HC Deb 30 November 1938 vol 342 cc445-505

4.10 p.m.

Mr. Sutcliffe

I beg to move, That, in view of the urgent need to promote our overseas trade and guard against any undue increase in the adverse balance of payments, this House welcomes the recent statements by the President of the Board of Trade, as to the intention of the Government to assist the basic exporting industries, and is of the opinion that particular regard should be had to the desirability of maintaining and increasing trade within the Empire; of using the buying power of this country in the most effective manner possible in the negotiation and revision of trade agreements; of assisting the cotton and other exporting industries to increase their efficiency and to maintain and expand their overseas trade; and of promoting action, where necessary, to overcome the increasing menace of State-aided foreign competition. Much has, of necessity, been heard in this House during recent weeks about foreign affairs, Defence and other kindred subjects, and all too little has been heard about our trade and industry. Therefore, I want to-day, in the time available to private Members, to direct attention rather to our own industry, and especially to our export trade, on which, after all, our whole future as a great country and the welfare of our people depend. To-day it is only those nations which look ahead and have a determined policy for the future which can hope to compete with the new conditions. The President of the Board of Trade, speaking in this House on 1st November, referred to the new technique of competition with our export trade in the markets of the world, and went on to say: If we are to maintain our exports in face of the new form of competition there must be some form of unity in the industry which will enable it to direct its exporting power at its strongest wherever we wish it to direct it. I welcome the assurance which he gave that the Government are fully alive to the danger of the competition that faces us. My right hon. Friend went on to say that the Government were prepared to give whatever assistance we can to the industries of this country to put themselves in a position to fight, if fight they must."—[OFFICIAL REPORT, 1st November, 1938; col. 181, Vol. 340.] I was pleased to see, also, that that sentiment was followed up in the Gracious Speech from the Throne, in which it was stated that Ministers would persist in their efforts to establish favourable conditions for the development of overseas markets. I know that that has given satisfaction. The export trade are assured that the Government are keeping their interests in the forefront of their policy at the present time, but I know, too, that these great industries are most anxious that the Government's intentions should be translated into action as soon as possible. That is the reason why I have moved this Motion, in the hope of getting from the Government some encouraging statement which will give the basic export trades something really tangible on which to base their expectations for the future. New life must be put into the export trade if our position in the world is to be retained and the standard of living of our people maintained or, as we hope, improved.

The seriousness of the situation is shown by the grave deterioration which has taken place in the position of what is, after all, one of our greatest export industries, the cotton trade. I wish during the next few minutes to direct attention to the seriousness of the position in that industry. The value of our exports of cotton manufactures in 1928 was £145,000,000, but in 1937, after a lapse of 10 years, the figure had fallen to only £68,000,000. No doubt the fall was partly due to a decline in values, but only to a small extent. At the same time the volume of cotton piece goods exported fell from 3,866 million square yards to 1,922 million square yards in the same period. The decline mostly took place in the period from 1929 to 1931, but since then little recovery has taken place. In fact, the most alarming feature is that during the first 10 months of this year the exports of cotton manufactures were only two-thirds of what they were during the first 10 months of last year. They were some 1,159 million square yards, as compared with 1,631 million square yards in the first 10 months of 1937. The American side of the spinning industry to-day is working at less than 50 per cent. of its capacity, in fact, it averages between 40 and 50 per cent. from week to week, and at present is nearer to 40 per cent. than 50, and that is, I am assured, the lowest percentage which it has ever experienced.

I do not want to dwell too long on that serious position, but I want to emphasise that this decline in the cotton industry is by no means a local matter. It affects the whole nation, a point that is sometimes apt to be forgotten. In 1928, for instance, the cotton manufactures were 20 per cent. of the total exports of the country, but this year, so far, the proportion has fallen as low as 11 per cent. A solution of the cotton export problem would go a long way towards improving the export trade of the country as a whole. The cotton trade has a most essential contribution to make to the national balance of trade. The industry imports all its supplies of raw cotton, and, in spite of that, the export of cotton manufactures is still large enough to pay for the whole of those imports and, in addition, to provide a surplus. In 1937 this surplus amounted to £22,000,000, but that is far less than it was 10 years ago, when cotton's contribution to the balance of trade was no less than £89,000,000. That is a decline of £67,000,000. I say without hesitation that the decline in the cotton exporting industry has produced much of the difficulty which we now find in balancing our internal accounts. That sum of £67,000,000 would have been more than sufficient to pay for our whole imports of wheat last year, or sufficient to pay more than five times over for our imports of rubber.

There is another aspect of the matter to which I must refer from the national point of view, and that is the employment position. Assuming that two-thirds of those who are employed in the finishing industry are employed on cotton goods, the total number of people employed has fallen from 536,000 in 1928 to 347,000 in 1938—a difference of 189,000. Many, fortunately, have found work in other districts and in other parts of England, but the number of unemployed in the cotton industry still ranges between 70,000 and 90,000. That is the position, and it is a formidable one. Indeed, it is a most tragic position, despite all that has been done, in trade agreements, for instance. Under several trade agreements, as the President of the Board of Trade informed me the other day, we have improved the position of the cotton industry to some considerable extent. In that connection we particularly welcome the Agreement with the United States of America, which has been very well received in Manchester. As we know, that Agreement was the outcome of a great deal of hard work on the part of the Board of Trade and its President, and we look forward to some advantage from it, but, of course, the United States tariff has the highest in the whole world, and although the reduction is large, the effective tariff is still high. I am not saying that with any intention of belittling the Agreement, but the tariff does remain high, and it remains to be seen whether the purchasing power of the United States and the attractions of our own goods will be sufficient to surmount it. But this Agreement is one of very great significance and opens up great possibilities for the future, and we welcome it.

In this connection I want to stress the point that cotton ought to receive more consideration in connection with our trade agreements. It has often been said that cotton should come first in all agreements. Much has been done for coal, and we do not complain, because the coal industry was in a very serious position and needed help, but the latest legislation dealing with the coal industry has placed a burden of £750,000 a year on the Lancashire cotton industry alone in respect of coal, and while willing to bear it, they do feel that their own industry should now come first, and should have a greater place in trade agreements than in the past. A more aggressive line on behalf of the cotton industry should be taken in connection with these trade agreements. A lot has been said in Lancashire during the last few months or indeed years—and the feeling seems, unfortunately, to be growing—to the effect that the Government are not particularly interested in the cotton trade.

If the Government could once and for all dispel that idea, it would do a great amount of good, and I hope that idea will be largely dispelled by my hon. Friend the Secretary of the Department of Overseas Trade who, I understand, is going to reply. He represents a seaside resort in that county—at least it used to be a seaside resort, though I rather think the sea has left it. At any rate, it is still a popular place with retired cotton manufacturers, if any are able to retire nowadays which seems somewhat doubtful, and he is therefore in contact with many of the heads of the cotton industry, and we look forward to hearing some constructive suggestions from him. It would be a fine thing if only he could dispel the sort of pessimism which has settled upon Lancashire arising from the feeling that the Government are not doing sufficient for this trade.

I know that there are many difficulties. We have lost our chief export market in India which, owing to the growth of economic nationalism, has in the past 10 years increased its production of cotton goods by some 2,000 million square yards while we have lost 1,200 million square yards of our exports to India. The trade are anxiously awaiting the outcome of the recent Government negotiations with India. We still import from there more than we did in 1913, whereas our exports to that country are only half what they were before 1914. Much has been said in the North to the effect that we must take a firm hand and force India to reduce her tariffs against our goods. We know, unfortunately, that is not possible, because the matter is now out of our control, but the position must in course of time be considered on a purely commercial basis alone, apart altogether from the political basis or the tariff basis. Surely this discrepancy in what we buy from India and what India buys from us has become so enormous that more consideration should be shown for our manufactured goods. The difficulties can only be overcome by negotiation, by persistence on the lines of the recent negotiations, of which we are still waiting to hear the result, but we do use such large quantities of raw material that we are in a position to compel attention to the demands for fairer treatment for our exports of manufactured goods of all kinds, and I think some scheme could be evolved.

Take the position of the Colonies. I think it is true to say that if the quota regulation policy on foreign imports going to the Colonies had not been adopted, our markets would have been virtually extinct there, and so we welcome that policy, but I am rather afraid that in the course of time we shall lose more and more of our Colonial trade, unless the greatest care is taken to foster it. Recent figures tend to show that that time is approaching. Many Colonies are undeveloped on account of a lack of capital, and the capital for development can only come from industry or from the Government. What can we do? I urge the Government to call a conference with the Colonies to go into the details of this great question of Colonial trade and development before it is too late. It is possible to do it now, but the time will come when it will be too late. The Government should interest themselves more in the development of our supplies of essential raw materials from our Colonial Empire. If we purchase their natural products surely they should provide a favourable market for us, and especially for our chief exporting industry, that of textiles. Take the sugar industry as an example. The present position of the West Indian Colonies is due to the fact that in the past sufficient attention has not been paid to those Colonies in connection with the development of the sugar industry. We have given far less attention to that market than the Americans gave in the case of Porto Rico, for example, with the result that our exports to those Colonies have fallen far short of possibilities—far short of the American exports to Porto Rico. I maintain that there is infinite scope for planning, and it is planning that we must have, the planning and the development of the Colonial Empire both in their interests and our own. I most strongly urge this idea of a conference upon the Government for consideration.

There are one or two other matters to which I wish to refer shortly while on the subject of Colonies, and one is the Congo Basin Treaty, because a great deal of propaganda is going on in Lancashire in favour of our abrogating that Treaty. No doubt the Treaty is operating very unfairly, and the situation is in many ways unsatisfactory, but the legal position has been stated in this House by the Law Officers of the Crown and we know that the Treaty cannot be abrogated unless all nations who are parties to it agree. But I do urge that the Government should take advantage of every opportunity which arises to alter the present situation to make it more helpful to our own industry. Indeed, I hope they will go further and create the opportunity for such a course.

There is much talk about our Colonial position, and it will come much more to the fore during the next few months, and conferences upon it will probably be held. That may provide an opportunity to do something about the Congo Basin Treaty. I would urge that that possibility be kept in view and that if the opportunity should arise, or if there should be any chance of making the opportunity, the Government should take it. In regard to the Most-Favoured-Nation Clause many statements are being circulated. We do not want abolition, as some people suggest, it is out of date and its conditions are evaded. It now operates unfairly to our export trade. What is needed is a fresh interpretation of the principle of no favouritism.

Now a word about the enabling Bill, which has been talked about for just over two years. Lancashire as a whole certainly wants the Bill and we hope that too much further delay will not take place in the production of the Bill. It is not the Government's fault, but now that we have reached agreement with nearly everybody and that we are, so to speak, at the last fence and as the Bill is badly needed, speed is essential, since so much time has been lost. People cannot go ahead with contracts, and in some directions trade is held up because people are uncertain whether the Bill will be brought forward. I suggest that it should be brought forward during the present Session and as early as possible, and that too much consideration should not be given, after two years, to the people who are opposing it. We have got nearly unanimous consent. I believe the Government have whittled down the original plan and that agreement has almost been reached. The time has come to pay less attention to anybody who tries further to stop its progress.

An illustration was given to me last week to show how the Bill would operate and the necessity for its being brought forward as early as possible. Several Lancashire firms made contracts with Germany for cotton yarn and the contracts provided for a profit of one penny per pound. Some other Lancashire firms came along, after the contract had been in operation for a short time and entirely because of their internal price-cutting on a declining trade, those contracts have resulted not in a profit of one penny per pound but in a loss of one farthing per pound. You cannot do business on those lines. Such under cutting by other firms would be prevented by the enabling Bill. I want the House to note especially that there was no question whatever of foreign competition, but that it was entirely a matter of undercutting by other Lancashire firms.

My hon. Friend the senior Member for Oldham (Mr. Hamilton Kerr) is to follow me and I believe that he will also deal to some extent with the cotton industry. I was rather surprised to see the Amendment which has been put down by the hon. Member for Nelson and Colne (Mr. Silverman) and two of his supporters, Lancashire Members, because it seems to suggest that the Government should take over the export trade. It would be a pity if this Debate were drawn off on that rather complicated issue and that it should serve perhaps not quite so useful a purpose as if we had been able to have more unity.

The export industry of this country as a whole has grown up in a casual way. Perhaps there has been too much casualness about it in the past, but it is essential now to have a planned policy regarding the whole of our export trade if we are to hold that trade. The Government are responsible for the well-being of the State. I feel that the industry and the people of the country are in the mood for some help from the Government, and I believe that they would welcome more active interest by the Government. The mood of the people is tending in that direction, so serious is the whole range of foreign competition becoming. The Government should not wait for industry to approach them, but should rather approach industry and say: "What can we do to help?" Government Departments know the state of trade frequently when the figures are received. I would recommend that officials should go to some of our exporting industries and say: "We have just seen the figures and we are concerned about this lack of export trade. Why are the figures down so much? Can we do anything to help you to get back your vanishing markets?" Traders would be tremendously encouraged and would feel that the Government were really behind them. We are facing developments which are operating unfairly against us and will continue to do so more unfavourably as time goes on. There is the ever-growing menace of State-aided competition. Are we going to do anything about it? How are we going to combat it? Have we any plans for dealing with this increasing menace? Perhaps when the right hon. Gentleman replies he will 'be able to tell us.

We need a centralised effort. The effort of the other nations is centralised and we have to put in hand similar efforts if we are to face them successfully. Such an effort will require close co-operation with the Government. Traders must be told what to do and how to meet the new situation. We cannot live completely decentralised as we have done up to now, and I believe that everyone realises this. The suggestion that I am leading up to is that, as this form of competition is quite new, a committee should be set up immediately to represent all the basic exporting industries—not merely the cotton industry—with, say, two representatives from each large industry. It should be a committee of men experienced in business and industry and its task should be to investigate the types of this foreign competition and the methods employed and to propose the alterations which we should make to meet it. It is a vital necessity that we should find out what is the present position and what should be done about it. The committee should be definitely instructed to report in three months. It should not be one of those committees which go on for months and months. After it had reported we should get on and do something on the lines it suggested. I am convinced that only in such a way can our export trade be saved and be enabled to meet the ever-growing competition in a changing world.

4.40 p.m.

Mr. Hamilton Kerr

I beg to second the Motion.

I am certain that the House will be grateful to my hon. Friend the Member for Royton (Mr. Sutcliffe) for having utilised his good fortune in the Ballot to bring before us the question of the export trade. As he said in his speech, the time has now come to make a thorough survey of our export markets. In this country since the War two Englands seem to have grown up. In the safe shelter of the tariff wall, our home industries enjoy relative security, high wages and an expanding market and they enjoy the benefit of the policy of cheap money. Many industries enjoy amenities like holidays with pay. On the other hand, the exporting industries suffer the heat and frost of untempered foreign competition. They suffer not only from foreign efforts to undermine them with subsidies, but from internal troubles like price-cutting, unemployment and all the distress which depression brings.

Our exporters look out to-day on a very different world from that surveyed by their fathers and grandfathers in the nineteenth century. There appear to be two blocs in the world. The first I might call the Liberal economic bloc, the bloc of the Most-Favoured-Nation Clause. Those within that bloc try as much as possible to enter any breach made in the tariff walls. There is, on the other hand, another bloc which I might call the authoritarian bloc. In that bloc, we have to recognise, politics and economics are as inseparably connected as Siamese twins. In fact, in this bloc every bag of wheat and every keg of oil sold are as much an instrument of power politics as are aeroplanes and tanks. That is a state of affairs which, in this country, we cannot afford to neglect. Our export industries are faced with other complications. The first is the varying price-level of raw materials. The livelihood of the Kansas farmer, and the Malaya rubber companies are of vital interest to our producers. That is why anxious eyes are so often fixed on the ticker in Wall Street, America being one of the largest purchasers and users of raw materials.

The second complicating factor is that of the economic nationalism, which is transforming the whole world, as far as I can see, into a series of economic blockhouses. The garrisons in these blockhouses improve their defences or lower them according to the state of the world on the other side of the stockade. If the war whoops of the dictators are more or less menacing, they deepen their ditches or heighten their barricades. But if things are more or less quiet, the garrisons venture out under armed escort. This tendency to economic nationalism brings in its train other equally vicious tendencies, including the tendency to subsidise industry. That is a most unhealthy tendency but one which we cannot afford to neglect, or not to face. The second tendency is that of countries to start secondary industries whereas formerly they were producing only primary commodities.

Those are some of the uncertain factors which face our traders. There is another new factor in twentieth century trade which is quite different from any in nineteenth century trade. The science of advertising has brought a new competition into marketing. Nations are not only competing nowadays in the type, variety and range of goods they sell, but in the relative attractiveness of the parcels in which the goods are wrapped and even of the labels on the parcels. What are we to do about this? I believe that our marketing machinery is now out-of-date to a certain extent. The last century was the day of the great merchant houses like Jardine, Mathieson and Company, of Shanghai, and Rani, of Bombay. The merchant in his office had his personal contacts. He knew the whims and prejudices of the people with whom he dealt and he could pass on first-hand information to those directly interested in the trade. Nowadays, I believe, certain factors have driven the merchant more and more out of business. The first is the tendency to try to make trade a one-way affair. The merchant in the old days, when trade was a two-way affair, both bought and sold. Likewise, I believe, the big firms nowadays prefer to have their own representatives in certain countries, and to deal direct with them. The small trader cannot afford to have his own personal representative, and he has to go to an agent. But in that agent's office his name on the agent's file is but one in a list of many, and I do not believe that his business can receive that personal attention which is the first requisite for successful trading. Therefore, I should like to make a suggestion.

As I see British trade nowadays, British exporters resemble a number of individual skirmishers acting on their own account without orders from headquarters. Would it not be possible in some way, as my hon. friend suggested, to mobilise these individual skirmishers into an efficient and highly knit army? Would it not be possible to divide world markets into sectors? All the firms directly interested in trading in those sectors would agree to pool their marketing resources—merchants, bankers, shippers—in one industry. It might, if you like, be called a marketing company. This may sound revolutionary to our ears in this country, but we have an example of the success of great marketing companies in the great Japanese merchant firms of Mitsui and Mitsubishi. Such firms have been largely successful in this enterprise because they combine all the functions of producing, merchanting and marketing.

I should also like to see His Majesty's Government send instructions to all His Majesty's representatives overseas to help, on every possible occasion, the cause of the British trader. I have often heard traders complain, I do not know with what justification, that British diplomacy is still too much an affair of the top hat and the visiting card, and that trade is left to the consul. I myself have seen the success with which American and, in particular, German Ambassadors have interfered on behalf of their nationals and obtained contracts. Then there is a sphere in which we can act with direct influence. I refer to the Colonial Empire. I believe that something like £1,000,000 is spent annually by the Colonial Development Fund. The fund spreads that money over a variety of objects, worthy in themselves, but nevertheless small and scattered. Would it not be possible each year to concentrate that £1,000,000 on a specific objective in a specific part of the Colonial Empire? This would at least allow us to carry on developments on a big scale, and the object of those developments would be to increase the purchasing power of the British Empire, with a view both to productiveness and to consumption.

I wish that a great many hon. Members wish to intervene, and I will hasten to my conclusion. I cannot conclude without a word on cotton. My hon. Friend gave figures which I think must impress us all. The cotton trade is in a terrible plight. I have in my possession a postcard called "Smoky Oldham." It dates from the days when the whole neighbourhood of Oldham smoked with prosperity like a giant kiln. Nowadays many of the mills pictured on that postcard do not show their lights of a winter evening far across the Yorkshire moors, for sales notices cover their walls. Lancashire has to face a very formidable opponent in Japan, and I believe there are certain factors of Japanese competition which will not change in the immediate future, and of which we shall have to take very active account. The first is that the Japanese exporter exports with a depreciated currency. In the second place, the labour force in Japan is growing by something like 300,000 every year. Every year the number of girls who come from the rice fields to find work in the Osaka factories is increasing. That means that wages will continue at a low level. Lastly, Japan, in spite of all her modern technique of salesmanship, is really in a transition stage from the conditions of the nineteenth century. There are no strong trade unions to regulate conditions and hours of labour. These are factors which, as far as I can see, are not likely to change in Japan in the near future.

It seems to me that Lancashire must tighten all its muscles and use every available resource to meet so formidable an opponent. Where can it be done? In China? According to the official spokesmen of the Japanese Foreign Office, no war exists in China. If I might borrow the apt phrase of my right hon. Friend the Member for Epping (Mr. Churchill), "the Celestial regions are lapped in peace." That peace means that no fewer than a million men are under arms in China, that the Japanese fleet is blockading the approaches to China, and that the great artery of China has been closed to French, English and American traffic. Japan, in fact, is like a giant boa constrictor, slowly strangling China. I was very glad to learn from a reply to a question that a new road has been built from Burma into China, and that a railway is contemplated. Perhaps the Minister can tell us how those preparations are being pressed forward. We cannot accept the refusal of the Japanese Government to allow us to trade with China.

Then there is the question of India, on which my hon. Friend touched. India at the present moment levies a crushing tariff on Lancashire cotton goods. India believes that she can flirt with two admirers, Japan and Lancashire, but I think a word of warning would not come amiss to our Indian friends. Japan will develop every single raw material that she can find in China, on her own doorstep, where no hostile fleet can intercept vital supplies. One of those raw materials will be cotton, and the day will come when India will find that Japan will no longer require to buy cotton from her. She will be left like the improvident virgin with no oil in her lamp before a closed door. India might well recognise that Lancashire has made great efforts to buy more and more cotton from her. We have tried to adapt our machinery for this purpose; we are customers of India; and trade goes both ways. India enjoys benefits in our Colonial markets, and I think the tariffs she levies on Lancashire cotton goods at the present moment bear absolutely no relation to Indian production costs.

Sir Stanley Reed

Would my hon. Friend tell the House what that tariff is?

Mr. Kerr

It is between 20 and 25 per cent. ad valorem. Perhaps my right hon. Friend will tell us how far the negotiations in that regard have proceeded.

There is another market, the market of South America. As far as I know, Brazil is the only country in South America which has a cotton manufacture of its own. I was looking at the figures of Japanese trade with South America, and I noticed that it is a one-way trade. Japan buys hardly any beef, wheat or coffee from South America. If the South American nations insisted on reciprocity, Japan would be very hard put to it. Perhaps a chance may exist of developing our interests in the South American market. Then I hope my right hon. Friend will be able to tell us that the disgraceful operations of the Cocoa Board, which recently upset the whole economy of Nigeria, have now been successfully brought to a conclusion. Hon. Members will recollect that, owing to the effort that was made by the cocoa group in this country to force certain prices on the natives, a complete boycott of Lancashire cotton goods was initiated.

One last idea, to which reference was made by my hon. Friend in dealing with the question of markets. I believe there is nothing like a direct appeal to the eye. I would like to see fashion centres for Lancashire cotton goods in Manchester and in London. The great Signor Mussolini once confessed that no power in the world, not even the guillotine, could run counter to fashion. If the Dictator of Italy, the lord of a thousand black-shirt legions, bows before the power of the latest model from Paris, we should be foolish to ignore his advice. I believe that such centres could do a great deal, not only in England but in other parts of the world, to tempt the housewife to refurnish herself with nice new spring materials in the latest fashion. This would bring Lancashire on to the map.

Lancashire does not come with a begging bowl in her hand to Whitehall; she expects help as a valuable partner in the whole national economy. Lancashire's prosperity is England's health; Lancashire's poverty and depression is England's weakness. Lancashire plays an integral part in the export trade which is the subject of this Motion, and I think no hon. Member can doubt that the export trade is the true destiny of this country. We laid the foundations of our prosperity in the last century, when our goods and our capital flowed to every market from China to South America. Now things have changed. The British tramp steamer, described by Conrad and Kipling, no longer ploughs a steady seven knots, unchallenged by foreign competitors, in every sea. It has competitors—subsidised competitors—on every sea nowadays. But we still have immense resources. We have the power to produce first-class goods; we have the skill of our people; we have our great capital resources. The only thing, I think, that we sometimes lack is imagination. If we had a little more imagination in the marketing of our goods, there is nothing that we could not do. If we could sometimes combine the American gift for salesmanship with British craftsmanship, the rest of the world might shut up shop for a hundred years.

4.57 P.m.

Mr. Silverman

I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof: this House regrets the failure of His Majesty's Government to recognise, in the light of modern conditions, the imperative need for creating trading organisations on national lines, including export boards, in order to expand the basic British exports such as coal and cotton. I think that the whole House, whatever they may think of the terms of the Motion, will be grateful to the hon. Members for having chosen this subject for debate to-day, and also, may I say, for the way in which they have put their case. If I may say so without offence to the hon. Member who seconded the Motion, I think that, whatever we may think of the contents of his parcel, his speech was an example of wrapping up and labelling which might well commend it to those to whom it was displayed.

I was a little disappointed by the references made to the Amendment by the Mover of the Motion. He seemed rather to deprecate it, to think it was a pity that the Amendment had been put down, because in his view it tended to distract the attention of the House from the more important subjects that he wished to discuss. Had he really thought that, one could have understood his objection, but I am tempted to think that he made the objection purely out of respect for the exigencies of party political requirements rather than on its own merits. When I listened to his most interesting speech, and to the equally interesting speech of the Seconder, I found phrases which seemed to show that there is really no reason why the hon. Member should not accept the Amendment. He said it was necessary for the Government to approach industry, without waiting for industry to approach the Government, in regard to its policy when difficult times and conditions in the export trade develop. He said that traders should be told by the Government what to do, and that it was necessary to have a central committee which could coordinate the trading activities of the various competing institutions in a particular export trade, so that they could act unitedly—I think he said, as a unit. If that be so, it would be really interesting to know to what exactly he objected in an Amendment that asks for the creation of trading organisations on national lines. There might possibly be some difference as to the details, as to the method of organising such an institution; but it does not seem from the hon. Member's speech that we really differ as to the necessity of having some kind of national organisation to put an end to the haphazard, casual method that was honoured in the past as "the rights of individual enterprise" and "free competition in the markets of the world."

When I came to listen to the speech of the hon. Member who seconded the Motion, I almost decided that it was unnecessary for me to make a speech at all, apart from formally moving my Amendment. He wanted, in the first place, a rigorous survey by the Government of the requirements of the export trade. I am all for it; but how are the Government to organise and pursue their rigorous survey except by having some kind of central committee, some kind of trading organisation, some kind of unifying authority, such as is put forward in the Amendment? He said it was quite wrong that individual enterprises should go on conducting their activities like individual skirmishers. That is what hon. Members on that side of the House now think of free competition. They are all against it. They want those people to be regarded as individual skirmishers, who ought to be—in the next phrase of the hon. Member—"mobilised by the Government." You cannot have an army, industrial or of any other kind, based on free competition. It seems clear, from the two speeches we have heard so far, that those days are dead when individual firms and individual institutions could pursue their own individual trading policy, at home and abroad, without regard to the effects that their policy, or the lack of it, might have on the industry as a whole, and on the fate of the nation as a whole. So far, so good. I am still hoping that at 7.30 the hon. Member may find himself in a position, so far from deprecating the Amendment, to accept it. In that case, we might have a Motion which would represent the practically unanimous opinion of the House, without any Division in the Lobbies, calling on the Government to do what it would seem everybody wants them to do.

There is another thing I would like to say before leaving that aspect of the matter. It seems—and we ought to recognise it—that we have started our journey on the road back. The hon. Member who seconded the Motion had a great deal to say about economic nationalism. I am entirely with him. I was with him for a great deal of his speech. Economic nationalism is a thing to be deplored. I entirely agree that if ever we can bring about a situation where primitive tribalism, either in economics or any other field of human activity, can be done away with, we shall have made a long step towards a better, happier, and saner world. But would the hon. Member say that the Government of which he is still a supporter, apparently, is quite guiltless in this matter of economic nationalism? Memories may be short, but there was an Ottawa Conference at one time; and when people now praise the Anglo-American Agreement—and I think they are entitled to praise it, at any rate in its intention, its outlook and its approach to things; what its practical value may be we must wait to see—let us not forget that it is a step which the Government have taken along the road by which they hope to retrieve some of the effects of the mistaken policy upon which they embarked seven years ago.

There is another respect in which we are on the road back. Both hon. Gentlemen had something to say about foreign and imperial competition in the cotton trade. There is no doubt that, at any rate, some part—we need not stop to discuss how much—of the contraction of the cotton industry is due to the competition that comes from Japan, China and India. Hon. Members on the other side now want to limit that competition, to restrain it, and to escape from it. Let us not wholly forget how it began. The cotton industry in China, Japan and India was created by the forbears of those employers in the cotton industry to-day who are seeking to escape from the misdeeds of their forbears in the not very distant past. The cotton industry in these countries was created in order that industrialists in the late nineteenth century should be able to escape from the British Factory Laws. Those industrialists exported machines, labour and capital, in order to create the competing industries which now prevent them from exporting cotton goods. In these questions, after all, we get to a point at which the two main problems of our time meet, and are seen to be, as it were, the obverse sides of one another. On the one side there is the problem of poverty, and on the other side the problem of work.

Hon. Members talk about the contraction in the cotton industry. Some of us see that contraction not merely in terms of the number of millions of yards of cloth exported, but in terms of human lives. If the cotton industry in Lancashire dies, the Lancashire people die with it, unless some substitute for that industry can be found. The hon. Member talked about figures in the last ten years, and showed to what an enormous degree the cotton exporting industry had contracted in that time. I have in front of me the report of the medical officer of health for the town of Nelson, for the year 1937. I take the same ten years as the hon. Member took—1928 to 1937. In the first of those years, the excess of deaths over births was 32; in the second, it was 126; in the third, 1930, when a Labour Government had done something to diminish the consequences of stress in the area, 14; in 1931, it was back to 100; in 1932, it was 70; 1933, 142; 1934, 131; 1935, 107; 1936, 139; 1937, 165. Those are just the years which the hon. Member rightly told the House had seen the steepest decline in the cotton trade in Lancashire.

It has to be be remembered that, whereas the employers in that industry invest a good deal of capital, there is an industrial population that invest in it their very lives; and that any mismanagement, any inadequacy of policy, any failure of the nation as a whole to support it, is reflected in a decline in the industry, and also in the deepening degradation of human life and in a decline in human life itself. It is agreed, apparently, that there must be some kind of centralisation, some kind of organisation. Let me refer to the cotton trade from that point of view. Will it be realised that in Lancashire to-day there are no fewer than 2,000 competing producing firms? I am not referring at all to merchant firms; there are merchant firms on top of that. What happened? Here is the opinion of the Joint Committee of the Cotton Trade Organisation: The present system of free competition, under the conditions which have obtained in the cotton industry for many years, has certainly not made for efficiency. Too often, orders go to the firm with the biggest overdraft, or the firm which is hardest put to it to meet the next week's wages bill. Prices are depressed to a level at which even the most efficient cannot make profits or provide adequately for the upkeep of their plant. If this condition continues, the industry must become inefficient and lose still more trade. How long is the industry to wait for Governmental insistence that it shall reorganise? It is obvious that there must be reorganisation. It is clear that almost everybody in the cotton trade wants reorganisation. Are the Government really going to wait until the last diehard in the industry agrees to come in; or what proportion of this disagreement will they be content to coerce? Is it 1 per cent., or 5 per cent.? Surely the time must come when the Government will say, "There is substantial agreement, and those recalcitrants must be compelled to come in." What we say to the right hon. Gentleman, from both sides of the House, as I understand it, is that there is substantial agreement now. While we wait, the people in the constituency that I have the honour to represent in this House are not merely starving, but dying; and I do not suppose that the figures I have given are peculiar to that town.

When the Government make up their minds to see to it that organisation takes the place of anarchy in the cotton industry, may we suggest that they should remember that it may possibly have the effect of excluding for all time from the cotton industry some portion of those people who have themselves, like their parents and grandparents, always depended on that industry? It will not be quite enough to make a smaller industry, efficiently run, efficiently organised, competent to take its place in the markets of the world, getting a fairer and better share of those markets than it is getting in its present anarchical state, if, as a result, you are depriving for ever some portion of Lancashire's population of its only means of livelihood.

If the Government make up their minds when the time comes that it must be organised on a rationalised basis, which means a smaller number of firms, and possibly a smaller number of workers, they must not forget that they will incur responsibilities to those whom they exclude who have nothing but their labour and their skill to rely upon for means of livelihood. It must be clear that what is good for the cotton industry is good for other industries, too. If you are to have economic planning in that industry, the reasons which compel you to have it will apply to other industries likewise. I am not going to say anything about the coal industry, which has very eloquent and able advocates in this House, and who, I am sure, will not neglect their opportunities. They have never neglected them before, and there is no reason to think that they will neglect them now. Cotton, perhaps, does not get quite so frequent an advertisement in this House, and no one, I think, will complain that we are taking our opportunity this afternoon.

There is one matter with which I will not neglect to deal. Its relevancy is not quite as close as some of the other matters with which I have dealt, but I have frequently, as have other hon. Members from Lancashire, raised in this House in all kinds of ways the problem of the organisation of the cotton industry which results in the starvation of the under employed weaver. I need not describe the problem again, or how it comes about. In short, he is being employed for 48 hours, a full working week, in the weaving shed and, owing to the system, by which the cotton operative is paid, goes home at the end of the week with the reward of only one or two of the working looms out of the four which he must tend. He goes home with 10s., 12s., or, if he is lucky, 15s. at the end of a 48-hour week without any right to Unemployment Benefit, because he is technically employed, and without any right to relief from the public assistance committees, because that would be to subsidise wages out of the Poor Law. We have raised this question with the Minister of Labour time after time. Apparently, he is at the end of his tether. He does not know what to do, and cannot find a remedy or a way out. He talks vaguely now about it being due not to any fault in social legislation, but to the structure of the cotton industry itself. If that be true, then the Board of Trade must take a hand and see if it cannot do something when it comes forward with its proposal for reorganising and reconstructing the cotton industry, which so far it has been unable to do for itself. It should do something to bring to an end once and for all what is rapidly becoming a public scandal.

Ail this need for centralised planning and co-operative effort is not limited to the cotton industry. I was told a story this afternoon which, I think, ought to be told here, and perhaps the right hon. Gentleman, when he comes to reply, will tell us something about the matter. There are, apparently, many dying industries in this country. Cotton is not the only one; there are the heavy industries. There is what is described by those who best know it, as a dying industry—the herring industry. The boats are able to get from the sea almost unlimited quantities of herring but they are unable to sell it. In the West Indies there is a population that is unable to get food, but which is unable to produce in large quantities things which, in this country, are not so easily obtained. A proposal, I understand, was made by my right hon. Friend the Member for West Stirling (Mr. Johnston) many months ago whereby the West Indies should take annually 100,000 barrels of herring and should send in return £100,000 worth of citrus fruits of which the Colonial Marketing Board undertook to dispose. That would be an admirable thing to do. It is a perfectly feasible scheme, but nothing seems to have been heard of it at all, possibly because we have not a national export board to deal with that kind of problem. I wonder whether the right hon. Gentleman could tell us what became of that proposal when he comes to reply. That was intended merely as an aside, and, I hope, not an irrelevant one.

It seems that when one reviews the question as a whole the Government have not yet begun to realise the new conditions in the world market with which they are faced, or what united national effort is necessary if we are to compete with the new methods elsewhere of which we are all aware. The Government go on saying that they intend to do this or that, that some day they will help, and that, if there is sufficient agreement in industry, they will do something to give effect to that agreement, and in the meantime, all over the world, the subsidised exports of other countries are displacing our goods from all the markets of the world, including the markets of our own Empire. When are the Government going to realise that if they intend to compete with that kind of modern trading, they must have equal powers. They must be able to organise industry in this country in such a way as will enable it to use the vast purchasing power of the country—because we are still the largest importing country, I think, in the world—in order to influence and facilitate our own export basic trades. They have to learn to approach these questions not merely with a new vigour, but with a new outlook if they are to do justice to the problems that exist.

I hope that they will not forget among their other investigations the question of improving the purchasing power of the people of our own country. There is a vast margin, an almost fantastic margin, between the cost of production and the retail price of our products. When we relate this question to the low purchasing power of the working classes of the country, especially of the unemployed, and to the low purchasing power of other peoples in the world, it is obvious that one of the ways of relieving some of the distresses in the export trade would be by making effective the demands of consumers in the market that is upon our own doorstep. I hope that that will not be forgotten, and also that some day we may be able to break down completely the economic barriers between nations. We shall not be able to do it until we are organised in such a way as to compete with others.

Even those who were in theory out and out protectionists always said that one of the reasons why they wanted a tariff was in order to have something with which to bargain when it came to negotiating with others. I do not think that they have used that bargaining power very well during the seven years that they have provided themselves with that weapon. [Interruption.] Yes, no doubt it will be necessary, in order to talk on equal terms with those totalitarian States which are pursuing a line of economic policy which is throttling us, to put ourselves in a position to be able to bargain with them. Let it not be forgotten that this striving of people for foreign markets is inevitably one of the most prolific causes, if indeed it is not, in an ultimate sense, the only cause of war. One would like to see the Government taking the initiative. We know it is difficult and that long preparation may be necessary, but the more difficult it is, the more necessary it is that it should be tackled early. The longer it takes to do, the more reason why you should begin early.

We would like to see the Government take the initiative in calling together some kind of world economic conference which would consider the making available to all the nations of the world, on fair conditions, the raw materials which all need, and the methods whereby these economic barriers might be pulled down, and economic nationalism, and economic imperialism, too, swept away. This should be done so that we could have a world in which, at home, people could work together in comradeship producing the wealth of the world, and the nations in the world, too, could work side by side, co-operating with one another in some kind of world economy, instead of pursuing the anarchic, cut-throat competition which now leaves the nations of the world unable to enjoy the fruits of modern science, and always with the impending fear of war looming on a not distant horizon. These economic questions are fundamental, and I suggest that the Government should take immediate steps to see what kind of problem they really have to face, in order that they may put themselves on equal terms with those other nations to which reference has been made, so as to enable them some day to go in for the policy of the longer view with the object of getting, in the place of a world dominated by the continual fear of poverty and war, a world where human effort is able to co-operate so that it can consume the goods which it produces and lead mankind into happier fields.

5.30 p.m.

Mr. Burke

I beg to second the Amendment.

This Debate on the export trades is really another Debate on the distressed areas. I hope the Mover and Seconder of the Motion will accept my apologies if I do not reply to what they have said, but I do not desire to take up too much time. I would, however, draw attention to the fact that the Mover of the Motion said that in Lancashire there was a great deal of satisfaction with the Anglo-American Treaty. He must have been mixing in circles entirely different from those in which I have been moving. I have met responsible people on both sides, and at the most they adopt a very cautious attitude in regard to this treaty. It touches only a very small amount of the Lancashire cotton trade. The tariff reductions are very small, and, so far as the worst part of the cotton trade is concerned, namely, those who are making the cheaper kind of goods, as in Burnley, the treaty does not affect us one bit.

Mr. Sutcliffe

I carefully went on to say that it would require time to see how it would turn out, and I was cautious in regard to any figures as to results.

Mr. Burke

I am pleased to hear that statement. I admit that the action taken by the Government is a step in the right direction, but, as far as Lancashire is concerned, the effect will be negligible. It is as well to remember that the trade we do with America amounts to £14,000,000, against the £31,000,000 of goods that they take from us, although their population is three times the size of ours. That does not show very great bargaining power in our favour. With regard to the Congo Basin Treaty, the hon. Member said that in many ways it was unsatisfactory. That is an extraordinarily mild way to describe the situation. As far as Lancashire is concerned, in every way it is entirely unsatisfactory. That is how Lancashire regards it.

This is really a Debate on the distressed areas again, because the exporting trades are the trades that have caused the distressed areas. When we criticise the Government for not doing anything for the distressed areas, we are criticising them for not doing anything for the export trades. The cotton trade has been neglected, and the centre of gravity in our industrial life has shifted. The same thing has happened in regard to our external trade. There is no balance between the external trade and the home trade, with the result that our whole economic structure has been thrown out of gear. That means that, as far as the cotton trade is concerned, for years it has been going down. I do not know what happened in this House before I came here in 1935, but since I have been here I have tried to draw the attention of the Government to the parlous condition of the cotton industry, as much as I could, but with no tangible results. Not only has the matter been brought to the attention of the Government repeatedly, but various Commissions—there was one in 1924 and another in 1929—have drawn attention to it. We have only to look at the figures. I have looked at them ad nauseam. Our export trade before the War was 800,000 million square yards of cloth, and it is now down to 200,000 million, and the position is growing steadily worse. It has gone worse in the last month compared with the previous month, and the position this year is worse than last year.

Mr. Radford

The hon. Member is wrong. Instead of 800,000 millions, he should have said 8,000 millions, and instead of 200,000 millions he should have said 2,000 millions.

Mr. Burke

We are not particular about 100,000 or so. We have lost so much that it does not matter. What it means so far as my constituency is concerned is that, while the unemployment rate throughout the country averages 13 per cent., the unemployment rate in Burnley, Nelson and other places is between 30 and 40 per cent. To-day, in regard to the number of looms and the number of firms, we are down to the position of 1,882. Why is no effective action being taken by the Government to prevent this state of affairs? If hon. Members will look at the Trade and Navigation Returns, on page 180, they will see that in regard to our markets in Ireland, West Africa, South Africa, British East Africa, in fact in every market in the world as well as in the Empire, without exception, month after month, our position has gone steadily down. It was the cotton trade along with our Mercantile Marine that placed this country where it is at the present time as a trading nation, and we are entitled to get more consideration than we have had from the Government, in view of the fact that we have been rapidly put out of the markets of the world.

To-day, the position presents an even worse feature, because the economic conditions of the world are different from what they used to be. Competition before was bad enough, but at the present time our individual firms in Lancashire have to compete against competitiors who are backed up by all the strength of their Governments, depreciated currencies and all kinds of selling organisations. That is a position which the people in Lancashire cannot meet, and it requires Government assistance. First of all, it requires that the organisation shall be made into a unit. The Government tell us that they have asked the cotton trade to come to an agreement among themselves. You will never get complete agreement between Lancashire people, but you have had a measure of agreement such as you have never had before, and a measure of agreement which justified the Government in coming forward and presenting a Bill which would have put the industry in a position to compete more successfully.

Either the Government have to say that this export industry shall be kept alive and maintained, or, alternatively, if they are going to have any balance between our exports and our home markets, they must establish new export industries, and those new export industries must be put in these neglected areas. As far as my own constituency is concerned, the Government have done absolutely nothing in that direction. There will have to be a more definite and clearer indication of a comprehensive scheme. No piecemeal tinkering with the matter will deal with an industry like the cotton industry, which has sunk to half its former proportions in regard to the employment of people and the employment of machinery. Since 1931 the returns show that there has been an adverse balance of trade between the two sides amounting to £150,000,000. In one year only, 1935, was there a favourable balance of trade.

At the present time it is likely that the Government's policy will disturb the balance of trade even more. We are concentrating on an agricultural policy which keeps out imports, a rearmament policy which expands the home market and a policy of creating new light industries, and ignoring the old exporting industries. Therefore, the balance will be thrown out more and more. We as a great exporting country cannot afford this. We are the greatest purveyor of shipping and financial services, which depend on the export trades and depend upon an increased volume, not only of British but of world trade. While profits in the home market are bringing people into that market, it is not right that the Government should allow the drift to go on haphazardly at the individual will of employers, and neglect completely the restoration of our export markets. Last year 541 factories were established in this country, and of that number only 14 were connected with the export industries. That is symptomatic of the decline in our export trade and of the unbalanced, unregulated growth of the home trade at its expense.

Two things are necessary: (1) a reorganisation of the industry, because in these days when political considerations in other countries outweigh and dominate commercial and economic considerations, it is impossible for individual units to meet the situation; (2) it is necessary that the Government should take a more lively and more persistent interest in the position of the Lancashire cotton trade, when it is negotiating trade agreements. I believe that we have 21 agreements in operation, and of those agreements there are only three that give us a favourable balance of trade. I suggest to the Government that they have tremendous power and should be able to do better for our exporting industries than they have done. The bargaining power that this country has as a great consuming nation is sufficient to enable the Government to give us better results. Our imports last year were 18 per cent. of the whole world trade. That is sufficient to enable the Government to deal more adequately than they have with Lancashire under trade agreements.

I would like the Minister to tell us what is happening in regard to the Indian Agreement. Negotiations have been going on for a long time, and Lancashire has been waiting to hear the result. All the time—and it has been going on for years—our imports from India have been going up. In rice, oil, hides, skins and raw cotton we have been taking steadily more and more from India, and they have been taking less and less from us. In 1928, we sent 354,000,000 square yards of cloth, but the figure has now dropped to 77,000,000 square yards. That is not all. We have to put against the drop from 354,000,000 to 77,000,000, the tremendous rise in the Japanese trade with India, which has risen from 89,000,000 square yards to 134,000,000 square yards in the same period. Somehow or other, by better organisation and better methods, Japan buying raw cotton from India is able to get that raw cotton manufactured at home and to sell the finished cloth in India as cheaply as the Indians themselves can do it. Moreover, Japan pursues a policy of strict reciprocity in these things, which gives her a tremendous advantage.

I hope the Government will tell us why it must always be the case that for political reasons we sacrifice the economic interests of our big industries for those of Japan. Here is another interesting fact. British East Africa in 1928 took from us about 4,000,000 square yards of cotton piece goods, and 3,000,000 square yards from Japan. Now the position is entirely reversed. We are down to 1,000,000 square yards and Japan is up to 19,000,000 square yards. Recently, I went on a deputation to the Board of Trade to see about the imports of cotton goods into Ceylon, and we were told that a new Agreement had to be made there, for political reasons. It may be that political reasons in this country have to outweigh economic situations at times, but why does it always happen that in these political negotiations it is the Lancashire cotton trade that always gets the thick end of the stick?

I do not want to go into the question of the Most-Favoured-Nation Clause because there is little time to deal with that matter. I want to say a word about the Overseas Trade Department. In the Estimates for the year the amount of money that has been spent by the Department is £500,000, or about one-ninth of 1 per cent. of our export trade. I suggest that in these times that is not nearly enough to spend on furthering the commercial interests of this country. I do not know whether the Overseas Trade Department is a real Department or not. It seems to me partly under the Foreign Office and partly under the Board of Trade. The sum of £500,000 is not enough, and if you take the salaries and the expenses of administration you will find that they are about £17,000 a year, a mere negligible sum to deal with the most vital thing for this country, that is to restore its commerce. When we are subsidising agriculture and other industries and spending such a negligible amount on our overseas trade is there any wonder that in nearly every market in the world we are being beaten? Is it not time that the Secretary of the Overseas Trade Department had more money to spend? We have only 100 commercial agents and secretaries over the vast field of our commerce throughout the world. The time is more than ripe when the Government should seriously reconsider its attitude towards our export trade in general and the Lancashire cotton trade in particular.

5.49 p.m.

Mr. Graham White

I share the view which has already been expressed this afternoon that the hon. Member for Royton (Mr. Sutcliffe) has rendered a service to the House in giving us an opportunity for reviewing for the first time this Session in any great detail the very important question of our overseas trade. He and the hon. Member for Oldham (Mr. Kerr) introduced the subject in speeches which were very interesting and which covered a great deal of ground. We must not allow our preoccupations with a sad and disorderly world and the more direct aspects of Defence to distract our attention from what must be the foundation of all our efforts, the maintenance and extension of our overseas trade, which is vital to the defence of the standard of living of our people and is without question the foundation on which every other effort we may be called upon to make must rest. Therefore, I welcome this opportunity to discuss overseas trade questions. If I allowed myself to make one of those party points which are sometimes exhilarating but seldom useful, I could comment on the failure of the two hon. Members to relate the stories they have told of our export trade and industry with the policy adopted in 1931, but on this occasion I refrain from doing anything of the kind because I want to make my observations as objective as possible.

Before dealing with the subject of the Motion I should like to make some wider comments on the Anglo-American Trade Agreement. It has been mentioned, but solely in regard to specific points. I do not think that quite sufficient importance has been attached to it, having regard to the background in which it was made. I want to congratulate the President of the Board of Trade and those who have been associated with him in this country on what I consider to be a very important achievement. It is true that we shall have to wait to see the full consequences of the Agreement, and when one sees that a duty has been reduced from 45 per cent. to 20 per cent. one does not lose sight of the fact that a duty of 20 per cent. may be almost as prohibitive as one of 45 per cent. But apart from that I do regard as a most remarkable achievement what amounts almost to a complete disavowal of the high tariff policy of the United States of America, which was consummated by the Hawley-Smoot tariff, which in my judgment was a most iniquitous instrument. Also one must not overlook the fact that the powers of President Roosevelt and his administration were limited in all cases to a reduction in tariffs of 50 per cent.

We must also take into account certain other considerations in regard to this Agreement. In the first place, the negotiations themselves have been prolonged and at some stages I do not think they have been altogether easy, but all who have had a hand in it are entitled to our gratitude and our thanks. It would have been comparatively easy to have produced an Agreement with little substance in it. There has been no professedly political object on either side throughout these negotiations, and I am glad there was not. When a designedly political objective is associated with any trade agreement it is not likely in my view in the long run to commend itself to the people of those countries with whom it is wished to extend trading relations. One can mention on this occasion the services rendered with equal determination and good will by Mr. Cordell Hull and the administration of President Roosevelt. We have with them achieved in this matter one important step towards the policy of conciliation and peace which the President and Mr. Cordell Hull have set themselves to follow. Anyone who makes even a superficial examination of this Agreement must see that if it had not been for the friendly co-operation and a desire to see it go through on the part of Mr. Mackenzie King and other Dominion statesmen it would not have been possible to have produced the Agreement.

The results of the Agreement must necessarily be the subject of speculation, but to my mind we can gauge these results by trying to realise what would have happened if there had been no Agreement. There would have been a chorus of contempt and of satisfaction in some quarters of the world if the Agreement had failed; it would have been pointed to as a failure of democracy; and more than that it would have had a most deplorable effect on our trade and on the whole of our relations with the United States of America. It is a matter of great satisfaction that the Agreement had been made. I notice that Mr. Gilbert Carr, speaking at a meeting of the Anglo-American Society in London, quoted the words of the late Mr. Leonard Reid of the "Daily Telegraph," a writer of distinction and influence on both sides of the Atlantic: Against the black background of European discord, the concord in trade matters between the great English speaking peoples lights a real lantern of hope. There are reasons for regarding this as one of the most hopeful events which have occurred since the end of the Great War. I associate myself with that statement. It is a wonderful example in these days to find two great peoples, in the lamentable atmosphere of disorder which exists, coming together and making an agreement for their mutual benefit, for the extension of their trade, an agreement which raises no tariffs, which creates no fresh obstacles to the free exchange of goods, and an agreement which will leave no other country poorer because it has been made. I do not want to go into the matter in any detail because we shall have opportunities of discussing those aspects which are of interest to us, but with the memory of older controversies in mind I cannot but express my satisfaction that the discriminatory duties on Canadian wheat shipped from American ports will finally disappear. It was a thoroughly stupid Customs regulation which deprived Canada of a very important alternative route of shipment when the St. Lawrence was closed and deprived America of a profitable transit business. That was a matter of serious contention at the time. We can now look upon that as closed.

One hears to-day many pessimistic views with regard to the future of English overseas trade. I am fully aware of the figures quoted by the hon. Member for Burnley (Mr. Burke). They are disappointing and even alarming, but I do not find myself compelled to subscribe to the gloomy views which are so often expressed. I admit that there are dangers the like of which the world has never known before; I am speaking of new trading methods, if they can be called trading methods, by governments themselves, which are of such a character that the individual trader cannot compete. I am in cordial agreement with the hon. Member for Oldham when he speaks about the necessity for direct representation. I associate myself with him in asking for increased representation on the spot. He referred to the services of our Consular officers and our commercial attachés, and to what the Government can do.

Without wishing to detract in any way from the services which our Consular and commercial representatives perform abroad, I submit to the House that there is nothing which they can do to replace the value of actual contact in the markets between the men who make the goods and sell them, and the men who buy them. Is there any policy on foot to try to re-introduce the system of trade delegations? Some 10 or 12 years ago there were some very valuable trade delegations, organised not by individual firms, but by the whole of the trade concerned, and their value was enhanced perhaps by the fact that they were composed of men who were almost unknown in the countries which they visited, where there had been no English representatives for many years. In those countries which are still open to free trade and free intercourse, and where trade is not done on the lines of the arbitrary discrimination of Governments, nothing could be more valuable than an extension of the direct method of representation.

When I look at the course of our export trade, however, I am somewhat concerned to find that we are steadily becoming dearer sellers. Since 1932, there has been a very marked increase in the prices of our industrial exports in comparison with the average prices of our imports, and actually the increased divergence has reached about 24 per cent. This is a serious matter which calls for consideration. Although it affects a wide range of products, I would like to take the steel trade as an example. From 1920 to 1930 the course of steel prices moved almost in the same proportion on an average as the prices of other industrial products, but since 1930 or 1931 the prices of steel and the prices of other industrial products have greatly diverged, and during the last two years the divergence has risen very steeply. This is a matter which directly affects our export trade, not merely in regard to steel products, but a large variety of other manufactured goods. Since 1932, the steel industry has held practically a monopoly position. The profits in 1930 were 1¼ per cent., and they have risen to approximately 12¼ per cent. since that time. I do not assert that that necessarily means that the monopoly position is being abused, but there is a monopoly position and substantial profits are being made. At Question Time yesterday, the right hon. Gentleman the President of the Board of Trade was asked about the amount of shipbuilding which is being done in Holland, and he replied to the effect that the ships to which reference had been made were ships of a small type for which there are special facilities in Holland. There are, of course, just as good facilities for making these ships in England, and I understand that the firm bearing the honoured name of Samuel White and Company in the Isle of Wight makes that sort of craft.

The question which calls for immediate examination by the Government is whether, relatively, steel prices in this country are too high and whether this is affecting our export trade. There is no question that the prices in this country are higher than the prices in Germany, and during the last two years they have risen more than the prices in Germany, France and the United States. In Belgium, the prices have risen more rapidly during the last two years than they have in this country, but still the prices in Belgium are substantially below the prices in this country. The question is to what extent the high prices and the rigid prices of steel in this country are affecting our export trade and affecting other industries. I gather that it is the contention of the steel trade that if prices were reduced, the reduction would not lead to any greater consumption. I should be more satisfied that that was a good and conclusive argument if the demand for shipbuilding had ceased or fallen off. What is happening is that a greater proportion of ship repairing and shipbuilding is being done on the Continent than in this country.

Mr. A. Bevan

When the hon. Gentleman refers to the rigidity of steel prices, does he mean that he thinks prices should be revised more frequently, or is he against a fixed price system?

Mr. White

I mean exactly what I say. I am not sufficiently au fait with the organisation of the steel trade to say whether prices should be revised every six months or every 12 months, but I think that an examination should be made to see whether the prices, which have not been altered for some time, ought to be altered, in the national interest. My contention is that the acid test of the steel trade is whether it can adjust its prices to the national necessity and the national requirements. If the demand for manufactured steel products had fallen off and did not exist, the argument that a change in prices would not stimulate a greater demand might be a good one, but I am told that the high prices have affected the building trade and constructional trade, that ferro-concrete is taking the place of steel, and that the prices have also affected the motor trade. Obviously, the question is one which calls for consideration. It is one of the aspects of our internal affairs to which regard should be had. There may be answers to my questions, and I should like to hear what they are.

I would like now to draw attention to the situation which is developing in Eastern and South Eastern Europe, a development which is likely to be increased as a result of the greater ascendency which Germany has acquired in this area since the Munich Agreement. I entirely associate myself with the Prime Minister's statement concerning the policy with regard to British trade in the Balkans and that area of Europe. It may be that we are not concerned and have no right to try to interfere with the legitimate development of German trade in that part of the world, but statements have been made, and are still being made, which suggest that the operations of German trade in that area will be disastrous to the affairs of this country. As things are at the present time the expansion of German trade has not been disastrous to us, and if it stays as it is, this country need not have any great apprehension; but it is not likely to stay as it is now. It is in this field, in particular, that the Government ought to be prepared to take decisive action as a Government, since the position is one that cannot be met by individual traders.

An examination of the last available figures of the relative position of British and German trade does not indicate that anything very terrible has happened to British trade. In the Northern countries of Europe, we have held our position, and perhaps improved it. In Western Europe, we are holding our own. In some of the countries of South America where there have been strange manipulations of currencies, we have suffered in competition with Germany. In the Argentine we have held our own. In the United States of America, the relative volume of trade as between this country and Germany has increased in our favour. But when we consider the position in South Eastern Europe, we meet with a species of competition, if it can be so called, which is entirely new and of which the world has not hitherto had any experience. For the first time, a large Power, by means of discrimination, by the use of political power and by currency manipulation, is setting out to divert trade in a way of which we have had little experience before. It is clear that these methods, if they are pursued and if there is no attempt by us to maintain our position in those markets and sustain the trade we have there, may in course of time lead to very unfortunate consequences to such trade as we still have in that area. The natural fact arising from those methods of trading is that if they are to be completely successful, they must be complete as between one country and another. In those countries where these methods of currency manipulation take place and where there is trade on the barter system, the natural result must be to make those countries more anxious to trade with a country which can give them free exchange. There we have our open- ing in that part of the world. Do not let us lose sight of the fact that the whole of the present exports from the Danubian countries are small in comparison with our great imports.

Hon. Members are no doubt familiar with the kind of transactions that have been taking place. For instance, a considerable proportion of the Rumanian wheat crop is bought by Germany at a price which is highly attractive to the growers of wheat in Rumania; but when the question of payment arises, the Rumanian growers find that the payment is put into the clearing and that they can get it only in blocked marks if and when they buy goods from Germany. Consequently, the Rumanian Government have the task of financing their own wheat crop. On the other hand, the exporter in Germany is free to sell goods to Rumania at attractive prices, because as soon as the goods cross the frontier into Rumania, he is entitled to draw on the blocked marks account for payment. That is what is happening, but I doubt very much whether these methods are likely to be permanent. They would not be permanent if there were any adequate counter markets available.

It is altogether unsatisfactory to a country which has a credit, on which it is entitled to import manufactured goods, to be told when it wants some particular class of goods that it cannot have those goods but that it must take other goods which it does not want. It is very unsatisfactory for Rumania, for instance if it wants typewriters, to receive instead a consignment of mouth-organs. I am told that in Yugoslavia there is such an amount of aspirin at present, that even if each one of the population had a headache every day, it would not be consumed in a year. That is the kind of transaction which is taking place and those transactions cannot give satisfaction to the people of the countries who are obliged to carry them out. Therefore we must be prepared to buy wherever we can and if we think it worth our while to keep this trade I think we can do it, but it will require vigilance and decision.

We have one hopeful thing now in the Anglo-American Trade Agreement and I congratulate all those who have had a hand in it. I hope that they will continue to pursue the same policy and that this agreement will not prove to be the last agreement of the kind. I hope that it will be found possible to negotiate further to extend it and apply it so that international trade will cease to be what it is so largely at the present time, merely a process of trying to force exports and cut down imports. That policy, in its ultimate meaning, simply amounts to putting people into work in one place, at the expense of putting other people out of work somewhere else. I hope that on the basis of the Anglo-American Agreement we shall pursue a steady course for the removal of trade barriers and that we shall aim at making international trade more and more the willing exchange of goods and services.

6.18 p.m.

Sir Stanley Reed

I should not have intervened, however diffidently, in this Debate if it were not for the fact that there is one point of view which has not yet been put before the House. In our economic discussions we hear constantly the views of the industrialists and the views of the workpeople—the producers—but very little is heard about that third factor in economics, namely, the buyer. It is because he has not been mentioned this afternoon that I venture to trespass upon the attention of the House for a few minutes. I represent, perhaps almost alone in this House, the oversea buyer, the man who is the backbone and the central prop of our export trade. For nearly 30 years of my life I served in one of the great markets of the Empire and in that market I was very actively connected with many forms of industry. I can speak from personal experience having been connected with the placing of orders for at least a million, possibly millions of pounds on the products of various branches of British industry and manufacture.

When the oversea buyer is deciding to make a purchase, what is the determining factor in his decision? Naturally he locks first to Great Britain, partly from sentiment and partly from his experience and his knowledge of the quality, the craftsmanship and the skill of design to be found in British goods. But when all allowance has been made for this factor there is one other factor which is final and that is the factor of cost—of price. The question of price has been touched upon only briefly in this discussion by the hon. Member who spoke last. He referred to the disparity between the manufactur- ing costs on which we have to sell, and the agricultural price on which the individual oversea has to buy. During the Debate on the Special Areas a tribute was justly paid to the skill of our craftsmen and their capacity for finished production. The unfortunate thing is that we are not to-day alone in the possession of those qualities. We are not to-day the workshop of the world. The automatic tool has been a great leveller between the producing nations, some with more experience and some with less.

I wish to stress this point because I hear from all sides of the House incessant demands on the Government to spend more and yet more, but I have never yet heard from any part of the House, any attempt whatever to relate the piling up of this prodigious expenditure to the question of the cost of the goods which we must export and in the sale of which price is the final factor. I ask in all earnestness, as one who has had experience of the buying point of view, as one who knows the buyer—the pillar of our export trade—that this House should very jealously watch over increased expenditure and correlate all proposed expenditure to the cost imposed upon our export trade before deciding finally upon it.

There is this very serious consideration regarding the competition of foreign manufacturers in an oversea Dominion. When the foreign manufacturer gets in, whether on a question of price or as the result of an industrial dispute in this country, or for any other cause, something more is involved than the mere loss of wages represented by that single purchase. There is the establishment in that country of a "cell" of competitive influence. When you buy a foreign plant it is necessary to have a manufacturer's agent there to instal it; he may have to remain there to run it, and when the need arises for any extension or renewal, then, he naturally and inevitably looks to his own country to supply what is necessary. I have seen that process repeatedly and I know how that tendency operates to the detriment and prejudice of British industry.

I should not refer to the question of Lancashire to-night were it not for the fact that it has already played a prominent part in this discussion. I do not think there is anybody in the House who has not been profoundly moved by the appeal from the Lancashire Members and the accounts which we have heard of the distress among the workers in the great cotton industry. We know the great traditions of high skill belonging to those workers and I am sure there is no Member here who would not do anything in his power to help Lancashire out of its difficulties, if any practical scheme were put forward for doing so. But we shall do no service to Lancashire or its people, if we hold out false hopes. I want to tell the House definitely that, as far as the great Indian market is concerned, Lancashire's position can never be restored to what it was in pre-war years. In pre-war years, Lancashire held 97 per cent. of the trade in cotton piece goods imported into India. That percentage has now sunk to 45 and in those years the Indian production of yarn has doubled and the Indian production of cloth has gone up fourfold. Indian production enjoys the advantages of proximity to the source of raw material and to the consuming market and apart from these advantages the Indian industry must ultimately provide for the bulk of the demand?

Sir Joseph Nall

Why do they need tariffs?

Sir S. Reed

I know India has tariffs, but have we not tariffs in this country? Hon. Members speak of a tariff of 20 per cent. but are there not tariffs of 33⅓ per cent.?

Sir J. Nall

Not on cotton.

Sir S. Reed

You cannot pick and choose the articles here and there. If you are going to have tariffs they will be applied in accordance with the wishes and needs of the people who frame them.

Major Procter

Is it fair that we should allow Indian goods to come into this market without any tariffs and that they should put 20 per cent. on our goods going into their market? We also provide the whole of the Colonial market for the Indian manufacturer, without any tariff whatever. Surely the hon. Gentleman must agree that Lancashire is entitled to fair play?

Sir S. Reed

The tariff imposed in this country is levied by the people in this country in accordance with their own conception of their own interests. A tariff in India is levied by the legislature of that country in accordance with its conception of that country's interest. We cannot claim a right for ourselves in tariff policy and exercise that right, without conceding the same right to those to whom we had wisely and generously given control of their own affairs. What I am concerned with however is not the trade that we have lost but the trade which remains. There is this 45 per cent. of the imports of textile goods into India which still remains with Lancashire. I implore those who can speak with authority for Lancashire to consider how they are to retain and possibly develop that trade. They will not do so without some greater concentration on production, some greater economy in marketing and some greater vivacity in their selling policy than they have been showing.

The hon. Member for Oldham (Mr. Hamilton Kerr) spoke of competition from Japan. Japanese competition has evolved a system which embraces all those agencies under one control; if one goes back and studies the history of the Hanseatic League one will find modern Japanese conditions reflected there and may I say with all respect that the Japanese for nearly 40 years have been presenting Lancashire with an example of their methods. But I do urge upon hon. Members the consideration that the market which remains can be retained and may be extended and I hope and trust that Lancashire will seize the opportunity which still remains to it. One or two questions have been asked about the Indian trade agreement and the right hon. Gentleman the President of the Board of Trade has been asked to make some statement upon it. The Mover and the Seconder of this Motion very wisely discarded any idea of the use of the political voting power of Lancashire in this House, in order to force upon India trade agreements which would be repugnant to that country. I would ask them to go even further and to see that the voting power of Lancashire in this House is not used to prejudice any general trade agreement merely because that general trade agreement does not bring them specific advantages.

Mr. Silverman

If we are to accept the hon. Gentleman's argument that Lancashire must continue to be satisfied with 45 per cent. of the trade which it used to enjoy what in his view is to become of the rest of Lancashire?

Sir S. Reed

I did not ask Lancashire to be satisfied; I asked Lancashire so to use its opportunities as not only to hold but to expand its share of Indian trade, and I suggested what, to my mind—and I speak with practical experience—were the only means by which Lancashire could maintain and expand that market. I have had actual experience, and on a big scale, and with this experience I would invite the House, when schemes for social improvement and national expenditure are before it, never to lose sight of the influence they must exercise on the cost of production, on the selling costs which must be a governing factor in the maintenance, much more the expansion of our export trade. By that trade we live or perish; that trade cannot flourish if it is hamstrung by legislative burdens which overload it in days of such intensive competition as those in which we live.

6.31 p.m.

Mr. Shinwell

I gladly pay my tribute to the hon. Member for Royton (Mr. Sutcliffe), who raised this Debate, and I agree that this is a subject of prime importance. It concerns our major industries, upon which so many people depend for their livelihood, and it affects our prestige and indeed the whole future of the country. At the same time I must not be regarded as accepting all the arguments of the hon. Member. Indeed, in some respects I differ from him fundamentally, and that is indeed the reason for the Amendment on the Paper. It is not my intention to dwell upon the divergencies of view held in every quarter of this House. What concerns us more is to ascertain by what means we can escape from our present difficulty. But I am tempted to remind hon. Members that there is some significance in the Motion advanced by those who sit on the Government side of the House. After six years of tariffs they now complain of the state of our export trade. That is curiously like an admission that the Government's fiscal policy, whatever it may have accomplished, has failed to recapture our lost foreign markets. Obviously, tariffs are incapable of solving the problem, otherwise this discussion would be redundant, and we on these benches ask whether, in the judgment of hon. Members opposite, tariffs are too high or too low or whether it is now agreed that they have become ineffective in a crumbling market. But the last thing that I desire to do is to revive the barren and irrelevant fiscal issues of the past. We have much more serious work to do.

There is genuine agreement as regards the state of our export trade, yet it would be folly to exaggerate the position. We may be doing as well as can be expected. The world has never fully recovered from the shock of the post-war years, the vast drain on financial resources, and the follies of so-called statesmen, who vainly imagined that by imposing reparations on other countries they were assisting their own people. Moreover, other countries have steadily developed their industries and have adopted the industrial methods of the older industrial countries and, indeed, improved upon them, and that applies equally to the primary producing countries. Thus the pressure of competition is ever increasing; it is a natural and inevitable tendency. But the problem in this country is differentiated in its character. Some industries—for example, the electrical industries—are flourishing, and their exports are on the increase.

The real problem is to be found, as both my hon. Friends who have taken part in this Debate have maintained, in the coal, cotton, and shipbuilding industries, although, of course, others as well are affected. The facts are beyond dispute, they are familiar to every hon. Member, and they have been stated here repeatedly, but let us consider the latest and most accurate figures and facts known to us. I take for my purpose the month of October. We find that coal exports were 7 per cent. less in that month than for the same period last year; in iron and steel 159,100 tons were exported as against 260,000 tons in the corresponding month of last year; in cotton we exported 29 per cent. less cloth than in the previous October period; and we also exported 1,281 fewer private motor cars. If these figures are translated into actual amounts and values and also into the actual number of persons affected, it will be realised that the position is one which calls for serious thought.

What is the issue before us? It is whether we can take the proper and effective steps either to expand our markets or, at the very least, to arrest the decline. We must recognise, to begin with, that over some of the causes of this downward tendency we have no control what- ever. For example, we are unable to interfere in the trading methods employed by certain other countries, and, for example, we cannot compete successfully with certain classes of foreign-made goods, because they are too cheap, both as to price and quality, and because they are produced by labour which is paid deplorably low wages and which works excessively long hours. It may be that in respect of some of these articles we can no longer remain supreme in the world's markets; we may require to concentrate on the better qualities. Nor can we control the development of secondary industries in other countries, even if we were so inclined. We must reconcile ourselves to that fact; it is inescapable. But one of the main causes of the contraction in our markets, accompanied by formidable competition from other countries, is the low standard of living and the consequent low purchasing power in certain countries, for example in India, in our Colonial possessions, and in some European countries.

Perhaps I may be pardoned if I say that that is the crux of the whole problem. You may fiddle about with the machinery of organisation, you may reconstruct it entirely, you can, if you care, retain your present methods, you can adopt the quaint devices suggested by the hon. Member for East Birkenhead (Mr. White) or any of those devices suggested by hon. Members opposite, but unless you deal with the fundamental cause of contracted international trade, namely, low purchasing power, the problem will remain. The question that we ask, therefore, is: Can the Government do anything to stimulate an upward movement? I believe they could if they cared. It could be done through the International Labour Office, but instead of assisting to raise the level of wages and working standards through the organisation of the International Labour Office, the Government have so far deliberately frustrated all efforts in that desirable direction. Moreover, the Government might take appropriate action in the direction of stimulating and increasing purchasing power in our Colonial possessions. We have recently heard about the deplorable conditions in the West Indies. Something could be done there by direct Government intervention, and surely, if the standard of living could be raised in those countries, it would relax the pressure on the world market by increasing the demand for consumable goods of the various kinds with which our export trades are deeply concerned.

We could do more than this. We could improve our methods of trade publicity. I entirely agree with what the hon. Member for Oldham (Mr. Hamilton Kerr) said. In large measure it was repeated by my hon. Friend the Member for Burnley (Mr. Burke), who made such an interesting speech. We ought to spend liberally in this direction, but at the present time publicity for export purposes seems to be undertaken by anybody or everybody. It seems to be nobody's business, and there is no attempt at coordination. I certainly think that if we believe in the quality of our products, we ought not to be parsimonious in providing the necessary publicity in order to find the markets which we require, and I shall await with interest the reply of the hon. Member on that head.

Again, we might examine the methods employed by some traders who seem to be dilatory in giving delivery and who seem to think that foreigners can be treated as traders treated them in the halcyon days when the world markets were at our feet. Take the case of Russian trade. I came across a very interesting example of the failure of British exporters to make delivery. There has been considerable controversy in this House on the question of the alleged adverse balance of Anglo-Soviet trade, but in a document which I have in my possession, which I obtained from an unimpeachable source, I find that British manufacturers had on 1st November, 1938, goods undelivered against orders placed by Soviet organisations in the United Kingdom to the value of £2,262,110; and they go on to point out, because it might be thought that the failure of delivery was due to the fact that the goods were not due for delivery, that if these goods had been delivered, that amount would have been included in the import figures for Soviet Russia and would have considerably reduced the adverse balance of trade. At any rate, this is the statement put in my possession, and I think it is for the right hon. Gentleman the President of the Board of Trade or for the Secretary for the Overseas Trade Department to deal with this matter if there be any truth in the contention.

We might adopt a foreign policy more in keeping with our trade requirements. What is the position to-day? We allow our ships to be bombarded, thus frightening shipping firms away and increasing premiums. Something was said about that to-day. We permit Germany and Italy to capture our trade before our very eyes, and apparently make no attempt to prevent it. What are the facts in connection with our trade with Spain? I shall say nothing about our trade with Republican Spain and shall deal only, and that very briefly, with our trade with that part of Spanish territory which is now under the control of General Franco. There are some very interesting facts, and I will deal primarily with the shipping position. The arrival of British vessels in Franco ports in May, 1935, was 184, but in May, 1938, it had been reduced to 89. Consider the position as regards German vessels trading with Franco ports. The arrival of German vessels in Franco ports in May, 1935, was 108, and in 1938 it had increased to 165. There may, of course, be substantial reasons why our trade is diminishing in that quarter, but clearly they relate to our foreign policy. It that policy were sound and healthy and properly directed, we should not be losing our mercantile marine position in that part of the world. There is a great deal to be said on that aspect of the subject, but I forbear.

I come to the Amendment. We are asking for national trading organisations for the purpose of dealing with our export trades. Some of us are tired of the antics of traders and exporters in this country. They are too stodgy. They rely upon traditional methods which are now out-of-date, and I agree with the hon. Member for Oldham that they display no imagination whatever. Most of us dislike German persecution, but we must agree that the trade machinery devised in that country for exploiting the world markets in ingenious and has succeeded where we have failed. What is the position in this country? We have a mass of traders speaking with different voices. German trade speaks with one voice. That is the essential difference. Let us consider some of the effects of this paucity in organisation—there is, indeed, no actual organisation at all. Of course, private traders will tell us that they know their own business best, but unfortunately for them and everybody else the facts belie their self-assurance and optimism. We have to deal with effects and results, and they are obvious to everybody.

Let us consider the coal trade. We have there done something very singular; we have established an internal centralised organisation. That is all very well in its way, but it is no use to the export trade. There is no central organisation dealing with the export trade, except in South Wales, where recently an organisation of the kind was established by the traders and exporters, and it is now vested in the hands of one particular undertaking. It is true that as a result of that modest centralised effort there has been no stimulus to exports, but it has succeeded in doing something that is almost as valuable; it has maintained a reasonable price level. I go so far as to say that that is not a disadvantage, for if we cannot sell any more goods abroad, the next best thing is to receive a higher price for the goods we do sell. Obviously, if we can establish an organisation, even of so modest a character, which can assist in bolstering up the price level for export purposes, it is an advantage.

The same applies to the cotton industry. I shall not deal with that, because so much has been said about it, except to say that the Government have played about with this question far too long. They maintain that those who are responsible for the running of the cotton industry are divided and, therefore, in the absence of agreement, nothing can be done. Surely the obvious thing to do, if we are concerned about cotton exports and the rebuilding of the Lancashire cotton industry, is to ask those gentlemen who will not agree to stand out of the way and for the Government to use compulsory powers.

Sir Henry Fildes

Will the hon. Gentleman deal with the point that coal to-day is costing the cotton industry £4,000,000 a year more than it did last year?

Mr. Shinwell

It may well be that the cotton industry has to pay heavy charges for the coal it uses, but that is an example of the lack of effective organisation in the country, which leads to one industry exploiting another. It is no part of the policy of the Labour party to have a situation of that kind in this country, Therefore, if the hon. Gentleman has any complaint to make on that score, it lies at the door of the right hon. Gentlemen on the Government Front Bench.

I want to say a word about shipbuilding. The hon. Member for East Birkenhead argued that the price of steel affected the building of ships in this country. It is a remarkable fact, however, that steel prices from 1924 to 1937 suffered a serious reduction. The hon. Member argued as if there had been an appreciable increase in prices which militated against shipbuilding in this country. In 1924 the ascertained price of steel plates was £9 11s. a ton. In 1937 it was only £8 18s. 5d., and in the intervening years it never exceeded £7 15s. It is not so much the high steel prices which are at the root of the trouble in respect of shipbuilding. There is a system in the steel industry which provides for rebates to the shipbuilding industry, and, as far as exports are concerned, the International Steel Cartel provides for a reduction of 7½ per cent. on all steel that is exported. It is possible to extend the system of rebates, and I suggest that the Minister should put himself in communication with the Iron and Steel Trades Federation in order to find out whether that can be done. It would assist the shipbuilding industry to some extent. I should not be surprised if the reason why Holland is now building ships which could be built in this country is that she is buying cheap steel from Belgium and, of course, getting the advantage of the reduction in the export rate. That also might be inquired into. A further point is that the use of capital might be extended and properly directed. We should have no hesitation in using capital to assist our potential customers so long as our home needs are not neglected. If capital is available it should be used. That would mean the establishment of an international investment board, because investment, if it is to be undertaken, should be well directed and should not concern itself so much with private and selfish interests, but should concern itself with the interests of the community as a whole.

I come finally to the question of German and other subsidised competition. We are gradually being driven from markets which formerly provided us with a liberal outlet for our goods, particularly by Germany. Let no one suppose for a moment that we on these benches are hostile to Germany as a whole. Whatever views we may hold about the political dispensation in that country, we recognise that Germany has a right to trade, a right to export and import as freely as we do. Let us consider what has happened. Take the case of coal. The average subsidy on German coal is six marks a ton. For much of their exports it is more. That takes no account of additional subsidies which are derived from the reduction in freights. What is happening in consequence? The hon. Member for East Birkenhead, I think, argued as if Germany had not traded in such a fashion as to deprive us of much of our trade in foreign markets. He is all wrong.

I have in my possession a publication called "Coal and Colliery News" for November, 1938, in which that point is dealt with in relation to coal. It shows that our trade with Brazil has diminished. In spite of the fact that Brazil owes large sums for business done in this country in 1930, she is reducing her trade with this country. Now she has increased her imports of coal from Germany and takes less from us. Portugal, too—and this is an interesting point—is taking less from us and more from Germany. The same applies to the Argentine, in spite of the trade treaty. All sorts of excuses are made by these countries. If we adopt measures of retaliation it may lead to difficulties among the countries, but I put this point to the right hon. Gentleman. In the case of Portugal, for example, which comes within the sterling group, Germany is very anxious to trade with her in order to obtain currency to buy from elsewhere imports which she badly requires. In the case of Portugal, we might, as a result of our trade treaty operations, induce her to consider whether she ought not to take as much from us as we take from her. The same might apply very well to the Argentine and the other countries.

The fact is that these countries have succumbed to German blandishments. Some of them are paying in perfectly good currency, although they are forced to take what is offered in return. Why should we give the German Government the benefit of the Most-Favoured-Nation Clause, having regard to existing circumstances? I am not complaining about German exports or imports, or about Germany capturing our markets. It is not a complaint against Germany so much as a complaint against our former customers who want to send goods to this country but are not prepared to take goods in return. I recognise all the obligations of multilateral trade and so on, but these matters do not apply to some of the countries to which I have referred. Reference has been made to the Anglo-American Trade Agreement. The right hon. Gentleman the President of the Board of Trade deserves our commendation for the work he has done in connection with it. I observe that the United States is denying Germany the Most-Favoured-Nation Clause. What are we to do? I venture to put a question to hon. Members. This is no party matter; it is a matter which has been forced upon us by the exigencies of the new situation, for which we are not responsible. I put it to hon. Members and to the Government, that if Germany is not prepared to reduce her tariff or to operate her trade in a fair and reasonable fashion according to the traditional capitalist system—I am not going to make a song and dance about that now—if Germany is not prepared to play the game, we ought not to allow her to obtain all the advantages that accrue from the Most-Favoured-Nation Clause.

There are a great many other points that I should have liked to mention, but I conclude by urging upon the Government the most careful examination of the situation to be followed by speedy and effective action. They must not allow vested interests to stand in the way, but should concern themselves only with the general interests. Nor should they, because of any apparent loss of dignity, refuse to consider any suggestions placed before them—that happens too often—even if those suggestions are made by political opponents. For this is no party matter, but one affecting every section of the community. If they flinch from this task we shall witness, if not the collapse of our export trades, at least a further deterioration, and we shall end up with a major disaster. That is a luxury we cannot afford. The Government may require to employ new devices which hitherto have been regarded as objectionable. Let us not forget that we are living in a new world which is undergoing a vast change, in which it is impossible to stand still and yet hope to make progress. I do not despair of the future of British export trade, but if it is to be revived and even maintained at its present level, it will require courage and the acceptance of new ideas which the present situation has rendered necessary.

7.0 p.m.

Mr. R. S. Hudson (Secretary, Overseas Trade Department)

We are indebted to the hon. Member for Royton (Mr. Sutcliffe) for raising this Debate. As a matter of fact, it is the first time in the last four or five years in which a private Member has utilised his opportunities to raise the question of our export trade. My only regret is that we should have had such a short time to discuss the matter, in view of its importance, and that I have to exclude several hon. Members as the result of getting up to speak now. However, I hope we may have other opportunities to disuss the matter. The hon. Gentleman who has just spoken, with almost the whole of whose speech I agreed, said we must not take too tragic a view of the export trade. I should like to put the matter, as I see it, in its proper perspective. We have been hearing a lot lately about the increase of our adverse balance of trade, and I have made it the subject of several speeches in the country. But, although the adverse visible balance of trade was increasing very seriously in the early part of the year, that tendency has been reversed in recent months, with the result that for the 10 months of this year it is nearly £12 million less than in the corresponding period of last year. I am not going to suggest for a moment that it is not serious, and that if it deteriorated we should not have to take new steps, but I hope to show that there are reasonable causes for what is happening.

If you look at the final balance of payments, after taking into account our invisible exports, you will find that the adverse balance of payments ran over the last four or five years to an average of £16,000,000 a year, and it was only last year that it suddenly jumped to the substantial figure of £52,000,000. The fact that there is that adverse balance means, if you analyse it, that a larger amount has been invested from abroad in this country than we have invested from this country abroad. If you look at the situation in the world, that reversal of the old trend of investment is not to be wondered at when you think of the diffi- culties, the uncertainty throughout the world and the heavy losses that British investors have suffered in foreign countries. At the same time that you have had these adverse effects abroad you have had, owing to the development of the home market under tariffs, owing in the last year or two to rearmament, and owing to the great increase in our social services, and particularly to our housing programme, a very largely increased field at home for the profitable investment of capital. Therefore, it is not really astonishing that we should be seeing this reversal, but I think, if it became more accentuated, it would be a thing with which we should have to deal.

Several hon. Members have referred to the difficulties that face our export trade at present. References have been made to the falling off in the purchasing power of our customers abroad. There have been particularly, of course, the war in the Far East and the war in Spain. Many of our older markets have been lost as the result of the increasing industrialisation of countries which originally were merely producers of raw material, and I think the loss of trade in Lancashire is very largely to be attributed to that item alone. I took out some interesting figures as an illustration of the sort of process that has been going on, and I instance the exports from this country of textile machinery. Our textile machinery exports during the last 10 years have totalled a figure of £75,500,000, of which £22,250,000 was sold to British India alone. Naturally, when you are faced with figures of that kind, you cannot expect that Lancashire's export trade in yarns and tissues will not suffer. Let no one in reply to this say that this is entirely the fault of the British manufacturers of textile machinery. If they had not exported it, someone else would have done so, and I do not think they can be blamed. On the contrary, so far as they have created employment here, they are to be congratulated. The hon. Member for Seaham (Mr. Shinwell) said it was necessary to face up to the conditions and to realise that we should have to depend more and more in the future on new markets and on the production and sale of new forms of goods. I agree, but naturally in the period of change-over there is bound to be a great deal of distress amongst the firms and individuals con- cerned. Lancashire, in fact, to take a case in point, is going through this process and during the last few years has changed over very successfully to the creation of a very large number of smaller and newer industries which are placing in employment numbers of people who have been displaced from other industries.

In face of an analysis of that kind it must be obvious that there is no single remedy that can be applied. The remedies are various. Indeed, there is no remedy that the Government of itself can hope successfully to apply. All we can hope to do is to mitigate the effects of these various causes. We have succeeded by our policy in mitigating those effects very successfully. We have, for example, helped to maintain the purchasing power of our consumers by our policy of cheap money and, in particular cases, by our schemes for the regulation of such primary commodities as tin and rubber. We have negotiated with many countries bilateral agreements and, as a result, we have succeeded in reducing the barriers to our trade, and in a number of cases—Denmark and the Scandinavian countries, for example—we have succeeded in securing a definite market for certain of our goods—both coal and cotton. As an example with which the House will be familiar, the increase of our export trade with these trade agreement countries amounts to £125,000,000 in the last few years. A figure of which the House will not be aware, but which is not without significance, is that in the last nine months, when we have been suffering from a general recession of exports, whereas our trade with the non-agreement countries went down by no less than £32,000,000, our trade with the agreement countries went down by only some £20,000,000. Our trade with the non-agreement countries went down 18 per cent., and with the agreement countries 7½ per cent., which shows that not only in times of trade expansion but also in times of recession, this policy of trade agreements is of some definite benefit to the British export trade. Another thing that we have done is to maintain this country as one of the most important consumer markets in the world. We cannot expect other people to buy from us unless we in turn are prepared to buy from them. I, therefore, think that our success in maintaining this country as a great market for the goods of the world has been of immense benefit to our export trade.

Several Members have referred to the Most-Favoured-Nation Clause and have suggested that in many cases we ought to take more drastic steps to see that countries that sell to us also buy from us. I agree very largely with the idea underlying many of these remarks, but the policy must not be carried to excess, except in the case of those countries which, obviously, are refusing, or have refused, to play their fair share in carrying on or allowing the international trade of the world to be carried on. That policy involves the admission that in certain circumstances we have, and we must continue to have, an adverse balance of trade. In the course of the negotiations with the United States I came across a figure which struck me very much. We bought from the United States 535,000,000 dollars worth of goods last year and sold them about 200,000,000 dollars worth, leaving an apparent adverse balance of 335,000,000 dollars against us. If you look at the trade of the British Empire as a whole, you can take one small part of it, British Malaya, and you will find that in the same year British Malaya sold to the United States 235,000,000 dollars worth of goods and the United States sold to Malaya—how much does the House think?—9,000,000 dollars worth. In other words, that small part of the Empire is paying off not less than 226,000,000 dollars worth of the adverse balance. We are paying for our wheat from America with our exports of rubber from Malaya. I could quote other instances if I had time which show that there is another side to the question.

When you come to countries which have definitely gone out of their way to discriminate against us and not play the game, we have had no hesitation at all in putting on the screw. I need only quote the case of the agreement that we negotiated with Germany this summer, in which we insisted not merely that Germany should take an increased percentage of manufactured goods instead of raw materials and semi-manufactured goods, but that her obligation to purchase these goods from us should be increased by 90 per cent. of whatever sum she gained by selling goods to us over a certain level. In the case of Italy, as in other cases where we thought we were not being fairly treated, we negotiated an agreement under which they were compelled to agree to take goods from us to the extent of 87 per cent. of their sales to us. So I think we can claim that where there has been shown to be good cause we have insisted on being properly treated. An hon. Member mentioned Soviet Russia, and I was very interested to hear his statement that there were £2,000,000 worth of goods outstanding waiting for delivery, and that it was suggested to him by certain Russian sources that if those goods had been delivered the adverse balance would have been reduced. I am delighted to hear that it is beginning to penetrate the mind of Soviet Russia that we are concerned at the rising adverse balance. We were compelled some years ago to negotiate an agreement with Soviet Russia under which she undertook to make purchases from this country up to a certain proportion of what we took from her. We tried hard to insist that that proportion should include goods manufactured here, but owing to the fact that we were at that time in a sellers' market Russia had the whip hand and we were unable to get what we wanted. The situation has changed now. The world has become not a sellers' market but a buyers' market, and I have hopes that very soon we shall be in a position to see that this adverse balance of trade is reduced, and reduced more especially not by re-exports from this country but by Russian purchases of our manufactured goods.

Mr. Shinwell

Lest the hon. Gentleman should imagine that I am allowing him to get away with that, I should like to say that he must not forget that the attitude of certain British Governments has not been conducive to Russian trade with us.

Mr. Boothby

May I suggest to the hon. Gentleman that he should include herring in those manufactured goods?

Mr. Hudson

Two hon. Members referred to the question of our cotton export trade with Africa, and suggested that if the Congo Basin Treaty were altered or denounced, that would have a material effect. It has been repeatedly stated from this Box that it is quite impossible to denounce the Congo Basin Treaty or to alter it except with the assent of the other signatories, and as one of the signatories is Japan, and one of the objects of altering the treaty would be to reduce Japanese exports, the chances of Japan agreeing to such an alteration are extremely small. On the other hand, as a result of the quota policy which we have imposed upon certain Colonies in favour of Lancashire the exports of British cotton textiles have increased from £4,000,000 to £7,800,000 in five years. Our share of the cotton trade with those Colonies has increased from 57 per cent. to 66 per cent., while the share of Japan has decreased from 27 to 9 per cent. The total imports of cotton goods from all countries into the British Congo Basin Treaty areas (excluding mandated territory) amounted in 1937 to only £1,400,000, and if the whole of that trade were given to this country, which is obviously impossible, that would bring Lancashire merely a fraction of the advantage she has already got as a result of our quota policy. Therefore, I do hope that we shall hear the end of this myth that the denunciation of the Congo Basin Treaty is possible, or that if it were denounced the effect on Lancashire would be a material one.

The hon. Member said it would be a very good thing if we were to raise the standard of living and the consuming power of our customers throughout the world, especially of the inhabitants of our Colonies. I quite agree, but he must not forget that it would have a result which would run entirely counter to the accepted policy of his own party of reducing the cost of living in this country. If you are going to raise the standard of living of those peoples, if you are going to give them more for the products they send here, you will increase the cost of living in this country. You have only to take the classic case of West African cocoa. When in 1936 the price of cocoa was 42s. per cwt. Lancashire sent to West Africa £3,300,000 worth of goods in the ten months ending 31st October. When the price of cocoa rose to 50s. and it became, therefore, more expensive to the British housewife, our total exports rose still further; but when, during the first ten months of this year the price of cocoa fell to 37s. and became, therefore, cheaper for the British housewife, and helped to reduce the cost of living, Lancashire's exports fell to £1,250,000. In other words there is a direct connection between the cost of raw materials in West Africa and the amount of goods you can send. I could quote other similar instances in the Argentine.

The hon. Member made another gallant attempt to have it both ways when he complained about the reduction in the number of British ships going to Franco territory compared with the number of German ships. Clearly one of the main reasons why the number of German ships is greater is the large quantity of munitions that the German Government are sending to Franco, and I have yet to learn, what would be the obvious corollary, that he wants to see the number of British ships going to Franco territories increased, as would be the case if we were to follow that policy of sending munitions.

Mr. Leslie

Send them to the Spanish Government.

Mr. Hudson

Finally, we come to the question of Germany. The hon. Member asked why we did not refuse to extend the Most-Favoured-Nation treatment to Germany, following the example of the United States. The answer is that Germany is refused Most-Favoured-Nation treatment by the United States because she is discriminating against American goods in Germany. Germany is not discriminating against British goods in Germany. Our complaint is that Germany is, by her methods, destroying trade throughout the world. We thus have no case for taking away Most-Favoured-Nation treatment, which depends upon how Germany treats our goods in Germany, and the question is the very much broader one of how to meet the new form of German competition throughout the world. As far as Germany herself is concerned, we have got her to take our exports up to 60 per cent. of her exports to us up to a certain level and up to 90 per cent. of her exports to us in excess of this level.

As regards Central and South-Eastern Europe, I have got out some figures which, I think, will interest the House. As far as we can make out, because it is difficult to get very exact information as to the way in which things are done in Germany, the basis of their hold is that they pay to producers in Central and South-Eastern Europe much more than the world price. Obviously, they do that at the expense of their own people. How they treat their own people is a matter for the German Government, but it does affect us. At a particular date this year the Germans were paying over £10 a ton for wheat, at a time when Manitoba No. 1 wheat was selling at £7 on the London market.

Mr. A. Jenkins

Was that in blocked marks?

Mr. Hudson

No, that is at the official rate of exchange provided for in the German agreement. We found, also, that she was buying barley at £7 10s. a ton when the London price was £5 6s. She was buying eggs at £7 12s. the metric quintal when the price in London was £5 18s. She has followed the same course in regard to cotton, hides, meat, poultry, oil seeds and cereals, buying them at prices so high that producers sending to other markets cannot hope to obtain similar prices. In the case of Turkey, for example, to take the case of mohair, owing largely to her action imports of mohair to this country which were £190,000 in the first 10 months of last year, have decreased to £24,000 in the corresponding period this year because of the increase in price.

Mr. Jenkins

Is this trade done on the system of blocked marks?

Mr. Hudson

Whatever you like to call it, the effect of it is that the Rumanian or Bulgarian peasant receives more from his sales to Germany than he would be able to get by sales on the world market. Then take the case of Poland. The Germans have entered into an agreement by which Poland gets a large quantity of machinery, in this case at competitive prices. Germany has contracted to buy over a period of nine years agricultural produce from Poland at well above world prices, and Poland has also obtained her goods on credit and has to pay interest at a very low rate.

Mr. Jenkins

To make the picture complete the hon. Gentleman should give us the prices of the articles Germany is to supply to Poland.

Mr. Hudson

I have said that in this particular case Germany has sold her machinery at competitive prices. I am trying to explain that by these methods Germany is obtaining a stranglehold on the countries in that part of Europe, an uneconomic stranglehold at the expense of her own people, because it means raising the cost of living to her own people and, in fact, exporting goods at less than cost price. Hon. Members ask "What is the solution here?" Obviously, I do not think any one wishes us to adopt similar methods. We do not want to see the cost of bread increased here because we buy, in competition with Germany, wheat from Rumania at a price above the world price; but clearly we have to meet this competition in the case of Poland.

We have made a survey of all possible methods and the only way we see is by organising our industries in such a way that they will be able to speak as units with their opposite numbers in. Germany and say "Unless you are prepared to put an end to this form of treatment, unless you are prepared to come to an agreement to sell your goods at prices which represent a reasonable return, then we will fight you and beat you at your own game." This country is infinitely stronger financially than, I was going to say, any other country in the world, but certainly stronger than Germany, and therefore we have great advantages, advantages which I believe will result in our winning the fight; but it is an essential preliminary that our own industries should be organised. Where they have been organised, they have succeeded, over the last few months, in making satisfactory agreements with their opposite numbers in Germany. I have been engaged for several months past in doing my best to see that more and more industries are organised on this basis in order to meet this competition, and I am glad to be able to tell the House that we are meeting with success.

Mr. Shinwell

Then you will accept our Amendment?

Mr. Hudson

No. The Amendment suggests boards, which I do not believe would be effective, because they would have exactly the same effect on the world as the German measures, making the nations of the world hate the particular country which adopted them. Every country in South-Eastern Europe hates this process; they are all afraid of being economically strangled by Germany, and they are continually turning to us to ask us to help them out. I think the same evil results on international relations would follow from the system suggested in the Amendment.

In conclusion, I would say that while a great deal has been heard about our relative inefficiency in industry, we still export nearly £600,000,000 worth of goods a year. That in itself proves that there must be plenty of really efficient industries left in this country, but despite that success I still find from my talks with firms that there is a feeling of discouragement as a result of all the quota and exchange difficulties they meet with in the export trade. In my position I should not try in any way to minimise the difficulties that the exporter meets with, but though foreign propaganda would have the world believe that we are a decadent country, I believe, like the hon. Member for Oldham (Mr. Hamilton

Kerr), that there are still great reserves of energy, initiative and skill in this country, and that if we can encourage our people to make a united effort, that united effort will succeed in restoring our export trade.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 197; Noes, 121.

Division 11.] AYES. [7.30 p.m.
Acland-Troyte, Lt.-Col. G. J. Fleming, E. L. Peters, Dr. S. J.
Adams, S. V. T. (Leeds, W.) Fremantle, Sir F. E. Petherick, M.
Agnew, Lieut.-Comdr. P. G. Furness, S. N. Pickthorn, K. W. M.
Anderson, Sir A. Garrett (C. of Ldn.) Fyfe, D. P. M. Pilkington, R.
Anderson, Rt. Hn. Sir J. (Sc'h Univ's) George, Megan Lloyd (Anglesey) Ponsonby, Col. C. E.
Aske, Sir R. W. Gower, Sir R. V Porritt, R. W.
Astor, Hon. W. W. (Fulham, E.) Graham, Captain A. C. (Wirral) Pownall, Lt.-Col. Sir Assheton
Baillie, Sir A. W. M. Greene, W. P. C. (Worcester) Procter, Major H. A.
Balniel, Lord Gridley, Sir A. B. Radford, E. A.
Barclay-Harvey, Sir C. M. Griffith, F. Kingsley (M'ddl'sbre, W.) Ramsbotham, H.
Bartlett, C. V. O. Grimston, R. V. Ramsden, Sir E.
Beamish, Rear-Admiral T. P. H. Gunston, Capt. Sir D. W. Reed, Sir H. S. (Aylesbury)
Beaumont, Hon. R. E. B. (Portsm'h) Hacking, Rt. Hon. Sir D. H. Reid, Sir D. D. (Down)
Bernays, R. H. Hannon, Sir P. J. H. Reid, W. Allan (Derby)
Beothby, R. J. G. Harris, Sir P. A. Roberts, W. (Cumberland, N.)
Bassom, A. C. Haslam, Henry (Horncastle) Robinson, J. R. (Blackpool)
Bower, Comdr. R. T. Haslam, Sir J. (Bolton) Ropner, Colonel L.
Boyce, H. Leslie Heilgers, Captain F. F. A. Ross, Major Sir R. D. (Londonderry)
Braithwaite, Major A. N. Hely-Hutchinson, M. R. Ross Taylor, W. (Woodbridge)
Brass, Sir W. Heneage, Lieut.-Colonel A. P. Rowlands, G.
Briscoe, Capt. R. G. Hepworth, J. Royds, Admiral Sir P. M. R.
Brooke, H. (Lewisham, W.) Herbert, Major J. A. (Monmouth) Russell, R. J. (Eddisbury)
Brown, Brig.-Gen. H. C. (Newbury) Higgs, W. F. Russell, S. H. M. (Darwen)
Browne, A. C. (Belfast, W.) Hope, Captain Hon. A. O. J. Salmon, Sir I.
Butcher, H. W. Hopkinson, A. Salt, E. W.
Carver, Major W. H. Harsbrugh, Florence Samuel, M. R. A.
Cary, R. A. Hudson, Capt. A. U. M. (Hack., N.) Sandeman, Sir N. S.
Cazalet, Thelma (Islington, E.) Hudson, Rt. Hon. R. S. (Southport) Sanderson, Sir F. B.
Channon, H. Hume, Sir G. H. Schuster, Sir G. E.
Chapman, A. (Rutherglen) Hunter, T. Seely, Sir H. M.
Chorlton, A. E. L. Hutchinson, G. C. Shaw, Major P. S. (Wavertree)
Clarke, Colonel R. S. (E. Grinstead) James, Wing-Commander A. W. H. Simmonds, O. E.
Cobb, Captain E. C. (Preston) Joel, D. J. B. Smiles, Lieut.-Colonel Sir W. D.
Cotton, Major W. P. Jones, Sir H. Haydn (Merioneth) Smith, Bracewell (Dulwich)
Colman, N. C. D. Jones, L. (Swansea W.) Smith, Sir Louis (Hallam)
Cooke. J. D. (Hammersmith, S.) Kimball, L. Smith, Sir R. W. (Aberdeen)
Courthope, Col. Rt. Hon. Sir G. L. Lamb, Sir J Q. Somervell, Rt. Hon. Sir Donald
Cox, Trevor Law, Sir A. J. (High Peak) Spears, Brigadier-General E. L.
Craven-Ellis, W. Leech, Sir J. W. Spans, W. P.
Critchtey, A. Lees-Jonas, J. Stanley, Rt. Hon. Oliver (W'm'ld)
Croft, Brig.-Gen. Sir H. Page Leighton, Major B. E. P. Storey, S.
Crooke, Sir J. Smedley Levy, T. Strickland, Captain W. F.
Crookshank, Capt. H. F. C. Lindsay, K. M. Stuart, Hon. J. (Moray and Nairn)
Cross, R. H. Loftus, P. C. Tacker, Sir R. I.
Crossley, A. C. MacAndrew, Colonel Sir C. G. Thomas, J. P. L.
Cruddas, Col. B. McCorquodale, M. S. Thomson, Sir J. D. W.
Davidson, Viscountess Macdonald, Capt. P. (Isle of Wight) Thorneycroft, G. E. P.
De Chair, S. S. McKie, J. H. Touche, G. C.
Da la Bère, R. Makins, Brigadier-General Sir Ernest Tufnell, Lieut.-Commander R. L.
Denman, Hon. R. D. Margesson, Capt. Rt. Hon. H. D. R. Turton, R. H.
Denville, Alfred Markham, S. F. Wallace, Capt. Rt. Hon. Euan
Dodd, J. S. Mason, Lt.-Col. Hon. G. K. M. Ward, Lieut.-Col. Sir A. L. (Hull)
Dower, Major A. V. G. Mayhew, Lt.-Col. J. Waterhouse, Captain C.
Drewe, C. Meller, Sir R. J. (Mitcham) Watt, Major G. S. Harvie
Duckworth, Arthur (Shrewsbury) Mellor, Sir J. S. P. (Tamworth) Wedderburn, H. J. S.
Dugdale, Captain T. L. Moreing, A. C. Wickham, Lt.-Col. E. T. R.
Eastwood, J. F. Morris-Jones, Sir Henry Williams, H. G. (Croydon, S.)
Edmondson, Major Sir J. Morrison, G. A. (Scottish Univ's.) Willoughby de Eresby, Lord
Ellis, Sir G. Morrison, Rt. Hon. W. S. (Cirencester) Windsor-Clive, Lieut.-Colonel G.
Elliston, Capt. G. S. Munro, P. Winterton, Rt. Hon. Earl
Emery, J. F. Nall, Sir J. Wood, Hon. C. I. C.
Emmott, C. E. G. C. Haven-Spence, Major B. H. H. Wright, Wing-Commander J. A. C.
Emrys-Evens, P. V. O'Connor, Sir Terenee J. Young, A. S. L. (Partick)
Errington, E. O'Neill, Rt. Hon. Sir Hugh
Evans, Capt. A. (Cardiff, S.) Owen, Major G. TELLERS FOR THE AYES.
Everard, W. L. Patrick, C. M. Mr. Sutcliffe and Mr. H. W. Kerr.
Fildes, Sir H. Perkins, W. R. D.
Adams, D. (Consett) Griffiths, G. A. (Hemsworth) Nathan, Colonel H. L.
Adams, D. M. (Poplar, S.) Griffiths, J. (Llanelly) Noel-Baker, P. J.
Adamson, Jennie L. (Dartford) Groves, T. E. Oliver, G. H.
Adamson, W. M. Hall, G. H. (Aberdare) Parker, J.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hall, J. H. (Whitechapel) Parkinson, J. A.
Anderson, F. (Whitehaven) Hardie, Agnes Pearson, A.
Attlee, Rt. Hon. C. R. Heyday, A. Pethick-Lawrence, Rt. Hon. F. W.
Bonfield, J. W. Henderson, A. (Kingswinford) Pritt, D. N.
Barnes, A. J. Henderson, T. (Tradesten) Ridtey, G.
Barr, J. Hicks, E. G. Riley, B.
Bellenger, F. J. Hopkin, D. Ritson, J.
Bann, Rt. Hon. W. W. Jenkins, A. (Pontypool) Robinson, W. A. (St. Helens)
Benson, G. John, W. Sanders, W. S.
Bevan, A. Johnston, Rt. Hon. T. Sexton. T. M.
Bromfield, W. Jones, A. C. (Shipley) Shinwell, E.
Brown, C. (Mansfield) Kelly, W. T. Silkin, L.
Buchanan, G. Kennedy, Rt. Hon. T. Simpson, F. B.
Cape, T. Kirby, B. V. Smith, Ben (Rotherhithe)
Chater, D. Kirkwood, D. Smith, E. (Stoke)
Cluse, W. S. Lansbury, Rt. Hon. G. Smith, Rt. Hon. H. B. Lees- (K'ly)
Clynes, Rt. Hon. J. R. Lathan, G. Smith, T. (Normanton)
Cocks, F. S. Lawson, J. J. Sorensen, R. W.
Collindridge, F. Leach, W. Stewart, W. J. (H'ght'n-le-Sp'ng)
Cove, W. G. Lee, F. Strauss, G. R. (Lambeth, N.)
Daggar, G. Leonard, W. Summerskill, Dr. Edith
Dalton, H. Leslie, J. R. Taylor, R. J. (Morpeth)
Davidson, J. J. (Maryhill) Logan, D. G. Thorne, W.
Davies, R. J. (Westhoughton) Lunn, W. Thurtle, E.
Davies, S. O. (Merthyr) Macdonald, G. (Ince) Tinker, J. J.
Day, H. McEntee, V. La T. Viant, S. P.
Dobbie, W. Maclean, N. Watson, W. McL.
Dunn, E. (Rother Valley) Macmillan, H. (Stockton-on-Tees) Westwood, J.
Ede, J. C. MacMillan, M. (Western Isles) Whiteley, W. (Blaydon)
Edwards, Sir C. (Bedwellty) Mainwaring, W. H. Wilkinson, Ellen
Fletcher, Lt.-Comdr. R. T. H. Marshall, F. Williams, T. (Don Valley)
Frankel, D. Mathers, G. Wilson, C. H. (Attercliffe)
Gallecher, W. Messer, F. Windsor, W. (Hull, C.)
Gardner, B. W. Montague, F. Woods, G. S. (Finsbury)
Green, W. H. (Deptford) Morrison, Rt. Hon. H. (Hackney, S.) Young, Sir R. (Newton)
Greenwood, Rt. Hon. A. Morrison, R. C. (Tottenham, N.)
Grenfell, D. R. Muff, G. TELLERS FOR THE NOES.
Mr. Silverman and Mr. Burke.

Question put, and agreed to.

Main Question again proposed.

Mr. Tinker rose

It being after Half-past Seven of the Clock, the Debate stood adjourned.