HC Deb 29 July 1938 vol 338 cc3521-39

Question again proposed, "That this House do now adjourn."

12.20 p.m.

Mr. Alexander

When the proceedings were interrupted I was referring to the adverse balance of trade, and I would like to add to what I then mentioned that the adverse balance last year was £52,000,000. I anticipate that in the first six months of the current year the adverse trade balance will' probably be steeper in its effect—it usually is in the first six months—and, therefore, we are facing the danger of an increasingly serious situation. The Federation of British Industries issued recently a manifesto on this subject. I will not quote it at length, but it finishes by saying that no nation can continue indefinitely to face an adverse trade balance of magnitude without permanently weakening the financial structure. In connection with this general trade position which we view with such anxiety, we on this side of the House at any rate are specially concerned with the constantly rising figure of unemployment. On 13th June the total number of registered unemployed was 1,802,000, an increase of 24,000 over the previous month, and on a comparable basis the June figure this year would show an increase of 500,000 over the figure for last June.

We have to remember, also, that 500,000 additional unemployed men mean that 500,000 additional homes are in restricted circumstances and subject to daily and weekly hardship. That is an exceedingly serious matter. As was pointed out in a Supplementary Question to-day, that is the position in spite of the rearmament programme, presumably now almost reaching its peak, and but for which it seems to me the registered figure of unemployment to-day would not be 1,800,000, but some figure nearer 3,000,000. We on this side of the House have asked more than once what was going to be done in regard to this important matter. The Prime Minister referred this morning to efforts to re-establish international trade. Unfortunately, as it seems to us, over and over again when we have tried to deal with this question, the expenditure on the rearmament programme and the unbalanced state of the Budget have interfered with any really active and constructive policy being announced by the Government to deal with this very serious situation. In spite of the statement of the Prime Minister repeated again this morning, I do not believe for a moment that anyone who examines the facts can feel other than that we are once again in the slough of trade depression.

Some of my colleagues when they spoke on this question on a previous occasion were told that they were alarmists, but the self-deception then practised by the Government was not adopted by the President in June. He was very frank about it. We see evidence on all hands of this serious position, not the least serious feature of which is the present heavy decline in railway traffics. One of the curious features of the situation is that to which attention was drawn by the "Economist". This position is accompanied by a shortage of labour in some industries and high activity in industries of the kind which are usually left dry when there is a slowing down of the tide of trade. In the past the Prime Minister in particular has always argued, and has indeed argued again this morning, against public works being undertaken to relieve depression. But when you consider this question of the varied circumstances of the employment and unemployment position that I have just mentioned, you have to remember that the Prime Minister's Government have, in fact, been relying very largely on special works—rearmament works—to deal with this situation. Yet we have these extraordinary differences in the different industries.

Later on to-day, I understand— and I hope—reference will be made by my hon. Friend to another example which has occurred this week in relation to this argument—the Prime Minister's refusal to consider the contributions that we think ought to be made to the cost of new bridges. The fact is that the President of the Board of Trade ought to be making representations to his colleagues that it is essential in the general trade interests, that urgently required public works of this character, should be put into operation, as this question is connected not merely with the home position but with the overseas position. Not the least important of these considerations is the present situation of the steel industry. I was very interested to read a long company report this morning in the "Times," in respect of Richard Thomas & Company, the very important steel company at Ebbw Vale. I will take only one short extract. The chairman, Sir William Firth, said: The absence of new business has been partly due to world depression and general lack of confidence, but largely due to the liquidation of stocks held by customers not only in this country but all over the world. It is very doubtful if normal trading conditions will return until conditions in America have greatly impoved. Therefore, when we are asking for some special consideration to be given to the usefulness of public works in this country in relation to an industry like the steel industry, we have to keep in mind what is the position overseas in regard to the United States and other countries. The steel industry undoubtedly is in very great need of orders, in spite of the expansion which took place a year or two ago as a result of the rearmament programme. The provision of public works of the kind to which I have referred would be exceedingly valuable.

The President of the Board of Trade has under his wing the Mercantile Marine Department, which is largely affected by this international trade situation. There is no doubt that the effect of the rearmament programme on iron and steel prices has been such that the shipbuilding industry is in danger, I will not say of going out of existence, but at least of beginning the decline towards that position. If the information contained in the Press this week is accurate—I have not checked up with any Chamber of Commerce figures—half the shipping berths in this country are empty, and actually this country is buying more tonnage from abroad than is being built here for foreign countries. It is true that the launchings are very heavy, but these are due to orders placed before the rearmament programme sent costs soaring. British shipowners have recently placed abroad orders to the value of £5,000,000 sterling, and only a few days ago the Canadian Pacific Company had to abandon the idea of placing orders in this country on account of the high prices. We hear continually that the cost of steel is preventing shipowners from placing orders.

The present position, I know, is due in part to the sharp recession in world trade. What we want to bring to the notice of the President of the Board of Trade is the need for dealing with this situation. The channels of international commerce have been silted up and reduced in number by the operation of quotas, tariffs, currency devices, bilateral arrangements, and be it said, such measures as the Ottawa Agreements. The Minister of Transport, whom I am glad to see come in, was one of the most prolific speakers in this House in putting through our continuous increase of restrictions on international trade. Now the effect is gradually being brought home to us in grave recession and greatly increasing unemployment. I am afraid that the volume of world trade as a whole is now falling. What is more serious in relation to our shipping is that the share of world trade carried in British bottoms is markedly declining. The necessity for doing something about this stands out. I do not want to be unfair, and I know it is much more easy to say that than to produce actual measures, but I remember an occasion when the party opposite were in Opposition and a tremendous attack was made on my right hon. Friend who used to sit in this House, Mr. Tom Shaw, because he used some phrase to the effect that he could not take rabbits out of a hat; yet this morning it was the Prime Minister who said "I should have to be a wizard to do the things which the hon. Member for Leigh is asking for this morning."

I believe—and I speak from my own personal conviction—that there is no real remedy for this position without a substantial move for the restoration of international trade. It is the position of the export trade which has contributed most to the current depression, and which will continue to contribute to the increasing depression. It is through the export trade that we can most usefully attack the problem of growing unemployment. I observe that a short manifesto was issued a week or two ago by the Federation of British Industries, in which they emphasised that exports must be increased, and they suggest that the British tariff should be of the three-decker variety, instead of, as it is in many instances to-day, the two-decker variety, and that there should be three rates—the lowest applying to the Empire, the middle one to those countries which treat British goods favourably, and the highest to those countries whose treatment of our goods we regard as unfair. I, personally, am a strong opponent of all tariffs and quotas, because I do not believe they are a satisfactory remedy for the international trade position: but in the present circumstances such a three-decker tariff would be an excellent thing, but only if the third schedule on commodities is drawn between two existing ones and provides concessions to countries that agree to facilitate our export trade.

There is a widespread feeling that the time is opportune for the countries that desire greater freedom in the exchange of goods to get together to promote it. If we could have an agreement on these lines it would be useful as a stimulating example to the rest of the world. That is why we asked to be allowed this morning to raise the question of the present negotiations on the proposed Anglo-American trade Agreement. We believe that such an agreement would not only help to clear the channels of world trade, but would also be a starting point for a fresh attempt at economic discussion. If I understood the Prime Minister aright the other day, agreement has been reached in respect of a considerable number of the commodities which have been the subject of the negotiations under that suggested American treaty. If I have understood the commercial and economic papers aright, it seems to me that the American Government have already offered to make extremely important tariff concessions for the benefit of United Kingdom manufacturers. Under the working of the most-favoured-nation Clause, the reductions would be applicable over a wide area. In return, I understand that the American Government have suggested that the British Government, among other concessions, should offer American exporters equality of opportunity with British traders in the British Colonial markets.

There is no doubt that there are many things in the Ottawa Agreements which are handicaps to the creation of a framework for freeing world trade. Probably, one of the reasons for the long delay in reaching a trade agreement in regard to the American negotiations is the difficulties in relation to the Ottawa Treaty, although I should not be at all surprised if there is not also considerable opposition from the British manufacturers and exporters of what I might call the Birmingham type of mind. In that regard I hope that, when the President of the Board of Trade comes to reply, he may tell us what are the actual difficulties which are still standing in the way. We know, however, that when the President has to negotiate with the United States there are a number of commodities and industries which he must come up against—certain Imperial productions and exports. American fruit and lumber, for example, come up against the Canadian, and I understand that the Canadian Government resist very strongly any concession to the United States of American on these particular commodities.

But although we were well behind other countries up to 1931–32 in a protectionist policy, we have in the last six years probably done more than any other country to restrict international trade. Not only have we passed the Import Duties Act and the Ottawa Agreements Act, but we have by Order reversed the open-door policy in regard to trade with our colonies. Therefore, when one bears in mind the fact that this week the Prime Minister has again banged the door upon any immediate consideration of the van Zeeland Report, we ought to press the Government very strongly to tell the House and the country what they are doing and are prepared to do, in face of the very serious adverse trade balance and the growing depression, really to reopen the channels of international trade. It is often argued that the van Zeeland Report would be a very useful document if conditions were more stable on which to begin to operate negotiations. I remember that M. van Zeeland thought that it would be most undesirable, in view of the serious world position, if any attempt were made to delay real discussion or any attempt to open up negotiations.

There is one other point in connection with this international trade position that I should like to mention. The President of the Board of Trade is himself signatory to a White Paper, which was issued, I think, on 20th July, with regard to the Australian trade discussions. I do not know what the President of the Board of Trade will have to say to us about it, but apparently, reading between the lines of that document, an almost complete deadlock was reached. I would direct specially the attention of the President to paragraph 9 of the report which states that the United Kingdom Ministers are prepared not to press their objection to the interpretations now placed by the Australian Tariff Board upon Article 10. That Article is an undertaking by the Australian Government that their tariffs shall be based on the principle that protective duties shall not exceed a level which will give United Kingdom producers full opportunity of reasonable competition. Does the White Paper, to which I have just referred, mean that really as a result of these negotiations, for the time being at any rate, the British manufacturers have been let down? We should also like to know whether conversations are taking place with other Dominions in relation to what we regard as fundamental, that is, the urgent and immediate conclusion of a trade agreement with the United States of America. If there are any special difficulties in regard to the other Dominions, I think that, as long as he does not betray any confidences, it would be a good thing for us and for the trade if the President of the Board of Trade would indicate what those particular difficulties are.

I must leave time for other hon. Members to speak on this question, but it is, of course, in Parliamentary practice the duty of the Opposition to oppose, but the situation to which I drew attention at the opening of the Debate, the international trade position, the enormous increase in unemployment in the last 12 months and the increasing difficulties in regard to the social conditions of the people of this country, must surely mean that all parties in the House are concerned with pressing on with the question of trying to reopen the channels of international trade. It would be extremely valuable if the President of the Board of Trade could, therefore, arising out of the broken remarks which I have addressed to him, give us a more detailed report about the position of the Anglo-American negotiations than we got from the Prime Minister last Tuesday. We understand that there are difficulties, but it would help Members of the House, and I am sure it would help members of the trading community, to try and assist in regard to the situation if we knew more of what those actual difficulties are.

I am more than ever convinced, as a result of a study of the present situation and an analysis of the trade situation for the last eight years, that what we have always said from these Benches has proved to be correct, namely, that the adoption of a policy of tariffs, quotas and restrictions, in order, as it used to be claimed, to maintain employment, has proved to be completely fallacious; that, in fact, with the imposition of Customs Duties to-day of one hundred odd millions more than in 1931, if it were not for the existence of the special emergency armaments programme, we should to-day be in a far worse trade position and employment situation than we were then. The case that we put is that, in spite of the claims that have been made by the Government in the last four or five years as to what tariffs have accomplished, we cannot possibly maintain the situation of this country, with its 45,000,000 people to provide for, unless we get down to a better basis with regard to the flow of international trade. We urge, as the immediate and first step, that the negotiations with the United States may be so pressed as to come to a successful conclusion.

12.44 p.m.

Mr. Quibell

I desire to draw attention to the answer given by the Minister of Transport respecting particularly the Humber Bridge, and other bridges, the schemes of which have been submitted to his Department for approval. We have good reason in this case to be exceedingly disappointed with his answer. I myself, in addition to the local authorities concerned, have been associated with the promotion of the Humber Bridge scheme since 1930. The Bill for the promotion of this bridge passed its Third Reading in July, 1931, after 32 days in Committee and after a good deal of money and valuable time had been expended in the preparation of its details. For the past 12 months we have been endeavouring to induce the Minister to approve of the erection of a new type of bridge that would get over the difficulties that we previously encountered. We have seen the Minister on several occasions and have pressed him by questions to allow us to proceed with the bridge. Considering the length of time that it will take the meet the local authorities in negotiations and for the engineers to prepare their scheme for bores and tests and other preliminary work to be undertaken, we are deeply disappointed at the answer that we have received this week and the discouraging attitude of the Government respecting this project.

The construction of the bridge would provide a large amount of work. There would be the approach roads, and then there is the question of the amount of steel that would be required. My right hon. Friend has stressed the point in regard to the steel industry. It is absolutely essential that so far as that trade is concerned local authorities should, whenever possible, promote schemes which would embody a certain amount of steel. It is important that that should be done for the purpose of helping the iron and steel industry. The projected bridge would be one of the most important connections between the North and the South and would provide a dual Great North Road connection. It may be said that this proposal would not meet the immediate position in the steel trade due to the recession of trade in steel. That may be true, because it would take us perhaps two years to carry through the preliminary negotiations, but the whole of the steel trade, the employers and the workmen, and the whole of the local authorities stand behind us in the demand for this bridge, so that they may look forward to the time when the steel trade will be helped very considerably because of the large amount of steel that would be required in its construction.

I should like to draw attention to the recession that has taken place in the iron and steel trade and to ask what steps, if any, the Government are taking to safeguard the interests of those who are almost entirely dependent upon this great basic industry for their livelihood. Hon. Members must be seriously perturbed at the increased unemployment in constituencies where this great industry is situated. In my own division I find that in this industry men are on short time, mills do not know how to keep going, blast furnaces are being blown out, and unemployment is increasing in one of the centres of this great industry, which is considered to he one of the most prosperous areas in the United Kingdom. There is a shortage of orders in every branch of the steel trade, and the people engaged in the industry, employers and workmen, are looking to the future with a good deal of anxiety as to what will finally happen to it.

I do not know whether it is the high price of steel that is having this adverse effect on the trade; if so, can it not be remedied in some way. What do we find? As my right hon. Friend has stated, British shipowners are being driven from our own shipbuilding centres to place their orders in foreign countries, thereby making the shipbuilding industry in other countries prosperous while our own is lacking work. We are informed that British shipowners have placed in foreign yards, mostly German, orders for new ships to the value of not less than £5,000,000. Strangest thing of all, British shipowners have placed orders for £1,000,000 worth of shipping in Chinese yards, while in this country the shipbuilding industry and the steel industry are looking to the future with anxiety. It is a serious matter that shipowners are being driven by high prices to place their orders in foreign yards to the detriment of our own employers and employés and to the advantage of foreign shipbuilding masters and foreign workmen. In 1930 our export of ships represented in value not less than £19,000,000.

We are told that the recession from which the iron and steel industry is suffering is due to world conditions. As a matter of fact it is the reverse. For instance, Poland and Russia are increasing their output of iron and steel tremendously. Like hon. Members opposite, I am not altogether enamoured of the methods of the Russian Government, but I am bound to say that the progress they have made in regard to their iron and steel industry has been marvellous, while we have been suffering a recession, and while we have been suffering from a decline in our pig iron industry, Poland has nearly doubled her output of pig iron.

The President of the Board of Trade (Mr. Oliver Stanley)

Since when?

Mr. Quibell

I will give the figures to the right hon. Gentleman a little later. It is a fact that there has been a tremendous increase in the production of pig iron in Poland; the output has been nearly doubled. On the other hand, 37 blast furnaces have gone out of blast in this country and a large number of those that are continuing in blast are going on slow blast, or what we call slack blast, which restricts output, and that in its turn reduces automatically the wages of those engaged in that great industry. Yet the Government sit down and, as far as I can understand, leave the matter entirely in the hands of the Import Duties Advisory Committee, composed as it is of employers in the iron and steel trade, who have mishandled, misjudged, or miscalculated the conditions of the world and this country very badly. In my own district we have been melting French pig iron and blowing our own furnaces out. As far as the Import Duties Advisory Committee is concerned the present position shows how dangerous it is to put this question into the hands of employers. They have made recommendations which have been accepted, and have put men out of work. They are men who are supposed to know their business, but they have imported pig iron to such an extent that it has destroyed at least 25 per cent. of the pig iron trade of this country and, as I have said, 37 blast furnaces have gone out of blast since last November.

We have always been told by hon. Members opposite that the purpose of a tariff is to keep British workmen at work and to retain the home market for the home producer, but in this case it has meant men being put out of work, and so far as the iron trade is concerned we are constantly receiving letters of a very discouraging character indeed from leaders in the trade union movement connected with the blast furnace men's associations. They are anxious because their men are being daily put out of work. The same thing applies to the steel trade. My right hon. Friend has referred to the meeting of the Richard Thomas Company. I can picture the meeting which is described in to-day's paper, where a representative of the steel trade met a representative of the bankers. The banker said, "Yes, what is it you want?" A north Lincolnshire friend of mine who went to the banker for an overdraft was asked the same question, and he said, "How much have you got?" In this case it was very nearly approaching that.

The banker said, "What do you propose to do in these steelworks? What capacity is it." The answer was "They will be the finest steel works ever put down, the last word in mechanisation and rationalisation and their output as far as sheets and steel sheets are concerned will be sufficient to supply the whole of the home market." "Wonderful," said the banker, "and you want me to help you. Do you know that already I am committed and my customers are in this matter? I and my customers hold shares in companies which will be closed down, and the shares of no value whatever if these works operate to full capacity, and these shares are held as securities for overdrafts, and if you operate to full capacity you are going to help one distressed area but, by heavens, you are going to create five more. If you are allowed to complete this work in order to help this distressed area I must be on the board to see that the interests of other steel works and our own, are safeguarded. Secondly, you must have a director of the Lancashire steel company on the board to see that you do not work at full capacity or undersell other manufacturers and, in the third place, we must put an accountant on the board to see that you do not recklessly spend the money which we propose to lend you."

This is the condition of the steel trade, and while this particular firm which is encouraged to go ahead for the purpose of solving the difficulties of a distressed area, will put 1,000 men in work, it will at the same time put 4,000 men out of work in other steel works. In my own district extensions are taking place to put down the most modern plant that you can find in the world. A statement was made by the Ministry of Labour about a fortnight ago in which he said that all evidence hitherto had proved that machinery and inventions had always increased employment, but I will wager—no, I am not allowed to do so, as this is not a place within the meaning of the Act—that if these steel works, these great blast furnaces, are put down they will turn out an increasing amount of iron with less human labour employed in its production than has been engaged hitherto. Every time there has been improvement or rationalisation in the steel trade, it has meant putting thousands of men out of work, even at a time which is called a real boom in trade. To-day in the iron and steel trade men are being put out of work because of these developments, and while we are extending steel works and spending money on modern plant there are no markets available for the products of the steel works which are now operating.

Last year in one annual report it was said that they were operating only to the extent of 50 per cent. of capacity, and yet we are building another huge steel works which will increase the power to produce when there are no markets for the product. This is a matter as much for the workmen and the Government as it is for the employers. We look with considerable anxiety to the prospects of unemployment in this great industry when these great steel works and modern extensions do operate. While they will put some men in work it means that they will put more men out of work in other plants which are probably out of date; and you have solved no problem.

The Prime Minister has said that the Government do not share the view expressed in some quarters that there was anything like a slump. It is now called a recession. Had we been on the Government side and the Government on this side I know what would have happened. We should have been reminded time after time that there was a recession, that there was something like a 25 per cent. drop in the steel trade as compared with 1937. The Government have sent out circulars to local authorities to prepare a five-year programme in order to mitigate the evils of unemployment, and to prepare schemes of work which will absorb them. We have put up schemes to the Government such as the Humber Bridge, the Severn Bridge and the Forth Bridge. They are a five-year programme, and are works which if carried out would help to develop this country. I ask the Minister of Transport to try again and see whether he can induce his colleagues to allow him to proceed with some of these schemes and spend a bit of money in developing this country of ours. If he does, we shall be very grateful indeed to the right hon. Gentleman, and he will have done a fine piece of constructive work for this country.

1.5 p.m.

Mr. Stanley

I think it would be convenient to the House if I intervened now to answer the speech of the right hon. Gentleman the Member for Hillsborough (Mr. Alexander), as I understand that several other hon. Members wish to deal with the question of bridges, which is a matter that properly concerns my right hon. Friend the Minister of Transport, who will reply to those speeches. As the right hon. Gentleman the Member for Hillsborough said, we have during the summer had several Debates on the general economic situation, and in those Debates I have endeavoured to put before hon. Members the situation, as I saw it, as frankly and in as great detail as was possible. Therefore, I do not propose to-day, when there is a number of subjects to be discussed and a number of hon. Members wish to speak on different topics, to repeat the more general statements that I have made in the past, but I wish to add a little which will bring more up-to-date some of the views which I have expressed.

First of all, the right hon. Gentleman referred at some length to the adverse balance of trade, which, of course, is a matter that must give the Government cause for constant and anxious attention. The right hon. Gentleman will realise—although I am not sure that the public generally realises—that the course of overseas trade has altered completely as between the first and second quarters of the year. Whereas during the first quarter of the year there was a monthly increase in the adverse balance of visible trade as compared with the year before, in the three months of the second quarter the adverse visible balance of trade has month by month been lower than a year ago. Although the fall has not yet been sufficient in the second quarter to make up for the increase in the first quarter, yet the tendency now is towards improvement, at any rate in the visible balance of trade.

Before coming to the main topic which the right hon. Gentleman discussed, namely, the Anglo-American Agreement, the right hon. Gentleman referred to one or two other matters. He dealt with the question of the iron and steel trade, in which he has been followed by the hon. Member for Brigg (Mr. Quibell), who desired the building of bridges not only as a matter of transport but also as a relief to the trade. The hon. Member himself was the first to point out that, in fact, such relief as that could give would be postponed for a period of two or three years, and I think I am right in saying that, to a large extent, the kind of steel that would be required for these bridges is not the product of that section of the industry which is suffering most to-day. What would be required for these bridges would be largely heavy constructional steel, which so far, at any rate, has not experienced to anything like the same extent the recession which has been experienced by the lighter sections of the trade. In fact, from all the reports I have had, the heavy sections are still working full time, although it is true that there is same falling off in their order books and that the prospects for the future are less certain.

Mr. Latham

I am sure the right lion. Gentleman would not desire to base any statement upon misinformation. I happen to have information from Sheffield to the effect that all the rolling mills which are producing precisely the heavy product to which he has referred, with two exceptions, are on short time, and that some of them are working only three days a week. I am sure the right hon. Gentleman will agree that that deserves most serious consideration.

Mr. Stanley

As hon. Members probably know, on Wednesday of every week the "Times" publishes an iron and steel report. No one can blame the Government for its publication or complain that it is over-optimistic because of Government influence; it is an entirely independent report on the steel trade. I am sure that hon. Members will have been glad to see that a much more favourable account was given, at any rate for the future, in that report last week than has occurred for many weeks past. It stated: A more optimistic feeling is in evidence and the inquiry in some departments has become more active. These tendencies point to a revival in business in the early Autumn rather than a broadening in the demand during the holiday period, hut the outlook now is regarded as being more encouraging than at any time since the first part of the year. The right hon. Gentleman the Member for Hillsborough also referred to the Mercantile Marine and in particular to shipbuilding. That, also, is a matter of great concern. Recently, the House debated the position of the Mercantile Marine, and I then expressed the anxiety which the Government felt regarding the state of the Merchant Navy and their willingness to consider sympathetically any proposals which the shipowners were themselves able to put forward for consideration. I am at the present time in touch with the shipbuilders with regard to the situation that has arisen there. I would also point out—and I hope that my authority will not be challenged, because the information was given to me in connection with the very incident to which the right hon. Gentleman referred, namely, the building of new ships for the Canadian Australian line—that as a matter of fact the rise in the cost of shipbuilding is due only in a very small part to the rise in the cost of steel and that a very large proportion indeed of the increased cost is due to the rise in wage costs in the shipbuilding and subsidiary industries.

The main part of the right hon. Gentleman's speech was devoted not to specific instances, but to a general discussion of our foreign trade and the prospects of and the difficulties that face our export trade. I was extremely surprised to hear the right hon. Gentleman at one moment praise the van Zeeland Report and at another moment say that what this country wanted was a three-decker tariff. A three-decker tariff would mean the abandonment of the Most-Favoured-Nation Clause. The right hon. Gentleman, who has studied the van Zeeland Report, knows that M. van Zeeland was not in favour of the abandonment of that Clause, and I think that the right hon. Gentleman, who has very great knowledge on these matters of foreign trade, knows the very great disadvantages which might well follow to the foreign trade of this country from the abandonment of the Most-Favoured-Nation Clause.

Mr. Alexander

I know that the right hon. Gentleman does not wish to misrepresent me, but I would point out that at the opening of that part of my speech I said that I am against all tariffs. I went on to say that if the Government were led to consider the suggestions of the Federation of British Industries for a three-decker tariff, that could not be regarded as good without the concessions I mentioned.

Mr. Stanley

If there were no tariffs, there would be no three-decker tariff, and no necessity for the Most-Favoured-Nation Clause. I am glad that the right hon. Gentleman, in so far as tariffs exist, attaches importance to the Most-Favoured-Nation Clause. But I understand that the main object of raising this Debate was to inquire about the progress of the trade negotiations with the United States. I cannot think that the right hon. Gentleman seriously expected that I should answer the sort of question which he put to me, or give him the sort of information which he indicated he desired.

Mr. Alexander

I hope the right hon. Gentleman will.

Mr. Stanley

I wonder whether the right hon. Gentleman wants a treaty or whether he does not. I believe he is one who genuinely desires it, as I do, but I wonder whether he really thinks that negotiations for a trade treaty are assisted by both sides publicly in their respective countries stating from time to time exactly what they are discussing, what their difficulties are and what their agreement is. I have no knowledge of any trade treaty or any other treaty which has ever been negotiated in those circumstances, and I cannot imagine that it is a way of negotiating which is very likely to meet with success. Nor can I agree with the right hon. Gentleman's repetition of some of the remarks which have appeared in the Press as to the attitude which may have been taken up on particular subjects, either by the Government of the United States or by this Government. The right hon. Gentleman must not fall into error. He must not, too easily, be led to believe that everything that appears in the capitalist Press is necessarily true.

It is impossible for me to go further today than to repeat the statement which was made by the Prime Minister at the beginning of the week. It is true that people may have been rendered anxious by the delay in the negotiations, but I would point out that the last treaty which the United States Government negotiated was one with Czechoslovakia, and from the day on which notice was given of the intention to proceed, to the day of the signature of that treaty was nearly six months. We have now occupied only a few weeks longer than that period, and I would ask the House to compare the difficulty of negotiations between Czechoslovakia and the United States, with the difficulty of negotiations between this country and the United States, with all the complications of the Dominions and the Colonial Empire as well. I hope the House will realise that for a matter of this complexity no undue length of time has been taken. The right hon. Gentleman will no doubt have seen the statements made by Mr. Cordell Hull to the Press after the Prime Minister's speech. I can assure him that it is the very strong and anxious desire of his Majesty's Government to bring these negotiations to a successful conclusion, and to obtain as a result a treaty which will be fair to both parties and will lead to the expansion of the trade between the two countries and which may be, perhaps, the first step to an increased expansion of trade elsewhere in the world as well.

The right hon. Gentleman said we had done more than anyone else to restrict world trade. To start with, I am not sure that, even if that statement were true, it presents a fair picture to the world to select a period when everybody else had done their worst, when everybody else had done all that it was possible to do in the way of restricting trade, and then to say that, in the six years after that, we had done more than the others had done. But the statement, of course, is based on a pure fallacy. In the first place, this country has never embarked upon those things which M. van Zeeland rightly points out as being the most restrictive actions of all, such things as currency restrictions and quotas on industrial goods. Secondly, that sort of statement is entirely inconsistent with the opening of the right hon. Gentleman's speech. He then pointed to our increased adverse balance of trade, an increase which is due almost entirely to the very large increase in imports. But how could it be said, at a time like last year, when we took, I think, more imports than we ever took before, that we had been the worst offenders in the way of restricting our market to international trade?

Mr. Alexander

May I point out in regard to the adverse balance of trade, that we have a worse balance to-day than we had in 1931 when we had practically no protective tariffs and that the adverse balance of trade is affected just as much by the position of our export trade as by that of our import trade.

Mr. Stanley

The right hon. Gentleman cannot get away from it like that. If he analyses the figures he will see that last year we had an enormous increase in imports. They reached a figure in advance of any which we have ever had, and, in face of those actual results, it is impossible to pretend that we have been in these last few years, as he says, the worst offenders in the way of restriction of international trade.

Finally, I wish to deal with one question which the right hon. Gentleman put with regard to the Memorandum on the Anglo-Australian conversations. He was anxious to know the meaning of the reference in paragraph 9 to the effect that we were prepared not to press our objection to the interpretation now placed by the Australian Tariff Board upon Article 10. He wanted to know whether that meant some worsening of the position of our manufacturers. It does not. It means that while the examination of the possibilities of maximum duties as a substitute for these Tariff Board clauses, is being carried out, the status quo will be maintained. This interpretation was put upon these Articles by the Tariff Board I think some three years ago and they will be interpreted, during the period of investigation, in the same way as they have been interpreted for the last three years.

It is because of difficulties of that kind that the United Kingdom Delegation were so glad to receive the assurance of the Australian Delegation that they would investigate the possibilities of the alternative form of trade treaty, the much more usual form of trade treaty, which is that of a schedule of maximum duties. The right hon. Gentleman will recollect that, whereas, at Ottawa, Canada entered into an agreement of the same type as the existing agreement with Australia, in a revision of that agreement last year she adopted to a very large extent the system of maximum duties, and that, I think, has led to great convenience of trade between the two countries. For that reason, the Government attach great importance to the promise of the Australian Ministers to investigate the possibility of such an arrangement in their case.