HL Deb 21 May 1930 vol 77 cc945-1020

VISCOUNT ELIBANK rose to move, That this House views with grave concern the serious and increasing depression manifesting itself in the manufacturing and agricultural industries of this country, and the resultingly expanding figures of unemployment, and is of the opinion that the most practical and immediate remedies are to be found in a comprehensive policy of Safeguarding, anti-dumping and Imperial economic unity.

The noble Viscount said: My Lords, the Motion which I am privileged to move this afternoon covers very wide ground indeed and might lend itself, without unnecessary verbiage, to a very lengthy speech; but there are quite a number of speakers who wish to take part in this debate and therefore I propose to confine my remarks within as short a compass as possible. When the Socialist Government came into power last May they found the country in an economic condition which was gradually but surely improving. There was a quiet optimism which, with the extended application of the Unionist policy of Safeguarding and Empire development, might have turned into definite progress and restored to some extent the economic condition of the country. But the electorate in their wisdom decided to listen to the insidious notes of the Socialists and to a lesser extent to the grandiose unemployment schemes of the Liberals. So, instead of returning the Unionists once more to power, they launched into office a Socialist Government with authority, if only to a limited extent, to try their hands at restoring the country's prosperity.

How has that Government responded to the task that has been placed in their hands? We find that during that year there have been 600,000 more unemployed. As a certain candidate who is now a Member of the House of Commons stated at an important by-election recently, for every minute that the Socialist Govern-has been in now it one more British workman has been put out of work. Not only has unemployment grown to that alarming extent, but there has been a serious falling-off in both our import and our export trade. I find that, compared with the exports of April, 1929, one month before this Government came into power, those of April, 1930, have receded by £13,000,000, while imports have fallen by £20,000,000. What has the Government done to try and cope with that situation? First of all, we have the "Minister of Unemployment," the Right Hon. J. H. Thomas, and I should like to give him credit here for having done his best under the most difficult circumstances and under a fiscal system that is entirely out of date and unbusinesslike. What has Mr. Thomas done under those conditions? He tells us that he has to-day unemployment schemes that are employing 100,000 men. In addition, he makes great play with what he has done towards the rationalisation of our industries. I only wish to say that it seems to me that Mr. Thomas in that part of his schemes has omitted the most important thing—namely, the remedies that are proposed in this Resolution—for without a tariff wall I do not believe that it will be possible to rationalise the industries of this country in an effective and efficient manner. In the United States of America such rationalisation as has been performed has been behind a tariff wall, and the same applies in European and other countries that have tried it.

So far as the Chancellor of the Exchequer, Mr. Snowden, is concerned, all he has done is to impose extra taxation at a time when some other countries are taking off taxation. This taxation has been direct taxation, and in a cold and callous manner be is taking off the Safeguarding Duties, the only duties that have helped our trade in the terrific blast of foreign competition under which they have been suffering, not only during the past year but during the past few years. I cannot understand why, in spite of the fact that every other country in the world, including our own Dominions, has abandoned this old shibboleth of Cobdenite Free Trade and has assumed Protection in its place and prospered under it—I cannot understand why Mr. Snowden should still stick to the old fetish of Free Trade.

What has happened with regard to the manufacturing trades? I want to run quickly through the various terms of my Resolution. What is the existing condition in the manufacturing trades? In order to give a fair and clear idea of the position it is necessary to divide the manufacturing trades into safeguarded trades and non-safeguarded trades. So far as the non-safeguarded manufactures are concerned, I find that for the three months ending March, 1925, the retained imports of non-safeguarded manufactures amounted to £56,000,000, while for the three months ending March, 1930, they were £66,000,000, or £10,000,000 more. With regard to exports of non-safeguarded manufactures, for the three months ending March, 1925, the figure is £157,000,000, whereas for the same period in 1930 it dropped to £118,000,000, a fall of £39,000,000. This shows a loss in the wealth and purchasing power of the community of £49,000,000 in three months, or the colossal and, I might say, calamitous rate of some £200,000,000 per annum.

It would take too long to analyse all the various trades that have suffered through the importation of goods of foreign origin into this country, but the cotton trade is a very well-known example, as is also the iron and steel trade. Both of them have suffered, as we know, very severely from foreign competition. In the case of the cotton trade, Japan has become one of the most serious competitors, not only in the overseas trade but in Lancashire itself. I am informed that in Manchester to-day it is possible to buy a cotton shirt of Japanese manufacture for the sum of 1s. 9d. whereas a similar shirt manufactured by British workers in Lancashire cannot be sold under 2s. 6d. Then if you look at India, I find that in 1913, just before the War, we exported 3,000,000,000 yards of cotton lengths into India. To-day we are exporting exactly half that amount—that is, 1,500,000,000 yards of cotton lengths. What has Japan done in the same time? Before the War, Japan exported into India only a 400th part of the whole cotton importation into that country. Now she is exporting one-fifth of those importations.

With regard to the iron and steel trade, I find there that the output to-day is 60 per cent. of full capacity, and I find also—and I think this is well known to your Lordships—that the average importations of steel into this country to-day are 3,000,000 tons. That quantity of steel, imported into this country, is giving work to 120,000 foreigners, and if we were to manufacture even half of it in this country we should at any rate be giving work to half that number of British workmen instead of to foreigners. Not only so, but the coal required to manufacture that steel would be mined by British coal miners instead of foreign coal miners, and British coal would be used for that purpose instead of foreign coal.

Now let me turn to agriculture. So far as that industry is concerned, the condition is parlous. Do noble Lords opposite really believe that the meetings of agriculturists which have been taking place all over the country during the last few months, representing all classes of agriculture, have been held for amusement, or for the purpose of throwing dust in the eyes of their fellow countrymen, or for seeking assistance where none was needed? Of course noble Lords know just as well as I do that that is not the case, but that the agricultural industry is in such a parlous condition that it requires the most anxious and early consideration on the part of the Government, and of anyone who has an interest in that industry, which is the greatest industry of this country. The right hon. gentleman, Mr. Noel Buxton, the Minister for Agriculture, speaking in the House of Commons only a few days ago, admitted these conditions, but he had no remedy; and then, speaking directly afterwards, that well-known Cobden Free Trade purist, Sir Archibald Sinclair, was compelled to appeal to the Government to set up a conference which might consider every form of remedy, including even Protection, for meeting and trying to produce a remedy for those conditions. Of course nothing could be done along those lines by this Government, which is so obviously and vocally a Free Trade Government.

I want to support my case for agriculture with a very few facts. I find that home-grown wheat is now only one-fifth of the total annual requirements of the United Kingdom, compared with one-fourth in the pre-War period, and I find that to-day—and I think this was stated by the Minister for Agriculture in the debate in the House of Commons the other day—the number of workers in agriculture has fallen by 100,000. In Morley's Life of Cobden, Cobden is reported to have said on one occasion "not an acre of land will go out of cultivation under my policy." What has actually happened? Before the War there were in round figures 7,000,000 acres under crops in this island. To-day there are only 5,500,000 acres, or 1,500,000 acres less, and we know what is the reason for this. It is due to severe foreign competition. It is due also to the dumping of German wheat and oats and of French wheat and other cheaply grown cereals into this country. What can be done in order to cope with such conditions? I venture to suggest to your Lordships that the best remedies, the most immediate and practical remedies, are to be found within the terms of the Motion what I have placed on the Order Paper—namely, a wide application of Safeguarding measures, of anti-dumping measures, and Imperial economic unity, or, as I would prefer to call it, Empire Free Trade.

I venture to believe that the only way in which I can prove that Safeguarding may be effective in this direction is by giving your Lordships certain facts, which I will try to put to you as shortly as possible. When Safeguarding was first inaugurated Cobden Free Traders made, and even now make, certain statements which I think you will agree, when I have given you these figures, have been refuted by actual experience. First of all it was said that employment would not be increased. What has actually happened? In the safeguarded trades we find that employment taken in all has increased by 80.000. Then it was said that production would not be increased. What, has actually happened with regard to that? There has been an increase in production of from 57 per cent. to 192 per cent. of safeguarded articles. The highest is fabric gloves, the production of which has increased by 192 per cent. Another statement made was that safeguarded goods would cost more. What has happened there? There has actually been a decrease of from 3 up to 40 per cent. in the price of all safeguarded articles. It was also stated that exports would decline. What has happened there? Exports have not declined. On the contrary they have increased in safeguarded goods by £10,000,000 per annum in the aggregate.


Will the noble Viscount be good enough to say what he includes in safeguarded goods?


I include all articles which have been actually safeguarded, including motor oars the duties on which the noble Lord prefers perhaps to call the McKenna Duties, but which I believe are as good an example as any other.


Does the noble Lord include artificial silk also?


Yes, I do, but I have not set them out separately, because it would take too long. I am including artificial silk, and with regard to artificial silk I see that 23 new factories have been set up since 1925. I unhesitatingly assert that if Safeguarding were imposed for all trades in which Safeguarding was required, today, the effect would be immediate. In fact, I believe that the effect on those trades and on unemployment would be so startling that everyone in this country would wonder why Safeguarding Duties had not been imposed before. I am sure that the noble Lord in his remarks is likely to tell us that in protected countries wages are lower and living conditions are poorer. I am going to admit that so far as Europe is concerned, 'but at any rate those countries have consolation in the shape of supplying their own markets almost entirely; and so far as the United States, Canada and Australia are concerned, there we find under safeguarding conditions that the labourer is just as well paid, if not better paid, and his conditions are as good as, if not better than, those in this country.

So far as agricultural depression is concerned I believe that anyone who is not absolutely blinded by the fetish of Cobden Free Trade will agree that it is absolutely necessary to prevent the dumping of foodstuffs into this country, which has been going on during the past year or two. Various measures for doing this have been suggested. I myself believe that the simplest and most effective method is by way of countervailing duties. I do not agree with the remedy of licensing of quantities or prohibition of entry, because I think that form of assistance may get us into difficulties with the countries to which we apply it. Not only that, I believe that it will mean in this country the establishment of a form of bureaucratic control over trading in our foodstuffs to which I aim very strongly opposed.

But I think the greatest measure of help could come to agriculture through the policy of Imperial economic unity, or Empire Free Trade as I prefer to call it. Personally, I have never concealed from myself, either privately or publicly, that the best and simplest method of bringing about a large measure of Empire Free Trade is by means of trading agreements with the Dominions and Crown Colonies, which will involve the importation into this country on a protective basis of the primary products of those Dominions and Colonies, whilst in return securing for the manufacturers of this country a large proportion of the trade with the Dominions and Colonies, at present being supplied from foreign countries. This means that Empire foodstuffs such as wheat, meat, butter, cheese, eggs, bacon, etc. will be introduced into this country entirely free of duties, whilst duties are placed on those articles from foreign countries. That is one reason why we call it Empire Free Trade. On the other hand the Dominions, in order to move towards the same ideal, would adjust their tariffs on manufactured imported goods in favour of British trade, and this could be done by reducing the duty on British goods, or increasing the duty on foreign goods, or by both methods.

So far as British agriculture is concerned, apart from our own production, this in my belief would provide for the consumption in this country of wheat and meat and other foodstuffs grown in the Empire, under conditions very similar and much nearer the price of wheat and meat produced in this country, than that now sent from the Argentine, and other foodstuffs from Denmark and other foreign countries. This would give immediate relief to the British farmer, and over and above that it is suggested that a guaranteed price should be given to the farmer for his wheat where that is necessary. I am told—we hear it constantly—that this will raise the price of food to the people of this country. I do not agree with that proposition. There have been numerous figures quoted by my noble friend Lord Beaverbrook to show that, even with wheat at 55s. a quarter, bread could still be sold in this country at 9d. to 9½d. per quartern loaf. But even if, for the sake of argument, the price of bread were a little higher, would it not be better that the whole of our people should be employed instead of having a million and three-quarters of them unemployed? In addition, those who are employed would be better off, and more certain of holding the employment which they have to-day.

We are told also that the Dominions will not have Empire Free Trade or Imperial economic unity. For a quarter of a century the Dominions have been holding out their hands to us, and by repeated actions in granting preferences on British goods they have shown there is nothing they desire more than closer trading with the Mother Country. Australia, New Zealand, and South Africa are expressing themselves in favour of these trade agreements. Quite recently we have had a glorious example of this in the shape of the action of the Canadian Government in reducing their tariffs enormously in our favour. I find that actually in the case of 589 tariff items out of 1,188 British trade will enjoy free entry into the Canadian market; while in the case of 270 items the duty on British goods has been lowered.

Just listen to an extract from a speech by Mr. Stewart, the Minister of the Interior in Canada, in a debate on the Budget only a few days ago. Speaking about the bold forward step the Government have taken in the direction of the extension of tariff preferences to British countries, he said:— We hope to transfer to British countries the large volume of imports which are now brought in from countries which do not favour trade with us. It is not merely an expression of family sentiment, but a straightforward offer to Great Britain for increased trade, without strings attached. Ours is not lip loyalty, but a genuine desire for trade with our kith and kin to mutual advantage. After that, for any people in this country to say that the Dominions do not want it is simply blinding themselves to a long series of acts and gestures on the part of our Dominions, and to brand themselves as Little Englanders, who would rather remain insular and unencumbered by Empire responsibility. In these days of severe competition it is ridiculous to suppose that the Dominions, in return for an assured market in Great Britain for their primary products, would not give us a large proportion of the trade they are now doing with foreign countries. The same applies to the Crown Colonies so far as their products are concerned.

To-day the Empire buys goods to the amount of about £600,000,000—and this, I would remind your Lordships, is a growing trade, as the population increases and their resources are developed. Our exports to the Empire amount to £275,000,000. Is there not a sufficiently wide margin between these two figures to indicate what a great opportunity the Mother Country has, through development of trade with the Dominions and Colonies? The various parts of the Empire have, as I have already intimated, made their gestures and are now waiting for a lead from the Mother Country. When did Great Britain give up leading the British Empire? It is, in my humble judgment, for His Majesty's Government to make offers to the Dominions, to ask them to call an economic conference, which will be unfettered, unhampered, and entirely free to discuss all ways and means of bringing about Imperial economic unity. In a letter recently to The Times the noble Lord, Lord Lloyd, who has rendered great and distinguished service overseas, and who is now Chairman of the Empire Economic Union, wrote:— I say that we have already come to the conclusion that there should be no fundamental difficulty in principle to prevent the formulation of mutually satisfactory agreements between the United Kingdom and the various parts of the Empire. I hope that, directly, the Chairman of the Empire Economic Union will give us some cases which we can consider ourselves.

I see that an Amendment to my Motion has been placed on the Order Paper and, perhaps, I shall be in order if at this stage I say a few words about it. The Amendment suggests that there should be a conference on a non-Party basis to deal with the whole subject of trade depression and unemployment. In times of war a conference on a non-Party basis is perhaps, practical politics, but in times of peace I do not believe that it will ever fit in with our political and democratic Constitution. I believe, indeed, that every subject which involves an issue like the fiscal issue will have to be fought out at the polls. This Amendment is, in my opinion, a side-tracking Amendment and an Amendment which will accomplish nothing at all. Therefore, whilst sympathising with my noble friend in his desire for finding on non-Party lines a solution of this very thorny problem, I am entirely opposed to his Amendment and much prefer my own Resolution, which indicates certain definite remedies which are every day receiving greater and greater support in the country.

If this Government does not adopt the policy of Empire Free Trade, the next Government will do so. West Fulham is the writing on the wall. Central Nottingham will be the next. The people of this country are waking up to the fact that they have a glorious heritage. They are waking up to the fact that they have a vast Empire with great riches, still undeveloped and waiting for population. On the other hand, the Empire itself is stretching out its hands to its British kinsmen across the seas and is appealing in the clearest terms for a closer bond of trade and unity. If this present Government will not give it to them, then, as surely as the sun sets in the west, the people will displace the present Government and put into power a Government that will. I beg to move.

Moved to resolve, That this House views with grave concern the serious and increasing depression manifesting itself in the manufacturing and agricultural industries of this country, and the resultingly expanding figures of unemployment, and is of the opinion that the most practical and immediate remedies are to be found in a comprehensive policy of Safeguarding, antidumping and Imperial economic unity.— (Viscount Elibank.)

THE MARQUESS OF HUNTLY had given Notice of an Amendment to the Motion, to leave out all words after "opinion" and to insert "that it would be of advantage to the State if the leaders and representatives of all Parties were to meet in conference to consider the necessary and remedial measures to be taken by agreement on non-political lines." The noble Marquess said: My Lords, I have placed on the Paper an Amendment to my noble friend's Motion and I assure him that it is in no way a sidetracking Amendment. Although I agree in the main with all his arguments and with the statistics he has produced, I believe that the situation is one that would be better dealt with after conference between Parties than by a Resolution of your Lordships' House. After all, it must be remembered that if we passed my noble friend's Resolution, it would be looked upon as only a pious expression of opinion, and I am afraid that I cannot be sanguine enough to believe that it would do any practical good. The situation is more serious even than he has shown it to be. I believe that there is a better way of dealing with it, and I propose to give your Lordships my reasons for that opinion.

Two days ago the Lord Privy Seal, addressing the House of Commons used some very remarkable words indeed and made what I can only describe as a very alarming confession. He said that he did not disguise the fact that the feeling of a want of confidence which was permeating the country among all sections of business was having a bad effect. When a Minister of the Crown admits that the condition of the country, owing to the feeling of insecurity, is such that businesses are shutting up, that trade is falling and that the state of things is as serious as he puts it, it seems to me that that admission must be regarded as one of a very alarming character. My object is to restore confidence to trade and industry by trying to induce all Parties to look at this great question, which is of vital importance to the country, apart from political lines. My noble friend told your Lordships that this question of Party conferences was only practical politics in times of war. I would remind him that many questions in our time have been settled by conference and compromise. I can remember when there was an agitation about lowering the franchise and the redistribution of seats, and that that great question was settled by Mr. Gladstone and Lord Salisbury at a conference by compromise on the matter. Whatever you may say, although it may have been in time of war, you have to realise that one of the greatest questions of the day, Irish Home Rule, which for forty years had agitated and disturbed the country, was settled under a Coalition Government of which Mr. Lloyd George was Prime Minister.

There is also another factor to consider. We have had an invitation from the Leader of the Liberal Party to consider this question apart from politics, and an answer has been given to that invitation by the Leader of the Government, the Prime Minister. He made a qualified answer to the appeal that he should respond to this invitation, because he said he was afraid that it would not be adopted—he meant that it would not be adopted by the Opposition. I am not so afraid of Mr. MacDonald adopting this proposal because, from what I see, the present Government and the Labour Party are more torn asunder than any other Party in the State upon this question. You have one wing, the extreme wing, which seems to be getting a few additions daily, which is all for enormous sums of money being raised by loan or by grants, and a great outlay of expenditure in order to provide work for the unemployed, and as an alternative it calls upon the Government to resign. There is another section of the Labour Party, headed by the stalwart Yorkshireman who is Chancellor of the Exchequer. He is very chary, and rightly so, about any commitment to large expenditure on unremunerative work. But he is also adamant against maintaining the Safeguarding Duties. There are also sections of that Party in favour of maintaining those Safeguarding Duties, and I see in the Press that some of them are bold enough to appear at Nottingham and say that they disagree with their own Government. When doctors differ the patient dies. We were told the other day in your Lordships' House in connection with, the Coal Mines Bill that we were to pool our brains over that Bill. All I suggest is that when you have a national question of far greater importance to the whole country than the Coal Bill, you should pool your brains and consider the best way of dealing with such an important question.

There are other reasons, which my noble friend has not touched upon, that are put forward in many quarters as a cause of this depression that is afflicting the country. There is the phenomenon of the extraordinarily low price in every country of the world for produce. There is apparently no one who can give any reason for that phenomenon. I must ask the House to allow me to recall a personal reminiscence which perhaps may be of interest. It is 51 years since in this House I made a Motion very similar to that which my noble friend has made. I called attention in 1879 to the depression of trade and industry in the country. We had been suffering from five bad harvests in succession, and foreign competition was very severe. Rents were falling, farms were being thrown up, and it was a subject which was exciting the interests of the country very gravely.

I remember the day very well. It was after a number of other Questions had been put, and it was near the dinner hour when I rose to speak. The whole of the Front Bench on my side walked out of the House. The only Peers who were left to support me were my two old school-fellows, Lord Rosebery and Lord Lansdowne. We did our best. I put forward my case and there was a long debate. It was late in the evening when Lord Beaconsfield, to everybody's astonishment, rose to reply. He gave three reasons for the depression in the country. The first was the bad harvests, the second was foreign competition and the third was the appreciation of gold. He said a very curious thing, and I think the House will be interested in it. He said: Notwithstanding an increase in population in the leading countries of Europe, which alone requires always a considerable increase of gold currency to carry on its transactions, the amount every year has diminished and is diminishing until a state of affairs has been brought about by the gold discoveries exactly the reverse of that which they produced at first. Gold is every day appreciating in value, and as it appreciates in value the lower become prices. I believe the same thing could be said to-day, but to a greater extent, as Lord Beaconsfield said 51 years ago.

There is another aspect of the gold question which is very alarming. We have on either side of us great countries which are taking gold and hoarding it. This is disturbing the money market and I believe is preventing the conversion of our War Loan at a lower rate of interest. We look across the Atlantic, and we see that in America they have a different system to what we have in this country. There the Federal Reserve Board, when a country requires gold and applies for it, have a system of credit by which they make advances to that country and thereby prevent the movement of gold. As the gold is not transferred the cost of insurance, transit and brokerage charges is saved, and there is not the disturbance or dislocation of the market which would be produced by a great movement of gold. That is a matter which I believe is being enquired into by the Government. There are also other very important questions bearing upon the situation.

When we have these economic questions about which people may hold very different opinions, and when there is a crisis such as we have to face, in my opinion instead of fighting these matters out, as my noble friend said we must eventually do, at the polls, it would be a prudent thing for the Leaders of the different Parties to confer. That is my view. I think that when there is an appalling disaster facing the country it is wise for those who are the leaders of opinion, and who have to consider their duty as patriots and not merely as leaders of a Party, and who also are responsible to their fellow-citizens, to consider whether or not they should see if some mutual common basis cannot be arrived at by which the difficulties with which we are faced could be met and overcome. I beg to move.

Amendment moved— Leave out from ("opinion") to end of Motion and insert ("that it would be of advantage to the State if the leaders and representatives of all Parties were to meet in conference to consider the necessary and remedial measures to be taken by agreement on non-political lines.")—(The Marquess of Huntly.)


My Lords, I do not intend to take up your time for more than a few moments. I should have liked to have talked upon the Motion of my noble friend Lord Elibank, but there are so many people more competent and desirous to speak upon it that I do not intend to say a word about it, except this. I do not think any one of your Lordships can doubt that it raises a most important question. Let us see what it is. It raises a, question of the increasing depression in the manufacturing and agricultural industries. We all know that exists, and it is a very acute question. It also raises the question of the expanding figures of unemployment. Unfortunately we know that that question also exists. It then suggests that there should be an immediate remedy, if one can be found. Nobody can suggest that that is not important. Therefore I, and I think most of your Lordships, came down with the idea that we should hear the considered opinion of your Lordships' House, than which I cannot conceive a body better able to come to a considered opinion upon this question, and eventually take a Division upon the matter.

The noble Marquess suggested in his speech that a pious Resolution of this House would do no good. I do not agree with him in the least. I think a Resolution of this House would not only carry weight in the country, even if this House could not carry out its desires, but would also carry weight in the Dominions and Colonies. I think this House ought to consider this question for itself, and not be put off by what I might call a clogging Amendment, which suggests that this afternoon should be devoted, not to your Lordships saying what you think about the main Motion, but whether or not it would be as well to get certain people together to talk among them- selves and then have another debate as to whether we are going to take their opinion or not. Surely this House is perfectly competent to make up its own mind without having another body of people to come together to tell it what is its mind. Therefore, I hope, and I hope very sincerely, that the debate this afternoon will more or less be attached to the main Motion rather than to the question of whether or not this Amendment should be taken first, which, of course, according to the procedure of the House theoretically must be done. I hope that noble Lords who take part in the debate will address themselves to the main Motion.

The noble Marquess was good enough to say that when doctors differ the patient dies. Well, the only really successful doctor I ever heard of was a doctor who owned the freehold of the local cemetery and I do not think it is much good getting in another doctor. Your Lordships should be perfectly capable of dealing with the matter yourselves. For that reason I have ventured to rise in the hope that after what I have said the debate will be carried on on the lines of the Motion and not on the mere question of having another Locarno or another, if I may venture to say so, Aboyne gathering appointed by someone to consider the matter further before we are allowed to consider it. I hope your Lordships will accept what I have said without taking into account that possibly it has been in some parts out of order.


My Lords, I think it would be perhaps for the general convenience of the House and for the symmetry of the debate if the views of His Majesty's Government upon the various points raised were stated at this juncture. I quite agree with the noble Earl who spoke last that the questions raised in the Motion of the noble Viscount are very important. The noble Viscount began the debate with a speech which was interesting and forceful, but a speech which, nevertheless, I hold will not bear close examination. Indeed, it showed, if I may say so, in some respects an almost reckless disregard of facts. I know the noble Viscount did not intend to be misleading, but in point of fact he was misleading in many respects. He began his observations by suggesting that the trade depression in this country is due to the fact that there is now a Socialist Government in office whereas about a year ago there was a Unionist Government, and he informed your Lordships that if the Unionist Government had remained in office and had continued the policy of Safeguarding and so forth we should now—I do not wish to overstate it—have reached a state of comparative prosperity.


Hear, hear.


I am glad I have stated it fairly. It is very interesting in that connection to consider what has happened in the same period in other parts of the world. What has been happening here has been happening, more or less, and in some respects a good deal more than here, all over the world. The noble Viscount gave certain figures regarding our export trade, which he said has fallen off under the Socialist Government. Just let me look at that. Take the first three months of this year—the first three months of 1930 as compared with the first three months of 1929. I am putting it as fairly as I can. Great Britain's export trade has fallen from £181,000,000 to £164,000,000. That is a fall of 9.4 per cent. But then I turn to the United States of America, a country in which they enjoy in a high degree the blessings of Protection and where, so far from having a Socialist Government, they have something very different. In the same period their export trade has fallen from $1,419,000,000 to $1,133,000,000. That is a fall of about 20 per cent., so I find as a matter of fact the export trade of the United States during that period—and it is as fair a period as I can take—has fallen to about double the extent that it has fallen here.

It makes me again emphasise the fact that there are certain world conditions at work which are responsible for the present situation. Take unemployment. Unemployment, unfortunately, has increased here but unemployment is also very bad in other countries. I noticed that the President of the American Labour Federation said that in February last no less than 21 per cent. of his members were out of employment and in the building trade 42 per cent. The latest figures in Australia show about 14 per cent. of un- employment and in Canada there is about 10 per cent, of unemployment. Trade has certainly been very depressed in Japan and a large number of works have been closing down. These things have been going on all over the world. The noble Viscount spoke about practically every other country except ourselves having discarded the shibboleth of Free Trade and he suggested that other countries had prospered under Protection. I venture to say, and I think I am stating a matter of fact, that he cannot sustain any proposition of that kind. Things are very far from prosperous in Australia where they have high Protection.


And a Socialist and Labour Government.


It happened before that. They are far from prosperous, and the same may be said of Germany and Japan. It is not true that every other country has discarded Free Trade. Denmark and Holland are not exactly Free Trade but they are largely Free Trade, and on the whole they are prosperous, and they are almost the only countries in Europe where real wages are as high as in this country. We have to look further into these things and that is where the noble Viscount's case completely breaks down. I suggest that his main premise was this, that unemployment and trade depression can be cured, or very largely cured, by Safeguarding and by Protection. But unfortunately, for him, if he will analyse the figures of unemployment in this country—


May I interrupt the noble Lord for a moment? I said—and by Imperial economic unity or Empire Free Trade as well.


Yes, I am coming to that. I am not going to avoid anything. I shall be only too glad to deal with that part a little later, but I cannot say everything all at once. I was going to say that unemployment and trade depression are worse just in those trades which Protection would help the least. That is the position. If the noble Viscount will analyse the unemployment figures he will find that three-quarters of the unemployment is in industries not subject to foreign imports, or practically not subject to them; that is, in industries in which Protection will not only not help but will positively injure. What good will Protection do for the coal trade? What will it do for shipbuilding? What will it do for the cotton trade, for the building trade and for the distributive and retail trades? What will it do for them?

Take the cotton trade. The noble Viscount spoke about increased foreign competition. There has been increased Japanese competition in India no doubt, but I fail to see how tariffs making the cost of production higher in Lancashire will help us in competing with Japan in India. He also spoke of the intensified foreign competition of cotton goods coming into this country. I wish the noble Viscount would go into the facts. If he does he will find in the matter of imports of foreign cotton goods that they are distinctly less, very very much less last year, 1929, than in the year before the War, 1913, which was a highly prosperous year in the cotton trade. They are not much more than half. There is nothing new about the phenomenon of a small proportion of very cheap cotton goods coming into this country. It goes back to the early years of the Tariff Reform campaign, the years between 1906 and 1910. We had then as a matter of fact imports of foreign cotton goods, but to-day they are not much more than half what they were in 1913.

Those are the facts. As a matter of fact, if we go into our trade—I am not now speaking of the cotton trade only but of our total trade—you will find that only about 10 per cent. of our imports are of fully manufactured goods and some of those could not be made here or not at anything like the same price. So the potential area over which the policy of Safeguarding and Protection can really be applied is quite small. I ask again. if Protection will cure unemployment, what is the reply to the figures I have given? What is the reply to the fact that in Germany there has been a great deal of unemployment, somewhere about 3,000,000, and what is the reply to the fact that in the years 1900 to 1914 under Free Trade our industries, speaking broadly, were prosperous and at one time unemployment was down to about 2 per cent.? This was under Free Trade, under this old system which we are told we ought to discard. What is the reply to that? Surely it follows that there is no case for the contention that Protection will cure unemployment. It is opposed to the facts. Both theory and experience really prove the contrary.

Then I come to the Safeguarding Duties in detail, about which the noble Viscount said something. He took it for granted, as all Safeguarders do, that these duties were a great success. As a matter of fact, in many respects, as I will show your Lordships, they have been a failure. Moreover, even if the extravagant claims of the Safeguarders could be sustained, it is necessary to point out that any results that could be obtained under Safeguarding in particular industries would be at the expense of consumers in general and other industries. That is a point that Safeguarders always leave out of account. When the noble Viscount claims, for instance, that Safeguarding has led to a great increase in exports, I say that, as a matter of fact, this is not the case. I was sorry to intervene, but I wanted to be quite clear. I knew what the reply would be, because I know what the figures are. He only arrives, as all Safeguarders do, at any kind of result favourable to their case by including in these figures those for motor cars and artificial silk.

If I take the real safeguarded industries, which number eight—glass, cutlery, lace, gas mantles, wrapping paper, pottery, buttons and enamel hollowware—their exports have not increased, but have decreased. Taking the year before the duty was put on in each case, and totalling the exports, you begin with a total of £5,052,000, which comes down last year, in 1929, to £4,628,000, a decrease of 8.39 per cent. Accordingly I say that, as a matter of fact, exports have not increased but have decreased. If I take as an equivalent for comparison the export of all articles wholly or mainly manufactured from 1924 to 1929, which is as nearly as possible the same period, I find a decrease from £618,855,000, in 1924, to £573,833,000 in 1929, a decrease of 7.28 per cent. Therefore, if you take all the manufactured exports, they have actually decreased less than those of the safeguarded industries.

I have said that the noble Viscount arrived at his results only by including motors and artificial silks in the safeguarded industries. As a matter of fact, the Safeguarding Duties were supposed to be put on to help depressed industries. Who can say that the motor industry or the artificial silk industry was a depressed industry? We Free Traders do not object to the introduction of the figures of the motor and artificial silk industries because they bring into the controversy something that we cannot answer or meet. That is not the reason why we object. We object because it is not a proper or fair method of controversy. We object because these are new trades, catering for a huge popular demand and bound to grow, duties or no duties. That can be proved. Their prosperity is demonstrably not due to the fact that they have duties. They would grow anyhow, duties or no duties, because they are new trades catering for a huge demand.

Let me give an illustration that I have given once before in your Lordships' House. Suppose that in 1922, for instance, a Safeguarding Duty had been put on wireless apparatus, a wholly new industry with an enormous demand. By 1928 the figures of production and employment would have shown an enormous increase, and the Safeguarders would have come along and said: "Look what Safeguarding has done, and haw this industry has grown because of it." As a matter of fact, Safeguarding would have had nothing whatever to do with it. It would have grown anyhow. In the same way, when the noble Viscount gives these figures of the safeguarded industries, why does he not give the figures of the electrical industry, in which there is no Safeguarding at all? The exports in that trade have increased very much without tariffs. They have increased from £16,034,000 in 1924 to £19,534,000 in 1929. The noble Viscount did not tell you that. He gives only certain figures which, as a matter of fact, ought not to be lumped together.

The artificial silk trade was prosperous long before there was any talk of duties. It was growing by leaps and bounds. Courtaulds did not want a duty and did not ask for it. At first they opposed it, and when they were helped slightly as regards the Excise Duty the most that the chairman of Courtaulds said was that he was inclined to think that the duties would be found in the long run not to have caused any damage to the British textile industry. That is not inconsistent with the fact that later on he did not want them taken off. When you have them on, a different position is created. It is really quite idle to suggest that the prosperity of the artificial silk trade is due to Safeguarding or to duties. Their exports and production were growing by leaps and bounds before.

Similarly with the motor trade. I will give the noble Viscount some figures here to prove this point beyond all doubt or controversy. We can do that in the case of the motor trade, because there was a short interval when the Motor Duties were taken off, and disaster was prophesied. We were told that all kinds of things would happen. One prominent person, I think, said that more employees in the motor trade would be thrown out of work than there actually were in the whole trade. As a matter of fact, after Mr. Snowden took the duties off in 1924, precisely the reverse happened. The trade had a very prosperous time in the ten months when the duties were off. Employment increased, production increased and exports increased. If I take the average for the six months before the duties were taken off, there were 199,000 workers, and in the following ten months that figure grew to 209,000. How can it be said, therefore, that Safeguarding increases employment and that non-safe-guarding does the reverse? Similarly with the export of motors. For the six months before the duties were taken off it amounted to £354,000 per month, and in the following ten months to £538,000, a growth of over 50 per cent. I think the noble Viscount ought to have mentioned some of these facts in his speech. If he is going to quote figures in the way in which he did, I think he ought to have indicated that, as a matter of fact, similar figures could be quoted under totally different conditions, and that these figures do not result from Safeguarding but from quite different reasons.

Then we come to lace. It is suggested that Safeguarding has largely increased employment in the safeguarded industries. It happens that the only safeguarded industry in which there are official statistics regarding unemployment is lace. The other figures which the noble Viscount gave are not official, though I do not say that there has not been an increase in some cases. However, the only safeguarded industry in which there are official figures is lace, and the figures show that, as between 1924 and 1929—that is between the year before the Safeguarding Duty was put on lace and the last year for which figures are available—there is a small decline in employment in the lace industry. Those are official figures. But even if it were not so, even if the reverse were the case, that is a very different state of things from the extravagant claims of the Safeguarders, who suggest that Safeguarding has enormously increased employment.

They always leave out of account the fact that, if in one particular trade employment has slightly benefited, unemployment has been created in some other trade. That is always left out of account. Take, for instance, the hosiery trade. That trade is not safeguarded, though perhaps a small amount might be held to be safeguarded because of the use of artificial silk. I have shown that the duties do not account for the growth of the artificial silk trade. There has been a great increase in the number of people employed in the same period in the hosiery trade. It is clear, therefore, that the contentions of the noble Viscount do not bear close examination. He said nothing about the damage done by the Safeguarding Duties to the re-export trades—a very serious damage indeed.

He then came to the question of prices. He said that prices had gone down enormously. There again, I should like to put it to your Lordships that there are no official statistics of prices in the safeguarded industries. The statistics upon which the noble Viscount based his statements are not official. As a matter of fact in this House from time to time the noble Earl, Lord Beauchamp, and I myself, have given specific instances of various articles the prices of which we say have been raised, and raised considerably. That is not official, because there are no official figures, but no attempt has ever been made by those who support Safeguarding to dispute a single one of those cases. Therefore we say that it is not a sustainable position to argue that Safeguarding has not merely not increased but has apparently decreased prices. The fact is that there has been a general fall in prices, and my point is that without the Safeguarding Duties prices would be cheaper still.

Similarly, with regard to wages. There really are no official statistics with regard to wages, but when the noble Viscount claims, as he does, that for instance in the United States of America real wages are higher than they are here, the reply to that has been made again and again and it is still true. We do not say that tariffs are everything, and that they transform and upset everything. We say that in a country like the United States, where you have a vast and to some extent undeveloped territory, with a great area for Free Trade within its borders, you may have wages higher than in the old European countries, tariffs or no tariffs, but real wages in this country are very much higher than they are in the European countries; that is, under more or less similar conditions with which they ought to be compared. The figures are 100 here, 71 in Germany, 53 in France, and 42 in Italy. Is it not, therefore, perfectly clear that under Free Trade the workers have better conditions with regard to wages than under Safeguarding? Then the noble Viscount mentioned iron and steel, and I would put a question here to Lord Melchett, and nobody can reply to anything which he may say better than himself a few years ago. Lord Melchett spoke a few days ago on the need of putting a duty upon steel. The noble Viscount asked why we do not make in this country the 3,000,000 tons of steel which is imported. It did not occur to him that that 3,000,000 tons of steel has to be paid for in some way, and that if it does not come in nothing is sent out to pay for it. If the question is asked: Why do we not make the 3,000,000 tons of steel here? the reply is that we cannot make it here at the same price. That is the reply. If you put a duty upon steel, steel is bound to be dearer, and of our total production of steel, which with the steel we import comes to about 11,000,000 tons, somewhere about half is exported. If we are going to make steel dearer by putting a duty upon the 3,000,000 tons which we import, we are bound to injure ourselves in our export trade, in our capacity to compete in neutral markets, and if we refuse the 3,000,000 tons some portion of that quantity will find its way, in intensified competition with us, into neutral markets. Therefore if we probe these things we find that they do not work out quite as simply as the noble Viscount suggested.

I will not say much about agriculture, because others will speak upon that, but I will say this. When all is said and done, so far as I can follow the noble Viscount, it came to this, that agriculture in this country is to be helped by a duty upon imports of foreign foodstuffs. That at any rate is the proposal of the noble Lord who is sitting beside the noble Viscount, and who is here to-day, and who, although he changes at times, is at any rate quite definite at any particular time about his programme. We say that a duty upon imported foreign foodstuffs will make food dearer. Does the noble Viscount deny that? I rather gathered from his speech that he does. If that is so, how is it that I can bring in here from the Library a Parliamentary Return for 1840–1910, showing the effect on the price of wheat of Import Duties in two or three of the principal countries of the world, as compared with our own prices? That return shows that broadly speaking the price of wheat in these countries—Great Britain, France and Germany—is affected by the amount of the Import Duty on wheat, about to the extent of that duty.


Can the noble Lord quote any figures for the years after the War?


I have looked into the figures after the War and the position is a good deal affected, particularly in the earlier years after the War, by the way in which foreign currencies were slipping about and constantly changing; but the economic law remains equally true over that period of time, that a duty on goods coming into a country must raise the price of those goods. Even Lord Melchett will not dispute that. Even he cannot have changed upon that because he said in 1921 that of course an Import Duty would raise the price; that that was what it was for. If a duty will not raise the price of food and wheat, why is the Conservative Party adopting the device of the referendum? Why does Mr. Baldwin think it necessary to have a referendum? It is because he knows that the people of this country are not likely to agree to anything which is likely to raise the price of food.

As a matter of fact even Lord Beaver-brook when he began his campaign last July, used words which in my submission mean, if they mean anything, that in his opinion a duty on foreign foodstuffs coming into this country would raise prices, because when he spoke he said:— We present to our opponents the cry of dear food and the small loaf.…. Contrary to the established Free Trade belief, this cry was never an election winner in any great industrial centre when it was faced boldly as part of an Imperial policy. Men care more for steady employment at high wages, which the Empire policy offers, than a cheap loaf and no money to buy it with. This must mean that he agreed then that an Import Duty would raise prices, and only later has the theory been evolved that it will not do so. If a duty will not raise prices why has Lord Beaver-brook been driven to this? At Preston, when he was asked what was going to be the effect of an Import Duty upon foreign cotton coming into this country—that was very awkward—he said, "Oh yes, it was so, but there was a system of rebate whereby cotton which was exported could get back the amount of the duty which had been imposed upon the import."

Just look at it. About three-quarters of the cotton trade is engaged in export. Now, does the noble Lord, Lord Beaver-brook, really propose that a duty should be put upon all foreign cotton coming into this country, and that all those engaged in the cotton trade, who are already harassed enough, Heaven knows, should try to get hack their proportion of the rebate on the foreign cotton which had come in? And if that is so, what is the advantage going to be? Will it not very much whittle down the advantage to the Empire in sending the cotton here? I could bring case after case all supporting the view that, even in the opinion of the Empire Free Traders and the Safeguarders, these duties must raise prices. If duties do not raise prices, or affect prices—which seems to be their contention—why was there all the indignation with the Chancellor of the Exchequer for not stating in advance of the Budget what his policy was about the Safeguarding Duties? What did it matter if they did not affect the price? Of course, everybody knows that they raise prices.

The noble Viscount dealt with the dumping of German and French wheat. A great deal was said about this two or three months ago. I am not going to minimise that, but, as a matter of fact, it really was, in proportion to, our total imports of wheat, quite a small thing, and not only so, it is not a new thing. It has been going on more or less for years. It went on before the War


Is the noble Lord referring to wheat only? Will he deal with oats?


I will deal with oats, if the noble Lord desires me to do so. As regards wheat, the position has already materially changed, because in the six months to the end of February this year the import was 493,000 cwts., against 1,847,000 cwts. during the corresponding period a year ago; showing that it was a sudden change, which has now to a large extent disappeared. And of our total imports of wheat into this country of 111,000,000 cwts., the wheat imported from Germany last year was 1,676,000 cwts. That is less than 1½ per cent. of our total imports. And yet it is on that that the noble Viscount apparently proposes that we should change our whole fiscal system, and increase the price of food to everybody in this country. And there is no certainty, when you have done it, that you will keep out the German imports. The noble Viscount, when he talks about dumping, overlooks that from time to time one of the greatest dumpers has been ourselves. We have dumped very heavily in foreign markets. That shows that tariffs do not stop dumping. They may in certain circumstances lessen it, but there is no guarantee. And you cannot have any guarantee that the tariff that he proposes will stop exceptional dumping, such as takes place from time to time.

As regards oats, it is true the imports have risen seriously and constitute a distinctly higher percentage of the total. In fact, last year I think they were about one-third of our total imports. But it is only fair to say that our imports of oats are very much less in volume than those of wheat, in fact, only about one-seventeenth of our wheat imports. And of our total agricultural production in this country of all kinds, wheat is now only about 4.4 per cent. and oats and barley, that is one or two other crops combined, only about 5.3 or 5.4 per cent. So, these figures proportionately are not very overwhelming. But it is necessary to point out to the noble Viscount that what he proposes is that this duty in order to keep out German wheat and oats does involve a complete change in our whole fiscal system.


Hear, hear.


He stands for that, but the noble Marquess opposite (Lord Salisbury) is not standing for that. The Tory Party as a whole are not standing for that. They have devised the referendum to come between them and this change. I thought when I saw in the words of the noble Viscount's Motion the term "economic unity" that that meant Empire Free Trade, and he said at the very outset that it did. It is a euphemism for that. We had a debate on this last November. There is not very much that is fresh to be said on the subject. The whole policy is quite impracticable, because the Dominions will not give up Protection, and Great Britain will not give up Free Trade. That is the position. The noble Viscount spoke of Australia and other Dominions having welcomed it. Surely he must be aware of what Mr. Scullin, the Prime Minister of Australia, said. This was since our last debate. He said:— It is quite hopeless to expect Australia to agree to Empire Free Trade. From the Australian point of view the scheme is entirely impracticable, the country being engaged in building its own industries. Lord Beaverbrook's plan would be of no value, because it would remove the tariff protection from manufactures. That is not very encouraging to the Empire Free Traders.

Then I come to the noble Marquess opposite. What does he say? He has had two or three letters in the Press on this subject. About two months ago he wrote in The Times:The remedy he prescribed"— the same remedy as that of the noble Viscount— of building up a fiscal union with the Empire, if it is designed to meet the urgency of our case, will be, I am afraid, of little avail. Lord Beaverbrook's policy is not going to save us now. The fruits of this policy, in fact, do not belong to the immediate future, and unless it is to be fully grasped it will not be merely useless, but dangerous. Another quotation from one of the younger members of the Conservative Party, Mr. Ormsby-Gore. He says:— The policy of the new Party is Empire Free Trade, with a tariff wall ail round the Empire. That policy, however noble, is impracticable, and, put forward as it has been, is really dangerous. The policy now advocated by the new Party has not received the support of a single leading statesman in any part of the Empire. A fortnight ago it was denounced in strong terms by the Prime Minister of Australia. Another quotation from Lord Salisbury:— The fulfilment of our dream is, I am afraid, a long way off, and if we were to pretend that the urgent gravity of our industrial position can be cured or even mitigated by generalities about Empire Free Trade, whose beginning is not even in sight and cannot be until public opinion in all parts of the Empire is changed, we should be only deceiving the country. To deceive the country on such a point seems to me to be the unforgivable sin. The idea appears to be that we can get all we want—I know this is what the noble Lord, Lord Melchett, will say—both in food and raw materials from the Empire before very long, or nearly all. As a matter of fact that is not so.


Before the noble Lord leaves that point, what reply has he to make to the very recent action of Canada? He has talked a great deal about Australia, but he said nothing about Canada.


As regards Canada the new Canadian tariff which has recently been introduced into the Canadian Parliament is something which we in this country of course welcome. We have not got the full details analysed yet. It is impossible to say precisely what its full significance will be. But the fact is that despite the preference which we have had in Canada and despite the preference we have had in Australia, American trade with Canada has increased immensely more than ours in the last six or seven years, and our exports to Australia have been declining while the imports into Australia from foreign countries without preference have been increasing. Therefore it would appear that this policy of preference does not accomplish anything like all that its supporters would suggest. I take meat. How are we going to get all the meat we require from the Empire. Last year we imported £36,140,000 worth; of that £2,224,000 worth came from Australia and nearly £28,000,000 worth from the Argentine.


When the noble Lords says meat, does he include mutton?


I include every possible meat which exists, raw, tinned, every kind of meat. The figure I have given is the total of imports, it is not merely imports retained for home consumption. But it makes very small difference to my argument. I could not get that figure because the statistics are not yet available. If the noble Lord would take my figure as given in my speech in your Lordships' House last November, he will find I think there, though it makes very little difference to the calculation, that about one-sixteenth of our meat comes from Australia.

Turning to timber, the imports of foreign timber last year were £37,960,000 and £4,600,000 from the Empire, so that between one-eighth and one-ninth came from the Empire. Taking cotton, there were £64,500,000 of foreign imports of cotton and nearly £11,000,000 from the Empire, or about one-sixth. How long is it going to take to supply these deficiencies from the Empire, and when it is done what is the price going to be? That is the point. I wish the noble Lord, Lord Melchett, who is a business man, would address himself to that when he speaks to-day and not indulge in his vague and airy generalisations about Imperial rationalisation and mergers. What is the price going to be when the products reach this country? It is a question of price. That is where Protectionists and Empire Crusaders go wrong—they leave out of account the question of price. How much is it going to cost? Clearly even if you could make up these huge deficiencies from the Dominions it would only be at an enhanced price. You could not get at anything like the same price from the Empire all that we import now of foreign food and raw materials. It cannot be done.

There is only one other thing, and I think this is a thing which should be made clear. The noble Viscount just touched upon Empire Free Trade not merely with the Dominions but with the Colonies. Lord Beaverbrook has frequently spoken about that. There is to be Free Trade between ourselves and the Colonies. In the first place, of course, that means that the Colonies would lose in many cases most of their revenue. As they cannot have direct taxation what are they going to do?


May I interrupt the noble Lord for a moment? I had not time, as I said at the beginning of my speech, to traverse the whole of the ground in my Motion. I just touched on the question of the Crown Colonies. The noble Lord is perfectly right. It is not possible to do away with the revenue tariffs in those Colonies, and anything that is done there will have to be done, leaving those revenue tariffs alone.


Therefore, it is not Empire Free Trade. But let me give one illustration on this particular point before I sit down to show how the new scheme works. I will take two very similar islands, Mauritius and Réunion. Mauritius is a British Colony and Réunion is a French Colony. These islands are very similar and are very close together. Let us just see what effect Empire Free Trade would have there. As a matter of fact, Réunion is the bigger island and its soil, I believe, is supposed to be a little better than the soil of Mauritius. We find in Mauritius, where they only have a Customs system and can trade with any other country and trade can flow into any channel, that the position is this. The total imports of Mauritius in 1927, which are the latest figures I have got and are not chosen for any other purpose, were £4,320,000 and the total imports of Réunion were £1,402,000—about one-third. The total exports of Mauritius were £4,493,000 and the total exports of Réunion £1,187,000.

You see the effect. Réunion has to trade with France. She can practically trade with nobody else; that is the French system. The result has been that in those two islands where you have a specific illustration, the system has had a devastating effect upon the total volume of trade. Because despite this system, despite what is in vogue there, Mauritius actually bought more from Great Britain in 1927 than Réunion did from France. In addition to that Mauritius bought £3,319,000 worth of goods from other Colonies and foreign countries; whereas Réunion only bought from such countries £561,000. For that comparison, which I venture to say shows clearly what Empire Free Trade would mean if it were in operation, I am indebted to Sir Graham Bower in a letter he wrote to the Press not very long ago. After his experience as Colonial Secretary of Mauritius he is entitled to speak on the question. He began with a leaning towards Empire Preference, but his experience changed his view. Those are the figures. I think they are very conclusive that if this system were in vogue it would mean, not more but less trade. It would unquestionably tremendously magnify our difficulties whether with the Colonies or the Dominions or elsewhere.

I must say one word about the Amendment of the noble Marquess. That Amendment has been spoken to by the noble and learned Earl. He proposes, in the words on the Paper, to have really a non-Party conference. I would say about that, that if the noble Marquess has some new proposals to bring forward which have their bearing upon present questions, we shall be very glad if he will bring them forward and we will give them consideration. But so far as the Conservative Party are concerned, apparently the only proposals or almost the only proposals which they put forward from time to time—I follow their speeches in another place, in the country and in your Lordships' House very closely—are Safeguarding of one kind and another. They come to much the same thing and the Amendment of the noble Marquess is not likely to carry the matter very much further, because the noble Viscount is proposing Safeguarding and it would appear to lead to very much the same result. If there are new proposals let them be put forward and the Government will certainly give them their close consideration.

Though not intentionally, of course, I venture to suggest that some of the speeches which are being made by Empire Free Traders and Safeguarders are not calculated to assist us in our troubles. I would deprecate what I would call this spirit almost of defeatism which is evidenced in their speeches. I think it will probably do damage to the trade of this country if we are told day after day and week after week by important personages in the country that we cannot compete with the foreigner, and the tendency will be for people in foreign markets to take note of that and say it is not as much use going to British merchants as was formerly the case. As a matter of fact, we can compete with the foreigner, and on the whole we continue to compete with the foreigner with a pretty considerable degree of success. Another feature which I think is unfortunate about the latest campaign is this. In certain instances it is encouraging manufacturers and others to hope for Safeguarding instead of taking every possible means they can take now to bring about greater efficiency in their works and to get on as best they can under the system under which this country has prospered for so long.

I am sorry that I have spoken for so long, but this is a great question. There will not be many speeches from this side of the House and I believe there will be a great many from the other side, so I hope I shall be pardoned. But I do submit that the arguments and the figures of the noble Viscount must be put to the closest examination and scrutiny, and that if that is done they do not really come very well out of it. In those circumstances, I very much hope that his Motion will be rejected.


My Lords, the noble Lord in the course of his lengthy and interesting speech has referred to me and perhaps I may be allowed to say a few words, and they shall not be very many, in reply to him. So that is Labour's answer to depressed industry! That is Labour's answer to 1,750,000 unemployed walking the streets in this country. That is Labour's answer to the Dominions, after struggling and waiting for years to hear a sympathetic word of Empire economic union—"What is the price? How much is it going to cost?" It is more like the language of Shylock than of a member of the Socialist Government. What a speech ! A farrago of figures, tendencious, inaccurate, produced without any system or plan, a number of statements and assumptions contradicting each other from moment to moment, visualising no policy and arriving at no result.

Is that the constructive capacity of the Socialist Party, who, after all, are not bound by any of the old fetishes or any of the old ideas which prevailed in the days of the Manchester school, with its child labour, its own factory Acts, its theory of buying everything in the cheapest market with the human being, the human child, as the raw material? Is that doctrine of cheapness the real doctrine that is surviving in the Labour Party to-day? I have not the honour or being a member of that Party, but I will tell the noble Lord that it is not the belief of the millions of the working men of this country. It is not the belief of the leaders of the great trade unionist movement. Not a single argument that he has produced will save him and his colleagues from defeat at the next Election if that is the best they can produce.

What is our position in the country? Unemployment is enormous. What is the use of pointing to what is happening in other countries? Let us deal with what is happening in Great Britain. The Labour Party is bankrupt in ideas. Sir Oswald Mosley has retired in disgust from the Government. Mr. George Lansbury, I believe, is shortly to follow in his train. All the bright young men and women of the Labour Party are rushing away from dismal economists like the noble Lord, and are asking for a wider and freer field of life. My friend the Lord Privy Seal still makes the same speeches as those which were denounced by the Party opposite, when they were made by Conservative Leaders, as "murder," and yet when constructive proposals are brought forward such proposals are brushed aside with a haughty assumption that nothing in the world has changed.

The noble Lord spoke of the days of 1912, 1913, and 1914. He said we then had 2 per cent, of unemployed. He was right. That is one great reason why I myself saw no cause at that time to change our fiscal system. Is that our position to-day? Has it been our position for the last five years? Are not our figures of unemployment much more chronic, much more basic and much more alarming that the figures for unemployment quoted from the United States of America or even Germany? Is it not a fact that, owing to political circumstances even more than economic ones, our export markets are being year by year restricted? I call the noble Lord the Rip Van Winkle of business. He seems to have entirely overlooked what is really happening in the world. He cannot imagine why I have changed my views on such economic subjects. The new facts are fundamental. What are they? The fundamental new facts are that during the War the world covered itself with factories. Things we used to make are now being made in countries who never thought of making them themselves, and in many cases they are being made under entirely uneconomic conditions by the help of tariffs or prohibitions. For that reason our exports are sinking. Even for the things that we make ourselves we cannot hold our home trade, and how therefore can we expect to hold the export trade?

Why, then, do we advocate Safeguarding for a vital industry—a vital industry for Britain's national defence—like steel? Can you conceive Great Britain without a steel industry? Let me ask the noble Lord this. Suppose we could get steel from abroad at £1 per ton cheaper than it could be made in England, and made no steel whatever ourselves, allowing our blast furnaces to stand idle and our great steel furnaces to go out of commission. It might be an economic gain, but what a national position would result ! We should be defenceless, incapable of producing a shot or shell in the event of war. Great Britain would be at the mercy of almost any vagabond of the seas. Is that the kind of position you could possibly allow this nation to be in? Of course it is not. On the other hand, as the noble Lord knows, one of the great needs of modern industry is the continual increase of larger units of production. The larger units of production we have the greater security of output we get. Our great productive industries can only operate economically when they are producing up to nearly 100 per cent. of their capacity. Therefore, it is not merely a question of price. It is much more a question of the market.

It does not necessarily follow that a tariff will raise prices. If you are assured of conditions which will enable you to produce on a larger scale you can sell at a cheaper price. The Dyes Act created the dye industry in this country by prohibiting the importation of German dyes. I venture to say that in spite of that prohibition, owing to the size of the market, British dyes are being manufactured and sold at a price to British consumers which was formerly not possible, and thousands of people are being employed who would not otherwise be employed here. What is the use of telling me, with such an example under my eyes, that you cannot do anything for employment, and that if you do not import your steel you cannot export something else?

The noble Lord knows as well as I do that goods are either paid for in gold or goods or services. We seem to be paying a great deal to-day in gold are we not? Contrary to pre-War experience the fluctuations and flow of gold in and out of this country is a most disturbing factor to the whole of our industry, and creates a continuous state of nervous apprehension. It is one of the things which can only be explained by unfavourable trade balances. You are paying with your works of art. It gives no employment in this country to sell a Hoppner to America, but it does give employment to make steel and iron in this country. You may be paying in services. Certainly you are broking bills, you are having commissions, you are employing a few clerks in offices in London, but how about the hundreds of thousands of men in the mine, in the forge, and in the rolling shop, sullen, discontented, wonderfully patient, but getting more and more impatient, more and more likely to listen to the agitators from other countries which noble Lords are so fond of letting in here? It is their funeral rather than ours. Do they think that these people will be satisfied to be told that because you have taken so much commission and accepted so many trade bills you are paying for this imported steel? How can you rationalise a great industry under such conditions?

I have been into the question of steel mergers for three years. The noble Lord was once associated with the Stock Exchange, and he knows very well the difficulties of raising capital in difficult times for our industries. What is the investor asking for? He wants to know what return he can get. Can you assure him of a return that he will be satisfied with on steel works when you have the German, French and Belgian cartels dumping their surplus steel here regardless of cost in order to stop our own industry from being rationalised. Surely, it is no use talking of an international arrangement. How can you make an international arrangement when the British manufacturer sits at the table with his hands tied behind his back? What is the argument? The European says: "You cannot send anything into my market; I have a tariff arrangement." The Frenchman says: "You cannot export to my country; I have a tariff." The Belgian chips in with the same remark. What remains? Oh, the British market. Here you have nobody to help you and you will have to help yourselves. It is really a miracle that British industrialists are going on at all under these depressing circumstances, harassed from every side.

The noble Lord said I interrupted the other day during the debate on the Coal Mines Bill. I will tell him why. The coal measure of the Government is more Protection than anything proposed in the Motion of my noble friend. It is a Bill deliberately designed to make coal dear to the home consumer in order to give a bounty on export. If it does not make coal dearer to the home consumer the Bill does not work. Its object is to make coal dearer in order that the miner may be paid the same wages for fewer hours of work. You might put it the other way. Suppose coal was coming into this country from abroad you would have to impose an Import Duty on coal in order to produce the effect you are producing by that Bill. Would it not be better for our coal to be used in English blast furnaces and steel furnaces rather than be used in Belgian blast and steel furnaces? Is it really fair to this country to subsidise the coal used by the competitors of the English heavy metal trade? You are forcing that Bill through this House and I understand the Government are going to cram it down our throats.

What an illogical, what a farcical position! The Lord Privy Seal in great glee said the other day: "I have ordered local authorities, I have ordered the railway companies," to do what? To buy goods in this country. Why did not the noble Lord tell him how futile it was to do that, that of course there would be fewer imports and more people unemployed? Is that Free Trade? It is not a Free Trade doctrine which I have ever heard of. I quite understand the kind of doctrine expounded by Sir Herbert Samuel in the House of Commons, that whatever happens it does not matter where you buy anything. That is the old Free Trade doctrine—to buy in the cheapest market and sell in the dearest market. The Lord Privy Seal at any rate does not spread that doctrine and the Under-Secretary for the Dominions does not. The Government are giving £1,000,000 a year to the Empire Marketing Board to cover the countryside with wonderful pictures telling people to buy British, to buy Empire produce. Why should they buy British or buy Empire produce? Surely the Government should say "Buy cheap, buy foreign." That is really the propaganda of the noble Lord opposite!

Really we must have some kind of logic. We cannot be Protectionists half the time and then run away, and try all the oldest and most-worn-out theories of Free Trade for the other half. This country has drifted away from its old Free Trade practice. You have loaded up one side of the scale with enormous overhead charges for social services. You say to the manufacturer that he must pay not merely the ordinary wage—which the noble Lord admits is higher than in other countries—which of itself makes it difficult to compete in the world market or even to keep the home market. You also tell him he must pay for social services, and you say to him: "Why are you depressed? Gambol and be cheerful like the young lambs in the spring and be glad that the Chancellor of the Exchequer has not taken the remaining part of the profits you cannot make." Manufacturers cannot do it. This is their answer: "If you want us to do these things, to maintain artificial wages and keep up the level of orders you must help us." And what will help? A big home market to enable them to export cheaply. America is proving that every day.

May I just refer to one point about Safeguarding? Why should there be this indignation on the part of the noble Lord when my noble friend speaks of safeguarded industries. He said that motor cars do not come under Safeguarding, that they come under the McKenna Duties. But my noble friend's Motion treats Safeguarding in a general way. If there is any kind of protective duty really it is Safeguarding. It is pedantry driven to the extreme to endeavour to differentiate between those two things. Then he says if an industry has done well: "Well, of course, that is not due to Safeguarding at all." But, if it does badly, then that is due to Safeguarding. I hope the noble Lord will tell that to the lacemakers of Nottingham, who may continue a precarious existence owing to the fact that France has a tariff and therefore the French have been able by imposing a tariff on motor cars to reduce the tariff in America to such a state that our lacemakers may be able to sell something. I think the lacemakers might well send a deputation to the French Government to say: "Thank you, gentlemen. You are not debarred from fighting for your workmen, for getting justice for your people." They ought to ask how it is that the French Government can do those things which their own Labour Government entirely fail to do for them.

One word as to Imperial economic unity. Imperial economic unity connotes more to me than tariffs, or food duties, which are only a very small fraction of a very large sum. Since we had a debate in November one very striking event has happened to which the noble Lord did not refer at all. What brought me in 1926 to the position of being firmly convinced that unless you can tie the Empire together in bonds of economic union, it is bound, as certain as I am standing here, in time to disintegrate, was the fact that the economic organisation of the world to-day, for good or evil, is tending to larger and larger units. I have pointed out before that the great economic complex of America must be balanced by the economic complex of Europe. A few days ago that veteran statesman M. Briand issued an official Memorandum to the Governments of the world adumbrating a scheme for the Federated States of Europe involving, as it will have to do in time, the economic union of Europe. Whenever I have talked to people on the Continent, to statesmen, to economists, financiers, industrialists, the question I have always been asked is: "Where is Great Britain going to stand when we have formed an economic union?" The noble Lord has no answer to that, but we ought to have an answer.

Are we going to join that economic union or remain in a state of glorious isolation with no friends, or are we going to join together the greatest Empire the world has ever seen in as big a trade as we can possibly get, in as great a development in finance, in banking, in control of its valuable raw materials as we can possibly get? Cannot the noble Lord have a little imagination? Has it never occurred to him that the Empire produces 75 per cent, of the world's gold supply Has it never occurred to him that that fact might be made of great use to the Empire and to-day is not? We do not want to get on to purely sterile controversies on small issues. Is it to be said that the people of Great Britain will never do anything so long as there is a possibility of a farthing being put on the price of the loaf? I was speaking some time ago to a man who has been Governor-General in the Dominions. He said: "Have you forgotten the hundreds of thousands of men Canada sent during the War? Have you forgotten the War munitions Canada supplied, the National Debt of £2,000,000,000 Canada has incurred?"

Is it to be said that Englishmen are ungrateful and think of nothing but price, price, price? The English people have always responded to great causes, to causes in which there was no money and no price. In the old Liberal days the Party to which the noble Lord belonged took up under Gladstone questions like the liberation of Greece and the Bulgarian atrocities, questions about which the British people were deeply stirred. Nobody asked the price. I say to the noble Lord I cannot tell you how long it will take to bring about the economic union of the Empire. It may not come at once. I do not quarrel with the noble Marquess if he says it is not going to solve the immediate difficulties of today or to-morrow. I say that however long it takes, or however great an effort is demanded, if it does not come then the greatest Empire the world has ever seen, the greatest Commonwealth of free people ever created will crumble and fall, and not all the statistics and niggling of Politics will prevent that fall.


My Lords, I can assure your Lordships that I do not intervene at this early hour of the debate by any wish of my own. I should have preferred to have allowed others more competent than myself to have addressed your Lordships and especially I should have liked to have heard the brilliant leader of this movement, the noble Lord, Lord Beaverbrook, who sits below the gangway now and who is more competent to deal with this question adequately from his point of view than any other member of your Lordships' House. But it has seemed fit to those who are responsible for the order of debate that it should be altered, and of course I am delighted to fall in with any view that they have put forward. At any rate, we have had the speech of my noble friend Lord Elibank at the beginning of to-day's proceedings, a speech extremely well delivered, very moderate and conciliatory in tone and very cogent in argument, and we have also heard a very brilliant speech from my noble friend who has just sat down, full of that gorgeous Imperial sentiment which went to the heart, I think, of most of your Lordships.

There is a great deal in the Motion that is before your Lordships' House with which I cordially agree. I wish I could say that I agreed with every word of it, but one cannot expect everything. There is much in it with which I cordially agree, and I certainly do not agree with the noble Lord, Lord Arnold, who sits opposite. Lord Arnold found fault with me, or at least he made a criticism. The noble Lord dissents? I am much obliged to the noble Lord. I value his approbation. The noble Lord said that I had written land uttered certain things, but if he thinks it worth while to look more closely into what I said he will find that I made a very broad distinction between what is required immediately, for the present great emergency, and the ultimate great policy which this country ought to pursue. The terms of this Motion do comprise that great policy, which I should hope that all Conservatives, I would almost say all patriots, would be willing to accept. I should have thought that even the noble Lord, with all his rigid Cobdenite views, would have realised—apart from the great sentimental reasons with which my noble friend who has just sat down has dealt—that he, as a, great Free Trader, would have realised the importance of getting greater access to these Dominion markets, to replace those markets from which we are shut out by the mistaken protectionist policy of other countries. He did not say one word in the whole course of his speech to show that he was sensible of the importance of that particular object.

As regards the great question raised in this debate, I should like to say this: that it is not a new question. Un- doubtedly the noble Lord, Lord Beaverbrook, with his vigorous leadership and his brilliant pen, has brought it before us in a way that we have not seen for many years, but I am sorry to say that I am old enough to remember the whole of this question coming forward thirty years ago. There was a time, of course, when this question, or the greater part of it, fell behind the leadership of that great statesman, Mr. Joseph Chamberlain. He was responsible for submitting it to the country, and this was done with all the intellectual power that he possessed, with all the momentum, zeal and conviction of which he was master. But it failed. It failed on the question of food. I am not speaking for the moment in argument; I am speaking historically. That is what actually happened.

A great deal emerged from that controversy. The Conservative and Unionist Party was converted to a policy of Preference—the fundamental idea, of course, of the present movement—with the Dominions. I certainly was converted to that policy, and I have defended and worked for it ever since. I will yield to no man in my advocacy of the policy of Preference. Indeed I can remember, if I may be allowed a personal recollection, when I was an Under-Secretary a great many years ago, putting forward to the superior members of the Government what was, perhaps, rather a crude project in favour of freeing the ports of this country to Dominion ships and, of course, maintaining all the dues for ships that did not issue from the Dominions. I remember that this was about the first effort of the kind that I made, and it was, of course, Preference in its barest and most open form. I have always been in favour of such a policy. It might be extended in many directions, but the Conservative Party went into the policy of Preference, and it was so defined that the Preference was to take place upon any tariff which might exist in this country. We had, of course, in those days only a revenue tariff, but upon that revenue tariff the preference was to take place, and a sort of engagement was given to the country that, whatever might be the duties then or thereafter To be imposed in this country, then, in relation to any one of them, a preference should always be given to the Empire. That was the policy of Preference to which we were attached.

I should be very glad now to see a very great extension of the revenue tariff. I wonder whether many people have realised what a great difficulty Chancellors of the Exchequer of the future will be in in raising the necessary revenue for the country. I suppose we shall all admit that Mr. Snowden and his colleagues have not only reached the limit to which direct taxation can go, but have a long way overpassed it. What are they going to do for money, and what are future Chancellors of the Exchequer going to do? I venture to say one thing with absolute assurance: there must be a reversion to the policy of indirect taxation. There is no other alternative. We may have either indirect taxation or direct taxation for revenue purposes, but no other alternative exists. Therefore I look forward with absolute confidence to the time when there will be a very large extension of indirect taxation for revenue purposes, of course upon the principle to which I have just ventured to call your Lordships' attention, that upon every one of these duties a preference must be given to the Dominions. I only want to show to what an extent all Conservatives are really committed to the policy of Preference with the Empire and all that it implies.

I know that I shall at once be faced with the question: "What about food? Why do you exclude food from your tariffs? Why not a preference on food?" I want to be quite candid with your Lordships. I think the feeling against a tax on food, as such, is quite irrational. If other things are taxed why not food too? I do not for a moment defend it as it stands, but it is a very remarkable thing that the country feels a great hesitation about a tax on food Why is that? Our countrymen are not irrational, they are not stupid. On the contrary, nothing impresses one more as one grows old in public life than the immense shrewdness of our people. Why have they got this curious, strong feeling about a tax on food, so that any suggestion of it appears to arouse—I will not say universal but in great sections of the people the most acute opposition? There must be a reason for it. I think the reason is this, that the people are quite aware that so long as there is no tax on food the indirect taxation, whether it be in the form of Safeguarding or any other form, must be kept within limits, because it is quite evident that high Protection without a tax on food would be an impossibility, because the producers of food in this country would not stand it.

Therefore, with their very shrewd political insight, our people see that so long as they can avoid a tax on food they do really prevent anything like excessive Protection—not Safeguarding, as I shall show in a moment, but against anything like excessive Protection, they put an impassable bar. Consequently it is most important, and almost vita?, for the success of the policy which is alike the policy of Lord Beaverbrook, if he will allow me to say so, and the policy of the Conservative Party, where those policies coincide, to overcome in the minds of the people any idea that a tax on food will mean an excessive system of Protection, and a consequential raising of the cost of living to the working classes in this country. I have tried with the greatest frankness and candour to show to your Lordships—I am not so vain as to think that you will all agree with me—why I believe there is what appears to be an almost irrational feeling against a small tax on food. I believe it to be in response to that almost unerring instinct of the people that the only way to protect themselves from a high protective tariff is to be firm upon the question of food taxation.

I am sure that we are right to consider that strong feeling. I believe that everybody, even my noble friend Viscount Elibank, and any others of us who are facing up to this great question of fiscal reform, must consider candidly and frankly what this feeling of the people against a tax on food amounts to. Therefore, when my right honourable friend Mr. Baldwin lays it down as an absolute condition of his policy that he will specially consult the people before he proposes any tax on food, he is merely responding, as I believe, to that consideration of prudence, nay, much more than consideration of prudence, that proper feeling for the legitimate susceptibilities of the people which I have tried to describe to your Lordships.

But I have said not one word in what I have ventured to say to you against the Imperial economic unity which my noble friend advocates in his Motion. On the contrary, I am a warm supporter of it. It appears to me to be most essential, as I think Lord Melchett said just now, to the future unity of the Empire, and we cannot exaggerate the importance, not only to ourselves but to the whole world, of the continuance and prosperity of our Empire. It is the greatest instrument for good in the world, and any of us who have had the great privilege which I have had, of going round all the Dominions, and being a witness of the intense loyalty of our fellow subjects in whatever Dominion you go, cannot fail to feel an absolute obligation to do everything we can for the unity of the Empire. I agree with my noble friend, the noble Viscount, and with his leader who sits beside him, that fiscal unity as a method of Imperial unity is intensely valuable, even if I lay aside the question of markets, to which I referred at the beginning of my speech. Therefore I have nothing whatever to say against my noble friend being in favour of Imperial economic unity. He says what I intensely believe myself, nor do I disagree when he speaks about the severe depression in our industries. Perhaps I feel it more than he does.

Lord Melchett spoke with much greater authority than I can upon this point, and he used language of great weight in speaking of how far this serious depression had gone. In that respect we are in a worse position than Mr. Joseph Chamberlain was in many years ago, because in those days our country was intensely prosperous. Now it is not so, and the susceptibilities of the people upon the cost of living are naturally more acute than they were even in his days. What of this serious depression. It is due, of course, to causes which are not national only—they belong to the whole world—but still there are causes which we can observe, those of us who look into the subject closely and watch movements, which are profoundly alarming. There is a slackening of the fibre of our people. Not that there is anything fundamentally or radically wrong, but we can see it whether we look at the employers or the -workers. We see that there is not the same elasticity, the same enterprise, the same fitting to new conditions, the same determination to work even harder than before. On the contrary, they say: "Give us less work and higher wages." That is not the way to redeem the country out of its depression. In the same way the employers, instead of saying: "Let us try any method which can rescue us from our depression," say on the contrary: "What was good enough for our fathers is good enough for us, and we will go on in the same old way." Those symptoms are far the most serious thing which we have to face; it is indeed, unless it be checked, a fatal disease. And therefore in what I have said I have emphasised as well as I could how deep our feeling ought to be in respect of it.

That is where I come for a moment to criticise the terms of the Resolution. The Resolution of my noble friend says that Safeguarding and Imperial economic unity are the most practical and immediate remedies. In my judgment the most practical and immediate remedy is a change of heart, a change of spirit—a new spirit in industry, and a new spirit in those who are responsible for the finances of the country. It is as though you were dealing with a patient who had a malignant disease. You would first try to stamp out the malignant disease: that would be to restore the new spirit. Then you would try to get the patient into robust health, and that can only be done by a policy of fiscal unity and the policy which is set forth in my noble friend's Motion. And that is why I put the thing in that order, and still believe it to be the right order.

Now this new spirit. I am not merely calling in question the attitude of those who are engaged in industry, I am calling in question the attitude of politicians. Just look at the present Government piling up expenditure. Can anything be worse than the present state of things? I should have thought it was apparent to every man that the first remedy for our present industrial depression is to turn out the present Government. That is the first, that is the most immediate, and I think the most practical remedy. And that is what I should like to see done. Certain symptoms of dissolution seem to be already apparent. I am afraid I cannot sympathise with noble Lords opposite in that matter. And in the establishment of this new spirit of which I have spoken Safeguarding is of the greatest value, and that is why I approve also of that part of my noble friend's policy. You absolutely require Safe- guarding in order to carry out that reorganisation of which Lord Melchett spoke in such terms just now. That indeed is of immediate importance. That comes within the whole terms of the Motion. It is of immediate importance though, of course, I hope and believe that in applying Safeguarding there would be adequate discrimination between those industries which ought to be safeguarded and those industries for which Safeguarding was not necessary at all. But with that explanation that appears to me all right. We do require most intensely to restore confidence in our industry, and what has been said to-night can never be repeated too often: unless we can give some confidence to industry at this moment we cannot hope that it will set about this great business of reorganisation as it ought. And Safeguarding will undoubtedly tend to give it that confidence, and ought to be supported. Therefore, I approve that part of the Resolution too.

Well then, what does it come to? I will not spend any time upon the noble Marquess's Amendment. I understand the spirit in which he moved it, but I do not see any sign of that temper among the Leaders of Parties at the present moment which would render any such conference of the slightest use, so I am sure he will forgive me if I do not say anything more on that subject. But I am entirely and strongly for what I have called the new spirit. And if there is any criticism which I would like to address very respectfully to my noble friend the noble Viscount, it is this. In some of the agitation which is going on in the country I notice a certain disruptive element. Now, what we want of course, in order to turn these gentlemen out, is complete unity on our side among all Conservatives, among all men of good will—if noble Lords opposite will forgive my saying so. We want complete unity, and anything in the nature of disruptive tactics seems to me to be in the highest degree unwise. You cannot expect all the Party to be absolutely of one exact pattern; there must be differences. And the great object of Party leadership is not to get as few people as possible to follow you, but to get as many people as possible to follow you. Sometimes I think the noble Viscount and his friends forget that elementary rule.

I hope, therefore, that what I have said will show that, as far as I am concerned and as far as many others, I believe, are concerned, we are strongly in favour of all the positive parts of my noble friend's Motion, and we are still more strongly in favour of a new spirit in industry and a new spirit among politicians. When we come to the actual question of the Motion itself, I do not want to be too meticulous. I do not, after all, take a Resolution of this kind too literally. I am quite sure there is no member of your Lordships' House who will vote to-night in favour of this Resolution who does not put in front of it the object of turning out the Labour Government. I am sure that is so. Well then, we need not put too literal a construction upon it. But so long as this very grave condition of industry is borne in mind, and so long as we realise that our Party is on broad lines agreed, why, let us all go into the Lobby and vote for the Resolution.


My Lords, I think perhaps the most instructive portion of the speech of the noble Marquess is that in which he appealed to his own Party against any disruptive tendencies. Well, I do not find any fault with him except this, that you cannot avoid disruptive tendencies if on great questions of financial and economic policy you try to include in one formula or in one line of policy measures and suggestions which are essentially distinct and antagonistic. It is not a matter of asking people to vote for a Resolution which they understand in different ways. It goes much deeper than that, and if the noble Marquess desires no disruptive tendency in the Party to which he belongs the only way to avoid that is to do what he can to impose a policy on which the mass of the Party to which he belongs are in truth—not merely in words—of the same opinion, and hold the same view.

Before I refer to what was said by the noble Viscount let me deal with what the noble Marquess has said about taxation of food. Does he really wonder that the taxation of food, which means the taxation of the poorer working classes in this country, should meet with such strong objection? I do not know whether the noble Marquess has ever considered it in his own district. I have considered it in mine. The poorer the conditions are for the moment the larger is the consumption of bread, the reason being that bread is the food of the poorest; it has to be utilised above the average quantities when the conditions are below the average of prosperity. Now why should this tax be placed upon the poorer classes of this country? I differ from the noble Marquess in one respect. What he said may be true as regards those who have what are called regular meals, but to the really poor people who are almost on the verge of starvation and who have no margin whatever as regards the necessities of life, I say it is most cruel under these circumstances to impose a taxation on food. I am not sure what the noble Marquess himself meant when he dealt with the taxation of food. Is he against all taxation of food, or is he not? I understood him to say that the fear of a growing taxation was a very legitimate fear.


What I meant, if the noble and learned Lord asks me, is that a small tax on food is really no more oppressive to the payer of the tax than a small tax on many other commodities. Singling out food as being an absolute thing that you must never tax is in its nature irrational. That is the explanation which I venture to give your Lordships and which I hope the noble and learned Lord appreciates.


My answer is that when the immediate fear is of starvation, as is the case with the poorer classes in bad times, one would and must expect that they would fear any taxation placed particularly on bread, which in those conditions is their greatest necessity. What do you mean by Protection in the sense of taxes on food? You mean taxes on the poorest class. This is not merely a matter of trade. This is not only a question between Protection and Free Trade. It is also a question of taxation, and I want to ask the noble Marquess whether, under such conditions as exist in this and all other countries, there is any justification whatever for putting on a tax which admittedly has to be paid by the poorest class of all? It is not, as, is sometimes said of indirect taxation, that you may or may not buy a particular commodity. That may be true of a commodity of luxury, but regarding the commodity of food it is wholly untrue. The poor are obliged to buy food for their sustenance, and to put on a tax which will fall on the poorest class of all is, to my mind, a cruel proposal and a very unjust one.

In connection with that, I should like the noble Marquess to consider what was said by the noble Viscount who brought forward this Resolution. It appears to me that what he said really destroyed his whole case when he went into details and figures. What he said was that since the War there are lower wages and worse social conditions in all the protected European countries than there are in our own country. Can you condemn Protection more wholly and absolutely than by a, statement of that kind?—lower wages and worse social conditions in all other countries affected by the European War and European conditions than in England. Is that a reason for introducing Protection in this country? Do we want lower wages and worse social conditions here? I am not ashamed to say, speaking for a Government which I think is justly called Socialist—it is not a term of reproach to me at least—that on every occasion and in every direction it is opposed to a policy which would have the result pointed to by the noble Viscount who brought forward the Motion.


Might I interrupt the noble and learned Lord for a moment? He has only quoted one part of my remarks in that connection. I referred to Europe; but I went on to say that in the United States of America, Australia and Canada wages were higher and conditions better under Protection.


I think that emphasises the argument I am using. If you go to countries which are so different from our own in economic conditions as Australia and the United States it appears to me that you are comparing conditions which, from an economic standpoint, are not comparable. Therefore, I think I am justified not only in restating but in emphasising what the noble Viscount said. Taking other European countries which are substantially in our condition, suffering as we are from the loss and trade dislocation resulting from the War, we do not find in those countries the halcyon state of affairs suggested in the debate, but in every instance lower wages and worse social conditions. How can there be a greater condemnation than that of the system which is advocated? It seems to me that in that generalisation the whole case which he is seeking to bring forward in order to have a new economic policy in this country is met.

I answer him in this way. For the last eighty years under our system of Free Trade we have taken the lead in economic development. Under the conditions of Free Trade the working classes in this country have had better wages and better social conditions than on the average have obtained in European countries. We have withstood the evils of the War better than any other country in Europe, although the expense to us has been, of coarse, enormous. It is all very well for noble Lords to refer to the cost and trouble which have arisen from the economic dislocation consequent upon the War, and the enormous burden of debt which the War left upon this country—a debt of £10,000,000,000, which if you distributed it over the citizens of this country would mean something like £1,300 a head. Would the noble Viscount say that that was brought about by Free Trade? It was only Free Trade that enabled us to meet the enormous charge which modern warfare threw upon us, particularly amongst European countries.

I agree with what the noble Marquess said. You have no doubt to consider this to a great extent as an international matter, and no one is more immediately concerned that we are to ensure industrial peace throughout the civilised industrial world. Those of your Lordships who have read the report which M. Theunis—who is well known in this country and was Prime Minister of Belgium at the end of the War—made as Chairman of the World Economic Conference at Geneva, will know that in his view and the view of the great internationalists with him, the one great necessity for restoring economic prosperity in Europe was not to increase tariff walls but, on the contrary, to get rid of them owing to their obstruction of international intercourse amongst European industrial countries. I do not know whether the noble Lord laughed at that. It is a most serious question. It is not a question for laughter. It is a question we ought to consider, and one that goes to the whole basis of oar industrial position. It is far from being a matter for laughter, at any rate to those who are unemployed in this country.


I laughed at the credulity, not at the subject.


I cannot understand the distinction in what Lord Lovat has said. What does he mean by credulity? The question is whether you think a report of that kind was justified or not. That is not a matter of credulity.


I will answer, if I may, later.


What I do object to is that when we are talking upon an important matter of this kind we should have interventions and the use of words which, as far as I can see, have no reference whatever either to the subject matter about which we are talking, or the argument which I am attempting to address to your Lordships. I do not think that the noble Viscount who introduced this Motion intended in any way to put out of sight what are the real causes of the present industrial conditions in Europe. Of course they are not due to the Socialist Government, or the Conservative Government or the Coalition Government. The present difficulty in industrial life is the result of the prolonged War. At the present time the charge upon us in respect of the War is more than £1,000,000 a day.

The next point I want to say a word or two about is this. We have heard a great deal about Imperial unity. I want to suggest to your Lordships that what is being put forward by the noble Lord, Lord Beaverbrook, and what has been suggested to-day, is not in the direction of Imperial unity. I suppose we have all come in contact with the statesmen who have come over here from the Dominions, we have met them on visits over there, both before and after the War. What I believe to be the truth is this. There is no matter about which the independent Commonwealths of which our Empire is now made up are more jealous than their complete independence in regard to their fiscal and industrial policy; there is nothing they are more rightly jealous of than attempts on our part, in accordance with the view which they do not hold, to try and create an economic unity which, in their opinion, is not to their advantage either now or at any time in the future. That is quite rational. Why should we attempt to impose upon them a fiscal policy which they regard as not in accordance with their wants at the present time—a policy not only as between ourselves and the Dominions but as between the different Dominions?

Our Dominions in this matter of fiscal policy have not all the same interests obviously. No one can say that South Africa, Australia and Canada have naturally and necessarily the same common basis as regards the conditions under which they have to carry out their particular fiscal or tariff requirements. Apart altogether from the quotations made by my noble friend Lord Arnold, I regard it as not only quite impossible at the present time to obtain this Imperial unity, but I go further and say that to attempt to obtain it at the present time is much more likely to lead to disunity than unity. I do not know what may happen in the future. Of course we all wish for Imperial unity. It has been, and is, the ambition of this country to be the centre not only of the largest Empire but of the Empire which has done the greatest good as a civilising power in the World. I yield to no one in that. Then I come to the other side of the question—one that was pressed in 1927—that in order to produce Imperial unity you must allow each individual Commonwealth its full measure of independence.


Have they not got it now?


That is what I say; I think they have. I recollect rather criticising the terms at the time because we had not made sufficiently definite proposals. I quite agree that they have it, and I want them to keep it. It is by their keeping it and not by our attempting to interfere where they do not want us in matters of national, fiscal, and industrial policy, that we shall best preserve the great position which we now hold, and which, if we are prudent and do not attempt to invade the province of their Legislatures too far, I should hope we might retain indefinitely so far as one can look to the future.

There is one other point that the noble Viscount brought forward that I should like to say a word or two upon, because it is a matter about which I have had a great deal of personal experience. That is the question of agriculture. I have previously said in this House more than once, and I state it again to-day, that if you want to benefit the industry of agriculture in this country and to improve its prospects, the first thing to do is to change the method of land tenure. That is the view of Professor Orwin, who worked it out in the greatest detail. I must say I have never seen any other scheme worked out in such detail which gives the same promise. What is the suggestion of the noble Viscount? It is a mistake to suppose that you have the same conditions of agriculture in all portions of England, Scotland, and Wales. As a matter of fact I do not believe—and I have had a good deal of experience—that agriculture is on its last legs, or anything like it, in this country, although in about one-fifth of the agricultural districts there is undoubtedly great difficulty and great depression. But that is, after all, a small proportion of the whole.

If you deal with the remedies which the noble Viscount suggests—namely, increasing the wheat market, or, as I should put it, enhancing the price of wheat—what you do is this. For the benefit of comparatively a small proportion of agriculture you throw taxation on all the poor consumers both in town and country. I say more. In the county where I know- agriculture the growing of cereals is practically a matter of the past, and there it is the farmers themselves who, more than anyone else, dissent from the proposal to put on a tax in the sense of enhancing the price of wheat, because it will neither improve their position nor will it give them any advantage in the industry in which they are particularly interested. I wish this matter could be considered from a general non-political and agricultural standpoint. The reason is quite clear. We do not approach the problem from the same standpoint. We do not approach it considering how an industry, as an industry, is affected by any particular measure proposed. I recollect the noble Lord, Lord Bledisloe, who I think represented the agricultural view on the other side of the House as fully as any one did, always said that so long as suggested agricultural reform could be said, either theoretically or practically, to enure to the benefit not of the industry but of the rent owner, you would never get reform. I think that is true, and we have got to face it. No one has put it in a more admirable way than Professor Orwin of the Research Department of the University of Oxford.

There are one or two things I should like to call attention to in the speech of the noble Lord, Lord Melchett. I hope I shall not misquote him, but I think he spoke of us as being afraid of any vagabond of the seas or words to that effect. That is a rhetorical statement, but it is not only a rhetorical statement. It is one of those statements which tend to bring about the very slackening of spirit which the noble Marquess has so properly protested against in the speech he made, I do not mind rhetoric being used, but when it is used to advertise against ourselves and against our industrial position, I do regret its use. There was another passage of which I made a note. The noble Lord said he was an exuberant Imperialist. Well, we are all "exuberant Imperialists," but we mean different things by the word "exuberant." I am not an exuberant Imperialist in the sense in which he expressed himself. He went on to say that the noble Lord, Lord Arnold, had used inaccurate and contradictory figures. I only want to say that I happen to know that those figures have been most carefully prepared. Of course every one here heard them as stated by the noble Lord, Lord Arnold, but I wish in the strongest way to protest against a statement of that kind. They were statistics carefully prepared and I believe given in a perfectly accurate statement to your Lordships.


May I say that I do not mean that the statistics were arithmetically wrong? In controversy, I think, nearly all statistics have to be inaccurate in the sense that the people who prepare them prepare them for the sake of argument rather than for the sake of real abstract fact.


If the noble Lord will read the OFFICIAL REPORT he will find the figures I gave. He stated quite definitely that the figures were inaccurate and I should like to know which he said were inaccurate.


When I have had the chance of examining the figures I will let the noble Lord know.


I want to speak of the noble Lord with the greatest courtesy, but I think if we had had protection against chemical dyes perhaps we should not have had the advantage we now have of his great industrial knowledge in this country. I want to say to him: Is there any matter in which there is not an element at any rate of bias in the statement of figures? That does not show any inaccuracy when you take figures as the noble Lord, Lord Arnold, did out of official reports. All I want to say is you cannot get nearer to fact as regards statistical material than by adopting the method which is adopted by my noble friend Lord Arnold.

There is one other matter which struck me in the noble Lord's speech. I should have thought that a great deal of his speech showed the disorganisation which has been brought about in what I will call capitalist industry. I do not want to run down the word "capitalist." I use it because it is a significant term. I understand that his view is that in the future this disorganisation may be brought under the principle of rationalisation so as to produce better results. That is what I understood him to say. I do not want to attack anyone. I should like to adopt the view of the noble Marquess and see if we could not all act together. That, however, is not possible if we have diametrically contrary views. The only way you can have proper rationalisation of industry is by a perception of the necessity of national interests overriding the idea of individual profits, which came so much to the front during the last fifty years of the last century. That, I think, we have got to do and that is what we have to bear in mind. I do not want to be dogmatic, but I think we should bear in mind what Adam Smith said. He said that when you are dealing with industrial questions you must pay attention to what the consumer wants, and it is in proportion as you satisfy that want that you will succeed in any great industrial enterprise. I have not, I am glad to say, to make the appeal against the disruption on my side of the House which the noble Marquess made to his followers, and I think whatever else we may de we are all concentrated on the belief that it would be a fatal mistake to throw a burden upon the poorest in the country by departing from Free Trade policy into the labyrinths of tariff and Protection.


My Lords, my intervention in the debate must necessarily be very brief because so much time has been taken up already and there are so many speakers who want to address the House. I will say what I have to say in as few words as possible. The noble and learned Lord who has just sat down asked us to bear in mind the words of Adam Smith. I would ask him to bear in mind the words of Sir Alfred Cripps. It is only a short time ago that I was reading the urgent appeal he was making to the electors absolutely to reject the theory that Tariff Reform, as it was called at that time, would result in any increase in the price of bread.


I do not want to go into old history and I should like to say that I have never said a word in which I defended a tax on food.


I have not got any documents here upon which to substantiate the statements I have made, but I will send them to the noble Lord at the earliest moment. I was much interested in the speech of the noble Marquess the Leader of the Conservative Party in this House. He said our policy of Empire economic unity or Empire Free Trade is an old, old story. That is quite true. The policy, so far as I know, was first introduced by Sir John Macdonald, the Prime Minister of Canada, in 1874, and it was urged on this country in the exact terms that it is now being urged. It is quite true that the policy, according to the opinion of some persons, was varied in 1906 to 1910 on account of the proposal to tax foodstuffs. That is a statement which is denied. Others say nothing of the sort, the policy has never been tested. But it is certain that there is this great difference between 1906 and 1910 and the position to-day. In 1906 and 1910 the Empire could not produce enough food to feed itself. In 1930 the Empire can not only produce food sufficient for its purposes, but it produces a large surplus besides.


Does that apply to meat?


To wheat?


To meat.


That depends on the distinction between meat and beef.


It is all food.


If the noble Lord means beef, it applies to meat. The noble Marquess must also remember the difference between the policy of to-day and that of 1906. In 1906 and 1910 Chamberlain proposed to put a duty on Empire foodstuffs as well as foreign foodstuffs. Our plan is that of a duty on foreign foodstuffs with free entry to Empire foodstuffs. I have said that it is no use considering our policy of Empire Free Trade at all unless you are prepared to put a tax on foreign foodstuffs and on some foreign raw materials. The reason we say that is that the imports from the Dominions and the Colonies are made up almost entirely of foodstuffs and raw materials, and of every £1 that we pay for imports from the Dominions and Colonies snore than 18s. goes for foodstuffs and raw materials, so we are in the position that our whole policy appeals to the minds of those who are in favour of persuading the people of this country to adopt a tax on foreign foodstuffs. The noble Marquess went on to say that this is a difficult problem to get over. We admit that it is a difficult problem, but we should like to face it quite resolutely and frankly. He says that the referendum is a consideration of prudence. We can agree that it is a consideration—


I said that it was much more than a consideration of prudence.


I admit that the noble Marquess said it was more, but he said that it was, among other things, a consideration of prudence. But it was proposed at a time when conditions were very different from the situation at this moment. The Liberal Government in the Dominion of Canada had not spoken. Since the day when the referendum was put forward, the Canadian Government has adopted the principle of Empire Free Trade, and the Canadian Finance Minister, in announcing this policy, put it forward on the very terms that we have been advocating in this country. More than that, the Canadian Government is going to take this policy to the country. Shortly there will be an Election in that Dominion. It would be an inadequate response if we were to answer the proposals now coming from Canada by saying that we offer them in return a referendum. That is the principal reason why we are so completely opposed to it at this moment. We only urge this point as a counsel of expediency for the Conservative Party, and we hope that they will take note of our advice.

The noble Marquess said that he agreed with the Resolution of my noble friend Lord Elibank and would vote for it. I am very glad of that, even if he does not completely agree with it. What he wants is a new spirit, and his view is that the first principle of the new spirit is to turn out the Government. I am in agreement with that. I am quite satisfied that everybody would be completely pleased with the situation if the last Government were restored to its place on the policy that it held when it was last in office. The noble Marquess makes an appeal for unity. I would say to him that he is giving us a lesson in unity by saying that he will vote for the Resolution of my noble friend, but I would appeal to him on behalf of Empire economic unity as well. If Empire economic unity is taken up sincerely, fairly and frankly by the Conservative Party, there will emerge real unity in the whole rank and file. Of that I am quite sure.

Now let me refer, if I may, for a moment to the speech of the noble Lord, Lord Arnold. He made a statement about a newspaper report—I do not blame him in the least—that I had recommended a tax on raw cotton. I am bound to say that I did nothing of the sort. I am not denying that the report appeared in the newspaper, but the noble Lord will see that at a subsequent date Mr. Benjamin Bowker, the editor of the Lancashire Daily Post, a Free Trader and a most distinguished editor, wrote a letter denying that statement. I am not criticising the noble Lord in the very least for giving currency to it, because it did appear in the newspaper, although it was subsequently denied.


May we clear this up? Am I to understand that it is not part of the noble Lord's policy to tax foreign raw materials coming into this country?


I would much rather understand that the noble Lord will not again repeat the statement, since I have given him a correction.


Before I give any pledge of that kind, I want to know what the position of the noble Lord is. Is he or is he not in favour of putting a tax on foreign raw materials coming into this country as part of the Empire Free Trade policy?


Our policy is advocated so frankly that I answer at once, that it is the intention of Empire Free Traders—and I am speaking only for Empire Free Traders—to tax those raw materials which can be produced in the Empire. That is the policy of the Empire Free Traders. Whether or not there would be a tax on raw cotton depends on whether or not raw cotton can be produced in the Empire—


It is being produced in the Empire.


—and that could be settled quite easily. The noble Lord, Lord Arnold, brings out his Parliamentary Return of 1810 to 1840 or 1880—I forget which. That Parliamentary Return has done duty so often that I really think he might bring down to the House a report giving us the range of prices up to date. He says that, if there is a tax on foreign foodstuffs, food will be dearer. We deny that food will be dearer if there is a tax on foreign foodstuffs, and in support of our contention we point out that in the Empire there is a surplus of foodstuffs. There is a surplus of 13,000,000 quarters of wheat a year, and there is a surplus of beef. Does the noble Lord question that? It is a fact, according to his own statement made in this House on a previous occasion, that 12,000,000 head of cattle supply one half of the beef requirements of Great Britain. In the Dominions alone there are 34,000,000 head of cattle. Surely, if 12,000,000 head of cattle would supply half our requirements, then from 34,000,000 head we can draw the balance of our requirements. Apart from the Dominions, there is Northern Rhodesia and there are one or two other parts of the Empire where cattle breeding could be extended and developed.

The noble Lord, Lord Arnold, quoted an article written by me in which I said that we gave to our opponents as a gift the cry of the dear loaf or the small loaf, and that we did not care. The noble Lord tried to twist that statement into a statement on my part that under Empire Free Trade there would be an increase in the price of bread. I deny that. I have never made such a statement, and I could not possibly make it because I am earnestly and honestly convinced that, if we have Empire Free Trade, we shall have no increase in the price of food. At once an attempt is made to put us on the horns of a dilemma by saying: If there will not be an increase in the price of food, how can Empire Free Trade possibly bring any benefit to the farmers? Such a question arises out of ignorance of the farming industry. That industry is out of balance at the present time. For instance, we import into Great Britain 10 per cent. of all the milk consumed in the country, in the form of powder and sweetened and condensed milk. If we put up a barrier against this foreign import it would be ridiculous to suggest that on that account there would be the slightest increase in the price of milk in Great Britain, and yet the farmer will benefit enormously, because he will have an expansion of 10 per cent. in his market.

I will go on to point out one or two other complaints which I make of Lord Arnold's speech. He has repeated what he said last November when this subject was last debated in this House. He has repeated that the Dominions will not have it and then when he wan asked some questions about the attitude of the Dominion of Canada he slid away and would not stand up. The fact is that the attitude of Canada has completely altered the situation. The Dominion of Australia is also giving us evidence of an intention to adopt the policy of Empire Free Trade. It is quite true, as Lord Arnold says, that the Prime Minister of Australia, Mr. Scullin, will not have Empire Free Trade. Neither will the Prime Minister of Great Britain, Mr. Ramsay MacDonald; but we hope that the difficulty of Mr. Ramsay MacDonald will not stand in the way very long, and that the trouble about Mr. Scullin also will not last very long. What is really disturbing the Australians at the present time is whether Great Britain will agree to Empire Free Trade.

Lord Arnold talked of timber, and yet timber is one of the very reasons why we advance the policy of Empire Free Trade. In the Empire we have timber forests undeveloped to the extent of 1,600,000 square miles. In the United States their timber forests only extend to 750,000 square miles, and yet Great Britain at this moment imports from the United States twice as much timber as she buys from the Empire. That is one of the mistakes of the present system, and as Lord Melchett said in his thrilling speech, it is not merely a matter of tariffs but it is something more. It is a question of the organization of the undeveloped resources of the Empire, and if you examine fundamentally all these undeveloped resources you will at once see that the possibilities and opportunities for putting the unemployed back again to work are so vast and tremendous that it is absolutely inconceivable that sane men with business experience can turn their backs on the policy.


My Lords, you will undoubtedly agree that the very able speech to which we have listened has added very greatly to the interest of the occasion. Indeed I think in some ways it has shifted the interest from one part of the House to another. As technically the debate is taking place on an Amendment moved by the noble Marquess, Lord Huntly, I may say that the Party to which I belong will be perfectly willing to take part in any such conference, if called together by the Government, and perfectly ready and indeed anxious to put at its disposal, if the Amendment is carried, our plans and estimates, in order that everything which we have which will deal with the question may be at the disposal of the conference. It is too serious a question to be made a Party question, and to try to turn out the Government on a question of this importance seems to me to be a most unfortunate line to take. It is a national question of immense importance. For my own part, if I make any complaint it is that we are discussing in one afternoon so many questions of such importance. Unemployment is of sufficient importance in itself, and the three remedies which are proposed are each of them of sufficient importance to justify an afternoon's discussion.

We are not really agreed as to the causes of the present distress. We say it is chiefly due to the fact that the world is poor, and that our old customers can no longer afford to buy from us those highly finished goods which we used to send out to them. The Resolution speaks of Safeguarding, anti-dumping and Imperial economic unity. May I congratulate the noble Viscount upon the adoption of that phrase, Imperial economic unity in the place of Empire Free Trade? It is a far more accurate phrase, and a far better and less controversial name than Empire Free Trade. I confess that I listened with the greatest interest to what was said by Lord Beaverbrook with regard to the question of whether taxes on food would result in an increase of price. He told us that there would be no increase in the price of food. It is interesting to have his opinion, and even assurance, but he must forgive me if I say that the experience of the world is diametrically opposed to that, and shows that tariffs in the past have always led to an increase in prices. Whatever form you allow the restriction of trade to take it must mean a rise in price, and we must remember that Lord Balfour said that the object of a tariff is to raise the price. It always has done, and I am afraid always will do, however that fact may be uncomfortable to noble Lords who think it will not happen.

There are also one or two elementary facts to which I would refer. Unemployment is as bad in protected countries as it is in this country. How are you going to help the cotton industry of Lancashire by putting a tax on raw material? You might, but I hope the Empire will never do it, insist upon the Colonies buying nothing but British goods. We might, for instance, insist that in Kenya, where they now use Indian and Japanese cotton goods, they should buy nothing but Lancashire goods. To do so would be to abrogate our position as trustees of the native races, and would cut at the foundation of the great reputation which we have built up as being the best guardians of those native races entrusted to us. Surely the chief reason why the cotton industry is doing so badly is the unrest in its chief markets, China and India. How can Import Duties help the consumption of Lancashire cotton in China or India to-day?

The noble Lord spoke of Canada and Australia. Of course, as your Lordships know, the original cause of the change in the Canadian tariff was undoubtedly the tariff now being considered in the United States. That has put up to an unprecedented extent the tariff upon a number of goods going into the United States, and to such an extent would Canadian goods be penalised that Canada began to look around for some form of retaliation and, amongst other things, introduced this tariff. I am sure your Lordships all welcome the fact that there is going to be a considerable addition to the preference to be given to this country. We have discussed Preference before. I think it will be sufficient for us to say on this occasion that we are profoundly grateful to Canada for what she is doing in this matter, and that, as we do not wish to interfere in her affairs, so we are perfectly certain that she will equally correctly abstain from interfering in ours. In Australia a different course has been taken, and there a much higher tariff has been put on with, more especially, higher duties upon British goods going into that country.

May I say a few words upon what has already attracted a good deal of attention this afternoon—namely, the remedies proposed? First of all with regard to Safeguarding. It is not unfair to remind your Lordships that when the Safeguarding of Industries Act was introduced in 1921 in another place Mr. Baldwin, who introduced it, said that in his opinion five years was the limit of what the manufacturers might reasonably expect to have. It does not seem to me in those circumstances unreasonable on the part of His Majesty's Government to have allowed the Safeguarding Duties to lapse. Indeed, if I had my way, they would have gone a great deal further and taken them all off. After all, let us remember what happened in regard to the Safeguarding of Industries White Paper and the adoption by the Conservative Party of an unlimited policy of Safeguarding. I used to think that the only useful thing about the White Paper was the limitations it introduced in the matter of Safeguarding. Apparently in future it is not necessary that a trade to be safeguarded should be of substantial importance. No doubt we shall once more have those applications for protection from industries like that of granite tombstones which used to amuse us two or three years ago. They did not get it. Or we might, indeed, have applications on behalf of those articles which have just become the subject of an order under the Merchandise Marks Act, coat hangers, which are not very likely to add to the industry of this country. And then, apparently, in future it will be no longer necessary to prove that the competition of foreign imports is exceptional, or that the production of goods will be seriously affected; nor will it be necessary to say that the competition is unfair—meaning by that that it will no longer be necessary to consider the wages, which, of course, are invariably lower in a protected country than they are with us. And so it goes on.


The noble Earl says that wages are invariably lower in protected countries than with us. They are higher in the United States of America, Canada and Australia than here, and they are protected countries.


I quite agree that in America they are, but there is not a larger free trade area in the world than the United States of America, and that has always been our answer. It really is a very old familiar point, and I am sure the noble Viscount before he interrupted knew what my answer was going to be. The noble Lord, Lord Arnold, pointed out that so far as our competitors in Europe are concerned our wages and standard of living are higher. I think it was Mr. Baldwin who said so only the other day. I regret very much that those safeguards which were thought so proper not very long ago by the Conservative Party should be abolished when the Conservative Party once more gets its opportunity. But, after all, with regard to the safeguarded goods, of which so much has been said this evening, I think we must remember how very small a proportion of our trade they apply to—less than 2 per cent. of our imports, and less than 1 per cent. of our exports, unless, indeed, you include the goods to which Protection has been applied.

I do wish we could have more Accuracy iii this controversy. When we deal with safeguarded goods let us speak of safeguarded goods, but when you have goods which are merely protected under the McKenna Duties, do not speak of them as safeguarded. The process of Safeguarding was never applied to motor cars, gramophones, or silk, and therefore to speak of them as safeguarded goods is wholly inaccurate. They are protected, they are not safeguarded. They never came under the Safeguarding of Industries Act. How can anybody maintain that it is remotely accurate to state that those articles are safeguarded goods? Let us speak of them As they are, either as being the revived War Duties or else as protective—I do not mind—but do not let us confuse them in the future. Nor do I like to hear dyes spoken of as being included among the Safeguarding Duties. I understand that there is a Dyes Regulation Act under which dyes are only admitted under licence. That is quite different from any system which we have commonly understood up to the present by Safeguarding.

With regard to anti-dumping, that has occupied a comparatively small part of our discussion to-day. I would rather devote myself to the last part of the Resolution, dealing with Empire economic unity. Here I should like to make use of an interesting document, dated February 27, 1930, containing hints for speakers, issued by the Conservative and Unionist Central Office. On page 3 I find it stated that:— The responsible political leaders in Canada and Australia have definitely stated that 'Free Trade within the Empire' is impossible. It then quotes Mr. Bennett, the Conservative leader in Canada, Mr. Scullin, the Prime Minister of Australia, whose words have been read out to-night, and Mr. Latham, Leader of the Opposition in the Commonwealth Parliament. The last quotation is from Mr. Fenton, the Australian Minister for Trade and Customs, who stated:— What I do say is that 'Empire Free Trade,' in so far as it concerns us, is not within the hounds of practical politics. It then deals with the importance of Customs revenue to the Dominions, and on page 5 we have this:— In addition, the Dominions are not prepared to expose their manufacturing industries in the early period of their growth to the full blast of competition from the firmly established industries of other countries, including the United Kingdom. They deal then with the Crown Colonies, and say that the introduction of Empire Free Trade would hold up Colonial development for a generation or more. Then reference is made to the West African Colonies, and, explaining some of the difficulties which arise out of existing treaties, the speakers of the Conservative Party were authorised to say— 'Empire Free Trade' would involve the denunciation of those treaties, in some cases with disastrous results to British manufacturers. They give a series of examples in which that would undoubtedly happen. One of them is interesting because it affects cotton. It says— In consequence of that Convention"— a Convention with France— Lancashire is enabled to export a very large quantity of cotton goods to French West African territory. If the Convention were terminated the result would be the loss of trade to Lancashire running to hundreds of thousands of pounds. On Page 10 I find this— Lord Beaverbrook's scheme would tend to disunite the various parts of the Empire. And again—this is a point to which the noble Lord has just devoted a large part of his speech— Empire Free Trade' would involve the taxation of staple foodstuffs. And I find, on authority which is obviously unquestionable, that this country imports very nearly half of its wheat supply from foreign countries, while with regard to imports of meat less than half comes from the Empire. Then we get these figures from the annual statement on trade—that while 52,000,000 cwts. of wheat come from the Empire, 50,000,000 come from foreign countries; chilled beef—the foreign imports are 9,000,000 cwts., while from the Empire we get 1,000 cwts. With frozen beef the proportion is the other way—more from the Empire, and much less from foreign sources. Frozen mutton and lamb—from the Empire 3,000,000 cwts., from foreign sources 2,000,000 cwts. In bacon the foreign imports are supreme—very nearly 8,000,000 cwts. as against 800,000 from the Empire. So with butter, eggs, and so on.

Then I venture to make a quotation from an article by Lord Rothermere which appeared on November 25, 1923:— We cannot tax food products imported by us from foreign countries in order to give a preference to Dominion wheat and meat. On January 4 this year he said:— I am entirely against any duties on foodstuffs of any kind. In those circumstances, I venture to think that the position of the wheat grower of this country will not be improved by the adoption of a system of Empire economic unity, a system which, at the best, can only come into operation in the course of some three or four years, while there is an urgent need for dealing with unemployment to-day. Indeed, like noble Lords beside me, I regret that His Majesty s Government has no more plans for dealing with unemployment to-day. This is not the time to enter into it. We are discussing more the question of Imperial economic unity, and I shall look forward to the coming Division with very much interest in order that we may see how far, for the moment, an appearance of unity is attained and with still more interest in the future to see whether it is continued in the next twelve months.


My Lords, I support the second part of this Resolution rather than the first in the hope that the debate will proceed along lines which would throw as much reflection on present fiscal controversies as possible. It is because I do not propose to attempt to quote statistics or enter into academic arguments on either side, but because I look at it from the non-controversial point of view, that I venture, for the first time, to intervene in your Lordships' debates. What is the position or the underlying fact which has led to this question being debated in this Chamber? Surely, it is that the trade of the country is getting progressively worse and causing those who have been accustomed to the traditional fiscal policy of the country to question whether some change is not needed. The underlying fact is that the whole world is suffering from the downward movement of price levels in terms of gold. Surely it is superfluous to mention the differences between a high-wage country like the United States and a low-wage country like France and say that there is no unemployment in the one and little unemployment in the other. The underlying fact is that the world movement of commodity prices in terms of gold has a reactionary effect on employment. It is causing many to question whether the fiscal policy which has suited this country in the past is really best suited to it to-day. For that reason those of us who speak as industrialists feel great gratitude to the noble Lord, Lord Beaverbrook, for the campaign which he has carried out in this country, with the object of bringing into correct perspective this great question which, after all, is affecting the livelihood of the whole country.

Safeguarding is referred to in the second part of the Motion. In another place I consistently voted against the Bill which established the Safeguarding Duties and, until recently, I consistently opposed them mainly on the ground that until we had returned to normality it would be inopportune to risk changing our system. But, surely, we cannot fail to be influenced by the strong tide which is running of those industrialists, bankers and even economists who, having all their lives adhered to the rigid purist theory of free exchange, have now become convinced by the obvious fact that the free exchange of commodities in the world is slowly failing. One could quote any number of authorities. I choose just one—the remarks of the Chairman of the National Provincial Bank, Sir Harry Goschen. He said:— It may well be also that the circumstances of the time demand that serious consideration should be given to the fiscal policy of the country, in order that industry may not feel it is too severely handicapped in its competition with other countries. The noble Lord who spoke last referred to the textile industries, and that brought him into close relation with the remarks of the noble Lord, Lord Beaver-brook. The argument has been adduced, and the noble Lord, Lord Arnold, emphasised it, with regard to the safeguarding of steel, that necessarily the safeguarding of any industry must raise the price. Your Lordships will recognise that in many industries it is the operating ratio which affects the cost of the article, and if you can increase the operating ratio (that is, the degree of occupation in the industry) then, because of that greater volume, the price falls and the selling price may be lower. One of the fundamental theories on which all Free Traders have been brought up is that if you impose a duty it necessarily means that the demand arising from that duty, superimposed on the previous demand, would necessarily be so reflected and focused in the industry as to raise the price to the consumer. Your Lordships must recognise that, no matter what leading industry of the country we take, there is producing plant to-day immeasurably in excess of any conceivable demand that the present demand plus the demand which may be added by the increased result of an Import Duty would make. That is not the condition in which the wealth of this country was built up.

Coal, steel, iron, engineering and textiles, the great fundamental, unsheltered industries on which the wealth of this country was based, are to-day All distressed. Is it not reasonable that free from Party controversies we should reflect coolly—and surely there is no better place than your Lordships' House—as to whether the moment has not arrived when some modification of this system is justified? The noble and learned Lord, Lord Parmoor, resented the criticism of credulity. As one of the four British representatives who attended the Advisory Economic Council at Geneva I listened for many days, in that babel of tongues, to arguments as to why certain revised policies should be imposed on the fiscal system of England. I was one of those credulous economists who felt that we might succeed in persuading our European competitors that they would be better off if they reduced their duties. What has been the result of all the Conferences we have had at Geneva? I have listened to Frenchmen and others speaking with their tongues in their cheeks, doing lip service to the theory of free exchange and making all possible reservations in favour of their own tariffs. The truth is that they, at least, have so "jacked up" duties as to be in such a position of security that they could safely say: "We will not increase our duties if you will agree to our suggestions."

Agriculture has been referred to. That is a subject the economics of which are most familiar to your Lordships. I wonder if many of you have reflected on what is likely to be the effect on this country if the debenture plan tacked on to the tariff measure which has lately been discussed in the United States is put into effect? There you have a vast national movement for the application of a nation's resources to the handling of the nation's agricultural produce. Surely the throwing of the full weight of its economic force into buying wheat and selling it, and all the surplus in the world, at the best price possible involves a great hazard to this country and to other countries.

The position of the country at the present time has been referred to in connection with the textile trade. It will be within your Lordships' knowledge that 30 per cent. of our total exports are textiles. When you think of that, coal is relatively an unimportant commodity. If there is at the present moment in this country one industry which is undergoing a severe test it is the wool textile industry. Wool is a commodity on which the economics of the Empire are based. In that industry there is a conversation going on with regard to the terms of payment. A dispute arose. The Government appointed a Court of Inquiry. A Court of Inquiry was held and an award was given under the Chairmanship of a distinguished member of your Lordships' House. That impartial inquiry resulted in a recommendation that a decrease of wages was necessary. The employers accepted the terms of the award, and now six weeks have gone by and there has been no recognition by the workers' side that the fact that a Court of Inquiry has been held and an award given implies an obligation to abide by the award.

One may ask, what part can the Government take in that? It is perhaps indiscreet to refer to this dispute. I refer to it because it has such an important bearing upon the economic position of the country. In this unsheltered industry the conditions, according to the terms of the finding of the Court of Inquiry, justify a reduction of wages. As one who spent many-months of earnest conference with the leaders of Labour in the Melchett-Turner Conference, recognising across the table the sincerity with which those negotiations were carried on, one feels a regret that the atmosphere whereby the two large employers' organisations were brought into direct relations with the organisations of labour, should have been succeeded by an instance where it is clearly impossible for the new spirit in industry, to which the noble Marquess, the Leader of the Opposition referred in his speech, to be implemented. Certainly if the findings of a Court of Inquiry are not respected it makes it extremely difficult to implement that spirit.

The Minister of Labour made a move last week and addressed a letter to both sides. I feel it would be right that I should remind the noble Lord that in the reply which was sent by the employers to the Minister of Labour they stated that:— Under all the circumstances the employers cannot alter in any respect the terms of the notices posted. They did not post them without careful consideration nor without full regard to their responsibilities. They posted them in the conviction that by so doing they were acting in the best interests of all concerned, namely, their work-people, themselves and the country as a whole, and they cannot make any compromise. That is an important statement because the livelihood of a large number of people is in jeopardy. Your Lordships may wonder why I refer to that. It is because this industry is fighting a national battle by requiring a deflation of wages in the unsheltered industries, and if there should be any wavering in the resolution to adhere solely to the terms of the Court of Inquiry set up by the Government, a great disservice would be done to the further deflation of industry in this country, and the position whereby industry could meet competition.

The noble Lord, Lord Arnold, suggested it could be met by means of an increase in efficiency. He pleaded that the greater efficiency of manufacturers would avoid the cause of the appeal which he made. The one part of his speech with which one would agree was that the constant reiteration of the industrial difficulties of this country may do disservice to industry, and it is that spirit of defeatism which is dismaying industry. But how best can it be avoided? Surely, in reply to his own inquiry, it is due partly to the social service burdens which are being imposed, partly to inefficient administration on the part of the Government, and partly also, as the noble Marquess, the Leader of the Opposition said, to the imposition of taxation, direct or indirect. It is not possible further to increase direct taxation. Gladstone said that he always regarded those two ladies, one dark and one fair, as those to which he must pay court. But the administration of the Government's social services may at least help in this matter. My object in intervening in this debate was to ask if we cannot leave out of political controversy this question, and recognise the fact that during the period of world deflation which is resulting from this downward movement of prices we cannot, on this lower basis of value, while maintaining the responsibility for the service of £8,000,000,000 of debt, continue in the existing fiscal situation where our market is open to the world and the manufacturers of this country are driven to sell, if necessary, abroad. We should, by putting on some duties at least, retain to this country the best credits, which is our home market, and allow some of our competitors to have those less secure credits which they, in the necessity to keep employment, are being driven to seek in every quarter of the world.


My Lords, I do not wish at this hour to address the House for more than three minutes because we are going to have the Division, I understand, at seven o'clock, but I may perhaps be allowed to congratulate the noble Lord on the first speech that he has addressed to your Lordships, and to express a wish that, with his great experience of business and affairs, he may often address us again. I have been waiting to see whether the noble Earl, Lord Beauchamp, would rush to the assistance of the much-tried Government, and I was very glad to see that he gave them the assistance they required as Free Traders which he had so generously accorded to them as Protectionists on the Coal Bill.

I really have not risen, as I should have like to have done, to enter into the discussion raised by the figures given by the noble Lord, Lord Arnold, about which he is so sensitive, the figures about the Safeguarding Duties; nor do I intend to discuss again that nice distinction between Safeguarding Duties and Protectionist Duties. I do not think myself they make a very great difference to the industry which is either being protected or safeguarded. As a student of the older economists I know how careful one has to be in the phrases one uses on that subject. I would only point out to the noble Earl that when he asserted with such firmness and force that tariffs always raise prices, I think he was forgetting for a moment that it was only on foreign stuffs and goods that these duties are to be placed, and that his experience is rather based on those countries where duties are levied on all goods brought in. Indeed I think it is part of the feeling or habit of this country that we have been accustomed, or the public have been accustomed, to duties laid upon goods which have not been produced in this country, in which case, of course, the duty does fall almost entirely on the consumer. That is why the public has not accustomed itself to the question of a duty on articles of manufacture of which the prices might be largely reduced by the greater security given to manufacturers in this country.

I should like to say one word in reply to the noble and learned Lord opposite. I thought he rather dangerously misrepresented, or did not represent fairly, our position in relation to the Dominions to-day. He told us that he thought that a conference or discussion with the Dominions on this subject of mutual trade and the increasing of mutual trade might lead rather to disruption than to further ties.


I did not say that. I said pressing the view of Imperial unity might lead to that.


I think I did not misrepresent the noble and learned Lord. The views taken by the noble and learned Lord regarding the Constitution of the Empire are almost as belated as his economic views. He seemed to have forgotten, or not to have realised, the great change made in 1926 by the definition of the relations of the Dominions to this country, that now they know and recognise that they are equal self-governing units of the Empire. I can testify from a recent journey in Canada with the Parliamentary Association that the people in that Dominion fully realise all the implications and the freedom of that new dispensation. Therefore, coming to a conference of that kind they would know that there is no desire to interfere with their legislation or economic affairs, but that it is a conference between equal self-governing communities to consider what is to be done for the economic advantage of them all.

Another point on which I think he spoke with some degree of regrettable complacency was the question of whether Free Trade within the Empire was completely realisable. No great ideal can be easily realised in a year or in two years. But surely, if by conference with the Dominions you are going to enlarge the opportunities for trade among the great constituent parts of the Empire, then, whether you do or do not at once realise complete Free Trade within the Empire, you have done something which must be of immense advantage to economic unity and Free Trade between the different sections of the Empire. I believe myself that if you have a conference of that kind with the present attitude that we find in Australia and Canada and other parts of the Empire, and if you pursue that conference, not in any sort of minimising and depreciaatory spirit, but in a spirit of good will

Resolved in the affirmative and Motion agreed to accordingly.

and determination to reach some further unity, such a conference will succeed. I believe also—and this is the last word I shall say—that the first step to a conference of that kind is to turn out the present Government.


My Lords, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

On Question, Whether the Motion shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 25.

Northumberland, D. Sidmouth, V. Illingworth, L.
Westminster, D. Hereford, L. Bp. Jessel, L.
Kenmare, L. (E. Kenmare.)
Bath, M. Addington, L. Kylsant, L.
Lansdowne, M. Alvingham, L. Lawrence, L.
Salisbury, M. Ampthill, L. Lloyd, L.
Annaly, L. Lovat, L.
Albemarle, E. Annesley, L. (V. Valentia.) Luke, L.
Bathurst, E. Armstrong, L. Manners, L.
Cawdor, E. Arundell of Wardour, L. Melchett, L.
Denbigh, E. Askwith, L. Meldrum, L. (M. Huntly.)
Dudley, E. Banbury of Southam, L. Mildmay of Flete, L.
Haddington, E. Berwick, L. Newton, L.
Halsbury, E. Biddulph, L. Oxenfoord, L. (E. Stair.)
Lauderdale, E. Clanwilliam, L. (E. Clanwilliam.) Redesdale, L.
Lindsey, E. Remnant, L.
Lucan, E. Cranworth, L. [Teller.] Rossmore, L.
Macclesfield, E. Danesfort, L. Roundway, L.
Midleton, E. Darling, L. St. Levan, L.
Onslow, E. Daryngton, L. Saltoun, L.
Peel, E. Dynevor, L. Sandys, L.
Selborne, E. Ebbisham, L. Sinclair, L.
Sondes, E. Elphinstone, L. Somerleyton, L.
Stanhope, E. Ernle, L. Stratheden, L.
Vane, E. (M. Londonderry.) Fairfax of Cameron, L. Templemore, L.
Yarborough, E. Faringdon, L. Teynham, L.
Ypres, E. Forteviot, L. Trenchard, L.
Gage, L. (V. Gage.) Vernon, L.
Allenby of Megiddo, V. Greenway, L. Vivian, L.
Bertie of Thame, V. Greenwood, L. Wargrave, L.
Burnham, V. Hardinge of Penshurst, L. Waring, L.
Churchill, V. Harris, L. Wavertree, L.
Elibank, V. [Teller.] Hastings, L. Weir, L.
Falkland, V. Hawke, L. Wemyss, L. (E. Wemyss.)
FitzAlan of Derwent, V. Hothfield, L. Wraxall, L.
Hailsham, V. Howard of Glossop, L. Wynford, L.
Sankey, L. (L. Chancellor.) Mersey, V. Gainford, L.
Parmoor, L. (L. President.) Hemphill, L.
Arnold, L. Kirkley, L.
Reading, M. Balfour of Burleigh, L. Marks, L. [Teller.]
Bethell, L. Marley, L. [Teller.]
Beauchamp, E. Cawley, L. Pentland, L.
Clwyd, L. Rathcreedan, L.
Cecil of Chelwood, V. Craigmyle, L. Ritchie of Dundee, L.
Leverhulme, V. Denman, L. Stanmore, L.
Dickinson, L. Thomson, L.

House adjourned at a quarter past seven o'clock.