SAFEGUARDING DUTIES.

HL Deb 12 December 1928 vol 72 cc577-604

LORD ARNOLD rose to ask His Majesty's Government—

(1) Whether it is not the fact that nothing has happened to alter the situation since the Prime Minister said in December, 1925, when refusing to allow an application for Duties on iron and steel:— It became clear in the course of our investigations (by the Committee of Civil Research) that the Safeguarding of a basic industry…would have repercussions of a far wider character which might be held to be in conflict with our declarations in regard to a General Tariff. In all the circumstances…we have come to the conclusion that the application cannot be granted; and such being the case, will the Government. in view of the Prime Minister's pledge at Yarmouth that Safeguarding will not be used to introduce a General Tariff until the question of a General Tariff has been submitted to the country, either submit the question of a General Tariff to the country at the forthcoming General Election or else give a pledge that if they are returned to power they will not put Duties on iron and steel?

(2) Whether it is not the fact, as stated by the Parliamentary Secretary to the Board of Trade, that there are no official home prices of any of the manufactured goods now subject on import to Safeguarding Duties, and such being the case what was the basis for the statement made by the Prime Minister in his letter to the Conservative candidate for Ashton-under-Lyne as follows:—"Our experience of Safeguarding has shown that it is possible to protect British industries without increasing prices to the consumer"; and does this statement take into account the factor of inferior quality and also the general fall in prices which has occurred during the last few years?

and to call further attention to the Safeguarding Duties and to move for Papers.

The noble Lord said: My Lords, I hope it is not necessary to apologise for bringing forward again, after a brief interval, the question of Safeguarding Duties. The Questions that I have put upon the Paper were really put there at the invitation of the noble Marquess who leads the House. In the course of a debate not very long ago I asked these Questions and they were not answered. The noble Marquess said that if more notice had been given they would have been replied to. Therefore I have put them down and given plenty of opportunity for the Government to frame a reply. I hope that to-day we shall get a definite reply. Before I put the Questions, I should like to make some remarks about the matter with which they deal and also to discuss certain other questions in connection with the Safeguarding Duties. It will be noticed that I have not merely put Questions upon the Paper but have also a definite Motion. I do not merely move for Papers, but I also call attention to the Safeguarding Duties, and therefore, within the forms of the House, I am perfectly at liberty to discuss these questions in any shape. In particular I wish to refer to, and to challenge before I sit down, a speech dealing with the Safeguarding Duties made by the noble and learned Lord, the Lord Chancellor, because there, is much feeling in Free Trade circles about that speech, coming as it did from a man of his high authority, and we hold that the statements in it are incorrect and cannot be substantiated. I gave the noble and learned Lord notice of this point yesterday so that he might know that I should be raising the matter.

With regard to the first Question upon the Paper, I surmise that the Government will say something, as the noble Marquess did a fortnight ago, about the suggested arrangement in the steel trade. If that is so, I should like trade If that is so I should like to put a few points on the matter. The noble Marquess, in Kindly terms, asked me to apply my mind to this question of an arrangement in the steel trade As a matter of fact I had done so before he made the suggestion, and since then I have looked still further into this matter. The more I go into it the more unsustainable, in my view, the whole idea becomes. We are told that there is a new situation and that an arrangement is proposed between steel makers and steel users under which there would be an increased output of steel. But what would happen about prices? That, of course, is of paramount importance in any such connection. If the Government is relying upon this as a new fact in a new situation, I hope they will tell us to-night what they mean by steel makers. What body has come forward with this proposal, and is this body unanimous? I do not believe that even steel makers are unanimous about any such suggestion. I will not go over the happenings in regard to the application under the Merchandise Marks Act which was made by certain persons in the steel trade, but in the end it came to nothing. The conflicting interests were so great that in the end the proposal was dropped. That is not a very encouraging augury for this suggested arrangement, even so far as steel makers are concerned.

Still less do I believe for a moment that the users of steel are unanimous in regard to any such arrangement, or that they ever will be, because there the conflicting interests are very many. And what about the consumers of steel, the retail consumers, who include practically every man, woman and child in the country? They certainly are not, and never will be, in favour of any such arrangement, because steel enters into the price of nearly everything in this country aid this arrangement would tend, as I shall show, to make things dearer and to put up the cost of living. Protectionists have never, I think, sufficiently realised the fundamental importance, in all trade matters, of price. No doubt the claim which is made for this arrangement is that the price of British steel would not be increased but, owing to larger output, would even be reduced. Personally I do not believe that there is the smallest chance of the price being reduced after foreign competition has been largely stopped by a Safeguarding Duty. On the contrary, I have no doubt that prices will be increased, and no guarantee to the contrary is worth a scrap of paper. In any case a considerable proportion of the imports of foreign steel are of a kind not made in this country, and they cannot be made here except at a somewhat higher price. Those familiar with the steel trade will, I am sure, bear me out in that.

I repeat that Protectionists leave out of account the element of price. They assume that business will go on, that the demand will continue just the same at higher prices. That, of course, is not so, and under this suggested arrangements prices are bound, in fact, to be raised. In those circumstances, living will be made dearer at home and a large proportion of our business will be lost on the Continent in two ways: (1), owing to increased prices we shall be less able to compete in export markets—I think that is clear; and (2), there will be intensified competition in export markets, because some of the steel not now coming here will find its way there in one form or another. I emphasise again that if the price of British steel under this suggested arrangement is not increased, foreign steel will be increased in price by the Duty, and as the price of the corresponding British product is higher, for a considerable proportion of the steel trade, the net result will be an increased price of steel to large numbers of users of steel because they will have to use something which costs more than that which they have used before. Further, if you once begin to protect steel, you will have to go right through with it and protect not only the makers of steel but everybody having anything to do with the manufacturing of steel as well—in fact the whole of the metal and engineering trades.

I should like to read a very brief passage from the speech made by Mr. Arthur Chamberlain at the recent general meeting of Tube Investments, Limited, dealing with this question of Safeguarding. He said:— We are unanimous in considering that safeguarded steel without simultaneous safeguarded tube is fraught with so much menace to the fortunes of this company that we should feel compelled to oppose any such proposal by every means in our power. We can hardly see how, under the present regulations, the safeguarding of steel could be made contingent on the simultaneous safeguarding of steel tubes, nor dare we accept any promise, or any assurance, that if only we let steel be safeguarded our protection will surely follow. It looks, therefore, as though we shall be forced to oppose the safeguarding of steel. In this matter the interests of this company, as we conceive them, are paramount. Having regard to the varying political beliefs held by your directors, I think this common agreement is very significant, and indicative of what is likely to happen all over the country if Safeguarding is to be generally extended. So far we have only been playing with it, and its consequences, good or bad, have passed almost unfelt by the community, but, with its application to our important trades I think every manufacturer will be seriously affected and will quickly come to the conclusion at which we have been forced to arrive. It must be all or none. Whether Free Trade or Protection suits this country best is a debatable point, but that half the trade should be protected and the other half left out in the cold is, think, certain to cause the maximum of upset and commercial instability, and will be found to be absolutely unworkable.

There you have a quite definite statement put into most excellent language by a very experienced man of what everybody who has knowledge of these things was aware before—namely, that if you begin then you must go on and give protection not only to the makers and users of steel, but to the metal and engineering trades. I will not say more about steel to-night, for it is impossible to deal fully with the suggested arrangement now, but I hope I have said sufficient to show how untenable and dangerous the whole proposal is. I have a Motion down for Papers and I have a reasonable request which I should like to make to the Government—namely, when they say that the makers of steel have come forward with this proposal, will they lay all the Papers which have been submitted to the Government relating to the suggested arrangement with those industries? That is one of the requests that I want to put to the noble Ear] opposite [Lord Plymouth].

Now I come to the second Question on the Paper, which has to do with the matter of prices, and I there quote the statement made by the Prime Minister recently that:— Our experience of Safeguarding has shown that it is possible to protect British industries without increasing prices to the consumer. I do not think that a statement like that ought to be made by the Prime Minister unless it can be proved right up to the hilt. The Lord Chancellor made precisely the same statement. It is a perfectly definite statement without qualification or reservation of any sort or kind, that in no case have prices been increased to the consumer. What does this mean? It means that for the first time in history Duties have not raised prices, that everything which has gone before is wrong, that all the teaching of economics is wrong, and that the statistics for scores of years are wrong. I could bring before your Lordships a return showing that; as far back as 1840 the effect of a Duty upon a quarter of wheat as compared with the price in other countries was to cause the price of a quarter of wheat to vary about in proportion to the Duty put on. This statement; of the Prime Minister means that Mr. Balfour was wrong in his famous dictum and that Lord Melchett was wrong when he said, speaking in support of the Government, that these Safeguarding Duties would increase prices and were intended to do so. Now we are told that this is wrong.

On two previous occasions I have dealt with this matter and given figures, and no attempt has been made to controvert my figures. Those figures were not official and I never said that they were, but I believe that they are absolutely correct and uncontrovertible. It is no answer to say prices are not higher. Prices ought to be lower, because wholesale prices have fallen generally and prices would in many cases be lower but for these Duties. I hope the Government are not going to quote figures relating to artificial silk and motor prices. As I have pointed out before, these are not Safeguarding Duties. The artificial silk trade was increasing by leaps and bounds before the Duty was put on and is it not the fact that Courtaulds, the principal people in the trade, did not want the Duty? Is it not the fact that the motor trade had a time of great prosperity during the period when, owing to the Labour Government, the Motor Duties were taken off? We all know that these are exceptional industries catering for an exceptional demand and bound to grow anyhow with or without the Duties, and in my view they would have grown and expanded more without the Duties. It does not help in the least to quote the prices of artificial silk and motors as compared with years ago. You are not comparing like with like. There is no standard as there is in the case of a quarter of wheat. The Government, I know, did once give statistics with regard to the export price per pound of artificial silk yarn but it is well known that there are far more concerns making artificial silk now than in 1925. It is also well known that some of the artificial silk being made now is of such poor quality that it is not used in this country but is exported to countries where they do not need such good quality. Therefore, you are not comparing like with like, and I hope the Government will not put forward figures of that kind.

Then I come to motors. It really is ridiculous to compare the price of a motor car now, as the Government have done, with the price of a pre-War motor, and say that some conclusion can be drawn from that. They are totally different things. In the intervening years, for instance, mass production has very much developed. That has affected prices. I did, though, on a previous occasion, put some figures to the Government, and I will give one again. I pointed out that the price of the new Ford car in Detroit is nearly half the price in London. I pointed out that the roadster in Detroit was £78 f.o.b., and in London the price was, £150; and I said, making all allowances for freight and intermediate profits, agents' charges and so forth, it was clear that the full amount of the Duty had been added to the price of the car. Does the Government deny that? The whole point is not what is the price now, but what would the price be without the Duty? Without the Duty on these various articles the price would be lower still. Therefore it is not true to say that prices have not been increased to the consumer.

Let me come to the Duty on gloves. Now, that is a Safeguarding Duty. I would ask the Government to give some statistics relating to the real Safeguarded industries—gloves, cutlery and so forth—not about exceptional industries, like artificial silk and motors. I have said before, and I say again, that the price of gloves has been affected adversely by the Duty, either through higher prices, or indirectly through a decline in quality, or through a combination of both of these factors. The figures which the Government have given about certain foreign gloves are entirely misleading, because, there again, you are not comparing like with like. In order to prove that, let me quote from the Drapery Times of July 28, 1928. That is right up-to-date. That is not a Party organ, it is a trade organ. They say:— A very considerable trade in kid and glace goods which was done with Belgium and France has been greatly decreased to the advantage of Italy, the latter country supplying gloves of an inferior quality, which are supplied to the retail trade at somewhat similar prices to the better qualities they obtained previously, the difference in quality making up to some extent for the imposed Duty. Any one with experience of the retail glove trade must admit that the lower end of the leather trade has suffered greatly in the matter of quality since the imposition of the heavy Duty. I leave that there. I am informed that, before the Duty was put on, the price of a lady's two-fastener nappa glove was 2s. 11d. a pair, but to-day the price of a similar glove is 4s. 11a.

Then, again, I am given to understand that a woman buying a pair of fabric gloves at 1s. 11½d. is getting an inferior article to the one she purchased before the Duty at the same price. I have also given an instance in regard to china, and I said there, according to information which I have, before the Duty the price of a certain china set was 8s. 6d., after the Duty it went up to about 11s. Is that denied by the Government? We come to enamelled hollow-ware. The instance has been given of a trade catalogue which definitely stated that owing to the Safeguarding Duty there would be 25 per cent. increase in the price of the enamelled hollow-ware articles in that catalogue. What has the Government to say about that? Does not that increase the price?

I think I have said quite sufficient to show that prices have been adversely 'affected when everything is properly gone into. Not only is the price of foreign imports increased, but if they are competing with exactly the same article in this country the price of that will also be correspondingly increased. That must be so if you are comparing like with like, owing to the simple economic law that you cannot have two prices for the same thing in the same market at the same time. Protectionists will sometimes admit that the prices of foreign imports have been increased, but they say that home prices have not been increased. That is the case which they are now putting forward. I do not admit, taking into account the general fall in prices of which I have spoken, that home prices have not, at any rate in a large number of cases, been increased.

But look at the position. Foreign imports are often the cheaper kind of goods—those most bought by the poorer classes, and the prices of foreign imports unquestionably have been increased by the amount of the Duty. Nearly all Safeguarders will admit that. But, whether they admit it or not, of course everybody knows it to be true. Such being the ease, it is no satisfaction to a working woman to tell her that the foreign gloves which she used to buy are now dearer, but that the English gloves, which are much more expensive, are no dearer—even if that is so. She cannot really afford to buy the expensive English gloves. I am told the price of English-made tan leather gloves per pair is 5s. 11d. Working women cannot afford to pay those prices, and, as the one article which she has been accustomed to buy is dearer than it used to be, owing to the Duty, she is being injured by the Duty. That is my argument. I say that what has happened is what so often happens under Protection: the consumer is being forced in some cases to buy something at a higher price, or else to so without the article, or else he is getting something of worse quality. Prices, therefore, are being raised against the consumer. Even if, for the sake of argument, it were admitted that some home prices have not been increased, the general effect is to raise prices and make living dearer, and statements to the contrary are untenable.

Before I leave gloves let me give certain figures which I think prove this matter beyond the possibility of doubt and dispute. 1 say that foreign imported gloves have been affected in price, and f do not think that is denied. Their place—and I think this applies not only in the case of gloves, but in the case of other safeguarded industries—has not, generally speaking, been taken by British goods to any considerable extent. Take fabric gloves. The great mass of people are still buying the foreign goods at the higher price. In 1924, which is the proper year to go back to, because that is the complete year before the Safeguarding Duties were either introduced or expected, the retained imports of fabric gloves were 840,997 dozen pairs. We come down to 1928, when these Duties have been in force which were to keep out foreign imports, and we find that in the eleven months of 1928 the retained imports of fabric gloves are 1,314,000 dozen pairs; that is to say, about 470,000 dozen pairs more than they were in 1924. And these increased imports are being weighted with the Duty. Now I believe that even the Safeguarders themselves only contend that the home production of fabric gloves is somewhere about 300,000 dozen pairs, and if that is so, as I believe it to be, it means that four persons out of five are paying the higher price. For, if you import 1,300,000 at the higher price, and your home production is only about 300,000, I think my arithmetic is not far wrong when I say that four persons out of five are either paying the higher price or getting a less good quality.

Before I sit down I want to deal with a speech which the Lord Chancellor made. Speaking at the London Habitation of the Primrose League—this is reported in The Times of November 26, 1928—the Lord Chancellor said:— By Safeguarding our exports in safeguarded industries have gone up 10 per cent. in three years, while in non-safeguarded industries they have gone down 10 per cent. In safeguarded industries imports have gone down 30 per cent., while in non-safeguarded industries they have gone up 12 per cent. That means by Safeguarding we have increased employment in trades which were threatened with extinction. We have been able to do that without increasing prices. From the point of view of those of us who have opposed these Duties—I have read what we hold to be the offending passages—there are a great many mis-statements in those sentences. In fact, there is almost a maximum amount of misstatement in a minimum amount of space. That is why I bring this matter before your Lordships' House, that we may really get to the bottom of these statistics which are being broadcasted all over the country by persons not only of high authority but by countless paid orators of the Safeguarding campaign.

I will take these passages, and I will dissect them and show how very misleading they are. I will take them by instalments. The first one is:— By Safeguarding our exports in safeguarded industries have gone up 10 per cent. in three years. That statement is not correct. I hold in my hand a Board of Trade reply. I suppose the Lord Chancellor will accept the Board of Trade reply. This is the Board of Trade reply given in another place on March 21, 1928, relating to the safeguarded industries, lace, gloves, gas mantles, china and pottery, and so on, as far as they had been in existence for any space of time. I will not go through the figures in detail, but the fact is that so far from exports having gone up by 10 per cent., the reply of the Board of Trade, a Government Department of the same Government as that of which the Lord Chancellor is a member, is that as a matter of fact exports were 11.2 per cent. less in 1927 than in 1924; that is, that. in the three years to which the Lord Chancellor refers there was not an increase of 10 per cent. but a decrease of 11.2 per cent. If you choose to go to 1928 and bring the figures right up to date the result will be worse still from the Lord Chancellor's point of view.

Next the Lord Chancellor says:— In safeguarded industries imports have gone down by 30 per cent… I cannot understand that statement on any proper analysis of the matter or of the situation. Safeguarders, I know, sometimes arrive at queer results about imports by taking 1925 as the year from which to start. That is clearly wrong because 1925 is the year in which some of these Duties were either imposed or were proposed, and, therefore, imports were rushed into the country so as to get them in before the Duty was put on. Therefore, it is obvious that it was an abnormal year and not a fair year to take for purposes of comparison. Obviously the proper year to go back to is 1924, before there were any Safeguarding, Duties and before it was known that there would be any. Going back to that year let me give two or three figures. I have already given them in regard to fabric gloves. In 1924, the imports were 840,000 dozen pairs. In 1928, in eleven months they were 1,314,000 dozen pairs. Therefore, so far from the imports having gone down by 30 per cent. they have gone up by about 50 per cent. If we take lace and go into the figures and compare 1924 with 1927 we find that the imports are very nearly the same in 1927 as they were in 1924, £500,000—I am speaking, of course, of retained imports which is the proper figure—in 1924 and £465,000 in 1927.

What is the explanation of all this? I think it is that the Lord Chancellor has been doing what so many other Safeguarders do—he has been including in the figures he has given the statistics relating to motors and to artificial silk, which are not safeguarded industries at all. I think that is what he has been doing. Even so, I cannot arrive at such a result as he reaches. If I take 1924 and 1928, the first ten months of each year, which is the fairest I can do, I do not rind that imports have gone down by 30 per cent., even including everything and making the Lord Chancellor a present of motor cars and artificial silk for this purpose, but that they have gone down by about 15 per cent., which is about the average fall in wholesale prices in the period. I have those figures here and so far as I know they are quite correct.

I think I have made it clear that the Lord Chancellor ought not really to have included artificial silk and motors. He in particular is estopped from doing so by his own words, because if you read on in his speech you will see that he talks of these figures relating to trades "threatened with extinction." Does he contend that the motor trade and the artificial silk trade are, or ever were, threatened with extinction in the last few years? When I called the attention of a distinguished Free Trader to this passage he asked leave to get up from his chair and have a good laugh. He said: "Really, this surpasses anything which has yet been put forward by the Safeguarders. Threatened with extinction, the motor trade and the artificial silk trade! Two of the most booming and rapidly expanding trades in the whole country!" Clearly then, the Lord Chancellor cannot really include motors and artificial silk in what he says, because he is only referring apparently to trades "threatened with extinction." If you take out those trades you arrive at a totally different result from that which he gave.

Let me take the Lord Chancellor on his own ground. Take the motor trade. The whole argument of the Lord Chancellor, as I understand it (in fact he says so), is that by Safeguarding our exports have gone up by 10 per cent. What are the facts? For nearly a year the Motor Duties were taken off by Mr. Philip Snowden and we were then threatened with all kinds of disasters to the trade. As a matter of fact, the expansion of exports in that period was very great indeed. I will give your Lordships some figures. I give the figures for ten months because those are the most which can bring for 1928. The exports of motor cars, parts and accessories, in 1923, amounted to 3,068,000; in 1924, £5,116,000; in 1925, when the Duties were off during most of the time and when disaster was to come, £7,650,000; and in 1926, that is the time after the Duties were reimposed, £7,041,000. In 1927, in the first ten months, the exports were £8,557,000, and in 1928—and this is the point to which I would like to call attention—the exports have fallen in the first ten months to £7,194,000.

Why did not the Lord Chancellor tell the Primrose League that if he wanted to give them the facts about the exports, even if he included motors which ought not to have been included? As a matter of fact, I need not go through all the figures but if they are denied I can produce them. They clearly show that when Mr. Philip Snowden took off the Motor Duties there was a great increase in exports. The exports in the period of nearly a year during which the Motor Duties were off were about one and a half times as much as the average exports of the previous eighteen months. How then can it be said by any stretch of imagination that exports of motors have been increased by the Safeguarding Duties? The matter will not bear any serious investigation. At the present time—I am sorry it is so, but I am not surprised if you will go in for Safeguarding; I think it has a good deal to do with it—at the present time our exports of motors are, as I have shown, unsatisfactory and are declining. The more this speech is gone into the more vulnerable it becomes. I think the Lord Chancellor ought to explain the figures.

As further refutation of what he has said I will read a passage from the Spectator because it seems to be almost framed to meet what the. Lord Chancellor said. It is in the current number and it says:— Most Safeguarding speeches contain the assertion that in whatever trades Duties have been imposed, imports have decreased and exports hare increased, and unemployment has been reduced. This article refers to certain investigations which have been made on behalf of the Economist, which has published a series of articles containing, as is pointed out, enlightening results. The article in the Spectator goes on:— As against this claim— the sort of claim the Lord Chancellor made— the figures examined by the Economist demonstrate:—

1. "(1) That in many instances imports have been substantially increased;
2. "(2) That in few, if any, cases has the flow of imports been arrested without an actual decrease in our exports;
3. "(3) That in no single case have exports been increased except where there has been, also, an increase in imports;
4. "(4) That in, at least, one case exports have almost disappeared and imports remarkably increased.
5. "(5) That in every single case, the re-export trade has been damaged."

The article concludes by saying:— Direct employment figures show remarkably slight improvement and indirect employment has, in some cases, been inevitable.

To bring this whole matter to an issue—that is what I want to do; now we have it on the floor of Parliament not in the Primrose League I would like to put some questions to the Lord Chancellor of which I will give him a copy. I do not think he will object because they are perfectly fair. I will read them:—

1. "(1) Does the Lord Chancellor adhere to his statement that Safeguarding has been effected without increasing prices? If so, what is his reply to the facts and considerations which I have adduced to the contrary?
2. "(2) Does the Lord Chancellor consider that the prosperity of the artificial silk industry is due to the Safeguarding Duties? If so, how was it that the artificial silk industry was growing by leaps and bounds before the Duties were imposed, and how was it that Courtaulds, who practically comprised the industry, were opposed to the Duty, and how was it that the Chancellor of the Exchequer put an Excise Duty on artificial silk?
3. "(3) Does the Lord Chancellor consider that the prosperity of the motor industry is due to the Safeguarding Duties? If so, how is it that the motor industry, contrary to Protectionist predictions, had a time of great prosperity in the period when the Duties were taken off?
4. "(4) Is it not the fact that the President of the Board of Trade has stated that the Silk Duties are not Safeguarding Duties, and that the Parliamentary Secretary to the Ministry of Labour has stated that the Motor Duties are not Safeguarding Duties?
5. "(5) Does the Lord Chancellor think it fair to give the public to understand that the motor and artificial silk industries were trades threatened with extinction' and that it was since the Safeguarding Duties were put on that they have prospered, and that it was because Safeguarding Duties were put on that they have prospered? If not, and if, accordingly, figures relating to these two industries should not be included at all in statistics in the Safeguarding controversy, is it not the fact that the figures which he gave in his speech to the Primrose League would have been totally different? Such being the case, is it not the fact that his speech to the Primrose League conveyed an entirely wrong impression to the public?"

Those are the questions I should like the Lord Chancellor to reply to and I will give him a copy of them the moment I sit down. I hope he will reply.

We have made a previous attempt to get a reply on the floor of this House to Safeguarding statements, which, I am sorry to say, was singularly unsuccessful. I refer to the statements made by the noble Viscount, Lord Chaplin, who did not say a word when he was challenged. I am sure the Lord Chancellor will not take refuge in silence. We are entitled to a reply to these questions. It would not be a proper thing, I am sure your Lordships would agree, that statements should be made at meetings in the country by responsible Ministers unless they can be substantiated on the floor of your Lordships' House. I am only asking what is fair and proper in regard to the speech of the Lord Chancellor. If any Socialist Minister in a Labour Government, particularly one in such high authority, had made a speech about some important item of Labour policy such as the Lord Chancellor has made about the Safeguarding Duties, I am quite sure that in your Lordships' House that Labour Minister would have been most severely criticised. Your Lordships know what I say is true. I will not say any more now, but I will move for Papers in order to keep open my right of reply and also because I should very much like to have the Papers about the arrangements in the steel trade. I beg to move.

THE EARL OF PLYMOUTH

My Lords, the noble Lord asked some questions on certain specific points in connection with the Safeguarding Duties, and I intend to confine my reply strictly to those points as far as possible. A few days ago the noble Lord was kind enough to speak to me about the Questions he had on the Paper, and he conveyed to me then that it was not his intention to speak for more than a very few minutes in supporting them. Yesterday he informed me that he had added to those Questions in order to give him greater freedom in what he was going to say, but at the same time he did not think it likely that he was going to make a speech of any length. I look at the clock and I find that the noble Lord has spoken for almost exactly three quarters of an hour, and I think, in view of the fact that only a week or two ago he made an even longer speech on this subject in your Lordships' House, that what he has done has been hardly fair, and, indeed hardly civil to your Lordships' House. I have not the slightest intention of following the noble Lord into the realms of the theoretical effect of what might be the result of imposing Duties here and there. The noble Lord, the whole time he is calling our figures in question, at the same quotes a number of figures himself, but he has brought forth no proof whatever that those figures can be substantiated.

I should like to say right away, dealing with the first part of the Question, that the Government does not accept the view of the noble Lord that nothing has hap- pened to alter the situation since December, 1925, when the Prime Minister made the statement; with regard to safeguarding iron and steel which is quoted, although not fully quoted, in the Question the noble Lord has put, down on the Paper. In connection with this matter, I really think that the noble Lord is suffering under a misapprehension. Ho speaks as if this was a, question of whether a Duty should be imposed or not. It is nothing of the kind. The point at issue is merely this—ought there to be an inquiry into the question of whether a Duty on from and steel should be imposed? That is a very different thing indeed. It is true that the Government refused in 1925 to allow the safeguarding application in respect of this industry to go forward, on the ground that the safeguarding of the iron and steel industry would have repercussions of a wider character and might lead to the demand for dutying generally all the varieties of goods into which iron and steel entered. But the iron and steel manufacturers now put forward the claim that the increased output which a Safeguarding Duty would assure them would enable them so to reduce their costs that the industries using iron and steel as a material would not be prejudiced. This, if it can be established, would remove the fear that using industries would find themselves obliged to press for the extension of any Duty on iron and steel to all goods in which it was used and would naturally very materially affect the situation.

In substantiation of my suggestion that the opinion of people generally has been modified with regard to this subject I should like to draw your Lordships' attention to a, statement issued by the Council of the British Engineers' Association in March last. This statement reads as follows:— Subject to proper regard to the interests of the engineering industry, the general feeling of the council is sympathetic towards the safeguarding of iron and steel as a contributory means of assisting the iron and steel industry to improve its economic efficiency and thereby preserve in a state of robust vitality that great basic industry which, in their opinion, is indispensable to this country. Well, my Lords, all I can say is that the situation has changed. The position is modified and in all these circumstances I maintain that it is only reasonable and fair that the iron and steel industry should be given the same opportunity as any other industry of making, out its case before the tribunal which it is proposed to set up under the new procedure. All they ask is that an inquiry should be held into the question, and I would like to remind the House that one of the essential questions which this tribunal will be called upon to consider will be whether the imposition of a Duty would exert a seriously adverse affect upon costs of production in any other industry. The industries using iron and steel will be entitled to be represented at this inquiry and to give evidence there. I repeat that it is really a very different question—whether, on the one hand, you are going to settle once and for all whether a Safeguarding Duty should be imposed in the case of iron and steel, or whether you are going merely to give that industry the same opportunity as other industries have of making out their case.

I hope that as a result of what I have said I have made it clear to your Lordships that the Government have no intention at all of giving the undertaking asked for by the noble Lord in the first part of his Question. The noble Lord deliberately ignored all the conditions which govern the imposition of a Safeguarding Duty. No one can honestly pretend that a Duty imposed in special circumstances after an inquiry bears any resemblance to a General Tariff.

I pass for a few moments to the second part of the noble Lord's Question. It is true that the home prices of goods of the kind which are subject to Safeguarding and McKenna Duties are not collected by Government officials or established under Government auspices, but the noble Lord, after all, has been quoting numerous figures himself to-day in which, no doubt, he has the greatest belief, and he is surely entirely mistaken if he supposes that there is no reliable information as to the course of prices of these goods except such as you can get from Government sources. I really think that the noble Lord is not on sound ground if he claims that the only facts which can be depended upon are those which are produced under the auspices of some Government Department. I will give him one or two examples of the kind of information that is available, which I think your Lordships will all admit is definite information and well authenticated information.

Before I do so, I should like to say a word or two about another point. The noble Lord in the course of his remarks referred to the fall in the general level of prices during the last few years. I quite admit that undoubtedly there has been some fall. The Board of Trade index number of wholesale prices has fallen by eleven points since 1925 when the McKenna Duties were reimposed and the first Safeguarding Duty enacted, and by a little over four points since 1926. It is obviously extremely difficult and rash to attempt to apply such figures to any particular manufactured commodities, but even if we take that into full account there is ample justification in many cases for the statement made by the Prime Minister in the letter which the noble Lord quotes in his Question.

I am going to take first the case of motor cars. The noble Lord has already said he hoped I would not do so, but I should like to call his attention to a statement which he made himself on July 18 this year. He said then that— So far as effect on prices is concerned, it does not, of course, matter whether an Import Duty is a Safeguarding one or not. Therefore, I trust he will raise no serious objection to my taking the case of motor cars. The actual prices of different makes of cars are publicly announced by the Society of Motor Manufacturers and Traders, the recognised trade association in the industry. That society has prepared an index of prices of British cars, taking the price in 1914 as a basis and calling it 100. On this basis the average price of twelve typical models of private cars in 1924 was 99.1 and in the first six months of 1928 82.1. Similarly the average price of typical models of commercial vehicles in 1924 was 108.9 and in 1928 102. The noble Lord also referred to what he calls the factor of inferior quality. I really am not quite clear as to exactly what he means in this respect, but I can assure your Lordships there is no reason at all to suppose that the quality of British goods which enjoy the benefit of a Duty has fallen off in the last few years. Certainly in the case of motor cars it is common knowledge that there has been a great advance in design, in performance, and in equipment both of private cars and of commercial vehicles.

I take another example, this time, from tyres. A Duty was imposed on tyres in 1927. Just after the Duty came into force one particular foreign company increased the prices of some of their tyres by about 10 per cent. In November, 1927, however, a few months later, this company reduced its prices by 15 per cent. By the present year the company in question had established a factory in this country on account of the imposition of the Duty, and last September it made further reductions in the prices of its tyres, which are now manufactured for the British market in Great Britain. Generally it would seem that on the whole the prices of both British and foreign tyres at the end of 1927 were on about the same level as at the beginning of that year. Reductions were announced in price lists issued this year, due perhaps partly to the fall in the price of raw rubber which occurred in the course of 1928 and partly to the competition in this country from the new factories established here tinder the stimulus of the Duty.

I will pass for the moment to leather gloves, a safeguarded industry. The figures that I am going to quote have been compiled by the joint industrial council for that industry, and I feel certain that the noble Lord will not take exception to that body as an authority. The Duty was imposed in 1926. I really cannot go into any great detail and I will not describe the different types of gloves in question, because I do not think that I should convey very much to your Lordships. In one type of glove the price fell from 52s. 6d. a dozen pairs in 1925 to 48s. in 1927; in another the price fell from 60s. to 58s.; in another there was a fall of 4s.; in another of 3s. 6d.; and so on. The averages for 1928 are not yet available, but I am prepared to admit that they may show a tendency to increase, entirely as a result of the fact that in recent years the prices of raw skins, which are the material of the industry, have shown substantial increases.

I take another example, that of wrapping paper. The Duty was imposed in this case in 1926. The National Association of Packing and Wrapping Paper Makers have supplied a schedule of wholesale prices which shows that the standard prices for the classes of British paper which are most subject to competition from abroad have shown a substantial decline since the beginning of 1926. Nor has this been accompanied by any depreciation in the quality of the British article. It has constantly been alleged that the kraft paper made in this country was inferior to the foreign article, but great advance has been made in the last eighteen months in the quality of British kraft, which is now made in strengths which have proved amply sufficient for purposes for which formerly imported kraft was necessary, and this advance has been accompanied by a reduction of from £1 to £2 per ton in price. I could quote other instances, but I think that after what I have said it is not necessary to go into further detail. I only hope that the facts that I have brought forward this evening will induce your Lordships to take the same view as I do—namely, that the Prime Minister was fully justified in making the statement contained in the letter to the candidate for Ashton-under-Lyne which the noble Lord brings into his Question.

THE LORD CHANCELLOR (LORD HAILSHAM)

My Lords, I had not proposed to intervene in this discussion. The noble Lord yesterday told me that he proposed to challenge some of the figures that I had given in a Primrose League speech. He did not mention which they were, but I obtained the only figures that I could find that I had mentioned, and he has quoted them to-day. He did not tell me that he intended to proceed to a kind of Shorter Catechism, which he has been good enough to hand to me, but I will do any best even to answer that. It does seem to me that the noble Lord at some time—it must have been in his extreme youth, because they are such antiquated theories—was long ago, by some very efficient tutor of the Free Trade persuasion, instructed in certain Free Trade doctrines. He has never been able to learn anything about economics since, and he therefore comes down to this House and propounds, with an air of profound assurance, these doctrines as being universally accepted, and then he asserts that, since these doctrines are true, the facts must fit into them, and if the facts do not fit into them the facts must be wrong. Let me give an illustration. The noble Lord said that everybody knows that putting on a Duty must raise prices. If, therefore, you have put on a Duty, prices must have gone up; and if they have not gone up, why then, the quality must have gone down. Assuming his premisses, the conclusions follow, but unfortunately his premisses have long ago been disproved in almost every civilised country in the world, and no really serious thinker now supposes that the law of economics is as he states it.

However, I do not rise to discuss the noble Lord's economic theories. I rise to answer the particular questions that he put. The figures that he challenged were these. I said that in the three years from 1925 to 1927, the last three years for which figures were available, exports had gone up in the safeguarded industries by 10 per cent. and had gone down in the non-safeguarded industries by 10 per cent. I said that imports had gone down in the safeguarded industries by 30 per cent., and had gone up in the other industries by 12 per cent. I have the figures. Your Lordships will find them set out in about seventeen pages of the OFFICIAL REPORT of the House of Commons debates for March 21, 1928. The noble Lord has a copy. I add to these figures only one, because it was not included in the question put in 1928—namely, that concerning hosiery made of silk and artificial silk.

The actual figures are these. In regard to retained imports, which the noble Lord particularly mentioned, in 1925 the imports in the safeguarded manufactures amounted to £59,873,000; and in 1927, £41,675,000; a reduction of 30.4 per cent. I said it was 30 per cent. In other manufactures the figure for 1925 was £228,300,000; in 1927, £255,598,000; an increase of 12 per cent. I said that it was not less than 10 per cent. Now let me turn to exports. In safeguarded manufactures these amounted in 1.925 to £34,352,000; in 1127 to £37,902,000; a percentage increase of 10.3. I said that the increase had been 10 per cent. The figures for the other manufactures are, in 1925, £582,256,000; and in 1927, £526,063,000; a percentage drop of 9.7. I said 10 per cent., which was the nearest whole figure. The noble Lord asked why I did not take the 1928 figures. For the very good reason that nobody knows, in November when the year is not over, what the 1928 figures are.

Then he said that, if you took the motor trade for 1928, you would find that the ten months of this year showed a decrease as opposed to 1927. I have not the figures, so I assume that the noble Lord is correct, but he must see that it has no relevance at all to my argument. The point which was being made, and which your Lordships see that these figures establish, is that, if you compare safeguarded and non-safeguarded manufactures, you find that the safeguarded manufactures are steadily increasing in their exports, while the non-safeguarded manufactures are going down. What you want to know, at the end of 1928, is not whether the 1928 figures in motors are better or worse than those of 1927, but whether the comparison between 1928 and 1927 is better in the safeguarded than in the non-safeguarded industries, which I have no doubt will prove to be the case in this year, just as it was in preceding years. So far, then, as the figures are concerned, your Lordships will see, I hope, that I have exactly justified the statement that I made, and I have justified it on the floor of the House. The noble Lord keeps on telling us that we must exclude the Motor and Silk Duties——

LORD ARNOLD

Hear, hear.

THE LORD CHANCELLOR

—he says it again—because they were not put on for safeguarding purposes. If the noble Lord would only try to think the thing out for himself, instead of merely adopting parrot catchwords, he would realise that the point is whether or not the imposition of a Duty increases exports or diminishes imports, and whether or not it raises prices. It does not for that purpose in the least matter whether the motive with which the Duty was imposed was to save a dying industry, or further to improve a flourishing industry, or even to raise revenue. What we are discussing is the effect of the imposition of the Duty, and it is idle to say you are going to cut out figures which do not suit you, because it happens that these trades were very flourishing at the time when the Duty was imposed.

The noble Lord asks:— Does the Lord Chancellor"—

I have not had notice of these questions— adhere to his statement that Safeguarding has been effected without increasing prices? Certainly, I do. If so, what is his reply to the facts and considerations which I have adduced to the contrary? Lord Plymouth has given the answer to the so-called facts and considerations. I do not think the noble Lord has adduced any consideration "to the contrary," except that his economic theory says that it cannot be true. Then he asks:— Does the Lord Chancellor consider that the prosperity of the artificial silk industry is due to the Safeguarding Duties? That the artificial silk industry has been a great deal benefited by the Safeguarding Duties I have no doubt at all. The question continues:— If so, how was it that the artificial silk industry was growing by leaps and bounds before the Duties were imposed? Why should it not be? No person in favour of Safeguarding ever contended that no trade would increase without Duties. The question proceeds:— If so, how was it that Courtaulds who practically comprised the industry, were opposed to the Duty, and how was it that the Chancellor of the Exchequer put an Excise Duty on artificial silk? The Chancellor of the Exchequer put a Duty upon artificial silk because he wanted to get more revenue, and he did not want to give an undue advantage to artificial as opposed to natural silk. Courtaulds objected to any Duty at all, I believe, on artificial silk, and of course having a Duty on natural silk and not on artificial silk would, I dare say, have been found a very convenient plan.

Then the noble Lord asks:— Does the Lord Chancellor consider that the prosperity of the motor industry is due to the Safeguarding Duties? I consider that the prosperity of the motor industry has been enormously increased by Safeguarding Duties, and, a hat is more important—it is not my own view, because I do not pretend to be an expert, any more than does the noble Lord, on the motor trade—what is more important is that those who do know are unanimously of the same opinion. Under the McKenna Duties the motor industry benefited enormously and greatly prospered, and it takes time, even for such an industry, to be destroyed by the follies of Free Trade. The noble Lord also asks:— Is it not the fact that the President of the Board of Trade has stated that the Silk Duties are not Safeguarding Duties and that the Parliamentary Secretary to the Ministry of Labour has stated that the Motor Duties are not Safeguarding Duties? I did not give my views on the question and I do not carry in my mind everything that any other Minister may have said on every other occasion. If my colleagues asserted that duties were not of the nature of Safeguarding procedure, of course their statement was entirely accurate, but it has no relevance to the question.

Then the noble Lord asks:— Does the Lord Chancellor think it fair to give the public to understand that the motor and artificial silk industries were 'trades threatened with extinction'? Of course not, and nobody ever said it. The question proceeds:— and that it was since the Safeguarding Duties were put on that they have prospered, and that it was because Safeguarding Duties were put on that they have prospered? I think it is an entirely fair thing to say, because it is no doubt, true, that since the Duties were put on they have prospered, and, if they were prospering, they have because of the Duties had increased prosperity. The question proceeds:— If not, and if, accordingly, figures relating to these two industries should not be included at all in statistics in the Safeguarding controversy, is it not the fact that the figures which he gave in his speech to the Primrose League would have been totally different? I have already pointed out that I cannot admit that premise. If the figures should not be included, the answer is, "of course not." But they should have been included, and any statement which left them out would have been most misleading. The question concludes:— Such being the case, is it not the fact that his speech to the Primrose League conveyed an entirely wrong impression to the public? No, my Lords, it certainly was not, and is not, the case.

I think I have gone through the whole of this list of questions. It reminds me of what very young solicitors used some- times to do at the beginning of their experience, when they furnished you with a long list of questions ending up: "Then you must be a liar." Answer, "I suppose so." Unfortunately, that method never succeeded, because the witness very seldom gave the desired reply, and I am sorry if the noble Lord's experiment has not been more successful. I do not want to take up more of your Lordships' time, but I could not resist a direct challenge. Having answered the noble Lord, I hope your Lordships will appreciate that the figures given are entirely accurate, and that the Safeguarding policy has been proved to be of a great benefit to the country, and is going to be the one thing to save us from the disasters of unemployment which are threatened by the Socialist policy.

LORD ARNOLD

My Lords, I should like to say a word in reply to what the noble Earl has said with regard to my having spoken for three-quarters of an hour. As a matter of fact I did not speak for quite so long, but I made it perfectly clear to the noble Earl this afternoon that I had new material which had come into my hands, and that I could give no estimate of the time which would be required. Moreover, it was expected that the previous Bill would have ended much earlier than it did. I asked the noble Earl if he objected to sitting until half-past seven or eight, and he said that he had no objection. I explained that I could net postpone my Motion because at this stage of the Session it could not be done, and I really think that it was not quite a fair thing in the circumstances to say that I was not treating the House with civility. I told him perfectly clearly that I must take some time, that I was not going to divide the House, and that I did not want anybody to remain, but simply wanted the matter to be put in the OFFICIAL REPORT. We have had only four Safeguarding debates in three years, and I really think that the noble Earl should not make a statement like that. Moreover, I have always understood that conversations of that nature would not be repeated in public. I shall not give any undertakings in future. I told the noble Earl distinctly that this, debate would last for some time, and I do not think it was a proper thing for him to charge me with not being civil to the House. I have very little to reply to in what the noble Earl said. I will not go into the question of what he said about steel, because he practically said nothing. I gather that he has no Papers about any suggested arrangements, and therefore I will not press for them.

THE LORD CHANCELLOR

Will the noble Lord excuse me and allow the noble Earl, Lord Plymouth, to take my place on the Woolsack? I am already an hour overdue.

LORD ARNOLD

Certainly, and I should like to thank the Lord Chancellor before he goes for being so full in his reply. Of course, the noble Earl has wholly failed to substantiate the statement of the Prime Minister. Neither did he shake in the slightest particular any figure or fact which I put forward. Nor did he attempt to do so. And yet he finished up by saying that everything the Prime Minister said was justified. I really do not think that that view can be sustained.

Then I come to the Lord Chancellor. The Lord Chancellor said it was not necessary to reply to me on the question of prices, because the noble Earl had done so. As a matter of fact, he had not done so at all, and the Lord Chancellor did not attempt to shake a single figure I gave, or a single argument I used. In the speech to which I referred the Lord Chancellor distinctly said he was dealing with a three-year period. Now he comes to your Lordships and takes from 1925 to 1927, taking as his first year 1925, which was an abnormal year. Moreover, if he is dealing with a three-year period he should take from 1924 to 1927, which would be the proper way. He is now dealing with a two-year period. However that may be, 1925 was an entirely abnormal year, and if you take the proper years the results come out very differently. If you take the eleven months of this year also they come out very differently. The Lord Chancellor said he did not take the year 1928 because you could not take it yet, but he could have taken eleven months of this year. He did nothing of the sort.

And, of course, to contend that the motor and the artificial silk industries have prospered because of Safeguarding is to go entirely in face of the facts and entirely in face of the figures which I gave. He did not make the smallest effort to disprove the figures about the way in which exports increased when the Duties were taken off. He did not attempt, or did not attempt in any scientific way, to deal with the argument, but he did claim that it is the effect of these Duties which has led to the great prosperity of the artificial silk trade and of the motor trade. All I can say to that is that it is very difficult to deal in entirely Parliamentary language with a claim of that sort. Neither did he in the least degree meet the point that he had implied in his speech that these industries were "threatened with extinction" And if you take these figures out as you ought to have done, the results are exactly what said, and totally different from those which the Lord: Chancellor mentioned.

We are getting on, however. It is interesting to know that the Lord Chancellor is not merely a Protectionist; he talks now about the follies of Free Trade. We shall really have a right to ask where this Government stands. Is it a Free Trade Government at all? It was returned as a Free Trade Government. It is a long time since I heard a member of the Government say a single word in favour of Free Trade, except, I think, in the last week of July, when the Chancellor of the Exchequer, in a rash moment in the House of Commons, did say something which might be held to be favourable to Free Trade; and I understand he got into great trouble with his Party. Very well, we are getting on; we know where we stand; and we shall be quite prepared to take this issue to the country, and to abide by the result. As the noble Earl has no Papers, I will not go to a Division. I beg leave to withdraw my Motion.

Motion, by leave, withdrawn.