TRANSFER OF SUM FROM ROAD FUND TO EXCHEQUER.

§ Mr. SPEAKER

The Amendment that I propose to select is the second one on the Paper, in the name of the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) and other hon. Members. I think that the matter of time, referred to in the first Amendment on the Paper, can be better dealt with when we come to the Committee stage of the Bill.

§ Mr. PETHICK-LAWRENCE

May I ask, Sir, whether it is your intention to permit a general discussion on the whole range of this duty on this Amendment?

§ Mr. SPEAKER

I think it will be much to the convenience of the House to discuss both the amount and the method of this tax, it being a new tax, on this Amendment Then the House will be able to take two Divisions, one on the Amendment and one subsequently on the Main Question.

§ Lieut.-Commander KENWORTHY

May I ask, Sir, if this is the only Amendment that you propose to select, and if the whole discussion will be taken upon it?

§ Mr. SPEAKER

Yes; I think this raises the best issue covering the whole question.

§ Mr. HARRIS

I beg to move, in line 6, at the end to add the words Provided that the duty to be charged shall not exceed thirty-three and one-third per cent. ad valorem. I move this Amendment in the absence of my right hon. Friend the Member for Spen Valley (Sir J. Simon), in whose name, together with those of other Members, including myself, it stands on the Paper. This is the last of the series of duties proposed under the machinery of the Safeguarding of Industries Act. We have had many discussions on this machinery, and I do not intend in the present case to criticise the method of imposing a tariff or bringing in Protection through this machinery, but this particular recommendation is different in one or two marked respects from the others that have come before the House. As the House knows, the inquiry was held by a Committee of three, and I am going to suggest that, whatever the merits of a tariff or of Protection may be, to put the decision in the hands of such a very small number is very undesirable, and liable to lead to very bad results, and, when it comes to a very complicated, technical, scientific industry like the pottery industry, it is obviously open to very serious criticism.

The right hon. Gentleman admitted the difficulty of finding suitable persons. I have no doubt he searched high and low, and as the result of his inquiries he 1036 selected these two gentlemen and one lady. The first is an old colleague of mine on the county council and I am quite ready to admit that he is a most genial gentleman. I am not quite sure what his business experience is but I understand it has been mainly in the Ministry of Munitions. The lady is a very attractive, charming personality known to a great number of Members of the House. I understand her chief claim to fame, apart from being the wife of a very distinguished settler of industrial disputes, is that she is a leader of what is called the Middle Class Union. The third person, of course, I naturally regard with great respect because he has a lot of business experience and knowledge of the co-operative movement in all its extensive ramifications. There are only three members of the Committee and in many cases only two were present at their meetings. They were busy people.

After long inquiry, they did not come to a unanimous decision. It was only a majority of one. You may say it is a majority of 50 per cent. but the fact remains, from whatever angle you look at it, that a majority of only one decided in favour of the imposition of the duty. It is very undesirable to have inquiries of this kind carried on by such a very small Committee. I understand the President of the Board of Trade was asked to hear an appeal, but he was not to be persuaded. He took shelter behind the opinions of the two members of the Committee and the whole future of the business of supplying china to the people of this country has now been left to this decision. Whatever point of view one takes of this subject, this is not a sound way of carrying on trade. If we are to go in for Protection, surely it should be done on more scientific lines and after fuller inquiry by men of experience and knowledge and the decision should not be left to a small majority. Another respect in which this differs from other proposals for the safeguarding of industry is that the Report goes very much outside the scope of the inquiry. The applicants asked for protection for translucent ware, but for some reason in order to facilitate the work of the Customs as far as I can gather, they proposed to extend it to include vitrified ware, that is, earthenware which merely has a bright varnished surface. Although 1037 they were appointed to inquire into only one side of the pottery industry they extended the scope of their inquiry, while taking evidence, to include another section of the trade.

But there is a third and the most important objection of all. The industry was not modest in its request. It asked for a 33⅓ per cent. Duty—a very generous allowance, far beyond the dreams of pre-War Tariff Reformers. But this lady and gentleman decided to experiment in a new form of duty. Instead of imposing a duty on value, they proposed to impose it by weight. They gave no adequate reason. We do not know on what evidence they reached that conclusion. No facts or figures, as far as I can gather, were produced. That is the recommendation they have brought forward. The Minister blessed it and the Chancellor of the Exchequer has embodied it in his Budget. If you are going to levy a duty by weight, it will naturally be heavier on the cheaper as opposed to the more expensive article. The heavy china is usually of the cheaper and coarser kind, while the fine china is light. I have here some calculations of the results of this peculiar method of levying the duty. In the majority of cases it will work out at from 60 to 80 per cent. I have elaborate tables, which I shall be pleased to give the right hon. Gentleman, show-that on many of the cheaper articles it will mean as much as 60 or 70 per cent. That is a very serious thing. The Danish china sold in Bond Street is not seriously affected. The duty will only work out at 15 or 20 per cent. But when it Dames to the cheap cup, the child's 2d. mug or the cheap tea-set, it will work out at 60 to 70 per cent. It may be said the working man need not drink out of a china cup. He can have a tin cup, but, after all, these little luxuries are becoming something near necessities. It seems hard that, whether it is the working girl's cheap silk stocking or cheap cotton glove or cheap lace finery, the Tory Government singles them out for special disfavour. Now we have a tax so ingeniously contrived that expensive imported China sold in Bond Street bears a small duty, while the cheap china sold in the East End or on the coster's barrow will be subject to 70 or 80 per cent. taxation. I am going to ask the 1038 Minister so to alter it that, if he is to pursue this policy of safeguarding of industry, it will be distributed evenly according to value, and the cheaper articles shall not be singled out for special disfavour. I think we can ask for a certain concession under that head.

I have no doubt we shall be told that owing to the strength of trade unions and their powerful organisation they have been able to demand higher wages and the result is higher labour costs, while the foreigner is working longer hours for lower wages. If that told the whole story it would make a strong case for these duties, but it is very far from the truth. Of course, if we were comparing like with like, if the imported china was the same article, made by the same methods from the same raw material, there might be a very strong case. One thing the inquiry did bring out—and it is admitted even by those who signed this Report—was that the china made in Germany, France and Czechoslovakia is not only a very different article in quality, manufacture and process, but that it is very far from the same thing. The china industry is one of the oldest industries in this country. It is an industry of which we are very proud. I see that my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) has just come into his place. That industry will always be associated with the ancestor of his, who has dignified it and beautified it and made it of worldwide fame, as have many other great manufacturers of china. I am glad to see that the tradition of Wedgwood is still being maintained.

When it comes to quality and beauty of design, it is not surprising that British china is known in every part of the world, but china still remains a luxury for the rich rather than a general article for the masses of the people. China made by the old-fashioned methods in England compares with anything that is made in any other part of the world, On the Continent, and in France in particular, before the War mass production was aimed at and the industry was so reorganised and changed in its methods that, by using other materials, manufacturers were able to produce a different and a far cheaper article. Though it 1039 comes under the category of china, it is really quite a different article. It is just as easy to compare a Ford car with a Rolls-Royce or, say, a tailor-made suit with a ready-made suit, as to compare the high quality of the china turned out by the great china firms at Longton and its neighbourhood with the cheap china imported from abroad. Before the War competition from abroad in these cheaper articles was not so serious but for various reasons, which are partly explained by this Report, the cost of English china has gone up enormously, something like three times. Just after the War, when times were good, the demand for good quality English china was great, but when trade depression came along, this being a luxury and not a necessity, it was one of the first articles to feel the effects of that depression. The reason for the depression, according to the Report, is not so much because of the competition of china from abroad but rather because of the competition of earthenware made, not abroad but very often at factories under the same control and management as the factories for the making of china.

Earthenware—it is common knowledge to the House—is made by a very much cheaper process. It does not go through the same kind of baking in the oven, consequently it is not so brittle and there are not so many breakages. The process is not so expensive and the pottery can be produced much cheaper. Before the War, owing to the absence of scientific experiment, earthenware pottery could not in any way compete in appearance with good quality china, but the English manufacturers, realising that after the War they might have to compete very seriously with Continental china, reorganised their methods of manufacture of earthenware, with the result that they were able to produce pottery in the form of earthenware which in appearance, design, colour, shape and in every respect, competes with the better quality of china and is, on the other hand, much less expensive. It is a very significant thing that, while the cost of china has gone up by something like three times, the cost of English earthenware has only gone up by something like 75 per cent., although the labour costs are practically the same. The union controlling the two industries is the same and the rates 1040 of wages paid are almost identical, but, of course, the article is different. I suggest to the House that the unemployment in the manufacture of china is not so much due to foreign competition as to the substitution of well-designed, well-made earthenware, not by the foreigner, but by the English manufacturer.

When it comes to a question of wages abroad, of course, undoubtedly, there is a considerable difference of opinion. I do not think there is any doubt that to some extent wages are lower, and there is reason to believe that hours, to some extent, are longer. But it was pointed out at the inquiry that the real difference in the cost of producing German and Czechoslovakian china as compared with English china was not the labour cost but the mass production and the methods used. To begin with, the cost of the ovening or firing of the china at Longton works out, on an ordinary case of 20 dozen Minton china, at 22s. 5d. On the other hand, felspar china produced in Czechoslovakia works out at something like 8s. 6d. There is another factor which is a serious thing. The amount of breakage of the felspar china works out at 2s. 9d., but on earthenware it comes to 4s. 6d. They have also the advantages of a modern factory laid out on a new scale, on large lines—something like a garden city—while in Longton they, very naturally, adhere to their old historic buildings and old associations and go on with their individual manufacture of a good article as opposed to the cheap article manufactured abroad.

It may be said that it is not fair that the foreigners should be allowed to come into our market and compete with our better English articles on even terms, but the answer is, that the advance is so great—in many cases it is not a question of 20, 30, 40 or 50 per cent., but 60, 70 and even 100 per cent.—that if you do impose a duty at all, it will mean that the consumer will have to pay more for the same article. The English manufacturer will not be able to compete and it will merely mean the placing of extraordinary taxation on those people who, because they are poor and because of their requirements, have to buy the foreign article. It is a very curious thing that, although this application is made by the so-called china trade interests, the workers, the trade unionists, have not made any application. 1041 The representative of the union who, I believe, is a Member of this House, was present but he took no part in the discussion and did not give evidence. In almost every other case both the employers and the employés have made a joint application. In most cases the application was made by the Joint Industrial Council. It is a very significant fact that in the china trade, which was one of the first trades to have a Joint Industrial Council, although they have a Joint Industrial Council which functions effectively, the employés made no application. That is a very interesting fact which requires explanation, and I hope the Minister will be able to explain it.

Another very curious fact is the existence of a ring. There is a combine among these various china manufacturers, not in order to improve methods, not in order to get mass production, not in order to prevent overlapping, to improve their business organisation, to improve their methods of marketing or to introduce more scientific methods, but for one purpose only, and that is to keep up the minimum price. It is very peculiar, to say the least of it, that here is an industry asking for protection, for a special favour from this House, and it has already in existence an organisation to take full advantage of any protection and any increased price which we put it within their power to obtain. If no other argument were available, that is a very serious argument against passing through this very large duty. Here we have machinery ready to make a trust or combine to fleece the public. We ought to hesitate, we ought to wait long, before we allow the duty to go through in these most serious circumstances.

There is one further matter to which I wish to allude, and although it is a small matter it is of considerable interest. No doubt the President of the Board of Trade goes to hotels or restaurants. I do not suppose he ever patronises any hotel where there is foreign food, or foreign waiters or foreign dishes. That would be against his principles and his patriotism; but if by chance he should stray into a restaurant which is up-to-date he will probably notice the table-ware. One of the great troubles with which hotel-keepers have to deal is the large amount of breakages. One of the most costly things in the kitchen is the clumsiness 1042 or want of skill of the scullerymaid; it is proverbial. In order to get over that difficulty, it has been found in the past desirable to get a special brand of pottery from France. Since the War the German has been our serious competitor, and now this foreign stuff has been imported from Germany. I have here samples of pottery. I see that my right hon. Friend has a cup beside him. [An HON. MEMBER: "What about the mugs?"]

The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)

I thought the Liberal party would produce those.

§ Mr. ERNEST BROWN

We did not put mugs in the Report. It was the right hon. Gentleman's friends who put mugs in the Report, because they knew that they had mugs enough to support them.

§ Mr. HARRIS

I am not going to throw this plate at my right hon. Friend, but I am assured that if I did it would not break. It is vitrified pottery. [An HON. MEMBER: "Throw it."] One hon. Member wants me to throw it and thus test its durability, but I think that would be against the rules of order. This vitrified china costs 10s. a dozen, and its great quality, I understand, is that it is unbreakable. Here is a sample of English earthenware, which only costs 4s. 9½d. a dozen. I am sure that my right hon. Friend would prefer that, because it is British. It will interest him to know also that it is cheaper. It is only half the price: 4s. 9½d. as against l0s. It is common earthenware, while the other is vitrified pottery. The result of the duty would be that no advantage, so far as one can see, will be gained by the English manufacturer, because he is making an entirely different article and his article is cheaper; but the effect of the duty will be that 4s. 6d. a dozen will be added to the cost of the restaurant plate. Therefore, the cost of the "Come to England" campaign, which we are told to support, will be made greater, and the cost of running hotels in England will be made greater.

It may mean extra revenue, and that is a good thing at a time of financial stringency, but if we are going to impose a tax, let us do it with our eyes open and do it for revenue purposes, and not use it 1043 as a pretence in order to protect an industry which is not asking for protection. The earthenware industry are not asking for protection. The only result of this particular tax will be, not to help the china manufacturers, not to assist those great industries of which we are so proud, which are still working under their old-fashioned methods and producing a good article but not a cheap one; it will give a certain amount of protection to the earthenware industry, who have never asked for protection and have never put forward a case for it. They have not been subject to inquiry under the Safeguarding of Industries scheme. Notwithstanding, we are giving them something under the guise of another purpose.

I think I have said enough to show that there is an overwhelming case against this duty. There has not been an adequate inquiry. The articles included go far beyond the scope of the inquiry, and beyond the request of the petitioners for the duty. The method of levying the duty is unsound. It is going to press upon those least able to afford it. It will not really help business. It will merely add to the cost. For all these reasons, I submit that we have made out a strong case for the withdrawal of the duty.

§ Mr. PETHICK-LAWRENCE

I beg to second the Amendment.

4.0 p.m.

The Resolution which we are asked to approve proposes to put a tax, for five years, of 28s. cwt. on translucent and vitrified pottery. This is the latest of the brood of ugly ducklings which the Safeguarding of Industries methods have produced. I am sorry that the Chancellor of the Exchequer is not here, for I should have liked to have asked him a personal question. Perhaps the President of the Board of Trade will be able to answer the question. The question that I would have liked to have asked the Chancellor of the Exchequer was this: "Can you put your hand upon your heart and say that you have personally examined this duty and come to the conclusion that it is a sound proposal." Or is it the fact that the President of the Board of Trade came to you when your Budget was nearly complete and said: "You have so many eggs of a varying, miscellaneous character in your Budget nest 1044 that one further misshapen egg will not very much matter." Perhaps the President of the Board of Trade will be able to answer that question, or perhaps, alternatively, we shall be given this line of policy: "After all, the House of Commons agreed to the White Paper policy of 1925 setting up this Safeguarding of Industries method. We have appointed the Committee under the Safeguarding of Industries Act, according to the principles; they have reported in favour of the duty, and it is for the Chancellor of the Exchequer to obey the mandate of the Committee set up under this procedure." If that be the answer, or in effect be the answer, then the whole responsibility which rests upon the Chancellor of the Exchequer and upon this House to guard the financial destinies and fiscal policy of this country is being undermined. The procedure can only be defended if, when any duty may be recommended by any Committee, the Chancellor examines the facts for himself and comes to an independent judgment on the matter. It is perhaps rather unusual for us from this side of the House to demand that the Chancellor of the Exchequer on the other side should have a stiffer backbone, but it seems to me that if he is going to yield on all occasions to the demands of any and every committee which may be set up for a duty under this method, then we shall be inclined to regard him as a sheep in wolf's clothing professing to be fierce when, as a matter of fact, he is yielding to the efforts of the President of the Board of Trade to convert him to Protection.

After all, who are three people, however wise they may be, practically to decide by the simple majority of two over one, the whole of the financial policy of this country? As I understand it, the reason for setting up these Committees is to discover the facts, and if this Committee, in particular, set up for the purpose of examining this question of a Pottery Duty had really judicially and impartially examined the facts and had set them out in a way on which this House and the Chancellor of the Exchequer could have come to a definite opinion, then their function would have been a very real and practical one. But anyone who has studied this particular Report carefully and impartially will, I feel sure, agree with me that this finding 1045 of the Committee is not a setting out of the facts, is not a considered judgment based on facts, but is a verdict and judgment in the teeth of the evidence put forward before that Committee. That is really not all, because in their final proposals they actually go beyond their terms of reference, as I shall show a little later on. They have proposed a duty which for all practical purposes works out very much larger in most cases than twice the largest duty that has ever been proposed before. The form of their duty is regressive in the worst sense, and their proposals, I think, will be injurious to the trade and industry of this country.

Those are statements which, of course, need some proof, and I propose to give my reasons for making those strong statements in opposition to the duty in the form in which it is proposed. First of all, there is a preliminary point. The application was not one by the industry. I believe that in all previous instances where an application has been made for a duty under this safeguarding method it has been made by the industry as a whole. In this case, it was not even made by the largest section of the industry, the earthenware section. When we confine ourselves to the purely china section, it was not made by the employés, because they definitely refused to take part in the application, and, even so far as the employers in the china section are concerned, it was not a representation on behalf of the whole of them but only on behalf of some of them. It seems to me, therefore, that it fails at the outset, not being what it professes to be, namely, an application on behalf of the industry for this duty. The White Paper of 1925 lays down seven conditions that have to be fulfilled. The first of these is that the industry must be of a substantial character. The number of employés in the china section of the pottery trade is not very large, but I am, not disposed to quarrel over words and to deny that this industry should be regarded as a substantial one within the meaning of the White Paper of 1925.

We come to the next condition that the imports shall be in abnormal quantities. It is not very easy to form an exact measurement of the imports of china, because it has been admitted by all parties to this application, those in favour and 1046 those against it, that the Board of Trade nomenclature is open to considerable doubt as to what is involved. But, taking the applicants' own figures and comparing the importation in 1913 with that in 1925, we find, as a matter of fact, that the importation in 1925 was 308,000 cwts., whereas in 1913 it was 341,000 cwts., or 10 per cent. less in 1925 than in 1913 Under ordinary circumstances, I should have thought that that alone would have shown that the importation could not be called abnormal, but when you come actually to value, you find that the case is very much stronger still. You find, in spite of the enormous rise in world prices. that the importation only increased from £937,000 to £1,083,000. In other words, while prices in general increased something like 75 per cent., the increase in the value of the imports of china only amounted to something like 10 per cent. If you compare the value of the imports with the total production of china by manufacturers in this country, then, taking the figures of the applicants, which I by no means accept entirely, whereas the imports in 1913 were valued at £937,000, which is something like 110 per cent. of the production of the home manufacturers in 1913 which was £838,000, in 1925 so far from having increased in proportion, they did not anything like hold their own, but were only £1,083,000 against £1,558,000 of home manufacture, that is less than 70 per cent. Hon. Members may ask why I stop at 1925, and whether it is not a fact that the year 1926 is more in favour of the application. The reason we cannot take 1926 is that it is not at all a comparable year. We had the coal stoppage, which completely altered the whole of the facts, and it must be quite evident to the House that it would be grossly improper to take the year 1926 in order to make a comparison with the figures of pre-war years.

The next point which the White Paper insists upon is that this competition from abroad should be with similar goods in the United Kingdom. As a matter of fact, the goods which are imported from abroad under the name of china, are made of Felspar china, and it is perfectly clear to those who are willing to take the trouble to follow out the details of this application that Felspar china imports from abroad do not compare with the bone china, which is the applicants' case, but very much more nearly with the production 1047 of the earthenware manufacturers. Though I could quote a long piece of evidence, I will confine myself to one sentence from the evidence of Mr. W. P. Moreton, managing director of Messrs. Thomas Forester & Sons, the largest manufacturers of English china in Great Britain, where he says, in answer to a question: Well, you see bone china never, so far as my knowledge goes, even before the War, really could compete with the Continental or Felspar china. That, taken from one of the largest manufacturers of china in Great Britain, completely disposes of the idea that we are really dealing with similar things and can compare the Felspar china which is imported with the china which is the subject of the application. The fact is that this luxury article manufactured in this country has its best market among wealthy people, and a large quantity goes to the United States and to Australia, where money is plentiful; the principal trade is done there.

The next point in the White Paper is whether unemployment arises from the severity of the competition. I think, in this connection, one ought to point out that one of the great failures of the applicants in this inquiry was that they completely failed, or refused, to produce their balance-sheets, and, therefore, it was impossible to discover what was the pre-War costing. I think, therefore, that we are entitled to put our own interpretation on that refusal. It is quite true that it may be undesirable to produce balance-sheets in public, but those who are acquainted with the procedure of these committees know that on certain days they sit in camera, and it is perfectly proper then to produce balance-sheets. I should like to quote a sentence or two from the same witness before the inquiry. He was being cross-examined with regard to the year 1920, and it was pointed out to him that in that year there was no competition from abroad, and he was asked why it was. He hedged about it for some time, but he could not deny that, as a matter of fact, the competition then was due to the fact that people preferred to buy the cheap earthenware material being manufactured in this country instead of the much dearer china, which they found 1048 they could not afford even in those days when money was plentiful in this country. A final question was put to him to this effect: Is it not your real view that the bone china has got too expensive for the general demand for the tea ware and breakfast ware in this country for the masses? In reply, this manufacturer answered: Unfortunately, there is a great amount of truth in that to-day. Furthermore, on the question of unemployment arising from the severity of competition from abroad, I would remind the House of what the hon. Member for South-West Bethnal Green (Mr. Harris) has already mentioned, that the employes decided deliberately not to be represented in the application for a duty. If they had thought that unemployment would be cured or improved by the imposition of this duty they would certainly have taken their place alongside the manufacturers in demanding it.

The next point on which the White Paper lays emphasis is that in order to secure a duty there must be proved to be unfair competition. The applicants strove to make their case, but the only point they were able to make was that there was some difference in wages paid in Germany and Czechoslovakia in the industry as against the wages paid in this country. What I want to point out is this, that we are not discussing a general tariff, but whether a particular industry is unfairly dealt with as compared with other industries in this country and, therefore, the important point is whether the competition of foreign wages is greater than it is in other industries in this country.

The applicants entirely failed to make out their case, and in the Minority Report issued by the Committee, Mr. George Hayhurst states that in his opinion the difference in wages is very much less than appeared because such things as payment for holidays and other factors tended to minimise very much the difference. It was further proved in the course of the inquiry that if there still remained a general difference in wages it was more than counterbalanced by the superior workmanship in this country, and still more by the heavy cost which the foreign manufacturer was put to in the matter of packing and carriage. This fully compensated for the slight difference 1049 that obtained in the matter of wages. The idea that this foreign felspar china, by reason of the lower wages that are paid, is gaining a place in the markets of the world which our industry ought to have, was absolutely smashed by the statement made by the Counsel opposing the application. He said: If you take the cheapest factory making bone china in Longton, of which we have heard anything, and if every individual in it from the managing director down to the youngest operative's attendant, including the commercial travellers, worked free, gratis and for nothing, the cost of bone china would still be greater, and in some cases twice as dear as the cost of a similar article in felspar china made in Germany. That is the statement of the counsel for the defence, but the Chairman of the Inquiry commented upon it, and he said: Taking the figures given to us in camera and working it out in one's head, I think that is so. It is therefore not merely the statement of the counsel for the defence but actually the agreed statement of the Chairman, who was one of the signatories to the Majority Report.

I do not want to weary the House by taking up too much time, but I should like to say that so far as the sixth point in the White Paper is concerned—reasonable efficiency—there is no attempt to deny that, looking at the matter on narrow lines, the efficiency of the Long-ton factories is reasonably good, but looking at it on much broader lines, that is from the point of view as to whether the factories are really brought up to date and employ methods of mass production, about which hon. Members opposite are so fond of talking, then I think it is much more doubtful. There seems also no reason why there should not be manufactured in this country an article not precisely felspar china but something of a similar character which could really compete with the article imported from abroad. What we find is this, that the prices which the manufacturers of bone china in this country are asking have soared enormously as against pre-War prices—and in default of the presentation of full balance sheets, for no adequate reason. The Labour costs have gone up some 80 per cent., and the cost of all materials, except one, has gone up by less than 100 per cent. On the admission of the applicants themselves the prices they are charging have gone up 1050 by 125 per cent., which is 25 per cent. more than any of the items which make up the cost of production.

That 125 per cent. is a very low estimate, because some of the articles which they sell have gone up by 150 per cent. and 175 per cent., and in some cases even more than 200 per cent. The fact is that the people of this country cannot afford the high prices which have been put on these luxury articles by a price-fixing ring, and in consequence have gone to felspar china and earthenware china because only by doing so can they get an article at a reasonable cost. The White Paper also says that the duty is to be recommended. We, of course, think that in every one of the particulars the applicants failed to make out the case which it is necessary to make, and we do not come to the conclusion that this duty ought to be imposed. Not only so, but in our opinion, even if they are going to propose a duty, they have no right to propose it at this excessive amount. The Majority Report claims that in putting on the duty of 28s. per cwt. it is practically equivalent; to—let me read the actual words of the Report: We have, consequently, considered the possibility of a specific duty, and have come to the conclusion that a duty of 28s. per cwt. would be approximately equal to an ad valorem duty of 33⅓ per cent. on the main classes of pottery to which the application relates. I say that that is not what they have done. Anyone who takes the facts and deals with the "main classes of pottery" will find that instead of paying a duty of 33⅓ per cent. it is a duty of something over 50 per cent., probably it is 66⅔ per cent, and the only reason why it does not appear to be so is that they have included, in addition to "the main classes of pottery," the more expensive articles on which this duty of 28s. per cwt. is only perhaps a duty of a few per cent. If you include these articles you may perhaps be able to bring the average down to 33⅓ per cent., but on the great bulk of articles which the common people of this country use the duty, so far from being 33⅓ per cent. is probably 66⅔ per cent., or more. Let me give one or two illustrations. Here is a case of 60 dozen half-thick cups and saucers of the value of £7 13s. 9d. The duty on it is £5 13s. Take another case of 60 dozen valued at £6 10s. The duty comes to £5 13s. 3d., and in the case of white seconds pottery 1051 of the value of £3 1s. 10d., the duty is three guineas, or more than 100 per cent. In contrast take a case of one of the luxury articles, a china tea set worth £35. The duty on that is only 14s. If you throw in this kind of luxury article you will, perhaps, bring down the average of the duty to 33⅓ per cent.

We take exception to this duty because it is of a regressive character. There are three kinds of duties. Those that are ad valorem duties, which progress as the value progresses, those which are really specific duties and in the nature of a poll tax; and those duties, such as this, which are actually larger in amount on the cheaper articles than the duty imposed on the dearer articles. No doubt we shall be told that there are objections to an ad valorem duty. Of course there are; but we are not concerned with defining any method which is going to make this very obnoxious proposal a more suitable proposal. It is for those who advocate it to find a duty which will not be open to the very grave objections to which this duty is liable in whatever form it is imposed. I shall leave to others who follow me to deal in detail with the case of vitrified pottery, but I will say this, that it was in my opinion outside this inquiry, and I shall be interested to hear from the President of the Board of Trade how he justifies the inclusion of vitrified pottery with translucent table ware in this duty. Let me say a word or two on the injury that this duty is going to do to our export trade. It is part of our case that the effect of this duty on felspar china, which really competes with earthenware and not with china, will have the effect of putting up the prices of the common articles in this country. I do not know whether hon. Members opposite are going to dispute that statement or not, but if they are all I can say is that in the evidence of one of the manufacturers himself it was admitted. Mr. Johnstone was asked: Would your earthenware prices still be the same or would they be increased? And his answer was: I should be glad to keep my present prices, with the exception of white and gold. —That is the main line of cheap tea sets— I shall want to put them up 5d. a dozen. 1052 Therefore, on the evidence of one of the manufacturers himself there is a likelihood of the prices going up in the earthenware trade, and that is going to injure our export business, because although our manufacturers may try to sell abroad below the prices at which they sell at home they may find themselves prevented from doing so by the anti-dumping laws which prevail in some foreign countries. But, even if prices were not to go up and we keep out foreign china, do you think you are going to stop the foreign kilns? They are going to get somehow into the foreign markets which we have otherwise maintained. When you remember that the export trade of this country in domestic pottery is three times as large as our import trade you are going to do a very foolish thing by cutting off a small part of our imports and thus strike a blow at a much more important trade—namely, the export trade of this country.

As I have said, the real reason for this falling off in the china trade is the high prices fixed by a price fixing ring in this country, and so long as these high prices remain, there will not be a demand in this country for large quantities of bone china. They will still retain the best market, but they cannot expect to achieve the large quantity which they otherwise might hope to attain. The trade will go to the earthenware manufacturers of this country and to the foreign manufacturers of felspar, but it is only there that you can get prices that are within the limits of the purse, not only of the working people, but of the middle classes of this country. As I have said, the effect of the duty is regressive. It is in fact a tax on the cheap articles of the people in order to try to preserve a luxury trade. It will do an injury to our export business; it will do an injury to our entrepot business, and it will further complicate our Customs tariff. We would like to see this Resolution defeated, but if hon. Members opposite are not prepared to go as far as that we ask them at any rate to limit the amount ad valorem which This tax can reach, to the already large figure of 33⅓ per cent.

§ Sir CHARLES OMAN

As is my wont, I shall not detain the House more than a few minutes. I am not in the least intending to protest against the taxation which is involved in this Resolution. 1053 In fact I approve it. What I do protest against is a dreadful verbal heresy in the Resolution itself, which treats that splendid thing, china, porcelain, the transparent article, as merely a sort of pottery. Pottery has a very different meaning. I looked up the word in the Oxford Dictionary and found it defined as "the produce of the potter's art, collectively earthenware." I looked up the word "potter" and found it defined as "a maker of pots or earthenware vessels." It is, therefore, clear that the word pottery cannot include china and porcelain. Never was the word "pottery" used before to include chinaware until a most silly thing happened in 1925, in the reports of exports and imports. Right down to the War in 1914, china, porcelain and earthenware were scheduled as different things. Some person who could not have been a connoisseur or collector in these spheres chose to drop the words "china" and "porcelain" in 1925 and to substitute "transparent pottery." China is not transparent pottery, because pottery, being earthenware, is a different article. It seems to me that the wording of the Resolution ought to be varied. All that we have to say is that we wish to impose taxation on pottery and porcelain (or chinaware, if you like). But they are wholly different things in the usage of the English language. I wonder what Sotheby's would say if someone went to them and said, "I have a lot of pottery I want you to sell for me," and it turned out that what was meant was old Dresden and Chelsea china. It would be ludicrous to think that old porcelain was pottery, or that the word "pottery" could refer to it. They are wholly different things. This Resolution should be a Resolution to impose taxation on pottery and porcelain. I trust that when these things get into print the Minister will take the trouble to vary the wording and to insert both terms.

§ Mr. MacLAREN

In Staffordshire we are now producing earthenware which is translucent.

§ Sir C. OMAN

But the Resolution is meant to apply to china.

§ Mr. MacLAREN

We are now producing earthenware which is translucent.

§ Sir C. OMAN

Do you not call china translucent also? All I wish to do is to propose that the Minister should, since he is taxing this Czechoslovakian stuff, which is china, take the trouble to add to the heading of the Resolution "porcelain or china."

§ Sir JOHN SIMON

I have much natural sympathy with the hon. Gentleman when he desires to see that the English word should be correctly used in Parliamentary language. But, after all, the matter which the House has to consider this afternoon first and foremost is a matter of substance and not of words. I submit that of all the taxes proposed in the Budget this duty is the one which calls for the most complete explanation and justification. Let the House consider for a moment what its admitted features are. It is certainly a very heavy duty. It has been pointed out already by the hon. Member for West Leicester (Mr. Pethick-Lawrence), and I can show it by one or two instances, that as a matter of fact it is a duty far above 33⅓ per cent. upon a large range of articles. Indeed, there is no difficulty in showing that in some cases it is calculated to double the price, and it is so devised that the simpler and cheaper the cup or saucer or plate, the heavier will be the tax put upon that particular article. It is a tax that is put upon things of universal need and use, and notwithstanding all those features, which obviously call both for explanation of the tax and for justification, down to this moment no sort of defence or justification of the tax has been offered by the Government.

I would invite the House to consider to what this Safeguarding of Industries procedure is leading us. The primary function of ordinary Members of the House is to take such part as they can, in the public interest, both in considering suggested expenditure and in considering how money is to be raised. That is what the House of Commons, historically and practically, is for. Yet here is a method by which a Committee, which is not responsible to this House, which is not chosen by this House but is nominated, in all good faith no doubt, by the President of the Board of Trade—in the present instance three individuals, two gentlemen and a lady—and this Committee in course of time produces a Report which is not unanimous, in which 1055 you have indeed the opposition to this proposed duty put with much brevity and great plainness by one of the members of the Committee, and when that is all done it is passed into the Budget of the year, and the Chancellor of the Exchequer does not even think it necessary to be present when a matter of this kind is discussed. Indeed, if you consider the language which the Chancellor of the Exchequer used when he gave to the House the information that this would be included in the Budget, anyone can see that the right hon. Gentleman was doing his utmost to disclaim responsibility. Let me remind the House how the matter was first mentioned. We had that most brilliant and entertaining, though rather expensive discourse from the Chancellor of the Exchequer, and in due course of time he told us that he was about to invite us to join him in scaling a precipice which was £40,000,000 high and he employed much picturesque and attractive imagery on the subject. Then he said: I will take the smallest items first. The Safeguarding of Industry procedure in the present year has evolved a duty of 28s. per hundredweight for five years on table ware of translucent and vitrified pottery. I make this proposal in accordance with the recommendation of the Majority Report of a Committee duly appointed. The only other sentence which the right hon. Gentleman thought it worth while to pronounce on the merits of the matter was: This year I think it will produce £150,000."—[OFFICIAL, REPORT, 11th April, 1927; col. 88; Vol. 205.] If the right hon. Gentleman is engaged in scaling a precipice which is to be measured by £40,000,000, this particular item will take him exactly one three-thousandth part of the way up his height. So that in point of money to the Exchequer the thing is comparatively trumpery. But in point of interference and burden the matter is extremely substantial, and the House can see that the Chancellor of the Exchequer, who knows how to choose his language if anyone does, is ostentatiously pointing out to the House "This is not my brat. It has been laid on my doorstep, and I will put it into my Budget, and leave the President of the Board of Trade, when the time comes, to defend it if he can." That is the meaning of his statement that 1056 the Safeguarding of Industries procedure has "evolved" this duty. There is not the smallest ground now for saying that the Treasury has ever considered the matter. There is no representative of the Treasury present in the House. There is no ground for saying that 28s. a cwt. is the duty which the Treasury officials thought right or that the method is right. The whole thing from beginning to end is based on this White Paper, Report of the Committee on Table ware of Translucent Pottery. That is no reason why the matter should not be examined impartially. I did make, I hope, my first point, that here is, of all duties, a duty in the Budget which calls for explanation and justification from the Treasury. Up to the present we have passed a Resolution in Committee automatically without anything being said, and we have this Debate without anyone getting up to explain what it is all about. I make this claim, that I believe that anyone who will really address his mind for half an hour to the main considerations that are involved in connection with this duty is bound to come to the conclusion that the view which was formed by the minority member of the Committee is a view greatly to be preferred to that recommended by the other two members. I assume, of course, that the President of the Board of Trade, who was responsible, has done what I have done, that is, examined the shorthand notes of the Inquiry. No doubt he will tell us. I assume also, of course, that he has examined the statistical tables that were produced. I have. Of course he has. If he will now stand up and say that, having read the shorthand notes and examined the statistical tables, he can put his hand on his heart and say as an intelligent person that they really support the view of the majority and overthrow the view of the minority, he will be the first man I have yet met who can possibly make such a statement.

I hope the House will excuse me if I refer to points that it is really necessary to know as a preliminary. We have to remember that there are three different kinds of things manufactured in a different way and made out of different materials, all of which may be found represented in cups, saucers, plates and so forth. First of all, there is this 1057 article which is called bone china. It is extremely expensive. As far as I know the only place in the world where it is produced is Longton in Staffordshire, and the rest of the china of the world, both the china of the Far East and the china of Europe, is produced by a different process. Bone china is a special production made of special materials manufactured at that single spot of earth. It is a very old established industry and employs about 8,000 people. The manufacturers are all in a ring and the first object of their ring, according to its own constitution, is to maintain the prices of their products at a minimum which they prescribe. They produce, beyond all question, a very beautiful article which nobody wishes to decry but it is very expensive. Why is it expensive? Because it is made according to an ancient recipe out of bone ash and other ingredients and the glaze is in most cases produced by the use of a compound of lead. The whole process involves double and separate baking and a series of complications which tend to make the article very expensive. A limited number of people so much admire it that they are prepared to buy it, but to treat bone china, the manufacturers of which sought for safeguarding at this inquiry, as though it were in actual effective competition with common felspar china—which is now going to be taxed—is very much as though the old hand-loom weavers of Spitalfields or Yorkshire were to apply under the Safeguarding of Industries Act in order to get a tariff put upon machine-made silk or woollen goods. Anyone who examines with common sense and attention that elementary fact cannot possibly dispute it, and it will be found in the forefront of the minority Report where the gentleman who draws it up says at the very start: I am unable to see my way to sign the foregoing Report principally on the ground that in my opinion felspar china is essentially different in character from the bone china produced in this country. Felspar china is the cheap china which it is sought to tax. Let us carry it a step further. I will take an ordinary example of bone china. I will take what is called a "twenty-one piece tea set," that is to say, six cups, six saucers, six plates, a bread-and-butter plate, a cream-jug and a sugar basin. The manufacturers 1058 who applied for this safeguarding themselves put forward figures and I assume the President of the Board of Trade has studied those figures closely. They put forward figures in which they say that this particular standard thing, this twenty-one piece tea set, made by their process cost them 11s. 9d. to manufacture and they sold it for 13s. 2d. It may be so. It is a remarkable fact that that very same class of tea set, before the War, was made by these very same people and was sold for 3s. 9d. or 4s., so that these manufacturers at any rate are people who have succeeded in increasing the price of the goods they sell by a bigger percentage than anybody else whose case can be quoted in this country. Of course they are a ring. They were challenged to produce their balance-sheets and they refused, and as they are private companies there was no possibility of finding out how matters really stood.

Taking them at their word, they say this tea set costs then 11s. 9d. to make. If there is any business man listening to me he will be interested to know that of that 11s. 9d. no less than 4s. 1d. represents overhead charges. I should like to see the well-managed business which requires 4s. 1d. of overhead charges in order to produce a tea set. However, there it is. They say that is what it costs them and they divide it up into the cost of material and the cost of labour, these being almost exactly of equal size. Of that 11s. 9d., 5s. 10d. represents material and 5s. 1ld. represents labour, and they include in the labour cost everything from the general manager down to the office boy and even the commercial travellers. What is, at the same time, the cost and the selling price of this cheap felspar china which they are now seeking to tax? This felspar china which is not made out of bone-ash, which does not require double baking, which does not use lead but produces the glaze by the same materials as are used in the composition of the body of the article—this suggested rival in the market is to be bought here at 5s., and that is after paying the whole cost of transport from wherever it is made. As a matter of fact the cost of production was proved to be about 3s. 1d.

It is perfectly ridiculous for anybody to suggest that these bone-china manufacturers are suffering because of sweated 1059 labour or unfair labour conditions in the factories abroad which, they say, sell goods in this country. Let us give them the whole of their labour for nothing. Let us give them their general managers, office boys, commercial travellers and all the people who take part in the process and you will find that this foreign article is produced and sold for less than the mere element of material in the different products which they make. I appeal to the common-sense of Members of the House. What is the explanation of the fact that the maker of this translucent, decorative china—and as I say I do not in the least wish to decry it because it is a very beautiful thing—has to charge something like 13s. 2d. for an ordinary tea-set, whereas the vast quantities of ordinary tea-sets which you find in ordinary humble homes, can be got for a much smaller figure, namely 5s. or 6s. The explanation has nothing to do with the difference in labour conditions. It has to do with the fact that this Longton article, made out of this particular material and by these elaborate processes, is in the nature of things a much more expensive article to make. How can anybody who examines these figures—and I am quoting the figures which the applicants put forward as to their own costs—doubt that the gentleman who signed the Minority Report is well founded when he says: I regard the imports of felspar china as being entirely different in character from home-produced bone china, though it is true that as regards translucency design and use the two products might be deemed to be similar. He goes on to say: The costs of some of the materials used in England (in particular calcined bone and lead oxide) are much more expensive than the corresponding ingredients used in making the Continental product and, in view of this difference in the materials used, no comparison can be made as to whether Continental china is being sold at prices below those at which similar goods can be profitably manufactured in this country. I should like to know from the President of the Board of Trade, who has presumably considered all these points, what is wrong with that sentence? Assuming that the ordinary rules of arithmetic and people's ordinary common sense are to apply has the right hon. Gentleman the hardihood to say "I have studied the Minority Report of Mr. George Hayhurst 1060 and in reference to that sentence, I say upon examining it that it is not true." If it is true there is nothing left in this except a most preposterous attempt to get a tax upon an article which is cheap and of wide consumption and use, not in order to protect a thing which is similarly made but in order to protect a much more expensive, a much more elaborate, and, I quite admit, a much more delicate thing.

Let me go further. It was pointed out at the inquiry—and I presume the President of the Board of Trade, having read the shorthand notes, will know all about it—that there was a third article which was constantly being confused either with this bone-china which is so expensive, or with this felspar china which is so cheap. That is earthenware to which the hon. Member for Oxford University (Sir C. Oman) referred just now. What is the good of saying that the cheapness of imported felspar tea sets is due to bad labour conditions abroad, when the British manufacturer of earthenware is able to produce very good and beautiful earthenware tea sets which will compete with this foreign china, perfectly well? I have the figures here and, whereas, in the case of felspar china, very largely made abroad, the cost of production of one of these tea sets is 3s. 1d., in the case of English earthenware, which is almost indistinguishable in appearance, the cost is 3s. 5d. Indeed, there was evidence at the inquiry, by English earthenware manufacturers who are outside the ring, that they could produce at a less cost. Will the right hon. Gentleman please observe also that the same workpeople who are in the same trade onions are employed by the English earthenware manufacturers and by the bone-china manufacturers and they are paid on a similar scale of wages.

Therefore, it is impossible to say that the difficulty which the bone-china manufacturers say they have in selling their china is due to the fact that their foreign rivals underpay their workpeople, because the British earthenware manufacturers, who are a far more important body in the Potteries, as my right hon. Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) knows very well—a far bigger and more important body than the bone-china manufacturers—are 1061 able, perfectly well, to pay British trade union rates and to compete with that china from abroad. I do not require to delay the House or to complicate what is, in substance, a simple matter by delivering anything which could be called a lecture. I need only say that for 20 or 25 years of my life it has been my duty, in the course of my profession, to examine with a great deal of care shorthand notes of evidence, tables and statistics that have been prepared, and to consider, without the smallest heat or indignation, differences of opinion between one person who is trying to pronounce a judgment and another. I have never, in any experience I have ever had, seen material which more obviously supports the view of the minority, and is more plainly flouted and disregarded in the Report of the majority than in this case.

I simply cannot believe that an intelligent man like the President of the Board of Trade, or anybody else who tries to approach this thing without bias, can possibly say that the conclusions reached in the minority report, some of which I have read, are not absolutely justified by the material which was produced at the inquiry. This recommendation ought never to have been passed by the Board of Trade or the Treasury. If I am right in saying that the proved facts conclusively establish that the failure of the bone-china manufacturers to undersell felspar china has nothing to do with wages, then there is no justification for applying this Safeguarding of Industries method at all. It was one of the essential conditions laid down in the White Paper connected with the Safeguarding of Industries procedure that you should not recommend a duty and you should not impose a duty, unless it could be shown that the exceptional competition which was alleged arose from conditions which were so unfair as to be traced either to depreciation of currency, to subsidies or bounties, or to inferior conditions of employment of labour.

5.0 p.m.

I want the House to observe this. The Committee unanimously agreed that depreciation of currency had nothing to do with it. The Committee unanimously agreed that subsidies and bounties had nothing to do with it. Therefore, unless it could be said that it was proved before this Committee that the difference 1062 of rates of wages in Czechoslovakia and this country enabled the foreign manufacturers to underbid, there is no ground whatever for allowing such a recommendation to appear in the Budget. I have already pointed out that the proposition that the difference in rates of wages had anything to do with it is pure nonsense. It would be easy to take up other points, and the report of the Majority tempts one to do so, because although made in very good faith, it is in many respects a most extraordinary misrepresentation of evidence. To take one example. It was pointed out, in the first place, that it was not true that the import of this foreign china was increasing to a point above the import before the War, and it is not so. The import before the War—in 1913 for example—was 341,000 cwts., and the average for the five years up to 1913 was 300,000, although there has been an increase since 1920, for reasons which have got nothing to do with the point at issue, and the amount in 1925 was 293,125 cwts.

The majority of the Committee most cheerfully print another figure for 1926. At the inquiry, as anyone can see who reads the shorthand notes, it was agreed that the year 1926 was not a fair year to take, for the reason that since the President of the Board of Trade announced his intention to set up a Committee for the purpose of inquiring whether there should not be a tax on this imported stuff, immense quantities of it came into this country. There is a second reason. 1926 was the year of the very serious stoppage in the coal trade. There is no article of ordinary utility in commerce which takes so much coal for the purpose of producing a given weight of manufactured article as this bone pottery. Therefore, when there was a coal stoppage in 1926, this bone china industry was practically brought to a standstill, and it was pointed out, and admitted, at the inquiry, that the figures of imports for 1926 could not possibly be a fair guide. Yet you have this Majority cheerfully putting these figures in their report, without giving the slightest warning that they are introducing figures which both sides agree were not a fair test. They do more. They introduce columns in which they give what they call "Production of Longton China in cwts." but they do not go on to say, as they 1063 ought, that when those figures were submitted to cross-examination, it appeared that the accountant who produced them was quite unable to verify them, that the only figures he had were not of weights at all, but of quantities produced, and it entirely depends whether you are producing small things like pepper-pots or big things like tea-pots. It was admitted there was considerable change in the fashion in the course of years and the figures produced did not in the least agree or correspond with the Board of Trade figures. No one can really examine the material which is available without being deeply impressed by the fact that the Minority Report is extremely difficult to gainsay or contradict, and it is made by a man who says, quite frankly, that the case sought to be made was not made at all.

There is one other matter. It does not seem to me, with all respect to the President of the Board of Trade, that these Committees under the Safeguarding of Industries Act, act in a really judicial spirit. I am not arguing that they should observe special forms and technicalities of law, but if you appoint anybody—I do not care who it is—to decide a matter in controversy, there are certain very simple rules which have to be observed as a mater of commonsense and good faith. I do not doubt that the lady and gentlemen who were appointed have been acting bona fide, but they have not been acting in what anyone would regard as a reasonably judicial spirit. Let me give two illustrations. At the beginning of this particular inquiry, the applicants intimated that they would be willing that their factories should be inspected, because it is essential in these inquiries to know whether the applicants are carrying on their business in a reasonably efficient manner, and that was a matter of very sharp controversy. Later on, the representatives of the opponents referred to this, whereupon the President very frankly said, "We have already been." That is to say, this tribunal, which had before it the very critical issue as to whether the applicants were carrying on their business efficiently, had gone without the knowledge of the opponents, and under the conduct of the applicants themselves, were shown such things as the applicants chose to show 1064 them, and came back again and sat There is no commercial arbitrator in this country, whose award would be allowed to stand if he had done that.

It is not a question of the forms of law at all. The point is that if anybody wants to hold an inquiry in a reasonably judicial spirit, the first rule to observe is that he must not take information from one side without telling the other what he has got and giving the other side the opportunity of reply. When it turned out, in the course of this inquiry, that that had happened, the opponents said, "Well, at any rate, I hope we may be allowed to go and see the same thing." That was refused, and the opponents have never till this day been allowed to see the things shown to the Committee by the applicants. It may be said that this is a secret process, and so on. An application was made by Mr. Comyns Carr, a perfectly well-known and highly respected King's Counsel, that he, at any rate, should be allowed to go, but the applicants entirely refused to allow the opponents or their counsel to be shown the things they had shown the Committee without the knowledge of the opponents. That is how the matter remained to the end.

I take the second point. The lady member—because, after all, it is this lady whose casting vote has decided whether there is to be a tax—[An HON. MEMBER: "Is she over 21?"] Yes, she is over 21. I see that the lady in all innocence blurted out the fact that she was supplied with some confidential documents by the Board of Trade bearing on the subject of the inquiry, and thereupon, not unnaturally, the opponents' side asked to be allowed to see them. "No," said the President, "this is a secret document." No doubt the President was in a difficulty. The result was that an hon. Member put a question to the President of the Board of Trade in this House, and the right hon. Gentleman expressed his regret, said he had directed that it should not occur again, and, in the meantime, the document was to be shown to the other side, as it was. It was a lot of material, apparently collected by the Overseas Trade Department. The Overseas Trade Department has not been very successful in previous inquiries in producing accurate information. Incidentally, I may say, it is a very curious thing that a Department 1065 which is supposed to exist for the purpose of promoting trade overseas, should be used for the purpose of providing information to stop things from coming overseas.

In any case, what is to be said of a go-as-you-please proceeding by which a Government Department does no wrong in providing a body, which ought to be quite judicial, with material which, as a matter of fact, they do not disclose to the opponents, and for which privilege is claimed until it is over-ruled? Are we in the House of Commons really going to say, "Here is this famous Safeguarding of Industries Act. It was recommended to us from the Treasury Bench as another method by which the House of Commons would have much better control over taxes." As a matter of fact it is adopted holus bolus by the Chancellor of the Exchequer, who will not even come here to listen to the Debate. It is perfectly plain that it is an attempt to get a tax to protect a very beautiful and special sort of china, which is not in competition with the china which is to be taxed, and the procedure which is followed, and in complete good faith, as a matter of fact is not being conducted in a reasonably judicial way. I repudiate altogether the idea that we should hand over matters of primary taxes to men who have no responsibility to the House of Commons. When the Treasury is going to put a tax on silk, it makes very elaborate inquiries, interviews people, forms its own judgment, and comes here and explains it, and takes any responsibility; but in this proceeding, up to this moment, we have not had a single word from any member of the Government to explain why they think this is proper. It seems to me, on many points, to be wholly incompatible with the public interest, and, in some respects, nothing more than a mere confusion on the subject of figures and facts. The present proposal is to tax both translucent and vitrified pottery.

This Committee had no evidence at all before it on the subject. Going entirely beyond its terms of reference, without ever calling for any information, it has been pleased to say, "Besides putting a tax on translucent pottery, we propose to put a tax on vitrified china." Who was given an opportunity of furnishing evidence about it? I hold in my hand the very plate on which I got my lunch 1066 to-day. On the back of it I see it is labelled "Vitrified." It is not china at all; it is earthenware, and, as the hon. member opposite said, nowadays there is quite a lot of earthenware which is being vitrified, which means, I suppose, nothing more than that it is a material so treated that even inside the glaze the stuff is such that it will not take a stain. Here is this Committee going outside its terms of reference and cheerfully adding this to the thing with which it was asked to deal. Still more extraordinary, the Committee says on page 18. We have considered the possibility of a specific duty and have come to the conclusion that a duty of 28s. per cwt. would be approximately equal to an ad valorem duty of 33⅓ per cwt. on the main classes of pottery. Will the right hon. Gentleman tell me who told the Committee so? Where is the evidence and the calculations which show it is so? I have looked through the shorthand notes and made inquiries, and there is not a single word in the inquiry which would have given them that figure. As a matter of fact, it is a ludicrous error. I have had quite a number of communications about this. Take this, for example. Here is a well-known house, Messrs. Woolworth and Company. It is a very good instance to take, because they are dealing with some 250 branch retail shops. They say, take a comparatively ordinary staple line in china, and if you take thin tea-sets, you will get a consignment for £10 4s. 2d. and the tax as at present proposed, 28s. a cwt., will work out at £5 2s., which is almost exactly 50 per cent. But, they say, if you will take a thick cup and saucer, the kind that you will get in the kitchen or in the poorest homes, you will find that you can buy an almost similar weight, rather more, for £5 45. 2d., but it weighs rather more, and the tax on that will be £5 10s. Here is this precious Committee recommending its 28s. a cwt., and, as a matter of fact, it is not putting on a tax of 33⅓ per cent. at all, but, in the case of the simple, thick, coarse, rough ware, which is presumably principally used in very humble homes, it is actually adding something like 100 per cent. duty. I do ask the House of Commons to exercise that function, which we all of us claim to exercise at times, and to say whether these considerations are not such as make it our duty to urge 1067 that this particular impost should not be put upon this pottery. The Chancellor of the Exchequer said, after his first Budget, in one of his delightful and eloquent passages, that that Budget was the most delightful hamper, the most overflowing cornucopia of luxuries, the most delectable and carefully-chosen repast that ever was laid upon the table of the nation by a British Administration. That was about two years ago. Only two days ago the Chancellor of the Exchequer, at a time when he was attending to his duties under the Budget, was assuring the right hon. Member for Colne Valley (Mr. Snowden) that one of the great ambitions of his life was to secure something in the direction of a free breakfast table. When you look at the White Paper of the President of the Board of Trade, you will find that it puts in that the Safeguarding of Industries procedure must not be used to put any tax on an article of food or drink. But these people, though they will not tax the meat, tax the plate you eat the meat from. They will not use the Safeguarding of Industries method for taxing a liquid, even the most innocent liquid, but they will tax any vessels made out of common china in which such liquid can be put. Instead of using the involved language of the Resolution, about articles of translucent pottery or of vitrified pottery, being either articles suitable for use in connection with the serving of food or drink or component parts of such articles, let me for a moment just use homely English about it. There is a list at the end of this White Paper of what this really means. Here is what we are being asked to tax, among other things: Tea sets, dinner sets, breakfast sets, cups and saucers of all sizes, egg-cups, butter dishes, teapots, toast racks, bread and butter plates, jugs, plates of all sizes, soup tureens, cruets, mugs, all sizes and kinds, with one or more handles, etc. As far as I know, there is only one thing in the list which has escaped. These applicants, who were nothing if not bold, since they had got the right to apply for a tax on any article of table ware, included in the list flower vases, apparently under the argument that, after all, you put a flower vase on the table. You might just as well try to tax the Mace.

The truth is that this is a particularly odious form of tax. It 1068 puts, and deliberately puts, the heaviest burden upon the poorest person and the cheapest article. It is really a cruel tax, and unless it is justified up to the hilt by a series of facts and figures which I, for my part, cannot find, I cannot conceive that it is the duty of the House of Commons to do anything but to vote that it should be rejected.

Sir P. CUNLIFFE-LISTER

All those in this House, and they are many, who feel that the very close procedure under the White Paper bears perhaps unduly hardly on manufacturers, will welcome the speech which the right hon. and learned Member for Spen Valley (Sir J. Simon) has just delivered. He has hitherto said that before a duty is proposed to the House, there should be a careful and an exhaustive inquiry, but he has come down to the House to-day—and he is supported in this by one of the hon. Members above the Gangway—saying: "We do not want any more of these inquiries. What we want in future is that the Chancellor of the Exchequer, the President of the Board of Trade, and the Cabinet should make up their minds as to what duties should be put into the Budget of the year, that, as a Government, they should justify those duties, and that then the House should vote upon them." That is an argument which will indeed be welcomed by a number of my hon. Friends below the Gangway on this side of the House, for it is only in deference to a certain reading of our pledge that we have gone in for this system of exhaustive inquiries, but if, when these inquiries are held, the Opposition is going to say to us, "What is the use of these inquiries; why cannot you come forward as a Government and justify, as a Government, the duties you propose?" then I think hon. Members on this side are quite entitled to say that, if the whole of this exhaustive procedure is to be treated in that way, the Government are fully entitled to reconsider their position. If a duty should be proposed which has not gone through all this machinery of inquiry, it certainly will not rest with the right hon. and learned Member for Spen Valley or his colleagues or associates, or with hon. and right hon. Members above the Gangway opposite, to say that we are doing anything which is improper.

If any complaint were to be made as to the way we are fulfilling our pledge, 1069 I should have thought it would have come from hon. Members on this side far more reasonably than from hon. and right hon. Members opposite. Inquiry after inquiry has been turned down by Committees, and Members on this side have accepted that without a word, yet we are told to-day, because there has been an inquiry, and a majority of the Committee have reported in favour of a duty—

§ Mr. MacLAREN

A majority?

Sir P. CUNLIFFE-LISTER

Yes.

§ Mr. MacLAREN

An incompetent old woman!

HON. MEMBERS

Withdraw!

Sir P. CUNLIFFE-LISTER

The hon. Member is very gallant indeed in making attacks on people who are not present, and his characteristic courtesy will have the appreciation of his colleagues, I am sure. I remember another case, where there was a majority against a duty and a minority in favour of it—the case of superphosphates. What would hon. Members opposite have said if we had come down to this House and said: "There is a minority in favour of this duty, but we are going to impose it"? How eloquent would have been the exposition given us by the hon. Member for South-West Bethnal Green (Mr. Harris)! He would not have produced one article from under his seat, but dozens of articles, in order to show us how wrong we were in our action. It does not really rest with him to say that we are not entitled to proceed on the findings of a majority of a Committee. I am quite prepared to defend these duties in the House, not only on the findings of the Committee, but on the plain facts of this industry, which are apparent to everybody from the trade returns, and which are common knowledge. But before I come to the broad merits of the question, I will deal very briefly with one or two points that were raised by previous speakers.

The hon. Member who spoke first said it was wrong to put on a specific duty, but a specific duty is exactly what was asked for by the opponents. It was the opponents who said that an ad valorem duty would bear unfairly, by putting too high a tax on the highest priced articles, in which competition was not so keen, 1070 and, therefore, the last people who would be grateful to the hon. Member for his advocacy of an ad valorem as opposed to a specific duty are the people who opposed this at the inquiry. It is quite true that in some cases it will be somewhat above. The figures supplied to me show that in the case of teacups and saucers, it is estimated that a 33⅓ per cent. ad valorem duty would be 23s. 8d. per cwt. but it is 28s. per cwt. with a specific duty; but on tea sets, with which the right hon. and learned Member for Spen Valley dealt, a 33⅓ per cent. ad valorem duty would be 40s. per cwt., whereas the specific duty is 28s., and on plates, which were not only cited but produced in this House, the specific duty is 3s. per dozen, and an ad valorem duty works out at 5s. Therefore, taking it by and large, I do not think it can be said that the specific duty is very unfair as an average, as compared with an ad valorem duty.

§ Sir J. SIMON

Would the right hon. Gentleman be prepared to circulate as a Parliamentary Paper the document from which he has just taken those extracts? Then we should be able to see why our information is different from his.

Sir P. CUNLIFFE-LISTER

There are numbers of cases which can be produced. I am not prepared to circulate a mass of Parliamentary Papers.

§ Sir J. SIMON

Why not?

Sir P. CUNLIFFE-LISTER

We can argue these duties in one of two ways. We can either argue them on the report of the Committee, or we can argue them on the responsibility of the Government, but why should we be put in the dock and pilloried whenever we propose a duty which has gone through all the procedure of an inquiry in order to keep within the terms of the Prime Minister's pledge? It was a pledge by the Prime Minister at the last election that he was going to use this policy where industries needed protection, and I repudiate the suggestion that we are always to be put in the dock whenever a duty is proposed, and whenever we carry out the positive side of our pledge, which is far more import ant to the working classes of this country than the negative side, of which the right hon. and learned Gentleman is so fond. We are told that the people working in this industry are opposed to the 1071 duty, but on what authority is that stated? Has the hon. Gentleman been down to the factories and asked? Is he aware that in factory after factory workmen have signed petitions in favour of this duty? I suppose that when he is told that, he will change his mind and he will say, "Well, they may be in favour of it in this particular industry, but working men in general are not in favour of it."

§ Mr. PETHICK-LAWRENCE

Is it not a fact that the organised workmen in the trade definitely decided not to be represented if the employers made an application?

Sir P. CUNLIFFE-LISTER

I am not aware of that. What I am aware of is that in a very large number of cases the workmen in the factories, I am told, have signed unanimous petitions in favour of this duty. I would be very much surprised if the hon. Gentleman would have a successful tour to Longton speaking in favour of Czechoslovakian and German pottery as against the pottery which they make there. [Interruption.] It is not the least weak at all. I am proposing to the House to-day a duty upon this pottery. The hon. Member says the workmen in Longton do not want a duty upon German and Czechoslovakian pottery. Let him go down to Longton and make a series of speeches explaining to the workmen in the Longton factories how valuable it will be to them, how much the unemployment, which is very serious, will be improved, if his policy succeeds and the policy of the Government is defeated.

§ Miss LAWRENCE

Would the Minister tell us whether the organised workpeople did appear before the Committee?

Sir P. CUNLIFFE-LISTER

Really, if I am being challenged on this, I say, as a proposition, that if you put this duty upon this ware—

Sir P. CUNLIFFE-LISTER

Let me pursue my argument. If you put on this duty, you will undoubtedly improve the prospects of this trade, and undoubtedly the workmen will be in favour of it.

§ Mr. MacLAREN

Of the whole china trade?

Sir P. CUNLIFFE-LISTER

Certainly. If the hon. Lady says that the workmen who are employed in competition with German and Czechoslovakian workmen are anxious for this competition to go on—

§ Miss LAWRENCE

On a point of explanation. I did not say whether the workmen were anxious or not anxious. I asked the Minister whether the workmen came before the Committee.

Sir P. CUNLIFFE-LISTER

Really, how ridiculous this is. Here is a claim made from the other side—[Interruption]—I am in possession of the House—a claim that the workmen are opposed to this duty.

§ Mr. DEPUTY-SPEAKER (Captain FitzRoy)

Three hon. Members took an hour and three-quarters in attacking the Minister, and surely it is only fair to allow him to reply.

Sir P. CUNLIFFE-LISTER

I am quite content to let it rest at that, and when the opportunity of ultimately taking a decision comes, in the Longton area, it will be seen on which side the interests of the workers lie.

§ Colonel WEDGWOOD

It will.

Sir P. CUNLIFFE-LISTER

We were told that the export trade was going to be prejudiced in some way, but no one explained how the export trade was going to be prejudiced. The export trade is of two kinds. The export trade is in either very high-grade specialities, which are not affected at all, and which, because of their particularly high grade, do still find their way into many of the markets of the world, Or in lower-grade china, where we are in difficulties. I ask the House to remember that although our export trade and our production of this china has gone down, there is one series of export markets in which we have been steadily holding our position, and that is in the markets of our Dominions, where a preference is given to us under their tariffs.

I draw this analogy from Germany—if we are to succeed in the export trade it will not be by still further handicapping our own production here, but we shall succeed, as they have done, by having a protected home market for this 1073 trade and getting larger production, because if we have that larger production we shall have a better chance of selling in those other markets. The case for this duty is, I think, plainly established on the facts, which are not in dispute and do not require a meticulous examination of evidence. I have read pages of evidence of this and other inquiries. The broad, simple facts stand out. The right hon. and learned Gentleman has had to go through the evidence in order to find this and that item which will support his particular contention.

§ Sir J. SIMON

I shall be quite content if my right hon. Friend will take the Minority Report, and will say which of the paragraphs in it he is in a position to disprove.

Sir P. CUNLIFFE-LISTER

I am coming to the Minority Report. Naturally, the right hon. and learned Gentleman is very keen to cite whatever authority is in his favour. I have often heard him in this House and in the Courts, and the weaker his case the more he concentrates, naturally, on the one single authority which can support him. He would not be the great advocate he is if he did not do so.

§ Sir J. SIMON

I once won a case for the right hon. Gentleman.

Sir P. CUNLIFFE-LISTER

I was just going to say there is no one in this House who is more grateful to my right hon. and learned Friend; but he had a far better case there than he has got to-day. I am going to cite two other facts in defence of this proposal, which he has made light of. Unemployment is serious. In 1925 the unemployment in this branch of the industry was something like 16 per cent. I will not take 1926, which was, of course, an abnormal year. When unemployment is bad in this particular branch, it not only affects that branch of the industry, but the whole pottery industry; the pottery industry is still more upset. Imports are undoubtedly abnormal. There is no question that they are well above the pre-War average. They were steadily increasing through 1926, and reached a total of 365,000 cwts., and I will give the House what has happened in the first quarter of this year. In the first quarter of this year they reached the figure of 128,000 cwts.—that is for one quarter alone. Pre-War there were about 1074 300,000 cwts. for the whole year, and now there are 128,000 cwts. in one quarter. But it is not quite fair to make a comparison on the pre-War figures alone, although even if we take the pre-War standard as absolute and compare it with the rate of import to-day, the rate of import is higher than pre-War. I am often reminded by hon. Members opposite that we must take the relative proportion in this matter—must not take merely the imports, but must see what the trade at large is doing. Let us look at that. [Interruption.] The hon. Gentleman has proved the fragile character of the translucent ware he has introduced into the Chamber. Let us take the true parallel. The true parallel here is the import trade, in conjunction with the general trend of home production. When the question is looked at in that way, the argument is much more in our favour. Whereas the home production before the War was about 258,000 cwts. a year, the home production in 1926—this is not based upon the stoppage period, it is based on the four months during which there was no stoppage and they were working as fully as they could—was at the rate of only 183,000 cwts. a year.

§ Mr. PETHICK-LAWRENCE

Would the right hon. Gentleman give the values?

Sir P. CUNLIFFE-LISTER

I really think it is better that we should pursue this as a Debate and not as a conversazione. I have given way several times. When you compare the trend of production with the trend of import, you not only find that actually our imports are greater than they were before the War, but you find that the home production has gone down and, as I have said, is held up only because of the preference given to us in Dominion markets, and you find that, relatively, an adverse importation is far more serious than appears from the figure itself. Competition is coming from markets—there is not the least doubt about it—where the conditions are far less favourable to the workmen than they are in this country. Wages are lower and the hours are longer. I need not ask what are the industrial relations in this industry. It is one of the industries where the industrial relations are extraordinarily good. There is a Joint Industrial Council, and there has not been an industrial dispute 1075 with a stoppage for 25 years. It is just the kind of industry which should receive the attention, and the sympathetic attention, of Members of this House.

Really only two arguments are advanced against this proposal. The first is that the article is not of a similar character. That was the argument advanced by one hon. Member above the Gangway opposite and reinforced by the right hon. and learned Gentleman. We had an abstruse scientific exposition which showed that whereas the English make of china is made of china clay and bone ash that foreign china is made of this clay, or this china stone, and felspar instead of bone ash, and that therefore the two things are not similar. Scientifically, that is so; but what about the practice? What does an ordinary buyer look for in an ordinary china tea service? There is not one buyer in a thousand who inquires whether a particular type of cup he is going to buy is made of felspar china or bone china. If I were a betting man, I would adventure a small sum that even so great an expert as the right hon. and learned Gentleman would not know which was the bone china cup and which the felspar china cup out of these two cups (exhibited). I do not believe that he would guess right six times out of 10; and I am perfectly certain in the case of the ordinary individual who goes into a shop for this pottery the last thing in the world he would ask is whether he is getting felspar china or bone china.

§