HC Deb 15 February 1932 vol 261 cc1295-430

Order for Second Reading read.


I beg to move, "That the Bill be now read a Second time."

This Bill, as its Title indicates, provides for the imposition of a general ad valorem duty of Customs and of additional duties on any goods chargeable with the duty aforesaid, for the imposition of duties on goods produced or manufactured in a foreign country which discriminates 3.30 p.m.

against United Kingdom or Empire goods and for purposes connected with the matters aforesaid. This great matter, having been broached, has to proceed rapidly towards a conclusion, and within the narrow limits of some six Parliamentary days these great matters will have to be set forth finally in the form of an Act of Parliament so far as this House is concerned. In these circumstances, we shall have to work swiftly if we are to conclude our business satisfactorily. Therefore, I propose, as far as possible, to be brief, for I know there are many Members in all parts of the House who wish to make a contribution on the subject.

This Bill is based on the Resolutions that were passed last week by very large majorities. The size of the majorities is almost paralleled by their significance. Owing to the new procedure which has recently been embarked upon, we can follow with uncommon closeness the progress of these proposals in all their stages. We learn from a speech delivered in another place that they were first submitted to a Committee of the Cabinet and were carried by a large majority. They were then brought into the whole Cabinet and were carried again, we learned from a speech delivered in this place, by a large majority. They were introduced into this House, and I need not do more than refer to the majority which they obtained here.

A further fact is only revealed by a study of the Division lists. These proposals were examined by the party to which I belong, and were unanimously supported by that party. They were also examined during the Debate by a party which was under no pledge to do anything save to give these proposals its close consideration, and they were supported by a majority in that party. In these circumstances, the argument as to the right of the Government to introduce such a Bill seems already inapplicable and out-of-date. It was advanced in the earlier stages of the discussion by hon. and right hon. Gentlemen both below the Gangway and on the other side of the House. I have all the papers necessary to refute the accusation, but it is not necessary to quote them. We have the remarkable position that the argument, first conducted in private and then in public, has been conducted in this house under unusual circumstances by the two sides, both having access to every iota of information on the subject through the official memoranda, through the statistics, and through the private and confidential interviews which 'alone Members of His Majesty's Government are enabled to secure, and in these circumstances, the advocates of each side having placed the position before the House, the Liberal party, as well as the Conservative party, agreed by a majority to support. these proposals.

It is, in those circumstances, with uncommon authority that the proposals pass to this, their next stage. You have the name of the head of the Government, the Prime Minister himself, upon the back of the Bill. [Interruption.] We have a right, therefore, to say that the examination which was demanded by hon. and right hon. Gentlemen opposite has been fulfilled in the letter and in the spirit. And, as I say, not merely by pledge-before-hand-advocates, but by those who came with no such pledge, these proposals have been examined, and under their authority they are submitted to the House. If in such circumstances the supporters of the Measure did not press forward they would be playing an unworthy and a contemptible part. If they were not willing to put their fortunes to the touch, the touch of test, the touch of experiment—it is they who ought to resign. It is in those circumstances that we bring forward this Measure to-day. I understand that my right hon. Friend the Secretary of State for Scotland is to speak at a later stage in this Debate. We have a right to say to him—as we have a right to say to any Liberal Member opposing these pro- posals—that he is opposing them as a minority Member, and he must first address his arguments to his own side.

What do we seek to do? We seek to correct the balance of payments and to guard against an unchecked depreciation of the pound. We seek to secure within what area we may a freedom of trade by offering advantages to other countries in return for advantages which they give or may give to us possibly in the future. We seek to secure an instrument against those who discriminate against us. We seek to encourage our own people by securing to them a reasonable share of the home market and thus to enable them to render their methods more efficient. We seek to fortify the finances of the country by revenues themselves not unduly high and so widely spread as to inflict no harsh exactions upon any section of the community.

In all these objects we have the sup- port, not merely of the supporters of the sill, not merely of the majority of the Liberal party, but of the four Ministers, its opponents. I have here the speech of the Home Secretary. He assents to the first, the most vital proposition. Speaking on the 4th of February, he said: It is a fact that there is an adverse balance of trade. It cannot be ignored. There is a strain upon sterling due to that adverse balance,"—[OFFICIAL REPORT, 4th February, 1932; col. 329, Vol. 261.] There are one or two Free Traders in this House—the Home Secretary is not one of them. There is the right hon.and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), and there is the hon. Member for the Mossley Division (Mr. Hopkinson) —[Interruption.] There are certainly none on any part of the Labour Benches. These Members who stand for the full rigour of the doctrine of Free Trade, particularly the hon. Member for the Mossley Division, stand, as necessarily Free Trade implies, for the breaking of trade unions, for the smashing of wages, for the return to Free Trade, not in the one sense only but in all senses. A body which lives and thrives upon—and which came into being to defend—restrictive covenants—is not one to object to the principle of Protection as such, although it may object, and is entitled to object, to any broad application of it. The right hon. Gentleman the Home. Secretary assents, I said, to the existence of an adverse balance of trade. He assents to the second principle—the desire to offer trade advantages to other countries who offer advantages to us. He said: If it were found, as it might be found, that a considerable part of the world is now ripe for a movement for tariff reductions, I should he not indisposed to consider some combination of those countries. It is true that he put the Empire last; but we put the Empire first. But the fact remains—and it is not an argument against the so-coiled economic bloc; it is an argument for a bloc—that he suggests that those at any rate who have made tariff concessions to us should be treated in a better way than those who have not made such concessions. The Home Secretary, who assents to the principle of retaliation, said: With a view to bringing such economic pressure to bear upon other countries as the necessities of the case may require. These words might take him a very long way, and certainly do remove him entirely from the leadership of those who advocate the rejection of this Bill on the ground that it will lead to economic nationalism and assaults upon international peace. No more definite assault upon international peace in that way could be imagined than the words: With a view to bringing such economic pressure to bear upon other countries as the necessities of the ease may require." — [OFFICIAL REPORT, 4th February, 1932; col. 334, Vol, 261.] The fourth object—to encourage our own people in production here at home. —he assents to and supports even as far as the wheat quota, although he claims that the wheat quota will definitely and immediately cause a rise in price in a staple article of food. Well, in spite of that, the wheat quota receives the wholehearted support of the Home Secretary, and, I take it, of the four dissenting Ministers, and of the Secretary of State for Scotland who is about to speak in opposition to these proposals during this Debate. The only item in regard to which we are at variance is the desire to fortify the revenue. Although the Home Secretary demanded, even in that speech, a reduction of direct taxation, he found nothing to justify it. The principal point which he made was that the unemployment figures were only 2,500,000, but even as he spoke his figures were out of date. The 25th January showed an unemployment figure of two and three-quarter millions, a rise of 218,000, and a rise in the deficit on the Insurance Fund of £130,000 a week—a harsh reminder to us of the dangers through which we still are threading our way, There are, however, 155,000 more employed than at this time last year. But in the circumstances of to-day, can anyone say that the additional revenues which it is admitted this scheme will bring in will not be required? Anyone looking at the figures of the Death Duties and the figures in relation to the Road Fund must feel that any assistance we can bring to the revenues of this country is a wise insurance against dangers which we cannot possibly say have yet been removed from the path of a balanced Budget.

I understand, of course, that the rejection of the Bill is to be moved by the Leader of the Opposition. It is not possible to give due and full weight to the spectacle of the right hon. Gentleman who dances before the ark of the covenant of Nationalism when it comes to India, and is to be seen parading the streets in support of the apostle of the highest tariff it is possible to lay on against British goods, and denying to his fellow countrymen the right and liberty which he is so anxious to extend to men of other nations. But it is not by accident that the Opposition finds itself hampered and hamstrung when it desires to attack the principle of Protection. As I have said, the whole theory of the trade union movement is against the doctrine of the Manchester school of unrestricted free trade, and rightly and necessarily so. Their own remedies are remedies which go much further even than these proposals and which seek by watertight import boards of one kind or another, by the admission of goods into this country under licence or quota, to stop unauthorised imports coming into Great Britain.

I do not think the right hon. Gentleman would dissent from that view. He claims that these are unsuitable proposals, but he does not attack the principle of the proposals, and it is the principle to which we are asking the House to assent.

We are not here faced with the struggle between Protection and Free Trade, but with the question of a widely spread low tariff and a sudden capricious high tariff. The suggestion put forward by those who are opposed to our proposals is that, instead of the adoption of a tariff over a wide range of imports, the tariff should be put on to a limited number of articles, somewhat on the lines of the procedure under the Abnormal Importations Act. Any engineer knows that for a braking effect you want the widest possible surface that you can get. An engineer who proposed to apply his brakes on small selected points would be ploughed—and rightly so—in his preliminary, let alone his final, examination.

Let me draw attention to the salient points of our proposals. In Part I of the Bill are to be found our proposals for an ad valorem duty. The proposal is that there should be a general ad valorem Customs Duty of 10 per cent., which is to be applied to articles not already dutiable. Articles already dutiable are not liable to the 10 per cent. tariff. If an article is subject to duty under the Abnormal Importations Act, it will not be liable to the ad valorem duty, but if it is not subject to duty even temporarily, it will be subject to the 10 per cent. ad valorem tariff under this Bill. Under Imperial Preference, Dominion and Colonial goods are admitted free, Colonial goods with no limitation of date and Dominion goods up to the 15th day of November, which will give us time to conclude agreements with countries which already have shown a desire towards the lowering of tariffs, such as was desired by the spokesmen for the Opposition.

The House will also find that there are proposals for additional duties. Additional duties may be levied upon goods which can be produced here. The matter will he considered by the Advisory Committee, the Terms of Reference of which are given in some detail in Clause 3 (2) of the Bill. The Committee is to consider: the advisability in the national interest of restricting imports into the United Kingdom and the interests generally of trade and industry in the United Kingdom, including those of trades and industries which are consumers of goods as well as those of trades and industries which are producers of goods. These terms of reference seem to lay down all that any opponent of the scheme could desire. The only case that might be sought to be made against it is that the scheme will not be properly administered. Accusations have been made that the advisory committee is too small in number and that it will have to work too quickly to produce a satisfactory scheme. It will, at any rate, be able to devote much more attention to the problem than could possibly be afforded by an already overworked Cabinet. It is to the Cabinet that the spokesmen of the Opposition suggest that scheme of reconstruction should be made. Imagine adding to the already congested business of the Cabinet the survey that would be necessary to decide whether such schemes were adequate or inadequate and whether they could be put into operation. The Advisory Committee will have the power to examine and to settle schemes. It will be their duty to consider the position of consumers as well as producers. In some form or other it will be found that such a committee is necessary whenever it is desired to put schemes of this kind into operation.

The Advisory Committee's duties will, of course, be the consideration of the additional duties over and above the 10 per cent. ad valorem duty. These additional duties may be either high or low and they may or may not be subject to drawbacks. The question of drawback is dealt with in the Second Schedule of the Bill, and I shall have a few words to say later about the position of the drawbacks so far as the 10 per cent. tariff is concerned. Part II of the Bill gives power to the Board of Trade to ask for supplementary duties to be imposed in case of foreign discrimination against our goods. Again, in that matter we have support not of one but of every section of the House. A duty to deal with foreign discrimination has been asked for by many administrations and on many occasions by political parties. It has been said that we could do more without discriminatory duties than with them. It is said that in other countries the success of discriminatory duties has not been marked and that duties have gone higher and higher. They have certainly gone higher and higher against this country, which does not retaliate quite as much as against any country which does retaliate.

Therefore, it is not true to suggest that duties have gone lower in favour of this country and higher against those countries that retaliate. At least, the arguments on one side cancel out the arguments on the other. This country with its huge markets, access to which is of the greatest importance to many of the largest trading nations, possesses a much more powerful lever than does any other country and it is a lever than can and will be used to bring down duties and to lower the tariffs against trade in the world.

Part III concerns the great entrepôt trade of this country. When you bring a matter of this kind to the test of that crucible of reality, the Clauses and Schedules of a Parliamentary Bill, you at once find that you are dealing with a problem which affects this country to a very special extent. We are not blind to the necessity of preserving as far as passible the great entrepot trade which this country has built up, but we intend to deal with it, not by some single specific proposal, but by proposals applied to the needs of the case. In regard to shipbuilding, we are dealing with the question of imports of goods for the purpose of the construction of ships by making each shipbuilding yard a little entrepôt of its own. In the case of the wool trade, we are freeing wool altogether from any of the duties and placing it upon the free list. In the case of imports for re-export there are provisions in Clauses 13 and 14 so that goods may be imported either for re-export or exported with a view to free re-importation so long as the process which the goods undergo does not change the form and character of the goods. These are terms well understood and for l7 years they have been worked upon by traders in this country.

The question as to whether goods sent abroad, say, for printing or dyeing, can he re-introduced into this country has thus been under consideration, not in an abstract but in a concrete form. If the printing or dyeing does not change the form or character of the goods which have been exported, they will not be subject to the duty when re-introduced into this country. In the case of yarn sent from this country abroad and spun into goods, it is obvious that the form of the goods is changed in character. Therefore, goods produced in that manner will be subject to duty when re-introduced into this country. In all these matters we are dealing not with theory but with practice, we have had 17 years of experience in the case of the Customs and Excise, and it is the opinion of those who support our scheme that it can be easily administered and will not throw any undue strain either upon the traders or the Civil Service.


Are there any arrangements for drawbacks?


I have stated that I an going to speak on the subject of drawbacks on the Second Schedule, which particularly concerns them.

4.0 p.m.

Clause 15 of the general Clauses deals with the value of goods "for the purposes of this Act," and the value of goods for the purposes of the Act is being taken as the value "here," and not the value there. That differs from the practice of the United States and other countries where the value of goods is taken in the country of origin. We believe that that would lead to an administrative difficulty, as we have no machinery of inspectors such as is possessed by the United States. Those inspectors go to foreign countries, and often, to the great indignation of traders, do their utmost to ascertain the cost in the country of origin. That is a thing which is most difficult to find out. But the cost in the country to which the goods are sent is a thing which can be easily ascertained, and which you can demand of a man who is buying the goods. Under this scheme we are proposing the minimum of inspection to save wages, and therefore we shall ask for a declaration from the man to whom goods are sent. The determination of disputes as to the value of goods is to be settled by a referee appointed by the Lord Chancellor, and there are 'several provisions in the Clauses as to the machinery which. I think, we may leave to the actual point when we come to dead with those Clauses in Committee of the House.

There is one large section upon which I wish to say a word or two, and that is the Schedules to the Bill. The First Schedule raises a highly debatable point. Nobody will deny that there ought to be a free list. There will be discussion as to how large that free list should be, what articles it should contain, and what articles not now in the free list should be added to it. Hon. and right hon. Friends of mine in many parts of the House have already corresponded freely with me and with the Department both as to the additions to and the exclusion from the free list of many articles. That is but right and necessary. If you are attempting to change the direction of trade in this country, to plan our exports and our imports, to apply some principle of selection throughout exports and imports, you will inevitably have correspondence with the traders and enterprisers of this country. Any Government, unless they are willing to leave that great section of our economic life uncontrolled, will inevitably come upon such correspondence as that which we are now commencing. There is, however, no reason why we should refrain from embarking on that correspondence or from undertaking this experiment when by an overwhelming majority the country at the General Election decided that such an experiment should be made. We ought not to shelve the experiment because of the inevitable difficulties with which it will meet. In spite of that, there are, of course, points brought forward by firms and by hon. Members of this House of perhaps undue apprehension. The Home Secretary in his speech indicated a range of duties which is in no way borne out by the First Schedule to this Bill.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir Herbert Samuel)

The Schedule has been entirely altered since then.


It certainly seems to me that the new method is subject to very great difficulties. This is the first time that the House beholds the Schedule to this Bill. This is the first time that I am at liberty to speak about the Schedule to this Bill.


The Chancellor of the Exchequer in his speech stated that the exceptions would be wool and cotton, and, possibly, some others.


I shall leave the Chancellor of the Exchequer, who is a sufficiently powerful swordsman to strike his own blow, to deal with the question for himself. I say that the Chancellor of the Exchequer indicated in his speech on the Resolutions that there would be a free list. He indicated in his speech that the free list would be of no great length. He specifically avoided any catalogue or details of the free list, but he gave examples of the type of substances which would be in the free list. But any specific items which he named were items of example, and not by any means a catalogue. I say that here, for the first time, is a catalogue, and that is what the House is discussing, and not the speech of the right hon. Gentleman the Chancellor of the Exchequer when introducing the Resolutions.

Take the case of oil seed. I have had correspondence from hon. Gentlemen and ex-Members of the House indicating that the proposed duty would ruin the great oil-seed industry in this country. It will be seen in the Schedule that cotton seed, rape seed and linseed are upon the free list. Palm kernels are largely imported from the Empire. I will point out the main items in which the 10 per cent. ad valorem duty will apply. Soya beans imported into this country amount to £724,000. The total value of oil seeds is £11,481,433. The duty on the other imported seed—castor seed—of which half is produced within the Empire, would not affect more than another £181,000 worth of goods. The two together come to much less than £1,000,000 out of a total import of much over £10,000,000. The duty only covers one-tenth, and even less than one-tenth, of the articles imported, and the duty levied is one-tenth upon one-tenth. That cannot be said to be a crippling burden which will entirely destroy the industry in question. It may be said—and truly said—that there is a narrow margin in business and that every farthing of extra expenditure must be carefully examined. That is perfectly true, but it cannot be said that a duty of a tenth upon a tenth is a duty which will totally destroy a great industry dealing with goods to the value of £11,481,433.


Is the right hon. and gallant Gentleman aware that if soya and castor beans are not included in the free list, it will mean firms closing down and more unemployment on the Mersey side?


I do not wish to delay the House or to be led away by arguments on specific points. I repeat that a duty of one-tenth upon one-tenth cannot be reasonably represented as destroying one of the great staple trades of this country. I come to the question of drawback which is raised by the Second Schedule.


Before my right hon. and gallant Friend leaves the question of the free list, can he say why power is not entrusted to the Committee to add articles to the free list as well as to add to duties on articles not on the free list?


The Committee has power to add to the free list. [Interruption.] No; they cannot take them off, but they can add to the free list. Six months' delay must be given after the passage of the Bill before articles are added to the free list, and it is reasonable to allow after the settlement of the free list, which can be done by the House after Debate, a certain period to permit of stabilisation in the trade of the country before these duties and Schedules are again revised. The question, of course, of the exclusion and inclusion of agricultural products in the free list is a subject in itself, and I do not intend to enter upon that, because surely in the two days' general Debate and the two further speeches which will be given from the Front Bench, there is opportunity enough both to raise and answer questions, and I propose to deal only with the general proposals contained in the Bill, and the machinery by which it is intended to put those proposals into execution.

The Second Schedule deals with the subject of drawback. On the 10 percent. duties no drawback will be given. On the additional duty, it will or will not be given at the discretion of the Government after the recommendation of the Committee. It may be said, "Why should no drawback be given on the 10 per cent. duty?" Let me ask the attention of the House to this: We are not dealing here with the mountainous duties to which this country has alone been accustomed under the regime of Free Trade desired by the Home Secretary. Let me take two examples—the duty on petrol and the duty on sugar. Petrol is an important crude substance practically a raw material closely connected not only with transport buts with a good many manufacturing professes. Take again sugar, a foodstuff of first importance entering into the life of the very poorest of the poor. What is the duty upon raw sugar which has been imposed by successive Governments, including the Government supported by the right hon. Gentleman the Leader of the Opposition, and, indeed, by the four dissentient Ministers who are opposing this Measure? The duty on that enormously important article of food for the poorest people is 133½ per cent.

That is what I call a high tariff. At that of course, it is necessary to provide that drawback to be given when you are re-exporting to foreign countries. The duty on petrol is 100 per cent. It was 50 per cent., and was raised by the Government of the Leader- of the Opposition from 50 to 75 per cent. It was raised again, under the leadership of the right hon. Gentleman Viscount Snowden, although no longer, I am sorry to say supported by the Leader of the Opposition, from 75 to 100 per cent. Those two cases are examples in which drawbacks are given. But no such duties are proposed under the 10 per cent. ad valorem. The House should notice in passing two further points of great interest about each of these duties. It is said that the tariff of 10 per cent. which we propose to put on will be reflected in a far more than 10 per cent. increase by the time it gets to the ultimate consumer. On sugar a tariff of 133 per cent. on raw material is not represented by 150 per cent. or even 130 per cent. by the time the article reaches the retail shops and consumer. It has fallen to a. very much smaller percentage. It has fallen on the finished article by 50 per cent. less than is represented by those extremely high figures.

The other duty is the duty on petrol. When the tariff was raised to 75 per cent. and subsequently to 100 per cent., the rise in price to the consumer was not represented by these two successive increases. We are told that it is impossible to suppose that the importer will pay such a tax. The first of these increases was wholly absorbed by the importer and only the second was passed on to the consumer. Therefore in both these cases we see theory falsified. The theory that an increase in tariffs is passed on with a snowball effect to the consumer is not found to be the case in one example of actual practice. The contention that the importer will in many cases absorb any rise in prices caused by a tariff is true. It was certainly true in the case of the Petrol Duty. But I must return to my main subject. Drawbacks which are given for a high tariff are not given for a low tariff. A meticulous examination of the accounts of commercial firms would be more objectionable than the drawback would be worth. That is agreed by both sides. The 10 per cent. tariff can be avoided in several ways. It can be avoided by buying the raw materials within the Dominions and the Empire and it may be avoided by many of the arrangements which we hope to make with friendly countries whereby we can lower our tariffs to them. But a tariff of 10 per cent. will not be given a drawback. Any additional duty will or will not be given a drawback on the recommendation of the Commission as the Government and the Commission may finally decide.

These are the main points I wish to make in describing the Measure now before the House. The argument is no longer to be left purely to debate. It is to be brought to the test of experiment. Of all Parliaments this is the one, and especially at such a moment is best fitted to make this test and experiment. Whatever we were returned for we were not returned to sit here with arms folded. These Measures have not been wantonly embarked upon. We have had a harsh reminder of the facts in the rise in unemployment figures which has recently taken place. We know that the deficiency on the Unemployment Insurance Fund will have to be carried sooner or later directly by the Treasury; funds will have to be found to carry on that fund. Last Autumn when I became a newcomer to the Treasury that huge building was attempting to deal with an acute crisis under conditions which were totally unfamiliar to those who had previously been engaged in the financial administration of this country. The ship of State would not answer to the helm, she could not get steering way, and although the usual familiar things were done there was not the familiar response. We did not drift upon the rocks, but to be in such a ship, with such a freight, a ship which would not answer to the helm, is not an experience anyone responsible for the financial administration of this country would wish to undergo again. Those dangers were surmounted by good luck and by good guidance. We wish to gain further control over our economic life, to get way on the ship again, so that she may answer to the helm. These are our proposals, which we believe will accomplish that object.


I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day six months."

The Financial Secretary to the Treasury gibed at me for supporting Mr. Gandhi in his agitation to buy Indian goods. I cannot see the difference between Indians and Germans being asked to buy their own goods and I broadcasting an appeal to buy British goods. One is as good as the other. At the same time, I understand that the Indian Legislature and the Viceroy have power to deal with tariffs without reference to this House. I just thought I would clear that matter up. Let me say one personal word in regard to the gentleman who is looked upon as the parent of these proposals. We on these benches like to remember him not as a protagonist of tariff reform and economic nationalism but as the parent of municipal socialism, the author of the doctrine of ransom, and we shall remember his son who has introduced these Measures not by his Poor Law administration or by this Bill but because he is the first statesman who has had vision enough to see that there is a very big prospect of reform in our banking arrangements seeing that he assisted and largely initiated the establishment of the Socialist bank in Birmingham. While it is quite right that those who approve of these proposals should be loud in their praise of the late Mr. Joseph Chamberlain we shall remember him for quite other reasons. It is a strange commentary on Radical and Socialist statesmen that in my own time three of them have left their party. There was the late Mr. Joseph Chamberlain, to some extent the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and the present Prime Minister, and it is worth noting that all of them when they went were received at Londonderry House and found themselves the pampered darlings of the circles which inhabit Mayfair.

We move the rejection of this Bill because its provisions are totally irrelevant to the issues involved in the present crisis. The letter which appeared in the "Times" on the 9th February, over the signature, Professor Henry Clay, is the greatest condemnation that this Bill could receive from anyone. It puts as clear as daylight the fact that the imposition of this tariff will have no effect on what is described as the balance of trade. That is a fact which should be be taken into account in all our discussions. We on this side of the House, and any real opponents there may be of the Government below the Gangway, might sit comfortably in our seats and allow Ministers to arraign one another and prove that the other is wrong. It was a delightful scene that we witnessed just now when a Cabinet Minister flatly contradicted the Financial Secretary. I suppose we shall see a great deal more of that kind of thing, but I doubt whether right hon. Gentlemen opposite are adding to the knowledge of the country or to the respect of the electorate for Cabinet Ministers and this House. It has been said that we on this side believe in Protection up to a certain point. We do not believe in Protection as understood by hon. Members opposite, and no one knows that better than the old Socialist who has just addressed the House. We do not deny that under certain conditions Free Trade is the best thing.

The Lord President of the Council took exception Vie other day to the statement of the hon. Member for Merthyr (Mr. A. Bevan) that this country had stood up to the difficulties of unemployment and trade depression better than other nations because of Free Trade. That is a perfectly true statement. It is also true that in the years immediately preceding the War there was just as much agitation for social reform and the alleviation of unemployment as there is now. The difference is that we are now facing a world crisis which is much more acute. Under Free Trade slums and millionaires were created in this country; on the one hand paupers, on the other hand, millionaires, but in our maddest dreams we never thought that Protection was the cure for social evils. It may be repetition but it is a fact which the House should recognise, a cold, brutal fact, that the United States of America 4t this moment has from 8,000,000 to 12,000,000 people unemployed, and according to a telegram from a correspondent of the "Daily Telegraph" which appeared on Saturday last, we have the astonishing fact that not merely are these 12,000,000 unemployed but that children are dying by hundreds, people starving in the streets and thousands unable to find anywhere to live.

4.30 p.m.

The case which the Government have to answer is why it is that these conditions prevail in the United States of America, which has practically no War Debt to pay, which is a great creditor nation, which is a country still on the gold standard, which has no social services and no unemployment pay, which is a self-contained country, a country that can live without any reliance on. other nations whatsoever, and quite different from ours —how is it that in that nation this condition of things exists? Why is it that in protectionist America, favoured as she is, these things should be going on now? Why is it that in Free Trade Britain the same kind of thing is happening? Why is it that the same evil exists in both countries'? There is only one answer, and that is that production is carried on in both nations, not for the purpose of serving men and women with the goods they need, but in order to make rent, profit and interest for a class. I challenge anyone who speaks to-day, whether Liberal dissentient or Protection protagonist, to contradict that statement. There is no other reason for that state of affairs. Therefore, we ask the House to reject this Bill, because it makes no attempt to deal with a point of view which the right hon. Gentleman himself said was really the essential point of view, the value of sterling and so on. The Financial Secretary, when he was speaking just now, made me wonder whether he remembered that he himself said: The House is hungry and longing to get on to the greater problems before us. We shall not succeed by shelving the problems of currency and foreign policy… The rising spirit of the younger generation; the contribution which youth has still to make to the future of the country…"[OFFICIAL REPORT, 4th. February, 1932; col. 392, Vol. 261.] 4.30p.m.

And the contribution the right hon. and gallant Gentleman is making to-day is to rehash the protectionist theories of nearly a century ago. That is what is called the contribution of youth. Another fact is that all over the world, no matter where you look, in this country or in Australia, the same problem exists. When Australia was being pictured as bankrupt, her granaries and warehouses were full. If she could have paid in goods she could have settled all her debts right off. The problem before the world is not how to bring about a restriction in the circulaton of goods, but how to expand them. I make another challenge to the other side. Will they kindly tell us how these proposals will lead to a fuller volume of world trade? In what particular way can we hope that by passing this Bill international trade will recover itself? As a matter of fact the world problem, of which our problem is only a part, is that the world's productive capacity exceeds world consumption. That is what is wrong with the world to-day. That is brought about because of conditions over which no nation has complete control.

If anyone wishes to see and understand that, he should read a book which has been prepared, on the instructions of the International Labour Office, after a suggestion made at the World Economic Conference of 1927. I will give two•or three figures. The output of British mines is 6 per cent. higher now than in 1914. The British iron and steel worker per man at the blast furnaces has increased his productivity by 25 per cent.; in steel smelting and rolling mills by 37 per cent. Those two industries are very big basic industries. Take agriculture, take any single industry you please, from cotton to coal and from shipping to road transport, and in every one of them labour-saving machinery and better organisation have increased the output tremendously, but there has been no rise of consumption commensurate with that increase in production. Until that is settled we are just beating the air. If you want to come nearer home take the case of my Division. There I am told that 200 girls will shortly be displaced and two men will do their work with the aid of machines. Will anyone tell me what the doctrines of Free Trade or Protection have to say to that? Nothing at all.


What sort of factory is it?


It has to do with the making of some wireless apparatus. I do not know exactly what it is.




If the hon. Gentleman or the Noble Lord wishes to controvert my statement, I reply that not merely in that one factory but in scores of factories in East London what I say is true. I should have thought that the hon. Member for South Croydon (Mr. Williams), who has been at the Board of Trade, would have known that much better than I do. I repeat, how can anyone in this House or outside stand up and say that a protective tariff or shouting "Free Trade" is going to solve that problem? Only one thing will solve it, and that is to increase the consuming power of the masses of the world—nothing else. We may talk and dodge around the subject, but in the end we have to come to that. I am glad to sea that a large number of business men and bankers are coming to that point of view. We are not now so lonely as we used to be in our advocacy of a change. The other day the Halley Stewart lecture was delivered by Sir Basil Blackett in the City of London. I am sorry that a gentleman like him cannot be asked to come to the Bar of the House 'and give vs all the benefit of his experience and advice. [interruption.] It is all very well for hoc. Members opposite to interrupt. We are all here saying that we want to find a solution of this problem. and the Government have gone back about 70 years to find one in the nostrums that Disraeli said were "dead and damned." The Financial Secretary said that "Free Trade is dead as mutton."


And Disraeli is dead too.


Luckily he is. I say quite seriously that I think the House would be very wise to let some people come and talk to us, people who have not any party interests to serve in the matter. No one knows better than the Financial Secretary to the Treasury the truth of what I am now going to read to him, because I am certain that, although his mind may have wobbled about a good deal, fundamentally he is where he was when he was young and when he saw the truth, and the truth that he knows and understands is that by some means or other mankind has to discover how to use the abundance which science and men's labour produce.

Sir Basil Blackett

is no Socialist, and no doubt he would disclaim any sort of sympathy with Socialism. He is a Governor of the Bank of England, and therefore is a man of whom one ought to take some notice. This is what he said: Money was meant to be a yardstick with which to measure the value to be put on commodities and services in process of being exchanged for each other, but throughout the ages mankind had never been able to devise a monetary yardstick which did not at one time measure an inch and at another 100 or more inches. Although it was obviously not a fact that money remains stable in terms of commodities, nearly everything we did in our everyday business life was based on the unconscious assumption that it did remain approximately stable. This is what I wish the House to consider on this hotchpotch of a, Bill: In the forefront of the reforms which the Planned Twentieth Century demanded was a stable money whose purchasing power would remain constant. In saying that stable money was practicable and attainable he did not mean that it was easy and simple of attainment. But it was surely worth a big effort to attain it. If he put stable money"— not Tariff Reform— in the forefront of what was needed for successful national reconstruction, it was because national planning ahead was so difficult as to be almost impossible without reasonable stability of prices. What I am going to read now is what has been said from these benches and the Liberal benches time after time without anyone taking the least notice of it: For the first time in human history the mere problem of daily subsistence had ceased to be the primary preoccupation of a large part of the inhabitants of the earth. There was no reason why in a short time any human being should feel serious anxiety about the provision of house and clothing and house room for himself and for those for whom he was responsible. Science offered to us and to the generation immediate ahead of us a standard of living and of material comfort immensely higher than any that had been known to the most fortunate of those who had gone before.


Will the right hon. Gentleman finish the quotation and put in the bit about the advocacy of Protection?


If the House wants it all read I will read it all, but I am thinking of the time. The portion that I have read deals with a question about which I want to say a few words afterwards. It has all to do with the Bill. Here is another quotation: In the economic sphere, then, the first necessity for the building up of the twentieth century was a new philosophy to take the place of the doctrine of laissez-faire." Does anyone accuse me of desiring laissez-faire? If tariffs at long last won the day against free trade in this country, it was not because the nation had been converted to protectionism, but, because tariffs might well be a useful instrument in a consciously controlled reconstruction of our economic life. And right hon. and hon. Members opposite call this Bill a proposal for the reconstruction of national life. There never was such rot. Anyhow, my point is that this distinguished economist has put it on record that the problem is not Protection naked and undiluted. He has put it on record that if the industries of this country were being re-planned under national control and national organisation— [Interruption.] I am as much entitled to say that as anyone else here because, later on, the lecturer speaks of national co-ordination and how you could have that without some measure of national control, I do not know. Sir Basil Blackett has laid it down that, even if you must have Protection, if you must have tariffs, it is only in order to re-plan your industries. There is nothing in this Bill to lead anyone to suppose that there is going to be any interference with the sort of competitive muddle which goes on at the present time. That, no one will deny.

As regards Sir Basil Blackett's proposal concerning currency, we are continually being told that the one thing necessary is that we should give ourselves some special advantage over other nations. Where is there in any of the propositions of the Government, any proposal which indicates that they are thinking in terms of currency in this matter? Those of us who sit on these benches have no idea that suddenly all the world will become Socialist and that our view of what ought to be will prevail. I do not suppose that even the Prime Minister in his best Socialist days was ever able to work out a scheme of life which would cover national and international exchange. But that is the problem of to-day—how are we going to carry on the business of exchange with other nations. Apparently, the policy of the Government is one of restriction, and the President of the Board of Trade defended it in a very curious passage in which he told us that nobody understood international currency and exchange. He said: One of the most distinguished members of the financial community in the City, …Lord Swaythling once said to Mr. Asquith that there were only two men in the City of London who understood the underlying economics of foreign exchange, and 'I have grave suspicion about the other one.'" —[OFFICIAL REPORT, 9th February, 1932; col. 706, Vol. 2611 We live in an amazing world. That statement apparently was made to the President of the Board of Trade many years ago, but within the last seven or eight years a very distinguished banker in the City of London—whether he had heard the story or not, I do not know—made the same statement to me. He thought that he knew. To-day there is so much mystery about this financial jugglery that nobody is supposed to know anything about it. The Chancellor of the Exchequer chided me for not understanding these matters, but now the President of the Board of Trade says that nobody understands them. Is it not time that somebody got down to this business and tried to discover what it all means?

One thing we know however, is that in the midst of plenty people starve. We know that to be true of America and of this country. And we know that in the midst of bad trade and depression, practically the only people who maintain their dividends are the bankers and the moneylenders. I go through the City of London nearly every day. I pass the Bank of England and I see another storey being added to it and on the other side I see the Westminster Bank and the Midland Bank—[Laughter.] It is all very well to laugh, but the workmen do not understand it. They do not understand the mystery of a business which enables a few people to become increasingly wealthy while masses of people go without the necessities of life. What I protest against is the cynicism of the remark that nobody understands these exchanges and the organisation of trade. Perhaps the hon. Member for South Croydon (Mr. Herbert Williams) is the other fellow who understands the question and if so, he will be able to tell us all about it.

It is true, however, that the working of this system has brought us to where we are, and there is not really much mystery about it. Certain gentlemen called "bulls" and "bears" are just now engaged in a beautiful gamble in New York because of certain arrangements which are being made by the Government of the United States in regard to the issue of money. We know that the richest people are not those who actually do the work of running businesses and keeping industry going, but the people who control the credit and the money of the world—some of whom get into prison occasionally—[Interruption.] Yes, and very often they are just as good people as those who are left outside, but it happens that they have not been quite so lucky. Had they succeeded they would have been looked upon as Napoleons of finance. But somebody has to pay the piper all the time, and those who pay the piper are the victims of trade depression, because of the manipulation of finance in various parts of the world.

I understand from a statement published by the Government that there is going to be an international conference to deal with economic conditions generally. We should move the rejection of this Bill even on this ground—because we do not think it a good thing to go into a conference to discuss better methods of cooperation with one another, if you take a bludgeon in with you. It would have been better to have postponed this proposal until the conference had been held. And may I remind the House that we have been asking for that conference ever since the first week after the General Election. I do not know why it has been so long delayed. They are going to wait until June and the conference will probably start with a discussion of these wretched tariffs, whereas the first discussion ought to be, as Sir Basil Blackett has laid down, on how we can get a stabilised currency and establish means by which the flow of goods between individuals and nations shall not be choked.

All Members of this House wherever they sit, if they have taken any interest in the discussions which have been proceeding, must have been obliged to consider the conditions of the people whom they represent. We have all had to read more about economics and we have tried to understand a little more about banking than we did when our chief interest was in our overdrafts. We have had to face all these problems and I have been reading what bank managers and others have had to say on this subject. As far as I have read not one of them has supported the proposition which is before the House this afternoon. I have also read articles by various economists on the subject. The hon. Member for Mossley (Mr. Hopkinson) said the other day that we in this House ought to be honest and tell the workers that they would have to make much greater sacrifices than they had been asked to make up to the present; that they would have to work for even lower wages and suffer still more. The Government are going to make them suffer still more by taking 50,000,000 off them through these tariffs. About that there is no dispute because hon. Members opposite say so.

A leading economist, not on the Protectionist side but on the Free Trade side, defending the present arrangement said that what Malthus told us a century or so ago that the population would exceed our power to provide for the population was still true. I have heard the same gentleman talk like that in this House and on the county council—[Hon. MEMBERS: "Name!"] Mr. Harold Cox. It shows the depths to which politicians and economists—clever people—have to descend in order to refute Socialist arguments. He says that Malthus was right, but you apply the principle in a different. way now. To-day you are suffering because you can produce so many goods with so many fewer people, and therefore you say you must have less population. Accordingly, one of these days we may reach the point that you will not want any population at all, more than a dozen people or so, and it will only be necessary to press a button and everything will be done.

Instead of wasting time over what the right hon. and gallant Gentleman opposite described as the musty and fusty controversies of a century or 60 years ago, this House should long ago have set itself to discussing how best to re-plan our own industries. If it is true that the nations of the world will not need so many services from us in the future, that they will not need so much shipping, that they will not need us to do their insurance, that they will not need to borrow money from us—if that is true, and it appears to be largely true, then it is also true that we must recondition our own country and re-establish agriculture. [HON. MEMBERS: "Hear, hear!"] Yes, and when the Bill comes, we shall put our case upon that subject. We must also find some means of dealing with the Dominions and with the wide open spaces of the world into which our population should go. But it is no use to-day saying that you will do that.

5.0 p.m.

I have had the bitter experience of sitting round a table with a dozen of the so-called big business men of our country trying to argue with them that we ought to develop our own resources in the Dominions and Colonies. What did these men say to me? It is on record. They said in effect: "What is there that you want to produce? If you take 10,000 acres or 500,000 acres in Australia or Canada and put men on to that land and organise new settlements, what are they going to produce? Coal, cotton, iron and steel, leather—what is it you want?" Then they went on to say that tin was restricted, iron and steel was restricted, coffee was restricted, tea was restricted, everything was restricted. What a mad world we live in. What sort of lunacy is it which says that with all the resources of the world at our disposal men should be kept away from them, that we should go on maintaining huge populations in the way in which we are maintaining them today?

Two great nations have gone in for planning. You may curse Russia as you like, but the fact remains that she is one of the only countries in the world that is making an attempt to plan her own industry and her own life. Italy is the other. I do not agree with dictatorships, but if you cannot do it except by a dictatorship, I am going to hold up my hand for a dictatorship. In Italy everyone knows that her industries are being planned and that it is being done because all the old theories are worn out. Our position is that this Bill is irrelevant to the world crisis, that its whole proposals will only make things worse, and we come before you and say that, instead of wasting time about this, let us get together. If you do not want old fossils like me, let the young men and the young women here get together; and as for yourselves, do not rely on the worn-out, musty, fusty controversies of the past, but face up to modern problems by modern propositions. And the fundamental modern proposition is to bring abundance to the service of the nation.


As one who for over 20 years has been working for the protection of our home markets and for the economic consolidation of the Empire, I appreciate to the full the privilege of being permitted to make my maiden speech in this House in support of a policy which, in the words of the Chancellor of the Exchequer, is a practical working plan by which we may gradually hope to rebuild the prosperity of our country." —[OFFICIAL REPORT, 4th February, 1932; col. 296, Vol. 261.] This plan of a 10 per cent. tariff on all goods except those of the Empire, with, in addition, the power of imposing a. duty which may amount to as much as 100 per cent. upon goods from offending countries, has met with wide approval. It has been recognised that a general tariff will reduce the adverse balance of payment by restricting excess of imports, at the same time providing a new source of revenue; while the probability of a 100 per cent. added duty will, without doubt, cause foreign countries to consider terms for the all-round lowering of tariff barriers.

The most notable speech, at any rate so far, against these proposals was the one delivered by the Home Secretary, and as the principle of joint Cabinet responsibility is on this occasion, by Cabinet agreement, to be shelved, the right hon. Gentleman was justified in giving expression to his personal disagreement with the majority, but I submit that he had no right to infer that these taxes were to be imposed for the direct purpose of lightening the taxation which rests on the well-to-do classes, and he had no right to suggest that the Government's intention was to tax the food of the unemployed, when he knows full well that the motive is to provide the unemployed with work and the country with the means to support them.

The hon. and gallant Member for Pembroke (Major Lloyd George) said there was no doubt whatever that large numbers of free traders voted for National candidates because they were assured that a change in the fiscal policy of this country was not the issue at the election. I submit that every voter realised that a vote for a National candidate was a vote for the free hand. Personally, I claimed last October to have captured the spirit of a National Government, and in these times of exceptional urgency and exceptional conditions, which demand exceptional treatment, I, as did other National candidates, including, I suppose, the Home Secretary, pledged myself to support the declarations contained in the Prime Minister's manifesto of 7th October, and to assist in the working-out of a new policy of reconstruction, irrespective of party creed or advantage. The present proposals, recommended by the majority of the Cabinet and expounded by the Chancellor of the Exchequer, constitute part of the new policy which I have every confidence will indeed bring about a return of prosperity to this country.

It is highly gratifying to all engaged in the British iron and steel industry, who are anxious to maintain the present standard of life of our iron and steel workers, to find that the foreign products with which our manufacturers have for some years been unable to compete are no longer to come in duty free. Having lived for the past 26 years at Scunthorpe and Frodingham, the centre of the important Lincolnshire iron and steel industry, I claim to have some little knowledge of that industry, and I say unhesitatingly that unless something is done to protect the home market, particularly as regards the heavy trades, the iron and steel industry of this country is doomed sooner or later to complete annihilation.

Last Wednesday, the hon. Member for Westhoughton (Mr. Rhys Davies) complained that hardly a word about the wages of our workpeople has been uttered in the whole of the discussion on these Resolutions. He asserted that: While some employers, so protected, are able to make huge profits, the workpeople are at the same time screwed down in their rates of wages. And he asked: If we are going to have Protection in this country, will it bring about the same adverse results in regard to wages as it has brought in foreign lands? Take the steel smelter. In Great Britain, according to the latest figures, the average wage of the steel smelter is £3 a week, in Germany,£10s. 11d., in France, 37s., and in Belgium, 35s. 5d." —[OFFICIAL REPORT, 10th February, 1932; cols. 957, 961–2, Vol. 261.] In the first place, it is entirely wrong to blame Protection for the very low wages on the Continent. The low wages are due to the fact that continental work-people have no organisation comparable to the organisations which exist in this country. In France not only is there no discussion relative to wages between employers as a body and workpeople as a body, but practically each individual works conducts its own negotiations with its workpeople and fixes its own rates of pay, without any reference to a trade union or like organisation. The same thing can be said more or less of Belgium.

In this country the wages of our ironworkers are regulated by sliding scale agreements, the percentage basis being the selling price of iron realised at makers' works for the previous three months. Practically the same system prevails in the heavy steel industry and many of its ancillary trades, for the workers' wages are determined by piecework rates, which, in the majority of instances, have a definite relation to the selling price of material. Free Traders' fears that the prices of iron and steel commodities will, under Protection, be increased to the consumer will leave the iron and steel workers cold, because the higher the price of pig-iron and of manufactured steel, the higher the wages of our workers will be. In regard to the statement of the hon. Member fur Westhoughton that the average wage of the British steel smelter is £3 a week, I visited a most important steelworks on Saturday, and was officially informed that the average weekly wage of a first-hand steel smelter is £8 10s., a second hand £6, and a third hand 10s. The average wage of the ordinary labourer in the lowest grade is approximately 40s. a week.

The hon. Member for Pontypool (Mr. T. Griffiths) on Thursday referred to the fact that in 1929 there was the biggest production of tinplate in the history of the trade, and he could have said the same thing about steel. In 1929 Great Britain had its record make, but most of it, owing to unfair foreign competition, was sold at a dead loss. Many and varied have been the charges levied against our industries by people who to-day say that they are not in favour of either Protection or Free Trade, but charges of mismanagement and obsolete plants cannot be levied against the iron and steel industry of Lincolnshire. Vast amounts of capital have been expended in recent years, and are still being expended, with a view to bringing the various works up to the highest state of metallurgical efficiency. At the Appleby Company's new steel works at Scunthorpe, we have the finest plate mills in Europe, and during the past few weeks there has been put into operation at the Normanby Park works of John Lysaght, Limited, a perfectly balanced scheme of fuel economy, with the latest type of coke ovens and innumerable systems of utilisation of waste heat, whereby no solid fuel is used on the works with the exception of the coal going to the coke ovens. These works as a whole can now be looked upon as having one of the most perfectly balanced plants in the world. The capital expended, however, will undoubtedly be wasted unless the plants are soon operating at approximately their full productive capacity. A duty of 10 per cent. may not be sufficiently high in some instances, but a comparatively low tariff will be sufficient to put the heavy trades once more on their feet.

My constituency is Lincoln City, whose engineering products are to be found in all parts of the British Empire and in practically every country on the globe. In passing, I may also say that no other city offers better sites for the establishlishment of new industries. If, with the hoped-for tariff, our iron and steel manufacturers are able to supply at prices not higher than the Continent, without doubt all British engineering firms will buy British, but there must be no exploitation of our engineering firms. I have little fear of this provided that our modernised plants can be kept working at their full capacity. In pre-War times the trade of Lincoln was mainly export, and the chief of these exports was power-threshing machinery. Owing to German and American competition in the neutral markets, that trade seriously declined. Consequently, the Lincoln works devoted more attention to the production of industrial machinery.

Since the War it has been a desperate struggle to keep the works employed on products suitable for the Lincoln works, and this difficulty has been accentuated by the imports of foreign manufacturers into Great Britain. Comparatively small quantities of imports may have a more depressing influence than is at first apparent, as it is perfectly obvious that if you have 12 buyers and only 11 units manufactured the price is entirely different from when you have 11 buyers and 12 units to sell. The imports are just sufficient to change over this proportion, and the fact that these units are imported at an uneconomic price prevents the manufacturer of the 11 units obtaining an economic price for their production. In these circumstances, I claim that the placing of a duty on manufactured engineering goods will tend to restore the balance; in any case, it is entirely wrong that such engineering products should come into the country without bearing any of the heavy taxation which our manufacturers have to endure.

The Chancellor of the Exchequer properly paid tribute on Thursday week to the self-sacrificing and devoted patriotism shown by the British taxpayers, but the reaction is already being experienced by some of our engineering firms who not only are having to wait for their money for orders executed, but find prospective customers unable to place new orders because they have paid their Income Tax with such extraordinary promptitude. Taxation must be reduced, and in addition to tariffs, we must continue to practise rigid economy in national and local expenditure. I am satisfied that the Government's policy of security and encouragement will help more than any of us can possibly realise at the moment. All will agree with the President of the Board of Trade that no vested interests must have influence with the Import Duties Advisory Committee whose recommendations for restriction and reduction of tariffs will enable the Government efficiently to safeguard the interests of consumers. In its desire to help, the steel trade has already taken steps to bring about the formation of an association comprising both manufacturers and users of steel in order that the interests of both may be maintained, and to ensure that our steel export trade shall not be jeopardised, but probably increased, even though the supply of cheap foreign steel is cut off.

The Home Secretary may contend that his speech of Thursday week was consistent with his pre-crisis views, but politics, I submit, should largely consist of the due adaptation of means to the end, namely, the common weal of the nation and country to which we chance to belong. The policy of a nation will not gain necessarily by glorying in its consistency throughout all time. A wise statesman must needs shape his course partly in relation to the present condition of his own people, and partly in view of the present attitude of other nations. It verges on the region of comedy to hea[...] capable and responsible politicians speaking as though Protection and ruination were synonymous terms when they and the whole world know that Protection is in vogue everywhere and that the only point of practical moment is a question of degree. It is a fallacy to imagine that Free Trade is to be judged irrespective of what other countries do to us. Other countries make us pay a large portion of their taxes and revenue to balance the advantage to us of supplying them with goods. We now say that they must pay part of our all too heavy taxes if they are to enjoy the benefit of our market.

Great Britain is not a universal benevolent society. Were the other nations to adopt the policy of the open door, we should at once do the same as a quid pro quo. The abstract idealist in a very actual and relentless world may soon discover to his cost that he has been dwelling in a fool's paradise. Let us then put aside abstract discussion and a certain British tendency towards sloppy sentiment. The grim logic of facts is that the Great War altered the world. Nations have put on one side, at any rate for the time being, the idealistic and laudable vision of world-wide Free Trade, and the instinct for self-defence is paramount in every nation. In our present dire and harrowing condition, to pose as a benevolent society of well-wishers is little more than a farce.


There will be no hon. Member of whatever opinion or party who will not wish to join with me in expressing the congratulations of the House to the hon. Member for Lincoln (Mr. Liddall) for the contribution which he has made to the discussion of this important subject. It will be the wish of the House, I am sure, that he will often contribute to our debates, especially in connection with those matters in which he has shown that he has a special knowledge. The Financial Secretary to the Treasury, in laying before the House a statement as to the contents of the Import Duties Bill with very few syllables of explanation of the policy which it embodies, spoke with his usual engaging truculence of the Liberal party and with a truculence which was less engaging of my right hon. Friend the Home Secretary and the other Liberal Members of the Cabinet. I will say nothing upon that subject, for the Financial Secretary will be faithfully dealt with to-morrow by my right hon. Friend the Secretary of State for Scotland.

I seem to find in the speech of the Financial Secretary the echo of a statement made by the Lord President of the Council in the country a little time ago that, however regarded, these proposals with regard to tariffs were a great experiment. It would be more apt to define them as a great gamble. The policy which the Government are presenting to the country, which finds form in the Bill now before the House, is the policy which, knowing the antecedents of the majority of the Government, the country expected to receive from the Government irrespective of whether there was any examination or not. Not the least significant fact is that the policy presented by the Government, with its Protectionist Tory majority is almost indistinguishable from the tariff policy presented by the same statesman long before the present crisis intervened and irrespective of the emergency.

5.30 p.m.

The country expected, and justly expected, that the examination which the Prime Minister and his principal colleagues promised should be undertaken, should be an objective examination made, not by Members of the Cabinet, but by skilled advisers outside the Cabinet who would make recommendations to the Government. and that the evidence on which the recommendations were based and the reasons to justify them, would be placed before the country so that the country could form its own opinion. There has been no disclosure of the evidence upon which the conclusions of the Cabinet were based and no indication of the reasons which underlay their recommendations, nor, indeed, any very certain evidence that there has been any examination at all in the true sense of the term. If the country had had placed before it the evidence upon which the Government formulated this policy, it would at least have been possible to check the information upon which the conclusions were based. We are bound, therefore, to test the validity of those conclusions by reference to such evidence as has, in fact, been disclosed. I take the figures used by the Chancellor of the Exchequer in attempting to justify his proposals to the House on 4th February. In his figures as to the balance of payments he omitted, a trifle disingenuously, as I thought, all reference to bullion movements which, in the matter of the balance of payments, are just as relevant as movements of goods. Including bullion, the visible adverse balance in the past three years has been—for 1929, not £382,000,000, as the Chancellor stated, but £366,000,000; for 1930, £392.000,000; and for 1931 not £409,000,000, the figure given by the Chancellor, but £376,000,000. There is nothing very alarming there. The adverse visible balance on these figures, while £10,000,000 worse than in 1929, is £16,000,000 more favourable than in 1930.

But the discrepancy between the figures given to the House by the Chancellor of the Exchequer and those published in the "Board of Trade Journal" does not end there. The Chancellor, in dealing with the invisible exports, stated that for the year 1929 they amounted to £482,000,000. The right hon. Gentleman has doubtless not had his attention drawn to the corrected figures given in the "Board of Trade Journal" for February, 1931, when the £482,000,000 is shown, on closer calculation and on more evidence becoming available, to be, according to the calculations of the Board of Trade, £504,000,000, a difference—a trifling difference—of £22,000,000. It is only fair to say that. when the Chancellor of the Exchequer gave the figure of £296,000,000 as the amount of our invisible exports for the year 1931, he stated quite frankly that it was only an estimate, though he believed it to be an approximation to the truth.

It is significant that in a recent careful estimate made by the "Economist" the conclusion was reached that the amount of the invisible exports for 1931 would be something between £301,000,000 and £356,000,000, as compared with £296,000,000 given by the Chancellor. The report of the Macmillan Committee has made it clear, as, indeed, most people knew before, that the whole basis for arriving at the amount of invisible exports was unscientific and artificial, and that the figure reached must, in the best event, be a guess. The guess of the "Economist" is just as likely to he right as the guess of the Chancellor of the Exchequer, and if the "Economist's" higher figure of £356,000,000 for our invisible exports should turn out to be right, then our adverse balance would not be £113,000,000, as mentioned by the Chancellor, but £20,000,000, which puts a very different complexion indeed on the picture.

Let me make it clear that my object in questioning the figures given by the Chancellor of the Exchequer, and I do so upon the authority only of official publications, is not to impugn the Chancellor's figures so much as to demonstrate that the information available, permitting as it does so wide a divergency of opinion, is not a stable basis upon which a permanent change can be made in our fiscal policy, or any other policy. In any case, it is to be observed that all the figures for 1931 are based upon a period during three-quarters of which we were still on the Gold Standard. The only relevant figures are those which emerge for the period since we abandoned the Gold Standard. Though I asked the President of the Board of Trade for those figures by a question and a supplementary question, I was quite unable to obtain the information from him, and I am forced to the assumption that that vital and, indeed, the only relevant information in reference to the balance of payments is not available. I deduce from that the conclusions of the examination, such 'as it 'was, are very questionable.

The other day, speaking in this Chamber, I advanced reasons for thinking that the position of sterling was steady, and that on the whole sterling was likely to appreciate. I am sorry the President of the Board of Trade is not here, for I feel bound to say that I cannot help feeling that he rendered no public service to the country, but, on the contrary, wantonly risked creating a feeling of mistrust abroad as to Eng- land's financial position, when basing his whole case upon the argument that sterling still required defence. The steadiness of sterling in face of the payments for abnormal imports at the end of the year, the usual seasonal pressure, the withdrawals by the Bank of France and the acquisition of £30,000,000 of sterling by the Bank of England, tends to show that, partly no doubt on account of the emergency duties, but mainly on account of the depreciation of sterling, and the consequent reduction of our purchasing power, the time has almost come, or may be approaching, when there has been a sufficient contraction of our imports to meet the necessities of the case and to assist substantially and effectively in restoring our balance of payments.

Probably it would not be unfair to say that but for the fact that the Bank of England is at the present time steadily selling sterling for the purpose of enabling it to repay Treasury credits next July, sterling would not merely be steady but rising, and perhaps rising dangerously, and creating new handicaps for our export trade. The position, on the whole, is reassuring, especially as more and more of the world, as the President of the Board of Trade stated, is basing itself upon sterling. Barring hostile and sudden withdrawals of foreign balances in London, there is not only reason to think that there will not be a reaction, but there is reason to think that the position of sterling will gradually improve—the external value of the pound will gradually improve. If, of course, there should be wholesale withdrawals of foreign balances, then neither tariffs nor any other domestic policy will enable the value of the pound to be maintained. Vulnerability to panic runs is one of the penalties we pay for being the banker of the world; but in the present situation of world affairs sterling is holding a remarkably steady and steadying place. Not only is the adverse balance, at 2376,000,000, including bullion movements, less by £16,000,000 than in 1930, but new issues of capital on foreign account, apart from issues destined for the Dominions, are £26,000,000 less in 1931 than in 1930, and had it not been for the decline in our income from overseas investments the pressure on sterling at the present time would be very much less than in times of normality.

But even though there has been a decline in our invisible exports, how do the Government suggest that this tariff Bill is going to remedy that position? Is it not rather the case that by joining India and China in the suicidal game of boycotting foreign goods we are risking the loss of the £250,000,000 a year which we ordinarily receive from our foreign investments, by making it impossible for our debtors to liquidate their liabilities to us? The United States and France have already learned or are learning the bitter lesson that a policy of high Protection is fundamentally inconsistent with the position of a creditor nation. To be a creditor nation you must base yourself upon a policy of low tariffs or Free Trade.

When I come to the Bill it seems to me to consist of a mass of mutually contradictory objects. It seeks to impose a 10 per cent. duty on a vast range of essential foodstuffs, but it is not to increase the cost of living! It is to provide revenue for the relief of direct taxation, and at the same time it is, presumably by Protection, to give more employment in British industry. it is to provide for a low tariff, and at the same time to provide the machinery whereby a high tariff can be erected upon the structure of throw tariff. What about the consumer? It is idle to pretend, as hon. Members in favour of these measures are sometimes aunt to do, that duties on food will not be an onerous burden on the poorest of the consumers. With all respect to the President of the Board of Trade, man does not live by bread and fresh meat alone.

As one looks through the list of exemptions from duty and observes that. meat and bread are to be exempted, one is struck by the reflection that the reason for this exemption is to prevent the cost of-living figures from rising. The index, though never a very satisfactory measure of the cost of living, now becomes utterly fallacious. Tinned meat, tinned milk, vegetables and tinned fish, to take only a few examples, are all important items in the dietary of the working-man's household, and they are all taxed, and by a curious and rather suspicious coincidence not one of them figures in the prices making up the cost-of-living figures. I have pressed in this House before, and shall press with renewed strength and conviction in future, for the construction of a new cost-of-living index designed to bring it into line with actualities. The President of the Board of Trade referred to himself the other day as a director of slimming. Slimming involves a reduced diet. This Government, through the mouth of the President of the Board of Trade, announce that they have now adopted starvation as an instrument of national policy.

The inconsistencies of the Bill are nowhere more noticeable than in connection with raw materials. Vital raw materials like timber, zinc, copper, chemicals and lead are taxed; and an infinite number of "semis" are taxed, though it is upon them that the employment of hundreds of thousands of our workpeople depends; but wood pulp and newsprint are to be free. Can it be that the Chancellor fears the onslaughts of the Press; or is it not rather the fact that the Chancellor has awakened to the consciousness that if in addition to their timber the Scandinavians find their newsprint and wood pulp excluded by us they will be unable to find the means of obtaining sterling wherewith to pay for British exports? This argument applies not only to Scandinavia but to all the countries with which we do an international business. A nation cannot sell unless it will buy. There is no such thing as a one-way traffic in commerce.

It is clear that the list of exempted materials will have to be extended, but the effect of the exemptions is limited to our primary processes. What about the finishing processes? What about the metal trades, which are dependant for the maintenance of their export business on being able to acquire what they want in the cheapest market? They are being dealt a grievous blow by this Bill. The free hand of the Government will become the closed fist of the Protectionist. There is great danger that this Bill will stimulate deflation. Unless credit is constricted, the result of the tariff will be that prices will go up, and it is that which the Government have promised to prevent. The only way that they can prevent it is by ensuring that our purchasing power is restricted, which further oppresses our industries and

commerce. The other side of the domestic deflationary policy of the Government is that the ad valorem duties mean that the greater the rise of world prices the heavier the incidence of the duties and the greater the resulting contraction of our imports, and consequently, in the long run, of British exports and of world trade in general. These duties will bar the way to the restoration of the world price-level to anything like a tolerable figure.

What are the results to be expected of this policy? The outstanding feature of the present world situation is not that Great Britain, through inward weakness, is going downhill while other countries are prospering. This country is a relatively well-situated oasis in a growing desert. We have got rid of our gold parity which artificially hampered our exports. The source of our difficulties is not at home; it is abroad. Our debtors cannot pay us, and our customers are suffering from trade depression and unemployment and cannot pay for our goods. Those troubles are precisely those which will be aggravated by these proposals, to say nothing of the damage to our shipping and the important re-export and financial business of the City of London, which will be grievously damaged by this dangerous conversion to Contractionism. The Government spokesmen have referred more than once to a use of a tariff weapon for bargaining with other nations. I do not wish to trespass upon the indulgence of the House by pausing to consider the implications of this declaration of economic war, but let me say that the whole of history shows that in the case of every tariff war, the record at the end is that both parties have found their trade worse than it was at the beginning.

I must pause for a moment to allude to the references made by the Chancellor of the Exchequer to the influence of this policy upon unemployment. His one object, he says, is moderate Protection. scientifically adjusted to the needs of industry and agriculture, so as to transfer to our own factories and to our own fields work which is now done elsewhere. The hon. and gallant Member for Bournemouth (Sir H. Croft), like the Chancellor of the Exchequer, makes it clear that he considers imports as deleterious in themselves, and as necessarily displacing British labour and British production. That is a denial of the whole principle of the division of labour. The Chancellor of the Exchequer and the Government seem to overlook the fact that imports and the volume of employment run together. Let the hon. and gallant Gentleman take pencil and paper, and let him plot out the curves of employment and of imports, and be will find that the greater the imports the greater the rise in employment, and the fewer the imports, down goes the curve of employment.

Brigadier-General Sir HENRY CROFT

The hon. and gallant Gentleman has invited me to examine these affairs. May I ask him if it is not a fact that until world prices fell, two years ago, every protected country in the world was increasing its exports more rapidly than we were?


I do not understand the relevance of the interruption of the hon. and gallant Gentleman. I asked him to take pencil and paper and plot the figures. There was no need to ask me any question. The curves will answer for themselves, and show that this is an unshakeable truth. The hon. and gallant Gentleman will have observed that the Advisory Committee under the Bill is to have a standing instruction to have regard to the advisability of restricting imports, although the Chancellor of the Exchequer admitted in his speech that you cannot increase exports without at the same time increasing imports.

We Free Traders believe that the Government are attacking this problem from the wrong end, and that the proper object of statesmanship at this time is not to attempt the restriction of imports but the expansion of exports. We believe that this instruction to the Advisory Committee as to the restriction of imports marks nothing less than the hauling down once and for all of the flag of Britain's industrial supremacy. We believe, in a word, that the Government had a magnificent opportunity for offering to the country a policy inspired by courage, and that they have offered to the country in this Bill a policy inspired by funk.

Mr. LAMBERT: May I, as a supporter of the National Government and as an

old Member of this House, offer a word of advice, which is that the sharp exchanges of controversy which took place just now when the Financial Secretary was introducing this Bill should cease? The experiment will be sufficiently difficult, even if worked out with good will; I am certain that it will become impossible if you have Members of the Front Bench answering each other. May I say also, that. I was one of the opponents of the late Mr. Joseph Chamberlain's policy, and that, were we in the same position as we were in 1903, I should be an opponent still. I noticed, when I looked up the figures, that when Mr. Joseph Chamberlain first introduced his policy to the country, taxation in this country was £ 150,000,000, a year. This year it is £ 900,000,000. Where the tax gatherer collected £ 1 in taxes, he now collects £ 6. Income Tax then was 11d. in the pound; to-day it is 5s. and runs to 13s., with the Super-tax on very large incomes. It is evident that I would have preferred the Income Tax of 11d. in the pound.

My two Liberal hon. Friends who disagree with me, have powerfully delivered arguments against this Bill. I ask my fellow-Liberals to consider these points: We have had unrestricted imports since the War. We abandoned the Gold Standard last August. We have an adverse balance—although my hon. Friend rather questioned it—which, according to the Chancellor of the Exchequer, is £113,000,000, and we have 2,728,000 unemployed. Does not that bring my hon. Friends to a realisation that we must make some change? We cannot go on. Had not the Government taken into account these matters and taken action last September, no one could say what the value of the pound would be at this moment.

I want to deal with this matter not quite so generally, but from the point of view of the great agricultural industry. The Chancellor of the Exchequer, in introducing his Resolutions, said: We propose, by a system of moderate Protection, scientifically adjusted to the needs of industry and agriculture, to transfer to our own factories and our own fields work which is now done elsewhere. I propose to deal with the field part of the programme. In answer to a question asked by an hon. Gentleman opposite, figures were given us as to those occupied on the land in various European countries. They showed that in Italy, 55 per cent.; France, 41 per cent.; Germany, 30 per cent.; Belgium, 20 per cent., and Great Britain only 7 per cent. I say solemnly that you cannot carry the country to prosperity with such a very small proportion of its people engaged in agricultural pursuits. Seven per cent. only, and that has been gradually slipping away! Prices have been gradually declining. It is well known that something like 2,000,000 arable acres have gone out of cultivation in the last 10 years, and that the number of agricultural workers has declined from 869,000 in 1921 to 716,000 in 1931. That is a decrease in agricultural workers of 153,000.

6.0 p.m.

I invite all urban Members to come down into a country constituency and see the very pitiable state to which the farmers have been reduced. I represent men who work hard, 10, 12 or 14 hours a day for six days a week, and often for a few hours on Sunday. They arc efficient, industrious and frugal men, and yet to-day they are ploughing the fields of bankruptcy and their fortunes are broken. I observed a week ago that from Wales to Scotland there went a trainload of spectators to a football match. Fourteen train loads, an hon. Member tells me. They must have started early on Saturday morning and they must have got back pretty late on Sunday. My constituents were engaged on the land. They have to be on their farms on Saturday morning, Saturday night and Sunday morning, otherwise the whole concern would stop. We have a National Government; I wish we could invent a national cow that would not require milking on Saturday nights and Sunday morinngs. It would be a very great advantage. I observe that the Government are suggesting that farmers are always grumbling. Well, they have cause to grumble. Here is some evidence from the President of the Incorporated Society of Auctioneers. I take it from the "Times" of 10th February. He quotes some reports from Lincolnshire, among which are the following: Case 1. —Estate, 4,500 acres, £2 5s. only received in respect of Michaelmas, 1931, rents up to end of January, 1932. The agent has three farms to let for 6th April next, extending to 687 acres, and has had no applications for them. If farmers were so prosperous, there would be applications for those farms. Case 2. —'Owing to the tremendous fall in the price of sheep, and the almost hopeless state of the barley trade, the outlook is serious unless we get a programme from the Government at once.' I will say a word or two more about that in a moment. Case 3. —Rents reduced from 30 per cent. to 65 per cent. Case 4.–1,700 acres still unlet and no hope of finding tenants. That is the position in which the agricultural industry is. Can it be wondered at, considering the fall in prices? There is one thing that the Ministry does do; it supplies us with admirable statistics. These are the Ministry's figures for 1925 and for December, 1931, which I give for the purpose of showing what a drop there has been in agricultural prices. 1 am sorry that the weights are so mixed up, but apparently they are the weights that are returned. The price of fat cattle has fallen from 32s. 7d. per live cwt. to 39s. 4d. That is a reduction of 25 per cent. In the case of fat sheep, the price has fallen from ls. 8 ½d. — a reduction of from 35 to 40 per cent. In the case of bacon pigs, the price has fallen from 16s. 4d. per score to 8s. 8d. — a reduction of 45 per cent. The prices of butter and cheese have fallen also. The farmer has to bear these falls in price, but nearly all his expenses are the same as before.

My right hon. Friend has announced his agricultural policy, but I am afraid it will be a little disappointing. We hear talk about a wheat quota, but I would like him to give us the price that he has in his mind. From the farmer's point of view it does not matter whether there is taxation; what the farmers really want is to know the price which the Government is going to guarantee. We heard about my right hon. Friend's long-range policy, and I seem to have heard echoes of that policy in the last Parliament. Economic development has been mentioned, but what does economic development mean? I am somewhat sceptical of phrases like "economic development." They are like the blessed word "Mesopotamia." Again, in the milk industry we are to have a reorganisation commission—another commission; and potato growers are to have a reorganisation commission if they desire it—yet another commission. Then we were told that the Government is engaged in preparing a scheme for the organisation of the bacon industry forthwith, and that if a suitable and feasible scheme was evolved the Government would promote some form of quantitative regulation of imports. Really, however, what the farmer wants is something done now, not in a month's time or some months' time. He is on his beam ends.

The unkindest cut of all, I think, came from my right hon. Friend when he said that the future of any industry must depend largely on its own efforts. I say to the Ministry of Agriculture that, unless the farmers had been efficient, unless they had been frugal and industrious, they could never have carried on so long as they have. The times that they have been going through have been cruel. I would not advise my right hon. Friend to consult his officials. I have no doubt that they all know how to make farming pay, but not one of them has done it yet. The Ministry has engaged in a good many farming experiments, but it has always found a balance on the wrong side. I am reminded of the line: Let such teach others who themselves excel. I do not think that the Ministry of Agriculture can give the farmers of the country advice about making farming pay

There is another point. How does this Bill deal with agricultural products? The Chancellor of the Exchequer was in office in 1926, when he dealt with the milk and dairy question, and milk and dairy products are dealt with in this Bill. The Chancellor of the Exchequer, as Minister of Health in 1926, issued a Milk and Dairies Order. Cleanliness was to be observed in all parts of this country; the hands of the milkers were to be washed; the flanks of the cows were to be washed; the utensils were to be washed; the byres were to be lime-washed twice a year; there was to be no dust, and there was to be artificial light if it was dark. That is all right for the British farmer, but I observe that there were butter imports from Denmark last year of the value of £15,000,000; Finland sent here £1,500,000 worth, and Soviet Russia sent £2,000,000 worth of butter. I would like to ask my right hon. Friend, or the Chancellor of the Exchequer, is he quite certain that the hands of the milkers are washed, or the flanks of the cows are washed, or the byres are white washed twice a year, in Soviet Russia? If not, why not, and why are these restrictions placed upon the home producer? The foreign importer is being pampered while all these restrictions are placed upon us. I said just now that a large proportion of the farmer's expenses are regulated by law. Take the case of agricultural wages. I am not one of those who believe that agricultural labourers are paid too much; they are paid too little—there is not the smallest doubt about that. No doubt the right hon. Gentleman the Leader of the Opposition would say it was a scandal if scavengers did not get £4 a week—


I am sorry: I cannot say that they do. [Interruption.?


I am now talking of the relative value—[Interruption,] If my right hon. Friend would come down into Devonshire and do a little agricultural work with me, we should get on very much better. The agricultural workers' wages are fixed by law. They are too little, but on what principle are they fixed? Wages in England are fixed, not according to the price of produce, but it is laid down that the men shall have Such wages as in the opinion of the Committee are adequate to promote efficiency and to enable a man in an ordinary case to maintain himself and his family in accordance with such standard of comfort as may be reasonable in relation to the nature of the occupation. It has not to be in accordance with prices, but must be a reasonable wage. I quite agree with that, but how can the farmer pay this reasonable wage when the prices of his products are always dropping? I ask the Government that question. I do not know whether I shall get an answer or not, but I do say that, unless the farmers had been efficient, they never could have carried on.

Will the Government's policy help the farmer? The Chancellor of the Exchequer talked about our own fields and our own factories, but beef, mutton, pork and bacon are excluded from the operation of this Bill. I do not know why.

If a moderate Protection scientifically adjusted is good for the iron and steel industry, why is it not good for the meat industry? I cannot understand the logic of the distinction. If this moderate Protection scientifically adjusted is good for the textile industries, why is it not good for the agricultural industry? Many of the things that the farmer uses are to he taxed. The grain that he uses for feeding his cattle is to be taxed. Something like 70 per cent. of the farmer's sales are meat, dairy produce, poultry and eggs, and Colonial produce is to come in free. I say to the Government quite frankly that it does not matter whether the farmer has competition from Argentina or Australia; he has to meet that competition. Whether butter comes from Denmark or New Zealand, he has to meet it.

The Government are actually putting taxes upon many of the farmer's raw materials. Take the case of feeding stuffs. Of feeding barley, £4,000,000 worth came into this country last year; of oats, £1,900,000; of oil-cakes, £2,300,000; of maize nearly £10,000,000 worth. We imported something like 53,000,000 cwts. of maize, of which 48,000,000 came from Argentina. I do not quite understand why Argentina, which is a very friendly nation, should not be given the same facilities as other countries. Why is maize to be taxed? Maize enters into the feeding of poultry, pigs, and all kinds of animals, and I say to the Government that before this Bill is through the House of Commons they will meet with very strenuous opposition from the agricultural industry unless they take maize and other feeding stuffs out of the Bill.

We have been told that we are to foster Colonial development. There is no one who would go further than I would in that respect, but I must point out what was said by that very forcible statesman, Mr. Bennett. When he came over here two years ago, he said, "Canada first." I say in this matter "Britain first," and do not let us forget that Britain is the centre of the British Empire and, if the heart fails, the extremities will wither. I ask the Government now to reconsider their policy. Their long-range policy, which the right hon. Gentleman announced last Thurs- day, will be a great disappointment to the farmers. They have a unique opportunity at the moment. I believe everyone in the country, even in the urban districts, wants to see the resuscitation of agriculture. Therefore, I ask them to use this opportunity. Never mind about Free Trade and Protection. Never mind what we thought about before the War. The agricultural world has been drained of its manhood and treasure, and I beseech the Government to act up to what the country expects of them, and to regenerate and repopulate rural England.


I rise to support the Amendment. I am opposed to the Bill root-and-branch and, as a rule, I do not leave any doubt as to where my feeling is upon any question. But I should like the Debate to be continued for the whole of this week, the speeches not to be more than 20 minutes and every Member who desires to speak to have an opportunity, as I see there are many Members who would like to continue I the discussion upon a Bill of such importance which is almost creating a Revolution in what has been our fiscal system, for generations. In Clause 1 the Government seek to impose a general ad valorem duty of 10 per cent. on nearly everything that we eat and wear. When we get the wheat quota Bill, I suppose almost everything that we eat will be taxed as a result of the Government policy, and not only what we eat and wear, but also the raw materials of many industries.

These duties, in my opinion, are bound to increase the cost of living, and this is being done in face of the fact that unemployment is mounting by hundreds of thousands a month, that Public Assistance Committees have removed from benefit another 200,000 during the last two or three months and that there are to-day 151,000 more coal miners unemployed than there were two years ago. That was stated by the Ministry of Labour last Thursday in answer to a question I put. Toryism does not mind doing these things if, by making the people pay millions in indirect taxation, it will be able to reduce Super-tax and Income Tax and carry out its policy of looking after its friends. In Clauses 2 and 3 it sets up a tariff board with power to increase duties up to 100 per cent. I should like to ask one of the Ministers who is to take part to deal with Clause 2 (5), which relates to the expenses of the Committee and which, I believe is to be taken after eleven o'clock to-night or to-morrow. It is so important that it ought to be dealt with separately and at such a time that it can be discussed by the House.

When these proposals were submitted a week or two ago, they were to readjust the adverse balance of our trade. The bottom has been knocked out of that suggestion, as we have heard in the Debate. We now know that they were the outcome. of the way the Tories used the Liberal party and a few from our party at the General Election to enable them to impose upon the country a policy of tariffs which they have long desired but which, in my opinion, would never have been accepted by our people had it been the issue at the election and had it not been for the betrayal by the Liberal party of the one principle it had left, and the abandonment of lifelong beliefs by a few from our party. I am a Free Trader. I fear the disastrous effect that Protection will have on the life of our people. I believe that Free Trade is the best economic arrangement for Great Britain. I know that, even under Free Trade, capitalism has broken down, and this Bill is meant to patch it up, but there can be no satisfactory means of dealing with economic evils short of public ownership and control of land and industry and the means of life. I am convinced that that change will come sooner rather than later.

On the back of this amazing Bill I see the name of the Prime Minister—I hope that he will soon be restored to health, and will not long continue suffering pain as the result of what he is undergoing—and the name of the Secretary of State for the Dominions. I am surprised. They have gone completely over the precipice. It was only in June last year that the Prime Minister used the words that I am about to quote in a speech at the Labour Women's Conference at Blackpool. He said: Times were not good. They were anything but good. What was happening was just what they had been telling the people for years and years would happen sooner or later, that this system of self-regarding individual ism would break down. It had broken clown and the other side were telling them about tariffs. It was the house- wife who could give them the most effective reply. How could you improve social conditions by making the working-class chancellor of the exchequer harder up than she was before? If it were a question of helping everybody all round, he was not sure that they would not be willing to add a little more to their personal expenditure if they knew their neighbours were enjoying a higher standard of living. But that was not what tariffs did. Tariffs simply increased the cost of the means of livelihood, and the person who bore that increased burden first of all was the workman's wife. Wherever they had been tried, wages had gone down, the hours of labour had gone up, social services had deteriorated and the struggle for life had been intensified. They were not going to adopt that quack cure for their present ills. And yet the Prime Minister's name is on the back of this Bill! How can anyone respect his opinions after such a betrayal? Lord Snowden says he is still a Free Trader, but he must now realise that it was he, along with the Liberal party, which assassinated Free Trade in October. I could quote him for hours in opposition to the Bill. The speech he made at Manchester 18 months ago, in his better days, is an unanswerable case against Protection. He said: Protective duties will increase the Cost of production. This is not a matter for argument. It is not a matter of controversy. It is a matter of ordinary common sense. Again: There is behind this movement for protective tariffs a sinister attack on wages. Again: One of the great causes of world depression is Protection—because it reduces the purchasing power of the people. In April last, speaking in this House, he said: A revenue tariff is a means of relieving the well-to-do at the expense of the poor, and it is au indirect method of reducing wages. I agree absolutely with that declaration. He went on: I shall never be a party to any such imposition. How can he escape after what has happened? He is now in the Governmentan and is responsible for the Bill which it has brought before the House. In my opinion—and I am sorry to say it —there is no living man more responsible for the fact that we are discussing Protection to-day than Lord Snowden. He may have been deceived, but that is the fact. In another place last week Lord Snowden reminded us that it was the support given by himself and other so-called Free Traders that gave millions of Free Trade votes at the election to Tory candidates, and the party opposite know that that is absolutely true. Many of them have admitted it. Take the case of any division represented by a Labour man. Take my own—and there are scores of divisions like my own. In my division, apart from scares and fears of "Bolshevism run mad," as every Tory candidate had postered throughout the election, it would be a generous estimate to say that the Tories could ever poll 10,000 votes, and the Liberals a lesser number, in a normal election. They can never poll a third of the votes, and more than three-quarters of the voters in a division like mine are opposed to Protection, and they will show that whenever again an opportunity is given. This country is not Protectionist, and the people do not want this Bill.

6.30 p.m.

Clause 4 deals with the preference that is to be given to the Dominions. The Government are making a bold bid for Dominion Free Trade, but they are doubting its possibility. A hundred per cent. preference is to be given, but only till November next. You fear what will happen at the Ottawa Conference. We all know what a reception was given by the Tories to the speech of the Canadian Prime Minister at the last Imperial Conference. Will Canada now go for Empire Free Trade 1 Is Australia likely to reciprocate what is contained in Clause 4? I remember once saying to Lord Snowden, when an arrangement was being made for a cheap loan to Australia, that, no doubt, they would purchase the necessary materials from this country. He said, with that sarcasm that the House well knows, "You will not get them to guarantee to buy a spade," and he was right. If you look at the Trade and Navigation Returns for January, you will notice what a change there has been in the figures during the last three years. Imports from Canada, Australia, South Africa and New Zealand have gone down by more than £40,000,000 and the exports to our Dominions have gone down by more than £80,000,000. It is not only to foreign countries that our exports have fallen, but to our Dominions to a very large extent. Like most Members of this House and of the Government, I also doubt the possibility of Dominion Free Trade, though I wish it could be achieved. I wish we could have, not only Empire Free Trade, but world Free Trade, as I feel sure it would not only lead to real international co-operation, but would en sure the certainty of peace and disarmament in the world better than anything else. The more tariff barriers there are erected, the more certain it is that we are all paving the way for another war.

I take my stand on this question, as I do on most other questions, as a loyal member of the Labour party on the policy declared by the Labour party at the last election. The Labour party, in its Manifesto at the last election said: The Labour party has no confidence in any attempt to holster up a bankrupt Capitalism by a system of tariffs. Tariffs would artificially increase the cost of living. They would enrich private interests at the expense of the Nation. They would prejudice the prospect of international co-operation. In the circumstances produced by our departure from the Gold Standard, they have no relevance to economic need. In the face of the millions unemployed in high tariff America and Germany, they are clearly no cure for unemployment. They would permanently injure our shipping and export trades and conceal our need for greater efficiency in industrial organisation. The Labour party urges a better way. It urges the definite planning of industry and trade so as to produce the highest standard of life for the Nation. As a first step, it proposes to reorganise the most important basic industries—Power, Transport, Iron and Steel—as public services owned and controlled in the national interest, with such a regulation of prices as will enable British industry to compete effectively in the markets of the world. Wherever necessary, Import Boards will be created for foodstuffs, raw materials, and manufactured goods with all adequate powers of regulation and purchase. For the proper and organised conduct of export, machinery will be set up in connection with the principal industries. The Labour party demands efficiency. Any special assistance to industry must be conditional upon the acceptance of the necessary measure of public ownership or control. That is the policy I would like to see adopted, and because this Bill is utterly opposed to it, and because I know that its effect will be to lower the standard of life of the people—already much too low and will increase their hardships, and because it is to-day ruining the mining industry, through the reprisals which we are now facing from foreign countries, I shall vote for the rejection of the Bill.


In the course of the Debates both upon the Financial Resolutions and the Vote of Censure upon the agreement to differ, and upon the Motion for the Second Reading of this Bill, the House has heard many orations upon either side. Some of those, perhaps, particularly remain in memory, such as that delivered by an Irish Member on the benches above the Gangway. All of us must have sympathised with the terrible situation of an Irish Member who finds that in order to disagree with one part of the Government he has to find himself in agreement with another. Also we have had since bitter attacks upon the Government, and in particular upon Lord Snowden, and in listening to one which I have in mind from one of the Clydesido Members, I cannot help thinking of the old and homely proverb, "When the cat is away the mice will play." I do not know that they exercised the same freedom in criticising the Noble Lord when he was in this House. We also heard a more lively but decidedly damaging attack upon the Front Bench from the Noble Lord the Member for Horsham (Earl Winterton), who roused the House to cheers and laughter by the perhaps rather simple method of asserting that those in the Cabinet and elsewhere who did not agree with him were 80 years of age. He event went so far as to accuse them of, what I am sure since, in his calmer moments, he has regretted—writing to the "Times."


I am sorry to interrupt a maiden speech, but the hon. Gentleman must not accuse me of saying that right hon. and hon. Gentlemen wrote to the "Times."


The Noble Lord, at any rate, will, I think, admit that he accused Members who did not agree with him of being sexagenarians. As to that, I can only say that he took up a considerable amount of time in explaining that he had been a supporter of his economic views for over a quarter of a century. I do not know at what period of life he first saw the light, and became fixed upon those economic principles, but I am prepared to believe from what I have heard of his expositions of them that it was a very early one. But at whatever age, if he has been putting them before the country for over a quarter of a century, they are not only rather irrelevant to our present difficulties with regard to the balance of trade, but he must be getting dangerously near the flash-point himself, and may pop off at any moment into the sexagenarian class. It is upon this whole class of speech that I should like to make a few observations. It is a type of speech which is not particularly useful. If there is one thing quite certain about the last election it is, on the one hand, that the whole country, not only the Cabinet, agreed to differ upon this fiscal issue, but however much they agreed to differ, they refused to be divided about it. In fact, this issue is dead. It is finished for the next few years as a point of difference. Whatever the electorate may or may not have had as a secondary consideration in returning us to this House, its primary consideration was, I think, that it said to us: Have any views you like upon the fiscal issue, for or against, but the one thing we demand is 'Get rid of that lot, and do not come near us again for five years.' "

This issue has come to a conclusion. I am not prepared to admit that it has been argued to a conclusion. I have been amazed to have to listen in this House to arguments gravely advanced on behalf of Measures for which I have voted and perhaps will vote again of which I thought nobody except historians of the fallacies of Eighteenth Century economists had ever heard. However that may be, we are, if the election 'results and if the votes in this House are any guide, committed to a period of what I may perhaps call Swanee River economics. We are going to try to rebuild our industry to angels' voices calling, "Poor old Joe." We cannot help it. However fallacious the arguments with which many Members on these benches support their votes, it can be no reason for our refusing to go into the Lobby with them.

If I may be allowed to argue the case on its merits, I, for one, welcome the opportunity of putting in a gentle caveat lest one should be taken to assent to a. great many of the views expressed, sometimes with very high authority, as to the reasons for supporting this departure, and, in particular, arguments based upon the balance of trade. I cannot help thinking that an enormous amount of disingenuousness has been used in endeavouring to bring this proposal within the rubric of the Prime Minister's Manifesto, and to support it upon arguments based upon the balance of trade. It is true that when faced with the very pertinent inquiry a the Home Secretary with regard to the temporariness of those proposals; the Financial Secretary to the Treasury Made a gallant attempt to prove that it did pot matter, that they were not temporary because our real emergency was", the Twentieth Century." We had gone out of the realm of scarcity and into the realm of superabundance, and our emergency was the Twentieth Century, The Financial Secretary to the Treasury, I presume, should be aware of the fact that not only during the 14 years before the War, but for several years after the War, our balance of trade, on whatever figures you may take, was not only not adverse, but, by scores and hundreds of millions, was in our favour. Hon. Members must have seen on the figures for January that, even supposing the figures of the Chancellor of the Exchequer were correct, we had an adverse balance round about £100,000,000 last year, the figures had moved in our favour to the tune of about £9,000,000, from which by a simple piece of arithmetic, if you multiply nine by 12, you get something like the £100,000,000 required, of which only one-sixth was due to the Abnormal Imports Bill. In listening to the attempts of those who possess views on the balance of trade addressing the serried ranks in this House, I have been occasionally reminded of four rather perhaps over-quoted lines of Dryden, especially after one of the frequent interventions in debate by Members such as the hon. and gallant Member for Bournemouth (Sir H. Croft): But far more numerous was the herd of such Who thought too little and who spoke too much; And who, in sheer instinct, they knew not why, Adored their fathers' God— and property. I cannot help believing that though a decent veneer may be put upon these proposals by an ingenious Member such as the Financial Secretary to the Treasury, the bulk of the Members on these benches neither understand those arguments nor are interested in them, and they are voting for them for reasons which, rightly or wrongly, are totally disconnected from anything which has to do with the balance of trade. While we are on the balance of trade argument, I do not honestly think that anyone looking at it dispassionately can fail to give very considerable weight to the fact that in the last few months, at the time of our greatest weakness in sterling, the Bank of England was able to repay some £30,000,000 and to carry all the heavy demands of sterling about that time. Our French balances had been steadily withdrawn. It is true that a large part was due to the imports of Indian gold, but it is fair to point out that those imports of gold are a function of the level of sterling, and as long as there is a very heavy premium on imports of gold we may expect them to continue for a considerable time.

As far as these facts go they all tend to show that it is impossible to justify a revolutionary change in our fiscal system by argument based upon the balance of trade. I will go further. There is evidence to show that both in France and the United States the balance of their payments is, if it has not already done so, about to turn against them. Some of the reasons are obvious, the falling off in tourist traffic, and so on. The French Government has a deficit on its Budget, with all the obvious results of such a state of things. The United States is about to embark, if it has not already embarked, upon a process which they do not like to call "inflation" and for which they have coined the word "reflation" They are about to endeavour, quite rightly, to decrease the value of gold in terms of commodities. All these things tend to show that the suggestion that sterling is still in grave peril, however useful it may be as an argument at the Treasury Box in order to support the Government's proposals and bring them within the rubric that Was propounded some months ago, are disengenuous.

Let me advance one further argument which may not carry as much weight with some hon. Members as it does with me, but it is a most crucial argument. I refer to the state of the forward dollar exchange. The argument. may be somewhat technical, but I put it forward be- cause I think it is the first time that it has been mentioned. The present relative short interest rates in London and New York should have led to a heavy premium on forward dollars over spot, but anyone who has any knowledge of the financial situation knows perfectly well that there has for months been not a heavy premium or a premium at all but a discount. That can only mean one thing, namely, that the very astute gentlemen who know more about the future of sterling than any Member of this House are at the present moment heavy bears of dollars. However foolish the ordinary speculator may be, the professional dealer in the forward exchange is not a parking place for flies, and he is apparently convinced that sterling is an appreciating and not a depreciating security. Therefore, the vote which I propose to give for these proposals is not based on the question of the balance of trade, because in my opinion the balance of trade argument is not worth a fig. I would say in all friendliness to the Government that they will find themselves in a very awkward position in a few months or a year hence if they base themselves on the balance of trade. If we are able a year to two hence to make heavy exports of capital again, where will their Act be then? [An Hori. MEMBER "On the Statute Book!"]Yes, but they cannot be certain that it will remain there, if that is the only ground on which they base it.

On the other hand, there is equally little if not less to be said for all the arguments about the increased price of food and taxation of people's food. Let us put it at its worst. Let us say that about one-third of the taxed imports that will come in will be food. Suppose we say that £10,000,000 have to be paid. Let us say that the unemployed man gets I5s. unemployment pay and that on the average when he is at work he gets 45s. There is a difference of about £75 a year balance to him. If as a result of this policy of Protection 100,000 men or thereabouts are taken off the unemployment register and put into work, surely at the very worst the working classes will be better off 7 They will be getting more benefit even if 100,000 people come off the unemployment register. Can any hon. Member put his hand upon his heart and swear that as a result of these protective Measures there will not be an increase in employment, say, in the cotton industry, by the protection against foreign dumping, or in the iron and steel industry and others?

I suggest that the attempt to awaken the old bogy about taxes on the people's food is perhaps not even a starter, at any rate it is a poor horse to back. In supporting our votes for the Bill we are entitled to go further. The 10 per cent. ad valorem duty is 10 per cent. on wholesale prices. If we reckon it as one-half or one-third on retail prices, we are being generous. When we consider that it affects only a small proportion of the cost of living, can anyone pretend that the proposed 10 per cent. is likely to put more than one per cent. on to the cost of living? We all know that the cost of living is falling rapidly, and if it goes up even by one per cent. or more it is far more likely to go up for other reasons than because of any tax that is placed upon food under the provisions of this Bill, It is therefore not particularly useful to endeavour to base serious criticism of the Bill upon the supposed effect of a tax upon food.

May I press one further point upon our Liberal friends? Anyone with any sense who went into the last General Election must have realised that either the party who now sit on the Opposition benches would get away with it or that any conceivable National Government would have a very considerable Conservative majority. That being so, if we are to get down to realities, we all knew and the country knew when they took the decision to keep this issue in the background, that some sort of tariff system was almost certain, whether they liked it or not. Can anyone honestly say that it is a particularly bad tariff that is proposed. It may be that our attempt to use it for bargaining will be a failure, but this is not the time to raise that question. We cannot say until after the Ottawa Conference whether the Dominions are prepared to give us a little better proposition than Mr. Bennett offered to us some time ago. It may be, it is arguable in the abstract, that the attempt to get a quid pro quo from foreign countries has not been very satisfactory in the past, but if we admit that some sort of tariff is inevitable let us at least wait for a few months and see whether we can get rather better results through our newly-armed President of the Board of Trade. It is true that at the present time Australia is a shining example of how to mismanage currency and tariffs. Canada has been about as difficult in these currency affairs as most foreign countries. South Africa is even worse in sticking to the gold standard. India has indulged in boycotts. But surely it is too early to say, purely as a result of theoretical, abstract argument, that it is impossible as a result of the new armoury with which we are equipping ourselves that we cannot arrive at some better results in our negotiations with them.

With regard to the Committee, the Home Secretary appears not to like very much the way in which it is to be formed. He desires that it should be armed with powers which would enable it to insist upon a greater measure of reconstruction. There again the Terms of Reference as in the Bill are extraordinarily widely drawn. Let us, therefore, see who the gentlemen are, and let us see how they proceed with their business. From what I gather in the Press, it seems to me that the lines that are being proposed by our Liberal friends are the least likely to get us forward. They wish to have a sort of judicial body sitting in public and listening to arguments. That is a hopeless way of making the Commission more likely to insist upon the necessary measures of reconstruction. I should like to make one suggestion through the Parliamentary Secretary of the Board of Trade, namely, that the Government should consider the advisability, when we come to the Committee stage, of giving the Advisory Committee power not only to lay down the length of time for which the duties may be imposed but also to lay down the conditions.

A good many of us who are attempting to preserve an open mind are much exercised in regard to one matter. What we are afraid of is not profiteering—if every industry could profiteer for a few years it would be a jolly good thing, but the difficulty is that there are no profits —but what we are frightened about is that obstinate trade union leaders and obstinate individualist employers may succeed in keeping their industries in a state in which no profits are being earned, by

refusal to take the necessary measures for reconstruction. I agree that there is nothing to prevent the Commission from taking these matters into consideration, but there is nothing to say that they shall, and I suggest that it might be a very good thing specifically to say that the Advisory Committee shall have power to make this a condition of the grant of a tariff to any industry. I think that would go a long way to meet the objections of the Home Secretary.

I would summarise my points in this way. I do not think that any hon. Member who is fully seized of all the economic arguments on the one side or the other can honestly say, after adding up the pros and cons, whether in this matter at this particular moment the advantages are on the one side or on the other; but I believe that this matter has gone beyond the realm of rational determination. partly because so many of the relevant considerations are themselves irrational. There is the movement of capital to and from this country and the effect of these proposals upon employers who are waiting to know whether to sink money or not. It is not a matter merely of adding up pounds, shillings and pence, but it is a feeling on the part of employers that they want tariffs and that tariffs would do good to industry.

7.0 p.m.

The point that I wish primarily to put to the House is that while it is impossible to decide firmly and finally that there is a strong balance one way or the other, that is an overwhel-lming reason why every hon. Member who supports the National Government should vote for this Bill. What hon. Members like the Home Secretary have to show as a reason for voting against the Measure is not that there may be objections, nor even that there may be a balance of objections, but that the objections are so overwhelming and so clearly established, that they justify them in saying to the House and the country that they would prefer, if necessary, the return of hon. Members on those benches to those opposite. They cannot have it both ways. If they represent a tiny minority in the country, as they do in this House, what right have they to hold up our proceedings? If, on the other hand, they represent a far larger proportion of votes in the country than they do in this House, they cannot shelter behind the fact that they can vote against the Government's proposals with impunity without causing the fall of the Government. If they are speaking for millions of Liberal voters in the country and if, as they assert, Liberal and Labour votes in the country are more than the Conservative votes, they are, in effect, saying to the country that in their belief this issue is still so important that they would feel justified in turning out the National Government and putting back upon those benches the Government which we had to take such desperate remedies to get rid of some months ago. If that is true, I would suggest one further thing to the supporters of the National Government, that the sooner these Debates are over the better, though not because we have any reason to fear them.

We say, quite frankly, that it is an economic experiment. We are not rewriting the Athanasian Creed. The time for these religious frenzies for and against tariffs is gone. But, if this is so, the hon. Members on the Front Bench must set us a better example than they do. They really must try to respect one another's Saint's Days. The National Government cannot keep in office much longer if these communal disorders go on. It may be irritating to hear the different reasons given by hon. Members for supporting the National Government, but they are supporting it and are not against it. When these hosts of Belial go upstairs to scream before their images and cut themselves with knives before their idol Protection, Elijah must restrain himself from going out to cut down the groves of Ashtaroth. We have to keep this Government in office. When we finish up in the late hours to-morrow circulating in the ambulatories let the Conservative Members by all means sing their little songs of triumph and Liberal Members chant their penitential psalms, but not too loudly because they might endanger the National Government and also wake up feeling slightly ridiculous.


Let me congratulate the hon. Member on the first occasion on which he has addressed this House. It is the first time, too, on which I have spoken in this Parliament, although I have already spoken in other Parliaments. We have had valuable information from the hon. Member, but he will not think me unkind if I suggest that there are also some others with information in this House. The Bill we are now considering is a very notable one. Historians will decide that the 4th February was a turning point in our national history. We decided then to go back on the policy which has dominated this country in three generations. I was not one of those who ever believed there was any economic argument in support of Free Trade, national or international, and in that I took a, different point of view from most people. Of the three generations in which Free Trade has dominated this country, in two of those generations no thought processes have taken place in the minds of those who believe in Free Trade. They have thought that by the mouthing of a few phrases such as "duties are added to the price," or "exports pay for imports," they have solved the whole economic problem. As a matter of fact, very few of them have any exact knowledge on the subject as a result of original thought.

The Home Secretary, in what the newspapers called a devastating speech, attacked the Bill. The burden of his argument was than an import duty raises prices. It does not necessarily raise prices if there is available a sufficient and efficient supply within the tariff wall. That is not a matter of theory, but can clearly be established as a result of experiment. We have in operation to-day, apart from the Abnormal Importations Duties which have not been going on long enough for us to formulate any results, duties covering an enormous variety of commodities which have been in existence for a number of years, and in no case that I have been able to discover, where the articles are made in this country in substantial quantities, has any rise in prices occurred. I go further than that and say that in no case has a fall in prices not taken place at least in line with general commodity prices. I have been for years endeavouring to obtain any documentary evidence whatsoever in support of the Liberal doctrine of rising prices. Not only have I failed, but the Liberal Publications Department has failed too. In the 1929 election they published a leaflet giving six commodities with prices before and after. In no case was the article sufficiently clearly defined. In no ease was any human being unable to buy these articles much cheaper than the price given in the leaflet. When challenged, they not only refused to produce any evidence in support of that statement, but I have no hesitation in saying that the document was invented in the office.


Who pays the import duty?


In those cases where the import continues without a rise in price the duty has been paid either by the foreign producer or by his agent in this country. Only then could it con tinue if the price does not rise. The Free Trader does not understand that the duty only protects when the price does not rise. It is only when the price does not rise that the duty acts in an excluding manner. When your price does not rise you realise that the foreigner has paid. We shall have plenty of opportunities in the next few days for any Free Trader to produce any evidence which will refute that.


I shall certainly supply the hon. Member with evidence showing that, even before the imposition of the duties, the idea that a duty was to be imposed resulted in Canadian timber being increased in price in certain instances by 9½ per cent.


Will the hon. and gallant Member tell me on what date the increase took place?


With the greatest pleasure. I am perfectly willing to give the name of the firm to the hon. Member but not on the Floor of the House. This is their letter: We have had to purchase 70 standards of Colombian pine of quality to be obtained in the United States or in Canada. We were in touch with five merchants, but were just too late in placing our order. We have since placed the order for Canadian timber at 9½ per cent. higher or £150 in all on the price quoted to us just before the tariff was imposed.


That is very interesting, but let me again recount my statement. I said "where there was an adequate supply produced within the tariff wall." When we come to discuss the Schedule, I shall certainly comment on the fact that timber is not included in it, timber in the class described as hewn and sawn, because that does not at present comply with the conditions I have laid down. That does not in any way affect my argument as to articles that can be produced efficiently and sufficiently within the tariff wall. Who can judge the permanent effect of any Measure by the time of transition? If that is the best argument that comes from Bethnal Green, then Bethnal Green has very little argument against the Bill. I am a supporter of the Bill and a friend of the Bill. It is not as comprehensive as it would have been if I had drafted it, but that is no reason why I should not support all I can get. I would have preferred a broader Bill like the Horticultural Products Act giving the President of the Board of Trade and the Chancellor of the Exchequer power by order to impose duties within certain limits.

That is not the method chosen here. A slower method is provided, and we have to examine it with great care in order to be sure that we get the best possible Bill. In the first place, it is not clear whether, when a seasonal duty under the Horticultural Products Act lapses, a duty of 10 per cent. is automatically to come into operation. We ought to know definitely whether a seasonal duty is a real seasonal duty. A seasonal duty is an admirable duty, but, in the season when the duty is not on, a duty ought not to be put on at all. With regard to Clause 3, the powers of the Committee are limited to those qualities which can be produced in the United Kingdom in quantities sufficient for the United Kingdom consumption. That is much too narrow. I am quite satisfied that we ought to take into account production within the whole of the tariff wall, Dominion production as well as United Kingdom production. The powers of the Committee are limited, too, in that they can only consider goods covered by duties imposed under this Act. The Committee ought to have the power to consider duties already existing such as the McKenna Duties, the duty on matches, the Key Industry Duties, which they can consider in 1936 when they have reason to apprehend that they will lapse but not in the meantime. That is making the Bill too narrow.

Again, in another Cluase there is a reference to drawbacks. I was very dissatisfied with the statement as to drawbacks. I am satisfied that it would be wrong to give any right to drawback in general for goods that, have undergone any process of manufacture. It would be fatal to the success of the tariff. if drawback is allowed—and there are cases clearly when a drawback should be given —it should be applied to the whole duty and not merely to the additional duty. It is indefensible to argue that you should give a drawback in respect of additional duty but not in respect of the other duty. I hope the Treasury and the Chancellor of the Exchequer will be willing to consider that matter in due course.

In Clause 5 there is an interesting indication of future policy. There is a reference to the power of His Majesty, by Order-in-Council, to apply Imperial Preference to mandated territories. At the moment Palestine is held under a Class A mandate, which has been interpreted as meaning that the country must he treated for trade purposes as if it were a foreign country. There is a unilateral declaration on our part, but I understand that we are under no international obligation to stick to it, and I hope the Government have decided to treat Palestine as an integral part of the British Empire. The Home Secretary was once High Commissioner for Palestine and long ago urged that the mandate should be regarded fiscally in the same way as a Class B mandate. It will be a matter of profound satisfaction to the Home Secretary if as a result of this Bill, which he opposes, Imperial Preference is granted to Palestine.

Under Clause 7 we are contemplating Preference to certain foreign countries. We cannot grant a preference to foreign countries unless we denounce our trade treaties and the most-favoured-nation clause. I hope it means that the Government have made up their mind. I think we should get rid of the unconditioned most-favoured-nation clause and replace it by some conditional form which would entitle us to give concessions for concessions received. The clause is quite valueless, however, unless the Foreign Office take the necessary administrative action. Clause 8 deals with those cases where part of a commodity is dutiable; and the position is not quite satisfactory. In a case like that of sweetened condensed milk it is a mistake that it should be exempt entirely from the 10 per cent. duty merely because the duty on the sugar content works out at an ad valorem duty of more than 10 per cent, I "think the 10 per cent. duty should apply in the case of mixed goods to the value of the part not covered by the existing duty.

There are a number of other important points which I hope to be able to raise in Committee, including one in connection with the drawback arrangements under Clause 13. I think that where goods are imported for the specific purpose of re-exporting there should be some provision that people engaged in the entrepot trade should have their warehouses made into temporary bonded stores. May I refer to one item in the Schedule. Newsprint is the only manufactured article, apart from books, upon which it is not proposed to put a duty. I understand that the inclusion of newsprint in the Schedule is due to the fact that certain newspaper proprietors were afraid that they would be squeezed out of existence because certain newspaper combines have a large control of the newsprint of this country. If that was the case the Government would be right in placing newsprint on the free list, but my information is that such a danger does not exist. There is a large free production in this country which is in no sense associated with the big combines. The mills which are associated with newspapers are all in active competition with one another and sell two-thirds of their paper to newspapers outside the control; and in addition there is a potential supply in Canada equal to the whole production of this country. Therefore, the case for placing newsprint on the free list is without justification. Certain people may have been justifiably nervous, and I was impressed with the situation when it was explained to me a year ago, but a careful investigation revealed to me that the situation is not dangerous, and so long as the Import Duties Advisory Board have power to transfer any commodity to the free list it will be perfectly safe to take newsprint off the free list and let the parties take their chance before the committee like any other industry,

I am afraid that I have taken a little more time than I intended, but my apology must be that this Bill deals with matters which have been the subject of my deep study for more than 28 years when I made my first political speech supporting the proposals of Mr. Joseph Chamberlain. It is remarkable that Imperial Preference should have been presented in 1919 by the right hon. Member for West Birmingham (Sir A. Chamberlain) and that these proposals for the permanent adoption of a comprehensive tariff system should have been presented by his brother; both sons of that great man who inspired so many people in this country, among them myself.


I know it is expected that those who make their first attempt at oratory in this House should see to it that their remarks are as general and as free from personal matters, indeed, as non-controversial, as it is possible to make them. At the same time, I feel that the House on this occasion will understand if my speech is perhaps a little controversial, for I have the honour to be the successor in this House of one of the most respected Members of the National Cabinet, the Lord Privy Seal, and J um one of those crude, unrepentant, Colne Valley, or shall I say Ichornshavian, Free Traders upon whom so much scorn has been poured in these Debates. No one will suggest that these matters are not of the utmost importance. For 30 years men have been pressing and striving to see the matters we are now discussing come to fulfilment. They are now on the verge of being fulfilled; and, if the House will bear with me, I should like to examine the method by which they have been brought to fulfilment. It is upon this one matter that I am venturing to address the House.

Last August the country saw that it was facing a very difficult situation, and it approved whole-heartedly of the formation of the National Cabinet. The talk then was about putting country first, abandoning old prejudices and worn-out ideas. Then came the pressure from the wolves in the national fold for the holding of an immediate General Election. Hon. Members who. do not belong to my party will pardon me if I explain to them the position of members of that party in the country when they were faced with this rather delicate aiosition. Had they followed the advice of their then leader, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), they would have disbelieved the statement of the National leaders that Protection and Free Trade were not in issue. But the vast majority of people of progressive opinion trusted the National leaders when they made those statements. They trusted them with a national mandate, and I submit that this is not by any means being fulfilled, but that a party policy is the result.

Trusting the words of the National leaders, as the electorate did, droves of members of the Conservative party were returned to this House, and the moment those droves arrived at Westminster they began to yell for Protection at any price, as though it were the only remedy for all ills from cold in the head to an adverse balance of payments. Nor has there been any impartial or expert inquiry. The President of the Board of Trade has excused this lapse on the ground that experts never agree. But experts frequently disagree in other walks of life; yet this does not prevent one taking counsel's opinion, and some of us in this House have reason to be thankful this is so. What happened was that out of that famous pigeonhole, in the Conservative Central Office, there was produced the worn-out scarecrow of 30 years ago which was invented for the supposed needs of that time. There was the application of a purely party policy. Do not let us mince our language. There was, in my view, and in the view of many people throughout the country, a most flagrant breach of faith with the electors. With all the changes of the last 30 years, there has been a singular failure to explain how these changes have made these measures more appropriate for the present day than when they were first produced.

The right hon. Member for Sparkbrook (Mr. Amery) was the first to mention the real reason for the introduction of these proposals. He said that there was to be an equalisation of the burden of taxation. The most sickly symptom of the distress of the country at the present time was the well-nourished applause which greeted that statement. This is the moment of all times When the cost of living must rise, although it has not happened yet, owing to our going off the Gold Standard, that this extra £30,000,000 of taxation is to be put on those who are least able to bear it. I know that the justification put forward by the President of the Board of Trade was that these Measures were to redress the adverse balance of payments. That contention has already been ridiculed this evening. The Chancellor of the Exchequer stated that the adverse balance of payments came not from increased discrepancy between imports and exports, but from a falling off in the invisible exports, which he admitted could not be treated by a tariff.

7.30 p.m.

We listened with great admiration to his speech on 4th February, not with admiration for a man who had seen his country's need and had met it; but with admiration for a good party effort. In his last paragraph, so finely uttered and so noble in form, he admitted the whole case against him. He was now putting into effect the proposals which his father had produced long before. I do not propose to go into a close examination of the Measure now, but I should like to comment in passing on the taxation of raw materials. The President of the Board of Trade, turning to some of my hon. Friends on these benches, said he knew as well as any of them that raw materials should not be taxed if it could be helped. He gave that assurance when he was introducing his Abnormal Importations Bill. He told me, in particular, that one of the chief raw materials of my constituency, worsted yarns, should not be raised in price, and said that he was taking steps to prevent it. I have no doubt he did take steps to prevent the rise of the price of worsted yarns, but I would remind him that he has been singularly unsuccessful, and that since that time not only has the price risen to the consumer in this country, but delivery has not been possible within three or four weeks of the time when delivery would have been possible had the consumer been able to buy abroad. In consequence, of course, orders have been lost to the Colne Valley which otherwise would have been kept busier at this time.

I hope also that the wish of the hon. Member who has just spoken, with regard to drawbacks, will be given very favourable attention by the Government, because it would seem to be no part of even their desire to destroy the entrepot trade of this Kingdom, such, for instance, as that carried on with the Irish Free State. No one would suppose that if the Irish Free State buyers have to pay more for their goods in London than they would pay in places abroad, they will still buy from London. If in the next six months, during which time it is not possible to have drawbacks, they find the price in London is raised to them, of course they will go to the foreign countries and buy there. Then, indeed, the adverse balance of payments will be made even worse than it is at present supposed to be.

There is one bright spot for those who have seen their principles trampled under foot lately, and it is that it will no longer be the height of patriotism in the Tory camp to shout from every tent-top that the country is doomed, because now at any rate there will be in each honourable Conservative Member a vested interest in the maintenance of confidence in the country, and they will have to go about and say that the country is about to be prosperous. Let us hope that their efforts to restore confidence in this way will be successful, because, whatever our views may be on the fiscal question, everyone on these benches, as everywhere else, desires to see the prosperity of the countryreturning.

Viscount WOLMER

I would like with great cordiality to congratulate the hon. Member who has just spoken on a singularly successful maiden speech, as happy in the manner of delivery as he was with the arguments that he used for supporting what some of us feel to be a rather difficult case. With regard to the attack which he made on the Government and on this House, when he charged them with a breach of confidence, I will only say that I have no doubt that at the last election the hon. Member put his views before his constituents as ably and fully as frankly as he has put them before the House this afternoon. We other Members also put our views frankly before our constituents and we have all been returned to this House. We have given an undertaking to examine the problem to the best of our ability, and then to do what seemed to us right, and I think that we have just as much right to vote for what we believe to be the right policy as the hon. Member and his friends have to vote for what they believe to be the right policy. I have risen only to discuss briefly the agricultural side of this Measure. I do so particularly because I listened to a very able speech from the right hon. Member for South Molton (Mr. Lambert), in which he dealt with this aspect of the question. I agree with nearly everything that my right hon. Friend said. I do not think that he painted the least too dark the picture of the terrible crisis that confronts agriculture at the moment. But I listened in vain to him for any concrete and definite suggestion as to what the Government should do in legislative form to meet the situation. We cannot discuss the full agricultural policy of the Government at this moment, but I think it is vitally important that a day should be given for full discussion as soon as the time of the House allows. It was a little bit unfortunate that my right hon. Friend the Minister had to announce his policy in what was necessarily a rather bald statement, instead of being able to amplify it in the way that I am sure he wished. I will only say that I believe that in that part of the policy which concerns milk, bacon and potatoes is the foundation of a great agricultural policy. My right hon. Friend will be looked back to as having opened a new chapter in agriculture and as having inaugurated one of the greatest reforms of the present day.

But we cannot discuss that now; we can only discuss this Bill. It is perfectly true that a 10 per cent. tariff is not much use to agriculture. The fluctuations in prices due to gluts are of such a wide nature that a small duty of that sort is not very important. But agriculture in this respect is being treated on exactly the same basis as every other industry, and so far as agriculture is concerned the really important part of the Bill is in Clause 3, the Advisory Committee. It is the Advisory Committee which will have to impose the really important duties, behind which my right hon. Friend's great scheme for reconstruction can be built up. I would ask one or two questions in regard to this Advisory Committee. Its composition is of fundamental importance to the success of the scheme. I think we can take it for granted that the Committee will be composed of men who believe in protection as a policy. I hope that the chairman will not be a judge who will look at the thing from a judicial point of view in the legal sense, but will be a statesman of wide experience who believes in the principles on which the Government's policy is based. I would like to see someone like the right hon. Member for West Birmingham (Sir A. Chamberlain) as chairman of the Advisory Committee, someone whose personal character is above suspicion and is a believer in the policy, and one who means to carry it out thoroughly. It is no use trying any policy if you try it in a half-hearted and left-handed fashion; it must be carried out thoroughly.

I hope also that in the composition of the Advisory Committee there will be some Member who has a knowledge of agriculture, or an interest in agriculture, and especially a gentleman who has knowledge of agricultural organisation. On the framing of these additional duties the whole future of agricultural organisation will depend. Duties on agriculture have to be based on somewhat different principles from those of any ordinary industry, because you are always up against the problem of gluts. What has injured agriculture more than anything else in this country in the past has been that, whenever any foreign country had a glut of any particular crop, it was at once dumped into Great Britain. If you have a glut of a certain crop coming here, 100 per cent. duty may be quite useless; you may require 200 or 300 per cent. duty in such cases, and such a duty could be justified only if you have built up behind your tariff wall an efficient organisation which can give to the British public the foodstuff at a continuously reasonable and fair price. That is to say, if the agricultural industry can guarantee a staple article of diet, such as potatoes or milk or bacon, at what is, year in and year out, a fair price which can be defended in Parliament, then the industry is entitled to absolute security against glut prices of that sort, even though it may involve a tariff of 200 or 300 per cent. on certain occasions. The thing should be looked at from the point of view of continuity and security, and security in these matters is really just as important to the consumer as to the producer.

My right hon. Friend has been criticised very severely because it is said that the livestock producers are not dealt with fairly in the Bill. I do not think all the criticism levelled against the Government has been quite fair. I do not believe that the Bill should increase the cost of feeding stuffs to any important extent. Only a portion of feeding stuffs is being taxed. The duty is a small one, and the resources of this country and the Empire in regard to feeding stuffs are so great that, with the fall in price level which is now taking place, I shall be surprised if there will be any appreciable increase in the cost of feeding stuffs as a result of the Bill. Then I do not think it is fair to say that the Government are doing nothing to help the livestock producers. A part of the policy of the Government is the wheat quota. We cannot discuss that now, but it has always been one of the principal arguments in favour of a wheat quota that, 700,000 acres having gone out of wheat, the milk producer and the cattle fattener have had to meet competition which they never had to face before, and that all this great acreage of some of the best land in the country has come into competition with other branches of agriculture, glutted their markets, upset their balance of supply and demand, and caused a great deal of injury not only to the wheat grower but to practically every other branch of farming.

That is one of the principal arguments in favour of the wheat policy of the Government, and for that reason I believe that the National Farmers' Union were perfectly right when they advanced that contention. But that being the case, they cannot have it both ways. If the Government are going to accede to the almost universal demand of agriculture for a wheat policy, we cannot forget that one of the reasons for asking for that policy was that it was going to help every branch of agriculture, and the livestock producer not less than the others. I would also say to my farming friends that there is no farmer who is going to benefit more from any industrial revival than the livestock producer. The first thing that the industrialist of the North does when he has the money is to buy British meat. He is the best customer that our livestock farmers have. Therefore, I am a little bit sorry to see the attitude adopted by some farmers in regard to the proposals which the Government have put forward. At the same time I hope that my right hon. Friend the Minister, when he gets the opportunity, will make a statement regarding the Government's proposals on meat. I am sure he will agree that the meat industry needs organisation just as much as many other branches of agriculture. The degree to which organisation can help the beef and mutton producer is more intimate even than it is in other branches. One has only to go to any cattle market in the country to see that if there are 10 beasts more than the dealers require that day, the prices are bad all round, while, if there are three beasts fewer than the requirement, there are good prices all round. A system of organisation, feeding our markets with the numbers required and not putting farmers to the unnecessary expense of driving beasts to market in excess of the demand, would at once put thousands of pounds into the pockets of the farmers of the country. But you cannot attempt organisation of the meat industry unless you have a tariff, at any rate in reserve.

My right hon. Friend the Minister of Agriculture I think would admit that it is notable that he proposes the organisation of milk, of bacon and of potatoes behind a tariff, but he does not propose the organisation of meat at this stage because the tariff guarantee is not, at the moment, forthcoming. I put it to him that you cannot have organisation without a tariff, and I trust that he will be able to hold out hopes to the meat producers of this country that, if the industry is prepared to undertake its organisation, the Government will consider giving it a guarantee that that work shall not be undone by a flood of foreign imports. Even the Home Secretary admits that industries cannot be re• organised without security, and it is simply for that security that the farmers are asking. I suggest to my right hon. Friend that he should consider something in the nature of a seasonal duty on imported meat. We get the great hulk of imported meat from the Argentine and the Government are perfectly right in attaching the greatest importance to the Argentine market and to our trade with the Argentine. We have to deal very carefully with the Argentine, but I see no reason why we should not have a duty, say, of id. per lb. on chilled meat coming to this country during the winter months. That is the time when our farmers want to sell and find it difficult to keep the stock on the land, and, as that happens to be the summer period in the Argentine, it seems to me that some sort of rationalisation on those lines might suit both countries. The Argentine would be able to send their beasts freely to us during their winter and we should have a measure of Protection for our stock farmers during our winter.

Therefore, I hope the Bill will be amended in the sense of giving the Advisory Committee power to delete names from the free list. I have not yet heard an explanation as to why the Advisory Committee are not to be allowed to make recommendations to the Government that items at present on the free list should be removed from it. Surely if you have confidence in the Committee, and if that Committee are capable of advising on the hundred and one intricate questions on which they will have to advise, it should be within their province to make such recommendations. A recommendation of that kind would not bind the Government. If the Government for reasons of high policy did not wish to adopt it, they would only have to say so. But I would like to see the Bill amended so as to enable at any rate the meat producers of this country to propose some scheme such as I have suggested.

Clause 12 of the Bill enables penalising duties to be put on the produce of any country which does not treat this country fairly. I presume it would apply to Russia; in my view it certainly ought to be applied to Russia. The agricultural produce sent from Russia to this country is a very important matter and a matter of concern to the farmers. I am sorry to see that the administration of Clause 12 is to be in the hands of the President of the Board of Trade. I have the greatest respect for the right hon. Gentleman, but I venture to say that he knows very little about agriculture and his Department knows even less. We ought to have some assurance that the Minister of Agriculture will have a status in this matter and will have an authoritative voice in determining what sort of duties will be put on agricultural produce under Clause 12. Farmers have had very unfortunate experience of Orders being administered by Depart- ments other than the Ministry of Agriculture. We dislike the Milk and Dairies Orders being administered by the Ministry of Health and we would rather that that matter was put under the Ministry of Agriculture. We do not want to see the question of Russian agricultural produce coming into this country determined entirely by the Board of Trade. It is not sufficient that the Minister of Agriculture as a Cabinet colleague of the President of the Board of Trade should be able merely to make representations. If a Minister is given a special position under an Act of Parliament, when it comes to a Departmental row—and there are Departmental rows all day and every day—that Minister is in a very strong position.

I think this Bill goes as far to help agriculture as any Bill of this nature can reasonably be expected to go. It does not represent the full agricultural policy of the Government. That policy is to be regarded as a whole and will be debated, I hope at an early date, as a whole in this House. All I ask my right hon. Friend is that the policy of reconstruction behind tariffs which he has put forward should be pursued with vigour. If I have any complaint to make against the Ministry it is that these reorganisation commissions were not appointed last September. Had that been done we should now be five months nearer the completion of the job. Now that we have put our hands to the plough let us not turn back. Let us go forward as fast as we can. A lot of propaganda is necessary. It is necessary to get confidence into the farmers again and show them that they are going to have a square deal. The right hon. Gentleman the Member for South Molton asks how this policy is going to help the farmer immediately. Nothing can help the farmers immediately except to lend them money. I hope that something will be done in the direction of an extension of credits. We cannot discuss that subject now, but it is the one and only thing that is going to help the man who, owing to insolvency, cannot carry on. Every other policy has to wait before its results help the farmers' pockets. Judged by that standard this Bill is treating agriculture fairly and giving it a chance such as it never had before and such as we should have been grateful for a few years ago.


I rise to address this House for the first time as a new and young Member, conscious of the great traditions which have been maintained in this Chamber throughout past years, and with the sincere hope that whatever words may fall from my lips will be in keeping with the dignity of the House. We are entering an age in which the old order is giving way to the new. An old fiscal system, allied to a Government policy of reckless overspending, left this country in such a vulnerable position that it has been very badly hit by the world depression. In fact, so badly have we been hit that there can be no person in this country who is not feeling the effect of that depression in some way or another. As a result, the actions of our National Government are being watched with world-wide interest. It has been interesting to see workers and employers in this country frequently uniting in an effort to secure some form of Protection for their industries from unrestricted foreign competition. Only last month in my division, the Widnes chamber of commerce passed a unanimous resolution urging that there should be some immediate and adequate measure of Protection given to the industry of this country, and they considered that it was a vital necessity, from both the national and local point of view.

This policy of production in our own factories and on our own soil has already begun to have results in attracting new industries to this country, and we were very pleased when the Parliamentary Secretary to the Board of Trade was able to say the other day that inquiries had been received for 200 factory sites during the lifetime of this Government. We, in Lancashire, are particularly interested in this movement, and we have formed a non-party body, the Lancashire Industrial Development Council, under the guidance of Lord Derby, to try to attract to our area new industries from abroad, so that the workers in Lancashire may have the benefit of the Government's policy. The city of Liverpool too has been active and, if only the inquiries which they have received materialise, the prosperity of that city is assured. In my own division the Widnes town council and the chamber of commerce have been co-operating in an effort to tell the world of the undoubted advan- tages which we can offer as an industrial area. I believe that these efforts will result in a new era of prosperity opening for the Merseyside.

During the Christmas Recess I conceived it to be my duty to the people whom I represent to go to the United States of America to see if I could secure some of the new work which seemed to be coming to this country. While there I had the opportunity of discussing with many of the leaders of industry in that country the tariff proposals and how they would affect the export trade from the United States to this country. They told me, one and all, that the combination of the depreciated currency and the prospective tariff policy was rapidly causing all the export trade to Great Britain to dry up. Those men were eager as far as possible to retain the trade, and they realised that the only way to do it was to bring the workshop from America and plant it here in Great Britain. That is a very welcome feature. It means that we are bringing here fresh capital from abroad, and new ideas which may go a long way towards revitalising our industry.

8.0 p.m.

There is a second movement. Many firms do not consider that their unit of production is sufficiently large to justify them in building factories here. They have various lines of production, often protected by patents. Their trade with this country is drying up also, and they are trying to come to some form of agreement to have their goods manufactured here in British factories. I gathered many inquiries while I was there, and I have referred those inquiries to the manufacturers in my Division. I found them all eager to do whatever they could to take advantage of this policy. I can see that there is going to be no slacking behind the protection of a tariff wall, and many manufacturers have told me that if only they could get the benefit of these offers which are coming from abroad, they would be willing to lay down fresh plant and expand their factories to embrace the opportunity. One firm told me that so great would be the increase of trade that they were now spending £26,000 on the framework alone of a new factory to take advantage of our policy. I have spoken to the managing director of the same firm, and he said:

Already my associated companies are negotiating to take over from five or six foreign firms. While I was away, another encouraging feature of which I heard was the case of a man who came over here from America in 1929, the head of a big firm, who said he thought he would establish himself over here because some day we might have a system of Protection and he would be in the home market in the beginning. He came to England then, and now he says that, with the benefit of a depreciated currency and in addition a larger home market because of the tariff system, he thinks his firm will be in a position to close down the head firm in America and operate solely from England, exporting to America and mounting over their tariff walls. I think that is a very great tribute to what can be done under our system by the manufacturers of this country.

While I was over there, too, I found that there was little or no resentment at all of our Government's tariff policy, but rather a feeling almost akin to wonder that we had not thought of doing it before. I found one thing which I feel sure would give joy to the heart of the right hon. Gentleman the Home Secretary, because the American manufacturers said: "Why should we reduce our tariffs when we can produce behind this high tariff wall and send the surplus into the big Free Trade market in England? Once we are effectively cut out of that market, we shall then lead a movement for a world reduction of tariffs and so approximate once more to a state of international Free Trade." I believe that if we are to take advantage of what I might call this "Come to England" movement in industry, something more than a 10 per cent. tariff is necessary, and for that reason I sincerely welcome the superstructure, which will be built later, of higher duties, at the same time making every provision for an adequate supply of raw materials to come into this country.

The day after the Chancellor of the Exchequer introduced his proposals to this House, I had a cable from America, from an agent there, who perhaps is the largest foreign trade counsel operating at the present time, and his scheme is to get together the American manufacturers who want to operate here or to have their goods made here and find suitable places or suitable people to do the work for them in this country. He stated: Am contracting for batteries. Mailing several inquiries. To-day's newspapers expectation only 15 per cent. tariffs on lines we discussed insufficient to protect or justify British production. To-day I had a letter from him on the same subject, in which he says: If a revenue tariff is all that is going to he established, British manufacturers will not benefit to any degree, nor will they have any incentive to manufacture new lines; likewise, the American manufacturer would have no incentive as he would be able to overcome the 15 per cent. tariff by a reduction in price, as by retention of his mass production volume he will simply look upon export sales as a burden carrier, i.e., a means of cutting down his overheads. I might mention that one of the firms by whom I am actually employed as their export manager has authorised me to quote a 20 per cent. reduction in prices, and from figures presented to me, I know these are below actual manufacturing costs if full overhead is included. Yet hon. Members of the Opposition say that we shall have an all-round increase in prices to the consumer. Here is the case of a 20 per cent. reduction in prices on the part of an American manufacturer, so that he may continue to dump the surplus of mass production in this country. He then adds: I see from this morning's papers a 10 per cent. base tariff is imposed and additional tariffs will be placed on specific groups. I hope you will keep me informed … He adds that it is his general opinion that this tariff must be very much higher if they are to come over to England. On the strength of that, he writes a further letter, saying: The following is a short summary of definite proposals I have on hand and for which I am authorised to enter into negotiations with British manufacturers. Here we have definite proposals from abroad, perhaps the very first. fruits of our Government's policy, written the very day that it was put forward in this House, and I know I shall be pardoned for going into it in detail, because I feel that the House ought to know the exact effect of this policy as soon as it possibly can. Here are the proposals on which this man has definite authority to negotiate with manufacturers in this country: A. Vacuum cleaners and floor polishing machines on a licence and royalty basis, covering a small minimum annual production … B. Manufacturer of household refrigerators and washing madhines—has sold in considerable volume in Great Britain and trade mark well known. Is open to negotiate for manufacture on any mutually satisfactory terms. C. Manufacturer of electric household heating appliances requires initial licence fee or sum of money to cover cost of drawing up blue-prints … etc …. D. Manufacturer of Neon gas flood lighting devices, traffic signals, railway crossing automatic signals, flashers and advertising signs, all patented or patentable in Great Britain. Subsidiary company, merger, licence, royalty or other arrangements would be considered. E. Complete patented line of inter-communicating telephones for apartment houses, hospital or industrial service … F. Automobile electric speciality line of starter coils, friction joint (patented), which is applicable to many articles, automobile dashboard specialities, etc. Manufacturer open to submit definite proposal to suitable British producer. G. Electric trouser presser and electrical tie presser … H. Automobile car washing brush … Manufacturing cost around 4s. Annual American sales approximately 90,000 … He finishes: In addition to the above definite proposals which I am authorised to negotiate upon, I am working on a number of others which have not reached the stage of being under my control. Things like that are a very cogent proof of the wisdom of the policy which has been put forward by His Majesty s Government. I would welcome this scheme further because it foreshadows a system of a permanent nature, and I believe that that is the very thing which has been required by our industry for a long time. It is this uncertainty as to whether we were going to have a definite tariff policy which has held up many inquiries for factory sites, for the opportunity of working in this country. I am reminded of the words of a former Member of this House, now unfortunately not with us, a great industrialist, who shortly before he joined the Conservative party said: No human being can carry on an industry under an uncertainty. These words have all the force now that they had in 1925. Give to industry the promise of stability and certainty which is offered to them in this policy, and I believe they will be able to go right ahead. I am confident that our system will justify itself by results, and I believe that if hon. Members of the Opposition should ever get back to power again, they would never dare to repeal a system which had actually brought work to the people of this country. Furthermore, I am reminded of those words of Lord Snowden, when he said the other day that he would as soon leave the defence of Free Trade to the Members of the Opposition as he would to the hon. and gallant Member for Bournemouth (Sir H. Croft). I believe that industry need have no fear on the ground of the certainty of these proposals.

I welcome too the very great gesture which is made when we say that under this Bill the products of the Dominions and of the vast Colonial Empire shall be allowed to come in absolutely free of duty, and I would draw a parallel between this and industry. It has been shown in industries how impossible it is for the small unit to compete with success against the big unit. From time to time numerous small competing units have had to join together to form a larger unit, and this has resulted in the often over-capitalised small units giving way and being cut out, so that there is no more wasteful competition and a new and rationalised industry is able to grow up and compete with great success in the markets of the world. So, with our system of Protection, I believe that the day of the small unit is gone and that if we are to succeed, we must, as it were, rationalise our Protection, because it is useless to maintain within the British Empire small units, often overcapitalised and having a market which is not really large enough to justify production. If we can do away with the small unit and have one big Empire unit, then I believe that our Empire industry will be able to go out, compete with success in the markets of the world, and beat the other small units which we see all over the Continent of Europe. I believe that these proposals are to be welcomed and that we can look forward to the Ottawa Conference with great hope. These measures are putting a new heart into industry and giving a new life to our people.


I know that I shall be acting in accordance with the wishes of every hon. Member of this House in congratulating the hon. Member for Widnes (Mr. Robinson), who has just sat down, on his maiden speech, and in saying that we shall look forward with pleasure to any contribution to our Debates that he may make in the future. I have been very interested in the discussion which has taken place on the issue that is now before us, and I have been fascinated and interested in the contradictions and inconsistencies that have been found in the speeches, not only of Members of the Cabinet, but also of those who advocate the retention of our present fiscal system and those who advocate a fundamental change. I want to assure the right hon. Gentlemen opposite that if we on these benches can be convinced that a change in our fiscal system will be a lasting benefit to the people we claim to represent, we shall have no hesitation in supporting the Measure before the House. It may also be necessary to assure those who disagree with us that we have not made a fetish of Free Trade and are not unduly influenced by the arguments deduced by some of the so-called Free Traders. I recently read a statement of one of those who advocate the retention of the present system as follows: If foreigners will bring us goods cheaper than we can make them ourselves, we shall be the gainers. Although that statement was made by a Free Trader, not one on these benches would agree with it. The writer goes on to state: The more we get in imports as compared with what we have to give in exports, the better the trade for us. And since foreigners are not liberal enough to give us their productions, hut will let us have them in return for our own productions, bow can they ruin our industry? The only way they could ruin our industry would be by bringing us for nothing all we want so as to save us the necessity for work. If this were possible, ought it to seem very dreadful? I need not assure the House that we are not in agreement with that. The name of one who made Tariff Reform very popular has been quoted in this House; this is from the writings of an individual upon which the whole case for Free Trade has been built up, namely, Henry George. As an illustration of the contradictions in the statements made by those who are anxious to retain our present fiscal system and those who want a change, it is interesting to study the statements of some Members of this House. The Chancellor of the Exchequer last week said:

The purposes of that general duty are two-fold. We desire to raise by it a substantial contribution to the Revenue, and we desire also to put a general brake on the total of the imports coming in here." —[OFFICIAL REPORT, 4th February, 1932; col. 288, Vol. 261.] There are various estimates as to how much revenue could be procured as a result of the imposition of the 10 per cent. tariff. I notice that the President of the Board of Trade believes that it is possible to raise something like £30,000,000. The President also agrees with the statement of the Chancellor of the Exchequer, but it is interesting to contrast that statement with the one which recently appeared in a newspaper which was at one time very near and dear to the heart of the President of the Board of Trade. This is the statement contained in that publication: I notice that the Protectionists still insist that Mr. Chamberlain will derive a revenue of anything from £50,000,000 to £100,000,000 from his tariff scheme. If this be the case then obviously British manufacturers will not be freed from that foreign competition which the Tories promise. An impost of 10 per cent. on our imports last year, including grain and meat, would yield only £86,000,000. It is just another instance of the tariffists claiming the best of two worlds in the hope of deluding the people. There cannot, obviously, be both substantial revenue and an absence of foreign imports. I am naturally interested in whether the imposition of this tariff will increase the cost of living. We were assured by the right hon. Gentleman the Home Secretary that the tax when imposed on imports will increase the cost of living. He had no hesitation in making a declaration that these taxes upon necessaries of life must be fairly and squarely envisaged by the Committee before it gives consent to them. We know how much poverty there is in the country. He also asked how the taxes could be justified. There is no doubt in his mind as to the taxes increasing the cost of living. He also said: You are going to tax much more than £100,000,000 worth of foodstuffs to exclude £6,000,000 or £8,000,000 worth." —[OFFICIAL REPORT, 4th February, 1932; cols. 324 and 325, Vol. 261.] He is convinced that the tariff will increase the cost of living. It is very strange that, notwithstanding his agreement that the imposition of a 10 per cent. tax will affect the cost of living, he said, in reply to a question which was put to him during his speech, that he was in favour of the wheat quota, although it would increase the price of the 4-lb. loaf by one half-penny. That is another instance of the contradiction of views of those who believe in the retention of the present fiscal system—and that at a time when the working class cannot live without considerable privation and sacrifice. The right hon. Gentleman also observed that we have in these days a new feature which we had not a generation ago, that is, 2,500,000 working people unemployed and a vast, number working short time. The whole case for Free Trade was destroyed by a Free Trader when he quoted that figure, for that number of unemployed exists in a country where we have not Protection, but where the system of Free Trade has been in existence for 83 years.

At the same time, the right hon. Gentleman accepted responsibility for reducing unemployment benefit. I fail to see any difference in principle between reducing the benefit to an unemployed man and shirking the issue of the impost of a 10 per cent. tariff which will ultimately lead to an increase in the cost of living. What were the right hon. Gentleman's alternatives One was rationalisation. If there be any factor that has aggravated the problem of unemployment in this country more than any other in the Last few years, it is rationalisation in some form or another. His other remedy was to set up commissions. It used to be said a few years ago that when the Liberals were in difficulties they wrote a book. Now that has been changed. When they are in difficulties now they suggest that a commission should be appointed. That suggestion was probably due to the right hon. Gentleman's close association with the Prime Minister, who has a record in political history for having set up more commissions than any other Prime Minister. He also suggested that there should be measures of security to the industrialists in this country, notwithstanding the fact that, either in grants or subsidies in the last 25 years, these people have had £165,000,000 from the national funds. The Liberal party at one time wrote a book and seriously suggested providing employment for the miners by reducing the consumption of coal by no less than 55,000,000 tons a year. The Chancellor of the Exchequer, on the other hand, does not agree that the 10 per cent. tariff will increase the cost of living. He said: There is one point to which, as in duty bound, we have throughout devoted our particular and serious attention, namely, the avoidance of anything that might entail a serious rise in the cost of living. After careful calculation, checked over and over again by competent observers, we have satisfied ourselves that there is no danger of anything of the kind in our proposals. There are at present very large stocks of foodstuffs in the world which are being pressed upon the market by the sellers at prices which have very little relation to their cost of production." —[OFFICIAL REPORT, 4th February, 1932; col. 295, Vol. 261.] He has no hesitation in making a declaration which has a meaning contrary to the declaration of the Home Secretary. It is true that he followed that statement in that inimitable manner of his—cool, if not callous—by saying that even if there is a temporary increase in the cost of living, it will not be any higher than the workers have experienced during the last 18 months. I am confident, upon the authority of very re liable individuals in this country, that tariffs will eventually increase the cost of living. I am not alone in that view, but as those of us on these benches are not regarded as authorities upon such an abstruse economic question let me quote an authority: A protective policy is a policy which aims at safeguarding home industries by raising home prices. If home prices are not raised industry is not encouraged. If industry is encouraged it is by raising prices. That is a statement made upon the authority of Lord Balfour, who was Mr. Balfour at that time. I admire the political consistency of the Chancellor of the Exchequer in preference to the political consistency of either the President of the Board of Trade, the President of the Board of Education or the Home Secretary, but when it comes to a question of economics or a tariff question I prefer to take my economics from the three gentlemen to whom I have referred. It is strange that after the gloomy picture which was given to us by the Home Secretary we should have an entirely different declaration from the Parliamentary Secretary to the Board of Trade, a person, after all, whose state- ments should be noted, because if he were as competent as he is confident he should be entitled to a seat in the Cabinet. He had no hesitation in declaring that after this tariff had been in operation there would be an increased amount of employment in this country. He said this after the passing of two simple Orders: Not only has there been an obvious benefit to the trades concerned and to the factories already in existence, but a remarkable aspect of the orders has been that, in the past six weeks, applications have been made to our industrial adviser by no less than 200 foreign firms which wish to set up factories in this country. I do not say whether that is a good thing or a bad thing. I merely record the fact, and I can tell the House that in 21 cases production has actually commenced." —[OFFICIAL REPORT, 3rd February, 1932; col. 196, Vol. 261.] That is of some interest to the unemployed in this country, but I must have been neglecting my newspapers, for up to now I have been informed through the Press of only one factory which is about to be erected and that is for the production of Eau de Cologne. It is strange that so much importance should be attached to this statement in view of the "Buy British Goods" campaign being conducted in the country. Here they are gloating over the fact that foreign capital will be invested in this country to produce goods which should be produced under decent conditions by English or British capital. The industrial supremacy of this country was built up chiefly, if not solely, upon coal, steel and other essentials, and not upon Eau de Cologne; upon essentials, and not upon luxuries.

As a representative of a mining industry I am naturally interested in the question of a tariff being used as a lever in order to compel other countries to lower their tariffs, or, as it has been said, used as a bargaining point. I am anxious to know who is going to move the lever. Is the instrument to be left to the members of the Tory party? In my Division, since the formation of this Government, no fewer than five pits have been closed, and in my opinion the Government are very slow to use the tariff as a lever. British coalowners have been out to France to interview the French Government. What have the British Government done about using the tariff as a lever? They simply arranged the inter- view between the representatives of the coalowners and the French Government. If that is all they are going to do with a tariff we who represent mining industries cannot be expected to have much faith in the proposals of the Government.

8.30 p.m.

In my opinion, scant consideration has been given to a statement made by one of my hon. Friends last week when he stated that instructions had been given by the Reich Coal Import Board that the amount of English coal coming into Germany was to be reduced to 140,000 tons per month, as against 200,000 tons a month during the preceding four months. There had been an average of 300,000 tons per month throughout last year. That means a reduction in the amount of coal entering Germany by approximately 2,000,000 tons a year, which will render unemployed an additional 8,000 miners here. We are entitled to know, even at this stage, what steps are being taken by this Government to use tariffs as a lever to provide employment for our people. I was also very much interested in the statement of the Lord President of the Council in connection with this very point. He said:

Much has been said during the Debate about a tariff war, as though we have not been living in a tariff war for generations. It is no less a tear it you must use these militant expressions, if you are being shelled without being able to reply, and although academically it may seem of little importance to manufacturers who find their works being stopped by the importation of dumped goods, who know well enough what a tariff war is, we shall he able for the first time—I am going to use the word 'retaliate,' but I still hope and believe it will be less by retaliation, if we are going to secure successes in the long run by what we are doing to-night, than by inducing other countries to meet us by a modification of their tariffs by reciprocity.''—[OFFICIAL REPORT, 9th February, 1932; col. 802, Vol. 261.] I would like to have evidence that it is possible to secure reciprocity by retaliation. In my opinion it cannot be done. There is nothing in this Bill that will be of permanent value to the working class of this country. Here I am entitled to quote from a person who is looked upon as an authority on this question: The rich in every country favour Protection and in every country they say they favour Protection to benefit, the poor. The poor in every country … are opposed to Protection because they know it cheats and bleeds them at a hundred points. The man who believes that wealthy landowners and manufacturers are shouting for Tariff Reform in the interest of the toiler carries simple faith too far … Protection is a positive act of aggression against the poor. That statement was made by no less an authority than the right hon. Member for Epping (Mr. Churchill). [An HON. MEMBER: "When?"] When he was a Free Trader. I am not interested in the question of the right of the right hon. Gentleman to change his views. There are very few in this House who have not changed their views, especially in the last 12 months. The greatest men in this country have changed their views. The case the right hon. Member made out for Free Trade when he was a Free Trader has not been destroyed because he has changed the coat he wears. We know that this country will experience all the disadvantages of tariffs, but with the Tory majority which there is in this House it would be foolish to expect the continuance of our present fiscal system. I would like to quote a speech referred to by the right hon. Member for Spark-brook (Mr. Amery), although I shall use it in an entirely different connection. It was a speech made by Mr. Disraeli: It may he in vain now, in the midnight of their intoxication, to tell them that there will be an awakening of bitterness; it may be idle now, in the spring tide of their economic frenzy to warn them that there may be an ebb of trouble. But the dark and inevitable hour will arrive. It is not surprising that one of our leading hankers should refer to this world as being a remarkable one. Are we taking steps to-night to make it a sane world by increasing the number of lunatics? We shall have what the Parliamentary Secretary to the Board of Trade very correctly described as a great fiscal revolution, but it will be at the expense of the increased misery of the working class, and it will leave unsolved our economic problems. In my opinion this will not touch any of the evils of capitalism that exist in society to-day, while possibly it will intensify the fight upon a much more important issue, which is not the continuation of Protection, but of Socialism, the policy for which we stand.


I feel myself fortunate in being allowed to speak upon such an important occasion, the first on which I have had a chance of saying something in this House. Perhaps I may do so with the more confidence in that hon. Members have always been ready to listen to that section of my countrymen known as "the Clydesiders," of whom I may claim to be one. The time is ripe, I think, for the hon. Member for Bridgeton (Mr. Maxton) to make a personal contribution to this historic Debate. I have heard him say several times since I have been in this House that the sooner we had a tariff the better. That will not prevent him from taking part with me in supporting this policy to-morrow evening in the Lobby. I shall be most happy to show him the procedure of supporting a Government, a procedure in which he has been so consistent in his self-denial during his political life.

Before referring to the provisions of this Bill I should like, very shortly, to make an observation upon the contributions which have been made from the Opposition Benches. The accusation that has run through most of the speeches has been that a tariff will be used as a backhand method to lower the standard of life of the people. I should like to pay my tribute to the sincerity with which hon. Members opposite plead their case. Indeed there can be no one who has listened to the hon. Member for Bridgeton, or the hon. Member for Gorbals (Mr. Buchanan), or the hon. Member for Shettleston (Mr. McGovern), or, indeed, any of the Opposition, pleading the cause of those among whom they have been brought up, who is not moved by the feeling and eloquence which they always put into their appeals. I pay every tribute to them, but I think sometimes that they give too little credit to hon. Members in other parts of the House for ideals that are no less sincerely held than their own, or for being no less backward in their intentions to do what they can to root out the poverty and distress that are in the country. To them the imposition of the tariff may seem a sop to the industrialists; to us it seems the only available method to try to bring more work to our own working people.

I heard an hon. Member on the Opposition Benches say that there was unemployment in America, and that they nevertheless had a tariff there. That is perfectly true. But I think that if you went to America you would find very few people who would suggest as a remedy for their unemployment the removal of the tariff barriers which they have put up to protect their industries. In America, while from their own point of view they were sorry to see that Great Britain was going to adopt a tariff, they were glad to see that the people of Great Britain had got some horse sense. That was the phrase that was used. I am glad to see opinion is changing in Britain, and that we are getting horse sense enough to impose some restriction on the imports which have flooded into this country in increasing quantities of late years.

To hon. Members opposite it seems that the imposition of a tariff must raise the cost of living; to us equally it seems that in so far as it stimulates employment and gives work, it will increase the purchasing power of the people by substituting wages for unemployment benefit and various reliefs of that kind. It seems to hon. Members opposite that the putting on of a tariff in order to get revenue from it and apply it to the reduction of Income Tax, is to relieve the rich at the expense of the poor; to us, equally truly, it seems that it is absolutely necessary in order to reduce the heavy burden of taxation which is crippling industry, and we honestly believe that until we can do something to remove that burden, we cannot make any great inroad into the numbers of the unemployed. The point then is this, that though our method of approach may be different, our goal is the same as that of hon. Members who sit on the opposite benches. In all seriousness I say that there is not one of us, and least of all the right hon. Gentleman who is responsible for bringing in this Bill, who would go on with it, if we thought that for one moment it was going to add to the burdens on the shoulders of the poor.

We have, I think, got beyond the point of dealing with this question as an old-fashioned battle between Protection and Free Trade. We must get down to the practical facts as to how this tariff and this Bill will affect industry. I have one or two general comments on the criticism which has been made of the Bill. The first point that has come from the Opposition, and from the Liberals, is that the imposition of a tariff is bound to mean a rise in prices, and that the food of the people is bound to cost more. I am not going into that controversy at the moment, but I am going to agree with the hon. Member who said that the country was warned. Hon. Members will hardly say that the country was not warned, because there were hundreds of them doing nothing else throughout the election campaign. People all through the country were fully prepared then, and they are still prepared, for a Bill of this nature. They recognised then, and they recognise now, that such a Bill is necessary to adjust the balance of trade, just as they realise that it was necessary to adjust the balance in the House of Commons before anything definite would be done.

The other difficulty which I have had is to reconcile hon. Gentlemen on the Opposition benches with the natural and hereditary champions of Free Trade. The Financial Secretary to the Treasury pointed out to-day, quite truly, that many hon. Members opposite have been actively connected for a great part of their careers with trade unions, and have a very full knowledge of trade union practice. They have assisted upon carrying out a policy of full protection for wages, hours and conditions of labour, a policy with which I fully agree, and with which I am sure hon. Members in all parts of the House agree. Trade unions can be of great assistance to industry in the future as long as they keep clear of political controversy.

One fact seems to me to have been missed, namely, that there can be no payment of wages and no employment unless the product of the industry is marketable at a profit, or, at any rate, not at a loss. I suggest that the time has come when, if we leave the product of industry any longer open to unrestricted competition, we shall be forced to abandon that high standard which we have built up in the last 50 years, and no one would care to contemplate that contingency. I should like to illustrate what I am saying from procedure which is well known to hon. Gentlemen opposite and to anyone who has seen a strike in progress, namely, what is known as peaceful picketing. We know that a peaceful picket is put on at the door of a factory, or at the pithead, or wherever a strike may be taking place, with the object of preventing blacklegs from going into the factory or mine and working longer hours or for lower wages and thus lowering the standard of living of those who are standing out for a rise or for no reduction in wages.

I suggest that the time has come when we need peaceful pickets, not only at the factory door, but also at the ports of this country. Nobody can deny that goods made by cheap labour in other countries and brought into this country are just as much a danger to the standard of life of the working people of this country as the blackleg who stands outside the door of the factory in this country. Just as I think that my hon. Friend the Member for Bridgeton (Mr. Maxton) ought, in view of his statements to-night, to come into the Lobby with me tomorrow night, so I feel that, if hon. Members opposite wish to stick to precedent—and they are sticklers for precedent—they should support this policy, which is in keeping with the ideas which have been prevalent in trade union practice for a considerable number of years. Hon. Members opposite will, however, really be judged by their inability to bring forward an alternative, and that also applies to hon. Members on this side below the Gangway. At first I could not find that they had suggested any alternative at all, but, on looking at the OFFICIAL REPORT, I found that the right hon. Gentleman the Leader of the Opposition had given this as the alternative of his party: All that is needed is to put the world right in order that abundance may be brought to the masses. It is that for which we stand."—[OFFICIAL REPORT, 8th February, 1932; col. 528, Vol. 261.] The hon. and learned Member for East Bristol (Sir S. Cripps) concurred in that profound judgment. I am reminded of a politician of whom I was told some time ago by the senior Member for the Scottish Universities (Mr. Buchan). This politician got up and said that all that was wrong in South Africa was that they wanted a better class of settler and a better water supply; and a voice from the back of the hall called out, "Yes, and that is all that is wrong with Hell." I suggest that this House and the country will want a more definite alternative, and one that bears more relation to fact, than the Leader of the Opposition's statement that all that is needed is to put the world right and it is that for which they stand.

As a Scottish Member, I should like to say a word as to how this Bill will affect us in Scotland. Scotland is rather different from England industrially, in that we depend for our prosperity to a large extent on two blocks of industry, namely, the heavy industries—in which I include steel, engineering, coal and shipbuilding—and the great industry of agriculture. I would ask hon. Members to recollect that by agriculture we do not mean only the farmer, or only the agricultural labourer, but must include a great number of people like small shopkeepers, blacksmiths, and people with small businesses in local towns. We have also to meet several adverse factors in Scotland. Never again shall we be able to employ in the shipbuilding industry the number of people that we did before the War. Never again, however prosperous our coal industry, shall we be able to reabsorb into that industry the number of people that it previously employed; and the same may be roughly said of the steel industry. There is a tendency, also, for new industries to move towards the South of England. That is a tendency which we hope will be checked, but which it would be folly to ignore.

We have in Scotland unemployment to the extent of 27 per cent. of the total insured population, and in the part which I represent the proportion is as high as 32 per cent. We find the unemployment largely concentrated in those heavy industries of steel, engineering and shipbuilding, and, I think I might add, the textile industries, so that our judgment of any policy must be on the following basis. We want to know, first, what that policy will do to preserve and extend those industries which we have ready equipped, and we want to know what possibilities it will open up for expansian in entirely new directions. Upon industries of the first class, including steel, textiles, shipbuilding and coal, depends the prosperity of the other industries. I am not greatly alarmed lest the textile and steel industries might possibly be neglected under the provisions of this Bill, because I think that the machinery is peculiarly fitted to give them the necessary protec- tion as quickly as possible. Their importance demands immediate action, their case is ready, they are organised, and they are in a position to put it forward immediately; and there is no doubt, from the evidence that they will be able to give, that they will receive a sufficient security of market to make them a national asset instead of a national burden, as they are at the present moment.

It is not of those industries that I particularly want to speak, but I would bring to the notice of the Financial Secretary, or whichever Minister replies this evening, one or two points with regard to the Scottish agricultural industry. In looking for an industry in which to absorb those unemployed people whom, as I have said, we cannot get rid of into the older industries, we have to look to agriculture. And it is not merely to the old agriculture, the old arable rotation, that we must look. The future of agriculture is going to be largely bound up with the more intensive production of milk and milk products, fruit and products made from fruit, bacon, poultry, and products of that class. The difficulty that I want to put before the Government is, as I see it, the difficulty that industries like steel and textiles will be entitled to the first consideration of the Committee; their size and importance demands it; but, while that is so, I hope that some means will be found whereby consideration of the agricultural side of industry is not unduly delayed. That seems to me to be an important and vital point. It is true to say that agriculture, as compared with these other industries, is not organised as well as it might be, and I would appeal beyond the walls of this House to the agricultural interests throughout Scotland to see that they do organise themselves and have their case ready with evidence to put before the Committee when the time shall arrive.

There is one tribute that I should like to pay in closing. I do not think I should be here in the House of Commons to-day if it were not that my political interests were stirred some 10 years ago by a remark of the right hon. Gentleman the Member for Carnarvon Boroughs (M. Lloyd George), who is not now present. I remember him saying, shortly after the War something to the effect that it was up to the new generation to look at things through new eyes. When the Safeguarding Duties and the McKenna Duties first appeared, we realised that he was talking business. The tribute I want to pay to him, by one of my generation, is that I think he has done more than anyone else in the country of recent years to make Protection a certainty in my time. I am going to take his advice. It is because I think it is necessary to look at things through new eyes and because this Bill embodies those principles that I support it.


I think I ought to extend the congratulations of the House to the Noble Lord. His case was well argued and well reasoned and, although we do not believe in what he said, it is reasonable and fair to say that it was a good performance, and we shall look forward to him taking part in our Debates. The Debate to-night seems to have ranged over practically every part of the Bill. The hon. Member for Lincoln (Mr. Liddall) contributed an argument on the effect of a tariff on wages. Fortunately he did not go very far in that direction, because he followed a line of argument which he could not possibly carry through. If he makes an examination of the effect of tariffs on the wages of workers in various countries, he will be starting on something which he cannot justify and which will be a condemnation of the Measure. He was followed by the hon. Member for Bethnal Green (Major Nathan), who described tariffs as a great gamble. They have been described by several prominent economists as the greatest gamble of all time. He further asked: Do the trade figures warrant the imposition of a tariff? That is a question on which we should all like to say something, but I am not going to follow that point of view. I intend to speak as to its effect on working-class people, because I feel that they have been left too much out of the argument. They are the people who are going either to suffer or to benefit most, I cannot see that they are going to benefit at all, and I believe that they are the people who will suffer more than anyone else.

9.0 p.m.

On the question whether the trade figures warrant the imposition of a tariff, I will not use a lot of figures, because it is not necessary. It will be sufficient to say that for the first 10 months of 1930 our imports fell less than those of the United States, and the same thing applies to exports. I think that is a fair test, because America is the greatest tariff country. We will leave Germany out for the time being. If we can hold our own against America and come out rather better than America, I do not see that we are justified in any way in altering our tariff. Our unemployment figures are better than those of any tariff country in Europe, so that from that point of view there is nothing whatever to justify our adopting tariffs, because there is not a tariff country in Europe, with the exception of France, whose unemployment percentage is as low as ours. One would not like to see our unemployed in the position in which they are in America. If what we read in the Press is true, their position is a disgrace to humanity and to the world and, while I do not want to say anything about other governments we must realise that the fact that the people are in such a position as is reported in the Press is a matter that ought to be taken up by the chiefs of the Departments of the Government with a view to trying to improve it.

I was rather interested in the statement of the hon. Member for Widnes (Mr. Robinson), If the statement he made would only materialise, the Bill might justify its introduction, but inquiries have been made with a view to building factories ever since I came into political life, and not very many have been built. You can keep on making inquiries though there is nothing doing. The hon. Member said that inquiries have been made for about 200 factories to be built. If inquiries delivered the goods, it would be a different proposition. There would at least be some work for someone, because the factories would have to be built somewhere. He also said that he hoped the workers would have the benefit of the efforts of the Government. That is just one of the things that I am afraid of. I am afraid the workers are not going to have the benefits, but are going to suffer the penalties of the effect of this Bill when it is carried through. He said business was looking up in other countries on account of their tariffs, and he painted a picture which made it appear that Great Britain was going to be an Eldorado. Everyone would like to see us in that position. We should like to see an improvement from every point of view. I will not follow him, because I do not believe the statements he was making will ever materialise under the effects of the imposition of tariffs. I should like to make one or two short quotations. The Prime Minister, speaking at Bedford on 14th November, 1930, said: Whatever may be said for tariffs or for import duties, no reasonable and well informed man can say they will make the standard of life high and enable the workers in a protected country to keep their level of living at a standard which is really good. He followed that by speaking later at Blackpool in 1931. He said: But that was not what tariffs did. Tariffs simply increased the cost of the means of livelihood and the person who bore that increased burden first of all was the workman's wife. Wherever they had been tried wages had gone down, the hours of labour had gone up, social services had deteriorated and the struggle for life had been intensified. They were not going to adopt that quack cure for their present ills. However, we find that the quack cure is going to be adopted by a Government of which he is the head. If he has any qualms about it, it is rather peculiar that he should leave the staid opinions of a lifetime and as the head of a National Government became a quack of a new thing like the introduction of tariffs. The Lord President of the Council, writing to the First Lord of the Admiralty in 1928, said: We are pledged, and shall continue to be pledged, not to impose any taxes on food. That is a very definite pronouncement, but it is now a. thing of the past. I will quote two short passages from Lord Snowden: I am sure that high tariffs, being such a hindrance to trade, are in some degree responsible—and perhaps in no small degree responsible—for the depression of trade which has spread over the world. One of the effects of Protection is to reduce the spending power of the people. In a foreword which he wrote to a short pamphlet last year on the question of Empire Free Trade, he said: This title has been used to disguise the true character of the scheme which is undiluted Protection. The scheme would involve the heavy taxation of all kinds of food and raw materials, and by that would raise the cost of living and the prices of raw materials, thus inflicting a tremendous burden on industry and destroying our power to compete in world markets. The adoption of the policy would destroy our great export trade and throw vast numbers of people out of employment. It is the most fantastic and impossible scheme ever submitted to the country. On the other hand, much has been said about improving industry, but little has been said as to how it will lower the standard of life generally. Some people have said that it is a sop to industry, and the hon. Member who preceded me stated- that subsidies had been given in the past amounting to over £100,000,000. I believe that this is another sop to industry. Industry ought to be able to get upon its own feet without other people being penalised in order that the manufacturers in those industries could make themselves richer. There is something more in life than bank balances, and if we had a human feeling we should be as concerned for the welfare of the poores; people in the community as for the rich Nearly 40. years ago Keir Hardie said: I would resist … any attempt agai a to impose Protection … it would aggr[...]vate every social and industrial evil. I think that he was right. It is really nothing more than a method of increasing the social evils of our time and bringing our people to destitution and starvation. It has been said that Protection will not raise prices. It is a queer kind of arithmetical calculation for anyone to get into his mind that you can impose a charge upon a commodity and not make it dearer. Whatever is imported into this country in the last analysis will have to be paid for by the consumer or the last purchaser. The people who hand the commodity down from one to the other will not accept responsibility for the increased cost. The position is as true now as it was in 1904, when Mr. A. J. Balfour said: If home prices are not raised, industry is not encouraged. If industry is encouraged, it is by raising prices. The odd thing is that Tariff Reformers whilst stoutly protesting that Protection will not raise prices in this country, freely admit that it does so in every other land. It has been said by many people in this country that those who profit by the experience of others are wise people. One would naturally think that nations would be in the same category. If you take the whole of the tariff countries, nearly everyone agrees that the imposition of tariffs has made the cost of living higher. Mr. Blythe, Minister of Finance in the Irish Free State, said: A policy of high Protection would send the cost of living in the Free State soaring to intolerable heights. This is from Australia: In Australia the tariff wall has been made too high. It is inevitable that some changes will be necessary to permit cheaper cost of living, cheap manufactured goods and more employment. The increased duties increase the cost of living. We have the same sort of thing in respect of Germany. The Minister of Economic Affairs said: The new tariff had the effect of raising prices at least by the amount of the new duties. In France: It is considered that the French Tariff Bill will unnecessarily increase the cost of living. In the United States of America, Mr. Johnson states: Protection has raised the prices of everything. You can go from country to country, and you see that the same sort of thing applies. Nearly every country is suffering because of the high cost of living owing to the existence of very high tariff walls. Coming down to our own position, I will give two quotations from leading Conservative statesmen of this country. Lord Salisbury has said: The Government is pledged against throwing any fresh burden on the food of the people. Lord Brentford, formerly Sir William Joynson-Hicks, has said: They cannot tax imported food with 2,000,000 unemployed with the possible effect of making it dearer. There is also the classic statement of the late Lord Melchett, who said: Of course it will raise prices. It is bound to do so. That is the object of it. If it did not do that, there would he no point in it. These are the kind of things which lead us to believe that the whole thing is nothing more nor less than a farce and an attempt to give relief to a certain section of the community as against another section of the community. Are we prepared to consider the effect of a tariff upon a country when once it has been applied We are to have an advisory committee. If one makes in- quiries in regard to other countries where they have a tariff and have had an advisory committee, it will be found that the advisory committee is a particularly slow machine. There is very great difficulty in getting it to move. I am not afraid of that sort of thing applying here for some time. I think that the advisory committee will move with a rapidity which will probably mean that they are not giving the serious consideration to the question which is really necessary.

Will a tariff fortify private enterprise? Tariffs certainly will be a bulwark for the manufacturer and the employer, particularly in industries which have been accustomed to meet with great opposition in markets in respect of their commodities. What is a tariff going to do for the coal trade, which is the trade in which I am interested? Is it going to help the coal trade from any point of view at all? I know that I shall be told that they are not going to tax wooden pit props. But that will make no difference at all. Everything which is used in the pit, except human labour, will be increased in cost to the employer, and, therefore, it is bound to increase the cost of the production of coal. The increased cost of the production of coal will make it more difficult for our people to sell coal in other countries.

The question of retaliation has been raised. I am firmly convinced that retaliation from other countries will take place, and coal will be one of the commodities in regard to which we shall suffer most. It is no use people talking about good will when you know very well that a tariff will not result in increasing the wages of the working class, and cannot do so. The extra cost of living may eventually force employers to give higher wages, but before the workers receive higher wages they will have suffered tremendously through the imposition of high prices. They talk of higher wages under Protection but overlook the fact that the sweating conditions which they advance as the reason for tariffs, exists in protected countries. They seem to forget that anything of that kind can apply, but it does apply under Protection.

In my opinion, a large number of the basic industries, shipbuilding, mining and other big industries, will not benefit at all, and this Bill will simply mean laying burdens upon those people. Mr. Gardiner, in one paper, described this Bill as the greatest gamble in our history. I am not an economist but I read other people and draw my own conclusions, and I believe that it is a very great gamble. It is a Bill to provide revenue for the reduction of Income Tax, as was stated by the Chancellor of the Exchequer last week. If the main purpose of the Bill is to raise £30,000,000 or £40,000,000 in order to relieve the Income Tax payers, what are the Government going to do to relieve those people who have had 10 per cent. taken from their unemployment pay? Would it not be better —[HON. MEM BERS "To give them work!"] You have had nearly six months in which to give them work and you have given them none. You had a Vote of Censure on the Labour Government because we had not solved the unemployment problem in a fortnight.


Is the hon. Member aware that the unemployment figures in Bradford alone have gone down from 37,000 to less than 20,000?


The total unemployment figures have gone down very little, if any. People who have been working short time may have got one day, or perhaps two days, in a week extra, and have been taken off the register, but the total unemployment position is worse than it was in August last. The duties on food will be too great a burden for the poor to bear in their present depressed conditions, and any Government with any milk of human kindness in their composition would refrain from imposing any further hardships upon the poor people. If the Government are going to relieve burdens they should relieve the burdens of the poor first, the people who have tin opportunity whatever of relieving themselves. If under, this Bill the Government raise money they should apply that money in order to give the greatest comfort to the greatest number.

We are told that the Government were given a free hand at the election. Some say that they received a doctor's mandate, and that it has given them a free hand to do what they like. They are introducing Measures which they like and which we do not like. They are introducing Measures which have a definite and set purpose, and that purpose is to carry out the Tory policy of relieving the people who need no relief and imposing burdens upon those people who do need relief. They ought to apply the revenue that may be raised under this Bill to relieve the burdens of the poor and try to restore them to a higher standard of life, whereby their physique will not suffer as it has suffered during the past few years. How many people do hon. Members think would be physically fit to carry on their employment, providing it was offered to them next week? A great proportion of people, particularly in the mining industry, would break down. They are so weak that it would be absolutely impossible for them to carry out the work which they were called upon to do; they would be incapable of it.

By this Bill the Government are making a change in our fiscal system. What is it to be? Is it to be for the better or is it to create or strengthen the spirit of revenge, the revengeful feeling which at the moment is rife throughout the land? [Interruption.] It is no use saying that there is no feeling about this matter.


Will the hon. Member tell the House seriously what he means by the revengeful feeling about the land? There is no revengeful feeling that we know anything about.


If the hon. Member does not know anything about it, he does not know anything about anything. In every town or district that I have been in there is the feeling that the poor are penalised, and they are resenting the action of the Government. The hon. Member has asked the question in all good faith, and I can tell him that there is that feeling everywhere throughout the land. I would like the Government to do something to pacify that feeling and to give the people the feeling that they care for them, rather than the feeling that the poor people are an oppressed and depressed class and outside the pale of civilisation. That feeling must be remedied. If by this Bill any money becomes available, it would be far better to spend it in the direction which I have indicated than by relieving the Income Tax by 6d. in the pound, or whatever other sum may be contemplated.


The hon. Member for Wigan (Mr. Parkinson) seems to be labouring under a complete misunderstanding as to the aims and objects of those who support the Bill. We are as desirous, as he is, to secure more work for the unemployed, to maintain the standard of living and to do all we can to promote and develop industry. That is the object of the Bill.


I do not believe that the Bill will increase employment, and that is why I spoke in the way I did.


The hon. Member is entitled to his opinion, but he must not claim, as hon. Members on the Opposition side are inclined to claim, a monopoly of interest in the unemployed, or that the Opposition have complete wisdom and knowledge on these intricate subjects. I take the view that we are wise to rid ourselves sometimes of the views of experts and to have these matters decided by men of practical business experience, who can speak from their own knowledge of the difficulties with which the country is faced. Speaking as a Liberal, I attach great importance to the views of the President of the Board of Trade in matters relating to industry, and I desire to associate myself with him in the views which he has expressed. I think he put the matter in its true perspective when he said that the best and safest policy for the country as a whole in the special circumstances which have arisen is to adopt this Bill. The governing consideration with him, as with many of us, is not what theory appeals to our mind as the most attractive, but what conditions of trade and incidence of taxation are the best for British finance, industry and commerce in these strange days. That is the view which we who support this Bill are entitled to take.

It is possible greatly to exaggerate the differences which have arisen in the Cabinet upon the expediency of Measures of this kind. No doubt there are a few dissentients, but that does not in the least degree make this policy less the policy of the National Government. It is the policy of a Government which contains representatives of all parties in the State. While there are some dissentients, do not let us attach too great importance to the views which they have expressed. They remain in the Government, and by that very fact they have indicated that they regard the continuance of the National Government as essential to the well-being of the country. I should regard it as unthinkable that they should lend themselves in any shape or fashion to the weakening or the destruction of the prestige and authority of the Government of which they are Members.

Further, I venture to say that there is no distinction in principle between them and the other members of the Liberal party, because when I come to analyse —as has already been done so ably by the Financial Secretary—the views of the Home Secretary, I find that he is quite prepared to accept a measure of Protection, and that his difference is not one of principle but of method and degree. His alternative policy included, indeed, proposals which involve a certain measure of Protection. He is a party to the wheat quota, and to the combination of countries to secure economic pressure in other countries to reduce tariffs, and he has made it clear that he is, generally speaking, in whole-hearted sympathy with the agricultural policy.

There are in this House individual Members on the opposite benches who are opposed to this policy and to the Government, and who want to see the Government destroyed, but that is not the view of hon. Members who sit on this side. I, for one, believe that now that we have had this scheme put forward and endorsed by an overwhelming majority in the Divisions which took place on the Financial Resolutions we should turn now to the consideration of the Bill which is founded on the Resolutions and try to thrash out, in a spirit of friendly accommodation, the various proposals which are put forward and which the Government, I believe, are the first to admit should be subject to further modification where a case can be made, as I believe it can be, in certain respects to secure that modification. The form of the Bill itself is an exceedingly fortunate one in the elasticity which it provides, because the Advisory Committee has powers of such degree that it can not only move forward by stages but can also reverse. To use a motoring metaphor, the Bill has three gears. It starts with the 10 per cent. ad valorem under Section 1, and then beyond that the Committee can go further, and in the case of discriminatory action by other Powers, up to 100 per cent., but it has also the power to reverse. That power is given to the Committee to enable it to vary and to discontinue duties which may be found not to serve the purpose for which they were intended. It has also power to add to the list of exemptions of articles which are not to be subject to the duties. There is provision also dealing specifically with the case of shipbuilding, and we have got a very substantial concession in regard to the re-exportation of goods in order to preserve our entrepôt trade.

In other words, the form of this Bill suggests to me that the Government are anxious to proceed upon moderate and national lines with a view to meeting, as far as possible, the needs of our great industries, and protecting our consumers. Many of the criticisms made upon the proposals during the Debate on the Financial Resolution have now proved unfounded. No doubt there are substantial criticisms directed to the form of the Schedule and the provisions of the Bill, but, in taking it as the framework, the Bill appears to me to indicate the Government's desire to meet fairly all the various interests directly concerned and to recognise the difficulties and even the dangers that would attach to such legislation.

9.30 p.m.

The Lord President of the Council in his speech the other day indicated that this was an experiment and that Parliament always had complete control in its own hands. I venture to say that the permanence or non-permanence of these proposals will depend not upon political influences, but upon the success which attends them when they come into actual operation. I am satisfied that in the course of the Committee discussions the Government will be prepared to consider and to weigh very carefully all arguments which may be put forward for further modification or amendment of the Bill. For example, with regard to the question of raw materials, some of the fears which the Home Secretary indicated in the course of his speech have been removed, but there are other raw materials which one might well argue should be included in the exemptions. Perhaps the House will allow me to give one or two illustra- tions, very briefly, showing the type of thing which I am sure the Government are prepared to consider, and which I hope they will indicate in the course of the Debate their desire to consider.

In the division which I have the honour to represent, East Fife and in other parts of Scotland, we have a very important esparto paper manufacturing industry. What would happen if a duty were imposed on their raw material, which is esparto grass? It so happens that esparto grass is probably the best illustration of the pure raw material that could be given, because it is an uncultivated grass which has no labour upon it except for picking and baling it before it reaches the mill. It is not produced in any of our Dominions or at home, and can be obtained only from a very limited area in the North of Africa—in Algeria, Tunis and Tripoli.

This raw material is used by the mills which constitute one-sixth of the whole paper industry, and is imported to the value of £1,202,000, upon an adverse exchange, because it is paid for in francs, which puts a very serious burden upon the industry to-day. It is used in the manufacture of a high-grade paper which is exported very largely. The importance of our export trade is a consideration which, I understand, the Government have especially in view in dealing with exemptions. I have no desire to go into further details because I want rather to give an illustration, but I suggest that the very small revenue which might be derived from a duty of 10 per cent. upon this raw material, amounting only to something like £120,000, would be far more than counterbalanced by the loss of revenue from the reduced production and profits of the paper mills.

That is an illustration of the sort of raw material with which I am sure the Government will be willing to deal, along with others. I might mention also the case of certain woods, hickory shafts and persimmon heads used in the golf club industry, which are not produced in this country. That is the sort of case which might very well be considered in relation to the needs of industry. [Hon. Members: "Hear, hear !"] My hon. Friends opposite appear to think that is an argument against the Bill. I am going to put it the other way. It is an argument for the Bill, if the Govern- ment are prepared to show a willingness to meet, as far as they possibly can, the case of raw materials which are needed in some of our industries. The object is to maintain and develop our great industries, and it is for that reason that I support the Bill.

As regards the consumer, I have no doubt that it is the intention of the Government to protect their interests and it may be that some additions will require to be made to the Schedule of exemptions for this purpose. This Measure, I feel certain, will receive the support of the great mass of hon. Members on the ground that it is conceived on lines which are advantageous to the nation as a whole. I listened with interest to the excellent maiden speech of the hon. Member for North Lanark (Mr. Anstruther-Gray) whose father was for so many years a colleague of mine in this House. It was a speech which reflected, I am sure, the view which prevails in this House, that hon. Members are anxious to have the national mandate interpreted in its fairest and fullest sense and are supporting the Measure because it is on the lines of national advantage. We are sometimes twitted with not having the national interest in view. It is because we conceive that it is far better to unite in securing the national interest, upon lines which will receive the support of the great majority of the electorate of the country, that I support the Bill, and I do so with confidence that it will be regarded by the country as a genuine attempt to help our home industries.

I am not going into the question of agriculture to-night, but I hope that we shall have an opportunity of discussing that question on a future occasion, and of putting before the Minister of Agriculture the present needs of the industry. I maintain that it is possible to secure an immense increase in agricultural production and without exploiting the consumers take means to secure that our own producers have the first call upon the home market. That I am sure is a policy which will be carried out sympathetically by the Government. I desire to support the Bill believing as a Liberal that it will receive the support of the larger number of Liberal supporters of

the Government as a genuine attempt to secure the well-being of the nation as a whole.


I ask the indulgence of the House on the first occasion on which I have the honour of addressing it. There is one aspect of the Bill upon which I desire to make a few observations, and that is its effect on the development of the Colonies. I welcome the Bill because it is clearly the charter of the Colonies. Our Colonial Empire is greater in extent than the Indian Empire. Its population is nearly equal to that of this country and all the Dominions taken together. There are some 40 separate Governments and a great variety of peoples, towards whom we in this House are in the position of trustees. We are responsible for their welfare, both moral and material. The Colonies are capable of great development; they are destined to become the main sources of our supply of raw materials and they offer a very large field for our manufacturers in return. Most of my official life has been spent as an engineer on practical development work and I have some knowledge of the technical education of the natives. I am, therefore, in a position to testify first hand as to the great civilising work which this country has done for primitive peoples.

Recent research studies which I have made to determine the principles of the development of Colonies disclose that in order to develop successfully any territory there are three essentials, which I will briefly describe as men, money and markets. An examination as to whether any territory can be developed should be made on the following lines. First of all an examination of the potential production, next a study of what markets are available, and also a study of the population of the country and the capital necessary for its development. In the past the lack of assured markets has made it impossible to develop many of the Colonies in a proper fashion. With assured markets, that is where there is a secured preference, we can execute public works, instal plant and cultivate by modern methods. Without secured markets the wasteful native methods must be continued and no stable progress is possible. It is gratifying to find that this Bill provides such markets. We may say, in fact, that comprehensive economic development is possible for the first time in the history of the Colonial Empire.

The construction of communications, of large public works of irrigation, and the discovery of minerals, usually alters the economic life over large areas, and unless the developments are placed upon an economic basis, with more or less assured markets, disaster is almost bound to result to the people. Native cultivators cannot understand the great world fluctuations in the prices of commodities and some protection must be given them against the cruel blasts of these economic crises. In the past we have educated the native, improved the conditions of public health and raised the standard of life in the villages, but we have left them exposed to economic disaster by the insecurity of the overseas markets. It may be interesting to the House if I describe briefly haw these things may happen. Picture a native in the raw state, so to speak, after fighting and raiding and other amusing methods of gaining a livelihood, have been put down by a paternal Government. There is no incentive to work, his needs are very few; a handful of millet and a little milk suffices. He cultivates only enough grain to live upon, and perhaps brews a very potent beverage which has the most demoralising results.

In time the trader comes along bringing gay cotton goods from Manchester. These the women admire and insist upon having. The result is, as you would naturally expect, that the men have to exert themselves in order to cultivate more so that they can barter grain or some other product in exchange for the cloth and tea and sugar, which the trader also introduces. Into the territory that I have in mind these things have to be imported. Therefore, something has to be produced for export to pay for them. In the recent slump this product has fallen very much in value, and the native is being forced back to his original state, and would be forced back but for the help of a paternal Government. It is gratifying to know that the Bill provides such markets as will protect the natives from economic disaster in the future, and that the white population will be equally protected, because in these matters their interests are entirely identical.

The Colonies already give a very substantial and effective preference, up to 50 per cent. and more, wherever they can possibly do it. The suggestion has been made that they might give 100 per cent. preference, that is take the tariff off entirely, but this suggestion loses sight of the essential fact that these tariffs are the main source of revenue in most of the Colonies. If the tariff were taken off entirely it would be absolutely impossible, in most cases, for them to balance their budgets, and they would come down on our Treasury. The balancing of budgets is very difficult in primitive countries. It must not be forgotten that the Colonies have done more for us than we have done for them, and one is glad to note that that reproach is now about to be removed.

Summarising the effects of the Bill on this matter, the benefits to the dependencies are, first, assured markets for their products; secondly, secondary products are encouraged so as to prevent the country being dependent on a single product, which is very dangerous, especially if it has a crop liable to disease; thirdly, we have secured favourable conditions for the population, especially for the natives, whose economic position is generally very difficult. The benefits to Great Britain, on the other hand, are relief to the British Treasury, because many of these. Colonies to-day are living on their reserves. Then there is additional employment in this country because of the increased purchases made by the Colonies here. It has been estimated that even so little as an increase of 10s. per head of the colonial population would provide employment, direct and indirect, for from 150,000 to 200,000 workers in this country.

The third benefit to this country is that we have an assured supply of raw materials for our industries over a very wide range of materials. Also we have a secure supply of certain products which, owing to the limits of the world supply, it is very desirable in the national interest to produce within the Empire. It is evident therefore, that this Bill is a very important part of that Empire plan of economic unity which we all hope to see completed at Ottawa. The success of the Ottawa Conference seems to be now assured, and the beneficial result from it will react favourably not only to the Empire, but to the entire world.


In the first place let me congratulate the hon. Member who has just spoken upon his most excellent speech. He has shown a keen appreciation of the matters of which he has spoken and a wide knowledge which will be of great value to the House in future Debates. I wish to deal more particularly with one or two matters which are of great importance to the shipping industry and to the docks and harbours of this country. The Bill affects the shipping industry in three ways: First of all with regard to our imports from foreign countries which are, when received into our ports, incorporated into the common stock of the country; secondly, with regard to the exports of our domestic produce; and, thirdly, with regard to those goods which come into this country but are re-exported to other countries. That branch is what is called our transhipment trade.

The first two branches are obviously of great importance to the shipping trade, because every restriction of imports necessarily results in some depreciation of that trade unless it is compensated for by an increased export trade or by an increased import trade in other directions. Those are matters of great importance to the docks and harbours as well as to the shipping industry. But those are considerations into which I do not wish to enter now. What I desire to submit to the Government and to the House is the possible effect of the Bill upon our entrepôt and transhipment trade. It is impossible to exaggerate the great importance of this question. If I mention the fact that the re-export trade of London alone in 1930 was about £50,000,000, and that it constituted 30 per cent. of the entire export trade from the Port of London, one can appreciate the great importance of the subject.

It is quite easy, in dealing with traffic of this kind, when one is introducing for the first time a general tariff policy, to inflict irreparable injury upon that trade. The docks and harbours of this country are arranged and constructed from the Free Trade point of view; they are not arranged for a great tariff system. There is at present free inflow and outflow of goods at our ports, unrestricted in every way. It would seem quite obvious what may happen with regard to our tran- shipment trade when this country is in active competition with a great many Continental countries for this trade. It has to be appreciated that the only value of any particular port, from the point of view of this trade, is its adaptability to the three considerations of time, convenience and expense. The international trade which conies into those ports now will leave them if other ports provide better conveniences.

It seems quite obvious and I need not trouble the House with details, that if there is a general tariff policy, goods intended for re-export coming into these ports will have to go through formalities which must necessitate considerable delay. There will be formalities with regard to goods which are to be retained in this country, there will be formalities of bond and so forth and there will be no movement from one part of a port to another of goods for re-export without the closest supervision of Customs officials. A permit will be necessary before any movement of that kind can take place. The hand of the Customs officials will be upon the goods all the time, and that will necessarily involve great delay, and delay inevitably means expense and general congestion and dislocation at these ports.

That these are not mere figments of the imagination is shown by the fact that on the Continent all the difficulties which I have visualised have been experienced. One finds that in every Continental country where a general tariff system has been adopted, there has been the greatest difficulty in dealing with the international entrepot and transhipment trade. On the Continent the matter has been dealt with by making either entire ports, or large areas in the principal ports, free Customs areas. My submission to the House is that unless our transhipment trade, which is of such vast importance to the country, is protected against all these inconveniences, we are going to lose a great part of it.

10.0 p.m.

The only satisfactory remedy is to establish in all our great ports free zones where there can be as there is at the present time, a free inflow and outflow of the traffic intended for re-export. May I illustrate my point by reference to the case of Hamburg, a port which is no doubt known to many hon. Members. Hamburg is in a highly protected country and, there, one finds no less than five square miles of free Customs area. An area of 1,100 acres of wet basins is a free area, as against only 150 acres which is Customs area; and, as regards the basins for river craft, there are 375 acres of free area against 485 acres of Customs area. That is the secret of the great success of Hamburg as an international port. That alone has enabled Hamburg to occupy its present predominant position. One finds a similar arrangement in Copenhagen. If it is desired to judge what Continental experience has been I invite the Government to consider the development of these various free zones in the Continental countries. Free zones of considersiderable size are to be found in Norway, Sweden, Denmark, Germany, Spain, Italy, Greece and other countries, and, since the War, the free port zones have more than doubled. Practical experience is all tending in the direction of free zones. If it is desired to have the opinion of experts on the subject we find that M. Robert Haas, Director of the Communications and Transit Section of the League of Nations says:

The system of free areas and similar institutions thus appears to be a sort of compromise between the general tariff system of protectionist countries and the need for international commerce experienced by the great ports, which without that commerce are reduced to a merely local or regional importance. With regard to Italy, in a thesis upon this subject, Signor Montini having reviewed the history of the Italian ports states: The reasons which operate in favour of free zones are more urgent than ever. and he refers to — the almost universal favour which this institution more and more enjoys especially since the War, from the fact that it seems to be one of the necessary corrections of the ultra-protectionist tendencies which now prevail almost everywhere in the world. The United States in 1919 and again in 1929 held a thorough survey with reference to this question and arrived unhesitatingly at the conclusion that the system of free zones was essential for the proper carrying out of international trade among the countries of Europe. I, therefore, submit to the Government and the House that when introducing this great new system they should consider that it will inevitably cause the most serious dislocation unless some method of the kind I have mentioned is adopted. If a large free zone is provided in each of our ports, goods can be handled inside that zone and can go out from this country to other countries without need for the interference of Customs officials. An enormous saving of expense can be achieved in this way. Otherwise, all the goods coming in will have to be under the direct supervision of Customs officials involving great delay and cost. It is only necessary to refer to a survey held in our own country in 1918 by the Departmental Committee appointed by the Board of Trade to consider the position of the shipping and shipbuilding industries after the War. After full consideration of the free port system prevailing in foreign countries the Committee reported: Should it be decided whether for revenue or other purposes to extend widely the range of duties on imported articles, the question of creating similar free ports in the United Kingdom would become a matter of pressing importance. It is essential that the position of the United Kingdom as a great transhipment and entrepôt centre should not be impaired, and the best means of safeguarding these national interests would undoubtedly be by the establishment of free Customs areas on a large scale at the ports principally concerned. That is the definite, considered opinion of the Board of Trade after the War. There is no reason whatever why what was right then should not be absolutely right to-day, especially having regard to the fact that there has been a most extraordinary development of these free zones in the ports of the Continent. Our ports are up against the most intense competition by the foreign ports, and it is only by their adoption of the method of the free movement of goods in the ports that they have been able to compete with us in the past. This is the only method by which we shall be able to compete with them effectively in the future, and unless we take advantage of the experience over many years which other countries have had, we shall find that in the institution of our new system we shall run the gravest risk of losing this most valuable part of our international trade.


It is but natural that on a Bill of this magnitude it is possible to wander over a good many subjects, but I intend to confine myself to one or two points only. I am glad that the question of agriculture has already been mentioned in this Debate, first of all by my right hon. Friend the Member for South Molton (Mr. Lambert) and then by the Noble Lord the right hon. Member for Aldershot (Viscount Wolmer). I represent a purely agricultural constituency, and I cannot help agreeing with most of what was said by the right hon. Member for South Molton to the effect that the provisions in this Bill, in so far as they deal with agricultural products, are not very satisfactory, at any rate to the livestock producer. You have got a position where the producer of livestock will get no kind of protection for his produce. Meat is going to come free into this country. On the other hand, one of the great raw materials of the livestock producer undoubtedly is maize, and maize, as the Bill now stands, is subject to the 10 per cent. import duty. I know that in my constituency this state of affairs has been received almost with consternation, and I very much hope that, as the Bill goes through its Committee stage, it may be possible, in response to the strong representations which will be made by the agricultural interests, particularly by the livestock interests, to make some modification in this connection.

There is one other point which specially affects the part of the country which I represent, and also arises out of the First Schedule to this Bill and the articles which are exempted from the 10 per cent. duty. I refer particularly to the raw materials of flax and hemp. The other day, when the Home Secretary made his speech, he told us, or at any rate led us to believe, that flax and hemp were to be subject to the 10 per cent. duty, and from what he said earlier this afternoon I gather that it is possible that the original proposal was that flax and hemp should be subject to the duty. I assume that the Government said to themselves: "We are going to exclude meat, wheat, cotton and wool, at any rate, but with regard to the other things, let us leave it open till the last minute, and let us see how the various trades concerned take it and what they want." I assume that that is, in fact, what happened, that they found, for instance, that the linen industry was greatly concerned at the possibility of the taxation of raw flax and that industries dependent on hemp were equally concerned. They then, very rightly and properly, altered what may have been their original Schedule and put those raw materials on the free list.

With regard to flax, there is one rather special point that I want to emphasise, because I represent an agricultural constituency in Ulster, and I myself joined with the other Members from my part of the country in representing to the Government the desirability of putting flax on the free list, but in doing so I was in a sense acting contrary to the wishes of my own agricultural constituents, because flax is grown in my constituency, and of course my agricultural constituents would probably have liked to see foreign flax subjected to the dirty. But I myself and my colleagues from my part of the country felt that the balance of advantage was that the raw material of flax should be allowed in free and thereby benefit the great linen industry, whereas the production of flax in the North of Ireland is comparatively so small that I doubt whether, if it had been subject to this duty, it would have had a very great effect on the producers of flax. I hope, however, while dealing with this special point, that in future the linen manufacturers will make a real point of trying to use more home-grown flax, because unless they do in some way meet the home producers of flax, you will probably have before long a further application for a duty on foreign-grown flax.

On the general principles of this Bill, I desire to deal now only with one point, because there are so many points to which one could refer, and I so fully realise what a large number of Members desire to speak and how immensely important it is that Members should make short speeches on occasions of this sort. Therefore, I will merely say one word on the question to which the hon. Member for Tradeston (Dr. McLean) referred, namely, the Imperial aspect of this Bill. It is rather curious that after a long day's Debate we have really heard so little of the Imperial aspect. After all, from an Imperial point of view, this is without any question one of the greatest landmarks in British history. For the first time in recent history, we, the Mother country, are approaching our Dominions with the intention of talking business. There have been Imperial conferences in recent years many times, and every time at those conferences our Dominions and Colonies have been knocking at a firmly shut door. Now, for the first time, they will not come in vain and ask us to give them advantages which for years they have been prepared to give to us.

There never was a time when a more rosy view, if the situation is properly handled, lay before our great British Empire The responsibilities and the opportunities of those who go to Ottawa will be fraught with tremendous consequences to the future of our race. I earnestly hope and believe that our representatives at that momentous gathering will so conduct themselves that the British Empire will take-one more step forward in the great race for world supremacy; and I believe that the great opportunity which is afforded by the provisions of this Bill more closely to knit and unite the British Empire will not be allowed by the great traditions of our great British race to lapse.

Captain WATT

I must ask the House to extend to me that indulgence which is so generously and so willingly given to new Members who address it for the first time. Particularly must I ask that indulgence since I speak in a Debate of such outstanding and historic importance. In common with the vast majority in the House, I wish to congratulate the Government on introducing this Bill, a Bill which marks a new era in our fiscal policy and cannot fail to benefit our industry and trade and also our Imperial relations. While whole-heartedly supporting the general proposals of the Bill, I venture to offer in all humility and good will one or two criticisms which seem to me require favourable consideration if the Bill is to achieve that success which the country expects of it and which is so necessary in order to give security to our manufacturers.

My first criticism is directed towards the treatment of the iron and steel trade which, in common with other industries, is asked to be content with a 10 per cent. duty. A 10 per cent. duty, while bringing additional revenue to the Treasury, can have little or no effect in restricting the imports which, during the last few years, have been abnormal. It is true, of course, that the claims of this industry will be considered when the Tariff Committee is set up, but, while we are wait- ing for the Committee to be established, there is to be continued uncertainty and delay which might easily go on for weeks and months while this Committee, composed of a chairman and not less than two and not more than seven members, deals with a vast number of applications for protection and possibly an equally large number of objections. In ray opinion, the iron and steel producers ought to have been protected by an adequate emergency tariff at once, and not merely by a revenue-producing tariff. This would have restored the confidence of our manufacturers and restricted the imports which are now flooding the country, once that had been done then the Tariff Commission could have examined the claims of the industry and given their verdict applying a proper scientific tariff which would be both beneficial and protective.

I am one of those who think the iron and steel trade ought to have been included in the first Order under the Abnormal Importations (Customs Duties) Act, because I agree with the right hon. Member for Sparkbrook (Mr. Amery) that the essence of this matter is time. We cannot afford to waste time and miss our opportunities, because the position is too serious; and even now, before it is too late, and further delay ruins the chances of success, the Abnormal Importations (Customs Duties) Act ought to be applied to iron and steel. During the Christmas Recess I had the opportunity of spending a few weeks in an iron and steel district of Scotland. I do not know whether or not the Parliamentary Secretary to the Board of Trade visited that district during his recent industrial tour, but if he did he must have seen for himself the deplorable and critical conditions which exist entirely as a result of unfair foreign competition. Many works have closed down, others are working short time, with salaries reduced and staffs cut down until the numbers employed are only about a quarter of what they would be in normal times. These conditions are not peculiar to Scotland only, but are to be found in all parts of the United Kingdom. If the steel trade is to be helped to any appreciable extent, a tariff of not less than 33 ⅓per cent. must be imposed, because our manufacturers pay at least 30 to 40 per cent. more in wages than do foreign manufacturers, and their overhead charges are infinitely higher. A 10 per cent. duty, while of some value in restricting the imports of semi-manufactured articles, and bringing in additional revenue, is quite inadequate to give the steel trade any real chance against dumpers. I appeal to the Government to give the iron and steel industry that assurance and security which are so vitally necessary for its well-being and, indeed, for its very existence.

My second point relates to the textile trade, and concerns particularly the woollen and worsted section, the basic industry of Bradford and the West Riding of Yorkshire. Since the imposition of the 50 per cent. duty under the Abnormal Importations (Customs Duties) Act, the woollen industry has benefited to an enormous extent, with the result that the hosiery trade and the dress trade are in a particularly flourishing condition. Many firms are working day and night, though for months prior to the imposition of that duty they were almost idle, and there are thousands of men and women now in work in this industry who were previously unemployed. So far so good: but much uncertainty prevails as to what the ultimate duties will be when the claims of the industry have been examined by the Tariff Commission. There is a feeling that the Government ought to give an early assurance to manufacturers not only that the 50 per cent. duty will continue until the verdict on their case is given, but also that the textile industry shall be one of the first to receive consideration by the Commission.

Such an assurance would give our British manufacturers encouragement to launch new schemes of development and to lay down plant of Continental pattern. This would enable them to compete in those markets formerly held by France for the fine type of yarn, which is so extensively used in the manufacture of certain classes of goods where a soft handling yarn is essential, such as ladies' dress materials and fine types of hosiery. It is obvious that without some security on the tariff question, it would be folly for any of our firms to make these changes, and without the knowledge that by so doing they would be protected by a tariff sufficiently high to cover the difference between the labour and production costs in this country and those existing on the Continent. There is no doubt that uncertainty and lack of confidence are grave contributory factors in our depression at the present time, for not only do they hinder development, as I have indicated, in the textile trade, but they also prevent foreign fins from laying down factories here for the manufacture of goods which they are now making abroad.

I do appeal to the Government to hasten the sittings of the tariff committee and to let the terms of reference be as simple, clear and as easily understood as possible, for it is of the utmost importance to industry, to the unemployed and to the nation as a whole that the tariff difficulties of the various industries be removed at an early date, so that the country can settle down to hard work and enjoy that prosperity for which we have hoped and prayed for so long.


Following the usual custom, I would like to congratulate the hon. and gallant Gentleman the Member for Keighley (Captain Watt) upon the very able maiden speech which he has delivered. I do so with all the greater heartiness in that he was a fellow student of my own son at Glasgow University, and I should be only too proud to see my son follow in his footsteps. [HON. MEMBERS: "Not in the same party."] When I said "footsteps," I meant footsteps in a Parliamentary sense, certainly not in the party which has been adopted by the hon. and gallant Member. I like a son to follow in his father's footsteps.

10.30 p.m.

The Bill which we are discussing has been brought here with the avowed object of promoting the cure of the condition in which the country has found itself. The unfortunate thing for the Government is that it is not unanimous within its own ranks. There are differences of opinion as to whether this Bill is going to have the desired effect. Some of the Government's members are prepared to go a short distance with it in the direction of tariffs, but, having gone to the wayside inn, they remain there, and do not intend to follow the promoters of the Bill, or the Government, any further along the way. The Financial Secretary to the Treasury was warned this afternoon as to what he might expect tomorrow from the Secretary of State for Scotland, another dissentient, for the manner in which he had referred to the Home Secretary's dissension and defection from the party. They can compose their differences among themselves. I cannot understand why the Home Secretary, and those who are with him, having swallowed the Abnormal Importations (Customs Duties) Act and all that that contained, should halt there and not be prepared to go further with the Government with regard to tariffs. When they had taken the small bite, they might as well have swallowed the whole cherry, including the stone. Undoubtedly they would have suffered from indigestion, but that is what the country will suffer from when this Bill is passed.

The contention of the promoters of the Bill is, and it has been held by Members in all parts of the House who are supporting the Bill, that this Bill is necessary to provide revenue to help this country and also to reduce taxation. It. is also said to be necessary in order to provide employment. That was the old argument put forward by tariff reformers right back in the days when Joseph Chamberlain started his great campaign for Tariff Reform in 1903. It has always been pointed out, however, that you cannot have a tariff at the same time for revenue and for Protection. If you are going to take your revenue from the goods that come in, those goods are going- to compete with similar goods inside the country, and there is no doubt whatever that, in the case of previous tariffs imposed on articles coining into this country, the consumer did not receive the benefit of being able to buy the home-produced article at a lower rate than the article which came in from abroad.

There is another point which is maintained in the Bill itself, and which, to me, seems to be a very striking objection, and also a contradiction of the very things which the supporters of the Bill are putting forward. I notice that under Clause 11 it is proposed to exempt from taxation on coming into this country anything connected with shipbuilding, and to go further and say that, if any article has been brought into this country for some other industry and is now required for shipbuilding, the shipbuilders, if they obtain it in this country, will be entitled to a drawback. What is the purpose of that? If a revenue tariff is not going to increase the cost of the article by the amount of the tariff put upon it, why are goods or raw materials for shipbuilding purposes to be brought in free of tariff? Moreover, if it is not going to increase the cost of production of the ship, why is a drawback promised to people who get an article which has been brought into this country to be used ostensibly for some other trade, and upon which a tariff has been paid, when it is found to be necessary for the shipbuilding industry? You cannot have it both ways. You cannot say, with regard to one particular industry, that, if a tariff is put upon that industry it will boom, while in the case of another industry a tariff is not to be put on because it will destroy the industry. In Clause 11 alone the Cabinet and those who drafted this Bill have given away their own case, and have shown that either they do not understand what tariffs bring upon the country or they are deluding the people of this country by imposing such a Bill upon them.

No one, I am certain, will in any way grudge the tribute paid. to the father of the Chancellor of the Exchequer. I was fortunate enough to hear him at Glasgow in 1903 at the origin of the campaign. I do not grumble in the least. A man who believes sincerely and with conviction a certain faith, changes his ideas and absorbs new ones has a right to propagate them. And when the Chancellor of the Exchequer says this tariff is the consummation of the principles propagated by Mr. Joseph Chamberlain, he and his brother are entitled to the tribute which is being paid to them and to their father for the work that they have all three put in. But, if it is a tribute to Mr. Joseph Chamberlain's work, you have to realise that you are applauding and accepting an act which is going to be permanent and is not being brought into the House to be applied to the particular crisis which has arisen and for which the National Government was formed. The right hon. Gentleman smiles as if I were stating something which is not the case. Are you realising that it is the case? Then this Bill intends to make tariffs permanent.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

Nothing is permanent.


As permanent, then as the Chancellor and the Tory Government believe it can be. Then the national crisis is over. You cannot have it both ways. The National Government was to remain in office until the national crisis was over, and no party advantage was to be taken by one section of the others. If you are now forcing upon the House the whole Tory policy of the last 25 years, you are taking advantage of the other two parties—either that or the national crisis is over. The whole object of the Government is now clear. You have taken advantage of the Prime Minister's simplicity. There is one thing that Lord Snowden stated clearly in the other place last week in giving his reasons for his refusal to accept Cabinet responsibility. He told us that the Government had been formed expressly to look after and to endeavour to solve the national crisis. A national crisis cannot be solved by something which has been a political issue for the last 25 years. [HON. MEMBERS: "Why not? "] Because it has not solved it in America. It has not solved it in Italy. It has not solved it in Germany. Of course, the doctors who accepted the doctors' mandate from the country got a free hand. They believe, having first administered a small dose to the patient in the Abnormal Importations Bill, they can now give the full dose, and the probabilities are that the patient will die.

I should like to have seen the President of the Board of Trade here, because I have something further to say with regard to shipbuilding. It is to be left tax free, and I expect the reason for that is that the Cabinet consider that shipbuilding has been in such a disastrous condition for the last seven or eight years that it would be ruining it entirely to put a tariff upon anything that was looked upon as a raw material for that industry. I will give a few figures which I have compiled, and perhaps we shall find out from the Government later what is their object with regard to the shipbuilding industry. In 1923, 408,704 tons were built, the persons insured in that industry numbered 269,000, the percentage of employed in that year was 40, the number of unemployed persons was 113,000, the employed persons numbered 156,000, and the actual tonnage produced per man during that year was 2½ tons. In 1929 there were 931,397 tons built and launched, the persons insured in the trade numbered 204,500, the unemployed was 23 per cent., the actual numbers unemployed 47,035, the total employed persons in the industry 157,465, and the output per man was just under six tons. In 1930, 879,000 tons were produced, 204,000 people were insured in the industry, unemployment had increased to 31 per cent., the actual numbers of the unemployed had risen to 63,500, and the employed persons had dropped from 157,000 to 141,000, and the number of tons per man produced in that year was well over six. Mark the difference. In 1923 the output per man in the industry was 2½ tons, and in 1930 it was over six tons.

Can any Cabinet Minister, or any Under-Secretary on that bench, or any hon., right hon. or learned Member in the House tell me which part of this Bill is going to bring hope to the unemployed shipyard worker who has been thrown out of his work, not because of tariffs or of Free Trade, but because of the advanced methods of building mid launching ships which have made it impossible for him to find employment? Is there a Clause in the Bill which brings hope of improvement and prosperity either to the shipyard worker or to any individual in any other industry? The Chancellor of the Exchequer, and the Minister of Pensions smile. Let me tell them that this is not a smiling matter on the banks of the Clyde, the Tyne and the Mersey. I will give some more figures. Seventy-four thousand men in this industry have dropped out entirely since 1923, and of the remaining 195,000, 111,000 are now unemployed. The Government come forward with a Bill of this kind and talk about curing ills or solving the national crisis with a tariff Bill by puting 10 or 20 per cent. upon soya beans. Is that going to find employment for the shipyard workers or the steel workers or those in other trades? The Financial Secretary to the Treasury to-day indulged in a dialectical trick when speaking about the importation of raw material for the oil trade—feeding stuff for pigs. He spoke of soya beans, and said that it was only a one-tenth product of that industry and that this tariff of 10 per cent. was one-tenth upon one-tenth. A delightful trick, a dialectical trick. Saying that it was only one-tenth upon a tenth, was endeavouring to confuse the whole issue.




What is rubbish?


What you are saying.


I am only repeating what you said. I am glad that you admit that, it is rubbish. I should like to know whether the Government believe that this Bill is going to bring about what they claim that it will do. Tariffs will not bring about employment in this country. Tariffs cannot bring employment into this country, in the mass. We heard a statement made about certain districts where in some industries the workers are working overtime while others are unemployed and have been unemployed for a considerable time. That is the effect of tariffs. They have a repercussion upon other industries. It may be true that certain industries will be favourably effected, but the total unemployment during the past week or two has gone up by 200,000. On the other hand, one or two small villages and boroughs may show an increase of employment because some localised industry benefits, but in the country as a whole there is no improvement. Take the hosiery industry. The cold snap of the last week or two would justify an increase in the manufacture of underclothing, and that may account more for the increase in the employment in that industry than the possibility of tariffs.

I would ask the Chancellor of the Exchequer whether, when this matter is considered, the Advisory Committee will have before them the recommendations, as stated in the Bill, of the particular articles that have to be taxed and the amount that they have to be taxed, leaving the final decision to the Chancellor of the Exchequer or to the Treasury as to which particular article is to have a tariff placed upon it. Will they go over the whole extent of the articles? What will be the position if, as stated by the Financial Secretary to-day, there is a possibility of arrangements being made with other countries in order to have some sort of tariff agreement or tariff union whereby we give preferential rates to some countries on condition that they give preferential rates to us? The Financial Secretary made such a state- ment to-day. If that statement may be accepted as true, it clearly proves what was denied when it appeared in the Press, that there is a probability of a tariff union being formed to give preferences not only to the Dominions and Colonies but to other countries, on condition that they permit goods from this country to go into that country. That was denied, but the Financial Secretary has to-day admitted it is true, and the report of a particular interview that was denied has now been shown, by the haphazard phrase he introduced in his speech, to be true.

I hope that when we get to the Committee stage, the Government will realise the position. We on this side of the House may not be many but when we get to the Committee stage we shall carry this issue to the furthest point. It is not a tariff that is going to benefit the people. No one knows that better than the Financial Secretary. He has read sufficient Socialist literature and has quoted sufficient of it and tried to convert people sufficiently, to know that this Bill and all the talk which comes from the benches opposite in support of it is only so much rubbish, to use his own phrase. It is only political rubbish fit for the political garbage heap. The only thing which could benefit the people is scientific control of production and distribution. You have already seen that all the skill of man in the shipbuilding industry and in other industries can produce more than it is possible for this world to consume. More food can be produced than can be consumed, crops are allowed to lie rotting in the fields, grain is burnt in engine boilers, coffee is dumped into the sea and the production of rubber is restricted.

Everything that can be grown and produced by the hand and skill of man, and everything that nature can supply and can be encouraged to increase—all these increases are not accepted by the governing classes in the countries of the world as benefits for mankind, but are looked upon as a danger and a menace to the profit-making of the class that is ruling the country. Because of that the people are cooped up, languishing for food, in the slums of your great cities, insufficiently clad to meet the winter. Hon. Members may smile but they do not know anything about the matter. They do not understand the question. It is a political question for them but it is a life and death question for thousands of people in the country. That is why we are opposing this Bill tooth and nail and will fight it, small in numbers as we are. We hope to come back sufficient in strength to follow the precedent that those opposite have given us and the Measures that they have brought in, and with those precedents established, to bring in Bills that will create conditions which will really remedy this situation and end the crisis which has arisen.

The MINISTER of PENSIONS (Major Tryon)

I do not propose to follow the last speaker at any length in his elaborate and sensational account of the terrible conditions of the working classes of this country after two years of Labour Government.


May I correct the right hon. Gentleman? I gave the figures for 1923 under the Tory Government.


If the hon. Gentleman will look at 1931, when his Government went out, he will find things were very much worse. Nor do I propose to deal with the speech of the Leader of the Opposition. It had very little reference to the Bill under discussion, except that point where he said that our proposals were old and musty I gather that the proposal of the Opposition is one under which the Government would regulate and control all imports and exports. That is a much more musty programme than ours, because it is an arrangement which was unsuccessfully tried by Henry VIII.


He tried more than that.


An hon. Member whom we are pleased to see back in the House raised the question of newsprint, and it would not be inappropriate now for me to give some facts in regard to this matter. This is a question which affects between 6,000 and 7,000 newspapers and periodicals. Two-thirds of the imports come from Canada and Newfoundland and one-third from foreign sources, chiefly Finland, Norway and Sweden. The problem is not so simple as it appears. Three large newspaper groups own three-quarters of the newsprint resources in this country, with resources available for them in Canada and Newfoundland. On the other hand, certain periodicals and a great mass of small newspapers are not so favourably placed, and while certain newspapers advocate a duty on imports urgent representations have been made to the President of the Board of Trade by the proprietors of a very large number of newspapers in all parts of the country. The House will, therefore, appreciate the position on which we shall be asked to decide. The hon. and gallant Member for North East Bethnal Green (Major Nathan) gave us a very interesting speech. For many years as a protectionist I have had regularly thrown at me authorised figures about the balance of trade when they suited the Free Trade case, but now that the figures have gone against the hon. and gallant Member he suddenly brings forward fresh figures, which suit him rather better than the old figures.


The figures I quoted are the official figures from the Board of Trade Journal, 26th February, 1931.

11.0 p.m.


I am quoting from the notes made by the President of the Board of Trade. The question of Colonial preference has been mentioned. It has been suggested that you cannot combine a policy of Imperial preference with a policy of Protection for the mother country and at the same time negotiate with foreign Powers. The argument is that if you tie yourself to Imperial preference you will be crippled in your power to negotiate. It is quite easy to say that the thing cannot be done, but as a matter of fact the people of Canada know better. For many years they have had a three-decker tariff, a low one for us, and a higher one which they are prepared to mitigate in favour of those nations which are prepared to treat Canadian products fairly; and they are run simultaneously. As a matter of fact, in the case of Canada they have a special measure for the West Indies, and in a certain sense may be said to run four tariffs. There is no reason, therefore, why we should be denied three. Take the case of the 10 per cent. duty. I agree with those who say that this is mainly a revenue tax. It will be slightly protectionist, but the main effect of it will be to bring in revenue, and I claim that by strengthening our revenue we shall be able to present a much better balance sheet to the whole world which will help us internally to keep up the value of the pound. It does bear some features which I should have thought would have brought some support from Liberal Free Traders. I feel that they speak on the subject of food taxes with far more authority than I do. In the past, for generations, it has been the Free Trade policy to impose foodtaxes. It is because we have resolutely refused to put duties on manufactured goods that we have had to raise revenue by putting duties, and very high duties, on food. Therefore, when Liberal opponents of the Government speak of food taxes they speak with exceptional authority. Not only have they for generations been proposing at elections to take the taxes off, but they have constantly, on re-election, voted for keeping them on. If they had not always voted for keeping them on they would not have been able to go on promising at each election to take them off. They could not help themselves. It is just because they were Free Traders that these duties had to be put on food. These Liberal taxes are food taxes. You cannot get sugar from anywhere without paying a tax. That is so whether it is home grown or foreign. The word "tax" is rightly applied to these duties. But we propose something different. We do not propose what are rightly called taxes. We substitute something very much better in these duties on foreign produce, and we leave large sources of untaxed supplies available from British sources.

The Liberal policy is to tax food. We merely propose duties on certain foreign produce, and we take into consideration two things. First we take into consideration the enormous sources of untaxed supplies which are available, and, secondly, we take into account the enormous amount of increased internal production. There are nowadays two kinds of photographs, the familiar moving pictures and the old photographs which are known in America as "still" pictures. It seems to me that the Liberal opponents of the Government view these things as a "still" picture; they take no account of movement which will occur later. Before you take into account the incidence of a 10 per cent, duty you must allow, first, for the enormous free and untaxed supplies, and, secondly, you must not take the "still" picture, but think of the movements that will occur subsequently and the immense internal untaxed supplies which will become available for our people.

Let me turn now to the Opposition immediately in front of me. It is not for the Labour party to criticise a 10 per cent. tariff, because I understand that Mr. Arthur Henderson advocated a 10 per cent. tariff before the General Election as a means of raising revenue in order to avoid a reduction in the unemployment benefit. He cannot possibly be accused by hon. Members opposite of thinking that a 10 per cent. duty would raise prices, because that would have meant that he was concealing the fact from the unemployed and pretending that he was letting them off any sacrifice when he was really going to impose upon them a duty of 10 per cent. affecting everything that they consume, and affecting not the unemployed only but everyone else. Therefore, I had hoped that we should have had the support of the Labour party for this 10 per cent. duty, which some hon. Members opposite themselves have advocated and which it is contended would produce no rise in prices. I think the President of the Board of Trade was entirely right in taking that view. It occurs to me also, if you may use a tariff, as the Labour party suggested, to raise money for paying unemployment benefit, why should you not use a tariff to endeavour to provide the unemployed not with the dole but with work and wages?

We had an extraordinary criticism from a new Member of this House. I shall not give his constituency unless it is desired. He is one of those who voted for the Abnormal Importations Act, and he says that he knows and admits frankly that it has given an impetus to the wool and textile trade with which he is connected, and which was in danger of going out of existence. That Act has already, in his opinion, saved the wool textile trade. Then he proceeds to declare that he will vote that it should not go on and that this Bill should not be passed, so that the advantages which he acknowledges would be destroyed by his vote if he got a sufficient number of other people to be equally unwise. I suggest that when we come to consider not only the 10 per cent. duty, but the additional duties superimposed upon it, we are entitled to have regard to what has happened in this country in the last few years in the experiment on a considerable scale which has been made in the case of the McKenna Duties, the Safeguarding Duties and similar Measures. We have seen, first and foremost, that the Free Trade contention that a duty raises price by the full amount of the duty is unfounded. The whole Free Trade argument on that basis has collapsed. We have also seen works brought over here and established in this country.

We know that these additional duties, if imposed, will do something to redress the balance of trade by reducing the imports of certain things which we might just as well make in this country so that we could keep our very limited importing power to the things which we really need to import. We have not heard on this occasion from hon. Members opposite the argument that the bankers were in favour of Free Trade. It used to be considered a powerful argument on the other side that the bankers were opposed to us, but I believe that the bankers are not quite so popular on the other side as they used to be. The hon. and learned Member for East Bristol (Sir S. Cripps) perhaps did not like to bring the bankers into this Debate when it is proposed, I understand, to abolish bankers and have the banks taken over by the party opposite, whose management of our finances during the last few years was so conspicuously successful.


I would remind the hon. and gallant Gentleman that he took our Chancellor of the Exchequer.


Yes, and I am very proud to be associated with the man who warned the country of the danger. If the hon. Gentleman opposite had listened to him it would have been well for him.


He dissociated himself from you last week.


The hon. Member who preceded me also told us of the terrible condition of shipping. I sympathise with him in the sad state of that trade, but surely the fact that shipping is in a bad way is not a conclusive argument for maintaining the system under which it has got into the bad way. He asked a perfectly fair question: how would shipping benefit by our proposals? [HON. MEMBERS: "Shipbuilding!"] Yes, but increased shipping would. increase our shipbuilding. There are two or three ways. I shall deal later with the question of how by negotiation we can get a free exchange of goods with other countries which I hope will give increased use to British shipping. I believe it would he much better for our shipping if the ships brought in raw materials to this country and took out British manufactured goods instead of bringing in finished manufactured goods, and very often going out empty.

Then, apart from the question of Imperial Preference and the main advantage which I see from the Bill in the enormous power which it gives to this country to reciprocate with the Dominions in the matter of preferences, if we greatly increase, as we hope to do, the trade between this country and the Dominions, it is obvious that this being an island, that trade will be carried in ships and that would mean more employment for our ships, particularly in the long distance carriage of goods, which I am told by the hon. Member for Grimsby (Mr. Womersey) is especially valuable from the point of view of employment. Therefore I see advantages which can come to the shipping trade.

I hardly like to go at any length into the problem of the depreciated pound, but as a Tariff Reformer of the old days, I am much amused at the number of Free Traders who have suddenly discovered the enormous advantages to this country of a depreciated pound, which, they say, acts very much like a, tariff. I am glad that they are in some way anxious to limit our imports and increase our exports, but I suggest that a depreciated pound is not as good as a tariff for many reasons. First, it works equally against the importation of all classes of goods and does not discriminate between raw materials and manufactured goods; secondly, it is very uncertain. No one knows for how long any other country will be on the Gold Standard or when it may come off. It treats all goods alike and many countries differently, but above all it does two things which are very important to the country at present. It brings in no revenue, and it does not give preference to our Dominions. There fore I hope we shall not hear any more about the advantage of a depreciated pound as a substitute for a tariff.

The question has been asked, How do our exports benefit? That has been answered already by my Leader in this House much better than I can answer it, but I would remind hon. Members that we think that these proposals, by increasing production in this country and by encouraging it on a larger scale, will enable us to increase our exports, as has been the case under the Safeguarding of Industries Acts. Secondly, we believe that Imperial Preference will increase our exports, as it has done in many cases under Safeguarding, as is universally admitted. Thirdly, we believe that negotiations with other Powers will also enable us to increase our exports, So there are three examples of the way in which the passage of this Bill will, I believe, improve the export trade of this country.

Now we come to the problem of negotiations, and I do not wish in any way to deprive the hon. Members opposite of any satisfaction that they may have derived from their efforts to bring about a tariff truce. It seems to me that the proposal for a tariff truce, so far as it had any effect, encouraged other nations to put up tariffs. But there was a very important- statement made many years ago by Lord Salisbury, when Prime Minister, the upshot of which was that as long as Great Britain was stripped of her means of negotiation, other nations did not care two straws about our favour. When this Bill has been passed, foreign nations will care more than two straws about the commercial favours of this country. The interest of other countries in our favours will be measured not by two straws, but by about £1,000,000,000 worth of imports which in good years we have brought in. We are still the greatest purchasers of goods from overseas, and I believe there is no foreign country in the world which would not gladly modify her tariff in return for concessions which, when this Bill is passed, we shall be able to make.

I wish to allude to the subject which appeals to me most of all in connection with this Bill. My right hon. Friend the Member for Antrim (Sir H. O'Neill) spoke of it, and I was delighted to hear what he said. For more than 40 years the opportunity of Imperial Preference has been available for the people of this country. Free Traders have denied that any Colonial offer ever existed. Just 40 years ago the Canadian Parliament passed a resolution under which they declared that if we would favour their goods, they were prepared to give substantial reductions in the Canadian duties on British manufactures going into Canada. I will not go through the long story of conference after conference, but will just mention one or two of the leading events. At the time of the first jubilee of Queen Victoria the quiet people of that day were quite shocked at the proposals and a statement from South Africa and Australia that some preference should be introduced. None the less, the Dominions went on with the policy, and it was through a Canadian Prime Minister, who was a Liberal, that we first had Imperial Preference. Sir Wilfrid Laurier was the leader of the Canadian Liberals, and there was in this something which may perhaps appeal to the Liberals who are supporting the Government, because that was a development of Imperial Preference between Canada and this country and was some alternative to the high protection which his opponents in that country advocated at the time.

It was a movement towards freer trade in the Empire. It went on from that, and for many years nothing much more was done. I have always regarded the late Mr. Joseph Chamberlain as my leader in this matter. I have been very proud to he a humble participant in the early fights on this subject, and have fought elections and been beaten on it, but I have carried on until I won. He boldly put before the people of this country the proposal that we should adopt this policy, and from that moment it moved forward—not in this country, as it should have done, but New Zealand gave us a preference in 1903, in the next year South Africa. gave us a preference, three years afterwards Australia gave us a preference, and so it went on until all the great Dominions were united in favour of this policy. I will not go into detail except to say that during the War every remnant of Free Trade was thrown aside, when trade was controlled, when taxes were put on certain manufactured goods, and when almost everything in the country was controlled. We had a very remarkable sentence from the present President of the Board of Trade, who said in 1916: Our future trade policy must be based on new foundations in the light of events that have happened since the War broke out. It is interesting that the statesman who made that statement should have such a large and important part to play in bringing about this change now.

I come to the speech of my hon. and gallant Friend the Member for Pembroke (Major Lloyd George). I hope that he will allow me to say that we all appreciated his speech, which was such a happy combination of complete confidence and modesty. May I say in no hostile spirit that those of us on this side who favour Imperial Preference still remember his father as the Prime Minister who was in charge of this country when Imperial Preference was first introduced into the British Budget, and we rejoice to think that it was my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) who was Chancellor of the Exchequer at the time that this great reversal of our policy took place.

The point I wish to make is what an enormous help it is to the policy of Imperial Preference that this Bill should be available and should soon be law. Suppose we bad had this Bill law and this Government in power when the great Conference of 1930 took place. How very different would have been the result! It has been said that the Dominions do not give us very much. [An HON. MEMBER: "Hear, hear"] Some one says "Hear, hear" But the rebates which they gave amounted to no less than £15,000,000; that is to say, remissions of duty in order to pay for our goods. Remissions which we gave in exchange at that time were only £3,500,000. So they were giving more than they were getting. It is not from any lack of generosity on the part of this country that we have not been able to go further on the path of Imperial Preference. It is for the simple reason that, being a Free Trade country, we had such a very limited range of import duties. It is true that we had duties of over 100 per cent. on certain articles of food, but we had in these duties only a very limited range for giving preference.

Now the position will be very different. As a tariff reformer of the old days I welcome these 10 per cent. duties not merely for their revenue value but because their wide range over our imports will give us enormous opportunities of granting preference to the Dominions. Over and above that there will be additional duties which give us further opportunities in the same direction. We shall look forward, after regretting the follies of 1930 to the new conference at Ottawa, where a new Government fortified by the overwhelming decision of the people of this country will be able to meet the representatives of the Dominions.

Hon. Members opposite on the Labour benches are continually speaking of tariffs as if they were some invention of a limited number of Members of the Tory party. Have they ever heard of the Labour party in Australia? The Labour party there is protectionist, and there is this remarkable fact; When the great Imperial Conference took place in 1930, two Prime Ministers came to it, the leader of the Conservative party who had just won a general election in Canada, and the leader of the Labour party who had just won a general election in Australia; and when those two gentlemen met here in London both of them were supporters of Imperial Preference. So on all through you have had Liberal Prime Ministers for Canada, and Governments changing in Dominion after Dominion, Dutch representatives coming from South Africa, and all of them have been in favour of Imperial Preference.

It has been suggested by an Amendment that this Bill will bring a danger of war. I think that word might well have been left out of the Amendment. The United States, Russia and France have fenced off for their own privileged trade more than half the land of the world outside the British Empire. When the French arrange privileged trading with the natives of North Africa, when the Americans arrange privileged trading with the inhabitants of distant islands across the sea, when Russia corners half Asia are we to be denied the right of making what arrangements we like with the people of New Zealand, people of our own race? We have been treated badly enough in the past, and it is high time this nation, whose trade has been twisted and diverted and turned by the tariffs and regulations of every other country, should at last resume control of its own trade. More than that; I believe that the Bill will bring to this country some return of confidence. I believe it is right that the British people should endeavour to reorganise their trade in a conscious, deliberate effort, and I think the knowledge that the Government are doing what they can to help trade will, in these sad and difficult times, bring a new heart and a new spirit into our people.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to. —[Captain Margesson.]

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.

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