INSULATED IRON OR STEEL STAPLES. (Hansard, 9 February 1939)

§ Mr. Cross
I beg to move, That the Additional Import Duties (No. so) Order, 1938, dated the twenty-first day 1234 of December, nineteen hundred and thirty-eight, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-first day of December, nineteen hundred and thirty-eight, be approved. This Order relates to insulated iron or steel staples. This is a very small industry, but there is no reason why on that account it should not receive protective treatment. The staples are ordinary coppered steel staples, fitted with insulating fibre, and are largely used in the electrical and wireless trades. The manufacture of the staples is carried out in this country by two firms, which are keen competitors one with the other. In the past the home market was mainly in the hands of German and American firms, but the British firms brought their machinery and methods to such a pitch of efficiency that they were able to capture practically the whole of the home trade. That was at a time prior to the import duty. That condition continued until the trade became subject to severe Japanese competition a few years ago.
The House will appreciate that I cannot disclose the individual returns of firms, but in 1937 the sales of the home manufacturers in this country fell by 7½ per cent. and last year they fell by a further 9½ per cent. below even the figure in 1937. With regard to imports, separate figures have been given since 1936 and are published in the Appendix. The imports from Japan in 1937 were five times as high as in 1936. The average value in that year was about 11d. per 1,000 staples, exclusive of duty. Imports fell by about one-half last year, which was probably partly caused by the knowledge that an application for increased duties had been made and was under consideration, and doubt as to whether it would be granted and as to the date upon which such additional duty if granted would become effective. Nevertheless, the imports in 1938 were twice as large as in 1936 and the Japanese price averaged about 11d. per 1,000 staples. There has been a falling off in exports, as stated in the recommendation. It is clear from the average values of imports and from quotations which have been seen by the Import Duties Advisory Committee, that Japanese staples are now being consigned to this country at something under Is. per 1,000, and in order to bridge the gap between this price and the reasonable 1235 home selling price, a duty of at least 1s. 8d. per 1,000 is required. The Import Duties Advisory Committee recommend accordingly. The home manufacturers, they advise, are well able to meet all the demands of the home market. They are efficient, they have modern machinery, and their prices are reasonable in relation to costs. The Import Duties Advisory Committee are satisfied that the duty they recommend will not have any adverse effect upon any other industry.

§ Mr. Noel-Baker
I should like to make a few observations on this Order and also upon the Order which follows. Both these Orders seem to us to be open to many of the objections we have urged in the past in relation to other similar Orders. They are part of a policy which we think has been ineffective for the purpose of curing unemployment or of bringing efficient organisation into British industry. The memorandum on the weft pile velvets industry gives some evidence in support of that view. We do not, however, propose to vote against these Orders, because of the country of origin of the great majority of the imports with which they deal. Virtually, as the Minister said, the competition which it is desired to prevent comes from Japan.
The Order now under discussion affects a not very large interest, only£1,456 worth of imports in 1937, which was a peak year, but it involves a very great principle. The Parliamentary Secretary has given the least convincing statement in support of the measures to effect a reduction of the sales of Japanese goods in this country. If he had come to the House and stated frankly that these imports are produced by sweated labour and that we want to boycott them as part of our policy of dealing with sweated labour, we should have had much more sympathy with the proposal. If he had said that this is a measure of retaliation against the general treatment now being given to British interests in the Far East by Japan, we should have had more sympathy. If he had spoken of the oil interests of Manchuria and of the unfair treatment which American, British and Dutch oil interests in the rest of China were receiving from Japan, we should have been more interested. An expert wrote the other day that: 1236 Fair competition and equal opportunity have disappeared wherever the Japanese flag has recently been hoisted over Chinese territory. At Question Time there have been many inquiries from supporters of the Government about the discrimination now being made by the Japanese against British trade and shipping in the Yangtse and the Pearl rivers. We have heard at Question Time of the great damage that has been done by the Japanese forces in China to British interests by looting, damage in respect of which the Government have put in claims for£250,000, which are unpaid.
The reason why we attach importance to these small Orders is of a wider and more fundamental character than the mere subject of the Orders. We support them because the imports against which they are directed come from a country which is engaged in aggression, and because that aggression is financed by imports such as those which our country is now taking from the aggressor country. We are apt to forget the character of the Chinese war. An Englishman, just returned from China, has written: It is probable that the quietest day on the Far Eastern fronts is bloodier than the worst day in Spain.

§ Mr. Deputy-Speaker (Colonel Clifton Brown)
It is not open to the hon. Member on this Order to discuss the character of the Chinese war.

§ Mr. Noel-Baker
I realise that, and I have said all that I wish to say on that subject. I am, however, explaining the reasons why we are not opposing these two Orders. It is germane to the argument I am putting forward to explain that Japan could not conduct her aggression unless she was able to export her manufactured goods to other countries.

§ Mr. Noel-Baker
I was arguing that Japan is absolutely dependent on the importation of raw materials, oil, minerals and machinery from abroad, without which she could not possibly conduct war. She can buy these goods only from abroad if she can export her manufactured goods to other countries. We have urged from the beginning that there 1237 should have been a general international boycott of Japanese exports. We said that if there had been general agreement on that matter, Japanese aggression would end. I do not think that anyone would say that Japan could have resisted such a boycott for 18 months. However, that policy has not been adopted. There has, however, been a private boycott which has been effective in a very considerable degree. It has already reduced the Japanese gold reserve from 411 metric tons in January, 1937, to 232 in July, 1938, and has had a very serious effect on her position by curtailing imports of raw materials. We say that such a policy could quite safely have been carried out. I hope the Government will come to share those views, because we know they regard the situation in China with great anxiety. It is because these Orders are, in practice if not in intention, a tiny measure of unilateral economic sanction that we do not oppose them.