HC Deb 06 June 1951 vol 488 cc1021-43
The Deputy-Chairman

The Amendment in the name of the hon. Member for Croydon, East (Sir H. Williams), in page 2, line 38, to leave out "fifty-four" and to add "fifty-seven"—is out of order.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

3.57 p.m.

Sir Herbert Williams (Croydon, East)

I realised that my Amendment would be ruled out of order because it is outside the scope of the Financial Resolution, as this Clause provides that the key industry duty should be extended for another three years. As I thought that period was a little short, I put down my Amendment to suggest that it should be six years, and that has had the effect of drawing the Chancellor's attention to the fact that I think the period is too short.

I should like to remind the Chancellor and other hon. Members of the history of the key industry duty. It was in 1921, 30 years ago, that this House took an historic decision, because it was a reversal in a formal way of the policy of free trade to which this country had been committed for many years prior to that. When in 1921 this very important decision was taken, it was provided that the duty should operate for a period of five years, and I should like to remind hon. Members what this part of the Safeguarding of Industries Act did, because here we are extending it, quite rightly, for a further period.

It was discovered in the First World War that we were in great difficulties because the Germans had developed several industries which we had neglected. For the purpose of making sure that we would not be caught out again, we decided to protect in this country the products of what were called key industries, which are small industries whose products are very important to other industries. Originally, the duty was fixed at one-third of the value, and that duty, with modifications in the rates, has been applied to optical glass, scientific glassware, scientific instruments, wireless valves, magnetos, are lamp carbons and certain rare metals and fine chemicals. There is not the slightest doubt that the key industry duty was a great success. It safeguarded our economic position, and in many cases provided us with these articles more cheaply than was the case before the duty was imposed. When we were largely in the hands of the German manufacturers, we often had to pay through the nose, and we obtained the goods much cheaper when we started to produce them ourselves.

4.0 p.m.

I know that the Liberals will never learn anything—that is their fundamental trouble—but the fact remains that over a whole range of goods our position became, not only much safer, but economically much more satisfactory. In a great many cases, the consumer benefited enormously as a result of the duty, and if there are any Free Traders left in this country, I challenge them to give me one example of where the consumer has suffered over the years as the result of the duty.

I want to draw attention to an inconsistency of Parliament with regard to the duty. In 1921 it was rather a great venture, after 60 years of Free Trade, to introduce this duty, because although Mr. McKenna in 1915 introduced, for dollar reasons, certain duties, and Mr. Austen Chamberlain made certain duties preferential in 1919, up to that date we had still got Free Trade. This was the first occasion on which this country for over 60 years introduced definitely protective legislation, and the then Government were rather timorous about it.

It was a Coalition Government, and the Prime Minister of that Government belonged to the party largely represented behind me at this moment, namely, the Liberals. There are few survivors of that Government left. My right hon. Friend the Leader of the Opposition is one of them. He has made great progress in these matters. But there are now very few people left in this country who object to the idea of protecting the production of our goods. Though some people prefer to do it by methods of which I do not entirely approve, that does not matter, because they accept the general idea.

That was a bold step to take in 1921, but, instead of proposing permanent legislation, the Government suggested a period of five years only. When that time was up, the first Parliament of which I was a Member was in being. We were bolder by that time, though not so bold as we ought to have been, because there was an unfortunate election in 1923.

Mr. Messer (Tottenham)

The hon. Gentleman got bowled out.

Sir H. Williams

Yes, but we were bolder afterwards, and bowled out the hon. Gentleman's Government. In 1926, we were a good deal bolder, and continued the duty for 10 years. When in 1936 those 10 years were up, we had a Government not entirely Conservative—a National Government—and again we plumped for 10 years. That 10 years expired in 1946 when the predecessors of the existing Government were in power—there were certain changes of personnel, which is always a good idea; there ought to be more changes in personnel, and we have been rather successful recently in getting rid of some of them—and for some strange reason it was decided to extend the duty for only two years. When we came to 1948, it was extended for a further three years, and, now that that period is up, it is proposed to extend it for another period of the same length.

From the point of view of the stability of industry, I think it stupid not to make the duty permanent. Of course, nothing is completely permanent under our Constitution. We are not checked in any way like the Congress of the United States of America; nothing is referred to the Supreme Court. We are free to repeal any Act we like, and to make any Act we like. What we do is unchallenged. In the words of His Majesty when he is asking the Commissioners to give the Royal Assent, they are all described as good and perfect Acts of Parliament. That has nothing to do with their merits; it merely means that the courts have to take full notice of them. Therefore, if we make a thing permanent, it does not mean that we deprive ourselves of the power to repeal it later, but it does give greater stability to those engaged in the production of goods if they know that Parliament has decided that, unless it comes to the decision of reversal, these things shall go on indefinitely.

I do not know why something first enacted 30 years ago should already have had to be re-enacted four times, and will again, under this Clause, be re-enacted for three years. Why this limited period? Does it mean that after 30 years the Government cannot make up their minds about the merits of the proposal? It is rather stupid to make this temporary legislation. We all know, of course, that Income Tax is made temporary for a constitutional reason—in order that each year the House may have a measure of control over the Executive. Of course, if there were no Income Tax, there would be much happiness, but that is a different issue. There would be much happiness, too, if we did not have this Government, but that, again, is a different issue. If we did not have certain annual taxes the Government might get through the year without a Finance Bill at all.

But there are certain things which ought to be made permanent, and I do not think I am putting forward an unreasonable case in urging His Majesty's present Ministers, or their successors who will be on the Bench opposite next year, to make the duty permanent and not subject to a periodic re-enactment, sometimes at the end of five years, sometimes at the end of ten, sometimes at the end of two, and, as on this occasion, at the end of three. It is rather stupid that we should waste paper in reprinting something like this every three or four years. I am not against the Clause, but for the reasons I have given, I could wish that it went further.

Lieut.-Commander Gurney Braithwaite (Bristol, North-West)

As you have indicated, Sir Charles, it is not possible for us to discuss the Amendment of my hon. Friend the Member for Croydon, East (Sir H. Williams), but I understand that it will be in order to invert the matter by asking the Chancellor what particular magic there is in this period of three years. My hon. Friend recapitulated very ably the history of this matter, and I think it is not only fortuitous, but rather fortunate that we should have reached this stage of the Bill on the very afternoon that the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), endeavoured to raise as a matter of urgency just the kind of thing that brought about the Safeguarding of Industries Act, Part I, in 1921.

The Committee will recall that what caused Mr. Lloyd George and his friends to grope their way somewhat timorously, as we have been told, towards a protective system, were two cold winds blowing on British industry, the one depreciated currency, notably in Germany, and the other the lower standards of living in the Orient which were beginning to penetrate our markets, particularly Lancashire. Therefore, I think it fortunate that we can spend a few minutes on this matter today.

Following on that experience, we had the introduction of the Safeguarding of Industries Act, 1925, hedged about as it was with a great many gaps, and it was not until the financial crisis of 1931, which I will pass over rapidly, knowing what painful memories it has for hon. Members opposite, that we reached unity on this matter, not only on these benches, but among Liberal thought at that time, whatever prefix or suffix they carried in that period of their history, in favour of the Abnormal Importations Act, 1931, which was introduced to deal with the currency of that period. I always thought that the Abnormal Importations Act was a far more effective instrument than the Import Duties Act. Be that as it may, I submit to the Government that three years is a very short period of planning or security for those engaged in industry. I should have thought that this system had now successfully passed the test of time and might be placed in a permanent position on the Statute Book.

I anticipate one possible argument which may be adduced. I do not know whether we are to hear the President of the Board of Trade reply or which Minister is going to speak. If it is the President, I was going to anticipate what he may say, namely, that we are living in times of tremendous economic uncertainty, that there is a shortage of raw materials and that the Government may not be seeking restriction of imports but may wish to throw wide open the gates for some of the products this Measure sought to keep out. If that is the case, the three-year period is just as objectionable as anything else, because the next three years are going to be the critical period.

I feel that there is very great force in the argument that my hon. Friend the Member for Croydon, East, deployed to the Committee. After a period of 30 years' testing time, we ought to have got beyond these short steps and frequent renewals. It would create a much better feeling of confidence and certainty in the industrial world if the Government would say that there should be at any rate a 10 years' renewal. I hope that the right hon. Gentleman may feel this point to be worthy of examination between now and the Report stage.

Mr. Tomney (Hammersmith, North)

The hon. Member for Croydon, East (Sir H. Williams), mentioned two industries, both of which are vitally important. He spoke of the development and extension of the scientific glassware and gauge industries. There was a time when we were entirely in the hands of German manufacturers and craftsmen for the supply of these components. The hon. Member for Croydon, East, has a knowledge of neon tubes. He will remember that after their introduction into this country, from 1923 onwards there was inaugurated a Government training scheme whereby unemployed men were trained in neon glass blowing.

4.15 p.m.

At the outbreak of hostilities, when the German supply was cut off, it was essential to train our technicians. I was responsible in a small degree for the training of glass blowers. Today the production of chemical and scientific glassware is so developed that we are in a position to export these articles and to capture markets that we did not have before, especially in South Africa. It is vitally important, not only for the future but for the present defence programme that we should have a fully developed industry and a continued supply of craftsmen in connection with atomic energy and radio valves, and so forth.

The hon. Member for Croydon, East, has raised a matter at which we should look most carefully. This is a vital and valuable industry and I am proud to say that the craft formerly exercised by Austrians and Germans, in particular, has now passed in a great degree to craftsmen in this country.

Mr. Hopkin Morris (Carmarthen)

The hon. Member for Hammersmith, North (Mr. Tomney), developed a very interesting argument. He said that the glass industry had secured valuable protection from Part I of the Safeguarding of Industries Act dealing with key industries. But assuming, as he says, that the duty in the initial stages was of great help to the glass-blowing industry, the statement now is that the industry is fully developed and in a position to export and compete in world markets. Therefore, surely there is no longer any need for the duty to be maintained. It might disappear for the next three years, let alone the period of 10 years to which the Government are now urged to extend it.

The hon. Member for Croydon, East (Sir H. Williams), referred to the history of the Safeguarding of Industries Act, 1921. That Act was passed because those specific industries were necessary in time of war. But the argument put forward today is that this duty has been very useful in making this industry prosperous. Therefore, it is a different class of argument altogether, and if this argument were true, it might be asked why we should not increase the duty to make the industry more prosperous.

The hon. Member for Croydon, East, asked why the duty has not been made permanent during the whole of the 30 years which have intervened since its inception. In the meantime, several Governments have sat on the benches opposite, including a Government of the hon. Member's own party with as overwhelming a majority as the Labour Party had in the last Parliament. They did not make the duty permanent because they did not believe it was necessary to do so. Many hon. Members believe that the duty is not a good duty even for a short period.

A most outspoken attack on the duty and the Safeguarding of Industries Act came from a Member of the Conservative Party in 1923–24. He was Lord Hugh Cecil, now Lord Quickswood, who is possessed of one of the most distinguished minds of any Member who has sat in this Chamber during my time. He disposed completely of the argument used by the hon. Member for Croydon, East—that a duty is imposed and then has the result of making goods cheaper. If the hon. Member for Croydon, East, will look at the speeches of one of the most distinguished Conservatives, he will see that they disposed completely of his argument. There is no reason why this duty should be continued even for one year.

Colonel Ropner (Barkston Ash)

The hon. and learned Member for Carmarthen (Mr. Hopkin Morris) might have received some applause for his remarks if he had made that speech 20, 30 or 40 years ago, but I am afraid he must have missed the applause for the Free Trade views he expressed today.

Mr. Hopkin Morris

It would be out of order for me to pursue that. My answer would be that that is perfectly true of the last 20 or 30 years, but the history of the last 30 years is a very damning record of the results.

Colonel Ropner

The history of the last 30 years is that of the disappearance of the party the hon. and learned Member for Carmarthen so ably represents in the House of Commons. I imagine I should be ruled out of order if I continued the argument about Free Trade.

I hope the President of the Board of Trade will tell the Committee at least why these safeguarded industries are, in a sense, afforded exceptional treatment. I have some knowledge of one or two of these industries. I know there is some real doubt why this protective duty cannot be made permanent or disappear altogether and why we go on renewing it for a period of three or four years, or whatever it may be. The right hon. and learned Gentleman would be serving the interest of these industries and would be giving valuable information to the Committee if he could make that point clear.

Mr. Joynson-Hicks (Chichester)

I feel that this continuously recurring period of extension of the Safeguarding of Industries Act is getting rather like the man who, having served in his firm for 50 years, thanked the directors very much for their generosity in giving him a pension, because he had always been on a temporary basis. Why should we go on renewing this duty instead of taking at least a substantial bite of the cherry?

It has been seen in times past that at least a 10-year period could well be substantiated, and the general policy of past Governments, of whatever colour, has been to hasten slowly but to continue in a forward direction. This Government is rather retracing its steps, and is getting more and more halting in its attitude to this matter, advancing in brief intervals of three years. I cannot see any reason for it at all, and I shall be interested to know whether the President of the Board of Trade is able to give us some very substantial reasons.

I should have thought that even for the fundamental reason which has accounted for most forms of legislation at the present time, namely, that it is administratively convenient, it would have been more administratively convenient to have had this matter at least on a semi-permanent basis for 10 years than for the Departments concerned to feel that even the Government could not make up their minds what attitude to take towards this matter for a period in excess of three years.

If the Government cannot decide on a matter of that sort for a period longer than three years, can industry be expected to plan itself? We have heard a great deal about the Government's intention with regard to planning, and surely if this is a planning Government it can at this stage, on its virtual death bed, at least produce a codicil which will last for more than three years. If it is not prepared to commit itself to that extent, how can it hope for the co-operation of industry in building up these essential key industries on which any Government in this country will have to rely in the event of an emergency arising? I submit that there is an overwhelming case for a much more definite policy on the part of the Government in respect of this matter on grounds both of national interest as well as of current political administrative and business interest.

The President of the Board of Trade (Sir Hartley Shawcross)

I am glad to have the opportunity of intervening at this stage, because there is perhaps, not unnaturally, a certain amount of misunderstanding about the purpose of this Clause. I do not think there is much difference of opinion between the two sides of the Committee on principle, except perhaps on the part of those who take the full Free Trade view, and what is involved in this Clause is much more a question of method and system than one of principle.

I do not think there would be many people, except the hon. and learned Mem- ber for Carmarthen (Mr. Hopkin Morris), who would think that at the end of the three-year period for which we contemplate renewing the duties under the Safeguarding of Industries Act, they would all come suddenly and automatically to an end. That is not the present intention of the Government at all.

I am bound to say that I have some sympathy with the view of the hon. Member for Croydon, East (Sir H. Williams), and the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite), in their view that these duties should be placed on a more permanent and stable basis; but what those hon. Members and perhaps other hon. Members have lost sight of is that at present we are operating in this country what most people would agree is an inconvenient system of having two parallel sets of Import Duties, one under the Safeguarding of Industries Act, 1921, and the other under the Import Duties Act, 1932, Our object and our hope has always been—and here I think we may follow in the steps of our predecessors who are now, and I hope will long remain, on the other side of the Committee—to try to assimilate these two systems into a single understandable and simplified code.

I have no doubt that when these duties were renewed by hon. Members opposite in 1936, they hoped that circumstances might be such before the end of that period as to enable them to assimilate the two systems into a single whole, and I confess that when we renewed the duties in 1946 and 1948 we thought that comparatively short period for which the duties were then renewed might have been long enough to have enabled things to become more settled and to have enabled us to get back into a more normal pattern of trading so that we could introduce legislation which would cover the whole field in a single Bill.

Unfortunately, those hopes have not been fulfilled. The international situation, both on the economic and political planes, has been such that it has been quite impossible to reach any final conclusion on the question of whether we should or could maintain indefinitely these two parallel codes, the one for protecting key industries particularly, and the other for giving a general protection to British industry. I can well understand, as the hon. Member for Croydon, East, has said, that these industries would like to be able to see further ahead than three years, although whatever period is chosen is bound to be somewhat arbitrary. I appreciate that they would like to know, quite naturally, where they stand in this matter, but the very nature of things at the moment makes that impossible.

We have a system of import licensing restrictions still affecting a number of classes of imports. We have the re-armament programme which is planned at the moment to cover a period of three years. There are all sorts of abnormal conditions in international trading relations—controls over exchanges and over materials, and so on.

Mr. Hopkin Morris

As I understand it, the right hon. and learned Gentleman is defending the present system because it is necessary to extend the period from time to time and give these industries a sense of stability. The hon. Member for Hammersmith, North (Mr. Tomney) said that the industry with which he is concerned is on a completely competitive basis and has that stability. I should like to make this request to the right hon. and learned Gentleman. In seeking to make the duty permanent, would he discriminate between those industries that still require the duty and those industries which have in the meantime got themselves on a stable basis?

Sir H. Shawcross

What I said was that at the moment, because of the uncertain trading conditions and the fluid state of affairs in this respect, it is extremely difficult to say what industries, whether from a strategic or economic point of view, require this protection, whether at the rate of 33⅓ per cent. or 10 per cent. What we hope—and this is why we have chosen the period of three years—is that at the end of that period it may be possible for us to make a serious attempt to assimilate these two systems into one—I am not saying at what rate of tariff at all, but to have a single code which provides, where necessary, in respect of those industries which seem to us to require protection either from the strategic or from the general economic point of view, a tariff system to protect them against foreign imports, and to deal with the whole thing on a comprehensive basis in a single Measure.

What we want to get eventually, I think hon. Members will agree, assuming we have to have a tariff at all—and I appreciate that the hon. and learned Member for Carmarthen would take the view that we ought not to have a tariff—but assuming we have to have a tariff at all, I think it will be agreed that we ought to be able to have it in a single Measure and in as comprehensive and simple a way as these things can be done. No one would pretend that that is the position at present. We have these two systems running side by side, and eventually we want to get away from that state of affairs. That is why we would rather not continue this particular branch of the two systems for a long or indefinite period.

We hope that within the next two or three years, if we manage to avoid the calamity of war, trading conditions may perhaps become nearer to normal and the Government of the day will be able to take decisions about the continuance both of the key industry duty on the one hand on a long-term view, and also of the other duties that it may be necessary to maintain, and will be able to embody them in a single Measure.

4.30 p.m.

I must say that it is certainly our intention—and speaking as one who believes very much in simplicity in these matters I say it is our desire—to go ahead with this objective of arriving at a single tariff code and of assimilating the key industry duty system with the Import Duties system, while providing in the meantime, during this period of three years, the appropriate protection to those industries which in the light of modern developments appear to us to require it.

I Would add only that there is, as hon. Members know, machinery whereby, on the application of some consumer in this country who complains that he cannot obtain the product of some industry which is protected under the Act of 1921, the duties can be removed or lowered under the provisions of the Act of 1921. The hon. Member for Skipton (Mr. Drayson) was kind enough to call my attention to a case of that kind, and we were able to deal with it. If there are cases of that sort, it is within our power to reduce or remove particular duties. I was grateful to the hon. Member for bringing that case to our attention.

Subject to that, we think that it is in the interests of the trading community that we should proceed on this basis, following a good precedent, but proceed on it with a view to assimilating the two parallel systems in one code when we reach a position which is less fluid than is the case at present.

Captain Crookshank (Gainsborough)

We welcome the first intervention in our Finance Bill debates of the new President of the Board of Trade, and we hope that he will always be as kindly as he seems to be this afternoon. Let us make no mistake, this is an important point, as has been revealed by what has already been said.

The right hon. and learned Gentleman told us that he hoped to bring these two parallel sets of tariff arrangements—if I may use the phrase—into one document or enactment, or whatever it may be. It was not clear to me from what he said whether he was wanting the three years provided in this Clause in order to enable him to do that within a three-year period or whether he wanted a three-year cover before starting the amalgamating. What he has in mind makes a difference to the argument. According to what I jotted down, he said both things. At one moment he said that at the end of the period the Government intended to make a code. Then he said that they hoped during the three years to get on with it if trade circumstances allowed that to be done. We should like to know which of these intentions the right hon. and learned Gentleman has in mind.

Sir H. Shawcross

I am much obliged to the right hon. and gallant Member. I hope that I have not said two things which were inconsistent, and in the form in which the right hon. and gallant Gentleman repeated them I do not think that they were. We certainly intend to do what we are already doing, to continue within the next three years the process of study to see how we can blend the two together in a single code.

Neither the right hon. and gallant Gentleman nor I know what the situation will be at the end of three years. It may be that we shall then still require to have a special code for safeguarding key industries which are vital for strategic purposes. We hope not. We hope that things may be more normal then, and that we may then be able to introduce a Measure which will assimilate the two duties. In the three years we shall be working to that end.

I cannot guarantee what the position will be at the end of the three years. If our hopes are realised, we shall try to assimilate the two within that period—it may be sooner—though I think that is most improbable. We are working on this now and shall certainly continue to do so, using the three-year period as a target which we should hope to reach if all goes well in the international and economic fields.

Captain Crookshank

I am obliged to the right hon. and learned Gentleman. What he has said clears up the point. We all know that the Front Bench opposite cannot guarantee anything for three years ahead, but I think that the right hon. and learned Gentleman was talking merely in the economic sense, irrespective of what Government was in office, when he was speaking about that aspect.

What the Government's intention really amounts to is that for three years a prolonged engagement is being fostered with a view to marriage in three years' time. That may suit the argument which my hon. Friends have put forward because, and only because, the argument pre-supposes there is to be a marriage and that there is to be a continuance of the key industry duty, because that is the basis of the argument about the necessity for various industries to know where they stand.

I was delighted to hear the right hon. and learned Gentleman say quite as definitely as he did—I hope that he will not go back on this—that it is the Government's intention to go ahead with a single tariff code. I do not remember the Labour Party ever having previously announced the intention of going ahead with any tariff code. Certainly, if they intend to marry—[Interruption]—it is a very important decision, if it is a decision. I do not know that everybody in the Committee had appreciated that the Labour Party had now become a tariff party.

The President of the Board of Trade said that it is the Government's intention to go ahead with a single tariff code. Therefore, those who have believed in the past in that method of protecting industry against the adverse blasts of unfair foreign competition will have been encouraged by the fact that the Opposition have today raised this useful debate, leading up to an assurance that so far as the Government are concerned they hope, if still in office in three years' time, to have a permanent code embodying this and the other tariff arrangements.

Mr. Charles Williams (Torquay)

I am possibly almost the only person in the Committee at the moment who was present in the House when the 1921 Act was brought in. I welcome the terrific change which has come over the whole commonsense view of the country since that time. The President of the Board of Trade, whom we welcome in his new position—he cannot be any worse than his predecessor—has made an announcement this afternoon which those of us who have been fighting for tariffs during the whole of our lives welcome vigorously and with great relief.

We have known for a considerable time that some form of tariff was perfectly safe under a Socialist Government, but I welcome the fact that, although during many elections I have been abused by both Liberal and Socialist candidates because I wished to protect industry and because I was in favour of safeguarding industry, I can now say, at all events so far as Socialist candidates are concerned, that the President of the Board of Trade here admits that these tariffs are very good and that the only thing to do is to get a more unified and more perfect form of them. It is an occasion for considerable pleasure when one sees one's political opponents advancing on those roads to wisdom along which one has trodden for generations.

I do not for a moment wish to enter into controversy with my hon. Friend below the Gangway who represents the Liberal Party, except to say that if ever there was a person who believed in the freedom of imports it was Lord Hugh Cecil, and we can leave it at that. He never deviated from it, he fought our party on that question through the whole of his time, and it is only fair that I, as someone who knew him quite well, should pay that tribute to him.

I wish to say, in regard to this Clause, that if we have now come to a position where the two leading parties have agreed officially and openly in the House of Commons, I hope that it will be in the Socialist Party's programme at the next Election. I am sorry to see the right hon. and learned Gentleman being a little coy. I do hope that we shall not be told by the Prime Minister that this is one of the right hon. and learned Gentleman's informal speeches. It would be a shocking thing if that happened, because, after all, the right hon. and learned Gentleman has had the great advantage of a legal training, if there is any advantage in a legal training, and so he ought not from the Government Front Bench to make an informal speech. I am sure the Committee wishes him well, and I should not like to be told that the right hon. and learned Gentleman had had to resign his newly-won office so quickly. That would be a very sad thing.

However, so far as the three years are concerned, those three years do, of course, give time for a good many things to happen. We have the assurance that whichever party comes in this duty, which has been so very valuable, will remain. It has been very valuable. An hon. Gentleman opposite pointed out just now that it had brought his particular industry and a good many others into prosperity. I do hope we may go this step further, and that, when an industry has been brought into prosperity by such a duty, we shall not immediately turn round and take off the duty and let the industry go derelict once more. That, quite obviously, would be foolish.

I am very glad that we have this position, that the Socialists—a great section of the Labour Party; the great bulk of the Labour Party in this Chamber—are fully concerned to support this Clause because they are quite determined not to have limitless dumpings, and because they agree with Conservative wisdom, and also because we all realise as a nation that there was work of very great value done in those years between the wars when the Socialists were always saying that nothing good was done. Now in this matter, as in other matters, the Socialists see the value of Conservative legislation and Conservative policy.

I congratulate the right hon. and learned Gentleman on having got some common sense into some of the professors one sees at the back of him. Lawyers are bad enough; professors are worse. [Interruption.] Oh, I will not mention doctors. We are very glad to see that he has got some common sense into them and into his party, and we hope that they will not waver just because an odd Liberal thought they might not improve.

Mr. Hollis (Devizes)

I had waited with very great interest and curiosity for the speech of the President of the Board of Trade, because I was very anxious to know why this period of three years had been selected. I could understand the point of view of the hon. and learned Gentleman the Member for Carmarthen (Mr. Hopkin Morris), who is a Free Trader and wanted no tariff at all, and I could understand the point of view of my hon. Friends who said that these things were good things and, therefore, that they should be protected for a considerable period, but it seemed to me that three years was about as bad a period as one could choose. Therefore, like my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) I was listening with very great curiosity to the right hon. and learned Gentleman's speech and to his explanation.

I was interested in his arguments, and I was interested in his conclusions—at any rate, the tangible conclusion—but I see no connection between the arguments and the conclusion. The right hon. and learned Gentleman laughs. I am wondering if he is agreeing with me, because I am still in confusion; and I hope that the right hon. and learned Gentleman either will be so kind as to admit that there is confusion which is not mine and to make a concession to improve matters, or clear up the point.

I cannot guess the reason he would give for this period. He gave this very interesting reason that there were those two codes, and that for tidiness' sake he was hoping that the day would come when it would be possible to abolish those two codes and have the whole of our tariff regulations included in a single code. Everyone can see the common sense of that, but whether it will be possible to do it in as short a time as three years is another question. I should have thought it extremely doubtful.

Still, one can see that we could have everything included in one code instead of two codes, that, in itself, would be a convenience; but I do not see how that hope is an argument for the Clause we are now discussing—for this period of three years: this hope that when what my right hon. and gallant Friend called a marriage ceremony comes there will be a marriage ceremony and flowers and an organ; that is to say, there will have to be substantial new legislation, obviously, in which this legislation—a good deal of this legislation—will, of course, be abolished, being immediately supplemented by some alternative to it.

4.45 p.m.

The fact, as my right hon. and gallant Friend pointed out, that we make legislation permanent does not mean that future Parliaments are inhibited from repealing the legislation or substituting new legislation for it. But how does that help out the figure of three years in this Bill? That is what I just cannot understand at all. The right hon. and learned Gentleman makes a guess—and it cannot be more than a guess—that in about three years' time it will be possible to enact this new code. It may be possible; it may not be possible. The Government do not pretend themselves to know. Nobody else pretends to know.

What these key industries, therefore, want, surely, is a guarantee that if it is not possible to enact this code at the end of three years they will not be let down. If the legislation were on a permanent basis they would have that guarantee. At present, so far as I can see, they are having the guarantee taken away from them. What the key industries want is not a shady promise that there will be a marriage ceremony one day. They must have some guarantee against a breach of promise of marriage if, at the end of the three years, the bridegroom does not come up to scratch. No doubt, the right hon. and learned Gentleman will not be the bridegroom then, but a guarantee is required that the bridegroom then will come up to scratch. What purpose is served by putting in this period of three years? No one can say that whatever Government may be in power then will be in a position to enact that unifying code. I cannot see for what purpose this period of three years is in this Clause.

Mr. Donald Wade (Huddersfield, West)

I shall resist the temptation to enter into a debate upon the fundamental errors of the Protectionist philosophy, despite the new display of unity between the Conservative and Socialist parties, but I think it would be unfortunate if we left the discussion of this subject without some reference to the harmful effects which these import duties may have, particularly upon our defence programme. I think it was an hon. Member opposite who mentioned the subject of defence.

The President has said very little about the need for all these duties. It is true he referred to the procedure whereby the consumer may object, but I would respectfully suggest that that has not proved a very satisfactory procedure. What I wish to ask is whether he is satisfied that these duties are justified? Are not many articles covered by these duties, articles which must be imported anyway or for which the demand cannot be wholly satisfied by home manufacture? The Safeguarding of Industries Act affects 6,368 articles, and then there is that very great list of articles covered by other import duties. I suspect that there are many goods subject to duty, which this country has to import, which are necessary for defence, or for agriculture, or for the general well-being of the country, and that, in effect, we are simply imposing a discriminatory tax on goods which the country must import.

This may be a way of raising revenue, but if it is so I suggest that it is not the best way to do it. Where industry is engaged on a defence programme, then these duties must inevitably add to the costs of production and to the cost of the article and, therefore, to the cost of defence. In some cases it may add to the price which the Government itself pays for an article. The Government are, therefore, imposing a tax and paying it back again in the form of the additional cost of the article, which they have, of necessity, to buy for the purposes of defence.

May I give another illustration? The hon. Member for Wallasey (Mr. Marples) asked the President of the Board of Trade on 10th May: …whether he will remove temporarily the import duty on those steel reinforcing bars which are specially imported for use on the building work of the defence programme. The right hon. and learned Gentleman replied: I am always prepared to consider applications for adjustment or removal of import duties with a view to making appropriate recommendations to my right hon. Friend the Chancellor of the Exchequer. In general, however, there are no powers under existing legislation to make variations in duties on iron and steel goods imported by particular firms or for particular purposes."—[OFFICIAL REPORT, 10th May, 1951; Vol. 487, c. 236.] I would urge that there should be a review of all these import duties. I believe, even accepting the Protectionists' argument, that many of these duties are unjustified and merely impose an additional burden upon industry. It is true that by means of conferences with other countries, such as those at Geneva and Torquay, some reduction in tariffs may be brought about by mutual agreement, but I do not believe that that is adequate. The Board of Trade Journal for 28th April, 1951, said: Generally speaking, the consequence of tariffs as an instrument of national economic policy is increasing and the difficulties encountered in lowing the rates of duty are probably greater today than at any time since the end of the war. I believe that that is true.

The point that I have raised cannot be dealt with adequately by any mutual agreement for a general lowering of tariffs. It must be dealt with unilaterally and, therefore, I urge the Government to review the whole of these impositions. Whatever view may be held about national sovereignty, in economic affairs national boundaries and national barriers are becoming increasingly antiquated and illogical. Even if that view is not accepted, I suggest that the Government should consider the effect of these import duties upon the costs of production in industry and indirectly upon the cost of living. I do not think it is logical to object to other taxes, which have the effect of raising the cost of living, and, at the same time, advocate a continuation of taxes of this discriminatory nature.

Mr. Arthur Colegate (Burton)

The speech of the President of the Board of Trade was, I thought, very satisfactory for he showed he had a realisation of the position of British industry today which we do not always find on his side of the Committee and the possibility that there may be changes during the next three years, which may call for Government action, and which will materially affect conditions here. It is quite clear that the hon. and learned Gentleman the Member for Carmarthen (Mr. Hopkin Morris) has not apparently the faintest idea of the position in which British industry is at present. He alleged that an hon. Member on the other side of the Committee stated that industry was prosperous and was, therefore, on a competitive basis.

Mr. Hopkin Morris rose—

Mr. Colegate

I hope I am not interpreting the hon. and learned Gentleman incorrectly.

Mr. Hopkin Morris

I did not "allege" what an hon. Member had said. He was here when I said it and he did not deny it. He said that we were now capable of exporting all we manufactured and that meant that we were economically sound.

Mr. Colegate

That is just the very heresy which I wish to eradicate from the mind of the hon. and learned Gentleman. If we imagine that we are on a competitive basis when, in a year or two, we shall be faced with Japanese, German and other competition, we shall find out how mistaken we are.

The truth is that there is a shortage of goods because of failure to produce them during the six years of war. Though we can still sell in any quantity at a high price, it would be misleading the public and deceiving ourselves to think, therefore, that when competition comes we shall be able to meet it. The Government are right to extend this prohibition for three years, when we or perhaps their successors will have an opportunity of considering what need there is for some kind of action to protect our standards of life, which we hope we shall continue to build up to a high level.

Squadron Leader A. E. Cooper (Ilford, South)

The hon. Member for Huddersfield, West (Mr. Wade), did not speak to the Bill, but he related his entire remarks to the Import Duties Act, 1932. That particular Act, which we are now seeking to extend, was for the specific purpose of the safeguarding of British industries and preventing goods from coming into this country in order that the industries of this country could develop.

The hon. Member has made the suggestion that consumers could not get a reduction of duty at the present time. From my own personal knowledge, I can assure him that it is quite possible; indeed is done regularly when we make our views known to the Board of Trade, particularly when we are concerned with certain articles which are subject to duty and are not now available in this country. In such conditions, the Board of Trade make the necessary adjustments with very little delay. If the hon. Member studied some of the Statutory Instruments published during this week he will see a number of examples of such concessions having been made.

I would ask the President of the Board of Trade to reconsider this question of three years. He made it the burden of his case that industry of that time would be back to normal. I do not think that any man in business today imagines that business will be normal in three years' time. As one of my hon. Friends has said, industry and conditions are never normal. I must confess that when I saw this period of three years I was rather suspicious of the motives of the Government.

I could not help remembering that it was Mr. Philip Snowden who announced in 1929 that it was the intention of the Socialist Party to allow this Act to run out and not to renew it. We also know that in 1924 as well as in 1929 it was the intention of the Socialist Chancellor to repeal the McKenna Duties. We therefore had a suspicion in our minds that here was another attempt by the Socialist Party to expose British industry to the four winds of sweated labour from many countries overseas, thereby driving our own men out of employment as they succeeded in doing from 1929 to 1931.

We are very glad that the Government are seeking to codify or co-ordinate the various systems under which we are working today, and I ask the President of the Board of Trade to bear in mind that one of the industries which is having considerable difficulty is the chemical industry, which requires much more than three years to develop the new processes which they contemplate. The provision of plant today in the chemical industry, including stainless steel, creates considerable difficulties, because in many cases three or four years elapse before they get it.

It is not a practical proposition to say to industry, "Please do some research work on this particular problem, but when you have done it we do not guarantee to give you a good market in which to sell your product." I hope that by the Report stage the right hon. and learned Gentleman will have had second thoughts on this matter.

Question put, and agreed to.

Clause ordered to stand part of the Bill.