SAFEGUARDING DUTIES.

HL Deb 21 November 1928 vol 72 cc205-59

LORD ARNOLD had given Notice to call attention to the question of Safeguarding Duties, and to move to resolve, That statements made by the Prime Minister and other members of His Majesty's Government with regard to the policy of Safeguarding Duties are inconsistent and mutually destructive, and this House calls upon the Government to make a clear and unequivocal declaration of its Protectionist programme, particularly as regards iron and steel.

The noble Lord said: My Lords, I have put down this Motion in an attempt to elucidate a state of affairs with regard to a vital matter of public policy which is almost without precedent. I say almost and not quite, because there are in the present position many features which bear a singular resemblance to the happenings of the years 1903 to 1905, which some of your Lordships will have forgotten. The present Prime Minister, Mr. Stanley Baldwin, is endeavouring to do now precisely the same thing as Mr. Balfour, as he then was, was trying to do then. Mr. Baldwin, like Mr. Balfour, is still saying that things are, and are not, at the same time. He is still trying to unite on a common platform a divided Party. He is still trying to talk Free Trade to the Free Traders and Protection to the Protectionists in his own Party. He is still trying to prove that two and two make five. Well, if Mr. Balfour did not succeed in the years 1903 to 1905—in fact, so far from succeeding he led the Conservative Party to unprecedented disaster—if Mr. Balfour did not succeed, I think we may take it that Mr. Baldwin will not succeed either.

Before coming to the statements of Ministers, which are referred to in the terms of my Motion, I should like to be allowed to remind your Lordships that last July I put down a Motion on this subject of the Safeguarding Duties and discussed the whole question in very great detail. I have no intention of discussing at any length the Safeguarding Duties in detail now, or the facts and figures relating to them. I have no intention of doing that for two reasons: first, because I did it so recently; and, secondly, because the Government reply showed on that occasion that they have no real defence of their policy. No proper attempt was made then to justify the wild statements put forward by their followers and by Ministers, and no real endeavour was made to answer the case against the Safeguarding Duties—none whatever. So, if I repeated the case to-day, there is no reason to suppose that there would be any more satisfactory result. There would be no reply because there is no reply, and I am certainly not going to waste your Lordships' time, or my own time, in trying again to get the Government to defend the indefensible.

But I must take up a little time on some details, because nearly every day fresh evidence accumulates to show how unsustainable is the position of the Safeguarders. Nearly every day some new question in another place or some new fact comes forward to show how great are the misrepresentations which are being indulged in by the Protectionists in their desire to effect a change in the fiscal policy of this country. I affirm again that many of these statements of the Safeguarders are incorrect, not to say untrue. I affirm again that the claims which are made about the success of Safeguarding are unsustainable. The simple truth is that there has been no success of Safeguarding. The Safeguarders have not proved, because they cannot prove, that Safeguarding Duties have increased Exports. Safeguarders have not proved, because they cannot prove, that the prices of commodities on which Duties have been placed remain unaffected. On the contrary, I say that prices have been raised. Safeguarders have not proved, and they cannot prove, that unemployment as a whole has been helped by this policy. Nor has it been proved that unemployment in the safeguarded industries themselves has been reduced, except to a trifling degree.

The fact is that there are no official figures with regard to unemployment in the safeguarded industries, except in the case of the lace industry. Upon what, then, are all these statements based about a large increase of employment? The only industry of which there are official figures is the lace industry, and I pointed out in July that if you compared 1924 with 1927, taking the 1st of July in each year—those were the latest available figures and the fairest figures to take—the increase in employment in the lace industry since these Duties came into operation amounted to the tremendous total of 188!My noble friend Lord Hunsdon of Hunsdon was here on that occasion and he told me that this was all wrong and that there has been an increase of 2,000. I said: "There has been no increase of 2,000. What is your authority for that?" He told me that the Parliamentary Secretary of the Board of Trade said so in another place. I said, in effect, that I did not agree with what he said, that he had no official figures, that there had been no increase of 2,000 and that, if there had been any increase at all, it had not been large. Mr. Williams, the Parliamentary Secretary of the Board of Trade, had his attention called to that debate and he had to write to Lord Hunsdon and tell him that he (Lord Hunsdon) was wrong and that there had not been an increase of 2,000. It is true that in the House of Commons he had been understood by the reporters to say that there had been an increase of 2,000, but he said that he had not said that, but had said that there had been an increase of 1,000. It was a mistake and he wrote a long letter, the purport of which, when you went into it, seemed to be that even 1,000 was wrong; the actual increase at the moment when he spoke, so far as it could be estimated, was 859.

Since then, in fact only this week—that is what I mean when I say that fresh evidence accumulates every day in regard to these preposterous claims of the Safeguarders—official figures have come out down to July of this year. That is what I was waiting for. I stated that owing to certain changes in fashion, lace curtains and so forth were, I understood, rather more in request. I thought that if the official figures could be brought right down to date they would show something a little better than an increase of 188. I also truly observed that they could hardly be worse!What is the fact that we now find? We have the figures and we find that if we take the increase from 1925 to 1928, which is what the Government want to do—Mr. Williams, in his letter to Lord Hunsdon, said that Lord Arnold was very misleading because he began in 1924; but I do not agree with that at all, as I thought that 1924 was the proper year at which to begin because it was the previous year and the Duties were not in operation, nor was there any prospect of them, and with regard to 1925 I gave my reasons at the time—but start from 1925, if you like, and you find that the increase in employment from July, 1925, to July, 1928, amounted to 618. Accordingly, Mr. Williams was wrong. He said in his letter to Lord Hunsdon that when he spoke he knew that unemployment was diminishing. How could it be diminishing? As a matter of fact, the increase of employment is only 618 whereas he said that it was 1,000.

So there we have it. The only ease in which there are official figures shows that the increase in employment in that safeguarded industry in those few years has been 618, which works out at about 4 per cent. on the numbers employed, which are somewhere between 15,000 and 16,000. Further, this takes no account of people who have been thrown out of employment in other industries because of these Duties. As the noble Earl on my right (Earl Beauchamp) pointed out recently in reply to the noble Viscount, Lord Chaplin, it is all very well to give figures of this kind, but what about the other side of the account? What about the people who have been thrown out of work? It is perfectly clear that, as a matter of fact, this policy does not do what is claimed for it, because unemployment is getting worse and worse and on balance the country, so far as unemployment is concerned, is much worse off than it was before this policy began.

But it is said: "What about artificial silk? What about the motor trade? What about the Duties there? Are they not doing good?" Well, what about them? One point is that silk, although it has a Duty upon it, is not one of the safeguarded trades. The President of the Board of Trade said in another place only recently that silk had not been safeguarded. If the President of the Board of Trade, an arch-Protectionist, said that, I think we may take it that it is the fact. Motor-cars have not been safeguarded by a Safeguarding Duty. I will not go through that point again because your Lordships are familiar with the facts. The Artificial Silk Duty was put on as a luxury Duty by the present Government, and the Motor Duties in l915 by Mr. McKenna, for War purposes. The truth is, of course, that both motors and artificial silk are expanding industries, catering for a huge popular demand. They are new industries and they would probably prosper as much without Duties, as was proved when Mr. Snowden, when the Labour Government was in office, took off the Duty on motors, and the trade, which we were told was threatened with disaster, had a very prosperous year indeed. The artificial silk trade was growing by leaps and bounds long before these Duties were put on. They were not asked for by the trade, and to represent the artificial silk trade as a depressed industry is simply ridiculous. Messrs. Courtaulds, the chief people in the industry, did not want the Duty at all. In my view, both the motor trade and the artificial silk trade would have prospered even more if there had been no Duties. To come forward and claim that their expansion is caused by the Duties is to put a stain upon credibility that credibility cannot bear. Any schoolboy knows that as a matter of tact it is not so. It is only by including the Motor and Artificial Silk Duties and uniting the figures of those two industries with other safeguarded industries, that Safeguarders arrive at any kind of result which they can parade with confidence. That is the explanation between their statements and the truth.

This is not fair propaganda. It is grossly unfair propaganda. If I said it was not honest, noble Lords would not like it, because they do not like words which have not a very pleasant sound, but it is grossly unfair propaganda. I hope that Lord Plymouth, who I understand will reply, will not do what the Secretary for War did in another place a few days ago, and bring forward as his justification statistics with regard to artificial silk, and so on. It is not a fair thing to do, and it is an argument which can be very easily disposed of. Why not say something about the cutlery trade? Is the cutlery trade doing well? Is it not the fact that that trade is in a state of great depression? When we had the debate on the Address in this House, Lord Chaplin seconded the Address, and he was, of course, very pleased with Safeguarding, as one would expect from the man who is his father s son. What did he say? He said: The Act under which those Duties are levied has had the most happy results in all the industries to which it has been applied. It has increased production, it has largely increased employment, and it has not raised prices to the consumer. The noble Earl on my right (Earl Beauchamp) took him up, and challenged him, and asked what was the basis for those statements. He said the noble Viscount ought to come at an early date and tell the House what was the basis of those statements, and so, as I had put my Notice on the Paper, I thought it a proper thing to write to Lord Chaplin and ask him to come here, to-day, and substantiate those statements. I wrote him a courteous note, and he was courteous enough to thank me, yesterday, but he is not here to-day. He told me yesterday that it was very doubtful if he would speak. He is not here.

THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY)

When the House meets a quarter of an hour earlier it is always doubtful whether a noble Lord will be here.

LORD ARNOLD

He is not here, and he did not give me the impression, yesterday, that he was coming. I shall be very interested to see if he does come, and I shall be more interested to see if he speaks, but I shall be still more interested, should be speak, to hear what he has to say. If he does not come to substantiate those statements, after the double challenge—one from the noble Earl and one from myself—I think it would not be unfair to say that he has let the case go by default. I know very well what has happened. The noble Lord only reads the kind of literature, if it can be so called, which is turned out by the Empire Industries Association and other bodies of that kind. In the simplicity of his heart he believes it all and takes it as gospel, and comes down here and reads a summary of it to the House, instead of getting at the real facts and finding that his statements cannot be justified.

I will leave the noble Viscount and pass now to the last point which I want to consider before I come to the Ministerial statements. This is a somewhat important point. It has to do with the devastating effect of Safeguarding Duties upon the re-export trade. We have raised the point several times, and the attempted defence of the Government has been that, although the figures are very bad—I showed that in one class it was about nine-tenths of the trade which had been wiped out, and in another two-thirds, and in another one-half, clearly owing to these Duties—Lord Peel said that, while he had not got the figures, yet he thought a good deal could be explained by transhipments in bond. The noble Earl on my right asked if these figures would be produced in the Recess, to show what the effect of transhipments in bond had had upon the matter. They never have been produced.

I challenged the noble Viscount in July to give the figures, and a very extraordinary thing happened. When he came to reply the noble Viscount did not say a syllable—he did not even have the courtesy to say that he would look into the figures—and I would like to put the point to the noble Marquess, that it is not a very useful way of conducting debates, if a question like that, which has been asked before, is put to the Government and no syllable of reply is given. On the contrary, the noble Viscount read out a long speech prepared by the Board of Trade, a good deal of which was quite irrelevant, and I do not think that that kind of debate is conducive to any very useful result. Therefore, I ask again—I gave notice yesterday that I would raise the point: Will the Government give official and definite figures showing what effect transhipments in bond have had upon the re-export statistics in the safeguarded industries? If he will give those figures I shall be very grateful to him.

Now I leave the details of the Duties and pass on to the statements of Ministers—"inconsistent and mutually destructive" statements, in the words of my Motion—with regard to the policy of the Safeguarding Duties. The position in this matter is different from what it was in July. That difference is mainly due to statements of the Prime Minister, first in the letter published on the eve of the holidays to the Conservative Chief Whip, and, secondly, in his speech at Yarmouth, the most important speech of the year, to the Conservative Conference. The outstanding fact emerges from those two statements that the Prime Minister has been pushed further towards a policy of full Protection than either he will admit or the country has yet fully realised. Up to the present time it has not been easy for an industry which wanted a Safeguarding Duty to place its case before a Safeguarding Committee, because of the rules in the White Paper, and because of the veto of the Board of Trade. No application could be made unless the Board of Trade sanctioned it, and the Board of Trade has often refused to sanction applications, notably in the case of iron and steel. In spite of clamorous demands from Safeguarders no application to the Safeguarding Committee has hitherto been possible in the case of iron and steel. The Government have vetoed the application and that has been the end of the matter.

In future all this is to be changed, because the Prime Minister, in his letter to the Chief Whip, speaks of simplifying the procedure. He says:— No manufacturing industry will be barred from presenting its case before the appointed tribunal. Your Lordships will observe that there is no limit. The words are: "No manufacturing industry will be barred." And at the same time, and in the same letter to the Chief Whip, he says:— We are pledged, and shall continue to he pledged, not to introduce Protection. It is difficult to reconcile that second statement with the first, and certainly the second statement is quite inconsistent with what Mr. Amery said not very long afterwards, because Mr. Amery—who, to do him justice, has never concealed his views on this subject—the following month, in a speech, said:— If the Government were returned to power at the next Election, there would be no limit either to the character or the number of industries that would be able to secure Safeguarding for themselves and their workpeople, provided always—and that was the clear line of the distinction between Safeguarding and general Protection—that each industry on its own could prove a clear case on balance of benefit to the nation. This qualification at the end is mere verbiage, it amounts to nothing at all, because nothing of the kind has been proved in the case of the existing safeguarded industries either when evidence was put before the Committee or subsequently: so that Mr. Amery's statement might just as well have been made without these words at the end. They have no meaning and no application. We have proved that. By the bye, they do seem to imply, if you read them carefully, that Protection is not on balance of benefit to the nation—which is what we Free Traders are always saying.

However, the point is that Mr. Amery has said there is no limit to the number of industries able to secure—not apply for—Safeguarding. That means of course that if the Conservative Party comes back to power the way is quite open to Protection. What amount of value can you put, in view of that statement of Mr. Amery's, on the statement of the Prime Minister to his Chief Whip, when he says they are pledged and will continue to be pledged, not to introduce Protection? That statement is totally inconsistent with what Mr. Amery said, and it is totally inconsistent with a Duty on iron and steel. But the Prime Minister's statement means that iron and steel can apply for a Duty. Mr. Davidson, the Chairman of the Central Conservative Organisation, says it does mean that; iron and steel can go before a Committee. I ask your Lordships just to follow this. That Committee can recommend a Duty on iron and steel, and I think there is no doubt, from what we know is likely to be the composition of the Committee, that it will recommend a Duty on iron and steel. Are we, then, to be asked to believe that the Government, having set up this Committee, having allowed the iron and steel application to go through, and that application having been granted, and the Duty having been recommended by their own Committee, will turn down that recommendation, and do nothing and say there cannot be a Duty on iron and steel? Of course, they will not turn it down. But they will not say so now—that is the point; they will not say at present one way or the other.

Now, how is it that this extraordinary position has been created? It is due to the fact that the Prime Minister, on the one hand, has been compelled to do something by the pressure of Safeguarders in his own Party, and yet, on the other hand, in view of the unpopularity of tariffs in the country, he has to try and give the country to understand that nothing in particular is being done, that all he is proposing is simply a change of rules. The Prime Minister must know perfectly well that he is proposing something very different from that. He knows, for instance, that iron and steel can apply for a Duty. But a Duty on iron and steel would mean Protection. The iron and steel industries are of such vital importance, they have such great, such extensive ramifications—their repercussions are almost unlimited—that if you put a Duty on iron and steel this country has already become a Protectionist country. The Prime Minister himself has virtually admitted that, and the noble Marquess opposite has virtually admitted it.

This is not the first time that the Safeguarders have pressed for a Duty on iron and steel. They have been doing so for years, and the Government have always refused the Duty, because they know what grave results would follow from the imposition of a Duty on this vital industry. After the last General Election they were being pressed by their followers—even in those early days—about this matter, and they referred it to the Civil Research Committee—a good Committee, a very much better Committee than any other Committee which the Government will set up for the purpose, a Committee likely to give good, impartial and unbiased advice; and the Civil Research Committee have told the Cabinet that they had better leave the matter alone. The Prime Minister in announcing this decision of the Government said:— It became clear, however, 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. Very well, there you have it. On the statement of the Prime Minister himself, a Duty on iron and steel might be held to be in conflict with his pledges about no General Tariff.

This pledge has been given again and again, and it was repeated at Yarmouth only as recently as last September. The Prime Minister said:— I repeat the pledge which I have given that Safeguarding will not be used as a side door or a back door by which to introduce a General Tariff until the question of a General Tariff has been submitted to the country. Just look at the mass of contradictions with which we are faced. On the one hand, the Prime Minister, in his letter to the Chief Whip, says that he is pledged not to introduce Protection. But a General Tariff means Protection. A Duty on iron and steel means a General Tariff, and according to the Prime Minister, if he gets back into office, iron and steel can apply for a Duty and, presumably, get it. Therefore it is almost like a proposition of Euclid. The statements of the Prime Minister on this matter are quite inconsistent with each other and quite inconsistent with the statement made by his colleague Mr. Amery, and these various statements, in the words of my Motion, are "mutually destructive."

Let us consider the matter from another angle. It cannot be disputed, as I have said, that iron and steel can apply for a Duty. When the Prime Minister says that iron and steel can go to a Committee, he must mean that iron and steel can get a Duty if the Committee agrees, as no doubt it will. If it is not so, look at the position which arises. It would be this: that, in order to placate his followers, the Prime Minister tells them that the rules will be simplified and that any industry can make an application to the Committee; but in his own mind he does not intend that the decision of the Committee will be acted upon. I want to ask whether that is the position of the Government. If it is not their position, and presumably it is not, we are faced with this situation, that after the General Election, if the Conservative Party comes back to power, iron and steel will apply for a Duty and iron and steel will get that Duty, unless the Government will give, as they ought to give, a pledge to the contrary. That is the situation.

In all those circumstances I think we are entitled to ask, as my Motion does ask, for a clear and unequivocal declaration of policy. The country ought to know, and to know well in advance, that, failing a pledge to the contrary, the return of this Government to power will mean a Duty on iron and steel and that will mean that nearly everything in the country will speedily become dearer. This ought to be made clear: otherwise the country is being deceived; it is being hoodwinked. It means that the country is being asked to believe that there is some virtue, some safeguard, if I may use that now overworked word, in a Committee, when as a matter of fact there is nothing of the sort.

In order to bring this vital matter to a clear issue, I would like to put this question to the Government, and I will give them a copy of it so that it may be perfectly clear and that there can be no misunderstanding. Is it not a 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, however, 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? That, I think, is a perfectly fair question to ask, and I will hand a copy of it to the Government. I do not think the noble Earl, Lord Plymouth, who, I believe, is immediately to follow me, will be able to reply because it is a Cabinet matter; but I hope the noble Marquess, who, I believe, is going to speak at the end of the debate, will reply, because it is a proper question to ask and the country is entitled to know the answer.

Before leaving this aspect of the subject, let me turn again to the noble Viscount, Lord Chaplin, who, I am glad to see, is now in his place and who, I hope, will speak. The noble Viscount, Lord Chaplin, strongly pressed for Duties on iron and steel. I have already dealt with that and I come now to the reply of the noble Marquess, Lord Salisbury. What did he say? Clearly he was not informed of the position. Clearly he had not quite realised what had been going on. Obviously he did not understand the confusion he was creating in the ranks of his own followers in another place, or the difficulty he was making for his own Chief Whip there; because in his reply to the noble Viscount, Lord Chaplin, he actually said:— But when my noble friend states that we should carry it"— —that is Safeguarding— further and that I should tell your Lordships that we are prepared to safeguard iron and steel, I am afraid I cannot follow him. I am not sure that he has realised the reaction that the safeguarding of these basic industries would have upon other commodities and other industries and trades. As my right hon. friend said in the letter to which I have referred"— that is, the Prime Minister's letter to the Chief Whip— we are opposed to Protection and we are opposed especially to the taxation of food. Every industry is to have an equal chance before whatever tribunal is to consider its demands for Safeguarding. We are in exactly the same position as we were in formerly, and we are not prepared to accept a policy of Protection or the policy of a taxation of food. That statement is in many ways the most surprising of all. As I said, it naturally spread great dismay among the Safeguarders.

Let me make it quite clear that I do not object to the statement. I do not think that the statement is to the discredit of the noble Marquess. In fact, it is rather what I should expect from the member of a great Free Trade family. It would be very interesting if we could know what the noble Marquess really thinks about what is going on. It would be still more interesting if we could have been present at some recent Cabinet meetings, and could have seen the struggle between Free Trade on the one side and Protection on the other, and the Chancellor of the Exchequer looking on to see which way the scale would be weighted down and prepared to throw his weight into that scale on whichever side it was. Although we cannot see these things we can very well visualise them, and I leave it there.

Let me return to the noble Marquess and his statement about iron and steel. His friends in another place were of course up in arms. They threatened an Amendment to the Address. The Chief Whip had to have a special meeting to placate them. Did the noble Marquess, when he uttered those few innocent words, think that was going to happen? But they were brought to heel. As a matter of fact, by this statement, not only did the noble Marquess argue against the Duties on iron and steel, but it was in-consistent—this is what I want to draw his attention to—with what the Prime Minister conveyed in his letter as regards the fiscal policy of the Conservative Party, which was that it was to be changed and changed in material particulars. The letter was written actually on the eve of the holidays after Parliament had adjourned, and it was necessary to do something. It is clear that the situation was serious or that would never have happened. That is why it was done, to placate these people and to make a very important concession—namely, that any industry, as I have said, can ask for a Duty. Yet the noble Marquess says: "We are in exactly the same position as we were in before." So that this means nothing.

As a matter of fact, that statement of the noble Marquess is contradicted by the new rules and the new procedure. These rules are different. In the first place, the veto of the Board of Trade has gone, as I have already said. The truth is that this simplification of the rules, in effect, will largely mean abolishing the rules altogether. Under the old rules an abnormal and exceptional case had to be proved before there could be any question of Safeguarding. That has gone now. In order to be safeguarded all you have to prove is that foreign goods are being retained for consumption in quantities substantial in proportion to the consumption in this country. That is no safeguard at all, more particularly as experience has shown that these Committees frequently decided on wrong information. Counsel were put up to say things and it proved subsequently more than once, when the Census of Production came out, that the information was wrong. That is the kind of thing that has been going on. The Duty is granted on wrong information, yet the noble Marquess says we are in exactly the same position as we were in before. In point of fact, the way is now open for a flood of new Duties and for a complete reversal of our existing fiscal system.

They say: "We are not going to have a lot of Committees; we are to have but one Committee, as we have now under the Merchandise Marks Act." All I can say is, it will be the busiest Committee that has ever sat, for it will be inundated with applications. Is one Committee to hear applications from dozens of industries when one application now takes weeks? One Committee could never do it. In any case we have no confidence in these Committees. They frequently have decided on wrong information and they have also decided, I am sorry to say, more than once contrary to the evidence. Your Lordships may remember what happened in the case of the pottery trade. The case there was subjected in another place to the closest analytical examination by one of the keenest brains in this country—by Sir John Simon. What did he say about such a Committee, which we are asked to have confidence in, and which may effect a complete reversal of the fiscal system of this country?

He said about the pottery trade Committee:— I need only say that for twenty or twenty-five years of my life it has been my duty, in the course of my profession, to examine with a great deal of care shorthand notes of evidence, tables, and statistics that have been prepared and to consider, without the smallest heat or indignation, differences of opinion between one person who is trying to pronounce a judgment and another. I have never, in any experience I have ever had, seen material which more obviously supports the view of the minority"— there was one minority member— and is more plainly flouted and disregarded in the Report of the Majority than in this case. I simply cannot believe that an intelligent man like the President of the Board of Trade, or anybody else, who tries to approach this thing without bias, can possibly say that the conclusions reached in the Minority Report, some of which I have read, are not absolutely justified by the material which was produced at the Inquiry. This recommendation ought never to have been passed by the Board of Trade or the Treasury. That is the kind of tribunal, or one similar to it, in which we are asked to have confidence in regard to iron and steel.

"Oh," the Prime Minister says, "that is not the end of it, because after the Committee has made its recommendations then the Government will consider the matter; they will decide." Why cannot they decide now? They have had one examination by a good Committee better than any Committee they will set up. He goes on to say that after that the matter will come to the House of Commons and will be examined there. That is, in effect, a suggestion that the House of Commons is an entirely non-Party body, that everything is discussed there entirely on its merits, and that it will be the simplest thing in the world, when a vital matter like this has to be decided, for three-quarters of the followers of the Government to say they would not have it. I do not want to use strong language, but I must say that that kind of thing is camouflage. There is no safeguard in that and the Prime Minister must know it. Under our Party system, if the Government decides that there shall be a Duty on iron and steel a Duty there will be on iron and steel, or on anything else they may decide is to have a Duty.

I want to refer to one or two other inconsistencies in Ministerial statements, because contradiction and confusion are not confined to those matters with which I have been dealing. The same things are to be found in other aspects of this question. The Prime Minister, in his letter to the Conservative candidate for Ashton-under-Lyne—it does not seem to have done the candidate much good, by the way—said: Our experience of Safeguarding has shown that it is possible to protect British industries without increasing prices to the consumer. I should like to ask, what is the authority for that statement? I am inclined to agree for once with Mr. Lloyd George, who said he did not think the Prime Minister had really seen this letter. He certainly did not compose it. I repeat the question, what is the authority for that statement of fact? Are there any official prices of safeguarded articles? There are not. In July last I gave figures to show, I think conclusively, that prices had been adversely affected, that prices had been raised. Not the slightest attempt was made from the Government Bench to refute those figures.

I then pointed out that there has been a general fall in prices in the last few years. I also pointed out that in many cases as far as could be seen there had been a change in quality in safeguarded articles, that the quality of those articles was inferior to what it was formerly. When you say prices are no higher what do you mean? No higher than what? It does not follow, if prices are not higher than they were, that these Duties have not affected prices. The question is what would prices have been if there had been no Duty. I say prices would have been lower. In another place, in addition to the evidence I have given, a specific instance was brought forward of a trade catalogue in regard to enamel hollow-ware on which a Duty has been put this year. It was said that owing to Safeguarding Duties on enamel hollow-ware, prices would be advanced by 25 per cent. after the Duty had been put on. What is the reply to that? That is a specific case. What is the reply to that, if it is true, as the Prime Minister says in his letter, that Safeguarding does not raise prices? If that is true why did the noble Marquess say here that they would not put a tax on food?

Again let me quote what was said by Mr. Guinness, the Minister of Agriculture, to the farmers. He told them that they could not have Safeguarding because it would raise prices. That blows to smithereens what the Prime Minister and other Ministers are saying. Now I should like to give what the learned Lord Chancellor said. Speaking at a Land Union meeting—an important body, I understand—on July 12, 1927, he said: Protection must raise the prices of farm produce. There is no ambiguity about that. There you have one statement against another by members of the same Cabinet. How is it the Government are always so careful to emphasise that they will not put a tax on food? The reason is that the Government knows that this statement that Duties do not raise prices is not true, and the country knows it is not true, and the Government knows that the country knows that it is not true. That is the explanation of the whole business. That is why they will not come forward with a proper policy of Protection though they really believe in it.

In order to bring this matter to an issue I put another question—and this is my last question—to the Government: Is it 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 or other 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? Having handed that over to the Government, they will know exactly what it is we want a reply to. If they will answer these questions they will do a great deal to elucidate a position, which I think ought to have some light shed upon it.

In conclusion, let me draw attention to one of the most astonishing statements that has been made in the course of this controversy—made by the Prime Minister—who, after this unique aggregation of confusion, inconsistency and uncertainty, actually said in his defence that business could flourish with Tariffs and business could flourish without Tariffs, but business could not flourish with uncertainty. That is only another instance of the Prime Minister's capacity for blindness as to the effect of his own actions. It is almost incredible that the Prime Minister should have quoted that in his own defence. Surely he must see that his actions in this matter lay him open to this very charge of uncertainty. But there is so often in the Prime Minister a complete divorce between his words and his actions; otherwise he would have resigned from this Government long ago.

The Prime Minister must recognise that the position is one of the greatest uncertainty, particularly for iron and steel. The Government will not definitely make up their minds before the Election. All they say is that after the Election the matter will be referred to a Committee, but they will not definitely bind themselves to accept the findings of the Committee. The reason for this is perfectly obvious. The plot is really a very thin one. It is that in districts where Safeguarding Duties would help Conservative candidates they can go and say there will be a Duty on iron and steel and get votes in that way, but where Duties would not help they will say: "Oh, no, there is only going to be a Committee set up," and they will try to "get away," if I may use a common but expressive phrase, with that kind of speech. It is a plot which it is our duty as the Opposition to expose. The country ought to have brought home to them what is afoot. I say it is most unsatisfactory and wrong, and I believe that the noble Marquess, in his heart, agrees with me. I believe he agrees that in a vital matter of this kind the Government ought to decide and not a Committee, and they ought to decide well in advance of the General Election whether or not they are going to put a Duty on iron and steel. It is quite right and reasonable to ask for a definite statement and it is quite wrong and unreasonable if that statement is refused.

As I have said, we are faced with an almost unique collection of statements, conflicting, contradictory, inconsistent, evasive. There has been really nothing like it. Even in the years 1903 to 1905 things were not quite so bad as they are now. It is with a view to trying to clear up this extraordinary state of things that I have put down my Motion, and I shall, of course, proceed to a Division. As I said at the beginning of my speech, things cannot both be and not be. We ought to have a definite statement for this is a deliberate and persistent attempt to maintain ambiguity. I do not think that will be denied. It is our duty to try to break that down. Your Lordships know perfectly well that if the Labour Party were in office and sought to go to the country on some vital matter of policy with an inconsistent series of statements such as we have from the present Government with regard to fiscal policy, your Lordships would be the first to criticise them with most unsparing condemnation. I have no doubt my Motion will be defeated—Motions from this side of your Lordships' House always are defeated—but I do not see how anybody can vote against the first part of my Motion because it is quite clear that the statements are inconsistent and mutually destructive. I now wait to hear what the Government will say. If they will reply to the questions I shall feel that the debate has not been a useless one. I beg to move.

Moved to resolve, That statements made by the Prime Minister and other members of His Majesty's Government with regard to the policy of Safeguarding Duties are inconsistent and mutually destructive, and this House calls upon the Government to make a clear and unequivocal declaration of its Protectionist programme, particularly as regards iron and steel.—[Lord Arnold.]

THE EARL OF PLYMOUTH

My Lords, the noble Lord has, as usual, made a very vigorous and, I think, somewhat exaggerated attack upon the Government, particularly with regard to its policy in relation to the Safeguarding Duties. I think I have seldom had to listen to a speech which has been so misleading. Whereas he called upon the Government to elucidate the situation as far as possible, I think he has done his utmost to confuse it. He dwelt at some length upon the period 1903 to 1905, but I have not the slightest intention of going back to that date because in a serious situation of this kind I think to do a thing such as that, which is entirely ungermane to the present position, would be merely a waste of time.

I think I am quite justified in concluding from his speech that the noble Lord cannot find a single good word to say for the Safeguarding Duties, that he is opposed to them root and branch, that if he had his way and had the opportunity he would repeal them and would not substitute anything for them, but I am not clear whether he is speaking as an out-and-out Free Trader, or whether he subscribes to the policy which was enunciated by the Leader of the Labour Party at the recent Conference of that Party at Birmingham. At that Conference, Mr. MacDonald said:— Where there were glaring examples of sweated goods produced under conditions against which British people could not compete without lowering their standards of living, the remedy was not safeguarding but prohibiting the entry of such goods. Then again, at that Conference, in answer to the interjection of a certain Labour candidate as follows:— How long are these unmitigated horrors of Free Trade to continue in this country"? the right hon. gentleman replied:— Our policy, the Labour policy, is not the policy of the Liberal Party. Not a bit of it. We are out for absolute prohibition. Now, it is perfectly clear that whatever description is applied to that policy it cannot be called a policy of complete Free Trade. It strikes me as being an intensive form of Protection infinitely more clumsy than the procedure which is, at present, being applied by His Majesty's Government. But I do not want to go any further into that point.

I can quite well understand any one having been a convinced and even an enthusiastic Free Trader before the War, but I must confess that I find it difficult to understand the attitude of those who, in the utterly different conditions which obtain at the present time as the result of the War, and as the result of depreciation of currencies and changes in labour conditions throughout the world, continue to worship unquestioningly at the shrine of Free Trade. Free Trade is a theoretical ideal, an academic policy, which surely is quite inapplicable to the serious situation as we at present find it. I agree that the policy of Free Trade all-round is an ideal which many people think, and believe, we ought to aim at, but until that is achieved—and nobody can deny that it is a long way off at the present moment—is it really expected of us that we should do nothing at all, and that we should sit still and watch our own people being thrown out of employment, and kept out of employment, by the grossly unfair competition of certain goods imported from abroad?

In this connection the Leader of the Labour Party said at the Conference to which I have already referred:— The only way in which British labour could maintain its higher standards and meet the competition of foreign labour with low standards was by international agreement through trade unions, labour policies, and Labour governments at home and abroad. But I wonder whether anybody seriously believes that anything can be achieved in that direction for a very long time to come. Negotiations on a complicated matter such as that are bound to be prolonged and controversial, and in the meantime, I presume, it is the policy of noble Lords opposite to do nothing at all. I say definitely that His Majesty's Government have refused to take up a passive attitude of that kind.

The policy of Safeguarding was first of all introduced in 1921 by a Government of which the present Leader of the Liberal Parliamentary Party was the head, and Safeguarding Duties were introduced ostensibly to deal with the results of the War, the depreciation in currencies and the importation into this country of goods manufactured abroad under totally unfair labour and other conditions. Those Duties were repealed by the Labour Government. They were reintroduced and added to by His Majesty's Government when they returned to power, in order to deal with the worst and the most glaring cases, and I confidently maintain, in spite of everything that has been said, that the action of His Majesty's Government has been amply justified by the results of those Duties. I repeat, that in general their effect has been to increase employment and production in the industries to which they have been applied.

LORD ARNOLD

Is the noble Earl now including silk and motors?

THE EARL OF PLYMOUTH

I am including all industries. I will deal with that point in a moment. The Duties have not resulted in any increase of cost to the consumer and no appreciable harm has been done to any other industry. The noble Lord, in the course of his speech, was extremely irate because he maintained that these statements have been made without any justification or any substantiation in fact. He equally heatedly denied the truth of these statements, but he never took the trouble to bring forward one single fact to substantiate what he said on that side. During the course of the debate on the Address the noble Earl, Lord Beauchamp, suggested that, while the Safeguarding Duties might have increased employment in the particular industries to which they have been applied, they have at the same time thrown people out of employment in other industries, and he actually suggested that the increase in the number of unemployed during the past twelve months was largely due to Safeguarding. I say emphatically that I can find absolutely no foundation whatsoever for such an insinuation or suggestion and, indeed, he did not bring out a single fact to support that argument during his speech. I am sure that the noble Earl must really know that the increase of unemployment during the last year is due to influences entirely different from the imposition of the Safeguarding Duties.

I should like to remind your Lordships of the procedure employed with regard to the Safeguarding Duties. Having obtained the necessary sanction from the Board of Trade, the particular industry has to submit its case to an independent and entirely non-political Committee. I cannot leave that point without making reference to one or two statements of the noble Lord opposite with regard to these Committees. He really made very serious statements indeed, which I think he will find it very difficult to justify. He more or less suggested that these were not impartial Committees and did not carry out their duties impartially. That is a statement that I refute as strongly as I possibly can. These Committees have been chosen particularly because of their knowledge of industrial affairs, and it has always been the policy of the Government not to grant a Duty unless such a Committee has reported in favour of imposing it. I think it is interesting to note—and I should like the noble Lord opposite to listen to what I say on this point—that on several occasions when the Committee has actually included a trade union secretary it has reported unanimously in favour of imposing a Duty.

At the commencement of his speech the noble Lord said that he had no intention of going into the effect of these Duties in great detail, but as a matter of fact he did go into the effect in some cases at considerable length, and he naturally chose those instances which were most suited to his own views and his own arguments. He also made the point that those who were in favour of Safeguarding were continually quoting the results that had been achieved in the motor and tyre industries and the artificial silk industry, and he said that it was not fair to do so because these industries were not protected by Safeguarding Duties and the Duties had been imposed for other reasons. I must really submit that this is splitting hairs. What we are after is not the reason why these Duties were imposed but the effect that the Duties have had, and in both these cases he cannot possibly deny that the results since the imposition of the Duties have been such as fully to justify the action of His Majesty's Government. The amount of employment in the motor and tyre industries has gone up very considerably, and production has increased at the same time. In those cases prices have gone down to a really remarkable extent. In the case of artificial silk, it is well known that the industry is expanding at a very great rate. It may be said—it has in fact been said by the noble Lord opposite—that this expansion would have taken place anyhow. I agree that in the latter case, at any rate, this is probably true to a certain extent, but, if it be true, the argument applies in an exactly opposite direction with regard to those one or two industries where the Duties have not effected any material improvement. As I say, there are only one or two instances of that, but it is a well-known fact that most of the Safeguarding Duties were imposed in rapidly declining industries and that, where they have not had the effect of actually improving conditions, they have at any rate stemmed the decline and helped in that way.

It is impossible for me to go into figures at any great length this afternoon. The noble Lord asked me to take the instance of a particular industry—the cutlery industry. I admit that in that case the position is more or less stationary, but I repeat the argument that I have just addressed to your Lordships, that even in those instances where no direct improvement has resulted from the imposition of the Duties, at any rate they have had the effect of checking a decline which was very rapid before the Duties were imposed. The noble Lord referred in particular to the lace industry, and he repeated a question that he had previously asked in this House with regard to re-exports in that industry. I shall be very glad to give him the answer that he says he has been awaiting for such a long time with regard to that industry, and I hope your Lordships will bear with me, because I have to go into figures. The official figures show that in the year 1922 re-exports amounted to £889,000; in 1923, £1,264,000; in 1924, £1,710,000. From January to June, 1925, about the time the Duty was imposed, the total was £630,000; and from July to December, £87,000. In 1926 the total was £76,000, and in 1927 £115,000.

The noble Lord, I understand, suggests that this drop in the re-export trade is entirely due to Safeguarding Duties. The fact is that these figures are quite incomparable. There is not the slightest relationship of one to the other. It is known that prior to the imposition of the Lace Duty about 80 per cent. of the re-exports of cotton lace were shipped via United Kingdom ports on through bills of lading. Before the imposition of the Duty lace so shipped was included in the published figures of total imports and re-exports. When the Duty was imposed it was to be expected that such lace would be transhipped under bond, in order to avoid the deposit and subsequent refunding of the Duty. Goods transhipped under bond are excluded from the published returns of imports and re-exports. Thus, the great bulk of the trade, which was included in the returns of imports and re-exports before the imposition of the Duty, was excluded from these returns after the imposition of the Duty. Normally, there is no detailed record of the kinds of goods transhipped under bond, but, in view of the importance of this matter, the Customs were asked to compile special records. These records relate to lace and net of all sorts; that is, they cover a somewhat wider field than lace and net of cotton, but the difference is in fact very small.

According to these returns, the value of lace and net transhipped under bond in the year 1926 was £844,000, and in the year 1927 was £758,000. Corresponding figures for the second part of 1925 were not compiled. Thus the correct figures to compare with the £889,000 of re-exports in 1922, £1,264,000 in 1923, and £1,710,000 in 1924, are approximately £920,000 in 1926 and £873,000 in 1927.

LORD ARNOLD

I am very sorry to interrupt the noble Earl, but it is very important, and I want to get this clear. Broadly speaking, does it not come to this, that it is about half the trade compared with 1924?

THE EARL OF PLYMOUTH

Will the noble Lord kindly allow me to continue my argument?

LORD ARNOLD

I only want to be quite clear.

THE EARL OF PLYMOUTH

I have quoted the figures, and I say that in fact the re-exports in 1926 and in 1927, though substantially smaller in value than in 1923 or 1924, were about the same in value as in 1922. There is another very important point which I wish to make, and which I hope the noble Lord will make a note of. The great bulk of this lace which is now transhipped under bond, and was formerly shipped on through bills of lading, is French lace on its way to the United States. I am going to give a statement to show what were the total imports into the United States of machine-made laces, and the imports from France and the United Kingdom together. In 1922 the total imports were £1,284,000, of which from France and the United Kingdom the total was £852,000; in 1923 the total was £2,024,000, and from France and the United Kingdom £1,237,000; in 1924 the figures were £2,706,000, of which the imports from France and the United Kingdom represented £1,964,000; in 1925, £1,576,000—a big drop—and from France and the United Kingdom, £1,142,000; in 1926, £1,045,000—another big drop—and from France and the United Kingdom, £765,000; in 1927, £1,013,000, and from France and the United Kingdom, £712,000. From those figures it will be perfectly clear that the demand for those goods in the United States of recent years has fallen to quite an enormous extent, and I think it is clear that the fall in the re-exports in this trade is due in no way to the Safeguarding Duties, but merely to a change in the demand, and to the fact that the demand from the United States has fallen to such a very great extent.

The Resolution of the noble Lord opposite accuses the Government of great inconsistency with regard to the question of Safeguarding. It is easy enough to take out of their context the statements of different Ministers, made at very different times and under very different conditions, and to construe them in such a way as to make them look as if they were not in complete agreement. I think that if we all devoted ourselves to that sort of thing we would be pretty successful, if we gave enough time to it; but the fact remains that the policy of the Government with regard to Safeguarding has been entirely consistent and logical from the very beginning. The position is really quite clear. The Government loyally accepts the verdict of the electorate of 1923. They never had any intention, and they have no intention at the present moment, of introducing Protection through what is known as the back-door of Safeguarding Duties; but it is equally perfectly clear that in 1924 the Government did receive a very definite mandate from the electorate to proceed with their Safeguarding Duties. These Safeguarding Duties have been applied with great caution, and with great care, during the present Parliament, mainly with reference to unfair competition arising from wages and conditions of labour abroad.

The noble Lord made a special reference to, and made great play indeed with, the iron and steel industry, and I will quite frankly tell him what is the position so far as this industry is concerned. As he has already told your Lordships, the iron and steel industry applied for the appointment of a Committee of Inquiry under the Safeguarding procedure, and under that procedure they might have made out a case for the appointment of a Committee. Before the procedure was applied, however, the position of this important basic industry was considered by the Civil Research Committee, and the decision of the Government was stated by the Prime Minister in another place in these words, and this is what the noble Lord has already read out:— It became clear, however, in the course of our investigations, that the Safeguarding of a basic industry of this magnitude would have repercussions of a far wider character, which might be held to be in conflict with our declaration in regard to a General Tariff. In all the circumstances of the present time we have come to the conclusion that the application cannot be granted. In spite of the very serious situation in which the industry finds itself at the present time, the Government have maintained that decision for the lifetime of the present Parliament.

It has become apparent, however, that the industry may be able to establish that the repercussions upon other industries may be avoided, and that the grant of a Safeguarding Duty may enable the iron and steel manufacturers so to reduce their costs that the industries using iron and steel as a material will not be prejudiced. In all the circumstances, the Government, if they are returned after the next General Election, do not propose to prevent the iron and steel industry from endeavouring to make out its case before the appropriate tribunal on the same footing as other industries. I think that is a perfectly clear statement, but I do want to ask the noble Lord this. Why does he insist upon the fact that if the iron and steel industry were protected it would mean the introduction of a General Tariff? He made great play with that, but I can think of no argument to substantiate such a statement.

I want to say a word or two about the future. The Government intend to continue their policy on the same general lines as in the past. Every applicant industry will be required to make out a clear case that it is suffering from unfair competition, and that it is in a position to take advantage of the assistance of Safeguarding, and, moreover, that the benefit to itself will not be bought at the expense of serious injury to any other industry. On this last point even greater stress is laid in the proposals for the future than in the existing procedure, and specific provision is made for the consideration of the effect of any Duty applied for upon agriculture as well as upon other productive industries.

These, therefore, are the Government proposals. In the first place, I wish to repeat that they are pledged, and will continue to be pledged, not to introduce a general form of Protection; secondly, they are pledged, and will continue to be pledged, not to impose any taxes on food; in the third place, any Safeguarding Duties which are recommended by the tribunal and approved by the Government will, as in the past, be laid before the House of Commons in the usual way in a Finance Bill. It is proposed, in the place of the ad hoc Committees which are set up to consider individual applications under the existing procedure, to establish a permanent body, set up by the President of the Board of Trade on the same lines as that which has been established under the Merchandise Marks Acts, before which all applications will come, and I have already made reference to the remarks of the noble Lord with regard to this body, which I do not think were at all justified. No manufacturing industry will be barred from presenting its case before this tribunal.

The general nature of the questions which will be before the tribunal when an industry applies for Safeguarding have already been stated in another place by the Secretary of State for War on November 14. It will have to decide whether foreign goods of the class or description to which the application relates are being imported into, and retained for consumption in, the United Kingdon in quantities substantial in proportion to consumption in this country; whether, by reason of the severity and extent of the competition, employment in the manufacture or production of such goods in the United Kingdom is being, or is likely to be, seriously affected; whether the foreign goods so imported are manufactured in the country of origin under unfair or inferior conditions of hours or wages; whether the applicant industry in this country could materially increase its present output; whether the applicant industry is being carried on in the United Kingdom with a reasonable efficiency and economy; whether the imposition of a Duty on goods of the class or description in question would exert a seriously adverse effect upon employment or cost of production in any productive industry, including agriculture; whether, having regard to all these conditions, the applicant industry has in the opinion of the Committee established a claim to a Duty, and, if so, what rate or rates of Duty in the opinion of the Committee would be reasonably sufficient to countervail the unfair competition.

The noble Lord said that these provisions made no safeguards at all. I cannot understand that kind of argument. If provisions of this kind—stricter provisions than obtain at the present moment—are no safeguard at all I cannot understand what can be a safeguard. I hope I have said enough to show that the accusation of inconsistency made against the Government by the noble Lord with regard to these Safeguarding Duties is entirely without foundation. The policy of the Government with regard to this matter has been perfectly consistent and perfectly logical from the beginning, and I can assure your Lordships that the Government will not be diverted in any way from proceeding with and pursuing that policy by speeches such as the one to which we have listened from the noble Lord this afternoon.

LORD STANLEY OF ALDERLEY

My Lords, the noble Earl has referred to the distinction often drawn between Safeguarding and Protection, and, while he said the Government remained pledged not to introduce Protection, he also said that no manufacturing industry will be barred from presenting its case for a Safeguarding Duty. I am somewhat at a loss to understand where this distinction arises and what is the difference between a Safeguarding Duty and a Protective Duty. Etymologically they appear to be variants in the Latin and Anglo-Saxon languages, but in fact the intention of establishing a Safeguarding Duty is to give some advantage to the home producer which ex hypothesi will enable him to compete more effectually with the foreign producer. In the case of Safeguarding it is true this is introduced industry by industry, whereas a general protective system is one which starts out with the idea that you ought to protect every industry carried on in the home country. But no protective system, in fact, gives equal protection to all industries. Every Tariff which has been set up, either in this country or overseas, whether it be in the United States or in our Dominions, has always either started with or come to what is the equivalent of a tariff board, to weigh the respective claims of industries to receive tariff assistance.

The Protective Tariffs which exist in the United States or in Australia are applied after giving consideration, as best it can be given, to the respective demands of the various industries which apply for a Tariff. So you may have a Tariff on one article of 40 per cent., on another 50 per cent., on another 60 per cent., and so on, with many and repeated variations of these Tariffs from year to year as the result of further pressure and inquiry. Safeguarding is, it seems to me, the beginning of imposing a protective system. It is not, of course, the full-blown article, because at present there are few objects which benefit by the Safeguarding Duty. I am inclined to agree with the noble Earl that it does not very much matter what was the origin of a Duty which is in effect protective in character—whether it was introduced as the so-called McKenna Duties, or whether it was introduced as a Key Industry Duty, or whether it was subsequently introduced under the Safeguarding of Industries Act. What you have to look at is not what was the origin, but what is its present effect, and if its present effect is to give protection to a particular industry, then I imagine one is justified in describing that Duty as a Protective Duty.

So I am unable to understand the exact meaning of the Government's pledge that, while they feel themselves free to give every industry an opportunity of obtaining a Safeguarding Duty, they remain pledged against a protective system. In time, I imagine, and also from the very fact that you have a protective system introduced into your fiscal policy, you will get greater ease and readiness on the part even of your impartial Committee to consider that what other industries have obtained those left out in the cold ought to have. It appears to me that your Safeguarding is merely the young of a protective system, the undeveloped, immature young, perhaps, but with all the power of becoming a fully developed adult system. The Government and the supporters of the Government—I think I am doing them no injustice in saying so—found it easier perhaps to proceed in this piecemeal manner than by introducing a general system of Protection. It is easier to go to a particular constituency, especially at a by-election, and point out that the particular industry with which the constituents are concerned has a reasonable chance of appearing before an impartial tribunal and of obtaining that protection which each industry would like to have if it could have it to itself and it was not distributed amongst many others.

It is obvious that it is the easier method to go, on a by-election, say, to Sheffield and talk in detail about the advantages which the cutlery trade would obtain from a Tariff imposed on competing cutlery, or go to Bradford and talk about the advantages which might be obtained from a Tariff imposed upon woollen goods, and so on. You can talk to each particular industry, if a constituency has a special industry, and point out to the electors there what an immense advantage it would be to them to have a Tariff on what they produce, while you do not emphasise, unless your opponents force you to do so, that there are other industries which equally have a claim to come into a protective system and which in due course will make their demands at least as loudly as the Sheffield cutlery trade, the Bradford woollen trade, or whatever trade it may be. That, if I may give the experience of one who has taken part in several General Elections and by-elections, is a thing which is easier to do at a by-election than in the course of a General Election. At the time of a General Election the inconsistencies or the suppressions, if I may use so hard a term, of the candidates counteract one another and are revealed in all their native horridness to the electors all through. If the Leader of the Conservative Party goes to Sheffield and makes a speech on the advantages to be obtained by a Protective Duty on cutlery, he will be expected to go elsewhere, say, to Newcastle, or to Teeside, and explain the great advantages of a Tariff upon raw steel. And I think we must expect that those who think that this system is a mistaken one will set out in parallel columns the statements made by the protagonists of Safeguarding, and that the electorate will be less ready to receive the promises of the benefits to he derived from Safeguarding when they see that others will get that Safeguarding from the people who are promising Safeguarding to themselves.

All this talk about Safeguarding is surely an abandonment of the real duty of the Government of this country. The real duty of the Government of this country is not to see that a particular industry flourishes, but that industry as a whole flourishes. Our business, in so far as individual members of your Lordships' House are concerned in framing the policy of this country, which is peculiarly the business of any Ministry in the country, is to see, so far as lies in our power—it does not lie very much in our power—that the general industry of this country flourishes, and that the Government shall not be content with being able to point, as they might point, to an increase in employment in a particular corner of industry and say: "We have evidence that we have increased employment" in the cutlery trade, or the motor trade, unless at the same time they can satisfy themselves as reasonable thinking men that it is not mere transitory employment but the creation of new employment. It is easy to say that an increase of employment has been consequent upon a Protective Tariff. I expect that if you prohibit the importation of competing goods of a particular kind into this country, if those goods are essential or are desired by the people of this country, employment in the trade concerned will enlarge itself by the amount of the foreign articles shut out of the country.

I fear that I must go now into what the noble Earl described as academic argument. The expression "academic" is often used, I think, as synonymous with "unanswerable." Those two words mean something very different; but I have noticed that a device very often used by dialecticians is to fall upon an opponent with an accusation that he is using an academic argument. You must to some extent in all argument use the sense of logic and the sense of deduction which have been given to human beings for their advantage. Here we must go a little outside the plain facts which lie before us in order to see whether there are hidden facts, equally true and equally cogent, which cannot be brought as clearly to the eye of the casual observer as can the facts upon which those who support Safeguarding rely. It is obvious, as I say, that you may get an increase of employment in a particular trade owing to the exclusion of certain imports.

If I may be permitted to go into rather text-book matters, I must ask: what is the nature of the trade of this country with foreign countries? It is clear that nothing comes into this country unless something is given in its place. There are various ways in which you can pay for your imports. The simplest way is, perhaps, by exports. You may pay for them by services rendered. You may pay for them by selling the securities of a foreign country if you have such securities, or you may pay for them by running into debt and by borrowing from foreign countries. In this country I believe it to be generally admitted that at the moment we are neither selling our foreign securities—on the whole we are investing abroad—nor are we borrowing abroad. No doubt, a large part of our imports during the War were paid for in that way. They were paid for by selling our securities or by borrowing very largely in the United States. It may have been very wise and proper at that time to curtail imports so as to prevent the necessity either of borrowing or selling investments. But at the present moment I think it would be agreed that we are not paying for our imports either by borrowing or by selling foreign investments. No doubt the Stock Exchange is continually making casual sales of foreign investments, but, on balance, which is what we have to look at, we are neither borrowing nor selling investments. Therefore, I take it that imports coming into this country are paid for either by services rendered or by exports.

Is it possible to come to any conclusion as to whether, in fact, the exclusion of imports into this country has had any effect upon our export industries? It is extremely difficult to decide, because you have no clear case such as the case the noble Earl took of motor cars. Let me say, incidentally, that the figures of motor cars include other things besides motor car production, which is affected by Safeguarding. The figures regarding motor cars—I believe I am right in saying this—include not only motor cars but motor cycles and also ordinary pedal bicycles and aeroplanes, neither of which is safeguarded. It is easy to say, when you exclude motor cars, that you have increased employment in the motor car industry, but it is not quite so easy as that. In fact, it requires a little abstract argument—slightly abstract argument—to look into it further and see whether there is not evidence that by, excluding motor cars you are in fact reducing your exporting power; or, to put it in another way, whether you are reducing the amount of labour which you can employ. In that case, you have not to look at the employment figures of a particular industry or trade, you have to look at the general employment figures of the country, and looking at the general employment figures of the country, it appears that, far from our increasing the general employment, it has been stationary; probably it has gone down a little.

I am not going to say that fall in employment is due entirely or more than partially to the results of the Safeguarding Duty. Employment is a much more complicated, a much more elaborate matter. Causes which bring about unemployment are much more numerous and much more deep-seated than any trivial Duty which may be imposed, but, for what it is worth, I say the Government have no right to say that by imposing Duties they are increasing the employment of this country. There is not an atom of evidence that they have increased employment. There is evidence, if you like, that in certain selected industries employment has been increased, but that ought to be, I think, completely immaterial in view of the much more important point of how much employment at large is being gained in this country. Supposing you have a Tariff upon something really important, such as iron and steel, what will be the effect of it? The intended effect, and, I take it, the actual effect, will be to exclude a certain amount of iron and steel manufactured on the Continent or overseas from coming into this country. Let us follow that iron and steel a little further and see what will happen to it. No doubt the French steel-makers and German steel-makers will desire to continue to manufacture as much as they have done in the past, and they will, anyhow in the first instance, continue to sell. They will not shut down their furnaces because we have imposed a Duty against them. What they will do is this: they will look out for other markets outside the United Kingdom, and, on terms, they will find those other markets. At whose expense will they find them? Is it not at least conceivable that they will find them at the expense of our manufacturers of iron and steel, who are exporting from this country, I am glad to think, in increasing amounts?

I think it was noticed by the Morning Post the other day that the exports of pianos from Germany into this country had fallen off owing to the imposition of Duties on musical instruments. Simultaneously with that fall in the importation of pianos into England from Germany there has not occurred any reduction whatever in the exportation of pianos from Germany. Where did the German pianos go to? They went to those other countries which desired pianos and which we in this country used to supply with pianos. Instead of getting them from us they are importing pianos from Germany in lieu of the pianos which we ourselves might have exported and used to export to them. The fact is that if you shut out anything from this country which is of world use, those articles will go out into the world market and compete with you overseas. You may find that you curtail and reduce their competition in this country, but the very fact of your so doing will increase their competition with you in the world market. We in this country, fortunately, for more than a hundred years have been competitors in the world market. We have been selling to the world, and any system which increases the competition we have to face in the world will reduce our power of selling in that world. If you refuse to admit steel into this country eventually you injure the industries which depend on steel; you force steel-makers abroad to compete with you in the neutral markets of the world. I have not got his actual words with me, but a great authority in the United States, dealing with this matter, used words to this effect: "The more you exclude from your markets, the more vehement, the more active becomes competition in the world market in which you take a share."

Steel is employed in endless ways. You may have your raw steel in ingots or rails, you may have it converted into plates or converted into angle-irons; you may go further and manufacture it into a thousand and one objects into which steel enters, and to impose a Duty upon any form of steel is bound, I submit, to have repercussions which you could not, and nobody could, forecast. You say you are going to have a Committee impartial in character. Impartiality is one of the most difficult of human qualities to define. A man may desire to be impartial, he may think himself impartial, but his mind has been framed by the surroundings in which he lives and he comes to the subject with all the prejudices which are derived from his antecedent surroundings, friends and occupation. We know that the worst and most unsatisfactory cases of adjudicature in the Law Courts is when you have a quasi political case before the Courts. I remember a good many years ago being present at one of the earliest civil actions between a trade union and a large employer of labour. I am quite certain that the Judge who was trying the case had it fully in his mind to be completely impartial between the parties to the action, and yet it seemed to me—I was probably young and in-experienced—that there was an unconscious bias on the part of the Judge against the trade union. It may have been deserved—I am not going to speak for trade unions—but you cannot help getting that unconscious bias derived from the general environment in which a man is brought up.

You say you are going to have an impartial tribunal to determine whether these Tariffs ought to be imposed or not. How can you get a man who is impartial between a Protectionist and a Free Trade system. I suppose there are some who have never thought about it and, therefore, are impartial through ignorance, but any man who has considered it has, I take it, insensibly leaned over to one side or the other. I am quite certain of this, that if you had a committee of the professors of political economy from the ancient Universities to decide you would get a very different decision from that of a Committee of manufacturers in this country, and, indeed, you would get from one set of manufacturers a very different decision from that of another set of manufacturers. Committees of this sort are hardly fit to decide this question. This question should be decided after open debate in Parliament. True it is that you say these things will be debated, but a debate after an Inquiry which has been ex hypothesi favourable to the industry, with a Ministry, perhaps the present Ministry, with a Protectionist trend in their mind, is not likely to have very much result from a Free Trade point of view. I urge that it is almost impossible to get the detached impartial Committee of which you speak. Detached and impartial it may think itself, but that it will be so I think is beyond human anticipation.

The Prime Minister, in one of those pious ejaculations in which he is so successful, which mean so much to him, said the other day that he hoped—I am not quoting his actual words, but. I do not think I misrepresent him—to see a system of universal Free Trade, but that, things being as they are, it is impossible. I think the noble Earl paraphrased, or even repeated, the statement which the Prime Minister made. When I hear people express these pious aspirations, I am inclined to remember the French stateman who, when it was suggested to him that it would be a good thing to abolish capital punishment, said "Que messieurs les assassins commencent." So the Prime Minister has suggested that somebody else should begin. You will never get much further if you suggest somebody else should begin. If we began it would be a better example than saying: "I wish somebody else would begin and I will follow." This country has not taken in the past the line of waiting to see other countries introduce reforms. This country has been the leader in introducing political and economic reforms, and I believe this country might well continue to be the leader in introducing reforms.

But if, at the same time as you express pious aspirations that some day or another you may have a general system of Free Trade, you go to the electorate with a promise that no industry need despair of bringing a case before the tribunal to procure what I will again call a Protective Duty—I will call it Safeguarding, if you prefer—if, at the same time as you make these aspirations, you hold out hopes to the people of the country that a system which has been tried in small degrees and small instances during the last few years is going to be open to large expansion, then I say these pious aspirations towards a universal system of Free Trade do not mean a very great deal. Certainly they do not mean a very great deal to us on this side of the House, and I doubt if they mean much to anybody except lip-service. You have in Europe a movement—it is a small movement, perhaps—in favour of getting rid of some of the anomalies and absurdities which have grown up since the War. Europe, I think it is not an unfair thing to say, looks to this country to lead in matters economic, but if, while blessing the economic conference of the League of Nations, we at the same time introduce one after another Safeguarding Duties, then once again, I am afraid, we shall be told that Albion is perfidious and that hypocrisy is one of the virtues we cultivate most in this country.

I noted the provisos which the noble Earl said would still be maintained in respect of the Safeguarding Duties which are to be imposed by this Committee. I will only say that he appears to have burdened his future Committee with work which they will hardly be able to carry out if every industry is entitled to come to ask for a Duty. You will have here what they have in Australia, a Tariff Commission consisting of four gentlemen—I have a copy of their Report here—dealing with no fewer than 714 applications in the course of the year. They dealt with them somehow or other—how, I cannot imagine, because they talk about having had meetings at Melbourne, at Sydney, at Adelaide, at Brisbane, at Hobart, at Perth, and in some cases they have held inquiries on one application in more than one centre of the population. They must have hurried through pretty quickly. In the same way your Committee will be snowed under. You will find that Inquiry will be of necessity perfunctory and confined to small interests.

I ask whether you are going to allow persons, politicians if you wish, who represent the general consumer to have a chance of appearing and putting the consumer's point of view. If you are not, then it seems to me rather like, I was going to say, a council of thieves, but perhaps that would be an improper phrase to use regarding this impartial tribunal. But if you are going to exclude the consumer I think you will fail to be impar- tial. You may say that that will all be done in the House of Commons. But are there going to be 714 Inquiries in this country as there were 714 in Australia? If we may judge by the multiplicity of interests and by the infinite number of trades and industries carried on in this country which do not exist in Australia I should imagine the 714 inquiries in Australia will multiply to something more like 7,400 in this country. One cannot say, but if the hope is held out by the Government to all trades that they will get a chance, that nobody will be excluded from appearing before the Committee, I imagine you will find your Committee an overworked Committee, and an overworked Committee is one that does not do its work very accurately. I support the Motion that has been moved by Lord Arnold. It seems to me that, whether you will it or not, the Government are getting into contradictions and confusions. They think that there is some particular merit in using an Anglo-Saxon term rather than a Latin one. I can see no distinction, and I am quite convinced that this country, when it has had experience of the full development of these Safeguarding Duties, a development that will necessarily lead to a system of Protection, will return once more and say: "You have mistaken our desire and imposed upon us things that we will not endure."

THE EARL OF MIDLETON

My Lords, although I cannot say that I accept the conclusions of the noble Lord who has just sat down, I think it would be a great advantage to this discussion if we were to deal with the subject on the lines which my noble friend has adopted rather than upon those adopted by the noble Lord who introduced this Motion. I cannot say that I think that your Lordships' House is at all edified by a speech which so largely occupied itself in an attempt to create a Parliamentary score at the expense of His Majesty's Government and to attribute to members of the Government, and indeed to practically everybody concerned who does not agree with the noble Lord, sentiments and conduct which we all know are not to be expected of them.

The noble Lord practically assumed that the whole intention of the Prime Minister was to hoodwink the country until after the General Election. I must say that I do not think that any man in this country has deserved less than the Prime Minister to have such an accusation made against him—a man who has once put his whole fortunes to the test and suffered for it, and who has deliberately told the country in a series of speeches that thus far will he go and no further, that he will not go beyond a point to which he has agreed. I think that the noble Lord, in justice to his own character if not to the tone of discussion in this House, ought to have avoided that insinuation. Again, with regard to the tribunal, everybody who differs from the noble Lord is assumed to be acting in a crooked and perverse manner. I feel that on so grave a question we might have expected, in a speech of nearly an hour, to hear some expression on behalf of noble Lords on that Bench that showed their sense of its gravity. Although I went out for a moment and may have missed it, I cannot recall one single expression to suggest that this was a question involving the occupation of some hundreds of thousands of his fellow countrymen, an industry which is at the present moment in the greatest possible jeopardy and a fiscal question of the most grave nature.

I should like to recall to your Lordships in one or two sentences what is the problem with which the Government are endeavouring to deal. The noble Lord seems almost to be unaware of it, but the state of the coal trade in Durham, as in South Wales, is at this moment such as I think it has never been since coal was first discovered in these Islands. Of the industries that affect the coal trade iron and steel are the chief. I do not know if I am right—I see a noble Lord opposite who has great experience of the iron and steel trades and who will correct me if I am wrong—but I believe it is a fact that not one-third of the blast furnaces of this country are now in action, and that one blast furnace uses as much coal as a town of 250,000 inhabitants. We can imagine the effect on the coal trade of this great stoppage in the iron and steel trades. But that is not all. I noticed the other day a statement that there is hardly a great iron or steel firm that was not in difficulties at this moment regarding the payment of its debentures. I noticed n the Economist a list, which I have no doubt is correct, showing that the steel firms of sir William Arrol, Baldwins, Barrow, Beardmore, Bessemer, Palmers, Parting- ton, Pearson-Knowles and Vickers were among those that have made some sort of a composition in the last year. I see one or two members of this House who are connected with the largest banks, and I make bold to say that I doubt if one of them will get up in this House to-day and say that those banks are in a position to call in the immense advances which have been made to the iron and steel firms in order to enable them to carry on. I believe that there is one firm alone, which I could mention, which admits that it has an overdraft of over £1,000,000.

When we address ourselves to a question which concerns very deeply the prosperity of the country and the actual failure of a very large industry which may affect our powers of recuperation over a very long period of years, let us at any rate try to arrive at the bedrock fact with which we have to deal. Noble Lords opposite and, I think, the noble Lord who has just sat down, assumed that anything in the nature of Safeguarding of iron and steel must have a definite downward trend. First is to come general Protection, then increases of prices, then a General Tariff and then a rise in the price of coal. I speak here as one who has never been a Protectionist, but I have always been in favour of our having some power of free dealing in the case of an industry which could live and is not allowed to live. Two views are put by those who are represented in this House, not very numerously but, let us hope, efficiently by the noble Lord and his friends. One of the views is that this country ought not to admit goods produced by sweated labour. The other view is that we ought to interfere, or to endeavour by negotiations, to bring up wages on the Continent to the same level as our own. It was stated the other day in another place, and not contradicted, that the average wages in the steel industry in Great Britain are 60s. a week, in Germany 50s., in the Saar 38s., in France 33s., and in Belgium 30s. If your Lordships will follow this out, you will, I think, see that this is the ratio of wages to the price of commodities in this country.

My point is that it is not merely a question of whether foreign workmen will work for what our workmen would consider starvation wages, but that in those countries, and notably in Belgium, the state of exchange makes it possible to pay wages at one rate and to sell to this country at another. I have tried to obtain figures and, though I have not obtained them authoritatively, I believe I am not far out in saying, with regard to the wages that are paid in Belgium, that if the franc, instead of being at 25, is at about 90—the exchange in Belgium on this country was a few days ago 174 francs—these manufactures which come over here to undersell our manufactures are made by paying wages at one rate, and then, when sold here, the product demands double the price in francs. If you were conducting an industry which had gone on under the old system and did not reduce the costs, and which did not amalgamate, and which was using its better plant to bolster up its worse plant, then I should say there was a great deal of force in what has fallen from noble Lords, but you are speaking of an industry which is producing steel and iron cheaper than ever before, and which has to compete with unfair competition by reason of the alteration in exchange since the War.

I could urge a number of other considerations, but I believe your Lordships, like myself, are fully satisfied with the statement made by the noble Earl. I would, however, like to press this point. The object clearly of the noble Lord opposite was to get the Government into the open, so that the noble Lord and his friends might be able to cry "Protection" again at the Election, and be able to bolster up an exceedingly bad case by the fear of an increase in prices. What I ask the Government to do is to meet that at once. You may, of course, say, as the noble Lord opposite said, that any tribunal will be found to lean towards the protection of British industries. You may say that there will be repercussion. I know it is a most difficult subject, but what it ought not to be possible to say is that Safeguarding is to be only on one side. I think that the consumer ought to be safeguarded as well as the producer, and I suggest to the Government, what I have no doubt has been suggested before, that in addition to all those considerations which the Secretary for War stated would have to be brought before any tribunal—whether by reason of the severity of competition this trade is seriously affected, whether it is affected by unfair or inferior conditions of labour abroad, whether the applicant industry can materially increase its output, whether the applicant industry is conducted with reasonable efficiency and economy, and whether anything done for one industry will seriously affect another—in addition to all these considerations, I think there should be one other—namely, that whatever is judged by this tribunal to be a fair price, it shall not be possible for that price to be materially altered without the consent of the tribunal.

I do not think it should be in the power of the iron and steel industry, for instance, after it has been held that a reasonable profit may be made, let us say, by selling steel rails at £7 10s., to raise the price to £8 10s. I think we ought to try to keep these industries alive but I think the danger of repercussion would be enormously increased if, the moment the country has given its support, it is immediately found that the price of the product rises. I make that suggestion, which was made in the House of Commons and accepted by some of those most vehemently in favour of the policy against which Lord Arnold has spoken to-night. I see all the difficulties of the Government, and I am convinced that nothing would be more fatal than to take a step which might again cause a revulsion against genuine Safeguarding from a fear that it is a step towards a General Tariff. I am suite certain that if that is to be avoided it should not be in the power of anybody to say that the concession which has been made, and which is, in my opinion, most urgently needed, in order to prevent our greatest industries from falling into a state of decrepitude, and in order to prevent our lists of unemployment being largely increased, should be in any way utilised for the purpose of promoting a General Tariff or general Protection, against which this country at two General Elections has unhesitatingly pronounced.

LORD PARMOOR

My Lords, I should have thought that the noble Earl who has just spoken, after hearing the speech of Lord Arnold, would at least have been impressed with the view that Lord Arnold did regard this matter as one of extreme gravity, going really to the whole basis of the future industrial prosperity of the country. Indeed, one of his strong arguments was that so grave was this question that we must ask the Government, or any Government, to look at the matter as a whole, and really to bring themselves face to face with this position: Are we going over to a Protective system or not? If I follow what the noble Earl has said, he is not himself in favour of a Protective system. I agree with Lord Stanley of Alderley that it really is impossible to draw any line or distinction between a general system of Protection and what I will call a general system of Safeguarding. They mean the same thing, and come to the same results, and I think the noble Earl feels the force of that argument.

His suggestion as to the control of prices gives full weight to the doctrine that Protection, to be effective, must result in a rise in prices. That is one of the great, fundamental arguments against Protection. He suggests—how it is going to be done I do not know—that, although you introduce a system which would naturally enhance the price of the product, yet at the same time you should introduce some method by which the price itself is further controlled. To my mind it is an impossible suggestion unless you go the whole length and say that an industry of this kind is to become a socialised industry, as I think it has been called, and is to be wholly under public control and wholly worked for public purposes. But that, I think, is not the matter we are upon to-day, and I do not want to say anything further about it except this. How, if you are going to adjust a Protective Duty on one side and price on the other, are you to do that except through public management? I admit I am unable to understand, and I shall be rather astonished if the noble Marquess gives any countenance to the suggestion which the noble Earl has made.

Perhaps I may come quite shortly to what the noble Earl, Lord Plymouth, has said. I do not in the least want to depreciate the value or strength of his argument, but let me summarise what I think was the fundamental mistake which underlay all the calculations which he made. He drew a distinction between Safeguarding and Protection, and he said that the evils incident to Protection are not necessarily incident to Safeguarding, and on that basis he gave us certain figures, to which I want very shortly to refer later. What is the answer to that? Only to-day I was reading the report of the meeting of the National Union of Manufacturers on the new Safeguarding. I want to say, in order that I may not be thought to exaggerate, that that, of course, is a Protectionist body. Mr. George Terrell is, I think, the head of it, and everyone knows that it has been started in order to make Protection popular. His argument was that there is no difference between what he called the new Safeguarding and Protection, but, as I think the noble Earl, Lord Midleton, himself appreciates, it is a very dangerous thing for the purposes of electioneering to call it Protection if by any means you can persuade people that Safeguarding is something different.

Let me read what one of the leaders said at this meeting:— A crumb was better than no meal, but what they wanted was a substantial meal of Protection. Safeguarding and Protection meant precisely the same thing. How can any one draw any distinction between the two, provided, of course, that it is general Safeguarding or general Protection? He continued:— It was contradictory of the Government to extend Safeguarding and in the same breath to say that they did not want to introduce Protection. Sir Charles Wilson said they were in favour of all-round Protection. They were supporting the new Safeguarding as substantially the same. Then Sir Charles Wilson said, in reply to another speaker:— Yes, but if you go to the country on it"— that is, Protection— to-morrow, you will be defeated. That is the point. In electioneering you may have a very strong point, but when you come to the substance surely you must all agree with what was said on that occasion—namely, that Safeguarding, the new Safeguarding, the all-round Safeguarding, cannot as a general matter be differentiated from all-round Protection.

I also saw to-day a paper of Dr. Perelli, who is the chairman of the International Chamber of Commerce, and, as we know, one of the most remarkable reports presented in recent times is that of the World Economic Conference under the Chair- manship of M. Theunis, who during the War was Prime Minister of Belgium, and, as a matter of fact, is a banker with enormous commercial experience. What he says is this:— When the case for Protection was at its height the Committee on Trade Barriers threw the whole weight of the Chamber's influence into the scales, and materially helped to stop the movement. I think that is quite right, and it is in accordance with M. Theunis's view on the World Conference. Then he says this of Protection:— It increased the cost of production and decreased the standard of living. That is his view and it is certainly my view. If you come to the conclusion that that is the result of Protection, of course we should always be opposed to it.

Then the only remaining question is whether you can draw any distinction between Safeguarding, as now proposed, and Protection. What is the difference? Take iron and steel. Assume that they were safeguarded. What is that but Protection? If you have what is sometimes called selective protection under a system of Safeguarding, you avoid considering the whole repercussion and the whole operation of what you are doing because you exclude everything except one particular case, one particular industry. If you were to limit your views of Protection to one particular case, and not to consider its general repercussion on the whole industrial future of the country, you could always make out at any rate a prima facie case. But it is only a prima facie case, because you are illogical in having a very imperfect premise from which you start.

There are two great theories in the world at the present time. One is what is called world-unity in industry; that is, the encouragement of prosperity in one country because it conduces to prosperity in another; doing all you can to multiply the interchange between one country and another if it is beneficial in raising the standard of living or reducing the cost of production. In connection with that also, as we discussed only yesterday, you want to establish international agreement as regards wages and conditions of labour, so as to get rid of sweating. I believe that is the true policy for this country. We can live only on a large system of free and open markets. The more industry is regarded from the point of view of the unity of industrial life in the civilised world the more are we likely not only to hold our own, but to give employment to our people, to maintain our standard of living, which is all-important, and not to have any diminution in our rate of wages.

The other view, which no doubt was brought to the front after the War, is quite distinct from that. It is a doctrine of self-contained countries. It is the notion, which I think the noble Earl has, but I consider it a complete fallacy, that by Protective Duties or by Safeguarding you have any security for the increase of employment or for the diminution of the difficulties in which this country is at the present time in regard to the amount of unemployment. Unemployment, of course, is the greatest curse of modern industrial life, and I think we all realise that. But what is our position? I believe in one country being an effective agency in furthering the industry of another. I believe that the self-contained doctrine is purely reactionary and will, undoubtedly, end in an increased cost of production and a decrease in the wages and comfort of the working classes. What are we? We are a great world-industrial population at the present time. It is because of Free Trade and the great area of our foreign competition and trade that there is now, as the noble Earl stated, a higher rate of wages in this country, very much higher in the industries he indicated, than there ever has been in the protected countries to which he referred, Belgium, and so on. It is a question of wide outlook. It is a question of what our future is to be. I sincerely hope that the country will consider well before it sanctions further Safeguarding which, in my opinion, is only another name for all-round Protection.

THE MARQUESS OF SALISBURY

My Lords, I do not intend at this hour to detain your Lordships for more than a very few minutes. In the course of the last two hours we have traversed all the ancient fiscal topics, all the old arguments on one side and the other, the doctrine of Free Trade, the doctrine of Protection, the doctrine of this and the doctrine of that. I will have nothing to do with any fiscal doctrine. I believe that the doctrinaire spirit of approaching these questions is fundamentally wrong. We have to approach these sub- jects from an intensely and purely practical point of view. If I am asked the fiscal school to which I belong, I have always been a Free Trader; but I do not believe in the least that the system of Free Trade can be applied without exceptions, and I do not think that anybody else believes it now. I am not quite sure about the noble Lord, Lord Stanley of Alderley, who spoke just now, but he is almost the pure thing, the old Cobdenite. I am sure that nobody sitting on the Bench opposite holds the system of Free Trade without exception. As the noble and learned Lord said very truly just now, the greatest curse of this country is unemployment, and when we see a particular trade, owing to very special conditions of competition and the unfair advantages which the foreigner possesses, being thrown out of employment, I think it is a very grave and very serious matter which deserves the attention of your Lordships and of Parliament without reference to any doctrine whatever.

I am loth, of course, to detain your Lordships about any question of my own personal consistency, but I suppose it would be hardly courteous to the noble Lord who introduced this subject if I did not say one word upon the supposed inconsistencies of His Majesty's Ministers and of myself in particular. So far as I know I do not think there are any inconsistencies. It is perfectly true that in the debate on the Address I did say to your Lordships that if I was asked whether the Government were prepared to safeguard iron and steel I could not follow my noble friend Lord Chaplin in such an assertion. We are not prepared to safeguard iron and steel. The question of iron and steel will come up in due course, and I will say a word about it in a moment. If it satisfies certain conditions there might be a question of it; but as at present advised we are not prepared to safeguard iron and steel. That appears to me to be a perfectly straightforward statement, and that is the position of every Minister belonging to the present Government. I think there is no inconsistency, and if the noble Lord will study again the speeches of my right hon. friend the Prime Minister and others, from which he has quoted, he will find that they all sound the same note.

The main question which must be applied in order to solve whether a particular industry ought to be safeguarded—I will not say the only question but the principal question—is what repercussion, to use a phrase which has been repeated over and over again this evening, such Safeguarding would have upon other industries. In the debate on the Address I think I used the word "reaction"; but of course the two words mean in that connection exactly the same thing. It is the question as to what is the reaction upon other industries. It is perfectly true that in some relatively small industries there is no repercussion. It is a question which is contained within itself. If they can satisfy the other conditions as to Safeguarding, with which I will not trouble your Lordships but which I would remind you are very rigid—if they can satisfy those other conditions they may be made the subject of a Safeguarding Duty. When you come to the large basic industries, the question of repercussion or reaction is vital and it then becomes a very important consideration indeed. If the noble Lord will study the debate which took place recently in another place, he will find that that was the burden of the speech of my right hon. friend the Secretary of State for War, who was the principal speaker for the Government on that occasion. Until quite the end of his speech I was in doubt whether the noble Lord opposite had heard of that debate in another place.

LORD ARNOLD

I heard every word of it except for half an hour.

THE MARQUESS OF SALISBURY

Yes; but the noble Lord did not convey that to their Lordships in his speech, and he did not mention all the conditions which my right hon. friend explained had to be fulfilled by an industry which applied for a Safeguarding Duty. The question of repercussion, of reaction on other industries is vital. That was the reason, as I think the noble Lord said, why last year the Prime Minister rejected the possibility of an iron and steel Safeguarding Duty—because of the repercussion; and when my right hon. friend the Secretary of State for War spoke the other night, the principal feature of that part of his speech was his statement that the makers of steel had come with a new case before the country, and had declared that if by means of a Safeguarding Duty the output of steel could be increased, they would be able to reduce the price of steel to the consumer. I do not want to be misunderstood. I am not countersigning that statement. I am not expressing on behalf of the Government that we accept that statement. I merely say that the makers of steel have come before the country and have made their allegation. Undoubtedly, that does make a difference if it be true. Is it true that a Safeguarding Duty would cheapen the price of steel? Probably the noble Lord opposite has great doubts whether that would be the case.

LORD ARNOLD

Hear, hear.

THE MARQUESS OF SALISBURY

I must admit that I have some doubt, but the point is well worth consideration. If the noble Lord opposite, instead of indulging in mere invective against the Government, which amuses him and does not hurt us and is really a waste of time, would apply his mind and his undoubted ability to a discussion of points of that kind, I think, if I may say so with the greatest respect to him, his contributions to the discussion of this subject would be much more fruitful. What my right hon. friend said in another place is that the real test will be whether a Safeguarding Duty gets the support of the users of steel. I want your Lordships to notice this observation of my right hon. friend in another place. You see how far he went and how completely he grasped the difficulty. If the users of steel, that is, the consumers, support a Safeguarding Duty, it must be admitted that the conditions would be very different. I do not for a moment desire to say that I accept that position, but I do say that, that allegation having been brought forward by the makers of steel, it does deserve the greatest consideration, because, if it be true, undoubtedly it introduces into the whole question a vital difference. That being so, I would once more urge your Lordships very respectfully, and the noble Lord who introduced this Motion, to study very carefully the conditions which will have to be satisfied in order that a Safeguarding Duty should be accepted according to the terms of the speech which my right hon. friend made in another place.

The noble Lord said that this was General Protection. How could he say such a thing, how could he dream of saying such a thing? How is it general Protection if the industry to be accepted for the Safeguarding Duty has to fulfil every sort of most difficult conditions? You might as well say that because everybody has a right to apply to the electors to be elected a Member of Parliament, therefore that is as much as saying everybody could be made a Member of Parliament. Of course he could not. It depends whether he could satisfy the conditions and get a majority of the electors to return him to Parliament. The truth is there is no such question of General Tariff or General Protection. What I said on the debate upon the Address, if I may once more refer to my own speech, is perfectly true. On the question of Protection and a General Tariff we stand exactly where we did; there is no change whatever. It was with reference to that point that I made use of the observation which has been referred to. But upon the question of Safeguarding there is undoubtedly a modification in the conditions. Some of them are a little freer, some of them are a little tighter. For example, for the first time the agricultural interest has a right to be represented when the imposition of a Safeguarding Duty is being considered, whereas under the present conditions agriculture has no locus standi. That shows that in some respects the new conditions will be more rigid than the old ones. They are, I venture to think, perfectly reasonable conditions, and do not show any inconsistency with our previous attitude or any desire to violate the consistent attitude of the Prime Minister that he will not have a General Tariff or the protection of food, and that being so I ask the support of your Lordships and the country. I earnestly hope your Lordships will support the Government in the Lobby and resist the Motion.

LORD ARNOLD

Will the noble Marquess reply to my two questions? He has said nothing about them.

THE MARQUESS OF SALISBURY

I am sorry, but I think inferentially I did. I talked a great deal about repercussions. I am afraid I cannot go into all the noble Lord's questions at this moment. If the noble Lord had been good enough to send these questions before the debate I would have had a carefully written answer prepared. I am afraid I cannot trouble your Lordships any more at present.

LORD ARNOLD

My Lords, it is clear the Government does not intend to reply to the questions; of course, it cannot reply to them. If it did, it would split its Party and it will not do that. Although rather late, I would like to say a few words upon the point in regard to repercussions and steel. The noble Marquess seems to be under the impression that there has been some new theory developed, some new case put up, and he asked me to study carefully what was said by the Secretary of State for War in another place. Not only have I done that; but I heard the speech and I have studied it carefully since—if the noble Marquess will allow me to say so I have studied it more carefully than he has. There is complete inconsistency between what he says and what the Secretary of State for War says. The Secretary of State for War, in referring to the proposals, did not say that prices would be reduced; he said costs would be reduced; and it is on the question of price, if I may say so with respect, that Protectionists so frequently go wrong. I dealt with this matter at great length in my speech in July. If the suggestion is now that you can get an arrangement in the steel trade between makers and users which will suit all the various conflicting interests concerned and that under this arrangement you can not only keep out foreign steel or part of it—

THE MARQUESS OF SALISBURY

Perhaps the noble Lord will allow me. I think he will see we are not very far apart as regards this. This is the phrase in my right hon. friend's speech:— Their case is"— that is, the case of makers of steel— that the repercussions which were feared in 1925 may be avoided by their being able so to reduce their costs that they can bring with them the support of the users of steel.

LORD ARNOLD

I would point out that besides the users of steel the general consumer has to be considered, and my belief is that no such arrangement will ever be made because the diversity of interests is so great as between the makers and users of steel. It is impossible to do it. I deny that there is anything approaching unanimity among users of steel in regard to this matter. The noble Marquess says that it has been put up to them by users of steel. Who has put it up to them? There is no such arrangement which covers anything like all the users of steel. The Secretary of State said there was a new case which the older economists never considered. There really is no new case. There is nothing new about this. There is no new fact. I have no hesitation in describing the whole proposition from a practical point of view, and especially from the steel trade point of view, as perfectly hopeless. The more it is gone into the clearer that will become. I will, however, leave that matter by merely saying that the noble Marquess has not replied to my questions. But this is not the end of this business, it is only the beginning; we shall have other occasions for discussing this new idea which is put forward as something which is to accomplish great things (according to the noble Marquess), something which has never been done before; When it is gone into I say it will be shown that it is not sustainable, just as all other Protectionist arguments are not sustainable.

I must say just one word in regard to the speech of the noble Earl, Lord Plymouth. He began his speech with a grotesque caricature of the Labour policy in regard to the matter of an international Convention. He never informed your Lordships that the matter was one of international Convention, that it did not only apply to this country. This matter was debated at great length in another place last week and was made perfectly clear. There was nothing in the proposal which in the smallest degree impinges upon Free Trade policy. Confirmation of this will be found in the fact that Mr. Philip Snowden was Chairman of the Committee which put forward the proposals. If he is satisfied, everyone will be satisfied that Free Trade is not violated.

As regards re-exports, we have now at last been given an explanation which I shall read with great interest to-morrow morning. I noticed that the only kind of case which could be made out was apparently by going back to 1922. That in itself is very suspicious. The noble Earl says our re-export has been in no way affected by the Duties. That is not the opinion of people in the trade, very far from it; and they, I think, know a good deal more about the matter than does the noble Earl. It has been clearly proved that there are in regard to nearly all these vital matters practically no official statistics to help the Government. Your Lordships will not have overlooked the fact that the noble Viscount, Lord Chaplin, has not spoken. He has not produced any evidence to substantiate his case—not a scintilla, not a comma. The noble Viscount (Lord Peel) seems to think that is a matter for hilarity. Well, that is not the view which the country takes.

It is a fortunate thing that in Parliament we can pin down something definite. In the country we know that statements are constantly being made and