§ Major BEAUMONT THOMAS
I beg to move,That this House views with grave apprehension the present condition of the Iron and Steel Industry, and urges the Government to take immediate steps to stem the continuous decline in the activities of this industry with its resultant increase in unemployment.In moving this Motion I offer no apology for the fact that this matter was debated only last February. The condition to-day is so serious that I think that in all quarters of the House there is a desire that the position should be discussed, and events have taken place only recently which have so accentuated the gravity of the position that I think it is only proper that we should have an opportunity of discussing this matter in all its bearings. I have purposely worded this Motion so that it may not be taken in any quarter of the House as being in any way of an aggressive nature. In this industry we want this matter discussed as a business matter, and I hope that it will be in that atmosphere that this debate will be carried on this afternoon.
This industry is one of the key industries of this country, not only because it is capable of providing employment for a very large number of people, but because the production of iron and steel is a vital necessity to many of our chief industries. Since this matter was raised in the House last February, we have had the advantage of the publication of the report of the delegation which visited the Continent. The Government are to be congratulated on having appointed that delegation, and we have now in our hands information which we had not when this matter was dealt with last February. I would like to draw attention this afternoon to that report. The report dealt with Europe in particular, and, in every country visited by the delegation, production and exports have gone up very considerably. In the case of France the production has more than doubled, and exports have gone up sevenfold since 1913. We can all appreciate that that production, and those exports have been affected by the fact that France has received a large portion of industrial territory, and, naturally, we must take that 888 fact into consideration. In Belgium and Luxemburg, production has doubled and exports have gone up threefold. In Germany, which has been subjected to big losses of industrial territory, production and exports are practically the same as they were in 1913. In Czechoslovakia, a comparatively new country, production may be said to have increased fourfold, and exports in proportion.
In this country—and I regret to say that this information was not given in the report published to this House, and I consider that we in this House would be very much more capable of carrying out our duties if we had the fullest information at our disposal—in Great Britain, production has decreased by 698,700 tons, and exports have dropped by 589,800 tons. An hon. Member mentioned to me yesterday, that, in spite of that fact, this country last year produced a record quantity of steel. That is perfectly true, but we have not kept pace with other European countries, and in a race, unless you keep level with the rest, you are doing nothing but going back. I may add that, for the month of September this year, our exports have fallen to 200,280 tons, which is lower than for any month since April, 1926; while our imports have amounted to 223,800 tons. That is to say, our imports are greater than our exports, and we have now 38 per cent. of insured workers in the industry unemployed.
The charge is made against this industry in this country that it is inefficient. On that point may I say that the delegation, which visited various plants on the Continent, also visited representative iron and steel plants in this country, and this is what the delegation reported:As regards efficiency and management, and the modernity and equipment of certain units of plant, they were equal to, and in some cases superior to the iron and steel plants which have been seen on the Continent.I may also point out that steel is being produced in this country to-day at practically speaking pre-War cost, and I think that that will prove that the charge of inefficiency cannot hold good. That is in spite of the fact that, as is well known, wages and certain charges have risen considerably. We also know that the largest proportion of the cost of production of iron and steel is the labour cost.
889 To return to the report, what must strike one more than anything else are the conditions under which this industry is carried on on the Continent. Not only are wages about half of what they are in this country, but the hours of working, the system of payment, and the conditions generally are such as would not be tolerated in this country for one single moment. I know that that brings the reply that that is in countries which are under Protection. My reply to that is that the reason for these facts is that undoubtedly, in those countries, trade union organisation does not exist as it does in this country. That being so, we have to face that as a fact, and we have to appreciate that we have built up in this country a set of conditions which, somehow or other, we have got to protect, safeguard and preserve. While I am on the subject of hours, it is rather interesting to note that many of these countries have signed the Washington Hours Convention, and yet the Washington Hours Convention is not carried out in the spirit in which it has been in this country for many years.
Nobody will deny that there has been a very large increase in the production of steel since the War, and the demand has not kept pace with it; and during the last few years schemes have been set up on the Continent, not only to control output, but also to control prices. These schemes have, during the last few months, practically collapsed, They had been effective in keeping up the price of steel on the Continent, and they had also been effective in keeping in operation in this country the more efficient portions of the industry. During the last few months there has been a complete collapse in prices, and to-day we have to face an entirely different situation. What is the situation to-day? We can buy at the present moment Continental sheet bars free on truck in South Wales at £3 13s. 6d. The South Wales works cost is £4 17s. ed. That cost is only obtained by the use of a very large amount of scrap, and I may say that it is within a very few shillings of the cost in 1913. The price which is quoted, namely, £3 13s. 6d., is considerably lower than the price which is charged in the home market on the Continent. The home price for sheet bars in Belgium is about £4, and the ex- 890 port price £3 9s. In France, the home price is £5, and the export price £3 9s. We are faced with this situation, that Continental manufacturers have made up their mind that there is only one thing to do, and that is to dump steel into this country so as to put the steel industry in this country out of existence altogether. After they have accomplished that, we shall then be entirely at their mercy, and they will be able to ask whatever price they like. This week, joists are being ordered and delivered in Sheffield at £4 17s. 6d. per ton. The British price is £8 2s. 6d. I think this House must agree that the position is an impossible one.
The President of the Board of Trade has asked this industry what it proposes to do. The answer is a perfectly simple one. Unless some solution is offered by this House, the industry must cease to exist. Therefore, I have brought the matter before this House to-day, because I believe that in all quarters, irrespective of party, we are realising that this matter, like others, must be discussed and thrashed out on business lines. First of all, we want to know the facts, anti then to discuss various solutions which are put forward, and carry our decisions into effect. Something has got to be done, and I want to say a word about the suggestions which have been put forward during the last few years. At one time nationalisation was put forward as a solution for all our difficulties and all our ills. This is not a question of proprietorship, or ownership, or anything else like that.. If this industry were taken over by the State to-morrow, they would still be faced with exactly the same facts. They would he faced with the fact that they cannot produce steel and sell it at £3 13s. 6d. per ton. They would be faced with the report which has been issued to us, showing where the difference in conditions of working lies, and I do not think that there is anybody in this House who seriously considers to-day that nationalisation would solve the difficulty.
The word "rationalisation" has been freely used by important Members of this House. We are going to have a debate on rationalisation later in the day, and we may then learn something more about what that 'word exactly means. I believe there are very few people who know what it means, but, in any ease, it means, 891 undoubtedly, reorganisation of some kind, amalgamation by districts, horizontal or vertical, and so on. Any form of rationalisation or reorganisation requires financial assistance, and the Government and this House know perfectly well that that financial assistance is not forthcoming in any shape or form as long as there is no security offered in the shape of markets in the future. Another solution has been put forward, namely, some form of protection, and I am well aware that there are those who sit on all sides of this House who have come to believe that some form of protection will be necessary if this industry is to continue to exist. But I realise that on this matter we shall never be permitted a free vote of this House. I am perfectly certain that if we had a free vote of this House on this question it would be carried by a large majority.
Therefore, I propose to put forward this afternoon another suggestion. It is not a new one, and I offer it only as a temporary solution for the difficulties with which we are faced. In order to illustrate this suggestion, I propose to give to the House a concrete case of a steel plant at the present moment in operation, but which, I regret to say, will probably be closed within the next few days. This plant -happens to be part of what I will call a completely rationalised organisation which starts with digging up the ore and the coal and ends by selling the semi-finished product. It is rationalised in that respect as far as it is possible to rationalise anything. It is producing at the present time 2,700 tons of pig iron and 2,500 tons of steel per week, and could produce, if there were a demand for it, 3,500 tons of steel per week. It provides employment directly for 1,080 men in that plant itself, and 1,450 men in the production of the coal required, which, in this case, is about 7,000 tons per week. The wages of these men average £7,600 per week. The figure is based on the actual average wage paid. Steel produced at this plant can be delivered in Wales at a cost of £5 per ton. Those who are concerned in the industry here will know that that cost is only obtained by efficient working, and compares favourably with any other cost in this country. This same steel, as I have already stated, 892 can be bought from the Continent at £3 15s. per ton; in other words, 25s. a ton cheaper.
What is that organisation to do? It can do nothing else but shut down the steel producing side of its business, which is what has happened throughout the country during the last few weeks. What will be the result? The result in this particular case will be that 2,530 men will lose their employment. They will draw unemployment pay and, instead of having a. purchasing power of £7,600 per week, they will be reduced to, roughly speaking, £3,100 per week, which they receive from the Unemployment Fund, and the locality in which they live will suffer accordingly.
§ Major THOMAS
Both. I suggest that it would be more businesslike to use this money, or a portion of it, to help to keep this plant in operation. As an example of what might happen in a case like that, supposing a subsidy of £1 per ton of steel produced were decided upon, it would come to £2,300 per week, and would enable the steel to be sold at the Continental price, thereby meeting the objection of those re-rollers, if any, who may have Free Trade ideas, while 2,530 men would not be added to the already large number of unemployed, and they would not have their purchasing power reduced from £7,000 to C3,100 per week. The Unemployment Fund would be saved a matter of £663 a week. I realise that there are objections to this scheme. There was a memorandum published in 1923, and republished in 1925, which gave the objections to such a scheme as this. I have read through this White Paper, and I must confess that the objections did not appear to me to be in any way insurmountable.
§ Major THOMAS
It is a Ministry of Labour Memorandum on unemployment benefit and relief works, published in 1923, and reprinted in 1925. The principal objections to this scheme are very obvious without looking at the White Paper. First of all, the objection is that this money comes out of the 893 wages of the employés—that is perfectly true—out of the wages of the employers and out of the wages of the State. Whosoever wages it comes out of, surely it comes out of industry to start with, and I do not see any objection to money which has come out of industry being used to keep an industry in existence at a time of great emergency and to enable men to remain in employment and to retain their purchasing power.
There is a further objection, and I think this is the chief one. This money might enable a firm to make unreasonable profits or to prevent losses, which, after all, comes to the same thing. I agree that any firm accepting assistance under a scheme of this kind would also have to accept some limitations in this respect, and I do not think, with the steel industry in its present condition, it would be difficult to get reasonable terms agreed to. The suggestion that has been made lately of raising a loan and spending £200,000,000 or £250,000,000 on national works means spending money on works which will bring in nothing at all. In nine cases out of ten no return will be acquired from the money that is spent. It would be very much better, if we are going to raise loans or spend large sums of money of that kind, to apply the money to the assistance of the industries of the country rather than to schemes which bring in no return when, after they have been concluded, we shall still have the same problem to face. I dislike the idea of subsidies as much as anyone, but this is an extremely serious matter. It has to be dealt with, not within the next few years or even the next few months, but the next few weeks. If it is not, it will be too late.
I know the difficulties with which this House is faced. We have to carry on the government of the country by means of Parliament. No one in the House believes that a single word in the speech winding up the Debate last night will help anyone outside the House. We are faced with a very serious position, and it requires emergency measures. I would ask that this should be discussed as a national matter and that we should give a lead to the Government that some steps must be taken to deal with it. I believe there is very shortly to be another meeting between the Government and those who represent the 894 industry, I hope it will be more fruitful than the last one and that this time some solution will be arrived at. After all, the steel industry is in such a plight that it is willing to accept any help that may be offered, and I think it is the duty of the Government of the country, to whatever party it belongs, to tackle the question at once, or the time will come when the country will be nothing but a commercial country and not an industrial country at all. That will simply mean that we shall be forced to emigrate our people by hundreds of thousands, because there will be nothing for them to do.
§ Mr. RAMSBOTHAM
I beg to second the Motion.
It calls on the Government to take immediate steps. I am not sanguine that it will take immediate, or any, steps to remedy the position. My hon. and gallant Friend has pointed out most clearly that the iron and steel industry is in a, very bad way indeed. It has never been worse, and there has been a progressive deterioration for the last 18 months. But during the whole of that period the Government have not produced a remedy of any kind calculated to assist the position unless it be a sort of attitude of political Christian Science fortified by the admirable bedside manner of the President of the Board of Trade, which is so soothing in the House. The right hon. Gentleman alluded on Monday in certain terms to the industry and to a certain solution of its difficulties. He alluded to the solution, which he said had been proposed in some quarter, of a reduction of wages. He naturally and properly passed that by. He also alluded —and this solution he favoured—to a drastic and whole-hearted reorganisation. The third solution to which he alluded, assistance by protective tariffs, made no appeal to him. His argument was quite clear. He assumed that protective tariffs would raise prices. I should have thought an accurate man like the right hon. Gentleman might have made some qualification from his experience of the safeguarded industries. On the assumption that prices were raised, a reduction of wages would be achieved.
I want to deal with this question of real wages, not in any controversial spirit, but in the hope that there will be no latent contention discovered in the words I use. In a country like our own, 895 dependent very largely on international trade, a steady, rapid rise in real wages unaccompanied by a corresponding rise in production, or an equivalent increase in real wages among our competitors, is apt to cause certain economic trouble. That must be evident to all. I will give one or two figures. Between 1913 and 1926, real wages advanced, per hour, measured by the cost of living, 30 per cent. In the 27 years prior to 1913 they advanced by 22 per cent., so that, in spite of the fact that we have had an appalling war which cost thousands of millions of pounds and hundreds of thousands of valuable working lives, we have nevertheless been able to achieve a considerably greater increase in real wages in the last 13 years than we were able to achieve in the 27 years prior to that. It is a great achievement, but it is going to be a very difficult matter to maintain it, particularly in the iron and steel trade, a trade in which there is to-day 38 per cent. of unemployment. Over a third of the men engaged in it have nothing to do. It is 15 per cent. worse than it was nine months ago. For all we know it may be 50 per cent. at Christmas. It is not so much a question for these men of real wages or nominal wages. It is a question of any wage at all. Instead of wages they are drawing unemployment money.
There are three factors affecting the iron and steel industry that my hon. and gallant Friend has alluded to. There is, first of all, the factor of foreign importations. The percentages are interesting, because, compared with 1924, the last year of the census of production, the volume of imports of foreign iron and steel has increased by 39 per cent. and the volume of our exports has decreased by 10 per cent. Those free importers who think that situation is very satisfactory to the users of raw products, such as the engineering industry, might perhaps explain how it is that over the same period imports of machinery into this country have increased by 81 per cent. and exports only by 10 per cent. The Chancellor of the Exchequer has told us that foreign imports are an admirable way of providing work for British workpeople, but that contention is not borne out by the experience of the iron and steel industry. The wages paid abroad are, on 896 the average, something like half the wages paid here. In Czechoslovakia and Belgium they are less than half.
What is the solution? How are Members sitting for constituencies interested in iron and steel going to get their men back to the work in which they were trained? I understand the solution of the President of the Board of Trade is reorganisation, on the ground that there has been inefficiency—that has been exploded—and on the general ground that he can think of nothing else to do— regional reorganisation presumably on the lines of the Coal Mines Bill. The right hon. Gentleman has great gifts, but he is rather like a man in one of Disraeli's novels who was described as a charming person with only one idea and that was wrong. If it comes to a question of organisation, Members sitting for constituencies interested in iron and steel know perfectly well that those concerns are far better organised than ever the coal industry was. They have, no doubt, read the Balfour report. I remember the sentence that says:Two outstanding things we discovered. The first was that vertical combination has made a very large spread in the industry. Figures show that pig iron producers own 70 per cent. of their ore supplies and 60 per cent. of their coal supplies and the associations for regulating prices and outputs spread over practically every branch of the industry subsequent to the production of pig iron and ingot steel.That was four years ago. There is no reason to think that industry has been less backward in reorganising itself since then. When we come down to a consideration of the facts, it is not sufficient to make a case against the iron and steel industry by saying that at the present moment it is badly organised, and that its troubles are due to bad organisation. There are any number of associations connected with the industry—Scottish Steel Makers' Associations, English and Scottish Steel Founders, and others. The position to-day is that we have got so far that four firms produce 40 per cent. of our total output of pig iron. Four firms alone produce 40 per cent. of our total output of steel. Half of the output of steel is produced by seven firms, and half of the output of pig iron is produced by eight firms. It may be in the mind of the President of the Board of Trade to have 100 per cent. trustification, and, if so, I very much doubt 897 whether the consumers will be as happy about it as he may be. If a solution is going to be sought by reorganisation, there is not much more to do, and it will not remedy entirely the difficulties from which the industry is suffering to-day.
How do hon. Members opposite propose to deal with the 3,000,000 tons of foreign steel which comes into this country every year? What reorganisation is going to stop it? How are they going to answer their constituents when they see shiploads of this stuff arriving, and find out at what cost it has been produced? The Coal Mines Act is a different proposition, but I wonder what modifications would have been necessary if the President of the Board of Trade had been faced year after year by millions of tons of foreign coal produced at prices below those against which we can compete? I wonder how far that would have changed the working of the Coal Mines Act. My third observation on the proposal of the President of the Board of Trade for reorganisation is: What is the object of reorganisation? What was the object of the Coal Mines Bill? To get a better price for coal. The object of the reorganisation of the iron and steel industry is, presumably, to get a better price for iron and steel. The iron and steel workers have as much right to consideration in regard to that matter as the coal miners. We were told that it was not right that the consumer should batten on the coal miner and buy the product of his hands below the cost of production.
The same thing applies to iron and steel works. If it is a question of reducing real wages by increasing the price of the commodity, in what way is the protection given to the coal miner by the Coal Mines Act different from the protection which many of us, I believe most of us, desire to give to the iron and steel worker. If the price of coal is increased, as it must be, by the operation of the Coal Mines Act, is not that an attack, a sinister attack, on the real wages of the community? If not, why is the assumed possible increase in the price of iron and steel under a tariff, which I do not for one minute admit, in any way an attack upon the wages of the community, or a reduction of their wages? If the Parliamentary Secretary 898 to the Board of Trade will explain that matter to me, I shall be very grateful to him, for at present it is rather a mystery. I do not believe that any reorganisation of the iron and steel industry is going to cure the major problems with which it is faced.
The President of the Board of Trade told the House on Monday that the leaders of the iron and steel industry would not be content with the 33 per cent. tariff of the Safeguarding Duties. Well, let him try it. I believe that if 'he were to offer it it might be accepted as a remarkably attractive gesture. He says that they want prohibitive tariffs. My recollection of the Socialist gospel is that Socialists themselves prefer prohibition of imports to a tariff upon imports, and it may be that the leaders of the iron and steel industry, having that in mind, would prefer to make a request to the President of the Board of Trade more in keeping with the policy of his party as far as it is known on that subject.
The proposal for reorganisation is really futile. How long would it take? We should have to have another Royal Commission, and days, months, and years would go by. The matter is desperately urgent. How many more men are going to be out of work- by Christmas? There are over one-third of them out now, and there will be half of them out by Christmas. We cannot wait for Royal Commissions, investigations and reorganisations. We want something done. The importer may go on for a time buying his cheap -foreign products, but -one day the manufacturers from whom he buys them will not be selling them under coot price, but will extort the uttermost farthing. There are thousands of iron and steel workers struggling frantically to maintain their livelihood, and yet here the Government sit worshipping at the shrine of the sainted Cobden, chanting the monotonous dogmas of the free importers, and sacrificing thousands of our fellow citizens on the altar of an antiquated and fossilised creed.
§ Miss WILKINSON
My excuse for entering into this debate at all is that, with my colleague from Middlesbrough, I represent one of the heaviest iron and steel producing areas in this country. There the unemployment has become so acute and it has risen so rapidly in recent months that I could not let this 899 debate go by without saying something about it. I should like to pay my tribute to the spirit and general attitude to this question of the Mover of the Motion. I feel that a speech made with such a real desire to keep clear of party cries is something which provides a very helpful contribution. I want to answer his main contention. He said that if this industry is taken over by the State to-morrow it will be faced with the same problems with which it is faced to-day. That, of course, is something with which every one on this side will agree, but we go on to the next point and say that, if this industry were taken over thy the State, or, as I prefer, reorganised nationally with the State as an active partner, the problem would be faced in a different spirit from that in which it is faced to-day. It really is extraordinary the way hon. Gentlemen on the other side of the House wave a hand, as both the mover and seconder did, and dismiss that proposition with the mere phrase, that obviously the socialisation of this industry is quite out of the question. And then nobody thinks about it any snore. But they go on to prove that see all agree how appallingly the capitalist organisation of this industry has failed. It really is amazing the way in which we agree that the something which has broken down so utterly is the competitive organisation of this industry, and then assume that it is absolutely necessary that that organisation 'should continue.
The Seconder of the Motion has said that it is not probable that reorganisation can go very much further. Perhaps that may be true with the industry constituted as it is at the present time. If the hon. Gentleman who moved this Motion would examine the proposals for national reorganisation in the same spirit in which he Made his speech to-day, I do not think that he would dismiss that matter with a phrase and think that the national reorganisation of the industry is really as impossible as he would have us believe. What is the position? There is a very great deal of competition. There is a very great deal of inefficiency. There are concerns which show a high standard of efficiency and compare with anything which any other country in the world can show. We have some of them in the area for which I speak. There are others 900 which are practically derelict concerns. The difficulty with regard to the reorganisation of this industry is the very necessary squeezing out of watered capital. Some firms have taken the plunge, and others have not. The result is, that there is a very great deal of doubt about this industry and a very great deal of difficulty in getting the necessary financial security for going ahead with the big reorganisation plans which are so very necessary.
Suppose that we get down to a real consideration of the position, and regard the iron and steel industry as one of those industries ready for national reorganisation and for taking over by the State, or, as I have said, with the State as an active partner. Let us assume that we have a national board representing the interests which are at present in the steel industry both of employers and workers, and the State. You would there have a national board not. dealing with a collection of pettifogging things, but, as the Seconder of the Motion has said, with an industry in which there were associations for regulating prices and output. Would it not, therefore, be possible for a national hoard to conduct negotiations with other countries both in regard to buying and selling on a national scale, with all the economies which comes from eliminating competition? How would that help? I submit to hon. Gentlemen on the other side who know, from practical experience, more of the iron and steel industry than I—and what I say now is what I have gained from a very careful study of the conditions in my constituency—that there is a great deal of waste, even in highly efficient concerns, owing to the fact that firms are only able to obtain parcels of orders after great competitive effort. They know that mills of a certain type. have to deal with a particular order, and that they then have to change over in order to deal with another order, with the consequent loss such procedure entails. I suggest that if you had a national .board and a reorganised industry on the basis of each particular set of mills most competent to do a particular class of work, you would, with big orders coming from a national centre, get an enormous advantage by keeping one set of mills specialising on one set of orders in a way which is not being done and can- 901 not be done, even if you have only seven firms doing 50 per cent. of the work.
The Seconder of the Motion asked: If you are going to have national reorganisation, how long will it take 4 He said that we could not have any more Royal Commissions. I suggest that if we were having another war the reorganisation of the iron and steel industry would take precisely three weeks or less. The whole difficulty is in getting Members of this House to face up to the fact that we are in a national emergency that very nearly amounts to the emergency of war, and that the stricken industries are becoming hopeless and helpless. A national board and a national industry would make a great deal of difference in dealing with the workers in the industry. I remember the ex-Prime Minister, when he was speaking of his negotiations with the coal miners, saying that when he was dealing with the Miners' Federation he had to deal with people who would not look at a matter purely as an economic matter because politics came in. Hon. and right hon. Members opposite, especially those who are overflowing with the milk of human kindness, forget that in these industries there is a suspicion that is deep down in the souls of the workmen. These men have had an awful time. They have known what it was to have rates cut, cut and cut. The record of strikes and disputes has cut right down into the souls of the men, and you will not and you cannot get them to make even necessary alterations in trade union rules so long as they feel that they are likely to be done in the end.
If we had a national board and if we had a feeling that there is going to be a straight deal and that the men are to be real partners in the industry we should get the whole atmosphere changed and the question of alterations of trade union rules etc. would be regarded as something that had to be considered. These men have made terrible sacrifices in regard to wages, sacrifices which they ought not to have been asked to make. It is all very well talking about the high rate of wages in the industry compared with other countries, but we have to bear in mind that there are many men who are getting only 37s. 6d. per week. There is something that the men will not give up and that is the right to protect what they have got. We have no right 902 to ask them to give it up unless they are in an industry which they feel is not being run merely for private profit and in which they are not regarded as a commodity to be thrown out when it is no longer necessary. All these questions, and even the question of Protection come into a very different category when you are dealing with a national industry instead of a private industry. I want us to keep our minds free to examine everything and anything that will help us out of our difficulties, but it will not be done and it cannot be done if industry as a whole and the community as a whole feel that we are subsidising one set of profit makers against another.
There is one thing that is very badly needed in the iron and steel industry, and that is a system of national advertising. We are far behind in the use of steel in this country, and we need to cultivate a steel mind on the part of our people who have the fixing and giving of orders. We want to get rid of the antiquated building restrictions which are preventing the use of steel. We know of a ridiculous case not far from this House where there is a large building which cost many thousands of pounds to build and where, because of the antiquated regulations of the London County Council, the top storey cannot be used. No one can suggest that it is not as safe as any other storey, but it does not happen to fit in with the special regulations which were framed with no idea of the use of steel in that building. If we had a national board, speaking on behalf of the whole industry, they could deal with public departments in a way that the individual steel manufacturer is not able to deal with them. I want a national advertising campaign which would cultivate the idea of the use of steel in all sorts of ways that are never thought of and where in future the use of steel would become a matter of course.
We must get rid of the system under which architects, decorators and furnishers cling to the idea that there is something sacred in the use of wood, and that steel is a thing with which only Bolshevists will have anything to do. Some new designs in steel furniture might well be considered by the steel trade. France is far in advance of us in the use of steel for home furniture and office 903 furniture. If one makes such a suggestion to the average steel manufacturer he takes the view that this is only an idea of a woman, and one is greeted with a superior air. I am sure that there would be a great future for steel in these directions if only we could get people to consider new ideas. One of the difficulties that we have in the iron and steel industry is that it is one of our oldest basic industries and there is a kind of aristocratic idea that you may advertise underwear and all sorts of other things but that the advertising of the great basic commodity of steel is quite out of the question. The bringing forward and development of new ideas could be done by the national board. The steel industry made a very great mistake when they linked up the idea of steel houses with the idea of a lower rate of wages for the workmen. People would not look at steel houses because it meant lower wages.
We must look for more markets for our steel. There is one country which very badly needs equipping by iron and steel products of every kind. That country is asking for credits which we have the means in this country to give but which, because of political prejudice, we will not give. I would point out to the ex-Prime Minister that here again political prejudice interferes with the situation. He told us that when he was dealing with the Miners' Federation he was dealing with people who would not look at economic facts because questions of politics came in. In regard to Russia we have exactly the same thing to contend with. People will not look at economic facts in regard to credits for Russia because the question of politics comes in. I was at a lunch before the Recess at which one of the most important men in the iron and steel industry, Sir Hugh Bell, made a speech in which he said that a great deal of the prosperity of this country and of the iron and steel industry during the 19th century was due to the fact that we supplied the credits to the United States of America to enable them to lay thousands and thousands of miles of railways. He pointed out that we had not suffered in this country by the increased prosperity of the United States, but had gained by it. So long as we have 100,000,000 of people in Russia—we might 904 add hundreds of millions of people in China and India—and all the consumer possibilities of those people are being kept out of our market by prejudice, we must have poverty as the result. I suggest to those connected with the iron and steel trade that they might do more to get credits for their industry with respect to Russia. Not one of the commercial credits to Russia has ever failed to be repaid, and as the amounts are repaid they could be used for the financing of further orders.
There is also the question of the shipping industry. I am in a position to know that in regard to my own constituency a credit of £2,000,000 for three years would provide work for 2,500 men. It would provide them with work in the building of certain ships that Russia are prepared to order. That would he real, beneficial employment, instead of putting men on to such jobs at tittivating roads that are already good. It would mean using these men at the job to which they had been trained. Unfortunately, while we are willing to vote unemployment benefit by the millions we are not prepared to settle down in this country and see what are the possibilities of improveing the iron and steel industry in the directions which I have indicated. I know that I am now treading on very dangerous ground, but if we had a national board and a national industry not only would there be better opportunities for dealing with the men and for dealing with foreign competitors, but we should have a very different attitude in this country with regard to tariffs. I would not dream of standing up against the idea of a tariff if a tariff was necessary for a national industry, but I would never support it if a tariff is going to be used to bolster up an industry which will not reorganise itself, or an industry which has not given the workers in the industry a fair deal.
All the problems and difficulties that we find ourselves up against in a basic trade like the iron and steel trade 'ire very largely due to psychological factors. We forget how much the psychological factor enters into the old suspicions and difficulties. We will keep down to the wrong idea that the only way to supply the needs of the communities is on a profit making competitive basis. Hon. Members opposite cannot dismiss all new 905 ideas with a mere wave of the hand and say that they are exploded theories. Far from being that, they are explosive theories and they are beginning to have very explosive effects in the minds of the working classes of this country and are taking a very real place in the minds of very large numbers of people. I suggest that gentlemen like the mover of the Resolution might give more consideration to the solution of some of these problems, because it is along those lines that this particular problem, which we all admit is overwhelming, can be met.
§ 5.0 p.m.
§ Sir ROBERT ASKE
From all quarters of the House we sympathise with the object of the Motion and agree that anything that Parliament can do for the iron and steel trade without injury to the country as a whole or to any other branches of the industry, ought to be done. It is a little unfortunate that the mover of the Resolution did not set forth in the terms in which it is framed the real object which he desired to discuss. It is a little difficult to embark upon a discussion of the point of view which he indicated without having more time to investigate the matters with which he dealt. I did not gather that the hon. Member who seconded the Motion agreed with the project of the hon. Member who moved it, but from his concluding observations I gather that he considers that Safeguarding is the real remedy for the iron and steel trade. The hon. Member agrees; therefore, in the short time at my disposal I should like to indicate my view in regard to some of these matters.
So far as schemes for benefiting the iron and steel trade are concerned, the only practical measures before the country which Parliament can undertake are those which have been set forth in some detail by the party to which I have the honour to belong. Those schemes embody proposals which would give the greatest advantage to the iron and steel trades in the machinery which would be necessary for making roads, telephone extensions, bridge building, and a greater extension of housing; and in the agricultural schemes in the machinery arid implements which would be required. Those are practical proposals which would be of the greatest benefit to the industry. The proposal of the mover of this Motion boiled down amounts to a State grant- 906 in-aid of industry, based as I understand it in some measure upon output. The hon. Member did not indicate in much detail bow he proposes that this should be carried into practical effect, but it seems obvious that if the State is only to come to the aid of the inefficient branches of industry there is not much encouragement to embark on these proposals.
If any State aid is given it should be given to the efficient rather than to the inefficient, in order to enable industry to take advantage of its efficiency. It cannot be confined to any particular branch of industry. If it is extended to one it must be extended to all. It would have to be given to agriculture and shipping, to cotton and wool, and coal mining, and, indeed, to every branch of industry. If, on the other hand, the proposal is to confine it to those branches which are inefficient then it would necessitate an inquiry in every case as to the degree of inefficiency—an impossible proposition. One gets back to the idea that this is merely an attempt to re-introduce the old system of subsidising wages out of rates. Moreover, there is this important consideration to be remembered, that if it is to be based on the present state of unemployment it means that the subsidies will have to continue on the same basis, that is on the basis of over 2,000,000 unemployed; and these subsidies, which are supposed to be used in order to get men into work, would continue presumably even when men are in work because it is to be based on production. Consequently, we should be embarking upon perpetual subsidies to industry. There would be no dividing line as to where we should begin and where we should stop. It would mean that we should' establish the industries of this country, which up to the present time have subsisted' and flourished on their own unaided' basis, and impose them upon the State.
But a still greater argument appears to me to arise, and that is that it would be a serious deterrent to improvements. If a subsidy is given to any particular branch of industry which is not successful where is the urge upon those engaged in it to make it successful? What has made the industries of this country what they are has been the continual encouragement to develop by the energy 907 and enterprise of those engaged in them. One has to have regard to the situation in comparison with pre-War days. The present position of the iron and steel industry is not different in its essence to what it was time after time before the War. Even in the prosperous year of 1913 one found the same complaints from the iron and steel trade which exist at the present time. Starting at the bottom of the scale we find that last year there was a far less import of pig iron from foreign countries than in 1913. In 1913 we were importing enormous quantities of steel in a partly manufactured state, yet this country was never in a more prosperous condition than it was at that time. It induces one to look in other directions than the mere fact that there were these vast quantities of foreign steel coming into this country as an explanation of the condition of the iron and steel industry at the present time.
One has also to have some regard to the comparative position in the industry as it exists to-day. The industry as a whole is not nearly in such a deplorable conditions as has been indicated. Taking the whole of the trade, I find that we still have an export of £68,000,000 as against an import of only £24,000,000, and a total export of 4,380,000 tons as against a total import of only 2,800,000. If we take into account the character of the international trade, which after all is the most essential feature, we find that although we are importing considerable quantities of foreign iron and steel, yet what we are importing is the partly manufactured article which forms in itself the raw material so essential for those industries in this country which are the most prosperous, and which enables us by employing British labour upon them to make such a great part of the profit. of the nation. What we are doing is to import iron and steel of a character which employs more labour and exporting materials which employ a great amount of labour. That can be proved quite easily. The value per ton of imported iron and steel is less than £9, but the value per ton of exported iron and steel is £15; and if you exclude pig iron the value of imported iron and steel is only £9 per ton but the value of exported iron and steel is £17 per ton. There is a difference 908 in the one case of £6 per ton and in the other case a difference of £8 per ton, and the difference between the two carried over the total tonnage is no less than £16,000,000 per year. How is that £16,000,000 per year, which is the difference between the same tonnage imported and exported, made up? It is made up in the main in the wages paid to British workmen in working on the steel imported, which could not have been done but for the fact that the steel has been imported at a cheap price. As a matter of fact, the articles ready for sale imported into this country only amount to the small sum of £7,250,000 a year. In machinery, in tonnage, not in percentages, which in this case is a totally ineffective guide, we are exporting to-day five times as much as we import.
From these facts it appears that this country, compared with other countries of Europe and the United States of America, is maintaining its position in the world. There is one other point to which I must draw attention. Reference has been made to the total production of this country as compared with the year 1913. I am quoting now from the Statistical Abstract for the year 1928, and I find that in 1913 the production of steel by the processes in Great Britain was 7,600,000 tons, but in 1927 it 'was 9,000,000 tons and in 1928 8,500,000 tons, showing a great extension in the production of steel in this country up to 1928, the last date available, as compared with the year 1913. There is this further point. All these matters of comparison with one branch of industry and another involve very serious repercussions. The trade for which the hon. and gallant Member has spoken employs 200,000 men, but the branches of the iron and steel trade which are dependent upon iron and steel as their raw material employ directly over 1,500,000 men. It is therefore obvious that any measure which is undertaken, and which must have a reflex action upon all these dependent trades, must be scrutinised with the greatest care.
I have the honour to represent a constituency in which there is a trade which is the largest customer of the iron and steel trade, the shipbuilding and ship repairing industry—an area where practically all the workers, skilled or un- 909 skilled, all the tradespeople and all the professional people, are dependent upon these industries. Therefore, one has to be keenly jealous that nothing shall be done with regard to the raw materials which we want for this great and basic industry, and that one of the industries which has made this country famous shall not be jeopardised in any way. One also has to consider, in every one of these matters, the position of shipping. The amount which this country derives, as part of its national income, from shipping, is no less than £120,000,000 a year, which goes to purchase a large part of the food and the comforts and the luxuries which we enjoy and which we could not obtain without it. Everything that tends either to reduce our exports or to reduce our imports cuts into that source of national income, and those who speak so freely about reducing our imports are striking a direct blow at a source of national income which is so substantial. Since every import necessarily involves a corresponding export, because our foreign customers cannot afford to buy from us unless we buy from them, one sees that any interference with national trade cuts down directly a large part of our national income. That is a matter which is often forgotten in discussions regarding interference with our national trade.
Looking at the matter from the point of view of the shipbuilding and ship repairing industries, I would repeat that we want iron and steel at the cheapest price, and that we can live only if we can buy cheaply. Why do we buy foreign steel? Because we want it, because it is particularly suited to the requirements of the moment or because it is cheap. If we cannot get it at that price, we are unable to obtain contracts from foreign owners. Any interference with that is a denial of the rights of industrialists to buy in the cheapest market, which has always been one of the principles upon which British industry has been built. I regard with great apprehension the suggestion of the hon. Gentleman who seconded the Resolution, which was to the effect that there should be a restriction on the import of foreign materials—which, of course, necessarily tends to increase the price. If the price is not going to increase it is not much use to the industry.
910 The shipbuilding industry, which uses so much of the steel, both that produced at home and that imported from abroad, is in the direst straits. It is able to survive only with the greatest difficulty. During the last five or six years a great number of the contracts which have been obtained have been obtained only at cost of production or less in order to preserve the organisation of the yards. We are no longer in the predominant position in shipbuilding in which we were before the War. The increased efficiency of foreign yards and shipbuilders, coupled with their cheaper labour, has rendered it increasingly difficult for British shipbuilding to maintain its position. It is true that we still build practically all our own ships, which is a great tribute to the designing of British draughtsmen and to the efficiency of our workmen. But at the present time we are building for the United Kingdom only 668,000 tons and for foreign owners 450,000 tons, or a total of 1,100,000 tons, whereas foreign yards.—there are now 17 countries besides ours which are building ships—are together building no less than 1,400,000 tons Therefore at the present time we are not building half the tonnage of the world.
Taking marine engines, we are building only one-third of the engines under construction. In a great many recent public inquiries it has been made manifest by shipbuilders that it is only by getting cheap raw material that they have been able to keep their yards open. I contend that we as customers of the iron and steel trade are, if anything, entitled to more consideration than is the seller of our raw materials. It is more logical to give a stimulus to shipbuilding than to the production of the raw materials. If we, being the customers, are deprived of these cheap materials, there is a direct repercussion on the iron and steel trade itself. If you can in any way stimulate the building of ships you by that means necessarily give a stimulus, to the iron and steel trade. We have our unemployment. The unemployment in the shipbuilding and the ship repairing trade is 38 per cent. That is as much as in any other branch of the iron and steel trade. In marine engineering there is unemployment of 24 per cent. This trade is one of the depressed trades of the country, and I want to urge upon the House that with that state of affairs 911 and with a great industry of this kind employing more men than does the iron and steel trade, it is futile to talk about benefiting one industry at the expense of a greater industry. Exactly the same consideration applies to the other higher branches of iron and steel manufacture. If. one takes the tinplate trade of South Wales one finds that it has been able to survive only by reason of getting cheap material. One finds in the report of the Balfour Committee this passage:The possibility of obtaining cheap foreign steel clearly benefited some branches of the industry, for instance the re-rolling section and the tinplate and galvanised steel industries, and it was in some cases an important factor in enabling them to maintain and increase their export trade. The evidence of British manufacturers was to the effect that South Wales was making tin plates, from steel to the finished product, cheaper than any country in the world.The tinplate trade has expanded enormously since 1913. It has gone through its depressed period since the War, but the great efforts which were made in South Wales in reorganising the industry has enabled it to pull up, and the trade is in a better position than that which it occupied in pre-War days. That is a practical illustration of what can be done by reorganisation if those engaged in a trade are determined to make it prosperous. The same arguments apply entirely to the general engineering trade, which is again dependent upon the iron and steel trade, and to all the metal trades, such as those of Sheffield and Birmingham. Of course all these trades, in all their different gradations, in the evolutions of steel from its rawest form to its final state of manufacture, no doubt would all wish to have some kind of protection against competition. But one finds that every one of these stages is intensely anxious that there should be no protection at the stage below. They all want raw material at the cheapest price, all want the products which are made by those engaged in other stages of manufacture to be at the cheapest price, and they all want their products to be sold at the highest price. That is only human nature:
I would like to mention another feature with regard to the iron and steel trades. If one again takes 1913 as the basis of comparison, our imports last year were up by £9,000,000 and our exports, were 912 up by £14,000,000. If we include also machinery, electrical apparatus and vehicles made of steel, we find that our imports were up £28,000,000 and our exports were up £78,000,000. In 1913 in these classes we exported £78,000,000 more than we imported. In 1929 we exported £128,000,000 more. These figures lead to the conclusion that, although you may have great depression in some branches of the industry, nevertheless the production at cheap prices of raw material enables the industry to prosper. No doubt envious eyes are cast upon Germany. There is the report to which an hon. Member referred.It appears, however, that the metal industries in Germany wholly unemployed or on short time have over 30 per cent. of their workers unemployed. The machine industry is slacker than for many years and is only employed to 60 per cent, of its capacity.A general conclusion of great importance is to be found on page 33 of the report —that in the difficulties confronting the post-War position of the iron and steel industry there is a marked similarity between Germany and Great Britain. That conclusion which, of course, is quite impartial is of great importance for this reason. Here is one country based on Protection and another country based on Free Trade and yet one finds the same conditions prevailing in both countries. That seems to indicate that no proposal for revising the position of this country as regards tariffs could alter the dominant features of the situation. There is this greater consideration which I would mention in, reply to the Seconder of the Motion. If we begin to interfere with the free flow of exports from those on the Continent with whom we deal, we must expect retaliatory measures from them.
This country makes an enormous profit by reason of its export trade. If we attempt to interfere with the import trade which we carry on with Continental countries, we must expect them to interfere still more drastically with our export' trade. In other word's, we shall gain nothing by any measure of that kind. I have ventured to put before the House the point of view of the higher branches. of the iron and steel trade, as distinct' from that of the lower and basic portions of. the trade to which the Mover of the Motion alluded. I submit, that if, we attempt to undermine, even in a small 913 degree, the foundations of the industry, that is to say the supply of raw material for all the higher branches, we are going to prejudice the stability of the whole industrial fabric of the country. It has taken a lot of building up, but what has taken generations to build can be destroyed in a year or two by inexpedient measures. Bad as the position is, and we all deplore it, nevertheless we have to be careful that we do not, by ill-considered measures, make much worse what is already bad enough.
§ Mr. WALKER
I welcome this Motion because it gives the House an opportunity of discussing the present very parlous condition of one of the basic industries of the country. I suppose it was inevitable that the King Charles' head of the fiscal controversy would be brought into this discussion. The Motion itself deals with the position of the trade but the debate had not proceeded very far until we were once again into the old arguments as to Protection and Free Trade. We had a classic exponent of the virtues of Safeguarding and Protection and we had an equally splendid exponent of Free Trade replying from the Liberal benches. But I think we must go a bit further than either of those things. I can well imagine that the hon. Member for East Newcastle (Sir R. Aske) who looks with evident horror upon any interference with cheap materials coming into this country, would probably look with the same horror upon any interference with cheap labour coming into industry. But he has to face the logic of the situation as it presents itself to the whole country. We may say that we do not believe in Protection and yet the very theory which we are arguing is the theory of protecting the consumer, while the other man is arguing for the theory of protecting the producer.
Somewhere between those two points of view there ought to be a solution for the difficulties of an industry which has been foremost among the iron and steel industries of the world. Great Britain led the way in this industry, so that those engaged in it are not now trying to establish something which is not congenial to this country or is economically unsound. We are dealing with an industry which has been long established here and which enabled that great shipbuilding industry, 914 to which the hon. Member for East Newcastle belongs, to be built up in this country. A year ago I welcomed the appointment of a Royal Commission to deal with this industry and this afternoon I wish to deal with the position which has arisen since. We have had that Royal Commission, but we have not yet been supplied by the Government with its findings. Only one part of the report has been published and I cannot understand why this should be so, unless it is to supply material for our friends who worship not at the shrine of Cobden but at the shrine of Joseph Chamberlain.
All that that part of the report did was to deal with the wages position on the Continent. It gave us the wages rates quoted by the hon. and gallant Member for King's Norton (Major Thomas) and the hon. Member for Lancaster (Mr. Ramsbotham). They tried to show that the existence of these rates was the reason for the trouble in which the British steel trade finds itself. But the hon. and gallant Member for King's Norton, who is connected with the trade, knows that wage rates are no indication on the face of them of labour costs. It would be very difficult indeed for me, and I am connected with the iron and steel industry in this country, to get from the employers here a statement of labour costs; and if it is difficult to get such a statement here, how much more difficult is it to get labour costs in foreign countries where this Commission carried out its inquiries into wage conditions. They have not given any comparisons, and probably there is something else which has to be taken into consideration in connection with this matter.
I should like to know from the Government what were the recommendations presented to the iron and steel industry. It is a strange thing that those recommendations are unknown to the public of this country but they can be read in the "Cologne Gazette." They can be published in a foreign country but not in this country. I wish to know from the Government: do those recommendations contain anything which is going to be of benefit to the industry, and have the steel trade employers refused to carry out those recommendations? If so, this 'House and the country ought to 915 know. After all employers and owners of capital in any industry are only trustees for the nation. They are not the sole arbiters as to what is to occur in the trade. If the Government have met with a point-blank refusal from the iron and steel trade employers to carry out those recommendations, then I think, if they come to the House of Commons, they will get full support in compelling those people to carry out recommendations which will be of benefit to the trade.
§ Major COLVILLE
Has the hon. Member any reasons for believing that that is the case? Has he anything at all to go upon in making that statement?
§ Mr. WALKER
If the hon. and gallant Member were listening to me carefully he would know that I am at this moment inquiring about it.
§ Mr. WALKER
I am asking if those recommendations have been made and if the employers have refused to accept them. I want an answer to that question because it is of vital importance to those engaged in the industry to know exactly what the conclusions were and whether they have been accepted or not. We had an industry dealt with in this House which has some relation with the iron and steel industry because it supplies materials to that industry. It was dealt with by the Government in spite of active opposition from those who controlled it on the employers' side. The Government compelled them to organise and to set up marketing machinery. But the great difficulty in connection with that industry, and one which the Government had to face all the time, was the question of the relationship between the men and the owners. I submit that no such difficulty exists in the iron and steel industry. There, the relationship between workmen and employers has been one of business negotiation for more than 40 years, with very little dislocation of trade at any time, amicable arrangements being arrived at in almost all cases. It is not because the employers in that industry are more generous than they are in other industries or because the employes are not just as good fighters as those in other industries. It is because there happens to be in the industry an 916 instinct for business settlements, which has always brought about a solution of any question which arose.
Because of the existence of that relationship, because of the fact that wages in the industry are based on the price obtained by the employer for his goods, every fall in price owing to world competition is reflected immediately in a fall in wages. There have been no dislocations or disputes but there have been automatic reductions all the time, until, to-day, those engaged in the trade are working for less than half the wages which they received in 1920. That state of affairs ought to mean that one difficulty is out of the way in reference to this industry and I want to know from the Government whether they have considered—and on our side we believe this —that reorganisation in the industry ought to take place alongside greater national control of the industry. The hon. Member for East Middlesbrough (Miss Wilkinson) referred to the question of a national board. What we want is a national board which will control the industry in its development, and decide exactly where capital is going to be spent for development purposes in order to prevent it being spent in wrong places and in places where, to-day, because of adverse conditions, it is impossible to produce steel at a price which can meet any kind of competition.
There are cases in Scotland where pig iron is being produced on one side of a river and sent 20 miles away to a steel works although there is a steel works on the other side of the river a quarter of a' mile distant. The ironworks and the steel works belong to different companies. That is the kind of thing which has existed in the trade. Hon. Members will say, and it is true, that during the past few years that has been disappearing, but that is what is happening in the trade at the moment. Rationalisation is being applied on a very intensive scale inside the iron and steel industry, and that, of course, is something that the hon. Member for East Newcastle-upon-Tyne would say is the proper thing to do. But while you are doing that, you are laying some town or some village derelict, with all the people who have built up all their interests there. For them, everything is hound up in the works that have been planted there, in 917 some cases during the War in order to help the country in its hour of difficulty. Now those works are closed down, and nothing is being done, apart from the dole, in order to meet the cases of very great hardship that exist, but which can find no sympathy under the theory of laissez faire and not interfering with industry lest we do something to hurt the price of raw material.
We want a national board for the purpose of controlling all that, and I would remind the hon. Member for East Newcastle-upon-Tyne that when he is talking about the extra output of steel now as compared with 1913, we now have a capacity for 12,000,000 tons production, whereas in 1913 we had nothing like that. We had then a capacity for less than 8,000,000 tons, and were producing something like 7,600,000 tons, according to his own figures. This year will show very much lower figures than the 8,500,000 tons that he quoted. But we have our 12,000,000 capacity in the country, and some of the finest steel plants in the world. I have seen them in Germany and America, and I know that we have plants here equal to anything that they have in other countries.
I want that national board to deal with this question of development inside the industry, and I want—and perhaps this is where I shall quarrel with the hon. Member for East Newcastleupon-Tyne—an imports and exports board. I want a board connected with the industry, under the control of the nation, to deal with the imports and exports in order to try to get some proper values and relations there, so that later on we shall not be placed at a disadvantage. I quite agree with the hon. Member when he says that they have developed the tin plate trade. That trade is doing well, and the tin plate maker is making very large profits, and could perhaps afford to pay a little more for his raw materials than he is paying.
With regard to dumping, there is no question at all that they are selling those bars in South Wales at a very much lower price than they are selling them in their own country, and they are not doing that for the love of Great Britain. They are doing it with some set purpose, and if we can send that stuff away and get money for it, it may be used for the 918 purpose, as it is being used in certain quarters, of putting down tin mills for competing with the Welsh tinplate maker. If the Welsh tinplate maker can make the cheapest tinplates in the world because of his cheap raw material, surely other people who are supplying him with that cheap raw material can make those cheap tinplates as well, and menace him at another end. Would it not be far better for him to try, in co-operation with the whole industry, to establish conditions whereby they would get cheap raw 'materials, but get it inside the country, in order to prevent that menace coming along later on, which otherwise it is sure to do?
Only during the present year, what has happened so far as Australia is concerned They have told the sheet maker that there are to be no sheets going into Australia, and the people who sent those sheets out there have had to close down their works. There is no argument in the matter; they cannot discuss it. But a national imports and exports board would be able to negotiate with the people who are doing that kind of thing in other countries, and regulate the imports and exports into and out of this country. Unless we get things done in a businesslike way in our industries, we shall have difficulty all the time.
I do not blame the present crisis in the iron and steel industry as being something peculiar to that industry. You cannot divorce the iron and steel industry in its depressed state from the depressed state of all the other industries in the world which are exporting industries, because it is the exporting industries of the world in all the countries that are in a depressed state. All your home industries, your sheltered industries, are in a very much better position, but those exporting industries are in a position that is due, not to little causes inside any country, but to large world economic causes, which ought to have been dealt with in the debate on trade depression that took place on the King's Speech. But we can prevent things happening in particular industries if we get a businesslike method of doing it, and I want to know if there was any such recommendation in the committee's inquiry as an imports and exports board.
I want to know also if they are facing this situation: We have a capacity for delivery of over 12,000,000 tons. Have 919 they visualised the production of, say, 10,000,000 tons, and the labour necessary for that amount, and that the industry should be based upon 10,000,000 tons and should carry a proportion of reserve labour over and above, between the amount of 10,000,000 and 12,000,000 tons? It is no good sitting down and saying, "Thus far and no farther," and that 9,000,000 or 10,000,000 tons is sufficient. We ought to be aiming at something very much higher, because the use of steel in the world is still in its infancy, and it can be developed very much more.
We in the industry are taking steps from the point of view of propaganda, as has been mentioned. An organisation exists already which is spreading propaganda throughout the country on the use of steel. These things are being done, and rationalisation is taking place, but money is required in the industry. I do not say to the Government, "Give them money ad lib." I would not give anyone money ad lib, but I say, "Give them money under certain conditions," in order to enable them to put down plant where it is necessary to compete against the foreign competition which is sending here cheap bars and other things which could be produced here, if only the trade bad the necessary financial assistance in order to put down equipment and plant.
In Germany, in the Ruhr district, coal pits have coke ovens alongside, which are producing gas. If you put up coke oven plants here next to coal pits, you are bound to lose the gas, but it is getting clear in Germany and sent along pipes. Works are tapping those pipes and taking out so much gas, and town-ships are taking it, too. It would be quite possible for something to be done here in an industrial area whereby we should be producing from our coal the coke for blast furnaces, with the waste gas selling to our townships instead of selling them coal to take into gas works in order to make gas at a very much higher price than that at which it could be produced under such a system. That would enable us to get cheap pig iron and steel and, by getting those cheaper steels, 'would enable my hon. Friend the Member for East Newcastle-upon-Tyne to build even cheaper ships to sell to the rest of the world.
920 Industry wants to be correlated in that way, and I want to know if the Government in their report had any of those things to suggest and, if they suggested them to the steel and iron employers, whether those employers rejected them as being of no use. I want to know from the Government why the report was not published in its entirety, why only a part was published, which dealt with labour conditions, why the other part, which dealt with the much wider aspect of the trade, has not yet been published, and why so far we have been unable to get any promise that it will be published in the very near future.
§ Sir NEWTON MOORE
In common with a good many other hon. Members, I should like to congratulate the hon. Member for Newport (Mr. Walker), who has just resumed his seat, on his very practical remarks with regard to the iron and steel industry. Unlike the hon. Member for East Middlesbrough (Miss Wilkinson) I cannot claim a right to take part in this discussion as representing an industry in my constituency, but I feel that it gives an opportunity for all those of us who have had some experience here and in other parts of the world to pool our ideas, so that we may come to some conclusion as to what can be done to rehabilitate this great basic industry.
As the hon. Member for Newport has said, this is the home of the steel industry, and there is no reason why it could not be materially developed. We are indebted to him for the rather astounding fact that he has made known that there has been a report made to the Cabinet which has never been made available in this country but which has been published in a Cologne newspaper. I endeavoured to obtain some information with regard to that report in the legitimate way by putting a question in this House, but I was ruled out of order, and the question was not allowed to go forward. I hope, after the remarks of the last speaker, that the Government representative, in replying, will give us some idea of what was contained in that report.
I was glad he took the opportunity of informing the hon. Member for East Middlesbrough that, in so far as the steel industry is concerned, she is in error and that there have been practically no disputes in that industry for the last 30 921 years. In fact, the best of relations have existed, and that old veteran in the industry, Mr. John Hodge, has always been able to confer with the proprietors without giving away anything on the side of the men, and has been able to make good agreements, which have lasted over a considerable number of years.
It must be recognised by everyone here that the industry in this country is now in a parlous condition, though some of the supplementary industries are active, and the electrical industry is fairly holding its own, in so far as domestic requirements are concerned, but we realise that in the heavy machinery those great orders which were predicted last year have not eventuated. Mr. Charles Schwab, who was over here quite recently at a steel meeting—and who, as hon. Members may know, is President of the Bethlehem Steel Company and of the Iron and Steel Institute of America, and came over here to receive the Bessemer medal from the Iron and Steel Institute of this country in recognition of the part he has played in connection with this industry—in the course of his remarks pointed out that there was not a development in connection with the steel industry that had taken place in any part of the world which had not had its origin in this country. The Bessemer process, the open hearth process, all, had originated here and been developed and improved in Germany and America. He pointed out that this was the homeland of the steel industry, and he said it seemed, in his judgment, ridiculous that from 3,000,000 to 4,000,000 tons of steel should be imported into this country annually. He could not understand for a moment why people of this country could sit down and allow that amount of steel to be imported. The steel industry has been constantly urged to put its house in order, but it must be remembered that foreign material has been sold in this country at less than pre-War prices, and every Continental manufacture in search of a market finds this country the best field for dumping his production and so keeping his hands in employment. We on the other hand, are busy with transference schemes, endeavouring to make good miners and steel workers into navvies on the roads, rather than keeping them on their own specialist jobs. We 922 have to realise that every ton of steel imported displaces 3½ tons of coal. British steel, on which the commercial supremacy of this country was founded, has remained static for a long period, while our Continental friends have taken advantage of the position and are operating on a much lower scale of wages. The hon. Member for East Middlesbrough made a suggestion which is well worth considering. It was in regard to the substitution of steel for the foreign timber which is being imported. An intimation appears in the papers to-day that hundreds of thousands of timber doors from Russia are being dumped into this country, and the hon. Member wisely asks why something cannot be done by the Government to enable steel to be substituted for wood in our houses in the way of steel frames, doors, and so on. I do not see why the subsidy on houses should go to the benefit of the foreigner.
In the reorganisation which has recently taken place in Germany, the various buying and selling departments were organised under one control. A good deal could be done in that way in this country. In buying ore in Germany, all the works get together and make their contracts with the Sweden or with Bell Island, Newfoundland, for a long term of years. What happens in this country is a contrast to that which takes place in Germany, for the works in this country buy small consignments, say, of 10,000 or 20,000 tons at a time. By buying wholesale, the German works help the development of cheap production. Again, take the terminal facilities provided in this country; they are absolutely obsolete, and are not to be compared with those in Rotterdam, Amsterdam, Boston, Sydney, Nova Scotia. In Bell Island a 12,000-ton ore steamer can load in six hours, and can be discharged at Sydney in six hours, in Boston in 1½ days, and in Rotterdam front 24 to 36 hours. In this country, there are few ports in which such a vessel can unload. Most of the ore supplied in this country is procured from Sweden, Norway and Spain, and is generally brought here in very small vessels. The larger vessels draw too much water to be able to get into many of our ports, and, when they do get into the larger ports, they unload at the rate of only 1,000 tons a day. The ordinary demurrage charged on vessels of 10,000 tons and 923 over is approximately £80 per day. This would mean, say, £800, or about is. 7d. per ton on the ore imported, which would have an iron content generally of approximately 50 per cent.; consequently, it would take two tons of ore to make one ton of steel, and it follows that the price of steel would be increased by 3s. 2d. per ton. Cannot something be done to improve the terminal facilities for shipping? The same applies to the coal trade, where the same necessity-exists for materially reducing the costs of handling. Although I have more than once raised this question in the House, very little has been done up to the present to bring these facilities up to date.
We must realise that we are importing too much coal into this country, that is, coal through the medium of steel. We want to export more coal from this country through the medium of steel. I am satisfied that there is a degree of unanimity in regard to the desirability of some inquiry or some effort being made. This industry must go ahead. There is every condition surrounding it that could make for its success. We have lost many markets, and many of the overseas Dominions are establishing their own steel works, so we must look to our own home markets to take the place of the exports which we have lost. Australia used to take from 150,000 to 170.000 tons a year from us, and now she has her own mines, her own coal and limestone quarries, and established her own steel works. The same applies to India; as a result of the political boycott, little steel is being bought in this country, and the heavy orders have been transferred to Belgium and other places. As we have lost these markets, why should we not make provision now for the production in this country of another 3,500,000 tons, which, in addition to providing work for the men in the trade, would also employ 20,000 miners and give employment to the railways and all the other trades dependent on the industry
§ Mr. STRACHEY
When a Motion of this sort is moved, Members on this side of the House have to make up their mind whether they will approach the question of the regulation of a great industry like the steel industry on its merits, or whether they will adopt the pure milk of 924 the gospel of laissez faire—of Free Trade —of which we had a fine exposition given to us by the hon. Member for East Newcastle (Sir R. Aske) just now. His lesson was perfectly clear. He said that steel cannot be too cheap; if the British steel industry cannot produce steel cheaply enough and the steel users of this country-have to import it from the Continent, then so much the worse for the steel industry in this country, which must simply gradually go out of business. He was perfectly clear, and regarded the interest of the steel users, shipbuilders, engineering industry, and other users of steel in this country as paramount. He thought that any disparity which there might be in wages or conditions between the steel industry here and die rest of the world was no concern of us in this House, and that we must simply allow the free play of economic forces to decide whether we are to have a steel industry in this country at all.
That point of view is to me very attractive. I was brought up in the strictest tenets of that gospel; it is logical and clear cut, and we ought to feel its force; but, despite the expositions of it to which we are treated from our Front Bench very often, I feel a certain embarrassment in adhering to that doctrine at the present moment after the work of the last Session, which was so largely occupied by passing a Bill for (he regulation of another great industry, that of coal. In that Bill, we definitely departed from the view that a great commodity cannot be too cheap. We settled definitely, whether rightly or wrongly—I think rightly—that coal could be too cheap. We were told in many eloquent speeches from the President of the Board of Trade and the Prime Minister that the price of coal must not be allowed to fall below a point at which a decent wage could be paid to the miners. How are we to adopt that point of view in the matter of coal, and say that the price of coal has to be kept on a level compatible with decent wages to the miners, and adopt a precisely contrary attitude in the case of steel? It seems to me impossible to yield to the Miners' Federation of Great Britain what we refuse to the Steel Confederation. That produces a position of complete chaos in our economic outlook.
Therefore, I confidently believe that we shall adhere to the attitude of this party, in contrast to that of the party below the Gangway, which has never 925 taken the view that interference with so-called economic laws was in itself a sin or a crime, and that therefore it must look at the question of the regulation and control, and if necessary the protection, of a great industry such as this on its merits. Having said that, it seems to me that we must begin to look at the case on its merits. That does not mean that we shall inevitably find that the merits of protection by tariffs in the ordinary way—which have been pressed on us so vigorously from the opposite benches—are conclusive. Those who have listened to the speeches to-day will have felt that the case for the protection of the steel industry by the ordinary old-fashioned method of a general tariff is very weak. The hon. Member who moved this Motion must have felt that, because he was very far from addressing his appeal to the House on that case alone.
Those who advocate tariffs in the steel industry are somewhat in a dilemma. They must be advocating either a high tariff or a low tariff. Let us suppose that they advocate a low tariff. They are not complaining that the competition is from a foreign industry which is slightly more efficient, and which is therefore able to send in steel at slightly lower prices. That is not their contention at all. They tell us that our industry is equally efficient, but that the foreign steel producer, for purposes of his own, is dumping steel into this country at a price which bears no particular relation to his own cost of production. We have that view affirmed by the hon. Member for Newport (Mr. Walker) who spoke on behalf of the men's organisation in the industry. If this is the menace which they have to face they will agree that no low tariff will have any great effect one way or the other. If it is a case of dumping, if the foreign steel producer is putting steel into this country in order to build up balances, or for any reason of his own, without regard to his own cost of production, no low import tariff will possibly deter a great producers' organisation like the Continental Steel Cartel from pursuing that policy. So I do not imagine that it can be a low tariff which hon. Members have in mind.
Then we come to the alternative of a high, an almost prohibitive, tariff. I hope we shall hear from someone connected with the steel industry whether 926 they do actually ask the House to pass a high, an almost prohibitive, tariff on the import of steel into this country without any reorganisation of the industry or any other measures—just a simple measure of Tariff Reform. There are vast industrial interests. which have spokesmen in all quarters of the House, which would regard such a prospect with no equanimity. To pass a prohibitive tariff on all kinds of steel without any conditions, without any plan, would surely be to hand over vastly important interests in this country, such as shipbuilding, engineering, the motor car industry, all kinds of industries employing millions of men, the greatest industries in this country, and the only exporting industries which are making headway to-day in the world—to hand them over gagged and bound to the steel masters of this country. Surely, therefore, ordinary Protection by either a low tariff or a high prohibitive tariff would impose serious difficulties which even the steel producers themselves must recognise.
Again, what part of the product of the steel industry are we to protect by tariff? There are all sort of grades in the range of products from pig iron to the highly finished article. Are we to be told that we are to keep out foreign pig iron? That is quite a possibility, no doubt, by a tariff. In that case, the British manufacturers who work up pig iron into semi-finished steel will presumably have to pay more for their British pig iron than they would for foreign pig iron. That must increase the cost of the semi-finished article, and to that extent reduce their opportunities of competing with semi-finished articles produced abroad, and there will be an increasing inflow of Continental semi-finished steel. We shall only have kept out pig iron in order to bring in a greater quantity of semi-finished steel, because the complaint most frequently heard is of the disparity between labour costs here and abroad, and the proportion of labour costs in the manufacture of semi-finished steel is very much larger than in the case of pig iron and, accordingly, the competition will become more severe. If that is the case, the only thing to do will be to clap on a higher tariff still upon the range of semi-finished steel goods and keep those out. In that case the British industries using 927 British pig iron and British semi-finished steel will feel the force of foreign competition in their products, and they will feel it all the more because in the case of the finished article the element of labour costs in which there is the disparity complained of is even higher.
I am only bringing up these examples because they seem to show what many hon. Members know better than me, the impossibility of applying any direct simple tariff remedy to this extremely complicated situation. We often hear far more eloquent and more powerful destructions of the simple tariff arguments than I have given to-day from, among others, the President of the Board of Trade, but at the end of them, however conclusive they may be, we seem apt to go away unsatisfied. For while tariffs may be confidently predicted to produce all these unfortunate results, yet Free Trade is quite certainly producing most unfortunate results here and now, and therefore it is not possible for us to leave the matter there. Surely a position has been reached in this industry, as in other industries, where something, some move, some executive action on the part of the Government and on the part of this House is absolutely necessary. No economic exposition, however subtle and however conclusive, can possibly free the Government and the House from that responsibility.
We have had constructive suggestions during this debate. We had suggestions from the hon. Lady the Member for East Middlesbrough (Miss Wilkinson) and the hon. Member for Newport of some kind of reorganisation of the steel industry. I do not think it was evident to-day, but sometimes there has been a tendency for hon. Members opposite, representing the employing side of the steel industry, rather to brush that argument aside, and to suggest that that is merely toying with the question; to say that the industry is about as efficient as it could be, and that there is nothing much in the idea of reorganisation. I would like to read the House a passage which struck me very much in the remarks of Mr. Replogle, who was steel administrator of the United States Government during the War, and who was recently here inspecting our steel industries. He made these remarks, which I take from the "Financial Times" of 30th September last: 928Great Britain possesses unrivalled opportunities to become supreme in iron and steel. You cannot be supreme in, say, agriculture or petroleum, but you can in steel. You have all the raw materials and also shipping facilities, but you lack imagination and initiative. Some of your plants are the best in the world, for instance, Stewart and Lloyds Tube Mills and the Lysaght Tin Plate Works, but they are few in number. Most of your plants are out of date, some of them were obsolete 20 years ago and are crying aloud to be scrapped. I have said in my report, and our engineering investigations confirm it, that there is no valid reason for the decline of the British steel industry and the employment of 250,000 workers in Belgium, France and Germany, making steel for shipment into England, which is certainly carrying coals to Newcastle,' and that with modern methods Great Britain can be comparatively in as dominant a position in the industry on this side of the Atlantic as the United States is on the other.
§ Mr. STRACHEY
In quoting that I am not suggesting that this gentleman's opinion is necessarily conclusive, but it shows that there is a very strong body of impartial expert opinion which is of the view that there is a great deal of room for reorganisation and that the question cannot be simply brushed aside. If that is admitted on the other side of the House, it seems to me that we on this side of the House have to make a corresponding admission, that in the case of the steel industry the question of reorganisation cannot be separated from the question of the control of imports. We have been told that what is needed—and I agree—is something analogous to the Coal Mines Bill for the steel industry; not a Bill drawn on similar lines, of course, because the problem is a very different one, but a Bill which provides for the control and the reorganisation of the steel industry so that it can be put on some basis of organisation, with allocation of orders and the other points in reorganisation which have been mentioned to-day.
Now in the case of the Coal Mines Bill, although it was a far-reaching Measure in that it quite definitely attempted to fix minima in the matter of price which cut right into the idea of leaving the price of the commodity to the free play of economic forces, there was no problem of imports. Imports of coal do not exist for us, and therefore the question of Protection or Free Trade, in the ordinary 929 sense of the word, was held not to arise, and the principles of the Chancellor of the Exchequer and the President of the Board of Trade remained entirely intact while they were violating the canons of the older economists quite heartily. There was no actual question of imports, which for them apparently is the sacred thing which must not be even approached. But if the Government tackle the steel industry—and every speaker on this side has emphasised that they must tackle it by an analogous Bill of reorganisation—it will be impossible to ignore the question of imports, because it would obviously be quite impossible to make effective provisions such as were made in the Coal Bill without dealing with imports.
I have neither the opportunity nor, indeed, the knowledge to make even tentative suggestions as to the type of Bill needed, but I believe that some kind of central council or board would have to be established in the steel industry analagous to the central council established for the coal industry, and I suggest that the central board in the steel industry will have to be given some control over the importation of steel into this country. If it is to be given such powers, of course it cannot be composed solely of steel producers. That would be a lop-sided arrangement, and the sort of organisation which obviously springs to one's mind is a board composed equally of interests representing steel producers and steel users; and this House and any Government, no matter what their fiscal opinions, might be very ready to accord to this industry any amount of Protection to which that industry could persuade the steel users to agree. I feel that in that fairly simple provision we should have a very effective safeguard against all those dangers which I touched on and which other hon. Members have dealt with so fully arising from an ordinary protective tariff.
We cannot to-night outline the exact form of organisation which should be adopted, but if there were meeting jointly perhaps with a central steel board something in the nature of a commodity board representing all the interests which used steel, to which access to cheap steel at or near the world price is of absolutely essential importance, I should feel that we had established by 930 far the most effective safeguard we could possibly have. Of course, the central board should be representative not only of the employers but also of the workmen and we might follow in this, too, the analogy of the Coal Bill. When I speak of steel producers, I mean that there should be representatives of the men as well as the employers. Again in the engineering trade or shipbuilding, etc., the trade unionists should also be represented: they would be charged with a special care of matters relating to wages. If we could have some kind of commodity board of that sort on which the steel users could be represented, and the steel producers were enabled by this means to keep their works up-to-date, then we should have constructed a body which might produce some sort of order and hope out of the chaos of the very near despair into which many of our great industries today have fallen. On these benches we do not feel that tariffs are a very appropriate form of taxing imports; they seem to us to be a very clumsy and out-of-date method.
I am ready to agree, however, that the actual form of Protection once it has been introduced at all—it has been introduced in the Coal Bill—is only a small matter compared with the basic principle of interfering with the free play of economic circumstances. I believe that it is along the lines which I have hinted at of constructing some sort of organisation such as a commodity board that we ought to proceed. All those interests balanced together on a board of that kind must be an instrument for the realisation of what the steel producers are asking for. The steel users will say that unless we can give them some particular steel at or near the same price which they are now paying they cannot agree to shutting out the foreign article. But they will agree to the exclusion of the foreign steel if they obtain a guarantee that they can be supplied at the right price. The steel producer will have to put his house in order in order to meet the demands of the steel user. In this way we should be continually improving the industry and there would be a steady pressure towards reorganisation. I am afraid that if Protection was applied in any other way our worst fears would be 931 realised. I have only put forward my suggestions in the hope that this debate would not degenerate into the usual wrangle between the orthodox view of the Free Trader and the orthodox view of a general tariff. I believe that the situation of this country is too serious for our constituents outside to view with equanimity that long-continued wrangle —which is still occupying our time on these benches. I believe that the people of this country are looking for something a little more constructive and a little different from that, and if they are not given something more practical in the immediate future they will lose very much of their faith in this ancient institution.
§ Mr. JOHN BAKER
I want to put another phase of this problem before the House. I am very pleased with the discussion to-day, because we have been trying to look all round at the problem before us, and we have not been throwing all the old arguments at each other which has generally resulted in nothing being done. Certain suggestions have been made, and I believe that the steel manufacturers of this country have a perfect right to come here and ask for our assistance. I welcome for two reasons the application they have made. One of those reasons is that they are admitting the failure of private enterprise by coming to this House and acknowledging the need for State action in order to preserve one of our basic industries, not in the interests of the employers alone, but also in the interests of the workpeople and the consumers of steel in this country.
I can assure the hon. Member for East Newcastle (Sir R. Aske) that although the employers have consented to drop the import duty, they are certainly asking for its twin brother in the shape of a subsidy. If the employers in the steel industry have got beyond that point, and if they will take the further step of accepting some national control in return for national assistance, I do not think the consumer need worry very much, nor do I think that the workman need worry. The steel trade has made very little profit since 1921. Wages are now regulated by the selling price of some particular commodity, and there are several cases where employers might, if they had ex- 932 ercised their full rights, have forced wages much lower than they have done. Employers have realised what, I think, this House should realise, that a wage of 30s. or 40s. a week is not adequate for a man and his family to live upon.
Steel has been sold at an uneconomic price as far as the manufacturer is concerned. The index figure has been below the Board of Trade index figure for years. To-day the index figure for steel is 112 and for other commodities 117. After a long struggle to revive the trade, the employers have now come forward with a modest request that their case should be considered. As regards wages, they always follow prices. When we come to consider plant and the organisation of the industry, we find that many of our blast furnaces are out-of-date and much of our steel plant is also out-of-date. I think that the Seconder of this Motion mistook the reorganisation of capital for the reorganisation of the industry. In some parts of the country the employers are closing some of the more out of date mills. I would like to point out that in 1928, 59 per cent. of the men engaged in the steel section turned out 96 per cent. of the products of 1920. In other words, six men in 1928 turned out as much as 10 in 1920, largely because we have dispensed with the less efficient machines and partly because of reorganisation inside the works. The result is that capital, the engineer and the workman have contributed towards producing an output 50 per cent. per man higher than the steel section produced in 1920. That is making some progress, and at least it is making an effort.
With regard to wages, the average wage in 1920 was round about £5 a week, while the average wage in 1928 and 1929 was round about £3 a week. It does not follow that because one man got £10 a week and another £1 a week that the £1 a week man is the cheapest. We want to know the cost of producing either pig iron or steel bars. We often hear comparisons made between the efficiency and the inefficiency of producing steel in different countries and in particular works in this country. I believe that the labour cost of producing steel in Britain to-day is less now than ever it was before. I have asked many employers to give me their labour cost of production, which is the real 933 test, and they tell me that the process is simple in the sections comprising the blast furnaces—the smelting—but in the finishing department it becomes increasingly difficult to get accurate figures as to the labour cost of the product. The employers publish gross figures, and I will give the gross figures for the production of the finished material in 1920. The gross figures for finished material in 1928, though the finished material may not be exactly the same, showed that labour received about 32 per cent. of the selling price of steel in 1920, but only 27 per cent. in 1928. It may be perfectly true to say that we have to-day a higher standard of living, and that the steel worker who is at work is better off, but we have to remember the man who has not a job. That is why we want trade reorganisation and help.
I saw a statement in the Press this week that 100,000 tons of tinplate were used every year for imported canned fruit. Why cannot we develop the canning industry in this country? If we established the kind of board which has been suggested this afternoon, I think they would look around for things like that in order to see how far it is possible to start new industries. I know one of these small industries which was started two or three years ago, and it is now doing five times as much trade as when it started. Surely there is some way of helping that trade to do 10 times as much as it is doing to-day. Why should we buy canned fruit from foreign countries when we have the finest fruit in our own country, and might use our own tinplate for canning our own fruit? These are all possibilities. I am glad that tariffs as such have been dropped in this discussion, because it enables a Free Trader like myself to look at the matter from another angle. Tariff Reformers may say that control is the equivalent. I do not think so, and for this reason. I have always looked upon tariffs as being in the interest of the employer. Tariffs have not protected the wages of workpeople in other countries; tariffs have not protected the conditions of labour or the hours of labour in other countries. I do not hate employers. They are a necessary evil; but, so long as we have them, I say here, as I have said elsewhere, that 934 they are entitled to their living just as our workmen are entitled to a living. I believe that reorganisation of the steel trade on the lines suggested this afternoon would bring prosperity to both sections.
§ Major TRYON
Those who have, if I may say so, so admirably introduced this Motion, may take it as absolutely certain that the first part of their contention is proved. The first part of the Motion is:That this House views with grave apprehension the present condition of the iron and steel industry.I think that that part of their Motion is accepted and not disputed. Where, however, I think there will be a difference of opinion, which I imagine will lead us to a Division, is that we on this side of the House consider that the Government should take immediate steps to stop the continuous decline in the activities of this industry, with its resultant increase in unemployment. We think that the Government should do something about this, and we await with some interest the speech of the Parliamentary Secretary to the Board of Trade, to hear what he is going to do in circumstances which are admitted in all parts of the House to be extremely serious.
It will not, perhaps, be fair for me to say that something ought to be done without being prepared to say that we on our side have our remedies, which we believe would make things better. Quite frankly, I am in favour of dealing with this matter by a tariff, and I further say, to those who reject the remedy of a tariff, that it is all the more urgent that they should insist on the Government taking that other action which they say is better than the tariff which we suggest. There are one or two points which have not been very fully dealt with during this debate. I will not go over the points that have been touched upon, but there is this point. Ours is a country peculiarly adapted for the production of this commodity, with natural advantages, and with workmen who, I understand, are admitted to be equal to or better than any in the world at this work; and yet, at a time of grievous unemployment, we are importing year by year millions of pounds worth of iron and steel manufactures which could perfectly well be made in this country. We hold that the simplest and most effective way of deal- 935 ing with the problem would be by a tariff, and we say to the Government that, if they accept the responsibility of not putting on a tariff, then it is their duty to substitute and inmmediately put into force some other method of dealing with this importation of goods which we could perfectly well make here.
There are, of course, two parts of this trade. There is the trade which we do in these commodities with foreign countries, and there the balance is nearly even. Indeed, I understand that in September we were importing from foreign countries more than we sell to them. Therefore, I believe it would be enormously to the advantage of this country if we put a duty on these foreign manufactures—a carefully selected arrangement.—in order that these things should be made here instead of abroad. When, however, we turn to the iron and steel trade overseas beyond foreign countries, we come to our trade with the Dominions, and it is in that trade with the Dominions that we get from the steel trade our purchasing power to assist us in importing other things. The Dominions send us hardly any iron and steel, and we sell to them enormous quantities. Therefore, if the iron and steel trade is surviving, it is very largely owing to the assistance given to it by our Dominions.
I am not going to encroach too much upon the proceedings that are now being discussed with the Dominions, but I notice that one Dominion alone, namely, Canada, imported the year before last about £60,000,000 worth of iron and steel manufactures from the United States, and I say that one of the things that this Government might do to improve the condition of this industry would be to endeavour to make arrangements with Canada by which Canada would take some of those goods from us and not from the United States. I think I may say without anyone disputing it that the moment is peculiarly happy, because, not only is the Imperial Conference going on, but the United States have recently imposed a very heavy tariff against Canada, and, therefore, this is a very natural moment for Canada to turn more and more to us. Now is the opportunity; I should like to know whether the Government will seize that opportunity. 936 We had a speech from the hon. Member for East Middlesbrough (Miss Wilkinson), in which she seemed to foresee the day when some infinitely wise people would take over the steel industry in this country from those who have been engaged in it all their lives, and, through the State, manage it much better than it is being managed now. I think the hon. Lady is very sanguine, and, when she spoke of the objections of Labour to tariffs on the ground of bitterness against employers, I was very glad that she was answered by the interesting and admirable speech of the hon. Member for Newport (Mr. Walker), who contradicted her. That the hon. Lady is not here at the moment is not my fault, but I can remember speeches of hers in the last Parliament which did a great deal to stir up the hatred which she now says is an Obstacle to a tariff.
I have, in my humble capacity, for many years advocated tariffs for this country, and it is a certain pleasure to me to notice the entirely different point of view taken up by so many Members on the back benches opposite. The highly Protectionist arguments to which we have listened from the back benches are in rather marked contrast to the Free Trade views which we generally get from the Front Government Bench. The word "Protection" has been boldly and firmly used on the opposite benches. Suggestions have been made that the question of imports must he dealt with, and that is our view. When, however, it is suggested that boards and Government committees should deal with these questions of imports, I would say that that is an incredibly difficult thing to do. Without any discourtesy to the present Government, I very much doubt if they would be able to manage a great business like the steel industry in the way that is hoped for when these boards are suggested.
I have, therefore, two main points. The first is that one of the remedies that we would apply to our present discontents and difficulties is the remedy of a tariff, which would enable us to make in this country a large proportion of the manufactured iron and steel products which we now import. My second point is that we should develop the iron and steel trade of this country by doing all that we can to enlarge our markets in the Dominions. Finally, in reply to the 937 only Free Trade speech during the whole discussion, which came from the Liberal benches, we do not accept the contention that, because we manufacture on a larger scale, because we do all we can to get modern machinery put up in this country by protecting and encouraging the development of the industry, therefore prices will be higher. We have not found that prices have been higher in the other safeguarded industries. Therefore, while we have our remedies, the point that I wish to put to the House, and the question to which we ask for a reply from the Government, is: In view of the fact that the House undoubtedly views this problem with grave apprehension, are the Government prepared to take immediate steps to remedy the difficulty?
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith)
I shall be expressing the mind of all hon. Members present when I say that the debate which has taken place to-day on this Motion has been one of the most useful and instructive that we have ever had upon any Motion submitted by a private Member. Nearly all the speakers who have taken part in the debate have spoken from a very close knowledge of the industry, and many facts and much useful information have been forthcoming from their speeches. I should also like to comment on the excellent tone in which the debate has been carried on, and I think that perhaps I should be entitled to say that that is in a large measure due to the very excellent manner in which the Motion was introduced by the hon. and gallant Member for King's Norton (Major Thomas). No one who listened to him would doubt for a moment his earnestness or his sincerity, while all would commend the tone which he adopted for the purpose he had in view.
In the different speeches that have been made, one or two suggestions have been put forward as to how best this problem might be dealt with. The Mover of the Motion suggested that this was a favourable opportunity for the House itself to give a lead to the Government, and, while it is true that he hesitated to submit what I am inclined to think was his belief as to what the remedy was, touching upon, it very lightly, he did make one other suggestion, namely, that of a subsidy to be granted to the industry. I 938 do not wish to dwell very long upon that point, because it was very largely answered by the speech of the hon. Member for East Newcastle (Sir H. Aske), when he pointed out that a subsidy as a policy is not something that can be confined to one industry. Indeed, when we discuss these problems as related to an industry, we are compelled to consider them from a much wider point of view than that of the industry itself, and there is not the slightest doubt that hon. Members generally will readily appreciate that this industry, bad as it is in its general economic condition, and bad as it is from the standpoint of the numbers of unemployed workers connected with it, is, at the same tme, only one of a number of industries that are so affected: and, if the policy of a subsidy had to be adopted as a means of enabling the iron and steel industry of this country to be carried on, it is difficult to see how that same policy could be refused to other industries that are similarly circumstanced.
When one examines that proposal, one is brought to the conclusion that in the end we should find that the nation would be asked for such a sum of money as it would be almost impossible to find, and that very largely in the end it would be a question of taking the money out of one pocket and putting it into another without any tangible result. Therefore, I am afraid one is forced to the conclusion that a policy of subsidy, however well meaning may be the suggestions that have been made in regard to it this afternoon, is not a method by which to meet the problem that we are discussing so far as this industry is concerned. I think the suggestions that were made by the hon. Member for East Middlesbrough (Miss Wilkinson) are very useful, and might be followed up as a means of bringing to this industry a greater amount of employment than now exists in it; and the suggestions made by the hon. Member for Newport (Mr. Walker) are also worthy of consideration. Perhaps at this point I might answer one or two of the questions that he submitted so far as the position of the Government is concerned. He asked whether or not the report of the committee which had inquired into the iron and steel industry was to be published. Already, on more than one occasion, 939 Ministers from this Box have stated that it is not the intention of the Government to publish that report. I would like to say that that decision is not merely one of the Government themselves, but it is also one which harmonises with the views of those who took part in the inquiry, and very largely because much of the evidence and information associated with that inquiry and on which that report rests is of a. confidential nature.
§ Mr. WALKER
Is the hon. Member referring to the employers' side or to the workmen's side when he says that it harmonises with their opinion that that report should not be published.
§ Mr. SMITH
I do not know how far I am able to distinguish between one and the other, but my information, as conveyed to me, is that the industry is also of opinion that it is not wise to publish the report. It may be that the workmen are not associated with that point of view. It is therefore, impossible for me to say anything connected with this report because it is common knowledge that, unless a report is available to Members, it is not a subject matter for discussion so far as Members of this House are concerned.
§ Mr. GRIFFITHS
Can the hon. Gentleman explain, then, why the recommendations have appeared in a German newspaper and have been translated so that we have them in English, while the public of this country have no idea whatever what the recommendations are?
§ Mr. SMITH
It is not possible for me to give any information on that point. It is entirely news to me that the subject-matter of the report has been published in Germany as is suggested, and I cannot, of course, give any information whatever as to how that has taken place or what the explanation is. It would be almost impossible to discuss this question of iron and steel without ultimately getting to the old form of remedy which has been so often put forward in this House. It is quite true that it was not put forward by any speaker until my right hon. Friend opposite addressed the House, and came definitely down with the policy of tariffs as a means of solving this problem. He also asked some questions about the policy of the Government in regard to the Dominions and 940 followed it up by stating that these were matters that were very suitable for discussion, and, undoubtedly, would be discussed as part of the business of the Imperial Conference. Obviously, it is impossible for me to say anything about the subjects which have been and 'are being discussed at the Imperial Conference. He, like myself, must wait until they are published. Then he will know how far anything discussed there forms any contribution to the problem with which we are dealing.
The subject which we have discussed to-night in such an amiable spirit is not a new question to this House. It has been discussed many times before and, just as it is true that the present Government have conducted an inquiry into this industry to try to find some means by which the problem can be met, so also is it true that other Governments have held an inquiry into it and, therefore, have a knowledge of the subject practically equal to our own. Perhaps I might remind the House that in 1925 the late Government conducted an inquiry into the iron and steel industry and, just as this report of the Cabinet Committee is not available for publication, so the report and the conclusions of that inquiry of 1925 have not been published.
It is true, and it is within the knowledge of the House, that a question was put to the right hon. Member for Bewdley (Mr. S. Baldwin), and that he was definitely asked, arising out of the inquiry of 1925, whether he would adopt the policy of tariffs so far as this industry was concerned. Strange to say, the answer which the right hon. Gentleman gave the House on that occasion contained in terms almost the exact description of the conditions of the industry as it has been given to the House here this afternoon. Nothing was absent from his consideration. He stated that the investigation showed a serious situation, oppressive competition, aided by long hours, low wages, and depreciated currencies, which was being severely felt by our manufacturers, and he stated that, had His Majesty's Government been able to deal with the iron and steel industry in isolation, they might have regarded the case for inquiry as complete. Then, when he was pressed as to whether or not he would adopt a policy of tariffs as a remedy, he refused to do it, and one 941 of the reasons for his refusal was because of the repercussion on other industries in this country. That is the explanation, and I may say here in answer to the point made by my right hon. Friend, that he also added that, if he adopted that policy, it would be cutting across his pledges at the previous election not to adopt a general system of tariffs.
That position is perfectly clear, but the right hon. Gentleman, with all that knowledge and information arising out of that inquiry, with all the facts before him, with the knowledge that a policy of tariffs in connection with iron and steel would cut across his pledges at the election in 1924, did not seek to get release from those pledges in 1929. [Interruption.] I am open to correction, but my knowledge of the circumstances is that at the last election there was no attempt made by the party opposite to put before the country the idea and the suggestion that a policy of general tariffs was to form part of their policy in this House.
§ Major COLVILLE
It was clearly stated that the iron and steel trade had a right to apply for Safeguarding if the Conservative party were returned at the last election.
§ Mr. SMITH
That is not an answer to the point I am making. The right hon. Member for Bewdley declared when he was Prime Minister, with the knowledge of all the facts in the industry, exactly as presented to the House this evening—[HON. MEMBERS: "It is much worse!"]—I do not know that it is much worse. If it be so, it is very largely because of world conditions that it has grown worse. I do not know that the position of this country with regard to relative production is worse. It is not so far as the first nine months of this year are concerned. I believe it will be found that our relative production to the total production is better than in 1928. T am not certain about the figures, hut I think it will be found that the relative production is at least equal to 1928 if not better, while it will be found that the fall in production, so far as the protectionist countries are concerned, has been just as great as our own. The production in America and Germany has fallen to a substantial degree. It is wrong to suggest, when each country is suffering equally, when their system is 942 one of tariffs and ours one of Free Trade, that tariffs are a remedy for the problem with which we are dealing at the present time. It is, obviously, true that the party opposite, although they declare in favour of tariffs, when they were on this side of the House and had the responsibility of office and the opportunity of putting on a tariff if they were so minded, refused to do it, because they declared it was not in the interests of the country to do so on account of the repercussion which would take place in other industries.
Obviously, this question of tariffs on iron and steel cannot be considered apart from our great shipbuilding industry. You cannot consider this question separate and apart from the other great industries of this country. That is one of the great problems so far as tariffs are concerned. I had thought that there would be something of a fuller reply and statement from the other side of the House on this matter, seeing that they have taken up tariffs as a solution of this problem, after the statement of my right hon. Friend on Monday. The President of the Board of Trade was quite frank and candid in his statement as to the position of the steel industry and as to what the problem was. His statement was in the nature of a question to the party opposite to give an answer to the points he submitted, but no answer has been given here to-day. The Motion deplores the present condition of this industry, and requests something to be done immediately. If that is the issue before us, it is obvious that we cannot at this moment consider those wider questions, which will require a great deal of examination, that have been submitted from speakers on this side of the House.
We are concerned that some attempt shall be made to bring about a greater measure of prosperity and employment in this industry as far as we can in the existing conditions. The Government have not been idle in that respect. It has already been stated that, almost as soon as we took office, this committee of inquiry was set up to examine the whole problem so far as iron and steel are concerned. It has not finished with the conclusion of that inquiry, because ever since there has been a great deal of consultation taking place between the Government and representatives of the industry. 943 At the moment, the whole problem of the regional organisation of the industry is under consideration. Some amalgamations have already taken place, such as the amalgamation of Dorman Long and Bolckow Vaughan, and the whole problem, largely on a regional basis, is now under examination to see how far that can be accomplished with a view to bringing a greater measure of efficiency into the industry. After all, when we say we want to cut prices, one of the best means to meet that problem is to reduce the cost of production, and, while we on this side of the House would resist very strongly any attempt to reduce the cost of production by a reduction in the wages of the workers in the industry, we have never been opposed to any scheme of reorganisation which would increase the efficiency of the industry whereby the general cost might be reduced and a greater measure of prosperity follow. That is very largely the line that is being followed at the present moment.
In the very early days of this Parliament, the Government attempted, by legislation of a definite kind, to bring a greater amount of trade to this particular industry. One of the first Measures we passed was the Colonial Development Act. Very largely the purpose and object of that Measure was to bring about development in the Colonies of the Empire by big constructional works which in themselves might create opportunities for employment in this country. The Zambesi Bridge is an illustration of that fact, and I should say Middlesbrough much appreciates what has taken place in that respect because of the contract recently placed there for the constrution of that bridge across the Zambesi. Then there is the question of shipbuilding. The Cunard Company found themselves in a difficulty in connection with the insurance of their proposed new liners, a difficulty which the Government has met speedily, and I believe adequately, thus facilitating the construction of those boats. That is a very legitimate and proper method of stimulating industry along lines which are helpful and which in the end bring about employment. It is not the fault of the Government if more work of this description has not taken place. We have endeavoured to persuade the House to sanction a 944 scheme for a new bridge at Charing Cross which, had it been adopted, would have been the means of giving some more employment to the iron and steel industry for the necessary equipment and construction of that bridge. In the policy of developing, in conjunction with local authorities, road work, bridges, the abolition of level crossings and all that kind of thing, the Government have made a very real contribution towards helping this industry so far as immediate help can be given in existing circumstances.
It is not possible for us to resist the Motion in the sense that we could ask the House to go to a Division. It is couched in terms which, of course, are acceptable. It deplores the existing condition and asks for something to be clone, and my reply is that the Government is endeavouring, so far as it is possible, to do that something as a means of meeting the situation as we find it. I have said that this problem of the iron and steel industry cannot be dissociated from the general problem of world depression. It is part of that problem and must be considered in connection with it. In reply to my hon. Friend the Member for Newport, it is impossible to give any information with regard to national control by means of an import board apart from the fact that I will see that his suggestions are conveyed to my right hon. Friend, who undoubtedly will give them the consideration they deserve in connection with these consultations and negotiations that are taking place in the industry. I think the observations of the President of the Board of Trade on Monday apply here. As one hon. Member has said, this is all evidence that the present system will not work successfully and guarantee our people employment and good conditions in their life. It may mean that in the end we shall have to adopt some other methods and some other form of organisation before that amount of prosperity and well-being can come to the people that we should like to see. But that is not altogether the issue to-day. It is rather a question for immediate consideration. Tariffs are no solution of the problem, and right hon. Gentlemen opposite know it, otherwise, with all the information at their disposal, they would have put that policy into operation years ago. I can only express to the Mover of the Motion my 945 appreciation of the way in which he introduced the subject, and I say again I think the debate has been most useful and instructive, and possibly we have a better knowledge and acquaintance with the problem now than we had before the debate commenced.
§ Mr. MACQUISTEN
I think it is unfortunate that tariffs were not introduced in the 1924 Parliament, and the pledge that they would not be put on was unfortunate and the country has suffered very much by it. The sooner they are introduced into the industry the better. The hon. Member for East Newcastle (Sir R. Aske) took up the usual defeatist attitude of the Free Trader that we might, expect retaliatory measures from the Continent, but we always have had retaliatory measures. If you go to France you cannot get a collar stud that is not under a high tariff. The recent rise in rubber was due to the fact that France wanted it for her manufacturers. She helps her people all the time. The last people hon. Members below the Gangway think of are their own people. With regard to nervousness as to shipbuilding costs, I can console the hon. Member. There is a plant that can roll all the ships' plates that are used in Great Britain in about six months, and could roll all the ships' plates that are required in the world in about 12 months, at a much. cheaper rate than they are imported from Belgium or anywhere else, but it is not started because, unless it gets- wholesale mass production orders; it is not worth starting.
The hon. Member for East Newcastle ignores the effect of turnover. A small place of business that has a turnover of £10 weekly may be losing money. When it has a turnover of £20 with the same overheads it is probably making some money. When it reaches £30 it is probably making a substantial income, because the overheads are all the same. It is all a case of mass production, and you cannot get mass production unless you: have security and a protected market. People will not invest their money in it I admit that here and there there are plants in the iron and steel trade which are not as novel as one would like them to be, but you cannot get them equipped because- you cannot get money for an industry that is liable to the competition 946 of dumped goods from other countries which are fighting behind protective lines.
It is no use telling us, as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) did that wages in Germany and France are much less than ours. The question is what do they buy and what is the cost of living? Every Belgian workman is a cultivator. Take the men working in the Spanish mines—I am conected with one of them. When the spring comes, they go to their farms, and in the autumn they go away to reap. What they need to buy is much less, because they have their own production and they have not to keep a string of middlemen and shopkeepers to get the necessities of life. The question is, are they really better off? It is said in the iron trade that a blacksmith always has a spark in his throat which he is continually endeavouring to extinguish. It is a very warm job. You have to find out the cost of living and what the German pays for a glass of Pilsener beer. It is the same in regard to the Belgian. You have to find out his house rent and what he pays for food and vegetables. That is the competition we are up against.
The hon. Member for Aston (Mr. Strachey) said we had to have either a high or a low tariff, but we could put on a medium tariff. A 33 per cent. tariff made all the difference to the motor trade and has caused a considerable' consumption of steel. International matters have made it very difficult for this trade. The Washington Convention put an end to a great deal of hematite steel used for battleships. That was one of the heaviest blows struck at the iron and steel trade. Allow us to have in our own country the production of the major portion of the 3,500,000 tons that come into the country —I admit it is the cheapest quality of iron and we prefer to make the best, because our labour costs are high and, it is better to have a high priced article; but give us the production and consider the mass production market and we will quickly make the steel and, if we do not, and if it still comes in, we shall at least get some taxation on the imported article, which will enable us to pay some of the burdens that are being imposed upon it.
§ Question put, and agreed to.947
That this House views with grave apprehension the present condition of the Iron and Steel Industry, and urges the Government to take immediate steps to stem the continuous decline in the activities of this industry with its resultant increase in unemployment.