found in Lincolnshire or Northampton. But those conditions do not obtain. It cannot be said that the industry is dong badly. Since the operation of the international cartel or agreement the price of tinplates has gone up. It was 16s. 3d. per box in 1934 and it is 18s. 2d. at the moment. As a matter of fact the price is unnecessarily high. There is no active competition. Ottawa has given us a great measure of freedom in the colonies. We had lost our Mediterranean market and our other European markets and it was the Empire which saved the tinplate industry from disaster. I give the Government this credit—that Ottawa has been a big contribution to saving the industry in the last few years.

Now, what is this proposal? It is to establish a productive unit, at Redbourne. It cannot be said that the incapacity of the trade is inadequate to meet the market demands. At the present moment the output is only 55 per cent. of capacity. It cannot be said that we are short of plant or that this is an expanding market. There are none of the external conditions which make a departure of this kind imperative. What is behind it? The human and social background was presented in a most moving way by the hon. Member for Gower. It cannot be said that it is a matter of competitive urgency, that we must have new plant, since you have none of the inducements which would naturally bring about a move of this kind. Then what is behind it? Obviously, I think, Sir William Firth fears the entry into tinplate manufacture of certain concerns which are now manufacturing steel. But does Sir William Firth believe that he will be allowed to enjoy a monopoly of production on the rich ore field of East Anglia? He can move the centre of industrial gravity from South Wales to East Anglia, but he is not going to solve his basic problem, the basic problem of the iron and steel industry. The granting of a tariff was conditional on re-organisation, and tinplate manufacturers have been asking that the agreements made between various branches of the iron and steel industry not to trespass on one another's territory should be made legally binding.

There have been rumours in South Wales that there may be new entrants into tinplate manufacture. I think that Sir William Firth is anticipating events. But is he really helping to solve the problem of the tinplate industry? How can these new mills at Redbourne operate in a market which is not expanding except by taking over the quota now allocated to that firm's plants in South Wales. It means inevitably the closing down of those works. Sir William Firth admits in his speech on Monday last that he adheres to the pooling arrangement. He wants to regard it as something sacrosanct, and he prays that it will continue. How then can his new mills operate at all, without taking over the quota in South Wales. The thing is a mathematical impossibility. It is easy for Sir William Firth, whom I do not know, against whom I bear no ill will—he has shown on previous occasions that he is not insensitive to social obligations; I would say nothing in any way derogatory of him; he is a business man and has the affairs of his company to look after—but it is easy for him to set his accountants to work and to say "If I am allowed to organise at Redbourne the production of 150,000 tons I shall increase profits by £220,000 a year." But Sir William Firth is not obliged to enter on his balance-sheet what is entirely a debit item, the depreciation of the social capital of that area for that is not his affair. We know what that means. The gas works, the municipal services, the trams, the houses, the business premises, the chapels and churches—all these things are affected. We remember Dowlais when Guest, Keen and Nettlefold went. We have seen our Merthyrs. We know something of the bitterness in our hearts because of the consequences of this callousness.

In ultimate results what does this proposal mean? It simply means that if Messrs. Richard Thomas and Company establish themselves in Lincolnshire other concerns will embark on tinplate manufacture. It means for South Wales less consumption of steel and less consumption of coal. It is not merely the closing down of just two or three units. That is not all. This is a canker that will spread. It will make derelict certain areas in South Wales. That is a thing which no Government claiming statesmanship can allow. We thought that we had drunk to the dregs of our cup of bitterness, that the via dolorosa along which for years we have trod had nothing worse to offer. We thought that this industry which had become traditionally associated with South Wales, as cotton with Lancashire, cutlery with Sheffield, and wool textiles with Yorkshire, had become immunised against competition in Great Britain. The proposed removal may be a very good thing for Lincolnshire; it may be a good thing for the shareholders of Messrs. Richard Thomas and Company; but the Government have a duty to these communities which have been under the harrow for so long. I am not going to suggest in detail the lines along which the Government might proceed. But I will say just this: if you are going to allow Messrs. Richard Thomas and Company to do this, you must as a matter of justice also restore to the independent tinplate manufacturers the right to secure from Belgium and other places their cheap steel so that they can compete on equal terms. This would be punitive perhaps, but personally I would like the Government to intervene in far more direct a fashion in the affairs of the Iron and Steel Federation. I believe that this tragedy could be avoided if the agreements reached between the various branches had some sort of legal sanction. There are fears, and they can easily be eliminated. The Government must not allow this tragedy to be enacted. It must act promptly, it must act strongly, and assert beyond a peradventure that the claims of the community are paramount above all else.

7.10 p.m.


I should like to associate myself as strongly as possible with the speeches made by the hon. Members for Carmarthen (Mr. R. T. Evans) and Gower (Mr. D. Grenfell) on this subject of the proposed transfer of tinplate mills. But before doing that I should like to venture some general comments on the speech of the President of the Board of Trade. His remarks were very encouraging as to the past, and, although he viewed the future in terms of restrained optimism, I think he is to be congratulated on what has been achieved so far in rehabilitating our trade in this country. My principal regret is that increased trade and prosperity are not reflected to the same degree in South Wales and Monmouthshire, which seem for the moment to be the Cinderella of the country. He referred to the coal export business, and, while saying that there were excellent salesmen, he added that it was doubtful whether we should retain the business we had or get any new business. That is a pessimistic view and one that I am not prepared to accept. Nor, I think, will the country accept it. In my own constituency I have over 2,000 men at the docks who have been idle pretty well continuously for the past 10 years. Is it suggested that there is no opportunity for them ever to be employed again at the docks? Hydrogenation will not help them. That will be for process workers, near the collieries and not on the docks. I should like to ask the Government to make a very serious effort to deal with the coal export centres in South Wales and Monmouthshire.

In the report of the Special Commissioner no reference whatever is made to the export coal business. That cannot be left. There are ways of dealing with it. The trade agreements that have been made by the Government which provide for the export of coal from this country have dealt with the North European countries, who take coal from the north-east areas. South Wales has been left untouched by those agreements. I would suggest that great efforts should be made in any future trade agreement to prescribe definitely for the South Wales area. I am aware that something has been done, notably in connection with Argentina. The coal that is being displaced by the north-east is Polish coal, which has been forced into our ordinary market so that on balance I think it would be fair to say that we have received no benefit from the trade agreements embracing coal. I would like to press most strongly that any future agreements should provide for coal from South Wales. The question of an export bounty for coal from South Wales is worthy of consideration, because there would be an economic saving to the country. If even a substantial bonus were put on coal for export, it would be cheaper to pay a large bonus, for instance 2s. a ton, than keep a worker and his family idle on a subsistence level.

I want to support my two hon. Friends, and, although I am normally adverse to Government interference in trade and industry, I think that this is a case where they should interfere, for after all it is the Government's policy to encourage new works being established in the special areas. If that is their policy, it must also be their policy to discourage existing works going out of these special areas. I wish to cast no reflection on the management of Richard Thomas and Company, but I think they ought to reflect very carefully, both the executive and the shareholders, before they take such a drastic step in starting on tinplate at Redbourne. There has been an enormous loss of capital of Richard Thomas and Company in the past in their development at Redbourne, and those losses have been borne by the tinplate mills in South Wales. Anything that is likely to transfer and abandon the goose that laid the golden eggs in South Wales ought to be carefully considered by the company. I think that the economic possibilities of the future may be the deciding factor to any such transfer. I have no information that there is any dire necessity for the development at Red-bourne instead of South Wales, and they have had every assistance and encouragement in South Wales. The hon. Member for Gower dealt with the tradition of the tinplate industry. If this firm goes to Redbourne it must take leading hands from South Wales, but that will not deal with the nine out of every 10 people who will be affected by the move.

If there are reasons, which were hinted at by my hon. Friend the Member for Carmarthen, other than the economic one, Richard Thomas and Company should consider that they owe the country a very great deal. Their prosperity and the enormous appreciation in their share values during the past three years, which I understand has approximated £7,000,000, is due almost entirely to the tariff policy of the Government. I will not say that that policy can be reversed, because this country does not want to cut off its nose to spite its face, but if it is possible for the Government to help a company to that extent, it is possible for the Government to bring pressure to bear on them so that they will consider seriously before taking such a drastic step. If this issue is being raised as a form of intimidation of somebody or other, it is intolerable that not only the shareholders of that company, but the country and the workpeople, should be held to ransom by one firm or any group of individuals for ends other than those that are in the interests of the country as a whole. I urgently press the Government to bring every pressure they can to bear on this situation before it develops in directions which will not be satisfactory to anybody in the end. I cannot speak more strongly than I have done, for I think that the least said about the matter at this stage the better, but I shall look forward to hearing the Minister's view on the subject.

7.20 p.m.

Lieut.-Colonel J. COLVILLE

It might be for the convenience of the Committee if I intervened at this point to deal with the specific questions which were raised in connection with the trade agreements. My hon. Friend the Parliamentary Secretary, who will close the Debate, will deal with the general topics which have been raised. A few points were mentioned by the right hon. Gentleman the Member for Darwen (Sir H. Samuel) and it might be convenient if I dealt with them now. He asked for figures as well as pecentages to demonstrate the increase of the export trade to the countries with which we have made agreements. I have secured the latest figures, which show that in the first quarter of this year exports to the foreign countries with which commercial agreements were in force were greater by £4,498,000, or approximately 20 per cent., than in the first quarter of 1933, which is the period before the agreements were negotiated. The growth of the export trade with all other foreign countries during the same period was only £2,103,000, or 7½ per cent. I think the right hon. Gentleman will agree that if this increase continues throughout the year—and I have no reason to suppose that there will be any falling off—it will be of valuable assistance to our export trade with the group of foreign countries with which we have negotiated agreements. With regard to the Empire countries with which the Ottawa Agreements were negotiated, the question was asked during my right hon. Friend's speech whether the figures for the individual Dominions could be given. The figures demonstrate that, comparing 1932 with 1934, in the first year Canada bought £16,400,000, and in the second year £19,700,000; Australia £20,000,000 and £26,300,000; New Zealand £10,400,000 and £11,400,000; South Africa £18,100,000 and £30,200,000—a very remarkable rise; Southern Rhodesia £1,200,000 and £1,700,000; India £34,100,000 and £36,700,000. The total of these countries is £100,800,000 in 1932 and £126,800,000 in 1934—a result which would have been quite impossible without the Ottawa Agreements.


Why impossible?

Lieut.-Colonel COLVILLE

Because the Ottawa Agreements provided for a lowering of duties and obstacles on United Kingdom exports. It cannot be denied that the result of the agreements has been to foster inter-Imperial trade. I could also give the right hon. Gentleman the figures of imports from Empire countries during that period, but I think that I have given him enough to demonstrate that the Ottawa Agreements are a considerable assistance to this country. The right hon. Gentleman also said that in our agreements with foreign countries all we had succeeded in doing was to negotiate with foreign countries on a high tariff level, which had probably been raised in anticipation of the negotiations, and that we had only succeeded in fixing those tariffs at a high level. I want to show the right hon. Gentleman that that is by no means the case.


I did not quite say that.

Lieut.-Colonel COLVILLE

Let us see what has happened in typical cases. In the case of Denmark, taking as a basis our 1931 trade, we fixed free entry for £3,000,000 worth of trade. We conventionalised duties at a low level for a further £3,300,000, and reduced duties for something under £500,000. The right hon. Gentleman will agree that that definitely improves the situation so far as the United Kingdom trade with that country is concerned. In the case of Sweden, on the basis of our 1931 trade, we have secured concessions—conventionalisations and reductions—for no less than £5,400,000 worth of trade out of a total trade of £8,000,000. We secured in the case of the Argentine, out of a total trade of £19,000,000, a conventionalised free entry of £5,500,000, conventionalised duties to the extent of £2,600,000, and reduced duties to the extent of £5,900,000. In face of these facts I do not see how the right hon. Gentleman can assert that this policy of negotiating with countries in order to reduce tariffs has been a failure. I will give a further example of the case of Norway. Out of a total trade of £7,800,000 we have fixed free entry for £2,600,000, conventionalised duties on £500,000, and secured a reduction on £1,000,000. These are typical examples of what has taken place.


I did not say that the agreements were a failure. On the contrary, I said that they had achieved benefits for certain industries in particular cases. What I have said also is that the whole of them put together are comparatively trivial compared with the needs of the case.

Lieut.-Colonel COLVILLE

The right hon. Gentleman also said that the making of agreements one at a time was futile, and the trend of his whole speech was that our policy was futile. The fact that we have increased our trade with Empire countries by £26,000,000 may strike him as futile, but I am sure that it will not strike the Committee as futile.


What I protest against is attributing the whole of that increase to the Ottawa Agreement. The various Dominions, having recovered a certain amount of their previous prosperity, are able to buy more. Why does South Africa show such a large increase? It is simply because her prosperity has been restored largely owing to the gold industry.

Lieut.-Colonel COLVILLE

When we reached the Ottawa Agreements it gave the Dominions the opportunity of recovering, and without the agreements we should not have done anything like the trade with them. The right hon. Gentleman disregards the fact that the basis of the Ottawa Agreements provided the opportunity for the Empire to recover from the depression, and the Empire countries are now recovering to a considerable extent because of the basis of security which they got out of the agreements. Of course, the question of gold enters into the case of South Africa, but in denying the effect of our trade agreement policy, the right hon. Gentleman is shutting his eyes to the facts of the case. Let me give an example of how far wrong he is in the case of Poland. He suggested that our efforts to reduce duties generally succeeded only in nibbling a little off a high tariff which had been put on especially for the negotiations. In the case of Poland I find it is estimated, on the basis of the figures for 1930, that from 40 to 50 per cent. by value of our trade with Poland was benefited by duties lower than those which applied in 1930. The right hon. Gentleman talked about 1929. I will take him back to 1929. In the case of Poland our agreement brought us down as regards nearly 50 per cent. of our trade to duties less than those in operation in 1930. Could we have done that by any other means than the tariff? I think those figures have completely destroyed his argument on that basis.

Then the right hon. Gentleman suggested that instead of taking countries one at a time, we should take them in groups. He spoke of the Ouchy Group. I have had some personal experience of these negotiations, and I have found it extremely difficult to get any foreign country to reduce one single tariff item unless as a result of bargaining you can offer it some reciprocal advantage or make it feel that unless it gives this assistance its trade will be in danger. I wonder what leverage the right hon. Gentleman would use to get his group to reduce duties. We must remember that trade with the United Kingdom is not confined to one small group of nations, but is world-wide. Our front is extended all over the world, and any group that is to be of advantage to us must be a very big group. A group confined to Belgium and Holland, the only two positive recruits for the right hon. Gentleman's policy, would be of very little use to us, for this reason, that a group which gives reciprocal advantages and preferential duties within the group has, as its corollary, an area outside where differential duties on a higher scale are experienced.

Does the right hon. Gentleman not see that for Great Britain to be part of any group which necessitated placing differential duties against countries not within that group would be a dangerous policy for us in view of the wide extent of our export trade? There are two groups which have some resemblance to what the right hon. Gentleman has in mind, the British Empire group, in which we do give a preferential rate—and incidentally the right hon. Gentleman will have nothing to do with that policy—and the group of those countries, mostly in the sterling area, with which we have negotiated trade agreements and in which we have, as I can demonstrate further, if the right hon. Gentleman desires it, succeeded in checking the rise in tariffs and in many cases lowering the tariffs. And not only this, under the most-favoured-nation clause we have already spread that benefit outside. But the right hon. Gentleman would not have us do that. He would have us check it and limit it to the group. That is an arguable point, but the fact remains that so far as Great Britain, with her wide field of trade, is concerned, a policy of narrowing it into small groups, making friends with two or three countries and falling out with 20 or 30, does not seem to be one which should commend itself to the Government. I suggest that the attack delieverd by the right hon. Gentleman, which has resolved itself into an Amendment to reduce my right hon. Friend's salary, has failed even at this stage.

7.33 p.m.


I am sure the Committee, and particularly the supporters of the Government, welcome the interesting, able and convincing remarks which fell from the lips of the hon. Gentleman. We have sat here and listened to many speeches from the right hon. Member for Darwen (Sir H. Samuel). I always admire the power and persuasion of his arguments—I am one of his greatest admirers in that respect—and feel when he has sat down that he must be right, because his arguments sound so good, and I have often wished they could be met by a statement from the Government side such as that to which we have just listened. The Secretary for the Overseas Trade Department speaks with first-hand knowledge and extensive knowledge, and I feel that practical men will respond to his view and say that in the special difficulties of the time the line which the Government are following is, after all, the best. We should all like to see freedom of trade throughout the world, but we have gained the impression this afternoon that that cannot be had. I wish to raise a matter which is related somewhat to one which interested the House a few minutes ago. I am going to make a plea to the Board of Trade—in other circumstances it would have been a complaint, but it would be ungracious and ungenerous of me to make a complaint, coming as I do from a county to which the trade agreements have brought the greatest possible advantage. We have heard this afternoon that they have not done all that was expected of them, but let me give this testimony, that in the East of Scotland they have brought a higher measure of prosperity to the mining industry than has been experienced since the War, and the whole of the East of Scotland will remain under an everlasting debt of gratitude to the President of the Board of Trade and the previous Secretary for Mines for the work they have done.

The right hon. Gentleman, in his very welcome statement at the beginning of the Debate, indicated an advance upon a broad front, but that advance has not been all along the line. There have been sectors where the attack seems to have lingered, where there has been even a reverse, and where the position once held has been abandoned. I am not speaking of the distressed areas. There are areas in the country, and Fife is one in particular, where there have been setbacks, and in regard to them I would ask for the attention and sympathy of my right hon. Friend. I can best explain my plea by giving an example. In the county of Fife we have had for generations a series of little factories or mills with villages growing up around them and entirely dependent upon them. In those places there is a vigorous population and highly skilled labour. Those mills not only gave employment to many workers but supported whole villages and districts. In the last two or three years many of these small, vigorous, independent mills have been closed down, with the loss often of highly skilled technique and labour. One instance which has been brought to my notice is tragic. In a village called Springfield there was a jute mill employing 250 persons. Suddenly, without any real notice, the doors of that mill were closed about two months ago, all those people were thrown idle and the village and the district round about were left without any kind of employment. An excellent factory building was left there, with a fine floor space, an excellent water supply and first class transport facilities.

I appealed to the Board of Trade to ask whether there was not some enterprise that would like to come there. I wrote to the Parliamentary Secretary to the Board of Trade to ask: "Can you help me to introduce to this distressed area a new industry, because we have great advantages to offer?" I thought that was something the Board of Trade would have been glad and able to do. I received a very courteous reply from the Parliamentary Secretary, but I was amazed to discover two things from his letter. First, he had no knowledge of the closing of this mill, and no machinery for getting that knowledge. Had I not told him of it, probably he would not have heard anything about it for months. Secondly, there was no machinery at the Board of Trade for introducing a new industry to such an area. He suggested that I should approach the Scottish National Development Council, which I had already done, and also approach the London and North Eastern Railway Company, which has some kind of office for introducing potential customers. I applied to the railway company, and had a very courteous reply, but they could do nothing. Apparently the department of state which deals with the trade of the country has no means of introducing any new industry to any place suitable for that industry. When I suggested to the Parliamentary Secretary that surely this was a serious shortcoming he was inclined to pooh-pooh the idea; he thought it was impossible, that it was quite outside the scope of the Board of Trade. I was somewhat disheartened, because if the belief in private enterprise and capitalism was to be carried to those lengths I began to feel sympathy with hon. Members of the Opposition. But I found some encouragement this morning. Another Scotsman, much more eminent than I am, with much greater experience as an industrialist, and with first-hand knowledge of these matters, Mr. Malcolm Stewart, makes this important recommendation in his report: The Government might, with advantage, assist industrialists in coming to a decision with regard to the location of industry, and if it were to set up a central bureau of information to which they could refer for advice and technical data relating to potential industrial districts not only in the special areas but elsewhere"— I have put the case of the factory with which I am acquainted, but the same observations must apply to many other places with excellent factories. In my opinion the Board of Trade should have some machinery for introducing potential industries to these excellent sites. I was amazed and disappointed that no such machinery exists at the Board of Trade.


Will the hon. Gentleman tell me whether the Scottish National Development Council could not do more?


I did apply to that Council, and I have no doubt they could do more, but despite anything they can do I feel that the Board of Trade might have some kind of bureau to which, if necessary, foreign employers could apply. I think the artificial silk trade might be introduced in the place to which I have referred in Fife, but many artificial silk firms are foreign firms and they do not naturally look for the Scottish National Development Council—they have not heard of it—but they do turn to the Board of Trade. Some bureau of information might be set up at the Board of Trade, so that if in any place there exist conditions favourable to industry the promoters of any enterprise can be made aware of them.

7.44 p.m.


I sometimes think that on these Votes one is most likely to hear speeches from Members whose constituencies are experiencing a difficult time, and therefore I was very glad to listen to a speech from the hon. Member for East Fife (Mr. H. Stewart) paying a tribute to the work which the Government have done in the East of Scotland, and as a fellow Fifer I entirely agree with him. Representing a constituency which has benefited very much from the trade policy of the Government, I want to pay my tribute to the admirable and lucid speech which we had at the beginning of the Debate from the President of the Board of Trade. While my constituency might be criticised as one which has benefited to some extent by the moving of industry southwards towards the Metropolis, it has had examples also of foreign firms coming there and starting to manufacture instead of manufacturing abroad, as they have done before. If any testimony were required as to the success of the Government's trade policy, it could best be got by motoring down the Great West Road and seeing the large number of new factories which are arising there.

One sympathises very much with the complaints which have been made by hon. Members from South Wales about the difficult local conditions which face them at the present time. As one who, in his private capacity, is concerned in industry in an area which has gone through very difficult times, namely, the central part of Scotland, I can appreciate readily their plea. I endorse all that was said by my hon. Friend the Member for East Fife about the benefits of the Government's policy of trade agreements, particularly as affecting the East of Scotland, which I know very well. The whole of trade there has benefited to an immense degree as a result of this policy. A very great improvement is taking place also in the iron and steel trade in that part of Scotland.

I would comment upon one of the principal speeches which we have had today, namely, that of the right hon. Gentleman the Member for Darwen (Sir H. Samuel), who moved the reduction in the Vote, but I am afraid that the speech of my hon. and gallant Friend the Secretary to the Department of Overseas Trade has proved so effective that the Liberal benches, on a Liberal Supply Day, seem at this moment a little bare. I listened to the speech of the right hon. Gentleman with the greatest interest. He twitted the Government when he said that the motto of the Chancellor of the Exchequer seemed to be that everybody was happy. It is not unfair to say that everybody is considerably happier in industry than they were three years ago when the Government came into office. The right hon. Gentleman gave very little credit, if any, to the Government, for the improvement which has taken place in the country. He read out a long list of countries which, he claimed, had increased their export trade as we had done. It was very remarkable that practically all those countries belonged to what is described as the sterling convoy. And he might at least have given the Government some credit as leader of that group.

The right hon. Gentleman complained quite rightly that high taxation is one of the factors that militate against a revival of trade in this country. In mitigation of that taxation we receive a very substantial number of millions of pounds per annum from the Import Duties. I agreed with his plea that some approach should be made to other countries, particularly the United States, in regard to stabilisation of currency. Many people in industry, while appreciating the difficulty of making such approaches, would be glad of anything that could be done to make the future course of currency more certain. The right hon. Gentleman told us at the end of his speech what his schemes were for improving the employment condition of this country, and he put at the head of them a national development scheme. He criticised the trade agreements as being of little use because they were mostly of a unilateral nature. Anyone who examines the Scandinavian treaties in detail will admit that there is a large measure of resemblance amongst them, and that they may to a large extent be dealt with as one group. My hon. Friend the Secretary to the Department of Overseas Trade has disposed of the speech of the right hon. Gentleman very effectively. One thing which I had hoped for from the right hon. Gentleman, as the leader of an Opposition party, was that he would tell us—and he did not—whether, if by some miracle he were returned to power, his party would repeal those Import Duties which came in for a measure of criticism. As one engaged in industry and representing a constituency that is to some extent an industrial one, I would say how much we appreciate the work which the Government have done in restoring industry. We hope that the policy of the Board of Trade will continue on lines similar to those upon which it has operated so successfully during the last three years.

7.52 p.m.


I was very interested in the speech of my right hon. Friend the Member for Darwen (Sir H. Samuel) who gave all sorts of reasons why trade had improved in this country in the past three years. He referred to our going off gold, to cheaper money, and to the enterprise of our industrialists, but he overlooked the essential fact which led to that exercise of enterprise on the part of our industrialists. The protected market which the industrialists have had in this country during the past three years, and which has not only enabled them to cater for our home market to a greater extent that ever before, but has assisted them, by lowering the costs of production, to win a greater measure of trade from the world. With regard to tariffs, the right hon. Gentleman has apparently learned nothing and forgotten nothing. Those of us who are in industry have watched repeatedly the amazing amount of success that has been won by our exporters in the foreign markets of the world in the past few years in face of almost insuperable difficulties.

The right hon. Gentleman went on to refer to the possibility of getting the nations together on a free trade basis to cut down their quotas and abolish their licences and their restrictions. I wonder what he would do, say in Rumania or in Greece, or if he were trading in certain of the Balkan States. The President of the Board of Trade knows very well the difficulties of industrialists in the case of trade with Rumania. Our industrialists could export millions of pounds worth of goods more than they do, but what is the use of exporting if you are not likely to be paid for the goods. The great difficulty which is facing our industrialists is the refusal of the provision of exchange to meet the cost of goods. I noticed the other day that a conference was held by various chambers of commerce in the North of England for the purpose of making representations to the Board of Trade on the question of financial difficulties, and of debts outstanding in Rumania. The figures stated that the amount outstanding was £4,000,000, but I believe that to be greatly exaggerated. A few months before Rumania made her first payment, under the Anglo-Rumanian Agreement, the figure was, I believe, about £2,000,000. Under the agreement, Rumania, after paying a lump sum of £400,000, instead of paying her £60,000 a month, was a month late, I believe, on the first payment, and only paid £50,000. Later, she paid a second £50,000, and apparently has now defaulted. The £400,000 has been disbursed in payments to creditors in respect of small debts of less than £20.

The traders in this country have many millions of lei standing in the banks of Rumania, representing accounts which have been paid by the Rumanian debtors but which the Rumanian Government will not allow to be transferred from that country. They will not provide the sterling exchange. It is said that in the last five or six years over £9,000,000 worth of goods have left Rumania, have been paid for and the proceeds have never gone back to Rumania, but have mostly been retained in this country. I suppose the reason for that would be that the people who are the owners of the £9,000,000 prefer the security of this country to the insecurity of Rumania. Large amounts of money in sterling, being provided at the present time in payment for Rumanian imports into this country, are being held in this country at the disposal of the Germans, and, instead of our obtaining orders from Rumania, Germans are selling goods to Rumania in large quantities. Hon. Members should note that the Germans are not prepared to take lei, but they will take the sterling which is deposited in London and is provided against the Rumanian imports into this country. The money is being taken by the Germans to pay for the goods which the Germans are selling to Rumania.

I appeal to the President of the Board of Trade. I am satisfied that he regards this matter seriously, and that he will take all reasonable steps to deal with this difficult situation. In my part of the country, the West Riding of Yorkshire, many manufacturers have large amounts of money outstanding in Rumania, and I hope, in view of the fact that there is a balance of trade in favour of Rumania with this country, that the President of the Board of Trade will not hesitate to use the most extreme pressure to compel those people to meet their obligations to the people of this country. In more than one quarter it has been suggested that the Government should consider placing an embargo upon the exportation of sterling to Rumania, but that would be a very extreme measure. If that is not done, I hope the President of the Board of Trade will bear in mind that the very important fact that the moneys have been outstanding for two and three-quarter years in Rumania, is having an effect upon the resources of the manufacturers of the West Riding of Yorkshire. I hope the President of the Board of Trade will not mind my pointing out difficulties which our industrialists have to face in various parts of the world. It does not mean that there is a lack of approval of the efforts of the Government. I cannot conceive of any Department having more officials than work under the President of the Board of Trade; they are undoubtedly trying their best to help the business interests of this country. If I have made a few critical remarks, they have not been put forward in a spirit of carping criticism.

My next point is in regard to the subsidisation of industry. Speaking, I believe, on 20th May, the President of the Board of Trade made a remark to the effect that he had not heard of this subsidisation. Whether he really meant that or whether he meant that he had not had any complaints from any organisation on this matter, I do not know, but the fact remains that the subsidisation of industry has entirely obliterated the benefits of protection in many industries in this country. I do not know how his Department can meet this, but if there is any way of doing so I know his Department will adopt it. A few weeks ago I was in a certain factory in Germany, and I was informed that the coal used there was being subsidised to the extent of 50 per cent. in the case of goods exported from the country, and the manufacturer whenever he received 1,000 marks from a firm in England for goods exported to this country was credited in a German bank with 1,250 marks, a subsidy of 25 per cent. That is going on, too, in Norway and Sweden, and also in many South American countries. I do not see how the Government can do anything, but I hope they will take into careful consideration the effect of German subsidisation of industry on our position in this country.

There is, in my own industry, a certain section which manufactures leather for making into boot and shoe uppers. This industry had a duty granted to it three years ago of 15 per cent. They have made no progress at all in this country. It is not because these men are not progressive, but they cannot live against the subsidised exports of Germany. Probably 90 per cent. of these goods are coming to-day from Germany, and in all probability 19 out of every 20 hon. Members are wearing boots and shoes the uppers of which are made out of German leather. This 15 per cent. is more than wiped out by the effect of the subsidy on exports from Germany, and I hope the President of the Board of Trade will look into this particular matter.

Then I should like to refer to the Ottawa Agreements. I am willing to confess that, in the main, the Ottawa Agreements have worked to the advantage of the Empire, but there are certain aspects which call for very strong criticism. The other day in this House the Secretary of State for the Dominions mentioned that in the negotiations that would take place some time in the future to reconsider these agreements there would be taken into consideration Article 10 of the Ottawa Agreement, which deals with the question of granting to our exports to the various Dominions a fair competitive opportunity in their markets. As the Secretary of the Overseas Trade Department pointed out, we have here an almost entirely free market for goods which come from the various Dominions, and still the Dominions on their side have not carried out their part of the contract and given us a fair competitive chance in their market.

The President of the Board of Trade, speaking this afternoon, said that the Dominions have a free market here which they do not give to us. Again, in one section of my own industry, in 1931, Canada increased duties on certain leathers from 69 per cent. to 123 per cent. Later on the Ottawa Agreement came along, and these duties have never been reduced. My hon. Friend below me says, "Hear, hear." I am pleased to hear that, because I do not agree with that method of carrying out pledges. It is not the fault of the Agreement. The fault lies in the fact that the Canadians are not interpreting the true spirit and letter of the Ottawa Agreement. I remember that a certain kind of leather was imported into this country in very large quantities from the United States. A duty of 10 per cent. was placed on this leather, and later increased to 15 per cent., not particularly to encourage the manufacture in this country, because the leather has never been made to any extent here, but to encourage the Canadians to make large quantities of this patent leather. The result of the imposition of the 15 per cent. duty has been a considerable increase in the exports of that leather to this country. My complaint is that, while we are granting these benefits to the Dominions, we have just as much right to expect that they will interpret the spirit of the Ottawa Agreement from their side.

Take the case of India. Carpets come to this country free, but they still maintain a duty on carpets going into India. Take, again, my own industry of leather. India has a free market here and the imports into this country of leathers for boot and shoe uppers have increased from 400,000 square feet in 1932 to over 4,000,000 square feet in 1934. That is entirely due to the free market they have here, assisted also, I suppose, by their low cost of production. In the meantime the duty on similar leathers going into India from this country remains at 20 per cent. and has never been altered since the Ottawa Agreement. I hope the President of the Board of Trade will bear these matters in mind. There is only one more point I should like to mention, and that is in connection with the United States. We have no trade agreement with the United States. We imported from them in 1933 £76,000,000 worth of goods and in 1934 £82,000,000 worth. We exported to the United States in 1933 £19,000,000 worth of goods and in 1934 £17,500,000 worth. In 1934, out of a total export of £400,000,000 worth of goods from the United States of America we took 20 per cent. Of her total imports of £300,000,000 worth, she takes £17,500,000 from us, which is only five per cent.

It seems to me that there is a fertile ground to be explored to bring about some trade agreement, because the adverse balance of trade is so heavy and so striking. In 1930 the United States increased her duties all round, and, so far as I am aware, with only few exceptions, she has never reduced them since that time, and even though she has a so-called Democratic or free trade Government at the present time, they show not the slightest intention of lowering the tariffs on imports into the United States. There is no reason whatever why we should not fix up a trade agreement with the United States and be determined, in view of the enormous balance of trade in her favour, that we will see to it that we have a better and a far greater share of her trade in the future than we have had in the past. Despite my few complaints, which I hope will fall on careful ears, I may say, in conclusion, that, knowing a great deal of the work of the Department and of the Overseas Trade Department, I want once more to pay my tribute to their excellent work, which is very greatly appreciated by the industrial communities of this country and particularly those who are interested in the exportation of goods to all parts of the earth.

8.11 p.m.


My only excuse for intervening in this Debate is that it is one of the few opportunities ordinary Members get of making a few consecutive remarks to the President of the Board of Trade. I do not rise to support the reduction of salary as expressed by the right hon. Gentleman the Member for Darwen (Sir H. Samuel), although I would say to the Government that the outlook expressed by him would be well worth watching, because it is an outlook that is bound to come true when economics start to work again. The trouble to-day is that economics are not being allowed to work. The country will be genuinely pleased to hear the remarks of the President of the Board of Trade and to be shown the figures proving the improvement in trade. It is encouraging, and the Board of Trade and also the industrialists and workers who have come through a difficult period and are still holding their own in the world's markets deserve to be congratulated.

The outlook is hopeful for those workers in the magic circle of employment. The 2,000,000, however, who are outside cannot look for much hope in the remarks of the President of the Board of Trade. The trade agreements may improve our trade a little, but only a little, and that may be taken up by the improvements in machinery, etc. My reasons for that pessimism are the well known reasons. With the industrial growth of the rest of the world, Great Britain is not going to get the same proportion of the markets of the world as in the past. There is the ability of other nations to manufacture goods themselves and the nationalistic feeling in different countries. Even although this country manages to produce its articles cheaper, I doubt if other nations in the near future will allow our goods in. We are going to have tariffs and quotas—for some time—and for those reasons the outlook for these 2,000,000 unemployed men is a very difficult one and requires the closest consideration.

My reason for making these remarks is to draw attention to one point. I think on the whole that there has not been enough emphasis placed in the Government's statements on the need for new trades and new inventions. We spend a great deal of time on the question of holding up and reviving old industries. If Britain is to hold her place and give full employment to her people in the future at the present level of population it is imperative that new trades and new inventions must be taken up to gain for us the lead again. I think the Government want to stress that point more especially in the country. That brings me to ask the hon. Gentleman who is to reply if he can assure the Committee that the Board of Trade are co-operating with the Lord President of the Council who I believe is responsible for encouragement of research work and expenditure in that connection. Any money spent on research work must be money well spent.

One other point arises from that, and that is that a great deal of industrial research work is done in these days which never reaches the small man. It may be said that it is his own fault, but I think that the Board of Trade, or whoever is responsible for certain branches of research work, might do something to make sure that the results of that research are disseminated as far as possible among the traders and industrialists of this country. With regard to some observations made by the last speaker, the President of the Board of Trade stated to-day that the Government could not nurse industrialists to the extent of making sure that they got payment for everything, and that is true. Everyone who tries to sell goods abroad tries to ensure that payment will be made for them; but I would point out to the Board of Trade that it is not a question of British trader against foreign trader—it is a question of British trader against a foreign Government; and, when a foreign Government chooses to take up a hostile attitude, the trader by himself is completely helpless, no matter what he stipulates.

In view of the position in many countries to-day, the Board of Trade must be inundated with complaints from unfortunate traders who have money lying in this country or in that, and are hoping to get it out. How ridiculous the position sometimes is was shown by a case the other day, where a trader who was owed £700 from Germany was told, in answer to an application by his agent, that he was going to get a remittance on account, and, when that remittance on Account was sent to him, it amounted to £10 8s. 6d. If the Government and the Board of Trade can do anything to ensure that more help will be given to the British trader in regard to getting payment, so that he may be enabled to take orders, it will be of great service, bearing in mind the fact that a British trader against a foreign Government can do very little.

Another matter on which I have ventured to ask questions of the Government is that, while tariffs may be necessary at the present time for a short priod, strangely enough what is going to be good for this country over a short period will probably be bad for it when trade improves, and excessive tariffs may be a definite danger when world trade begins to expand. I think that that will be admitted by the Govenment, and, if it be so, it means that, if trade improves during the next few years, there is going to be considerable bargaining between the various Governments of the world, which in turn means that certain trades in this country are going to be bargained with. To-day we find certain trades putting in machinery and incurring expenditure on new plant in the belief, even although it may be a false belief, that the present level of tariffs will last indefinitely. I think that the Government and the Board of Trade should go out of their way to take care, if they see any undue signs of that sort of thing among traders, to throw out hints to those trades that the possibility of being bargained with is there. Somebody is going to be bargained with, somebody is going to be let down, and, if a hint of that kind can be thrown out, it may save great waste of expenditure.

To turn to the shipping subsidy question, about which the President spoke, it was, I think, made conditional, or at any rate almost conditional, when the subsidy was granted, that efforts should be made by this country to reorganise our own industry, which has been done with considerable success; and also that efforts should be made to get together the other countries and try to adjust the supplies of surplus tonnage. I think that this is an appropriate time to point out to the Government that there is a feeling in certain quarters that British shipping interests are not hurrying forward their plans as quickly as they might. I know that plans are being dis cussed,but there is a great deal of difference of opinion with regard to them. I do not desire to criticise my own industry, but I would point out that foreign nations were invited by Britain to set about producing schemes for rationalisation, and I want the Board of Trade to keep a careful watch so that Britain cannot be accused of having invited others and being herself the last to produce any plans. I think that this matter is of sufficient importance to warrant the Board of Trade taking measures to make sure that British schemes are put forward as fast as can be reasonably expected.

I think that the vast majority of shipowners will welcome the President's remarks to-day showing that he is taking action at the earliest possible moment to ensure the safety of life at sea. I think that that must be the feeling of everyone in this country, and I trust that the various reforms will be hurried up and introduced before the winter months arrive. With regard to the question of manning, I should like to say in passing that all owners and men wish for something definite, which they can understand, and which cannot be interpreted by one person in one way and by another person in another way. I am afraid that that has been partly the trouble up to the present time.

One question to which I think it is worth while to draw the attention of the Board of Trade is the question of accommodation in British ships. One cannot say much about old ships, for some of them go back to last century. As regards new ships however—I am speaking of the tramp section—while in a great many of them the accommodation is first-class, there is a tendency to overlook the importance of this question. That may be partly the owners' fault and partly the fault of the builders, but, when so much is being done in this country to improve housing accommodation for people who live ashore, I do not think it would be taken amiss by the industry as a whole if the Board of Trade tightened up some of the recommendations regarding the accommodation of new tonnage.


Is my hon. Friend referring to accommodation for crews?


Yes, to accommodation for crews. I understand that in the case of officers the question does not arise, as the accommodation for officers on the whole is good. Progress in this direction would be a good thing for the industry itself in the long run, because the time will probably come within the next five or 10 years when ships now going into the water will be required to be put right as regards accommodation, and it would be a wise policy on the part of the Board of Trade to see that that is done now.

The last point that I wish to emphasise is that the Government might well listen to the plea of the hon. Member for Gower (Mr. D. Grenfell) and of the hon. Member for Carmarthen (Mr. R. T. Evans) regarding the question of industrial plant in South Wales. During the last Session we have listened to a mass of interesting statements and carefully thought out speeches with regard to the future of industry and with regard to planning. The specific case to which reference has been made to-day might, it seems to me, be a dividing point for the policy of the present Government. I do not know whether they are going to do anything or not, but obviously you cannot take one industry and say that this or that shall be done in connection with it; it is necessary to deal with the whole question. You cannot penalise one industry, but must apply the same principle to every industry. If capitalism is to survive, and if private profit is to survive, this case in South Wales may be the dividing point as regards the treatment of this matter. An ordinary industrialist, although he is allowed to make private profit, cannot be allowed to disregard the consequences of moving vast sums of money about the country irrespective of what happens to the people and the districts affected. For that reason I think it would be well that the Government should consider this matter carefully and give a closely reasoned reply upon it at some time, because the principle is one which, let me assure them, is causing the greatest concern to all who call themselves Liberals.

8.24 p.m.


I should like to congratulate my right hon. Friend the President of the Board of Trade more emphatically than I have heard anyone do during the last couple of hours. I think that this country owes the Board of Trade a great debt of gratitude for two reasons—not only because it has introduced this radical alteration in our fiscal system, but because it has succeeded in doing so so skilfully as to make it almost certain that no radical change or re-alteration back again will have to take place within the purview of any practical politics as far as I can see. The hon. Member who spoke last was rather of the opinion that perhaps tariffs were only here for a short interval. As far as I can see, owing to their skilful introduction, without any setback, and owing to the state of world trade, it is going to be a very considerable interval; indeed I do not think they will be removed within the time of any of us here.

I associate myself also with the appeals that have been made to the Government to encourage new industries in any way that they can, but I wish to make a special appeal on the subject of some of these currency difficulties with which so many of our oldest and most efficient industries are wrestling. In the East of Scotland, certainly in the Lowlands, we are grateful to the Government not only for their protective policy but for their trade agreements, but there is an exception, the blame for which cannot lie at the Government's door, but on which we would press for action to be taken. The tweed mills in the Lowlands, and I believe in the Highlands, too, have sold very large quantities of cloth in Europe, and the currency position to-day has injured their trade very seriously. Whatever people may or may not think of tariffs, most of these tweed merchants were Free Traders in the old days, but I think no one would deny that they are now among the strongest advocates a tariffs in the country. I have seen many of these people and they say to me, "We do not mind how high a foreign tariff is put on. This article is so good and has so little fear of competition from any quarter that we are able to surmount any tariff, but we hope the Government will do all they can to discourage foreign quotas and at the same time help us with the currency difficulties."

I wish to touch on the question of Italy, because it seems to me a rather more simple case to deal with than that of other foreign countries. Italians who sell goods in this country offer a special discount or bonus if the British importer will pay by sterling cheque direct to Italy. On the other hand, the Italian buyer is compelled by his Government to make payments through the Banca d'Italia and, when the British exporter wishes to get his money, the Banca d'Italia, I believe with the best intentions in the world, raises constant difficulties. Indeed, if the amounts are at all considerable, it is practically impossible to get more than a very small instalment and at the same time we have large numbers of sterling cheques being posted direct by individuals in this country to individuals in Italy owing to the fact that this substantial discount is allowed. I know that the Government have issued an appeal of some sort to importers in this country—and many of these importers are themselves Italians—but the appeals are being disregarded, and sterling is being sent out direct, and the Banca d'Italia is continually saying, "We cannot make payment owing to there being no sterling." Will my hon. Friend seriously consider the advisability of issuing an order on this subject, not urging but compelling payments of lire to be made through some central organisation. If he can see his way to do anything of that kind, he will have gone far to solve the difficulties of some of the most efficient and oldest industries along Tweedside. If he could couple that with an assurance that the Government's policy will be rather that of tariffs than that of quotas, I imagine that he will have the united support of the whole of the South-East of Scotland. I should like to thank the Government very much for the statement of policy that they have outlined to-day.

8.32 p.m.


For months, even years, we have all attempted to impress upon the Government the necessity for the Board of Trade to inspire, either by word or deed, all industrialists to do whatever they can by way of improving plant, increasing efficiency, cutting down overhead costs and everything else connected with industry in order to bring more trade to the country. None have been more forcible in their arguments along these lines than members of the Liberal party. When we come to this great transfer from South Wales to Lincolnshire, it is suggested that there is something behind it more than a mere industrial transfer. The hon. Member for Carmarthen (Mr. R. T. Evans) said that in his opinion it was only the beginning of a movement by which the whole of the steel industry would ultimately become a monopoly in one part of the British Islands. If the business of the tinplate or any other industry is to maintain its industrial strength and to increase the demand for its commodities both here and in foreign markets, it is obvious that it must do everything it can to bring its efficiency to the highest possible level.

Those of us who are not inclined to agree with the arguments put forward by Members of both Oppositions are entitled to ask whether the tinplate industry of South Wales is in such a state of efficiency as will enable it to command the greatest possible share of the world's markets in tinplate. I am certain that that is not the case. For instance, has the tinplate industry of South Wales the same plant and up-to-date machinery as is possessed by the United States of America? Anyone looking at the respective positions will find that this country is considerably in arrears compared with the high standard of efficiency in the machine production of America, and if Great Britain, whether the industry is established in South Wales or in Lincolnshire, desires a greater portion of the world's market in tinplate, it is obvious that it must at least bring its standard of efficiency up to that of its chief competitor. It must be within the knowledge of the tinplate manufacturers of South Wales that unless they do this, the job will be taken out of their hands by their competitors whether they be competitors from America or from somewhere else. What is to stop America, seeing the weaker position of the tinplate industry of South Wales, suggesting the establishment of American plant in this country? In a very short time, the higher efficiency of American plant and production would render the power of the British tinplate industry much weaker than it is at the present moment.

I humbly suggest to those who deprecate this transfer that it will be in the best interests of the tinplate industry that such a transfer should take place. Is there any reason to believe that by the transfer taking place the whole of the tinplate industry of South Wales will be taken from South Wales? There is no reason to believe that the manufacturing centre at Ebbw Vale will completely close down, or that the plant at present existing will be destroyed, or that the power of that plant to produce will not be continually absorbed by the markets in which at the moment they place their commodities. But I believe that even the most biased Member of South Wales will admit that the chosen site in Lincolnshire is not one that anyone could ignore. It is a very valuable site; it is near to coal, to steel, to water and to rail, and the highest standards of transport service that any individual centre in this country could possess. I believe that in the long run, even if the plant takes three years before it is in capacity operation, it will enable the tinplate industry to gain for this country a greater measure of the markets of the world in that commodity than it possesses at the present time.

The hon. Member for Carmarthen was responsible for a very peculiar statement. I even wondered where Liberalism had got to when he made it. He said that if the Government are not prepared to prevent these huge transfers taking place, they should restore to the independent producers of tinplate the liberty to secure cheap German steel in order that they could continue to compete. Is that a new Liberal doctrine, or is it the old Liberal doctrine re-interpreted? What does it mean? Suppose that that could be put into practice at the moment, how would it help the tinplate workers, the coalminers or the steel workers in South Wales or in any other part of the British Isles—the steel workers, for instance, in my Division in Sheffield? If that is the policy of the Liberal party, I am convinced that the policy of this company to transfer an important works with important machinery to Lincolnshire is much saner, and certainly will be productive of much better and more valuable results.

It is the business of every industry, while attempting to overcome the difficulties of the moment, not to do anything that will bring about a reduction in the wages of the workpeople. The tendency, I believe, is not only to maintain wages at the highest possible level, but, if possible, to improve them. Surely, the bringing in of cheap German steel would not improve the wages of the tinplate workers. I should want to know whether or not the tinplate manufacturers, even though they had cheap German steel, would sell the tinplate they produced from it at a cheaper price. Would they sell at the price prevailing in the world markets, or even at the price that prevails in the market to-day, or would they cheapen the price for competitive purposes in order to compete against the more up-to-date plant that would exist in Lincolnshire? If they did either of these things the result would be a reduction in the wages of the workers concerned, and neither the Liberal party nor the party opposite, I feel certain, would subscribe to that policy if they saw that it would move in that direction. The suggestion is not only foolish but outrageous, and if it were made in South Wales the persons making it would have to seek the quickest way of escape in order to preserve their skins. However much the workers of South Wales may object to the suggestion to take this industry to Lincolnshire, I believe that in the long run the transport of important plant will create a demand for their services which will be a great relief both to South Wales and to the rest of the country.

I want to thank the Government, and especially the Board of Trade, for the policy that they have pursued, which has been such an advantage not only to the division which I am privileged to represent, but to the City of Sheffield. The improvement in trade in the City of Sheffield is very widespread. When the Government were returned and six months prior to their tariff policy being applied, there were no fewer than 64,000 unemployed workers out of a total population of less than 500,000 people, and to-day that figure of unemployment is reduced to just over 30,000, and were it not for the fact that we have an army of persons who were officially imported into Sheffield for the purpose of making munitions during the War, and remained to make Sheffield their home, our position, as far as the supply of skilled workers is concerned, would be very serious. With regard to the new employment which is being created, Sheffield owes everything to tariffs and any threat of the removal of tariffs would be, as far as the iron, steel and cutlery industry is concerned, a threat to the livelihood of the industry and of those who depend upon it. We maintain that in many respects tariffs should be higher as far as the specific interests of Sheffield are concerned, but we definitely say that they must at least remain at their present level. We have been able not only to increase the standard of production but to set down additional plant in practically every phase of iron, steel and cutlery production, the setting down of which has created new employment in almost every direction.

The right hon. Member for Darwen (Sir H. Samuel) suggested that the manufacture of new armaments was causing the new return of industry. The allegation has often been made against us, because we were a great armaments manufacturing centre in pre-war days, that Sheffield's new prosperity is entirely due to the fact that we are engaged in the manufacture of munitions to an abnormal extent. As a representative of that city I emphatically deny that statement. Not 3½ per cent. of our total manufacture in iron and steel is in any way connected with what people may legitimately call armaments. In fact, we have reduced our armament-making plant in Sheffield to such an extent that even if we were able to get to full capacity we could not produce more than 10 per cent. of our total pre-war production in armaments. While that may be to the good or to the bad, it does at least prove that Sheffield's activity is almost entirely due to the production of domestic and industrial commodities.

It is a pity that the right hon. Member for Darwen and the hon. Member for Gower (Mr. D. Grenfell), in their criticism of the Government's policy, did not tell us their alternatives. Had they done so we should have been in a much better position to criticise those alternatives. I do, however, give credit to the Official Opposition in that we know what their alternative is. We know that while they have opposed tariffs in this House and have always opposed every tariff Measure by speech and by vote, their official policy is really support of tariffs and duties on goods imported into this country which are produced under unfair conditions.


indicated dissent.


The deputy-leader of the Opposition shakes his head. If he does not believe that himself, perhaps he will believe his own leader, who, last Friday, in this House said: We have to live in a very imperfect world, and we have to do the best we can in those conditions. We are trying very hard to convert this country to Socialism. We may never be able to do it, and therefore, I expect the hon. Member thinks the Liberal party will come into its own. If there is one thing that is dead and damned, it is the idea of free competition and free import."—[OFFICIAL, REPORT, 12th July, 1935; col. 688, Vol. 304.]


The hon. Member does not realise that tariffs are only a method, and that because one objects to free competition and free imports, one does not necessarily accept the method of tariffs.


But if tariffs are the only method by which you can overcome this pernicious free competition and these free imports, it is obviously logical that that is the machinery, until you devise something different, that must be adopted in order to prevent the growth of such competition. I am convinced that even if the hon. Member in this House says that he is not in favour of tariffs he will not have the courage to go into the iron and steel districts, where the workpeople depend up to 100 per cent. for the first time for many years for their livelihood and weekly wages upon tariffs, and say that the Labour party are not in favour of tariffs. In industrial areas where tariffs have been most beneficial the official Opposition at the next election will issue very strict instructions that the least possible must be said on the question of tariffs, unless specific questions are asked. With respect to the Liberal party, we do not expect a solid declaration from them as to their attitude towards tariffs. The right hon. Member for Darwen was very careful and guarded in his reference to them. The only thing he said about them was in commendation of them. I hope that he will persist in that policy, even though it might mean that one or two more Members might be added to his party at the next election. Again, on behalf of Sheffield, I want to urge upon the Board of Trade not to be misled by the false premises that tariffs are a disadvantage to industry. I hope that tariffs will continue, that where they are not applied they will be applied and that where they have been applied they will remain in operation with complete success.

8.52 p.m.


Let me say a few words of congratulation to the President of the Board of Trade for the cheerful picture which he gave in regard to our trade. There is, however, one aspect of that trade review which was not so cheerful, and it is that aspect to which I intend to draw attention. I refer to the question of the sale of cotton piece goods, which he informed us had slightly improved but not nearly so much as he had hoped. I submit that the chief cause for that is that that industry has been precluded by certain treaties in existence from enjoying the benefits which other industries have enjoyed, namely, that of tariffs, quotas or improved trade agreements. The reason why no tariffs and no quotas could be applied was the existence of these obsolete treaties. The chief barrier is the Congo Basin Treaties. To what territories do these Treaties apply? They apply to the West, Central and Eastern African territories, the Belgian Congo, Nyasaland, Tanganyika, Uganda, Kenya, Zanzibar, parts of Portuguese East Africa, Northern Rhodesia, Portuguese West Africa, French Equatorial Africa, the Sudan, Ethiopia and Italian Somaliland—an extensive territory, chiefly British.

The treaties which affect these territories are the General Act of Berlin, 1885, the General Act and Declaration of Brussels, 1890, the Convention between Great Britain and France, 1898, and the Declaration of 1899, also the Convention of St. Germain-en-Laye, 1919. There was a time when this country received great advantage from the existence of these treaties, otherwise they would never have been entered into, but I submit that whoever entered into them made a very great blunder, because there was no clause in them allowing for revision or review. The treaties are irrevocable. That is a very serious matter. We are precluded from receiving any preferential treatment within our own Colonies in that very wide and extensive area. The treaty lines do not follow the political boundaries in all cases and are, therefore, largely ineffective. There is also—I have had experience of this on the spot—a great diversity in the interpretation of the treaties by the different Powers which have entered into them. Great Britain, whenever she puts her name to a treaty, always does her best to comply with it, but that is not the case with other nations, and it is certainly not the case with the countries which are signatories to the Congo Basin Treaties. We have only to visit the territories on the borders of Portuguese East Africa or the Belgian Congo to see how these treaties are being broken every day, while we, on our side, are maintaining them strictly.

It is true that the Colonies this year have tried to assist in the matter by changing their duties from an ad valorem to a specific basis. It was done for revenue purposes, but they also had in mind that it might help British manufactures. That is not the case, however, in practice. It is obvious that Lancashire cannot possibly compete with Japan. I happened to be in East African territories last year, and I visited three East African Colonies affected by these treaties. I heard the same story on all sides. I asked why I saw very few British goods and they all gave me the same reply, not because they did not want to sell British goods—indeed they would prefer to do so—but the purchasing power of the native being at a very low ebb he is going to buy the cheapest goods he can. They showed me samples of the disparity in price between Japanese and British cotton piece goods. To anyone who knows anything about this commodity there was an equal disparity in quality, but the African native is not discerning enough to know this disparity until after he has made his purchase. The result is that to-day we are being shut out of our own markets by these treaties which will not allow us to apply the same policy in these territories as we have applied, and are applying, to other parts of the British Empire.

Let me give a few examples to show what is happening in these markets. Japanese competition with British goods has been growing for several years. In 1934 our exports of cotton piece-goods to East Africa were only £260,000, whereas Japanese exports of the same goods were £964,000. In 1927 the figures were Japanese exports, 25,000,000 yards of cotton piece-goods; in 1931, 48,000,000; in 1932, 58,000,000; in 1933, 73,000,000; and in 1934, 87,000,000 yards; as compared with British exports of cotton piece-goods in 1929 of 18.7 million yards which has been slowly reduced, until last year, 1934, we exported only 8.5 million yards. It is only a matter of time before we are completely shut out of these fruitful markets by Japanese competition. It was hoped, I know, that the position would improve, but instead I maintain that it is steadily growing worse. The reason is not far to seek. The Board of Trade with the Colonial Office were able to apply, and did very effectively apply, a quota system to other British Colonies, and it has had a most remarkable effect on the exports of cotton piece-goods to those territories. You have only to examine the figures to see that in some cases they have gone up by 400 and 500 per cent. That is because we are able to apply a quota system to these Colonies. But when it comes to these territories—these important and fruitful territories—we are precluded from applying this policy by these obsolete treaties.

What is making the situation worse is that these quotas have been applied to some Colonies and not to others. Obviously, Japan, being shut out of Colonies like Ceylon and other British Colonies, is going to find markets elsewhere, and is finding them in British East Africa, in the territories affected by the Congo Basin Treaties, with the result that our exports to those territories are being gradually shut out altogether. It is not because they do not want British goods. They, do, and I am convinced that if we had a fair chance in these markets the natives would prefer to buy British goods every time. At any rate that is what we are told by the chiefs and administrators when we visit those territories. The only reason they sell Japanese goods is because of the very wide disparity in price between them and British goods.

This is not a new question. I have been raising this matter for ten or eleven years, and so have other hon. Members. In the past we have been told that the Board of Trade was prevented from taking any action in the matter because of the attitude of Lancashire, which is chiefly affected by the treaties. Whatever may have been the attitude of Lancashire in the past, the situation has completely changed to-day. I have copies of resolutions passed by chambers of commerce in the last few months unanimously demanding a revision of these treaties. I have put questions to the Minister, and on 2nd July received an answer to the effect that the wording of some of these treaties was somewhat obscure. I agree that they are obscure. I have always maintained that they are obscure to the point of imbecility. I cannot understand how any sane person could ever have entered into them. That makes in all the more imperative that we should be released from these treaties at the earliest moment and, therefore, I urge the President of the Board of Trade to continue the very wonderful work he and his Parliamentary Secretary and the Department have done towards resuscitating our industries. It was a most wonderful picture he was able to paint with this one exception, the cotton piece goods industry. I have given some reasons why this industry has not shown the same improvement that other industries have. Therefore, I urge the President of the Board of Trade to do everything he can at the earliest possible moment to deal with these treaties. The question has been under review by the Department for five or six years, and, however obscure the wording of the treaties may be, it is not beyond the wit of man to find some means of getting out of treaties which were entered into blindly or hastily, at any rate stupidly, because there is no clause allowing for revision or reconsideration. I believe there is one treaty than can be reviewed this year.

I urge the President of the Board of Trade to make a statement that will give some indication of the policy of the Government with regard to the Congo Basin treaties. I feel confident that if tomorrow he said he would take steps to revise or revoke these treaties he would have the whole House with him. No one can visit British Colonies without feeling that there has been some very grave blunder somewhere, and that something ought to be done to improve the situation. Knowing the ingenuity and the ability of the right hon. Gentleman, and of his Parliamentary Secretary, who, we know, is a great lawyer, and knowing the distinguished support that they have in the Department, and the support that they can call upon from outside, I feel sure that there is some way of getting release from these onerous treaties, which are ruining our markets.

9.7 p.m.


I want to comment very briefly on the state of trade in Liverpool and on Mersey-side generally. It has become a common-place to refer to the great decline in the prosperity of this very important area. A certain political event in the past few days has at least helped us to remember that the Government policy must be related to the depression on Mersey-side and in all seaport towns. To be charitable to my political opponents, that by-election result does not indicate any great rise in the political stock of the Government party. On the other hand it rather emphasises the depression in a certain political camp, which is on all fours with the depression in Liverpool and on Mersey-side. Liverpool is one of a family of Cinderellas so far as Government policy is concerned. I shall not attempt, arising out of my own experience—I have spent the whole of my life in Liverpool—to deal extensively with the situation to-night. But the Liverpool University social service department has recently conducted an exhaustive survey of the trade position of the city and the district of Mersey-side, and I shall quote one or two figures and facts from its report in order to place before the Government, if that is necessary, the condition of affairs in Liverpool and similar cities, in order to draw from the Government Front Bench some statement of policy which will give a little encouragement and heart to districts which are at the moment left in absolute despair, despite the prosperity complex of the National Government.

In the period 1927–1929 the annual average trade of the United Kingdom was £2,050,000,000. Of that, London enjoyed one-third and Liverpool one-quarter. Liverpool, therefore, held the position of second port in the United Kingdom. In the realm of export trade Liverpool accounted for 30 per cent. and London for 37 per cent. London held first place in that sphere. Take the other side. Since the 1927 to 1929 period the decline in United Kingdom trade has been one-quarter of its previous value. In Liverpool, that decline has been one-third and in London one-fifth. Before the slump, Liverpool exports exceeded imports in value, but now the position is exactly reversed, and that is a very different condition of things from that which applies in the country as a whole. Those figures and facts give some idea of the way in which the condition of affairs has been reversed, from a trade point of view, compared with the period 1927 to 1929. Over one third of Mersey-side insured unemployed used to be engaged about the docks and in the shipping industry generally. That, of course, brings us to the kernel of the situation. Because the policy of the Government has affected so detrimentally shipping and other industries connected with it, Liverpool has been very badly hit. No less than one-third of the total insured unemployed on Mersey-side were people who were engaged in this industry previously. The report to which I have referred ends with this passage It follows that to produce any spectacular improvement in the employment situation, on Mersey-side, it is essential to concentrate upon the problem of international trade. That sentence is the one that I want to bring to the attention of the Government, because while they claim that their policy is bringing gradually some kind of prosperity to the country as a whole, unfortunately we who represent certain areas are left absolutely in despair. We have a right to claim some relief, or at least some kind words, from the Government and if we can have them to-night I can assure the Government that they will help some of their discouraged and disheartened political supporters in the City of Liverpool.

9.13 p.m.


It is a matter of great regret to me that I did not hear the speech of my right hon. Friend the President of the Board of Trade. I intended no discourtesy. Some of us were engaged in Standing Committee A until early in the evening. There is no one in the House to whom I would be second in admiration of the team at the Board of Trade. I want to intervene for a very few minutes to supplement a question that I asked to-day. The President of the Board of Trade knows very well that I often bring to his attention what I deem to be the necessity of obtaining more complete information about the trade of retailed distribution in this country. I asked a question to-day about the statistics that are published from time to time in the Board of Trade Journal concerning the retail trade of this country. In each issue of that Journal there are published figures which show the course of retail trade, but on examination the figures reveal that the samples of trade on which they are based are incomplete.

The Committee may not be aware of the fact that some time ago a scheme was devised by the Board of Trade, the Incorporated Association of Retail Distributors and the Bunk of England in collaboration, as a result of which certain large distributors agreed to submit statistics of their trade to the Bank of England. The Bank compiled those statistics in secrecy and then submitted them to the Board of Trade. Unfortunately, those statistics are based on what is no more than 15 per cent. of the total retail trade of the country, and it is difficult to claim that they are representative. I ask the Parliamentary Secretary in his reply to give some indication that the Board of Trade is prepared to take some kind of positive action to make the sample on which these statistics are based more complete. I have said that, at present, the Board of Trade work in collaboration with the Incorporated Association of Retail Distributors. There are other organisations of retail distributors. There is the National Chamber of Trade, and there is another recently-formed and important body, the Federation of Multiple Shop Proprietors, which includes all the firms operating large chains of stores throughout the country.

I suggest that the Board should approach those organisations and persuade them that it would be advantageous if their members contributed statistics of their trade, to be included with the statistics on which the figures issued in the monthly journal are at present based. In the distributive trade there is an idea—an incorrect idea as I have discovered from the answer given to me to-day—that this scheme is a kind of preserve of the Incorporated Association of Retail Distributors, an organisation which embraces only the large departmental stores of the country. It is, I learn, not such a preserve, and it would be a great advantage if the great firms which operate chains of stores throughout the country were also encouraged to submit their statistics to the Bank of England each month. Thus we would secure a more complete and representative sample of trade. If the Board of Trade took such action as I suggest, it would be the first step towards realising an idea which I have long had in mind, namely, that the Board should attempt to achieve a census of retail distribution. I do not think that any of the Ministers at present at the head of that Department would deny that such a census, if it could be obtained, would be very valuable. It would enable the country to see the precise extent of this great industry and dispel many false impressions which are at present abroad about the manner in which it is conducted. While I have on previous occasions urged that the Board of Trade should attempt to initiate a census of distribution, I do not anticipate that the President of the Board of Trade or the Parliamentary Secretary will at this moment give me a favourable reply. I would, however, ask them to consider my smaller request that there should be a real attempt to make the statistics at present published by the Board more representative. I do not think that I am hoping for too much in suggesting that the Parliamentary Secretary in his reply will perhaps be able to assure me that the Board intend to take some steps to achieve that object.

9.19 p.m.


I ask the indulgence of the Committee for a brief space in order, in the first place, to assure the right hon. Gentleman of the appreciation which I believe is felt in industry generally of the great reforms for which he has been so largely responsible in connection with the trade and commerce of this country. We are all glad to compare the picture which the right hon. Gentleman can now unfold with the unfortunate position in which the country found itself in 1931. Speaking on behalf of a diverse and important industrial constituency I would say that we believe that the industry of the country has been saved by the action of this Government, and particularly of my right hon. Friend's Department, in the application of an absolutely necessary control of imports. Every one of us believes in universal Free Trade, if we could get it, and in international trade, but we cannot sit still with folded arms and allow this country to suffer as the result of one-way traffic in trade. Control of imports was a policy dictated by sheer force of economic necessity. It was a matter of commercial expediency and ought to be so regarded rather than as a question of political principle. Either section of the Opposition, if they dealt with this subject honestly, would be bound to admit that, with world conditions as they are to-day, they would have to retain the present system were they placed in the position of the Government. I do not imagine that the policy of giving industry a "first-class financial crisis" would be accepted by the country in preference to the sane and sensible control of imports which this Government has achieved.

I would also like to say how much the industries in my constituency appreciate the co-operation which now exists between the Board of Trade and industry generally, to a greater extent than ever before. The industries in my division are grateful for the opportunities so often afforded them by the Parliamentary Secretary of discussing, in a spirit of friendly co-operation, matters of difficulty and anxiety which arise from time to time. I believe there is at present a complete co-ordination between this Department of the Government and industry in general. If industries can feel that they are able to approach Ministerial representatives and secure their advice and assistance it is bound to result, ultimately, in a complete restoration of commercial confidence.

Of tariffs in particular I only desire to say this. The headquarters of the British typewriter trade is in my constituency and the change wrought in that industry as a result of tariffs has been remarkable. A factory which is working at high pressure and employing a record number of hands is naturally appreciative of the work of the National Government and grateful to my right hon. Friend and to the Board of Trade for the steps which have been taken to bring about prosperity instead of decline. The same remark applies to other industries and I could name several in Leicester, the people engaged in which hope that the time will never come when tariffs will be taken off and they will be once again left at the mercy of unfair competition from all over the world. We take consolation from the fact that there has been no increase in prices such as we were threatened with by the opponents of tariffs. Nor has there been any log-rolling. The Import Duties Advisory Committee, working a new experiment in a time of great difficulty, have achieved a vast amount of work with great success, and the change-over has been accomplished without any of the consequences prophesied by those who opposed the Government's policy. It is difficult to know how either section of the Opposition, if they were given the opportunity, could deal with the question of imports into this country except by the method which the Government fearlessly adopted. Certainly one leader of one section of the Opposition has said that if given the opportunity, not only would he not take off tariffs but that he would apply the tariff weapon ruthlessly.

I ask the Parliamentary Secretary, when he replies to give the Committee some information as to the general level of tariffs. After the success which has attended the action of the Government in applying control of imports, it is felt that in many cases the general level might be higher. Perhaps when the hon. Gentleman replies he will say whether it would be of advantage to the tariff system of this country and the work of the Advisory Committee if the general level was higher as a standard.

In trying to consider this matter fairly, I have tried to find if there is any instance in any manufacturing industry where the operation of the tariff has adversely affected either the home market or the workers. The answer is the answer of the good trade unionist. It is idle to protect—as we do happily in this country—the standard of life and work at every stage by Factory Acts, the Workmen's Compensation Act and every possible safeguard of work and living, if you are to let the result of that safeguarded work enter into open competition with the products of sweated labour from all over the world in our own market. I am sure that industry as a whole congratulates the Government on the work done in rescuing industry from what was absolutely a slough of despond. It has been re-established in a manner which is the envy of the world, and I hope the right hon. Gentleman who now presides over the Board of Trade will for a long time control the destinies of the country's commerce, which has made so remarkable a recovery.

9.27 p.m.


This has been a very interesting Debate, and of all the eloquent speeches made the speech made by my hon. Friend the Member for Gower (Mr. D. Grenfell) was not the least meritorious. Despite anything which may have been said by the hon. Member for Attercliffe (Mr. Pike) with regard to the super-efficiency of the potential works in Lincolnshire as compared with the hopelessly out-of-date and inadequate works in South Wales, I am sure that the right hon. Gentleman will pay infinitely more attention to the representatives of Wales than to the obviously uninformed observations of the hon. Member for Attercliffe. I think my hon. Friend not only made out a good case for a very careful examination of the position but for such influence and pressure as the Government may feel disposed to use to avoid what would otherwise be an overwhelming social tragedy to the Principality. I have listened to practically the whole of the Debate, and I have heard some very curious speeches. The hon. Member who has just spoken always pleases the President of the Board of Trade by bouquets and eulogies; and he always recalls the magnificent results of the efforts of this Government from the point of view of Leicester. As he is one of the representatives of Leicester, I do not object to him expressing his thanks for what may have been done for his constituents, even though it may have been done at the expense of my constituents. But the hon. Member would not expect me to throw any bouquets to the President of the Board of Trade. I am sure that when the right hon. Gentleman listened to that very fine and generous speech he himself must have wondered whether he did not require some self-analysis—for there must be something seriously wrong when so many bouquets are thrown. The hon. Member for Pudsey and Otley (Mr. Gibson) who represents the manufacturers of leather, also made his hardy annual speech and demanded higher duties upon imported leather—although in the next breath he demanded that the Government should insist on the Canadian Government decreasing their duties on leather imported into Canada from this country. The hon. Member is to be commended for looking after his own industry.

The Debate has been very useful for the wide survey it has permitted the President of the Board of Trade to make, and we had a very illuminating speech from the right hon. Member for Darwen (Sir H. Samuel). The speech of the President of the Board of Trade was a mixture of restrained optimism and inspissated gloom. He might have told us that "the depression is moving slowly eastward but that the further outlook is extremely doubtful." He tried to show to us that there was a slight upward tendency in the trade figures, and no one of the figures given by the right hon. Gentleman could be challenged. He gave figures which seemed to show an increase of exports to Ottawa Agreement countries and an increase of exports to the Trade Agreement countries. If one accepts the figures as given without any qualification, they certainly do show a relative improvement. But I am afraid they do not tell the whole story, and it is because they do not tell the whole story that one is driven to examine them very carefully. Such improvement as may have taken place during the past year or two is claimed to have been due to the application of tariffs.

It is not the first time that the right hon. Gentleman, despite his illustrious Free Trade past, has confessed that tariffs have come to the aid of this Government when every other thing had failed. I was interested to hear his reference to shipping, which is one of our most important services. He said that ships are now working on minimum rates and are enjoying greater prosperity, or less depression, than had been the case for many years. It is very interesting to hear the President of the Board of Trade make that statement. What he said, in effect, was that at long last the shipping companies have abolished competition. They have come together and applied minimum rates below which no shipping company can accept cargo or passengers and now they are enjoying some prosperity. That, from one of the "last ditchers" of individualism is a very important admission. It seems to me that the right hon. Gentleman is really on the way to a good political and economic education—although I regret very much that it has been left to the National Government to carry him over the last ditch.

I would say to the right hon. Gentleman that in certain respects the trade figures of this country are an improvement on one or two recent years. But I would say also that in most cases, as my right hon. Friend the Member for Darwen truly said, the improvement is more as a result of accidents than of any conscious effort on the part of the Government. We must never forget that the greatest help given to our export industries was on the day when we moved off the Gold Standard—the very thing that this Government came into office to avoid. It is certainly true that cheap money has been available in this country for years, but it is also true to say that the Labour Government prepared for the great conversion scheme which ultimately led to cheap money. The National Government can claim little or no credit for that. The right hon. Gentleman said that the restoration of "cuts" had been a helpful factor during the past 12 months. I think that is perfectly true. But to the extent that it has been a helpful factor during the last 12 months I would ask why the "cuts" were ever inflicted at all? If the restoration of the "cuts" is helpful now when the money is restored to the pockets of people who spend it as it is received, why were they ever inflicted?

Another factor, as the right hon. Gentleman the Member for Darwen truly said, is that we are enjoying an element of industrial prosperity in certain areas as a result of excessive armaments production. But with all the improvements, we still have over 2,000,000 people unemployed, and, with the rate of progress we have made even since 1933, we are many generations away from what may be termed a normal period. The right hon. Gentleman the Member for Darwen repeated the figures of the President of the Board of Trade showing the exports this year as compared with previous years. The £412,000,000 estimated as possible this year as compared with £729,000,000 exports for 1929, and a 50 per cent. reduction in our re-export trade, are the clearest indications of where we actually stand, notwithstanding all the improvements during the past few years. The right hon. Gentleman and his Government must bear in mind that the population is constantly increasing, and that unless there is an increase in trade somewhere somebody will go short. That, to some extent, militates against the optimistic note that has been struck in various parts of the Committee.

When the right hon. Gentleman referred to the Ottawa Agreements and their effect upon trade with Empire countries, I wish he could have given us a few more facts and figures concerning some of our Dominions. He told us that the net increase in our export trade to those countries which attended the Ottawa Conference and with whom agreements were made was 12½ per cent. There was a £25,000,000 increase, I think he said, since 1932. What are the facts with regard to our export trade to three of the Dominions, namely, Australia, New Zealand and Canada? It is true that there was an increase in 1934 over 1931–32, but, despite that increase, we are still 25 per cent. below the trade with those three countries combined in 1930. Therefore, the increase between 1932 and 1934 is simply an increase from the bottom of the trough. The right hon. Gentleman might suggest that in 1931 our exports to Australia, New Zealand and Canada were the lowest. That would be true, but the explanation can be given very simply and it would not be that it was due to the Labour Government or to anything that they did or omitted to do. That is not the point in question at the moment, but it could be argued on some other occasion. My point at the moment is that the small increase during the past two years is an increase from the lowest export figure far very many years to these Dominions, and it represents an insignificant trifle. It is still 25 per cent. less, after four years of the National Government and two years of the Ottawa Agreements, than the figures of 1930 when the Labour Government were in office. That is no credit to the Labour Government, and the present Government cannot claim a lot of credit for the results of 1934 when compared with 1930, 1929 or any normal year. Therefore, I suggest that instead of the figures being something to rejoice over, they are not so large as they ought to be.

The right hon. Gentleman referred to trade agreement countries and pointed out that the increase in our export trade to those countries was 33⅓ per cent. We welcome any useful agreement that may be made, and we are willing to express our thanks to the Government as and when we can see any real net improvement in our trade as the result of any trade agreement, but there are many industries in this country which have derived little or no benefit from all the trade agreements that have been made so far. When the right hon. Gentleman proceeded from the national figures of exports to the figures relating to individual industries, he pointed out that iron and steel, machinery, electricity and one or two other industries have shown definite signs of improvement, but he said that the textile trade was not so good, that cotton was dull, and that coal was hopeless.

It almost appeared when the right hon. Gentleman made a fairly lengthy, useful, but depressing reference to coal, that it was the last chapter of Jeremiah. There was not a single crumb of comfort to the mining community to be found in the right hon. Gentleman's statement. The hon. Member for East Fife (Mr. H. Stewart) said that the mining industry in Fife would be everlastingly grateful for the benefits conferred as the result of the efforts of the President of the Board of Trade and the Government. It is always pleasing to know that some section of the industry in some parts of the country has derived some benefit from something that the Government have done. It is remarkable that Fife seems to be the only part of the country that has derived any benefit from the action of the Government. So far as the general situation is concerned, if we compare the coal output of 1934 with, say, the output for 1930, we find that, despite the fact that the increase in 1934 was 14,000,000 tons, it was in 1933 23,000,000 tons below that of 1930. Instead of the mining industry having improved broadly throughout the federated area, it has, during the past year or two, continued to decline. The first six months of this year show a reduction in our exports of coal for bunker and other purposes of approximately 1,000,000 tons over last year, while last year was 23,000,000 tons less than 1930. If we look at the number of wage-earners on the books, in 1931 there were 825,000, whereas in June of this year the number was 757,000, or a reduction of 68,000 since this Government came into office.

Lieut.-Colonel COLVILLE

Can the hon. Gentleman give the figures for 1929 to show the diminution of numbers employed between 1929 and 1931?

The DEPUTY-CHAIRMAN (Captain Bourne)

I hope that we are not going to anticipate the Debate which, I understand, will take place next week.


I agree. I am sorry that I have not the figures at my disposal, but I am sure that they could not tell such a wretched story as the more recent figures. At any rate, there are 68,000 fewer miners than when they—the present Government—took office in 1931. The wages in the industry in 1930 were £104,000,000, while last year they were only £87,000,000. Yet the hon. Member for East Fife says that Fife will be everlastingly in debt to the right hon. Gentleman for what seems to have been done by him. I hope that Fife will continue to enjoy benefits which I rather suspect, but to whatever extent Scotland may have benefited during the past year it can only have done so at the expense of Durham, South Wales or some other mining area, because as regards net output, net exports, net sales, proceeds and wages the industry as a whole is infinitely worse off than it was in 1930 or 1931.


One of the reasons why the coal trade in Fife is more prosperous is that under the trade agreements negotiated by the Government we have got back a large number of Scandinavian contracts which were lost during the coal dispute in 1926.


I compliment Fife on having obtained an order anywhere, but I am afraid I cannot compliment the Government on what they have done for the industry as a whole, though I am sure that, if it had been within their power the President of the Board of Trade and his colleagues would have left nothing undone to restore prosperity to the mining industry in any part of the country. I wish to refer next to the export credits scheme, which has been in existence for a considerable time.


I must point out that that subject comes under a separate Vote.


I understood that the Overseas Trade Department was part and parcel of the Board of Trade?


I am afraid the hon. Member is under a misapprehension. It comes under a separate Vote, which has not been put on the Paper to-day, and is not now before the Committee.


In that case I shall make no further reference to the subject, but I certainly am suffering under a misunderstanding, because we clearly understood that the Board of Trade Vote permitted references to the export credits scheme. All I would say, therefore, is that I hope the President of the Board of Trade and the Secretary to the Overseas Trade Department have noted what has happened in Germany, Czechoslovakia and Italy, noted what an extra £16,000,000 of exports from any one of those three countries means not only to the producers of machines but to the producers of the raw materials out of which those machines are made. I am interested in anything we may be able to do in the way of granting terms and conditions which will facilitate the export of commodities which are based upon coal. I invite the hon. and gallant Gentleman to take note of what has been happening in the past few months, and if he can utilise that scheme for the purpose of extending our sales abroad of machinery and increasing our output of coal we shall welcome his action, and next year, perhaps, we shall be throwing bouquets in his direction.

The Board of Trade are responsible, I understand, for granting licences for the export of munitions of all kinds, whether small arms or bombing planes, and also planes for civil flying. We are becoming very disturbed over the fact that we are unable to obtain satisfactory replies from any Minister to questions asking where these planes are being exported to and for what purpose they are likely to be used. We are selling to foreign countries planes which to-morrow may be turned into bombing planes and sent over to this country to bomb men, women and children here, and we are doing that at a time when our people are being advised to buy and train themselves to wear gas masks and to make themselves secure against the consequences of bombing from the air. I want to ask whether the Board of Trade consider all these possibilities before granting a licence for the export of a plane such as may have been supplied to our own Air Force. More attention ought to be paid to this subject.

The usual answer given to us is that so long as manufacturers here are making articles which foreign countries are willing to buy we ought to be ready to sell, because if we refuse to sell some other country will do so. We here are not so sure about that, because many of the finest planes built in this country are produced with the assistance of technicians attached to one of our fighting Services, and before we allow such planes to be exported, even at a profit, to any other country, whether that country may use them against us or not, we ought to be satisfied that they are to be used exclusively for civil purposes and that we shall never be in danger of being bombed by them. I know this is a highly technical and complex problem for any Minister to deal with, but I hope the right hon. Gentleman will pay some attention to it because after the last war guns which had been captured from the Germans and were exhibited in some of the parks in this country were found to have been made by Armstrong, Whitworth and Company. History only repeats itself when we ignore history, and I do not want to ignore history, and if after careful consideration, and perhaps a Cabinet decision, we can avoid the blunder committed prior to 1914 I hope we shall do so.

I have another question to raise with respect to shipping. Recently this country adopted a scrap and build policy, that of building one new ship for every two old ones scrapped. I understand there have been cases in which a company, brought into existence for the purpose, has been able to buy many ships which ought to have been scrapped and to sell them to Italy at a fairly good profit, because shipping is so heavily subsidised there. Whether those old ships have been broken up in Italy and utilised in the production of munitions of war I do not know, but it was the object of the scrap and build policy to get rid of these old ships altogether and replace them by modern, up-to-date vessels. I ask the right hon. Gentleman whether such cases as I have mentioned have been brought to his notice, and, if so, what steps have been taken in the matter? I hope he will be able to tell us that similar sales will not be permitted in future.

We welcome any slight improvement in trade which there may have been during the past 12 months, but we are terribly disappointed with the rate of progress. Whether it be a question of tariffs or Free Trade, whether there is a slight increase or whether we remain on the level, whether or not we have reached the top of the little boom and are beginning to descend the hill, we have still over 2,000,000 people unemployed, and they will remain until some Government is stimulated into activity upon unorthodox lines. There seems to be little or no likelihood, as long as the Board of Trade and every other Government Department operate on the old orthodox lines, even with the addition of the tariff policy, of our emerging from this unemployment slough of despond into a position where we might hope that, within a measurable time, a goodly portion of the £7,000,000 which it costs per year to maintain the unemployed would be disposed of and a goodly number of those who are now condemned to unemployment, through no fault of their own, might be back at work.

We fear that neither of the two fiscal systems will solve the problem, and believe that, until we pay attention to the spending power of the people and to the need for facilitating rather than retarding world trade, there will be no hope for any section of the workers in any part of the world. We are dissatisfied with the old-fashioned system based upon a certain amount of self-satisfaction with the fact that we have increased our export trade by £1,000,000 or £2,000,000, which makes no material difference to the army of unemployed, and still leaves us with a burden which is almost too big for any nation to bear, in the shape of waste of wealth and of human opportunities. For those reasons, and for others which we should like to give, we shall be obliged to follow the right hon. Gentleman the Member for Darwen (Sir H. Samuel) into the Division Lobby to-night.

9.58 p.m.


Before making any reference to the general Debate there are two matters upon which I should like to ask information of the right hon. Gentleman. This may be the last opportunity this Session of raising matters which come under this Vote. One of them is a matter of some local difficulty which has arisen with regard to the importation of maize in bulk. Having regard to the safety of ships, the Board of Trade require that the maize shall be packed in bulk in a certain way. That process is followed out by the ship-owners for the specific purpose of complying with the regulations of the Board of Trade. The Customs authorities, however, insist upon levying a rate of duty of 20 per cent. ad valorem. No doubt a partnership of that kind between the right hon. Gentleman who is making those regulations and compelling ship-owners to pack the maize in that way, and on the other hand the Customs authorities, who tax the cargoes when they get here, may be profitable for the Chancellor of the Exchequer, but it does not give any satisfaction to people who have to pay. I shall be glad if the right hon. Gentleman will look into this matter and will say if anything can be done.

The other matter is of greater substance and importance. I refer to the great interest and anxiety aroused upon the sudden failure and the winding up of certain insurance companies. I know that the matter has been engaging the active attention of the right hon. Gentleman. Considerable interest and I may say a good deal of anger were aroused by the failure of these companies and by their being wound up and liquidated by the Board of Trade, because it was felt that the machinery of the Board of Trade did not provide the amount of control which was required in order to see that such bodies were able to give the cover which they had purported to give to their customers. More was required; legislation might be needed. I would be glad if the right hon. Gentleman could tell us whether his attention has been given to this matter so far, and whether he proposes to introduce legislation to deal with the position.

Now I will turn to the general Debate, which has certainly been very interesting. I do not propose to inflict a single figure upon the Committee if I can help it. I think I can summarise the position of this country in relation to other countries in a word or two by saying that we are in a pretty favourable position in regard to the world in general. We share that favourable position in a greater or less degree with every country who escaped the worst effects of depression and inflation by parting company with gold in 1931. Even compared with countries like ourselves, which are in the most favourable position, our activities are very much below normal, and still more below what we would like them to be. Other countries which fixed their currencies to gold, are still wallowing in the worst effects of the depression and those who are worst off are those who enjoy the benefits of tariffs in a high-protectionist system. I do not think that any more need be said about it than that.

I do not share the pessimistic outlook with regard to the ultimate trade prospects of this country, if this country and other countries would only behave sanely. There is nothing to encourage the view that the development of machinery and new ideas need permanently damage us in the trade of the world providing that we are sufficiently ingenious and alert to acquire them and to make them in this country. The whole economic development, taking it in the large, if not in detail, shows that the development of machinery and the growth of new ideas will not hamper us ultimately in regard to trade or employment. That is the teaching of history. If—it is a very big "if"—the countries of the world are prepared to behave with normal sanity, there is probably a greater potentiality for recovery than there has ever been in history. There are millions of unemployed only too anxious to get to work and to be consumers. There is scientific knowledge available for use in the production of goods, and new enterprises to be started. Everybody knows that; every entrepreneur and every manager would only be too glad of the opportunity to develop and proceed with his business instead of being hampered in a very large number of ways.

I agree with what was said by the hon. Member for Don Valley (Mr. T. Williams): the complaint against the Government is not that they have done nothing but that they have attempted nothing commensurate with the needs of the situation. In the main they have taken a negative attitude which bears little or no relationship to the necessities of the times. I observed with some regret that the right hon. Gentleman made no reference to the currency question, except an allusion to the difficulties of obtaining credit. Those difficulties are very great. There are great possibilities for the trade of the country, and there are many people whose views are entitled to be heard who think that probably nothing would contribute more to a return of confidence than the fixing of some stable basis of international trade and exchange. The effect upon Europe would be very marked, and so would the effect upon the internal political tension in France, Holland, Belgium and Switzerland, if something of that kind were done. I know the difficulties of the situation. I think that the currency policy pursued by this country for the last three years is probably as good as any other policy that could have been adopted. There is no question of a return to the Gold Standard in any conditions which are in sight at this time. I am speaking for myself; I know that others take a contrary view. Progress towards international sanity, re-organisation and stability have got to go a good deal further before there can be any question of this country returning to the Gold Standard. But between a policy of returning to the Gold Standard and a policy of doing nothing is there no intermediate course which might give a great fillip to the trade of the country?

Reference has already been made to the speech which was delivered on 13th May last by the Secretary of the Treasury in the United States of America. It was a somewhat remarkable statement. One thing that he said was: If there is to be a race in currency devaluation the United States is not going to be left behind. He went on to say: Our hands are free; we can move either way. But it the countries of the world are really anxious to stabilise their currencies the United States is prepared to work with them. I recall this to the Committee for the purpose of making the suggestion that that is not a statement to be left without comment and without investigation. It might be possible to make some arrangement with France and the gold bloc countries which might be very beneficial and might hasten the progress of trade recovery. It was a very sober and sombre picture which the President of the Board of Trade painted to us this afternoon, and I could not help feeling that as the hon. Member for Wavertree (Mr. Cleary) was addressing the Committee, because there is no part of the country which presents a more serious picture, a more depressing picture in many ways, of a depressed area than Merseyside and our ports in general. Some of us who have to see these things day by day see the very purpose of the existence of our communities departing from us. Out of every five insured persons on Merseyside three of them might expect under other conditions to get their living by riverside occupations of one kind or another. In the story unfolded by the President of the Board of Trade nothing whatever was held out to those people of any perfect opportunity of earning a livelihood. That is what struck me this afternoon as so terrible.

I would like to ask the right hon. Gentleman if he would use his influence to have taken off the walls of the towns in these districts the posters which advertise the wonderful prosperity which may obtain in other parts of the country but which does not help us. It does not help anybody or anybody's cause in those districts. As our thousands of people in the Merseyside district walk down to the dole office—that is the tragic name which is given to what we knew as the Employment Exchange—it does not help the burden which they have to carry when they see these statements on the wall. It increases the bitterness of the general situation. The Government claim to be realists, but we want from them more realism than they have given us up to the present time. I would like to quote some words on this subject which are better than any I think I could find for myself. They were used by an eminent shipowner, Sir Percy Bates, at the annual meeting of the Cunard Company. He said: The Atlantic cannot prosper till the world prospers. I may be accounted old-fashioned, but I doubt whether in the old sense and to the old degree prosperity can return to the world until the world again has some acknowledged and authorised medium of international exchange. There is a war, a universal war. The weapons are not armies, navies and aeroplanes, but tariffs, quotas and the shifting currencies. There is no authorised standard of international exchange, and each change in a tariff, quota or currency is nothing but a move, a hostile move, in this war. Had it been recognised we might have had a Peace Conference, with far greater possibilities of good for mankind than the Disarmament Conference at Geneva We do well to recognise that it is a war in which we and all the countries of the world are engaged. If we take that view, let us remember that the longest war must have an ending unless the combatants are to perish. If the war is to come to an end, somebody must take the responsibility of calling a truce. We were told when the Economic Conference dissolved that it was to be recalled. It is not for me to suggest when the appropriate moment will arrive for recalling it, but it is a moral responsibility of anybody in our country to see that a truce is called. It is a moral responsibility on the people of this country to see that in their name a truce is called, and called as soon as possible. It is not for me to suggest when a conference should be called, but I hope it will not be summoned in the spirit in which the last one was called. We want a different attitude of mind. The best prelude to another economic conference would be a recital of the General Confession. When that had been carried out the countries concerned, with humble and contrite hearts, could start equal, not saying, "Our tariffs are right, our quotas are legitimate, but yours are not." They could set to work with some degree of harmony to work out some economic system which is less insane than that under which we are living at present.

The attitude of the Government in this matter has puzzled me a good deal. Their attitude recalls to me very much that of the lady who was quoted in this House by Charles James Fox, the then leader of the Whig Party, who said in all seriousness that, while she recognised her own faults and weaknesses, she hoped that she had atoned for them fully by the way in which she denounced them when she saw them practised by other people. That seems to me to be in some degree the attitude of the Government in facing these problems, and I do not think it is one that helps the general situation. It is clear that, while there is the greatest possible scope for recovery in the world to-day—it has never been so great—it is utterly impossible to bring about recovery on our present lines. I hope that what has been said to-day is not the last word on this subject. As I read the situation, there seems to me to be the greatest hope in the world to-day. There is a greater volume of opportunity, a greater volume of consumptive power, and a greater possible measure of prosperity than ever before, and nothing that has been said to-day indicates that it is not within the reach of man. I have endeavoured to indicate, if not the actual means by which it may be sought, at any rate something of the spirit in which it ought to be sought.

10.16 p.m.


The hon. Member for East Birkenhead (Mr. White) made reference to the General Confession as the appropriate method by which to begin the summoning of a new World Economic Conference. I would go so far as to agree with him that the task of most Governments to-day is to answer the prayer, "Give us this day our daily bread." No doubt the hon. Member has seen the reports as to what the real position is in the United States, where 60,000,000 of the population, who earn something like a dollar a day on the land, are worrying as to how they are to buy from the other 60,000,000 of the population who earn five dollars a day in the town the manufactured articles which they are expected to be able to buy. That is the very real problem which confronts all Governments.

My right hon. Friend the President of the Board of Trade has no reason but to be encouraged by the reception with which his general view of the trading conditions of the country has met at the hands of the Committee. He spoke in what he himself described as a mood of restrained optimism. Had he sung an octave lower, he would have been accused of pessimism; had he sung an octave higher, he would have been accused of complacency; but he chose the course which all of us who know him would have expected—that of being perfectly frank with the Committee, and giving a general review of the position as he saw it, with restrained optimism. That is not a bad definition of the character of the British people. Restrained optimism describes very accurately the way in which the people of this country have confronted the depression which has besieged the world since 1931.

The hon. Member for East Birkenhead made reference, in connection to the question of shifting grain cargoes, to the duty on the sacks which have to be used to prevent such cargoes from shifting, and he wondered what would happen in that regard when the cargo was landed. If the sacks were of British origin, the duty would not be levied, but there are certain difficulties in the way. The hon. Member also called attention to the question of insurance companies, and he will like to know in that connection that the necessary Measure has come down to this House from another place, and its Second Reading will probably take place some time next week. A. measure to give the Board of Trade the additional powers which have been shown to be requisite by the events of recent months and years is in the form of legislation, and will be discussed in this House very shortly.

The hon. Member made some observations with regard to National Government posters in Liverpool and other ports. I believe it is an economic truth of general application that recovery somewhere helps recovery everywhere else. I appreciate that it may be difficult for those who find the task of securing employment harder to read of someone else's prosperity, but nevertheless I believe it to be an economic truth that the fact that some industries in the country show signs of great resiliency and great recovery is a measure of encouragement to everyone else. That is a point that I shall have to make a little later on in dealing with the recovery of the country generally.

The hon. Member for Don Valley (Mr. T. Williams), in his interesting review, asked me a number of questions. It is not very easy to cover the whole of the ground at this hour of the night. Perhaps I might deal with the one relating to the scrap-and-build policy. He asked whether it was true that owners in some circumstances who had tonnage for scrapping were scrapping it abroad. It certainly is true. Our object, of course, in the scrap-and-build programme is to secure that the tonnage of the world, within the measure that is under our control, is more properly approximated to the world cargo that there is to carry, and our chief anxiety is that the redundant tonnage should be scrapped. It is part of every contract entered into under the scrap-and-build policy that that tonnage should be effectively scrapped, and there are good reasons why in certain circumstances that scrapping should take place abroad, but the primary object is to see that the tonnage is in fact scrapped.

We have listened during the Debate, as was inevitable, to a number of extremely moving appeals by Members representing South Wales constituencies, none of which was more moving than that of the hon. Member for Gower (Mr. D. Grenfell). I listened with the greatest interest to his descriptive passages, with his unrivalled knowledge of the tinplate industry and all that it involves in the district which he knows so well and represents so effectively. I am sure there is no Member of the Committee who was not immensely impressed with the earnestness and fervour of that appeal. I do not propose to deal with the question of the possible transference of part of the tinplate industry from South Wales to another part of the country. That matter requires consideration. It is quite recent in origin and no useful purpose would be served by any immediate comment. The Committee will, I think, agree that an opportunity should be given for all the facts to be fully ascertained before the discussion is taken further. That the whole of the facts will be investigated and ascertained I can give the Committee a complete assurance.


May I ask whether whatever influence the Government has will be exercised to prevent the transfer taking place until the fullest inquiry has been held?


I do not want to say anything more than I have done. The whole of the circumstances of the matter, the full importance and effect of which are clearly appreciated, will be examined in detail. Probably the Committee will be prepared to take that assurance.


Are we to understand that an informal inquiry is going to take place at the Board of Trade into the matter without delay?


The hon. Member will understand that the Government, which learnt of this possible development from the same source as hon. Members, desire to inform themselves by their own methods in as complete detail as possible, and no time will be lost in consulting any authorities and making ourselves fully familiar with the position. But I will ask hon. Members who talk of the association of industries with any particular district—the hon. Member for Gower, who suggests that industry ought not to be moved from a district, and the hon. Member for East Fife (Mr. H. Stewart), who asks the Government to see that industries are moved to his district—to think out the consequences of what they are really asking and how far it is that they desire to see the Government telling an industrialist where he can best carry on the business that he knows and the Government do not. Inquiry in this direction could do no possible harm.

The right hon. Member for Darwen (Sir H. Samuel), whose speeches always remind me of the quotation from "Love's Labour's Lost,"— Delivers in such apt and gracious words, That aged ears play truant at his tales; And younger hearings are quite ravishéd So sweet and voluble is his discourse. —made a most interesting analysis of all kinds of political theories, but I cannot help remembering the words of a wise old pilot at Southampton who told me that no analysis had ever moved a tug boat. He quoted, as was quite proper, during the course of his speech, a number of authorities who had passed resolutions, and I am sure that he, as a great administrator and a right hon. Gentleman with great experience, knows how much easier it is to draft a resolution than it is to put one into practice. I was not in the least impressed with the immense volume of Press cuttings and the large number of names of very reputable people who had passed high-falutin' resolutions which, when examined in the crucible left very little salt after the water had been evaporated. I do not under-value the importance of the bodies to which he referred, but we all know something of the ease with which a generalisation can be embodied in a flowing resolution at the commencement of a conference and often how very little it means when examined under the miscroscope of realism and practical effect.

The right hon. Gentleman concluded by moving a reduction in the salary of the President of the Board of Trade on three grounds, the first of which was that the National Government were blameworthy in that they had not embarked upon a policy of National development. National development and New Deal begin with the same letters, but the author of the New Deal contemplated a ruthless use of tariffs, and, if I rightly understand the right hon. Gentleman the Member for Darwen, he did not advocate the ruthless use of tariffs and I detect the difference between New Deal and National development in that one particular if in no other. His second ground for thinking that the National Government were blameworthy was the allegation that it was the Government's delegation who were responsible for the breakdown of the World Economic Conference.


They shared the responsibility with the Americans.


That is not how the right hon. Gentleman put it.


It was not how I put it, but what I said.


I listened very attentively, and I heard nothing at all about sharing with the United States, I heard two definite reasons given, currency raised by the United States, and some attitude towards tariffs and trade raised by the United Kingdom delegation, and then when the right hon. Gentleman came to sum up the reasons, he gave as his reasons that the British Government were responsible for the breakdown of the World Economic Conference. I do not want to make any false point, but I would ask, Does he really think that the question of the British attitude was ever seriously discussed at all? Is it not withing the recollection of all of us who took part in that conference that when we were at the very beginning of it events of kaleidoscopic importance occurred on the other side of the Atlantic and that the whole basis on which the conference was summoned ceased to apply, and that we never got within measurable distance of trade at all? It is obvious that the reason why that conference had to be adjourned was the currency matters raised by the United States. The last ground that he gave for the National Government being blameworthy was that they were indulging in bilateral treaties, whereas they ought to have indulged in multilateral treaties on a large scale. He was frank enough to say that he could not tell how many countries would accept that invitation. Those of us who have the task of endeavouring to get agreements with foreign countries could say, and the answer is, none. We have the greatest possible difficulty in inducing countries to make trade agreements with us unless as a result of so doing they can secure advantages which, in their judgment, are commensurate with the advantages that we are asking from them. We are not going to ask to enter into any contract that is not of mutual advantage to both sides.

The right hon. Gentleman made two points. He asserted that the reason for the recovery of the United Kingdom was two-fold, first, that the world had recovered and, secondly, that we had gone off gold.


indicated dissent.


The right hon. Gentleman shakes his head. I took not a verbatim but a fairly good newspaper record of what he said, because I knew that I should have to deal with his main points, and I understood him to put as the two main factors of the recovery of Great Britain, first, that the world in general had recovered and, secondly, as a great contributing factor, that we had departed from the Gold Standard.


Two of the chief factors.


Would my right hon. Friend like to add any other?


I did mention four or five others.


I have a detailed record handy. I certainly understood those to be the two factors to which the right hon. Gentleman drew particular attention.


The two first, but not the only ones.


I agree. No one would allege that my right hon. Friend would not give credit to the virility of our people and the way that they have withstood the difficulties of the situation; but he did go on to say that most people would suggest—the Home Secretary was an exception—that it was very largely through our going off gold that we had recovered. I may tell him at once that the Home Secretary is no exception, but that a great number of people, probably a majority, do not share his opinion that our recovery is due to going off gold. I will give the Committee some reasons for the faith that is in me in making that statement. First, I will deal with the point that world conditions have so far altered. I would like the Committee to listen to one or two figures. Comparing 1934 with 1931, the United Kingdom share of world export trade, measured in gold, increased from 9.36 per cent. to 10.47 per cent. The real increase was much greater, because conversion of sterling into gold at the current rate of exchange necessarily fails to represent the facts when prices of exports remain practically stationary, as they have done in this country.

The League of Nations give the quantum of world trade, and the quantum for 1934 was 10 per cent. less than in 1931, and yet in that time the exports of our goods increased in volume by nearly 10 per cent. Compared with the principal manufacturing countries there was in the United States a decline of 16 per cent., in Germany a decline of 42 per cent. and in France a decline of 25 per cent. Production in the manufacturing industries of this country was higher in the first quarter of this year than in any quarter of any other year. I think that goes some way to show that the allegation that world trade had so far recovered that our recovery was being dragged, as it were, at the heel of world recovery, is quite unfounded. Taking 1929 as the peak year of post-War prosperity, industrial production in France in 1934 was 29 per cent. below that of 1929, while in Germany it was 15 per cent. below and in the United States of America 34 per cent. below 1929. These are lower than any year in the post-War period. What was Great Britain's position? We were only one per cent. lower, almost on a level with the production of 1929. In the case of the production of manufactured goods the output of the United Kingdom in 1934 was the highest ever recorded. These are facts which I put forward in answer to the allegation that such recovery as there is—and I was glad to note that a recovery was admitted—is due to a recovery in world trade. That claim cannot be made out; it fails on the facts.


The hon. Member's facts are not a reply to my statement, which was that many countries which were our markets had recovered and that there was some employment for our people. I gave various instances, but I was not referring to competing manufacturing countries so much.


The right hon. Gentleman cannot quite evade the answer I am giving. I am not suggesting that in a reply of this length I can deal adequately with the whole of his statement, but I want to deal with the substance, the headlines capacity of his speech, that world trade had recovered, that we had recovered in consequence, and that because we had gone off gold our trade was expanding. I should like to pursue the examination of this matter, because it is important. I want the right hon. Gentleman to look at the imports and exports for the year 1934 and compare them with the year 1929. I suggest that he should take France, Germany, Italy, the United States and the United Kingdom. I will not trouble the Committee with the figures, I have them here in detail, but in France, in Germany, in Italy, and in the United States they are all of the order of the thirties or forties—


They are all gold countries.


I am suggesting that anybody who desires to look into this matter should take these countries first. I will deal later with the sterling group. Taking these five countries, I want to suggest that whereas the first four—France, Germany, Italy and the United States—all show imports and exports somewhere of the order of the thirties or forties, that in the case of the United Kingdom, comparing 1934 with 1929, he will find the imports in the sixties and the exports fifty-four. It shows that last year we had a much larger proportion of our 1929 trade than other countries, and it proves that in the matter of international trade Great Britain has done better than other countries in the way she has struggled through the depression of the last few years.

In regard to the Gold Standard, it is suggested that by going off the Gold Standard we acquired a bonus on manufactures, which has had the result of our export figures having shown an increase. That is the argument. It was put from the Socialist benches this evening by the hon. Member for the Don Valley and reinforced by the right hon. Member for Darwen. If the position was simply that one country goes off gold and another does not, there may be something to be said for the fact that a depreciation of the currency of the country which goes off gold shows a considerable balance in its favour. But the position is not as simple as that. Countries on the Gold Standard do not remain in that position. They take steps to prevent increased quantities of our goods going into their countries; they prevent their nationals from buying British goods and thus make it more difficult to deal with the countries which remain on the Gold Standard than before. So far from our having gone off gold giving us a great competitive advantage, it did nothing of the kind, because the position was neutralised. We were not the only country that went off gold. A great many other countries followed us almost immediately, and as a matter of fact our exports to countries that have gone off gold have increased to a larger degree than to those countries that have remained on gold. In the light of those facts it is demonstrably untrue to assert that our industrial recovery is due in any large measure to our having abandoned the Gold Standard. I am content to leave the matter with that declaration at this hour of the night.

The hon. Member for Don Valley raised questions about exports of aeroplanes, and there have been a large number of questions across the Floor on the same subject. An ordinary aeroplane which has no armament on it does not require any specific licence at all. It is what is called a subject of an open general export licence. If the hon. Member takes the point of view that any aircraft can at any time be converted from a civilian to a warlike aircraft, that is, of course, a matter of very general application and will apply presumably to the export of a very large number of chemicals and metals and other substances. If we are to admit an absolutely universal power of conversion from a civilian to a warlike purpose, it becomes very difficult to know what is an armament and what is not. Hitherto the practice with regard to aircraft has been that unless there is something in the nature of armaments fitted to the plane an export licence is not required. A large part of the hon. Member's question fails to have any point unless he can be sure in the instances to which he called attention that either the plane exported had some armament attached or was of such a character that it was the intention of the buyer to fit that armament when the plane was purchased. As these facts are not known and certainly have not been called to the attention of the Board of Trade the position is that the aircraft do not require licences under these terms.

The right hon. Member for Darwen referred to six towns, Glasgow, Cardiff, Blackburn, Darwen, Sunderland and Liverpool, and he twitted the Chancellor for having said that only the Liberals remained despondent and that the rest of the world broadly recognised that there had been some element of recovery.


That everyone else was happy.


The right hon. Gentleman mentioned the figures of unemployment. They are distressingly high in those six towns, but I have in front of me the figures for June, 1932, June, 1934, and June, 1935. I do not intend to read out long columns of them, but I will tell him that in Glasgow the figures are five points below what they were in 1932, in Cardiff two points below, in Blackburn three points below, in Darwen eight points below, in Sunderland four points below, and in Liverpool .6 below.


Three years of progress?


Progress in the right direction. There were, of course, a number of other matters raised in the Debate. The hon. Member for Paisley (Mr. Maclay) expressed the hope that the Government would never lose sight of the value of research and invention, and would insist on new trades and industries being encouraged in this country, as well as the revival and bringing up to date of the old basic trades, and the improvement of the lighter industries. Hardly a day passes but some instance of the practical application of the interest of the Government arises. If the hon. Member will look at some of the electrical trades, some of the wireless trades, some of the chemical trades, some of the newer lighter industries around London, he will find that there has been started in this country in the last few years a very large number of industries based entirely on new inventions, new research and new discovery, and he may accept my assurance that the fullest attention is given to the importance of that side of national industrial equipment.

The hon. and gallant Member for the Isle of Wight (Captain P. Macdonald) raised the question of the Congo Basin Treaties. Naturally, every aspect of those Treaties is being considered and they are under very close examination. We regard the matter as one of national importance and I am sure the hon. and gallant Member will not expect me to say more than those few words at the end of a Debate.


Would it be possible for the Board of Trade to make a statement on the matter before the House rises for the Recess, in view of the fact that the hon. Gentleman admits that this is a matter of urgent national importance?


Yes, but it is not a matter upon which there is only one current of opinion. It is a matter which requires a great deal of study.


There have been five years.


I have told the hon. and gallant Member that it is under careful consideration. I will consider whether it is possible to have a statement made between now and the rising of the House although I give no undertaking. The matter, as I say, is one which requires consideration and as soon as there is a possibility of a statement being made, that statement will be made. The hon. Member for Huddersfield (Mr. Mabane) returned to the charge and referred to the retail trade figures which formed the subject-matter of a question and answer earlier to-day. The Board of Trade would welcome any contribution from any association in these matters and I think that is probably enough to say at the moment. A number of Members asked about Government assistance to British exporters and traders in connection with the payment of accounts for the export of goods to foreign countries.

That is a very important part of the work of the Commercial Relations and Treaties Department of the Board of Trade. A large number of the agreements that have been made with foreign countries may be termed agreements primarily concerned with the liquidation of trade debts and I would cite as instances those with Germany, Italy, Brazil and Roumania.

The way in which those agreements operate to the practical benefit of the exporting industries of this country is very definite and very much appreciated by the industry. It is a matter which has had the constant attention of the Government Department. It is one of the very valuable sides of the ordinary trade agreement. You may have trade agreements which deal with reduction of tariffs, with sale and purchase and with exchange, but, besides those classifications you have trade agreements which are primarily money-collecting agreements and the freeing of frozen balances. Those four are instances of that kind. I hope that the Committee with this explanation will now proceed to the Vote and will reject the suggestion that the salary of my right hon. Friend the President of the Board of Trade could ever be too high.


On a point of Order. After that speech, would I be in order in asking leave to withdraw my Amendment to reduce the Vote by £100, and to move instead an Amendment to reduce it by £1,000?


Is it the pleasure of the Committee that the Amendment be withdrawn?



Question put, "That a sum, not exceeding £160,812, be granted for the said Service."

The Committee divided: Ayes, 42; Noes, 174.

Division No. 277.] AYES. [10.50 p.m.
Attlee, Rt. Hon. Clement R. Grenfell, David Rees (Glamorgan) Mason, David M. (Edinburgh, E.)
Banfield, John William Griffith, F. Kingslay (Middlesbro', W.) Maxton, James
Batey, Joseph Groves, Thomas E. Nathan, Major H. L.
Buchanan, George Hall, George H. (Merthyr Tydvil) Paling, Wilfred
Cleary, J. J. Hamilton, Sir R. W. (Orkney & Ztl'nd) Rothschild, James A. de
Cripps, Sir Stafford Harris, Sir Percy Samuel, Rt. Hon. Sir H. (Darwen)
Daggar, George Janner, Barnett Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Dobbie, William John, William Tinker, John Joseph
Edwards, Sir Charles Jones, Morgan (Caerphilly) Williams, Dr. John H. (Lianelly)
Evans, David Owen (Cardigan) Kirkwood, David Williams, Thomas (York, Don Valley)
Foot, Dingle (Dundee) Lansbury, Rt. Hon. George Wilmot, John
Gardner, Benjamin Walter Lawson, John James Wood, Sir Murdoch McKenzie (Banff)
George, Megan A. Lloyd (Anglesea) Logan, David Gilbert
Gibbins, J. Maclean, Neil (Glasgow, Govan) TELLERS FOR THE AYES.—
Greenwood, Rt. Hon. Arthur Mallalieu, Edward Lancelot Mr. Harcourt Johnstone and Mr.
Graham White.
Acland-Troyte, Lieut.-Colonel Greene, William P. C. Orr Ewing, I. L.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Gretton, Colonel Rt. Hon. John Peake, Osbert
Anderson, Sir Alan Garrett Grimston, R. V. Peat, Charles U.
Apsley, Lord Guest, Capt. Rt. Hon. F. E. Perkins, Walter R. D.
Astor, Maj. Hn. John J. (Kent, Dover) Guinness, Thomas L. E. B. Peto, Geoffrey K. (W'verh'pt'n, Bilston)
Bailey, Eric Alfred George Guy, J. C. Morrison Pickthorn, K. W. M.
Baldwin, Rt. Hon. Stanley Hacking, Rt. Hon. Douglas H. Pike, Cecil F.
Baldwin-Webb, Colonel J. Hartland, George A. Potter, John
Balfour, George (Hampstead) Harvey, George (Lambeth, Kenningt'n) Procter, Major Henry Adam
Balfour, Capt. Harold (I. of Thanet) Haslam, Henry (Horncastle) Raikes, Henry V. A. M.
Barclay-Harvey, C. M. Heligers, Captain F. F. A. Ramsay, Capt. A. H. M. (Midlothian)
Beaumont, Hon. R. E. B. (Portsm'th, C.) Herbert, Major J. A. (Monmouth) Ramsay, T. B. W. (Western Isles)
Bevan, Stuart James (Holborn) Herbert, Capt. S. (Abbey Division) Ramsbotham, Herwald
Blaker, Sir ReginaldHope, Capt. Hon. A. O. J. (Aston) Ramsden, Sir Eugene
Blindell, James Horsbrugh, Florence Reed, Arthur C. (Exeter)
Bowyer, Capt. Sir George E. W. Hudson, Capt. A. U. M. (Hackney, N.) Reid, David D. (County Down)
Brass, Captain Sir William Hume, Sir George Hopwood Reid, William Allan (Derby)
Brocklebank, C. E. R. Hunter, Dr. Joseph (Dumfries) Remer, John R.
Brown, Brig.-Gen. H. C. (Berks., Newb'y) Hunter, Capt. M. J. (Brigg) Renwick, Major Gustav A.
Burgin, Dr. Edward Leslie Iveagh, Countess of Runciman, Rt. Hon. Walter
Burnett, John George James, Wing.-Com. A. W. H. Runge, Norah Cecil
Campbell, Vice-Admiral G. (Burnley) Jamieson, Rt. Hon. Douglas Russell, Albert (Kirkcaldy)
Campbell-Johnston, Malcolm Ker, J. Campbell Russell, R. J. (Eddisbury)
Cazalet, Thelma (Islington, E.) Kerr, Lieut.-Col. Charles (Montrose) Salmon, Sir Isldore
Chapman, Col. R. (Houghton-le-Spring) Lees-Jones, John Samuel, M. R. A. (W'ds'wth, Putney)
Chorlton, Alan Ernest Leofric Lindsay, Kenneth (Kilmarnock) Sandys, Duncan
Clarry, Reginald George Lister, Rt. Hon. Sir Philip Cunliffe- Sassoon, Rt. Hon. Sir Philip A. G. D.
Cochrane, Commander Hon. A. D. Llewellin, Major John J. Selley, Harry R.
Collins, Rt. Hon. Sir Godfrey Lovat-Fraser, James Alexander Shaw, Captain William T. (Forfar)
Colman, N. C. D. Lyons, Abraham Montagu Simon, Rt. Hon. Sir John
Colville, Lieut.-Colonel J. Mabane, William Skelton, Archibald Noel
Cooper, A. Duff MacAndrew, Lieut.-Col. Sir Charles Smith, Sir J. Walker- (Barrow-in-F.)
Cooper, T. M. (Edinburgh, W.) MacAndrew, Major J. O. (Ayr) Southby, Commander Archibald R. J.
Copeland, Ida McCorquodale, M. S. Spencer, Captain Richard A.
Craddock, Sir Reginald Henry MacDonald, Rt. Hon. J. R. (Seaham) Spens, William Patrick
Crookshank, Col. C. de Windt (Bootle) Macdonald, Capt. P. D. (I. of W.) Stanley, Rt. Hon. Oliver (W'morland)
Croom-Johnson, R. P. McEwen, Captain J. H. F. Stewart, J. Henderson (Fife, E.)
Cross, R. H. McKie, John Hamilton Storey, Samuel
Cruddas, Lieut.-Colonel Bernard Maclay, Hon. Joseph Paton Strauss, Edward A.
Davidson, Rt. Hon. Sir John McLean, Major Sir Alan Stuart, Hon. J. (Moray and Nairn)
Davies, Maj. Geo. F. (Somerset, Yeovil) McLean, Dr. W. H. (Tradeston) Sugden, Sir Wilfrid Hart
Dickie, John P. Makins, Brigadier-General Ernest Thomas, James P. L. (Hereford)
Duncan, James A. L. (Kensington, N.) Margesson, Capt. Rt. Hon. H. D. R. Train, John
Dunglass, Lord Mason, Col. Glyn K. (Croydon, N.) Wallace, Sir John (Dunfermline)
Ellis, Sir R. Geoffrey Mayhew, Lieut.-Colonel John Ward, Lt.-Col. Sir A. L. (Hull)
Everard, W. Lindsay Mellor, Sir J. S. P. Ward, Irene Mary Bewick (Wallsend)
Fielden, Edward Brocklehurst Mills, Major J. D. (New Forest) Ward, Sarah Adelaide (Cannock)
Fleming, Edward Lascelles Milne, Charles Warrender, Sir Victor A. G.
Ford, Sir Patrick J. Mitchell, Harold P. (Br'tf'd & Chisw'k) Wedderburn, Henry James Scrymgeour-
Fox, Sir Gifford Molson, A. Hugh Elsdale Wells, Sydney Richard
Fraser, Captain Sir Ian Moore-Brabazon, Lieut.-Col. J. T. C. Whiteside, Borras Noel H.
Fuller, Captain A. G. Moreing, Adrian C. Williams, Charles (Devon, Torquay)
Fyfe, D. P. M. Morris-Jones, Dr. J. H. (Denbigh) Wise, Alfred R.
Gault, Lieut.-Col. A. Hamilton Morrison, G. A. (Scottish Univer'ties) Wolmer, Rt. Hon. Viscount
Gluckstein, Louis Halle Muirhead, Lieut.-Colonel A. J. Worthington, Sir John
Goff, Sir Park Nation, Brigadier-General J. J. H. Wragg, Herbert
Goldie, Noel B. Nicholson, Godfrey (Morpeth)
Goodman, Colonel Albert W. O'Donovan, Dr. William James TELLERS FOR THE NOES.—
Gower, Sir Robert O'Neill, Rt. Hon. Sir Hugh Sir George Penny and Sir Walter

Question put, and agreed to.

Original Question again proposed.

Ordered, That the Chairman do report Progress, and ask leave to sit again."—[Captain Margesson.]

Committee report Progress; to sit again To-morrow.