§ 11.5 a.m.
§ The PRESIDENT of the BOARD of TRADE (Mr. Runciman)
I beg to move,That the Additional Import Duties (No. 6) Order, 1935, dated the twentieth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twentieth day of March nineteen hundred and thirty-five, be approved.This motion concerns one of the most important of our great basic industries, which has been the subject of discussion here on a good many occasions. The reason for its coming before the House to-day is that we have recently received from the Import Duties Advisory Committee recommendations for an increase in the duties to be paid on foreign iron and steel coming into this country under most of the main heads. It would perhaps be as well that I should in the first place give a short review of the position as we now find it. From the time of the adoption by this country of a tariff policy, up to last year, there had been a progressive diminution in the imports of foreign iron and steel into this country, which went down from 2,840,000 tons in 1931 to 970,000 tons in 1933. Last year, however, the process was reversed; the total imports increased to 1,370,000 tons, or roughly by 41 percent. Imports from foreign countries alone rose from 850,000 tons in 1933 to 1,160,000 tons last year, that is to say by 36 per cent.
At this stage I might mention the effect that the Continental Steel Cartel has had upon the industry in this country. The Continental Steel Cartel is not concerned with all the iron and steel products which are included in our trade returns; it does not cover all producing countries on the Continent; but the imports from the cartel increased from 643,000 tons in 1933 to 912,000 tons in 1934, that is to say by 42 per cent. This has given rise to a good deal of discussion from time to time within the industry, and it has been mentioned more than once in the House here. Moreover, negotiations have proceeded between the English producers and the cartel itself, and that brings us on to a new chapter in the story of these duties.
The iron and steel industry from the start secured exceptional treatment under 1494 the Import Duties Act, partly because of the severity of continental competition, and partly because of the disorganisation of the industry, in which we have taken a live interest, following years of abnormal depression. Duties of 33⅓per cent. ad valorem on most primary iron and steel products were imposed, for a limited period in the first place, under the No. 1 Order of April, 1932, and, after various extensions of the period under Orders Nos. 3 and 8, the duties were made permanent in May, 1934 by the No. 18 Order. It was made clear in the House at the time—I forget whether by myself or by my hon. Friend the Parliamentary Secretary—that when the Order of 1934 was made the industry had adopted a scheme which promised to lead to suitable measures of reorganisation in the industry.
We have felt for some time past that in the case of a great industry like this, which is the foundation of so many of our big trades, and matters so much to the coal trade among others, it was impossible for us to continue our approval of a system under which no attempt was made at the organisation of the industry either in Wales, in England or in Scotland. All the suggestions which had been made from time to time for bringing the various interests together had been unproductive of a good remodelling of the industrial system under which they work. We made it clear from time to time in our discussions with the representatives of the iron and steel industry that they could not count on receiving the support of import duties unless they put their house in order themselves. I am glad to say that the result of the pressure which we exercised upon them has been that they have now set going a very considerable advance in the reorganisation of the industry, particularly in the big areas of the North East Coast and Scotland, and to a smaller extent in the Midlands and elsewhere. In Wales, however, very little progress has been made, but I hope that the new signs of enterprise which are now indicated in various directions will be productive of better organisation worked on a basis likely to secure permanent profit to the industry and permanent employment to those who are engaged in it.
1495 In this reorganisation, which we laid down as a condition of the support to be given by this House and by Parliament to the industry, we made a strong point of the reconstruction of the Iron and Steel Federation, and, as one result of this, I am glad to say, the Iron and Steel Federation has secured the services of Sir Andrew Duncan as independent Chairman in a position where he will be able to exercise considerable influence on the reorganisation of the trade. Sir Andrew Duncan has taken up his duties and already for some months has been making a complete survey of the iron and steel organisation for the United Kingdom, and I think that some of his recommendations are already taking shape.
Progress in organisation was retarded by the uncertainty caused by the substantial increase of 36 per cent, in 1934, as compared with 1933, in the imports of foreign iron and steel products. It was only natural that the minds of those who are in control of this industry and are directing its destinies should have been diverted from their main business of internal organisation to meeting this very remarkable increase in competition from outside. In making a survey of the situation as we found it, we came to the conclusion that the time had arrived for a new arrangement being made with the Continental cartel. Certainly an effort to reach an agreement was in process, but nothing had come of it until the beginning of this year, when the negotiations with the cartel became more acute. Our ironmasters met the representatives of the Continental cartel in London, I think about the beginning of December. The reason why I come back to the tale of the Cartel is this, that whatever arrangements we may make, whatever import duties we may impose upon foreign products, the fact remains that nothing we can do in this country has a direct effect upon foreign markets.
Under the cartel plan and under previous arrangements it had been possible for certain allocations to be made for some sections of our iron and steel trade in markets which were under the influence of the Continental cartel. We naturally wished to extend the area of those markets, and we gave what support we 1496 could to the industry themselves in their negotiations with their Continental compeers. The Continental representatives agreed in principle to a temporary limitation of the remarkably large importations of the last 12 months, but the two sides could not agree upon a figure. The British representatives increased an initial offer of 25 per cent. to 50 per cent. of the existing level of imports, the cartel after demanding stabilisation of the existing level, appeared ready to accept a reduction from 100 to 90 per cent.; that is to say a drop of 10 per cent. After further discussions with the advisory committee our industry made a further offer to the cartel. They suggested that the imports during the temporary period should be limited to the 1933 level, that is to say, about 70 per cent. of the then existing level. I am sorry to say that the cartel in its reply, while it suggested a new basis, proposed in effect a slightly larger import figure than had been put forward in the meeting on 5th December. Though the reply referred to the possibility of further talks, at the meeting of the International Rail Manufacturers Association last month, it appeared certain that no real prospect of an agreement existed in the absence of some official action in this country. The cartel clearly had an interest in continuing the conferences. indefinitely while imports continued at the existing level.
This was accordingly reported to the Import Duties Advisory Committee, and they, on the 28th February, made a report recommending duties by weight on a range of semi-manufactured iron and steel goods. It is important at this stage to realise what were the considerations which the committee set out. They stated that a large proportion of the iron and steel now being imported could, with advantage, be made in this country; secondly, that such increased production would improve employment; thirdly, that it would strengthen the competitive power of the industry in other markets; fourthly, that they had given special attention to those sections of the industry which have been using foreign steel; and, finally, that they were satisfied that, taking the long view, the policy indicated in their report was one which would best serve the national interests. The new duties are equivalent, in general, to from 50 1497 to 60 per cent. ad valorem on present prices, but I would point out that an assessment made on present prices must be qualified by the knowledge that these prices are, for want of a better term, called "dumping" prices inasmuch as they are lower than the prices quoted for other countries, and are, on the whole, considerably lower than the Continental home prices.
In accepting the recommendation for which we are asking confirmation to-day, the Government have made it clear to the industry that there were some considerations of first-class importance that must be complied with. First of all, we wished them to use the position in which we placed them for the purposes of the re-opening and the conduct of further negotiations with the Continental cartel. When the British representatives went out to the Riviera for their meeting about six weeks ago it was clear that the cartel was not likely to make much advance towards an agreement. We authorised those who were representing British interests to let their Continental colleagues know that, if an arrangement was not reached under a cartel allocation, then we should have to do our best to control the home market here by the increase in the duties which we are moving to-day. That did not appear to have any immediate effect upon the Continental delegates, and indeed, after two or three days' discussion, it became obvious that they were not likely to agree to a new allocation. Since then they have stated that all that they intended by that postponement was merely to continue the discussion. I regret very much that that impression was not given at the time because it might have been possible for progress to have been made in the negotiations, but as it was not made at the time, there was nothing for us to do but to fall back on the prospect which had been held out to them at first, that, unless an arrangement was made, we must provide for an increase of the duties for the home market.
Since then we have had a number of conferences with the representatives of our own industry, and the impression which I have gained, confirmed by all the facts which are known, is that a genuine effort was made on our side to arrive at a new arrangement covering all 1498 the principal categories of the iron and steel products. Our representatives are indeed going to resume conversations with the Continental delegates, I think on the 16th of this month, and I hope that then it will be possible for them to arrive at an arrangement satisfactory to both sides.
But in making these arrangements we have had in mind the necessity from the first of providing for the interests of the consumer. I should like to draw special attention to the steps which have been taken by us to see that the consumers' interests do not suffer. An assurance was given to us on the 4th March by a deputation of the British Iron and Steel Federation which was repeated in a memorandum enclosed in a letter from the Federation themselves to me on the 14th March. I will read one extract from that communication:With costs of production being subject to variations in the price of ore, coke and scrap, the level of wages and possible variations in the general price level, any absolute guarantee in regard to a particular level of price is, of course, impossible; but the Federation categorically renew the assurance given by their representatives to Ministers on 4th March that it is not their intention to raise prices as a result of increased protection. They will continue to adhere to the policy of low prices and increased efficiency, and use the higher tariff as an instrument for securing an international agreement which will obtain for this country a reasonable proportion of the export trade under profitable conditions.That was one of the first assurances given by them to us after they had already informed the Import Duties Advisory Committee that they accepted the conditions laid down by the committee on the same subject. Then, on the 22nd March, a general assurance was published in the Press to the following effectThe industry welcomes the report of the Import Duties Advisory Committee published this morning and the action of the Government thereon for the reasons so cogently stated in the report. The Council is satisfied that the measures proposed will create conditions within which the internal organisation of the industry can be carried a further stage towards completion and will also provide a basis for effective negotiations with the International Steel Cartel. It is desirable that the various unauthorised statements which have appeared recently in certain newspapers as to international agreement having already been reached or the form such agreement may take should be authoritatively denied. 1499 It is the intention of the industry, steadfastly, to pursue the objective of international agreement for the regulation of the home and the development of export markets in the interest of increasing employment in the industry. The price policy of the industry will remain unchanged and will be calculated to stimulate consumption both at home and abroad.With those assurances before us, and with the knowledge, of course, that, if those assurances were not complied with, the policy of the Government would naturally be modified to meet the new situation, I think that we are justified in saying that the step which is now recommended strengthens the hands of our British iron and steel representatives in their negotiations with their international colleagues, and that at the same time they will be able to do that without imposing any injury on our consuming industries here at home. It was reported to the Government that it was impossible to obtain by negotiations an immediate reduction of imports into the United Kingdom. On this side we regarded that, however, as imperative. When it has been made clear by the action of the Government and of this House that the imports into the United Kingdom at their present high level cannot be allowed to continue, the discussion, I hope, with the cartel will be more fruitful. At all events both those who represented us on this side, and the Continental users on the other, are well aware of the fact of the active interest taken by the House of Commons and by the Government in the arrangements for the future. I hope that in that atmosphere it will be possible for them to arrive at mutually satisfactory agreements. Under the shelter of an arrangement of this kind it ought to be possible to proceed with the details of more permanent arrangements for close co-operation of United Kingdom and Continental producers.
Let me draw the attention of the Committee to a matter which still concerns the consumer. So long ago as December of 1931 I drew the attention of the House to the importance of preserving a cheap supply of iron and steel for the big consuming industries, of which there are so many in this country, and I made it clear then that it was impossible for us to accede to a demand which was being pressed with a great deal of fervour in some quarters for an increase of the duties up to 50 per cent., on the ground 1500 that without any scheme for re-organisation, without any re-opening of negotiations with the Continental steel cartel, which had so much influence in the allocation of our foreign trade, it would be premature for us to embark on these large high duties; and I pointed out at the time that without these various considerations and assurances we could not be certain that the consuming industry would receive fair play. I am glad to say that all the conditions which have been laid down by us have been complied with by the iron and steel industry, and I have no doubt that there will be no further reason to be apprehensive in any quarter, either in South Wales, the Midlands, the North-East or on the Clyde, as to the price at which their commodities will be made available for the using industries.
I do not wish to go into any of the minor points which, I understand, are to be raised in the course of the Debate, but if any further elucidation is required of the position in which our industries now stand, and the policy which will be pursued by the Government, I shall be only too glad to give the information to the House. My final suggestion is that we should give these new conditions a full trial, that we should enable those who control our industry and represent it abroad in these international negotiations to make a good case for a reasonable allocation, not exhorbitant on their side, or with any attempt to break the market on the other, and that we should throughout the next few months—I would like to add throughout the months, in particular, in which the negotiations are taking place—be able to give full support to those who are representing the iron and steel producers of this country in their negotiations with their most formidable competitors in many parts of the world. It is with the idea of placing this basic industry on a permanently prosperous foundation that I move this Motion.
§ 11.30 a.m.
§ Mr. DAVID GRENFELL
I waited for some time to hear the right hon. Gentleman make any reference to the consumer in whom he was so much interested in former years and whose cause he has championed so eloquently in this house; but as I sat listening to the right hon. Gentleman, calm and unperturbed and almost debonair, I thought he had forgotten the consumer and that we would 1501 not hear a word about him. The right hon. Gentleman has relieved me from the trouble of quoting some of his earlier speeches, with which I have provided myself in case he had forgotten the consumer. I dislike very much to hear the echo of political remarks resounding in this Chamber. "Sufficient unto the day is the evil thereof," and I propose to devote myself to the subject before the House. The right hon. Gentleman did give a longer history of the so-called negotiations than is given in the White Paper, but there is much left unsaid, and I think the House is entitled to be told much more about the negotiations and the points of difference which were manifested. We are taking a very considerable risk; we are carrying the principle of protection very much further than anybody in this House anticipated. A few years ago the right hon. Gentleman would have been aflame with indignation if he had seen himself from this side of the House making the kind of speech he has made this morning, and he would have answered himself promptly and effectively.
This industry is a vital industry in the economic structure of this country. We are proposing not a small and moderate measure of protection; we are proposing for the first time what is in effect a measure of prohibition in the supposed interests of the steel producers. This basic industry has to provide raw material for a considerable number of our industries. No one has ever described that relation in fuller and more accurate terms than the right hon. Gentleman himself did in former years. This industry provides the raw material for the larger industries of engineering, shipbuilding, locomotive construction, motor-car construction, building, and a hundred and one other very important industries in the life of this country. A duty of 50 per cent., if it has the effect of raising the price of this raw material, will have a further very considerable effect, we believe for the worse, upon industrial activities covering a very wide range in this country. This industry in turn gets its raw material drawn largely from the soil of our own country. Coal and iron ore are the raw material of the industry. We are mining the whole of the coal in our own country. We do not mine the whole of the iron ore, although there is a variety and quality of iron ore which 1502 would meet the whole of the needs of this industry.
I did not know that the hon. Member for Whitehaven (Mr. Nunn) had an Amendment on the Paper to-day. I know his interest in the subject and I know that he has called attention on several occasions to the enormous extent of unemployment in the iron ore producing center. He is interested in the haematite iron ore, and represents one of the districts where it is formation and always near to coal; in fact, immediately underlying the coal measures. There is another iron ore industry which is seriously affected by unemployment, in Cleveland, where the iron ore is stratified and exists under different conditions. But the bulk of the iron ore which is used in this country and which may be used more in the future, is iron ore which is not mined at all, but quarried in open cut.
A serious consideration in regard to the future position of this industry is the tendency to move further away from Cumberland and South Wales and North Lancashire, to the locality of surface beds of iron ore in Lincolnshire, Northamptonshire and Oxfordshire, where a low grade iron ore can be mined chiefly by mechanical methods, employing the minimum number of men and producing iron ore at a low price. This has been responsible for the transfer of the industry to these centres, where, under other conditions, there would be no prospects for the manufacture of iron ore. The question of coal is a very important consideration, and I will refer to that when I deal with the effects of the duties which have been operative for two or three years. The steel industry employs about 150,000 people, but the total volume of employment in the production of steel, directly and indirectly, must be at least double that figure. It is therefore a very important subject, and I ask the President of the Board of Trade to give some consideration to iron ore areas like that represented by the hon. Member for Whitehaven and South Wales, which have suffered unemployment to a greater extent in time and degree than any other parts of the country.
1503 The iron ore industry of this country has been almost ruined. It is important to remember that during the time that the National Government have been responsible for the political and economic direction of the country, during the time when tariffs have been operative, the figures show that the importation of iron ore has gone up from £1,885,680 in 1932 to a figure of £4,533,149 in 1934; more than two-and-a-half times more than the figure of two years ago. Men in the iron ore districts have been waiting for employment. They were told that their prospects of employment would be enhanced with the return of the National Government and when protection was given to the steel industry. Protection has been generously given to that industry; but no protection has been given to iron ore workers. We do not ask for protection for the iron ore industry, but we do say that as a condition of protection being afforded, the British steel makers, who claim to be protected from cheap foreign competition, should not exploit that cheap foreign competition for their own advantage, and that when this House brings forward orders to enable them to carry on their business they should buy British materials for the use of their industry. The figures show that in Sweden, Norway, France, Algeria and Tunis, the quantity of iron ore imported has gone up two or three times in the last two years. It is a great injustice to the iron ore workers of this country.
I ask any hon. Member who represents the steel industry, like the hon. Member for Swansea (Mr. L. Jones) who knows more about it than I do, why it is that the steel owners do not procure their iron ore from this country? The iron ore mines in South Wales have been closed and neglected, but there is no better quality ore in Europe. They are a little more expensive to work, but, if protection is given to the steel manufacturers, why should they not be asked to get their iron ore supplies from such places as South Wales, where ore lies near to the furnaces and works. It has been said very often that steel is a basic industry and that any interference with the production and distribution of this commodity must have a great effect on other industries. I think that too much compliance has been shown by the Advisory Committee to the claims of the 1504 industry as such, and too little attention paid to the claims of the country. The industry is now producing more than it did in 1913. In 1913 the figures of production were 7,600,000 tons, and they were just over 9,000,000 tons in 1934. Exports, on the other hand, have gone down. In 1913 we exported 5,000,000 tons, or 70 per cent. of our production; but in 1934 we exported only 25 per cent. of our production.
§ Mr. GRENFELL
I have got the figures, but I do not think that I am called upon to give the figures for every year. The imports in 1913 were 2,250,000 tons, and they have been reduced in 1934 to one and one-third million tons. The hon. and gallant Member has asked for the figures for 1931. They are available, but I do not propose to go into every detail. In 1929 we reached the high water mark of steel production in this country and in the world. It is interesting, and I invite hon. Members who came into this House in 1931 because of the supposed delinquency of the Labour Government to look over the figures and explain why steel production went down in 1931 all over the world. The reduction was not confined to Great Britain. World production of steel reached a total of 118,000,000 tons, and went down to 50,000,000 tons in 1932. American production went down almost to one-sixth; that is, that there was only one day's work a week for American workers compared with their capacity to produce. America is a tariff country, so is Germany and Belgium. Other steel-producing countries are all tariff countries, and their fall in production was equal to and in most cases greater than, our own.
A change of government took place in 1931, and there was a change in policy. The right hon. Gentleman who used to denounce protection gave his assistance. He has travelled regularly ever since towards the direction of high protection; indeed, he is responsible for the largest measure of protection this country has ever known. As we have been told by the right hon. Gentleman, we started with 33⅓ per cent. for three months. Another three months was added, and then we came to October, 1932. Then the 1505 duty was continued for two years in order that the industry might be given sufficient time to reorganise itself. All this amount of assistance was given on condition that the industry should reorganise itself. The duty was continued for two years from 1932 to 1934 and various attempts were made to get the industry to reorganise itself, but it looked as if nothing would come of the proposals of the Government and that the industry was prepared to repudiate its own pledge and to disappoint the expectations of those who had come to its assistance. Two schemes were, however, finally submitted for the reorganisation of the industry and we have had a White Paper prepared describing the scheme which was finally adopted in April, 1934.
Under that scheme the constitution of the British Iron and Steel Federation was set up and the main objects were described. Those objects were, (1) to provide for the co-ordination of affiliated trade associations; (2), to assist affiliated organisations to a more efficient state of organisation; (3), to regulate the disposal of imports of iron and steel products; and (4), to co-operate with affiliated organisations in promoting or regulating the export trade in iron and steel products. What has been done? The right hon. Gentleman has told us that certain things have been done, but there are a few questions that I should like to ask. First in regard to prices. There are complaints, and I should like to know whether the reorganisation has been effective in reducing the cost of production. Has it reduced the cost of marketing? What has been the effect on home prices and has it given the consumer of steel access to bigger supplies? In the "Manchester Guardian" of 25th March, 1935, there appeared a letter sent to the Association of British Chambers of Commerce by Mr. James W. G. Beaumont, secretary of the Preston Chamber of Commerce:It is assumed that import duties are to protect the steel trade against foreign competition and that such protection should not be used by trade associations to exercise dictatorial and monopolistic powers on nonmembers. Authentic documentary evidence has been produced to the Chamber indicating that unless a Preston firm joined a certain association prices to them would be advanced forthwith 50 per cent. on rolled steel supplies. Letters from steel-makers plainly state that this policy is to implement a closer arrangement made between 1506 two asociations, and would put independent firms to serious disadvantage. It is known that the cheapest cottages have already had £30 added to their costs in the past two or three months through advances in ring prices for iron, steel, lead and other products. Members of unsheltered trades may well feel alarmed at the increased cost foreshadowed by these arrangements between sheltered rings, and which they assert is a restraint of trade. It is obvious that such methods can only be attempted successfully under the shelter of a tariff, and by increased tariffs and it is regarded as highly improper that the protection afforded to this important basic trade should be so abused.The right hon. Gentleman made no reference to that possibility. With regard to the complaint in that letter, it is substantiated by three letters appearing in the "Manchester Guardian" which I will read. The first letter is from a steel company to a client:We regret to inform you that all prices for sash and casement sections have been advanced to those window-makers who are not members of the British Metal Window Makers' Association. May we request you seriously to consider joining the Association?The second letter reads:Doubtless you have heard that an alliance will very shortly be concluded between the Sash and Casement Association and the Metal Window Association, and we shall be working together under very close arrangements so that those outside the association as casement rollers or window-makers will, of course, be put to very serious disadvantage.Letter number three is as follows:We hear to-day with much regret that you have decided not to become a member of the Association, which decision we fear will mean that you will not be able to purchase any of your supplies from us in the future.That is peaceful persuasion. We have heard of that in connection with the trade union movement, but what novices we are compared with the gentlemen who are in this order to receive the support of the Government! It has been said that this sort of thing is not the purpose of the duty. We have been told by the President of the Board of Trade that the duty is to be used to force an agreement between the British and Continental steel makers. I do not think that "force" is too strong a word to use. I should like to put certain questions to the President of the Board of Trade.
I should like members of the steel industry to say whether that is so. The difference between the volume of imports and exports is not large. We are practically consuming all the steel we make. The difference between the imports and exports is not 10 per cent, of our production. Is it intended that we shall make all kinds of steel and make ourselves self-contained and shut the door finally to the imports of steel from foreign countries? I should like to know from the President of the Board of Trade whether the Import Duties Advisory Committee gave due consideration to the effect of these prohibitive duties on our export trade? Are they satisfied that they will not lead to the development of finishing industries on the Continent, and have they so advised the President of the Board of Trade?
- (1) Are we to understand that negotiations have broken down and that the
1507 increased tariff is the outcome of that failure?
- (2) In that case, will the House be furnished with the fullest information of the discussions that have taken place between the British steel makers and the Continental Steel Cartel?
- (3) What matters were discussed at the meeting which took place at Cannes on the 9th March, and what are the points on which the parties failed to agree?
- (4) Is the higher rate of duty now to be imposed subject to reduction in the event of successful negotiations in the near future?
- (5) Is it intended to make this country self-contained in the matter of steel production?
I should like right hon. Gentleman to pay a little closer attention to the increase in foreign exports of galvanised sheets and tinplates. Serious apprehension has been caused among producers in South Wales by the increase in the export of galvanised and tinplates from France, Germany, Italy and Belgium. A reply was given to the hon. Member for Carmarthen (Mr. R. T. Evans) on the 4th March, by the Parliamentary Secretary to the Board of Trade. The figures which were given showing the British exports to Belgium and the Belgian exports to Britain—in relation to tin plates, tin plate bars and coal—were astounding. The figures for 1931 are particularly significant. This 1508 is a matter of interest to the hon. and gallant Member for Bournemouth (Sir H. Croft) because it concerns his pet theory and this Government owes its swollen majority, its abnormal and unhealthy majority to the conditions which were created in 1931. These figures commence with the year 1929 and in that year we exported 23,366 tons of tinned plates to Belgium. In 1931 we exported 9,790 tons and in 1934 we only exported 2,334 tons or 10 per cent. of the quantity which we exported in 1929 and 25 per cent. of the quantity which we exported in 1931.
Now I take the figures of British exports of coal to Belgium. In 1929 we exported 4,139,634 tons of coal to Belgium. In 1931, we exported 1,979,321 tons and in 1934 we exported 972,404 tons. Thus, we have lost 1,000,000 tons in the export of coal to Belgium and 7,400 tons in the export of tinned plates to Belgium in those four years 1931 to 1934. Let us consider the value of the exports to Belgium which we have lost in that time. I take the value of a ton of tinned plates at £20, a figure with which I do not think any hon. Member will quarrel, and at that figure, a loss in exports of 7,500 tons represents a total value of £150,000. We have lost the export of 1,000,000 tons of coal which we may take at £1 per ton, so that in the exports of coal and tinned plates together since 1931 we have made a total loss of about £1,150,000. But it is claimed we have been able to stop the imports of Belgian steel into this country—a great achievement. The imports of Belgian steel into this country went down by 94,000 tons from 1931 to 1934.
§ Mr. GRENFELL
Yes, tin-plate bars. That represents a value of £450,000. Thus we have gained £450,000 worth of work in this country in the making of tinplate bars but we have lost £1,150,000 in the work of the production of coal and tinned plates. Our net loss on these three items in the period I have mentioned is £700,000. But Germany has come in and taken £80,000 worth per annum of the Belgian tin-plate trade. Almost exactly the quantity of trade with Belgium which we have lost has been transferred to Germany. According to the South Wales Chamber of Commerce a loss of 80,000 tons of tin-plate exports 1509 represents a loss of £300,000 in wages, whereas an increase of 100,000 tons production of tin-plate bars represents only £60,000 in wages in the steel industry. Therefore we have lost £300,000 in wages to the tinned plate workers and gained £60,000 wages for the men working in the production of steel. That is the net result of these transactions as they affect iron and steel and the tin-plate industry.
We would like to know what kind of reorganisation is now being carried out, how far it has gone and how far it is proposed to carry it? We know what can be done in the way of reorganisation. We would like to know whether the full power of the Government and the full scope of the new iron and steel federation are to be availed of in the reorganisation of the industry. One weakness which we see in the scheme as it has been disclosed so far, is that no mention whatever is made of the interests of the consumers and not a word is said about the workers in the industry. This new federation has been given unprecedented powers. Never before has a body of employers received the Parliamentary sanction which has been given to these people. They are to have power, not only to regulate their own industry under the four heads which I have described, but they are also given authority to go abroad and to negotiate with cartels in other countries. Furthermore, under the scheme in the White Paper they have authority to negotiate directly with foreign governments, and to come to terms with foreign governments without the intervention of His Majesty's Government in this country. If a body of workpeople claimed powers like that, there would be an uproar in this country the end of which would not come for a very long time. But the Parliament of this country is responsible in these matters and before we pass this Order to-day we ought to make it plain to the Government that there are limits beyond which they cannot go.
The hon. Member for Whitehaven has an Amendment on the Paper in which he asks the House not to support these duties until a certain local grievance has been met. That grievance is a serious one, we admit, and we share the hon. Member's anxiety. But ever so many other interests are affected by this matter, and we ask the Government to 1510 assure the House that this board is not to be allowed to have regard merely to its own interests; that it is not to be a monopolistic body, dictating to all kinds of consuming and other interests in the country. Above all, we desire to know what are the plans of this industry for the future. Do they propose to neglect their social and communal responsibilities? Do they propose to transfer their industry from districts where it has become well-established like South Wales, Cumberland and the North East Coast to other parts of the country like Northampton and Lincolnshire? Are they going to ignore the claims upon the industry of those communities which have shared in the promotion of the industry at each and every stage of its development?
The captain who deserts his ship is regarded as an offender against the law. The soldier who deserts his post in time of danger is regarded as a traitor and is liable to forfeit his life. But a steel monopoly can openly secure the support of the Government of the day when it proposes to abandon those who have been joined with it in the enterprise of steel-making for the last 50 years, or more. Now, when they find that the ship is in danger, that local rates are increasing and that heavy communal burdens can be evaded by the removal of their plant elsewhere, away they go. They scrap their concerns, betraying the shareholders in the original enterprise, going into liquidation in the broad light of day, and then inviting new shareholders to come and invest in companies to operate somewhere else, leaving derelict townships here and there and unsightly surroundings as the place of residence for men who have been deserted and who remain at their posts, men who have been left there to face the burden of communal responsibility alone, unaided by the employer who has made his profits and transferred them elsewhere. If there is to be planning, that aspect of planning ought to be kept in mind. What is to be done in Ebbw Vale? I ask the hon. member for West Swansea to tell us what he knows about this thing, and he certainly does know. There is a place very near to us, Pontardawe. Very fine works have been idle there for many months, and we do not know what the prospects are, but we would like to be told by the hon. member for West Swansea what is being done with these works.
1511 I appeal to the right hon. Gentleman the President of the Board of Trade on this matter. He does know the productive side of British business as well as anybody in this House, and I know that he does not look with favour upon the kind of financial transactions which enable a new company to be formed and an old one to be abandoned, with the scrapping of plant and the evasion of responsibilities and obligations. I beg the House not to be content with passing this duty and giving a 50 per cent. higher fence to shelter people engaged in production in this industry, while raising the prices of raw materials to a hundred other industries. This kind of thing cannot be assessed in regard to its effects on one industry alone. You may have 20,000 more people employed in the steel industry—and that is a high figure—but you can easily put out of employment 200,000 people if you raise the price of raw materials too highly against them. That aspect, I think, must be further considered, and we beg the House to look into the matter. I think it is a bad sign that a question so important as this one of the most important question that this House could have before it, should have received such little attention, and I hope this is not the last opportunity we shall have to discuss this question and, above all, the general question of the planning of industry, where it shall be established, and so on.
The costs of industry are not the mere costs of production alone. The costs of industry must include communal costs. To employ 1,500 people requires the erection of at least 1,000 houses, and those 1,000 houses are generally built by individuals or companies not connected with a works enterprise. To serve that community you require schools and hospitals, and a variety of other services. The works may show a dividend, as they do. We have seen a report in the "Times Supplement" the other day to the effect that the basic industries are showing an increase of profits, but there is a responsibility on the part of these enterprises to their partners in industry, in the local enterprise in which they are engaged. The local claims of the community at large should be borne in mind when we are embarking upon a reorganisation not foreshadowed in the scheme which we are now considering, 1512 a reorganisation not possible until there is a new outlook, which will not give Protection as easily as it has been given in the last two or three years, a real planning, having regard to the real national and communal interests. When that is pursued, we shall find our responsibilities very widely enlarged indeed, but we shall then find the possibility of the real planning of national industry, in which every part will find its relation to its neighbouring part, and we shall not run the risk of benefiting one small part at the expense of injuring all the others.
§ 12.9 p.m.
§ Mr. GRAHAM WHITE
We who sit on these benches cannot support the confirmation of this Order, which we feel is not justified and further, having regard to all the aspects of the question, is not in the national interests. It will be my duty to try to place before the House some of the reasons which have led us to this conclusion, and the task will be lightened by the comprehensive and effective nature of the speech to which we have just listened from the hon. Member for Gower (Mr. D. Grenfell), who has, with feeling and with comprehensive knowledge, raised some points of great importance. I wish to associate myself with some of the queries which he has addressed to the right hon. Gentleman the President of the Board of Trade. I do not propose to follow his example in raising any question with regard to opinions expressed formerly in this House by my right hon Friend, the President of the Board of Trade, unless it is to express again my gratitude for very sound guidance I have received from him in the past from his statement of arguments whose validity still seems to me to be intact. At any rate, I cannot pretend to answer those arguments, and if my right hon. Friend himself can answer them, I think he must be the only man in the world who can do so.
I cannot refrain, however, from making some comment upon the nature of the document which makes these recommendations to Parliament and which will have the effect of making the British iron and steel industry the most highly protected industry of its kind in the world, at all events in so far as any industry which is concerned with 1513 export trade. Taking the country as a whole, the report of the Advisory Committee says:We are satisfied that the advantages of the policy indicated in this report far outweigh any transient disadvantages to small sections of the industry.But it is a remarkable thing that a study of the report reveals very little evidence that the interests of the country as a whole have been so considered. They may have, but, if they have, the nature of the inquiries and the consideration given them are certainly not set out in the report itself, and there are many lacunæ in it which are by no means filled by the statement which we have had from my right hon. Friend this morning. There is no question that one of the most serious handicaps to the recovery of international commerce to-day, and one of the most important causes of unemployment in this country as in all other countries of the world, is the instability of international exchanges. I have no wish to raise now the general question as to What part British commercial policy in recent years has played in the general question of the instability of currency and the disorganisation of trade arising from that cause, but one must point out that the actual proposals Parliament is now asked to consider have increased, and could not have failed to increase, the difficulties of Belgium, Of France, and indeed of all the countries on the gold bloc which are suffering such inconvenience at the present time.
It does not need very much imagination to see that the effect of this last blow on these countries might be to raise currency problems and difficulties which might very well outweigh the most Sanguine anticipations which are set out in the report. I think the House of Commons should expect to hear whether in fact, as the matter is not mentioned in the report, this very important consideration was considered by the advisory committee, and, if so, what the conclusions of the committee were in the matter. If it was not considered by the advisory committee, was it considered by the Treasury on behalf of the Government as a whole, and, if so, are they satisfied that the possible disadvantages arising from the dislocations that may ensue from these proposals on the Continent, and on other branches of industry, outweigh 1514 the advantages which they imagine will accrue from increased protective duties on iron and steel.
This is the sort of question which is pre-eminently suitable to be considered by the Economic Advisory Committee, a body which is well able, well equipped to give an impartial survey of matters of this kind, without the pressure which inevitably arises from the interests which are particularly concerned in any matter under review. They can clearly take a full and impartial view of a question of this kind, without the bias which may arise from having to consider special interests. We know that this question was not considered by the Economic Advisory Committee, but we should like to know whether it has been considered by the Treasury, and if so, what were their conclusions. I may be told it has, in which case I should still think that the action of the Government, taken as a whole, was unwise. If a matter of this importance has not received any consideration either from the Advisory Committee or from the Government as a whole, then. I can only think of one word which will describe the action of the Government, and that is "irresponsible". I shall be glad if we may have some light on this matter.
The hon. Member Gower mentioned the extraordinary effect on the coal trade illustrated by the figures of exports of coal from our country to Belgium, and our imports of tin-plate bars and materials for the tin plate industry and other industries in this country. I do not propose to deal with that, as the hon. Member has already done so; nor, indeed, do I propose to deal with the position of the tin plate trade in South Wales, where there is in some quarters very grave apprehension, because later in the debate my hon. Friend the Member for Carmarthen (Mr. R. T. Evans), who may be so fortunate as to be called, will deal with this matter in some detail. Seeing that there is no such thing as a one-way traffic in trade and that there has been, apparently, this disastrous effect upon our export trade of coal to Belgium, one would like to know, further, whether the Ministry of Mines has been consulted in this matter as to whether the raising of duties of this kind will help them in negotiations 1515 in order to try to help the coal industry in this country. On this point, I think the House of Commons is entitled to know whether this aspect of the matter has been considered, and whether the increase in the use of coal which it is anticipated will be obtained by the increased manufacture in this country of steel will, in fact, set off these losses which seem likely to occur.
Let us have a proper balance sheet. We are told that tariffs are an advantage to some and a disadvantage to others. If I may make a suggestion in all deference to the Tariff Advisory Committee, I would suggest—and I do this impersonally, because I know the name of the chairman, but not the names of the other members, or how many there are—that they should read again that well-known story of "Robinson Crusoe", who, when he found himself in difficulties, took pen and ink and paper, and put on one side "Good", and on the other side "Bad", and in that, way arrived at a just balance of the course of action best calculated in his circumstances. That is what we ought to have in this case. When these documents come forward there is, naturally, put down the supposed advantages. We know there are some disadvantages, but whatever may be the good, there is no word of the possible injury to the export trade, the tin plate trade, shipping, employment in our ports, transport and the like. Let us have all these things, if we are to deal with this on a proper basis, to enable us to come to a proper conclusion in the matter.
The hon. Member above the Gangway also referred to the question of ore. That is by no means a matter of small interest from the point of view of employment in the industry. The hon. Member for Whitehaven (Mr. Nunn) has an Amendment on the Order Paper, and will probably have something to say about that. It is a vital matter to the future of the industry, and one might have expected a document purporting to be scientific—and we are told that tariffs are to be on scientific lines—would have had some reference to the ore produced in this country in relation to the life of the industry, and what effect these proposals will have upon the consumption of ore, 1516 and matters of that kind. Of course, "scientific" is the last word in the English language which can be applied to this document. It is vague, an affair of "mays" and "oughts," contradictory in many aspects, lacking in confidence, and unconvincing. If the Advisory Committee really believe that a large proportion of the steel and iron could be made here with advantage to this country I might ask—with advantage to whom? If those who have hitherto imported this iron and steel which is now to be kept out are to pay higher prices for it, it is clear that the price in this country must be higher than the price of foreign imports plus the duty, and it is clear that the advantage, if it is an advantage at all, is not an economic one, but only an advantage in price and not to the consumer; so that even that is a two-sided question. If they believe this can be made here with advantage, without any material adverse reaction on exports, without the fear of rising prices to the consumer, and will enable an agreement to be made with the Cartel, why should they resort to this advocacy of a very high tariff with regret. I should have thought in the circumstances that they might have announced their recommendation with the greatest confidence, and sat down to wait for the benefits that would accrue.
We have heard a good deal about the anticipation that these proposals will enable a satisfactory arrangement to be made, with the cartel. My right hon. Friend the President of the Board of Trade in that connection used a word which sticks in my mind. He said that at one stage the negotiations had become acute. I should have thought there would have been considerable reason to anticipate that this proposal which he asks us to confirm might have made the negotiations become rather acute, although perhaps in a different sense. I noticed the other day it was reported that the French Government and the Belgian Government have made protests against these increased duties. That hardly seems to be calculated to facilitate negotiations in the making of agreements. It seems to be rather another blow at the general good will which is such an important factor in all trade, and perhaps especially in international trade. If history, and recent history in 1517 particular, is at all a precedent, this duty, so far from facilitating arrangements with other countries, will, in fact, mean reprisals of some kind which cannot fail to affect the attitude of mind of those who have to conduct negotiations on behalf of the cartel.
I should like to ask for some further information with regard to the nature of the agreement which it is sought to be made. It is, after all, I think I may say, the main object of the proposals which the House is asked to confirm, namely, the making of an agreement with the cartel. Could we have some indication of the kind of arrangement which it is sought to make? It is not exactly reassuring to be told that, as part of an agreement of that kind, it may be worth while to make an arrangement whereby imports may be admitted on terms which give Continental producers a better price than is now obtained by them, without making such steel too expensive to consumers in this country. I listened with great attention to the reassuring statement made by my right hon. Friend the President of the Board of Trade with regard to the price policy of the Federation and its effect upon the consuming trade of this country, but my confidence is very much undermined when I read that it is part of this very proposal and the object of the higher duties to make an arrangement whereby prices are to be raised, but not to be made too expensive. Steel may be expensive, but not too expensive. These things are contradictory, and we are entitled to ask for a little more light on them. It may be worth while to make an arrangement of that kind to raise the prices of raw materials to the industry of this country, but, on the contrary, it may and in all probability, will not be worth while.
We might as well ask to be given some indication of the nature of how these proposals are to be worked out. I understand that it is suggested that the foreign quota will be imported and marketed by a central agency. Foreign steel will be taken here at the same price as British steel. The profits so arrived at will be devoted to an export bonus to enable British steel products to be sold abroad. That is the matter on which, if it is available, information might well be afforded to us. We seem to be proposing to adopt the course which we generally re- 1518 sent very much when it is adopted by our foreign competitiors. If that proposal does not mean raising the price of steel to those who need it most and who have increased their imports of it because they need it in face of the high duties already imposed, it means nothing at all. If the cartel is to get a high price but not so high as the British price and the central agency is to add to the price which the cartel gets to bring it up to the British level, it may be hoped that it will not be too expensive, but no one can contend that it may not be too expensive for the purposes for which it has hitherto been used. It may be said by the Advisory Committee that it may be worth while making an arrangement of this kind and that it may not be too expensive for the users of the raw material, but no one can contend that it may not.
There is a great element of speculation in the whole of these transactions. I will remind the House of one sentence from a speech made by the President of the Board of Trade in December, 1931, when he said that, although he had an open mind on these matters, he was not prepared to enter into a gamble with this vast industry which is vital to our national economy. It ought not to be overlooked that there are some branches of the British iron and steel industry which have lived in the past on the export trade, and have depended on raw material being obtained at a reasonable price. This position will be put into jeopardy, because the industry cannot expect to have an expansion in the home market in all sections.
The net result of these proposals appears to be to form a producer's monopoly. I recognise, indeed it is common knowledge, that there has been a satisfactory advance technically and otherwise in the British steel industry. We recognise that an important gap has been or may be filled by the starting of the manufacture of the Bessemer process, which has hitherto been left in other hands. We know that something has been done in the process of reorganisation and consolidation upon vertical lines. We know that something has been done in relation to production, but as the report itself says, the process of re-organisation is far from complete.
1519 It is true to say that the broad effect of such re-organisation as has taken place up to the present time is in the form of rings and price-controlling combines and associations of that order, which clearly do nothing whatever to increase the technical efficiency of the industry. In fact, they do nothing of themselves to create efficiency in the industry. By fixing prices they destroy the main urge to increasing efficiency and reducing prices in the industry. It may be said that what has been done so far in a large measure removes the urge to increased re-organisation and technical efficiency. What is to happen to the duties if no agreement is reached? The weakness of all these speculative recommendations is that they assume that conditions are static. By putting up our duties we do not stop the production of steel which we are thereby shutting out from this country. We simply divert it to other markets where it may compete more successfully with our export trade. The duties which we are now putting on will undoubtedly lead to further arrangements and will accelerate arrangements of the kind which have recently been made for a freer trade between America and Belgium from which we shall be excluded.
The Government have stated that they attach great importance to the institution of an agreement with the cartel. I have not the knowledge to enable me to form any competent judgment on the advisability of that. I must accept it, but the past history of the cartel on the Continent does not lead me to regard it as a certainty that it will be an advantageous arrangement. In the past the cartel seems to have been an unstable body. Its policy has not been effective in every respect even from its own point of view, and its future seems to be quite uncertain. America, with its vast production, is outside it, Japan is outside it, Germany will go her own way, and other countries in Europe, such as Poland, will not enter the cartel, and overseas of course, we have the industries in our own Colonies which, whatever happens to the cartel, and because of what may happen to the cartel, will inevitably make every conceivable endeavour to compete more keenly than they have done. This I can say with confidence from my own knowledge, that wherever in the markets 1520 of the world there is a chance for a purchaser to do so he will buy from an independent firm rather than from the cartel. That gives some point to the observations made by my hon. Friend the Member for Gower. The capacity of the cartel itself is only some 40,000,000 tons out of a world capacity of 130,000,000 tons.
I wish to associate myself with the statements made and the questions asked by the hon. Member for Gower with regard to the treatment of consumers. Since these duties came into force there has been an attempt at the coercion of consumers in this country such as has hitherto been entirely foreign to the traditions of British commerce, and we are entitled to ask that such methods shall cease. If consumers are to be invited to join rings or combines or arrangements the advantage to them of doing so ought to be apparent to them, and they ought to be willing to come in without threats or coercion, threats of curtailment of supplies and of higher prices, such as one believes are taking place at the present time. By coercion and cajolery they are to be induced to go into the arrangement.
There is another matter on which I wish to ask a definite question. It has been suggested to me that there are firms in the tinplate industry, who are being paid a bonus for tinplates which they do not produce. Everyone is agreed that an efficient and up-to-date steel and iron industry is essential to the national economy of the country, but such an industry cannot be built up by methods of that kind. It is contrary to commonsense and to sound economics. The President of the Board of Trade comes here with letters of assurance on certain points, but the evidence from outside suggests that those assurances may not be worth as much as we hoped they might be. I also wish to point out that there is no provision for drawbacks in our system of duties on steel and iron. Ours is, I understand, the only iron and steel industry in the world of any consequence which does not have a system of drawbacks. It is of vital importance that we should have a drawback system if certain trades are to be maintained in this country. This is a matter of vast importance to South Wales. I do not propose to go into that aspect of the matter, because there are those from South Wales who 1521 can speak on it with special knowledge, but we ought to be told why our policy differs in this respect from that of other countries, unless it be that our object is to become entirely self-supporting in the matter of steel and that we are to have no interest in the maintenance of our export trade.
The Advisory Committe seem to have abandoned their control of the situation in so far as they have granted complete and, so far as one can see, permanent Protection to the steel industry without any definite understanding in the matter of its organisation. I should like to ask whether, if the reorganisation does not proceed to the satisfaction of the Government, they intend to reduce the duties or withdraw them. Further, seeing, as I think it will not be denied by any impartial reader of the Report, that the main objective is to reach an agreement with the cartel, if that agreement does not materialise does that in itself mean that the Government will then adopt a fresh policy? I should like to have an answer on that point.
I am afraid I have trespassed on the time of the House longer than I had intended, but I had to give some reasons to explain why we do not regard these proposals with approval. Thy have been introduced without any guarantee of effective reorganisation and without any guarantee of increased efficiency, and that is the only thing which can ensure the existence of the iron and steel industry in the long run, and perhaps not a very long run either. We are establishing a producers' monopoly in which, so far as can be seen, there is to be freedom for the producer but for nobody else, and there is no guarantee that the wider social aspects of the formation of such a monopoly are having attention. There appears to be a probability that our export trade may finally disappear, and if economic history is to be repeated in this country as it has in some others the steps we are now asked to confirm, coupled with those which have preceded it, will lead, when the demand for iron and steel in this country flags and has a set-back, as it does from time to time, to a relapse in the industry and to a depression which will compare with the worst experiences of the past.
§ 12.43 p.m.
§ Mr. L. JONES
The hon. Member for East Birkenhead (Mr. White) said that for some considerable time he had taken guidance from the President of the Board of Trade in matters concerning the economic policy of this country. The first proposal in the present economic policy of this country, as introduced by this Government, had the support of the hon. Member and his distinguished leader, and although he said that the proposals now before the House deal with the highest duties ever imposed by the House of Commons he will remember that he, as well as his distinguished leader, did support the proposal put forward by this Government which gave the President of the Board of Trade the power to fix duties not of 10, 20 or 30 per cent, but duties—under the Abnormal Importations Act—ranging from 50 up to even 100 per cent.
§ Mr. JONES
The fact that a duty may be temporary or otherwise surely does not affect the principle of the thing. That may be the theory of Darwenism, but surely the right hon. Gentleman will recall that when the iron and steel duties were first proposed and were for a period of three months he and his party did not on that occasion give approval to them merely because they were for a temporary period.
§ Mr. JONES
I am not suggesting that, nor am I referring to abnormal importations. It was not sufficient for the right hon. Gentleman and his colleagues that the iron and steel duties were for a temporary period of three or six months, and they opposed them on that occasion as they have opposed them to-day. When they take account of the good and the bad in the balance-sheet, I hope the right hon. Gentleman will bear in mind the effect of the action of his party on the future of the industry.
One cannot help feeling that this is an appropriate time to ask the House of Commons whether the imposition of these duties has not served a very good purpose within the industry and in the country generally. In 1931, we pro- 1523 duced in this country something like 3,750,000 tons of pig iron; last year, that tonnage had increased to approximately 6,000,000. Take the iron and steel position: In 1931 we were producing in this country a tonnage of 5,250,000; by the end of 1934 that production had increased to approximately 9,000,000 tons. What is more, the production figures for January and February of this year show substantial increases over those for the comparable periods of the preceding year.
The hon. Member for Gower (Mr. D. Grenfell), who represents a constituency adjoining my own and who knows the iron and steel trade of South Wales as well as I do, raised a question; as to the proportion which this country held of the iron and steel production of the world. In 1913, Great Britain had 10.2 per cent. of the iron and steel production of the world; in 1933 we still retained 10.7 per cent. Last year, even taking into consideration the increased output of America and Germany, Great Britain not only held to her pre-war percentage of the total world output but was able to increase it to 11.2. Reference was made by the hon. Member for Gower and by the hon. Member for East Birkenhead to the effect of the duties on our export trade. That has been the song of the opponents of these duties from the early days of their imposition. Time and again the House and the country have been warned that the effect would be to curtail seriously the export trade of the country. In considering the export trade of the iron and steel industry, regard must be had to the fact that there is a development of iron and steel production in various countries where in the past we found markets for our exports. One has only to look at such developments in Russia, Rumania, Italy, France, and in the Saar region as well as to the new steel plants in Germany to be aware that the number of competitors in the steel-producing area of the world was increasing and that countries that formerly bought steel from us are producing their own steel. The natural effect was bound to be a reduction in our export trade in iron and steel.
What happened in this country as a result of the duties? In 1934 we in- 1524 creased our exports over 1933 by 17 per cent., and over 1932 by 25 per cent. The figures for January, February and March of this year show a still greater proportionate increase, greater than at any time during the last few years. There is an interesting fact about our export trade which hon. Members would do well to note. In 1931 our imports of iron and steel exceeded our exports by 865,856 tons. Fortunately, in 1934, there was a complete reversal of those figures, and, instead of our imports exceeding our exports, our exports exceeded our imports by 886,807 tons. I suggest, therefore, that the fears expressed by both hon. Members are without justification. A great deal has been said about unemployment in the industry. I know that the number of men registered as workers in the iron and steel industry is not as considerable as in some of the larger industries, such as coal-mining, but in August, 1931, there were 81,726 unemployed in the industry. By March of 1935 that figure had been reduced to 38,618 a reduction of 52 per cent. That is a substantial contribution to a solution of the unemployment problem.
The matter does not end there. The industry consumes huge quantities of coal. We buy iron ore and other raw materials. For every ton of steel produced in this country five tons of raw materials are consumed, and the railway companies carry those five tons of raw material. The effect upon employment in other industries must therefore be considerable. It would not be out of place if the iron and steel industry claimed a certain amount of credit for the increased output in the iron and steel trade over last year having a marked effect upon coal production in this country. Hon. Members who represent coal-mining constituencies will appreciate that in 1934 the output of coal reached a figure which has not been exceeded since 1930. I suggest therefore to the hon. Member for Gower and his friends that the steel production figures of this country must have their reaction and must be reflected in an increased output in the coal industry.
One other point was made by the hon. Member for Gower in regard to the price level in the iron and steel trade. That is a very important matter to the steel producer. The steel producer will not raise prices of steel to such an extent as 1525 to throttle or strangle the trade, because that would obviously be a suicidal policy. The Board of Trade publishes an index of wholesale prices. Taking 1930 as 100 per cent., iron and steel in 1933, according to that index figure, was 93.9. By 1934, the index was 97.3. As hon. Members are aware, the Board of Trade index figure is compiled from 26 different items. An industry which can show such a figure of reduction, 2.7 per cent. from 1930 to 1934, has not very much to complain about.
The hon. Member for Gower was very concerned about what was to happen in the coal industry. We consume considerable quantities of coal in manufacturing steel. What is one to presume from what we have heard this morning? That there has been a ramp in the price of steel? Let us take the position of coal. Taking 1930 as 100, per cent., coal in 1933 was 100.7 per cent. as against steel, which was 93.9 per cent. Coal in 1934 was 103.8, while steel was 97.3. The level of prices in 1934 in the iron and steel trade is lower than it was in 1930, in spite of introduction of protection and the increasing demand which naturally falls upon raw materials in this country. There was a justification for the iron and steel trade, because of the increased prices of raw material to the industry, in increasing the price of commercial steel by 10 per cent. I want to suggest to the House that the maintenance of this price level, a fair price level by the steel trade, has only been made possible by the increased volume of production and the improvement in productive efficiency.
The hon. Member for Gower, in dealing with the question of the level of prices, made reference to the tinplate industry. Fortunately he has dose personal knowledge of the industry, which the hon. Member for East Birkenhead unfortunately has not or he would not have made the faux pas which he did this morning. He called attention to the tinplate people making so much for being idle. He does not realise that the tinplate industry does not come under this Order. The hon. Member for Gower was rather concerned as to the effect of prices in the steel trade on the tinplate trade, and quoted figures which the hon. Member for Carmarthen (Mr. R. T. Evans) received from the President of the Board of Trade in connection with trade with Belgium.
1526 Unfortunately, the hon. Member for Gower did not study these figures as closely as he might have done. What do the figures really show? In 1929 Belgium bought from this country over 4,000,000 tons of coal. In 1930 Belgium bought 3,500,000 tons of coal. In 1931 that tonnage had fallen to under 2,000,000, but the first duties introduced by this Government were in November of 1931. Therefore, no one can possibly pretend by any stretch of the imagination that the duties introduced in November, 1931, can have been responsible for a reduction in the export of coal to Belgium from 3,500,000 tons to 2,000,000 tons. The hon. Member for Gower did not suggest that that was so; I am just dealing with what the figures show, and it is obvious that the duties were not responsible for the reduction in the purchase of coal. Belgium bought from South Wales in 1929 23,366 tons of tinplate. In 1930 Belgium bought 20,823 tons. In 1931 the figure had fallen from 20,000 to 9,790. Will anyone pretend that the abnormal duties which the right hon. Gentleman the Member for Darwen (Sir H. Samuel) helped to introduce in the House in 1931 were responsible for the reduction in the purchase of tinplates? That is stretching the point a little too far.
It has been suggested by the hon. Member for Gower that because we reduced our purchase of steel bars from Belgium as a result of the duty they bought their tinplates from Germany. What happened? In 1929 we were buying from Belgium 19,000 tons of bars. In 1930 we went to 62,397. As we increased from 19,000 to 62,000 tons they reduced their purchase of tinplates from us from 23,000 to 20,000 tons. But in 1931 we were buying from Belgium 101,000 tons of bars. We went up from 62,000 to 101,000 tons. Our duties came into operation in November, 1931. In 1932 we bought 61,910 tons. By that time Belgium's purchase of tinplates from South Wales had fallen to 8,700 tons. I suggest to the hon. Members for Gower and Carmarthen that they should give a closer study to these figures, which fail in any point to prove the contention which my hon. Friend the Member for Gower has put forward to the House this morning.
Arising from that point, he warned the House as to the danger of the develop- 1527 ment on the Continent of Europe, if we do not buy the steel of the Continent, of finishing industries in those areas, and reference was made to our concern, in South Wales particularly, as to the increase of the export trade of Italy, France, Belgium and other countries in tinplates. It is true that there has been a surprising development in France, Belgium, Japan, India and other countries. This development is not the result of the tariff policy adopted by this country. We knew even before the war that Russia, Italy, and other countries were producing tinplates, and we knew that once the war was over they would speed up their production. Germany has made marvellous developments. We know that the development of the manufacture of tinplates and galvanised sheets is bound to take place. All that we ask is that the home market shall be protected against the low-paid labour and worsened conditions of labour on the Continent of Europe.
The President of the Board of Trade has at some length dealt with the difficulty that arose when the Continent sent into this country an increased tonnage of steel. It caused a great deal of concern to steel producers and to the trade union leaders within our industry. They were all concerned with the increasing tonnage of foreign steel that displaced British steel workers. The iron and steel industry was doing its utmost to improve its commercial, productive, and technical efficiency. It had been pressed on the steel manufacturers, by the advisory committee, and by the Government from time to time that they should take every step to make the industry more efficient and to reorganise it generally. They have done all that was possible, but they were up against this surprising increase in the importation of foreign steel.
It has been suggested that this matter should have been referred to some economic advisory committee. I thought that the Imports Advisory Committee was an advisory body, and an independent body, and that when it did consider applications it was at any rate acting impartially. An application was submitted and it was reportedthat the growth in foreign competition in the home market is definitely retarding progress in the iron and steel industry.1528 This market has been subject to a constant attack by the cartel countries. I make no complaint of that; it was carried on in the ordinary commercial way. But it has necessitated increased protection.
The President of the Board of Trade has told the House how the Import Duties Advisory Committee persuaded the iron and steel industry that they ought to meet the cartel representatives with a view to arriving at some voluntary limitation of imports. The continental steel-makers have had a free market in this country for many years. The hon. Member for East Birkenhead was concerned about the unpleasantness that might arise on the Continent as a result of an increase in duties, but, unfortunately for us in this country, we have had high tariff walls on the Continent against our steel for generations, and why people should now be so concerned about considering the feelings of continental steel-makers, just because we have made up our minds that our home market shall be our own, I cannot understand. The continental steel-maker has believed that he had a prescriptive right to a free market in this country.
As a result of the suggestion made by the Government, through the Import Duties Advisory Committee, we met the continental steel-makers in London. I was at the Conference, and know what took place. Certain proposals were made, but the continental steel-makers resented the fact that the steel-makers of this country expected at any rate to have the home market here for their own. In the end the continental steel-makers made the suggestion to us that they were prepared voluntarily to agree to a limitation of their exports to this country to a figure 10 per cent. below that of 1934. That, of course, from our point of view, was an impossible figure, and the negotiations broke down. As the President of the Board of Trade has told us, other discussions have taken place since. It became necessary to demonstrate that the Government of this country was in earnest in promising effective protection for the iron and steel industry.
The question was raised by the hon. Member for Gower, and it was also referred to by the hon. Member for East Birkenhead, as to what direction these negotiations were to take. The iron and steel industry of this country is prepared 1529 to come to an arrangement with the continental steel producers for a voluntary limitation of their exports of iron and steel to this country. The suggestion seems to be that we are prepared to compromise on the question of the employment of labour in the iron and steel industry, but that is not so; we are only prepared to agree to a voluntary limitation of imports of foreign steel into this country on condition that the International Steel Cartel enters into an arrangement with us as to the allocation of certain export markets to our steel producers. That is the line along which the negotiations have been pursued, and will be pursued during the next few months.
Some criticism has been made against the alleged failure of the. iron and steel industry to implement its undertaking to reorganise. I think that that criticism came more strongly from the hon. Member for East Birkenhead than from the hon. Member for Gower—probably because the hon. Member for Gower lives in the neighbourhood of steelworks, as I do, and knows a little more about them than the hon. Member for East Birkenhead. It is difficult, unless one knows something about an industry and is in touch with the people engaged in it, to know exactly what is going on, but unfortunately it is becoming increasingly the practice in this House that those who criticise an industry most are generally those who know very little about it. People who make statements about lack of reorganisation and modernisation in the iron and steel industry must be ignorant of the considerable developments that have taken place in the industry. Those who are closely in touch with the industry will know that a considerable improvement has taken place in its productive efficiency. Were that not so, the satisfactory reduction of prices to a level below that of 1930 would never have been possible. I would refer the House once again to the Report of the Import Duties Advisory Committee, who have been very thorough in their investigation. They say:This revival has led to, and in turn been fostered by, the progressive improvement in the productive efficiency of the industry arising from the many improvements and extensions of plant that have taken place. Alongside this progress in technical efficiency there has proceeded a movement for closer co-operation in the industry.1530 The hon. Member for East Birkenhead suggested that all that the new British Iron and Steel Federation seemed to be concerned about was to make rings to keep up prices—
§ Mr. JONES
I should have said that the hon. Member suggested that the British Iron and Steel Federation was mostly concerned with making rings for the maintenance of profits. I hope that what I have said about the level of prices will show how untrue that statement must be. Think of the capital expenditure that has been entered into. A hurried census has been made in the trade during the last few days. At the moment it has only been possible to get replies from 70 per cent. of the steel firms in this country, but we find that, since the duties were put on, some £12,000,000 of capital has been spent on the modernisation of furnaces, the improvement of rolling mill equipment, electrification, the installation of more power plants, and so on. In addition to that expenditure of £12,000,000, which, of course, has benefited other British industries, a further £8,000,000 of expenditure is projected. Commitments for the bulk of this have already been made, and a large portion of the work is well under way.
§ Mr. D. GRENFELL
Would the hon. Member tell the House how much capital has been scrapped, or is likely to be scrapped, in the course of the reorganisation?
§ Mr. JONES
If I may continue for a moment what I was saying, before I reply to the hon. Member's question, since 1931 £20,000,000 has been spent in improving the efficiency of the industry. In reply to the hon. Member for Gower, I cannot say how much capital has been scrapped, but it may be remembered that not long ago an application was made by one of the leading steel companies for permission to wipe off some £10,000,000 or £11,000,000 of its capital, and there has been a great deal of that in South Wales, with serious consequences 1531 both to the firms themselves and to the men concerned.
That leads me to refer to the fact that the President of the Board of Trade black-listed South Wales for its failure to reorganise its industry. Quite frankly, I think that the right hon. Gentleman, in doing so, is making a very great mistake; I am sure he has been wrongly informed. I do not think that any district in the country has proceeded more ruthlessly, unfortunately, with its reorganisation than the South Wales area. The hon. Member for Gower has complained this morning about the idleness in Ebbw Vale, and I have no doubt that had the hon. Member for Merthyr Tydfil been here he would have complained that the Dowlais Iron and Steel Works have been practically wiped out. Tinplate works after tinplate works have been closed. All this has been done in the sacred name of modernisation and efficiency—of centralising production in the most efficient plants, of speeding up in some works and closing down in others. We are building at Cardiff the most modern plant in this country, involving a capital of £3,000,000 or 4,000,000. Therefore, modernisation, development and reorganisation have gone on apace in South Wales—at a greater pace than in any other part of the country. I can only assume that the right hon. Gentleman, when he made that statement this morning, must have made it under some misapprehension as to what has really taken place.
References were made this morning to the position of the tinplate trade, and Concern was expressed that the tinplate trade of South Wales would have to pay more money for its steel bars and thus injure its trade. Let me make the position quite clear. The bulk of the tinplate trade of South Wales is at present owned and controlled by the steel maker; in fact, 90 per cent. of the tinplate production of South Wales is owned and controlled by the steel maker. Does the House think for a moment that the steel maker himself is going to put up the price of steel from his steel department to his tinplate department to such an extent as to close down not only his tinplate works, but his steel works? The thing is absurd and shows how little informed a number of people are of the exact position. Sir William Firth, who 1532 is the biggest tinplate manufacturer in the world and sells more tinplates than any individual in the world at the present time, has made it clear in a statement published on more than one occasion, that the importation of foreign steel, even at lower prices, has never affected the price of tinplates. He pointed out that tinplates are sold at a world price, but the price the tinplate manufacturer who used imparted Continental steel obtained for his tinplates was the same as that obtained by the tinplate manufacturer using British steel. The tinplate manufacturer using foreign steel merely puts into his own pocket the extra margin of profit obtained as the result of the lower price he pays for the steel bars. The only influence the importation of Continental bars has, apart from the extra profits enjoyed by the importer, is the throwing out of employment in Wales of many colliers and steel workers who become a charge upon the Unemployment Insurance Fund.
I say with authority, arid with full knowledge of the position that there is not a tinplate manufacturer in South Wales to-day who complains about the price of steel. As a matter of fact, the profit the tinplate manufacturer is making to-day as a result of his international Tinplate Cartel, even with the price of steel up by 2s. 6d. from £5, is greater than it was when the duties were first introduced. I have it from the leaders of the independent tinplate makers in South Wales that they have no complaint about the price of steel with which they are being supplied by the Welsh makers of it. Before these additional duties now before the House were put on a few weeks ago they definitely told me that they had not purchased any foreign steel for the best part of 12 months. I want to assure the House that there is not a single complaint from tinplate manufacturers as to the price which they are now paying for steel bars. Whether they have some fear in their minds of further development of the tinplate trade on the Continent is beside the point; all that I am concerned about is that at the moment there is no complaint about the price of steel bars.
It must be obvious that the results which have been achieved in the iron and steel trade in general could not have been realised without the very remarkable degree of internal re-organisation which 1533 has taken place, and, what is more, in spite of what has been said this morning, the very successful reconciliation of what might otherwise be termed conflicting interests in the trade itself. This has been done in a spirit of complete co-operation in the national interest. Those who are familiar with the industry itself know what progress has been made by reorganisation schemes, especially on a national basis. We claim that our industry is well organised and as effectively re-organised at the present time as any other industry in this country which is made up of so many individual units. In fact, individual units, each of necessity autonomous within its own sphere of activity, are all co-operating in a common policy to make the industry profitable and more efficient, and with a view to making a genuine contribution to the solution of unemployment.
We who are within the industry know that we are bound to be subject to criticism from time to time. I venture once more to deplore—I have done it many times on the floor of this House—unintelligent and uninformed criticism of any industry, whether it be steel, or cotton or any other industry. It affects the morale at home and lowers our prestige abroad, particularly in our Dominions and Colonies. On behalf of the industry, I thank His Majesty's Government for the generally sympathetic and helpful way members of the Government have at all times endeavoured to create within the industry the conditions under which efficient self-government of the industry can be made possible. I can say on behalf of the British Iron and Steel Federation that the guiding principle of that Federation is now, and always will be, co-operation with the Government of the day to secure national economic recovery. The industry believes that in working in a statesmanlike manner for its own prosperity it is making a substantial contribution to the solution of the unemployment problem and to the economic recovery of the country as a whole. The leaders of the industry, as has already been said, are very much pre-occupied at the moment with the problem of international co-operation. If we are successful in our effort, the industry believes that it will make no small contribution to the economic recovery of the world at large. We believe that stable conditions can be created throughout the 1534 world in a basic industry like the iron and steel industry, and we believe that as a corollary we shall have an increasing degree of political stability in the world which must result from more settled economic conditions.
§ 1.21 p.m.
§ Sir H. CROFT
I am not going to waste the time of the House at all in making any gibes with regard to old political theories as to whether the President of the Board of Trade held such a view at such a time or whether the hon. Member for East Birkenhead (Mr. White) held such and such a view. We may all say that we have left these theories behind and that we are engaged in a hard world of realities, and I think that I am not exaggerating when I say that there is not a Member in this House who is a free trader in terms. I do not think that anyone would rise from his seat and say that he did not desire a tariff of any kind. I was going to deal in some detail with the very interesting speech of the hon. Gentleman the Member for Gower (Mr. D. Grenfell) with regard to the tinplate industry, but, after the devastating reply from my hon. Friend the Member for West Swansea (Mr. L. Jones), I do not think that that is necessary. I want to bring the House to look at the large effects of this policy which I rejoice to think we are proposing in this House to-day. The hon. Gentleman said that neither in this debate nor in the report had a word been said with regard to the position of the workers in the industry. We have now arrived at the position that we at least understand that the workers in this country can only prosper if the industries in which they are engaged are in a healthy condition. As far as I am concerned, that ought to be our sole test; the prosperity of the industries should be maintained in such a condition as to give the maximum employment to the people of the country, which, I think, we have always been rather inclined to forget in all our discussions in regard to duties. The hon. Member for Birkenhead, East, quite unfairly suggested that when this Order comes into force there is to be an increase in prices and that the cost of the duty will be added to the cost of the goods, etc. The whole evidence that we have had since the duties were first imposed, and the whole story since His Majesty's Government adopted this policy, is to the 1535 contrary. By more efficient production we have been able not only not to increase prices but, as in the case of this industry, the index figure compared with 1930 shows that prices are actually lower. What is more, there is the distinct undertaking from the steel industry that in spite of this rise in the duty so long as labour costs and the costs of raw material are not increased unduly they are prepared to stand by their policy and to see that there is no increase in prices.
I want to point out one or two facts of which we have not taken sufficient notice in days gone by. I am most concerned at this moment with the whole position of the depressed areas of this country. I believe that in considering this policy we are going to do more in a speedy and efficient manner to bring new life into the depressed areas than under any other policy that I can foresee in the next 10 years. If we had had substantial duties on imported iron and steel since, say, 1928 there would have been an entirely different story to tell in the depressed areas. It has been my pleasure to introduce two or three deputations in recent years to Ministers, where we have been urging consideration of this question, and I should like to say at once, more especially as I have not been supporting His Majesty's Government very faithfully in the last three weeks on another Measure, that I congratulate them on not vetoing the decision of the Tariff Advisory Committee and on allowing this Order to come before the House. I rejoice that that step has been taken.
I am sorry that the miners representatives are not quite so thick on the ground as they were in the earlier part of the debate, but I think that they will agree with me that the depression in Souh Wales is more due to the decline in the coal industry than to any other. That statement is also true of three other great areas in the country.
§ Mr. GEORGE HALL
It is very largely the loss of the export market that is responsible for the greater portion of the depression in the coal industry.
§ Sir H. CROFT
In the coal industry. I agree. But if my hon. Friend will listen to me for a short time I think I can prove that for something over 15 years this country has lost 100,000,000 tons of 1536 coal production owing to the policy we have maintained of allowing so much iron and steel and other products of a metal character to be imported into this country. From 1933 to 1934 since the operation of the tariff the home consumption of steel has increased by 3,000,000 tons and exports have increased by 360,000 tons, which is the answer to those who have had great fears that in giving greater security to the industry we were going to lose our export trade. The opposite has occurred, because we have seen an improvement in the efficiency of the industry and in the home and export trade. If that had not been so it must be admitted that the condition of the depressed areas would have been worse to-day. Recently, foreign importers of steel have been getting over the tariff and we found that last year 1,155,000 tons of iron and steel goods were imported. The House is well aware that one steel worker throughout the year will turn out something like 25 tons of steel. On that computation the importation of foreign iron and steel goods last year would have represented the employment, had those goods been made in this country, of 46,000 steel workers. That is a very striking figure. Taking the cost of unemployment pay to the 46,000 steel workers who might have been employed, calculating the average weekly cost at £1 means that we should have been saving this country £2,300,000 in unemployment pay had those 46,000 workers been employed. When we remember also that we are devoting £2,000,000 as a start in the depressed areas for trying to establish new forms of occupation, through the instrumentality of this House, these figures are very striking.
There is one further matter, and this is the main point that I wish to bring before the Committee. The hon. Member for Gower (Mr. D. Grenfell) made a very interesting suggestion in regard to the loss of our coal exports to Belgium, and I hope that what I am about to say will be conveyed to him. He said that we had lost 300,000 tons of coal exports to Belgium. [HON. MEMBERS: "No."] Then I misunderstood him. Whatever the figure may be, that loss of our export coal trade to Belgium is one which is far outweighed when we look at the question of iron and steel. I believe that I am right in saying that the im- 1537 ports of iron and steel last year represented something like 3,500,000 tons of coal; a very substantial figure. Let us suppose that a miner hews 250 tons of coal a year, or perhaps a little less. That means that not only would 46,000 more steel workers be employed if these foreign iron and steel imports did not come into the country but that 14,000 coal miners would be employed all the year round provided we could get the whole of that trade. That represents a total of 60,000 workers. What other policy is there before this country at the present time which could with speed achieve anything like, or even a considerable proportion of, that employment.
His Majesty's Government have been very wise, and I congratulate them on the courage they have shown in pursuing this policy and I rejoice to think that the Advisory Committee has recommended it: and I cannot help thinking that if we once appreciate the national good as a whole that comes from this policy we shall see to it that not only will there be an increase in the consumption of British ore as a result, and of British limestone, but that we shall find that haulage on the railways, if we can deflect the whole of that trade to home manufacturers, will increase by something like 7,000,000 tons. Therefore, we have in three or four directions good that will accrue to the country from this policy. I am not one of those who believe that we have exhausted the possibilities of developing the home market. The hon. Member for Gower, at the end of his interesting speech, asked whether it was proposed that we should make all our own steel goods. On behalf of all hon. Members who support His Majesty's Government, I say undoubtedly that is our desire and our aim. Provided that we can make the goods as efficiently and at a reasonable cost, we intend to give every chance to our industry to bring about that situation. For that reason, I hope the hon. Member, who did not in fact say that he was going to oppose the Order, will not do so. Speaking as one who is not connected with the steel trade, but who is deeply concerned about the fortunes of our less fortunate brethren in the depressed areas, the iron and steel workers, the coal miners and the limestone workers, I say that His Majesty's Government are doing a good day's work 1538 in bringing this Order before the House, and I hope it will get the unanimous support of the House.
§ 1.37 p.m.
§ Mr. BANFIELD
I am sure that the President of the Board of Trade must have listened, perhaps with some joy, to the congratulations of the hon. and gallant Member for Bournemouth (Sir H. Croft) on having now become the archpriest of protection. Time brings its revenges and changes, and not the least is that the hon. and gallant Member, who has recently been wandering away, has now returned to give his hearty support to the Government. The picture which has been painted by some hon. Members may be interesting to those concerned with the production of steel. I admit that when an industry asks for a 15 or 16 per cent. tariff naturally it declares that it is a good thing for it. It puts up its special case, like the hon. Member for Swansea (Mr. L. Jones), who showed that all was best in the best possible worlds. But there is another side to the picture. The iron and steel industry are being put in a specially privileged position, they have received exceptional treatment. They have been placed in the position of a monopoly. Is the President of the Board of Trade aware that because of the tremendous increase in the tariff and the power which he is putting into the hands of the industry he is creating a monopoly for a comparatively few firms. Is it the policy of the Government, are they deliberately embarking on a policy of closing down a majority of the employers who buy iron and steel in this country, leaving the industry in the hands of two or three people? Is this for the good of the industry or of the nation as a whole?
I am speaking from a knowledge of what is happening to manufacturers in my own constituency who buy iron and steel. They are the consumers of the raw material and give employment to men in my constituency. Their point of view should be taken into consideration. It is not sufficient to bolster up the iron and steel trade without having due regard to the possible consequences to other people. Let me put before the House the position of the consumer as represented by the tube industry in my constituency and throughout the Midland Counties. This is a very important industry in Birmingham, Wolverhampton, 1539 Wednesbury, Walsall and the Black Country generally, I have been to the trouble of getting the views of the firms concerned as to the possible consequencies of an increase in the tariff from 33⅓ per cent. to 50 per cent. What has been their experience of granting this virtual monopoly to the iron and steel producers? In May last year, when the 33ࡩ per cent. was made permanent, I pointed out to the right hon. Gentleman the complaint of the manufacturers in my constituency that they were not getting a square deal from those who were then in a position to supply them with their raw material.
What has happened in the last 12 months. In the town of Wednesbury alone two firms have closed down and 500 people men and women have been thrown out of employment. While it is very nice to hear the statements of those who represent the iron and steel interests we must remember that there is a price which has to be paid, in the poverty, the misery, the want and the degradation, of men and women who are thrown out of employment, unable to get other work, and who are forced to stand at street corners so that the iron and steel producers may do well and make large profits. The report I have had from manufacturers in my constituency says:We regard the further large increase in the tariffs on iron and steel as unjustifiable and as very prejudicial to a vast number of businesses throughout the country. In our own particular trade"—That is the tube industry—it is simply disastrous. When the duty was first fixed at 33⅓ per cent, the Midland tube makers entered a protest with the Import Advisory Committee, pointing out that the duty would be levied on a certain quality of steel billets and strip which is essential for the manufacture of welded gas and steam tubes, and which was actually not being produced in this country at all. Numerous interviews took place between the Import Advisory Committee and representatives of the Midlands tube trade, but we could get no satisfaction. The Committee could not deny that the duty was being imposed on a class of steel which was actually not being made in this country, which means that it was a tax on our industry and not a protective tax at all,I am sure that the right hon. Gentleman will realise the importance of that point:but all they would say was that they were pledged to put the steel industry in this country on its feet. We claim that 1540 this argument cannot be brought forward to justify the further increase, for the reason that, during the past year, the demand on steel producers in this country has been very large indeed and, judging from the reports of numerous makers, very profitable.The special kind of steel referred to as being essential for the manufacture of welded tubes is what is known as Thomas basic, and, as you are no doubt aware, a firm of tube manufacturers have put down a plant for the manufacture of this class of material, and this plant has recently been brought into service, but, as we have said, it is in the hands of a firm of tube manufacturers, and there is no other plant of this kind in the country from which other tube manufacturers can get supplies of Thomas basic steel. So you can readily understand the position in which the Midland tube makers are placed by the increase in duty on the class of steel essential to them for their trade.Directly the increased duty was asked for the Midland tube manufacturers put in a letter to the Import Duties Advisory Committee explaining the position, but no notice was taken of this.The effect of this kind of thing on the constituency I represent is that in spite of the fall elsewhere in the unemployment figures, in spite of the prosperity of iron and steel producers, no less than 23 per cent. of the people in my district are unemployed. Manufacturer after manufacturer has closed down. Businesses that have been in existence 50, 60 or 70 years and have been handed down from father to son have been dosed one by one and they are not being reopened. People are left there in all their misery to make the best or the worst of their position.
Let me deal with a further point. The President of the Board of Trade in his statement said that the iron and steel producers had again renewed their assurance that it was not their intention to raise prices. I have here some prices, and I have been able to satisfy myself that they are correct. On 25th September, 1931, the price of strip steel was £6 7s. 6d. a ton. In February, 1935, the price was £7 6s. 3d. At the end of February this year it was announced that these duties were to be increased from 33⅓ to 50 per cent. In March of this year, within two weeks of that announcement being made, the price of strip steel was increased from £7 6s. 3d. per ton to £7 12s. 6d. I hold here the record of a firm in my constituency, who say:Naturally English steel works have not been slow to take advantage of the additional protection afforded them, and within 1541 seven days the price of strip in many cases has advanced by £1 a ton. … In our opinion a little healthy competition from abroad is a benefit to tube manufacturers, and furthermore, from our experience in the manufacture of tubing, strip manufactured from English billets is not so suitable for the manufacture of welded tubing as Thames quality strip manufactured from Thames billets.The hon. Member for West Swansea said just now that he deplored the fact that people who knew very little about iron and steel took part in these Debates. I have always tried to put forward the point of view of men actually engaged in the industry, employers and employed, who come to me as their Member of Parliament and say "This thing, instead of making for our advantage, is making it almost impossible for us to carry on." They point out to me that firms have closed down even in the last 12 months. They ask whether the President of the Board of Trade realises that he is creating a monopoly for firms manufacturing iron and steel, and whether he is doing sufficient to check that monopoly, and to give consumers and buyers of iron and steel that protection to which they are entitled.
I think it is a terrible thing to have to say here that people engaged in the industry, the buyers of iron and steel for certain purposes, are afraid even to open their mouths to their Member of Parliament in order to complain, for fear lest their supplies of iron and steel will either be stopped or that the price will be raised against them to such an extent as to put them out of business altogether. I have known of victimisation in the case of trade unions, but I am in this matter beginning to be terribly uneasy, and I think the President of the Board of Trade must be uneasy too, when he realises that he has put into the hands of a very few people the power almost of life and death over workpeople and employers who have pursued their calling for many years. If that is what protection is to bring us to, it is time that some voice was raised in this House to say that if it is necessary to protect the iron and steel industry it can no longer be left to private enterprise to have a monopoly of the market and to create what may turn out eventually to be simply a ramp; in other words that British makers are going to follow the example of the American iron and steel producers and control the whole of the 1542 home market. The hon. Member for West Swansea declared that what they were saying was "The home market is to be our own"; it was to be the property of the iron and steel firms. I suggest that the home markets are the concern of this nation and should not be left to be exploited by three or four or six firms inside the combine.
The argument always used against protection, as the President of the Board of Trade knows far better than I do, was that it created a monopoly and gave too much power into the hands of the few, who would ruthlessly use that power to squeeze out their competitors without any consideration for the best interests of the nation. We see what is happening in the tube industry as a consequence of the power given to the iron and steel firms. The comparatively small employer may employ only 500 workpeople, but in a place like Wednesbury those 300 represent a large proportion of the population, and when those 500 people are thrown out with no possibility of getting work in their own industry, it is a tragedy to them. This squeezing out of what is termed the small employer and getting the market into their own hands by the steel makers, who in the meantime use their power to undercut the home market so far as tubes are concerned—that sort of thing is against the best interests of the nation. It is anti-social and it is against everything for which I have always understood the Conservative party stood.
I am pleased to see that the hon. Member for West Swansea has returned to his place. For his benefit, may I repeat that while it is all very well for the Government to create a monopoly for the iron and steel people, my concern is with the consumers, particularly those in the Midlands and in the tube trade. They are not getting a square deal. The Government are giving the iron and steel industry a power which is being used ruthlessly to squeeze hundreds of decent people out of work. The hon. Member for Swansea may say that 46,000 more people are employed in the iron and steel industry but how many people have been put out of employment in other industries? An industry cannot live on itself alone and a basic industry like iron and steel cannot be left at the mercy of a few people who are using the power 1543 placed in their hands, not in the interests of the nation, but in the interests of themselves and their profits.
I appeal to the right hon. Gentleman to realise the danger. We are not necessarily prejudiced against the iron and steel firms. I think the hon. Member was right who said that no one in this House wanted to go back to the naked and unashamed Free Trade doctrine of a few years ago. That I believe is an impossibility, but in our attempt to cure one evil do not let us raise up this monster and create other evils. Let it be realised that if we help this industry it must recognise its own responsibilities. It must realise what it owes to the nation and to the people who use its products. In the circumstances, I am unable to support the increased duty proposed in this Order. I am not satisfied that the consumer is being adequately protected. I accept the evidence of my own people and I speak with the full knowledge and support of the users of iron and steel in my constituency. I speak on their behalf and on behalf of the men and women employed by them.
I want to see people employed in my constituency just as the hon. Member for West Swansea wants to see people employed in the iron and steel industry. But it is no solution of our problem to put 20,000 people to work in one way and to throw 20,000 or perhaps 30,000 people out of work in another way. I hope that the protest which I have endeavoured to make will receive the earnest consideration of the right hon. Gentleman. The people concerned have already been before the Import Duties Advisory Committee and they complain that no notice has been taken of their views. It may be that the Advisory Committee consider that they have to look at the question from a wider point of view, but I am concerned with the human side of the problem, with the men, the women and the children who are directly affected with the lowering of the standard of life in a particular area as a consequence of this policy. I trust that the right hon. Gentleman will do everything possible to see that all concerned get the fair and square deal to which they are entitled.
§ Notice taken that 40 Members were not present; House counted, and 40 Members being present—
§ 2.0 p.m.
§ Mr. NUNN
When I put on the Order Paper the Amendment which stands in my name—in line 1, to leave out from "That," to the end, and to add:this House declines to approve an Order increasing the import duties on iron and steel so long as British hematite iron ore is subjected to unrestricted foreign competition."—I did so, not for the purpose of attempting to deprive the iron and steel industry of the benefit of the tariff which is proposed, but in order to draw attention to a particular aspect of that industry. The iron ore industry has been referred to this morning already by the hon. Member for Gower (Mr. D. Grenfell). It is an essential part of the iron and steel industry, and I think I can best make my case by quoting the words of the report of the Advisory Committee to which, I think, the hon. Member for Birkenhead West (Mr. G. White) has already referred.Taking the interest of the country as a whole, we are satisfied that the advantages of the policy indicated in this report far outweigh any transient disadvantages to small sections of the industry and that, on a long view, this policy will best serve the interests even of those sections.It is on behalf of one of those sections, namely, the iron ore industry, that I wish to make some points. The iron and steel industry has received great benefit from the tariff and is receiving greater, and one wishes to know to what degree it has been and is prepared to pass on that benefit to the iron ore section. The main industry has been required to organise itself and one wishes to ask how has it acted in organising itself so as to benefit the production of native iron ore, which is an essential commodity for its own industry. The hon. Member for Gower has already outlined to some extent the position of the iron ore industry. I wish to draw the attention of the House to the fact that it is a most important industry. The hon. Member for Gower suggested that it was merely of local importance, but in fact it is of vital national importance. Hæmatite iron ore is found in the North-West—in my constituency in West Cumberland—in the North of Lancashire, in Glamorgan, to a considerable extent, and, to a lesser extent, in the Forest of 1545 Dean. It is an essential commodity for the highest class of munitions. During the War the North-West coast was, I suppose, one of the most important parts of this country, because had those supplies been cut off the production of munitions in this country would have suffered severely. Therefore, the hon. Member in referring to this as a matter of local importance, was not strictly correct.
From the point of view of employment, in my own constituency alone there are over 3,000 men on the unemployment register in a district which is entirely dependent upon the production of iron ore. That takes no account of the figures in North Lancashire which I have not been able to obtain in time for this Debate, but there are 3,000 odd people unemployed simply because the iron ore mines in the West portion of Cumberland are no longer working. A few years ago we had 20 mines in operation. To-day we have six, and I am extremely sorry to say that yesterday when I visited my constituency I heard that one of these six will probably close down within a week or a fortnight. The closing down of that mine will mean that 1,000,000 tons of the finest iron ore in the world will be drowned out for ever. The pumping of that mine has to deal with some 2,000 gallons of water per minute throughout the winter, and when those pumps are withdrawn that water will find its way inevitably into the other mines of the district which are working. I can foresee that the closing down of the two mines concerned in this one ownership will probably mean the closing down of all the hæmatite iron ore mines in my area. That is not, I submit, a matter merely of local importance.
One cannot blame the owner of those mines for having to close them down—he has been paying £600 a month on one mine and £500 a month on the other for pumping alone, and what he has managed to sell has been sold at a loss—but I do claim that there is a certain responsibility resting on the iron and steel industry with respect to the closing down of those two mines. The owner of those mines happens to be what is known as a free seller. He has to find his market for himself. Neighbouring mines are owned by the iron and steel industry, and that industry pleases itself whether it will buy from free sellers or whether, refusing to buy, it will crowd the free 1546 sellers out of the market. That, unfortunately, is what has been happening in my constituency and in North Lancashire. The free sellers have been steadily crowded out of the market, while the mines which are owned by this industry, to which we are giving this tariff to-day, are kept going in order to supply the somewhat limited quantity of monopoly metal which they want for their own purposes.
Something has got to be done about this. I have made suggestions. It is nearly three years now since I made a suggestion to the Government. I have heard about it at intervals from the Secretary for Mines, I have brought up deputations to see him, but for many months now there has been silence. Every Member of the Government and, I think I am right in saying, practically every Member of this House was circularised by myself nearly three years ago, but all that has happened has been that it has been left to me, a private Member, and a very modest one at that, to supply any motive force that has been used towards the resuscitation of this industry. I have not found, except from my hon. Friend the Secretary for Mines, any interest displayed in this question by any Member of the Government. It is just as well that I should speak plainly. One does not get this opportunity very often, and I think this is a time when the truth should be spoken.
I have yet to find that any Member of the Cabinet has shown the faintest interest in this question, which vitally affects, not only some 3,000 people, but the whole of a district. In fact, it so vitally affects that district that if the position were put right, there would be practically no necessity for the special commissioner who has been appointed to deal with my area; his problems would be finished at once.
In an effort to get this position remedied, I have drawn together the royalty-owners in my district. They unanimously agreed to reduce their royalties most handsomely, and the royalty question no longer remains an obstacle. Later, at the suggestion of the Secretary for Mines, I brought up deputations to see railway officials, and we got a fair way towards the reduction of railway freights, when once again the hand of the iron and steel industry came 1547 into the question. The railways offered certain concessions, provided certain conditions were accepted, not by the iron ore industry, but by the iron and steel industry. The question was taken off the shoulders of the iron ore people and put on to the shoulders of the Iron and Steel Federation. It was in July last that that offer was made by the railways, but nothing has been done by the Iron and Steel Federation since that time. From July till April there has been the silence of the grave, and any efforts made by those people who are interested only in iron ore and not equally in iron and steel have been entirely fruitless.
There the matter rests. Since that offer was made last July, nothing has been done by the railways, and, as far as I know, nothing has been done by my hon. Friend the Secretary for Mines. I do not want to appear to be suggesting in any way that the Secretary for Mines has been lacking in energy, vision, or desire to help, but I must suggest that he does not seem to me to have received any inspiration from any Member of the Cabinet or from the Cabinet as a whole; and I think, on a question of this vital importance to the country and of this seriousness, there should have been some energetic action taken by the Cabinet. My first suggestion was that the iron and steel industry might be required to accept a regulation which would impose upon them a quota, not a quota on imports, but a quota on usage, that they should use, say, 20 per cent. of British haematite ore in the production of haematite iron of certain qualities. I am not wedded to that suggestion, which was my own suggestion, but it seems to me that it is quite within the limits of the powers of the Government, working through the Import Duties Advisory Committee, to say to the iron and steel industry, "You have to reorganise yourselves, and you have to satisfy the Committee that this reorganisation is going to be for the general benefit of the country; you must see to it, when you are reorganising, that you so allot your work that the question of heavy freights and other questions of overhead costs will not necessarily arise, and you will be able to use British iron ore in your blast furnaces and foundries which lie near to the sources of that ore."
1548 That seems a possible thing for the Government to do through the advisory committee, and I think, in view of the seriousness of this question, in view of its national importance, in view particularly of the dark clouds which are hanging over Europe at the present moment, which may bring us once again under the threat of war, and in view of the necessity for maintaining this great, vital, national supply of iron ore, it is the duty of His Majesty's Government to look into this question at once and earnestly. It is not a question which can any longer be allowed to remain merely in the hands of a private Member of this House, for him to do what little he can to draw the Government's attention to its seriousness. I want once again to ask the Government to give this matter its most serious attention. I do not know whether I am in order in moving my Amendment. If I am not, the question will not arise, but if I am in order in moving it, I should not wish to divide the House on it. As I said before, I do not wish to do anything which would deprive the iron and steel industry of its tariff, but I should like some assurance from my right hon. Friend the President of the Board of Trade that this question is going to be considered very seriously.
There are several aspects of the question to which the Government might well give its attention. It might be possible, if the iron and steel industry cannot handle the whole difficulty themselves, for the Government to join hands with them, and there are means by which that could be done. If, for instance, the Government would undertake the heavy task of dewatering the district, leaving to the iron and steel industry the rest of the work, I think that might go a long way towards solving the difficulty, and I do make a very earnest appeal for action. My distressed area lies there derelict. But for the work provided by these iron ore mines, there is no work in the district. It is no good offering to my people the prospect of growing cabbages on the top of millions of tons of ore, a national asset which is not to be used. It is no good telling them that they must move to other districts. They know that under their feet, in some instances only 18 or 20 feet below the surface, they have an almost inexhaustible store of ore, which, 1549 I should have thought, would have been a temptation, if nothing else would tempt the Government, to get to work to see that that ore was used. I do appeal to His' Majesty's Government to give me some assurance to-day that this question is not going to remain merely a departmental question, but that it is to be taken up seriously by the Cabinet and given earnest consideration.
§ 2.16 p.m.
§ Mr. MACMILLAN
I hope the hon. Member for Whitehaven (Mr. Nunn) will not think it discourteous of me if I do not follow him in the details of the case he has put before the House. It is, of course, one of considerable application as regards this problem, and, no doubt, the Government will deal with it in their reply. It will not, I think, have escaped the notice of those Members who have sat through this Debate that, with the exception of one speech, there has been no revival in the Debate of the old Protection versus Free Trade controversy in its purest form. Almost every speech, including the very interesting speech of the hon. Member for Gower (Mr. D. Grenfell), who started on the Opposition side, has accepted the new and changed condition of the world, and has made that controversy somewhat obsolete. It is true there have been demands for all kinds of conditions and regulations governing the application of tariffs. Very interesting points have been raised, particularly from the Opposition benches, of what should be the quid pro quo which an industry should give, but there has been only one voice crying in the wilderness, and that was my hon. Friend who speaks from the Bench immediately below me.
I will say, however, that the hon. Member for East Birkenhead (Mr. White) showed great restraint in his speech. He refrained from quoting old speeches of the President of the Board of Trade and of the Parliamentary Secretary to the Board of Trade. He showed a self-control on which we must congratulate him. Indeed, his speech was all couched in a general deprecatory way. He deprecated almost everything. He deplored, in fact, the modern world. Cartels were not a very good thing; tariffs were bad things altogether. Then there is the question of the Gold Standard, which might have 1550 the effect of driving a country now on gold off gold. Whether he wished to see them kept on gold because it was a disadvantage to a country, or feared driving them off because it was to their advantage, he did not explain. It reminded me of a story about a meeting of Conservative peers which took place immediately before the question a as to whether the Parliament Act should be passed or not. At the gathering, different views were put forward, but one nobleman made a speech so reactionary in terms that one of his younger colleagues got up and said: "I do not think your Grace has realised that a Reform Bill was passed in 1832", upon which that nobleman majestically and said, "I do realise it, and I deeply deplore it". The official Liberal party deeply deplore the changed conditions of the modern world. They wish that the Victorian period had not passed away, and sigh for the old conditions which are disappearing. But all of us, in some way or other, are trying to give our minds to the solution of these new problems which are all concerned with the changed conditions with which the industrial system all over the world is now confronted.
This is indeed—to use the expression of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George)—a ruthless use of tariffs. I do not know whether it is the first sign of a new association between the Government and the right hon. Gentleman that they have adopted this part of the "New Deal". This is a ruthless use of tariffs, and more ruthlessly applied in the hands of converts, whose zeal is always greater than that of those who have always been believers. What is its defence? I think that the House listened with the deepest interest to the speech of the President of the Board of Trade, because it is no good disguising the fact that a great part of the House and of the country who are in principle Protectionist, are somewhat alarmed at this decision to make so large a rise in this particular set of tariffs. But I want the House, or those Members now here who did not have the advantage of hearing the President's speech, to realise what was the main basis upon which the Government defended these tariffs. It was the importance of a stabilisation both of imports and of exports. It was upon the basis that the 1551 international cartel is an essential part of that stabilising influence which is necessary if the industry both at home and abroad is to be carried on without definite warfare, equally harmful to ourselves and to foreigners. It was on the basis of giving a bargaining power to those who are dealing with the cartel that these duties are mainly recommended to-day, and the main purpose of this increase in the duty is to use the power of those who have to enter into an arrangement with the cartel.
I recognise, as I think the House does, with interest, that the Government's policy is based upon stabilisation, and regards, in the case of this industry at any rate, the preservation of a system of international stabilisation as being just as important as a system of internal stabilisation. What we have to be sure about is that we make reasonable demands in those negotiations, because there are some factors which also must be borne in mind. It is true there has been an increase in imports in the last two years, particularly in the last year, but that, of course, has been partly brought about by a general expansion of the home market because things have been better; but—and here I would refer to the very interesting speech of the hon. Member for West Swansea (Mr. L. Jones)—if some part of the industry were to think that it could have permanently the benefits of two conflicting systems, then there is danger. For the moment we have gained, because Protection has given to industry the home market, because the general expansion of wealth has expanded demands, and because there is a great deal of slack to be caught up. But we have also gained because the existence of the cartel has been of real benefit to the industry. It has prevented the stabilisation of foreign producers working within certain limits, has removed what would have been a much more dangerous competing power in other markets. It has not altogether to be waived aside that there is a danger which, I think, many in the industry recognise, that any sudden change or unreasonable demand in negotiations might have the effect of driving competitors further into the finishing trades. I know that that is held by a good many people who have some knowledge of the industry.
1552 Therefore, the House as a whole wants to be reassured—and I think the speech of the President reassured it—that the policy of the Government was to use the tariff as a bargaining weapon. It was to support the system of the international cartel because a balanced system of this industry is vitally important to us and is for the general benefit of industry all over the world; and to make not unreasonable demands upon the international cartel, but to try, if possible, to come to an agreement which will be satisfactory to the industry without endangering the finance of the international cartel. On the second part of the policy, the President of the Board of Trade has spoken not only to-day, but on many occasions with great force and vigour. He has always recognised from the beginning that the policy of what is roughly called reorganisation should be a condition of protection. On what we mean by reorganisation there is not agreement but there has been common agreement that the main purpose of Protection, the main reason why we allowed the President of the Board of Trade and his colleagues to take the changed view—which they were quite right to take in the new conditions—is to facilitate the reorganisation of the industry. About that he frankly told the House that the House and the country has been somewhat disappointed during the last three years.
The hon. Member for West Swansea will agree with what I am going to say, interesting as were the facts he gave with regard to the technical reorganisation of the industry; important as were the figures he gave as regards the new plant and machinery, and the improvement in technical methods; and interesting as are the figures which he might have given as to the financial arrangements within the industry. I think that he will agree there has been a greater progress of technical organisation of the industry than of the structure of the industry regarded as a whole and as to the relation of one part of it to another. The Committee over which Mr. Mitchell presided for two years did not really lead to a satisfactory result, and, as the President of the Board of Trade has told us, we are pinning our faith on the fact that in Sir Andrew Duncan there has been provided for a fresh consideration of this problem a man whose personality and 1553 power are believed to be capable of bringing about a satisfactory solution to these long negotiations.
All the objections that have been raised to-day have turned upon the conflicting interests of the various branches of the industry. They would be removed if it were possible to organise the structure of the industry as a whole. The difficulties in an industry confronted with such wide branches and ramifications all arise out of conflicting interests between one particular specialist part and other parts of the industry as a whole. I am always a little surprised that my hon. Friends above the Gangway who, in labour matters, have such a horror of the blackleg, seem to think that a capitalist blackleg who refuses to come into any agreement and to come into any trade association, who cuts every agreement and runs away from all the things he has undertaken to do, is a hero of the industrial world. I dislike the capitalist blackleg just as much as they dislike the workman blackleg, and it is a condition of modern industry that the morality of the jungle should disappear if industry is to be organised on a decent workable basis.
I am not going to bring, like King Charles' head, my own pet schemes and methods into this discussion, but I would observe that the general policy which the Government are supporting, that of the rigid monopolistic control of values, completely abandons the idea of the orthodox free market. I think that they are right as far as this industry is concerned as regards the organisation at home. What this House has a right to demand is that in any scheme of reorganisation which this or any other industry is able to make under the protection of tariffs due safeguards shall be made and clue regard had to the interests of all other parties. In the legislation with which my friends and I are largely connected, an attempt is made to set up a system of these safeguards. Under this system there is no legalised method for producing them at all; but if the result of this reorganisation means, as I suppose it must in the long run, that when an industry has completed its scheme it will come to Parliament for legal rights to support it, then as a condition of the continuance of the high protective system, the Government have a right and a duty to insure that 1554 the scheme of reorganisation shall be such as to provide for the interests of the consumer within and without the industry, as well as for the interests of the labour employed in the industry. The House was much impressed by the case made by the hon. Member for Gower. He referred to the importance of technical reorganisation combined with a due regard for the social effects of great changes, either in the locality in which the industry is carried on, or in the method in which its men are employed. The Government who are helping the industry with their tariff have a right and duty to ensure that, taking the long view, the changes that are made and the reorganisation that is necessary are in the national interest and do not inflict hardship, so far as can be avoided, either upon individuals or communities.
I think that the House as a whole is far more united on this matter than would appear from some of these Debates and sometimes from the Divisions. With very few exceptions, there is a general recognition—which is the reason of the general agreement—of the changed conditions in which modern industry and modern trade have to be carried on, and of the fact that the old slogans and disputes will not do any more. There is equally strong recognition, which I should like to impress upon His Majesty's Government, that these changes require an equal regard for the rights of consumers and, more especially, for the interests of the labour employed in the industry as for the interests of those who own the industries and are engaged in production as entrepreneurs. It is upon that theme that there has been a remarkable and even an impressive concentration of opinion to-day.
§ 2.35 p.m.
§ Mr. R. T. EVANS
Much as I should like to comment on the extraordinarily interesting speech of the hon. Member for Stockton-on-Tees (Mr. Macmillan) I cannot, I fear, take up time this afternoon in doing so. I share many of his views, and I share his general aspirations, and I think there is something very heroic in this persistence in being the midwife for a new world which stubbornly refuses to be born. It may be that many things will have to be undertaken before we reach the stage where his ideals can be realised. There are many things I should 1555 like to say on the speeches which have been made this afternoon, but it would be very unfair to other hon. Members who desire to speak if I were to detain them by doing so. Still, I must make one reference to the speech of my hon. Friend the Member for West Swansea (Mr. L. Jones). One would imagine from his speech that in the iron and steel industry, and in those phases of it connected with the processing of steel, there is nothing wrong. One was given the feeling that everything in this wonderful garden was perfectly lovely and that nothing required to be done. He said that great strides had been taken in reorganisation and told us with a complacency which is perhaps not unnatural in him that we had every ground for satisfaction, because the steel industry in this country had improved its position in the last two years. He said that in 1932 our share of the world's production of steel was 10.5 per cent., and his face was simply aglow when he announced that last year it had increased to 11.75 per cent.
Seemingly he attributed that increase, which we all welcome, to the operation of tariffs. I am not going to argue the case against the tariff this afternoon, but I suggest that some people are too facile in reaching conclusions on this matter. I have the same returns, probably, as he has, and I find that Germany's steel production has increased from 14.2 per cent. to 17.2 per cent., and in the United States the increase has been from 27.3 per cent. to 40.6 per cent. As to tinplates, which is the phase of the industry which concerns my constituents most intimately, he told us that the very serious decline in the exports of tin plates had existed long before the imposition of a tariff, that it had nothing to do with a tariff, and that it was one of the consequences of the process, which was world wide, of countries insisting on laying down their own tinplate works to satisfy their own needs. That is a very plausible argument. But the position is very serious, as the figures of the decline in our exports of tin plates show. The decline has been gradual since 1929, and it has become alarming. Here are a few examples. From 1931 to 1934 there was a decline of over 7,000 tons in the exports to the Netherlands, to Belgium a decline of over 1556 7,000 tons, Portgual 12,000 tons, Spain 14,000 tons; and so forth. Our exports to China are down by an enormous volume, and so are our exports to Japan.
My hon. Friend suggests that the real cause is that those countries have undertaken production to meet their home requirements, but the extraordinary thing is that many of those countries which have laid down tinplate works have increased their exports. I made a statement on the subject in the House last year, and my hon. Friend challenged it, but afterwards was good enough to apologise to me. I said that we were the only large-scale producing country whose exports had declined. The United States, in the last two years, have increased their exports from 39,000 tons to 186,000 tons. Germany, confronted with exactly the same conditions as we are in the matter of the increased production of other countries, has increased her exports from 80,450 tons to 139,092 tons. I know that there are all sorts of special circumstances affecting these matters. Italy, which imports cheap Continental bars and which operates a system of drawback, in 1931 did not export a single ton of tinplates, increased from 8,024 tons in 1932 to 27,818 tons. Therefore, I hope that my hon. Friend will not persist in making that point, because other countries are confronted with exactly the same conditions as we are, and yet those other countries, some of them without the economic and natural advantages that we have, are expanding their exports.
§ Mr. L. JONES
These are interesting facts, but what have they to do with the question of the price of steel?
§ Mr. EVANS
I am not at the moment discussing the price of steel, but export conditions in the tinplate industry. I should be prepared to refer to the other matter, but I have given an undertaking to occupy the minimum of time. I should like to deal with the hon. Member much more exhaustively and much more faithfully, but having given an undertaking I must carry it out. I want to help the tinplate industry. My hon. Friend made the point that 300 men find work in producing 1,500 tons of steel, but it takes four times that number of men to produce 1,500 tons, or, rather 1,200 tons, of tinplates. I am really concerned about the export position, which is serious, and I 1557 want to make an appeal for something to be done to help the export side of the industry. I want some answer to the appeal which has been made for a rebate on steel bars imported for use in the manufacture of tinplates which are to be exported. I want a drawback system. My hon. Friend the Member for West Swansea says, "Ah, you are going to have an international agreement about the export of tinplates.
You are going to zone the world. Germany is to have this, Italy is to have that, and France is to have the other; and so on." That is all very well. I know that the tinplate industry in South Wales has been saved largely by increased purchases by Canada, South Africa and New Zealand. The exports to those countries have considerably increased, and if I were to state the figures they would warm the cockles of Lord Beaverbrook's Imperial heart. We have lost the European market, we have lost China, we have lost Japan, we have lost Malay, we have lost Hong Kong—we have had vast declines there—but there is no shadow of a doubt that we have improved our position very considerably in Canada, in New Zealand and in South Africa, and I do not want those markets to be lost. It is easy for hon. Members to say "You are going to have this international agreement. We own Canada. Germany—hands off Canada!" But what if Canada says that she is not going to be owned, and what if this international agreement means maintaining minimum prices? After all, the United States are not in the international agreement. At least, I do not think so.
§ Mr. EVANS
Well, they are not going to Canada. We own Canada, but if our action is tyrannous Canada may say that she will not be owned, and without making any rash charge against steel manufacturers that they are going to engage in machinations in order to raise prices the fact is that these people, despite the virtues claimed by the hon. Member for West Swansea, will, I feel sure, succumb to the temptations which beset human nature. If they can get an increased price they will do so. A large part of the tinplate industry is owned either by those who are in the steel industry or vice versa. There are some tinplate 1558 manufacturers who own their own steel works.
But perhaps the most vital and enterprising elements in the tinplate industry are the independent firms. I speak for those when I say that they want a rebate or a drawback system which will enable them to have a return of whatever duty they have to pay for bars which are imported to be exported in the form of sheets and coated plates. I do not think that that is asking too much. The plea I make on behalf of the exporting tinplaters is that their interests should be considered and that there should be something in the form of a drawback.
§ 2.47 p.m.
§ Dr. WORTHINGTON
I have listened to the whole of this interesting debate, and I propose to address my remarks to one aspect of the case only. I would like to see the terms of the Amendment of the hon. Member for Whitehaven (Mr. Nunn) varied so as to read: "so long as British haematite iron ore producers do not get fair play at the hand of steel manufacturers." I cannot follow the hon. Member in his mild attack upon the Government; I propose to direct my attack elsewhere. I see not the slightest objection to the proposed Orders. I think they are necessary, in view of the recent currency changes. They may prevent large increases of importation with corresponding increases in unemployment. I support the duties because they will reduce unemployment, but I do not think that steel makers should have all the advantage of the duties if they continue to preserve complete indifference to the haematite and limonite ore miners. If they get their duty, as undoubtedly they will, I suggest that they might adopt a more generous attitude towards those miners. By doing so they would assure themselves of the good will of the public.
Steel makers have a, moral responsibility towards the ore miners. My hon. Friend the Member for Whitehaven has advanced the case of his constituency, and I wish to do the same for mine, and I make a very earnest appeal for my miners. The Dean iron ore mines are the oldest in the country. It may interest the House to know that many of the bolts originally used in Westminster Abbey and Westminster Hall 1559 were mined and forged in the Forest of Dean. Not so very long ago black miners and red miners were to be seen on the roads of the Forest, but the black miners have unfortunately decreased and the red miners have disappeared because they have been liquidated by the importation of foreign ore. The mines are there, however, and there are millions of tons of very rich limonite ore. Though the mines are full of water, it would not be a difficult matter, with modern pumps and under the grid system, to de-water them. I understand that could be done in seven months quite easily, for the reason that the make-up in the mines is not more than 140,000 gallons an hour. There is a move to re-open the mines. I have gone fairly deeply into the matter for the reason that should the mines be re-opened they would provide work for at least 200 miners. That may seem a small matter, but in a derelict area it is not a small matter. I have been confidently assured that the ore could be put on rail at competitive prices. There is thus a case in which the Government could help, provided that the steel makers could be persuaded to do their duty towards their fellow countrymen.
I have no intention of voting against the Orders, but I protest against the lack of interest shown by steel manufacturers in the plight of the hematite ore miners. I believe that the Iron and Steel Federation have been most unreasonable in regard to the proposal to give a fair quota to the British hæmatite iron ore industry. I appeal to the hon. Member for Swansea West (Mr. L. Jones) that he and his friends should do something to bring the Federation more closely together with the iron ore interests in order to give hæmatite ore miners the chance which they have so long been denied. I hope that the steel manufacturers, noting the trend of the debate, will not continue deliberately to block the very reasonable proposal for a quota for British ore, which would keep British miners in employment, just because they happen to possess iron mines in foreign countries and find it cheaper to employ foreign labour.
§ 2.54 p.m.
§ Mr. MOREING
The hon. Member for Gower (Mr. D. Grenfell) referred to a letter sent by the Preston Chamber of Commerce to the Associated British Chambers of Commerce. Certain extracts from other letters were appended to that letter. That letter was also sent to me by the Chamber of Commerce, and I made it my duty to get in touch with the chamber in order to ascertain what their views and anxieties were. I met the committee of the chamber and they informed me that they had no spirit of hostility to the increased duties that are proposed in the iron and steel Orders, but they did have a feeling of anxiety as to pressure which might be brought by great associations and trade rings, and which would result in increased cost of a semi-manufactured article which to them was raw material.
The hon. Member for Stockton-on-Tees (Mr. Macmillan), in his very interesting speech a few moments ago, made what I think was an unfair attack upon people who remain outside trade associations, and he applied to them an inelegant term which has come into use in our language, namely, that of being a blackleg. I know that there are blacklegs in relation to trade associations, as there are to trade unions, but when I inquired into the case which was brought to my notice I was informed that it happens that the association does not meet the particular need of the article which the individual in question supplies. Yet at the same time they are trying to force him, though he is really an outside person, into their association. That has caused a feeling of considerable apprehension in his mind and in the minds of some of his friends in the same line of business. I listened with great interest to the President of the Board of Trade when, in introducing this Motion, he gave a very categorical statement about the Government's desire to see that there should be no undue price raising and that the interests of the consumer should be protected when this Order is in operation. I would make an appeal to the Government to look at this matter from a rather wider aspect than merely the question of prices, and to see that these manufacturers outside the iron and steel industry who have expressed apprehensions should have an assurance that their apprehensions will prove to be groundless.
§ 2.57 p.m.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
Perhaps on a Friday it is not a bad practice to begin with what is said last. Perhaps I may deal at once with this question of increases of prices by trade associations. The House, very rightly, will roundly condemn anything in the nature of coercion of this kind. At the same time, if manufacturers desire to impose some standard of reliability and to prevent the under-cutting of prices and the sale of poor material, it would not be unnatural that members who join themselves together and agree to abide by a certain standard should be able to have a rebate off the otherwise agreed price. Providing the difference in price was not unreasonable, the Government would, I think, feel that there was no occasion to intervene, but if that price differential became too great there would be methods found to see that observations reached the right quarter. I hope that with this remark we may leave this question on one side. It has been, in fact, fully investigated.
I am sure the House would desire to record its fullest sympathy with the iron ore industry, and I should like to say how much we welcome the speeches of the hon. Members for Whitehaven (Mr. Nunn) and the Forest of Dean (Dr. Worthington). It obviously would be impossible for the Government to say to an industry: "You shall buy your raw material from particular sources" or "You shall locate your manufacture in a particular place". Those would be impossible conditions to lay down if you were in addition to say that your object in making any proposal at all was to render the industry more efficient. You cannot render an industry efficient by attaching to it some conditions that those within the industry do not regard as contributions to efficient working. You will find it impossible to make any general regulations prescribing that an industry must procure its supplies in a particular direction or that it must necessarily be located in a particular area. Apart from that, it is the desire as far as possible that the point of view which has been put forward with regard to the local supplies of iron ore should be fully borne in mind.
This House knows that when the opposition to an Order is in the hands of the 1562 hon. Member for Gower (Mr. D. Grenfell) we shall be treated to a carefully prepared and well-presented series of arguments, and the speech we have had from the hon. Member this morning was no exception to that rule. I should like to deal with one point. The hon. Member asked us what was going to happen to Pontardawe. I am told that, as a result of the duties, orders have been obtained for billets; and I am told that there is every probability of these works being restarted in a few weeks. I give that information exactly in the form in which it reaches me.
There are only a few other points I need mention, because the House has shown itself willing to come to a decision on these duties. We must speak with a sense of responsibility. The cartel negotiations are still proceeding, and I want to say a word or two about the cartel and the nature of international negotiations generally. There may be some Members who have not taken part in negotiations for international agreement among industrialists. I have had considerable experience personally in that form of negotiation, and I want to assure the House of the immense importance that is attached by the industrialists of other countries to every word said in this Parliament, and of the importance, in consequence, that we should speak to-day with due discretion. The Continental Iron and Steel Cartel was in existence before the War and was reformed in 1926. Some agreements are older still, for the International Rail Makers' Association, of which that distinguished Free Trader Sir Hugh Bell was one of the earliest supporters, goes back for some 40 years.
I mention these facts because part of the speech of the hon. Member for Birkenhead (Mr. White) might have led the House to assume that this cartel was some new-fangled organisation of comparatively recent growth. Quite the converse is the case. It has been in existence all these years and active discussions as to the extent to which our own industry should participate have been on foot for some six or seven years past, In these cartel negotiations the industrialists of other countries have been almost invariably supported by their own Governments, but it has been only in recent years, in consequence of the adoption of a tariff policy, that it has 1563 been possible for our industrialists to have any comparable support. These negotiations will continue. The hon. Member for Birkenhead asked why the word "regrettable" is used in the report of the Import Duties Advisory Committee. The answer is that if there is to be a pooling of markets, if a proper allocation is to be made, and if that can be reached by agreement between producers, that is more satisfactory than any methods of regulation in one country alone independently of the other. The regret is real, and it is rightly expressed. Had it been possible to do this without recourse to duties every one would have been pleased.
Statements have been made to-day by hon. Members suggesting that forceful action on the part of this country for the protection of our own markets might be interpreted by certain other countries as unfriendly, and might make negotiations more difficult; that it might increase currency instability, and might conceivably stimulate competition elsewhere. What is the logic of these observations? How long are we to stand by and have our markets exploited and under what conditions? Is there nothing on the part of the cartel producing countries to which we are entitled to take legitimate objection The President of the Board of Trade, in moving the adoption of this Order, pointed out that the exports from the cartel countries were coming into the United Kingdom market at less prices than those for which similar goods were being sold to other sterling countries, at less prices than similar goods were being sold to gold bloc countries, and at far less prices than the home cost of production.
I have a number of details here on each one of the categories of steel from the Continental countries. I will not trouble the House with details, but the differentiations between the prices at which goods which are sent into the United Kingdom market and the prices at which goods are sold to other sterling countries, and the prices for the same goods in the country of origin, are very striking indeed. There must obviously be a point at which Great Britain says that this cannot continue. It would not be of the least advantage to a consumer to buy below cost if as a result 1564 it cut right across the stability of an existing industry in our own country. It has been said time and time again that you cannot found any form of prosperity for the consumer upon the bankruptcy of the producer. The idea that you should never take any action at all until you can be assured in advance that it will be universally approved is an impossible doctrine. That fact has only to be stated to be realised.
The United Kingdom industry has been told that the present duties are not an end in themselves, but a means to an end, and the House need have no doubt that the industry will do its best to reach an agreement with the Cartel. If and when an agreement is reached, it will be possible, and may be necessary, to review the action taken in this Order. Negotiations in industrial matters, particularly when the industrialists of more than one nation are concerned, are a matter of great complication and some delicacy. The House is entitled to the fullest information compatible with those negotiations being successfully conducted, and, should the House desire it, my right hon. Friend or I will be prepared to give the House all the information we can properly give as to the progress of the negotiations from time to time.
There is only one other matter to which I need refer. Reference was made by the hon. Member for Gower to powers conferred by the Government upon the iron and steel industry. If I heard him aright, he said that the Trades Union Congress were mere novices in the art of delegating any sort of monopolistic powers to members of trade unions. "Think how much we might learn," he said, "if we only sat at the feet of His Majesty's Government." There is no truth in any idea of that kind. His Majesty's Government have conferred no powers whatever on the iron and steel industry or on the federation formed within it, and any such suggestion is a flight of rhetoric which need not delay the House in giving us the Order for which we have asked.
§ Question put.
§ The House divided; Ayes, 141; Noes, 37.1565
|Division No. 154.]||AYES.||[3.8 p.m.|
|Agnew, Lieut.-Com. P. G.||Gilmour, Lt.-Col Rt. Hon. Sir John||Orr Ewing, I. L.|
|Alexander, Sir William||Goff, Sir Park||Peake, Osbert|
|Allen, Sir J. Sandeman (L'pool, W.)||Gower, Sir Robert||Pearson, William G.|
|Baldwin, Rt. Hon. Stanley||Grattan-Doyle, Sir Nicholas||Peto, Sir Basil E. (Devon, Barnstaple)|
|Barclay-Harvey, C. M.||Griffith, F. Kingsley (Middlesbro'. W.)||Powell, Lieut.-Col. Evelyn G. H.|
|Beit, Sir Alfred L.||Grimston, R. V.||Pownall, Sir Assheton|
|Blindell, James||Gritten, W. G. Howard||Raikes, Henry V. A. M.|
|Bossom, A. C.||Guest, Capt. Rt. Hon. F. E.||Ramsay, T. B. W. (Western Isles)|
|Boulton, W. W.||Gunston, Captain D. W.||Reid, James S. C. (Stirling)|
|Boyce, H. Leslie||Hannon, Patrick Joseph Henry||Reid, William Allan (Derby)|
|Braithwaite, Maj. A. N. (Yorks, E. R.)||Hartland, George A.||Roberts, Sir Samuel (Ecclesall)|
|Broadbent, Colonel John||Harvey, George (Lambeth, Kenningt'n)||Ropner, Colonel L.|
|Brocklebank, C. E. R.||Harvey, Major Sir Samuel (Totnes)||Rosbotham, Sir Thomas|
|Brown, Brig.-Gen. H. C. (Berks., Newb'y)||Herbert, Major J. A. (Monmouth)||Ross Taylor, Walter (Woodbridge)|
|Buchan-Hepburn, P. G. T.||Hope, Capt. Hon. A. O. J. (Aston)||Runciman, Rt. Hon. Walter|
|Bullock, Captain Malcolm||Hope, Sydney (Chester, Stalybridge)||Russell, Alexander West (Tynemouth)|
|Burgin, Dr. Edward Leslie||Hornby, Frank||Russell, Hamer Field (Sheffield, B'tside)|
|Burton, Colonel Henry Walter||Horsbrugh, Florence||Rutherford, John (Edmonton)|
|Campbell-Johnston, Malcolm||Hudson, Capt. A. U. M. (Hackney N.)||Samuel, M. R. A. (W'ds'wth, Putney).|
|Castlereagh, Viscount||Hunter, Capt. M. J. (Brigg)||Sandys, Duncan|
|Cazalet, Thelma (Islington, E.)||Hurst, Sir Gerald B.||Sassoon, Rt. Hon. Sir Philip A. G. D.|
|Chapman, Sir Samuel (Edinburgh, S.)||Jackson, Sir Henry (Wandsworth, C.)||Smiles, Lieut.-Col, Sir Walter D.|
|Chorlton, Alan Ernest Leofric||James, Wing-Com. A. W. H.||Smith, Sir J. Walker- (Barrow-in-F.)|
|Clarry, Reginald George||Kirkpatrick, William M.||Smithers, Sir Waldron|
|Clayton, Sir Christopher||Leckie, J. A.||Somervell, Sir Donald|
|Cobb, Sir Cyril||Leech, Dr. J. W.||Sotheron-Estcourt, Captain T. E.|
|Cochrane, Commander Hon. A. D.||Leighton, Major B. E. P.||Spens, William Patrick|
|Colman, N. C. D.||Lindsay, Kenneth (Kilmarnock)||Stanley, Rt. Hon. Lord (Fylde)|
|Cooke, Douglas||Lindsay, Noel Ker||Stanley, Rt. Hon. Oliver (W'morland)|
|Cooper, A. Duff||Llewellin, Major John J.||Strauss, Edward A.|
|Croft, Brigadier-General Sir H.||Lloyd, Geoffrey||Sueter, Rear-Admiral Sir Murray F.|
|Crookshank, Col. C. de Windt (Bootle)||Mabane, William||Thomas, Rt. Hon J. H. (Derby)|
|Crookshank, Capt. H. C. (Gainsb'ro)||McKie, John Hamilton||Thomas, James P. L. (Hereford)|
|Crossley, A. C.||McLean, Dr. W. H. (Tradeston)||Touche, Gordon Cosmo|
|Denman, Hon. R. D.||Macmillan, Maurice Harold||Ward, Lt.-Col. Sir A. L. (Hull)|
|Denville, Alfred||Margesson, Capt. Rt. Hon. H. D. R.||Wardlaw-Milne, Sir John S.|
|Doran, Edward||Mayhew, Lieut.-Colonel John||Warrender, Sir Victor A. G.|
|Drewe, Cedric||Mills, Sir Frederick (Leyton, E.)||Wayland, Sir William A.|
|Duggan, Hubert John||Mitchell, Sir W. Lane (Streatham)||Wells, Sydney Richard|
|Duncan, James A. L. (Kensington, N.)||Molson, A. Hugh Elsdale||Willoughby de Eresby, Lord|
|Elliot, Rt. Hon. Walter||Monsell, Rt. Hon. Sir B. Eyres||Wills, Wilfrid D.|
|Ellis, Sir R. Geoffrey||Moreing, Adrian C.||Windsor-Clive, Lieut.-Colonel George|
|Elmley, Viscount||Morris-Jones, Dr. J. H. (Denbigh)||Winterton, Rt. Hon. Earl|
|Erskine-Bolst, Capt. C. C. (Blk'pool)||Morrison, William Shephard||Wise, Alfred R.|
|Essenhigh, Reginald Clare||Moss, Captain H. J.||Worthington, Dr. John V.|
|Fremantle, Sir Francis||Muirhead, Lieut.-Colonel A. J.|
|Fuller, Captain A. G.||Munro, Patrick||TELLERS FOR THE AYES.—|
|Ganzoni, Sir John||Ormsby-Gore, Rt. Hon. William G. A.||Sir George Penny and Major George Davies.|
|Addison, Rt. Hon. Dr. Christopher||Evans, R. T. (Carmarthen)||Mainwaring, William Henry|
|Attlee, Clement Richard||Foot, Dingle (Dundee)||Mason, David M. (Edinburgh, E.)|
|Banfield, John William||Gardner, Benjamin Walter||Parkinson, John Allen|
|Batey, Joseph||Greenwood, Rt. Hon. Arthur||Rea, Walter Russell|
|Bernays, Robert||Grenfell, David Rees (Glamorgan)||Rothschild, James A. de|
|Brown, C. W. E. (Notts., Mansfield)||Grundy, Thomas W.||Samuel, Rt. Hon. Sir H. (Darwen)|
|Cocks, Frederick Seymour||Hall, George H. (Merthyr Tydvil)||Smith, Tom (Normanton)|
|Daggar, George||Hamilton, Sir R. W. (Orkney & Zetl'nd)||Thorne, William James|
|Davies, David L. (Pontypridd)||John, William||Tinker, John Joseph|
|Davies, Stephen Owen||Jones, Morgan (Caerphilly)||Williams, David (Swansea, East)|
|Dobble, William||Lansbury, Rt. Hon. George||Williams, Edward John (Ogmore)|
|Edwards, Charles||Macdonald, Gordon (Ince)|
|Evans, David Owen (Cardigan)||McEntee, Valentine L.||TELLERS FOR THE NOES.—|
|Mr. Paling and Mr. Groves.|
That the Additional Import Duties (No. 6) Order, 1935, dated the twentieth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twentieth day of March, nineteen hundred and thirty-five, be approved.
§ Dr. BURGIN
I beg to move,That the Additional Import Duties (No. 7) Order, 1935, dated the twenty-eighth day of March, nineteen hundred and thirty- 1566 five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-eighth day of March, nineteen hundred and thirty-five, be approved.It deals with elastic cords, braids, webs and other elastic fabrics containing rubber and textile material. The Order proposes a minimum specific duty of 8d. a pound on these elastic cords, webs and braids as an alternative to the ad valorem duty of 20 per cent. It will naturally 1567 result in a decrease of imports of dumped goods from the United States of America. While the volume of imports has fallen substantially in recent years, an appreciable quantity of the imports consists of scraps and seconds from the United States of America which come in at far below Continental and British prices. Those prices have a most disturbing effect on the market and it is very desirable that the duty shall be given a specific as well as an ad valorem basis. The Order covers narrow width and broad width elastics and will not raise the duty on imports at normal price levels. I would emphasise to the House the fact that this duty is intended to deal with imports at an abnormally low price level and will not affect ordinary trade but merely the undercutting of a specific trade.
§ 3.16 p.m.
§ Mr. CHARLES BROWN
The Order that we have been discussing until a short time ago was very much more important than the one which the hon. Member has just moved, but there are matters in connection with this particular Order on which I should like to make a few comments and also to ask some questions. More than once from this bench I have expressed not very favourable comments on the Import Duties Advisory Committee, and although more than once I have taken a very strong stand about the imports of sweated goods into this country there are some peculiar features about this particular Order of which the House ought to be made aware. The hon. Member has referred to these imports in a very scrappy sort of fashion, and I think a little amplification is necessary. In this country, as far as I have been able to gather, there are about 26 firms who are involved in the production of these elastic cords, webs, braids and fabrics, and this Order is directed entirely against one concern. I do not know that it is any part of the business of the Tariff Advisory Committee to put a particular company out of operation, but it would seem that the purpose of the Order is to destroy the activities of this particular company.
The hon. Member has indicated the nature of the business which that company carries on. It is true that it imports what he has called scraps and 1568 waste and it is equally true that the material which it imports comes from the United States of America, but it is very doubtful whether he was correct in describing those goods as dumped goods. It is also very doubtful whether he was correct in implying that the material that this firm uses can be obtained in this country from any of the 26 firms which brought the application before the advisory committee. What does this firm do with the scraps and waste which they import into this country? They turn the scraps and waste into finished goods and employ in the course of this process about 200 persons. They turn this into finished goods, suspenders, ladies' corsets, braces, and pay considerable sums of money in duty, about £12,000 a year, and also about £5,000 in freightage charges, because all this material is carried in British ships.
It seems preposterous that the advisory committee, on the representation from 26 firms, who cannot supply this particular firm with the raw material they require, should deliberately put on a duty of this kind and put a particular firm out of business. I never thought that this was to be the duty of the advisory committee. This case is a startling illustration of what can go on before the advisory committee. I do not know whether there are other similar cases, but this is of so startling a nature that I hope the Parliamentary Secretary will throw further light on the matter. We have no intention of objecting to the other Orders, but the general statement he has made is certainly not satisfactory, and there is no reason why this particular action should have been taken.
§ 3.22 p.m.
§ Mr. DINGLE FOOT
I only want to address one question to the Parliamentary Secretary. He has said that the imports of these articles consist of dumped goods from the United States. Will he be good enough to give us a definition of dumped goods? Does he mean that the goods are being imported at a lower price than the price charged by firms in this country? Does he mean that they are dumped at prices lower than they are sold in the country of origin, or that they are being sold below the cost of production? It would assist the House on this Order, and on the future Orders of this kind, if we could 1569 know exactly what he means by dumped goods.
§ 3.23 p.m.
§ Dr. BURGIN
In the particular matter to which I was referring I mean that they are sold at prices below continental or British prices. That is the sense in which I used the word "dumping". These are scraps and seconds, which are sometimes of poorish quality. One of the complaints made about them has been the difficulty for the customer to distinguish the difference between seconds and good quality, as the elastic is covered with other material. The wearing quality is very different, and it is only after a period of wearing that the purchaser realises that what he has bought is not fresh but out of date stock, something old, poor, shoddy, seconds and of bad quality, which has been imported from abroad. That is the nature of the reasons which have induced the advisory committee to consider this application. In reply to the hon. Member for Mansfield (Mr. C. Brown) the manufacture of this elastic cord is carried on in Leicester by a large number of factories. The number of workpeople in the elastic webbing trade is 5,000. The industry has been discharging its workpeople, and a fair amount of short time has been worked in recent months. I have figures here of the imports in recent years from each of the different exporting countries, and there is an increase in the totals for 1934 over 1933 and 1932, while the figures for 1934 analysed by months show also an increase. The first two months of this year show that the rate for 1934 is also on the up-grade.
§ Mr. C. BROWN
Why does not the hon. Gentleman tell us of the tremendous decrease between 1931 and 1932. The figure fell from £272,000 in value in 1931 to £79,000 in 1933.
§ Dr. BURGIN
Quite right. I do not want to hide anything at all. I have the figures for 1930 and 1931. The Act came into force in 1932, and I am beginning at what 1 think is the appropriate place to begin. I shall always answer questions, whether they are relevant or irrelevant. The hon. Member's speech would have led the House to believe that this was some new duty, that some particular product had been singled out to the disadvantage of one particular importing firm. That is not the case. These elastic 1570 cords were liable under the Act to a total duty of 20 per cent. ad valorem. It is determined now that besides the ad valorem duty there should be a specific duty—a very wise and sensible movement which is taking place over a field of industry. This specific duty is calculated at 8d. a lb. as an alternative to the 20 per cent. I think that that statement provides the House with all the information required.
§ 3.27 p.m.
§ Sir BASIL PETO
I wish to emphasise the fact that the manufacturers in this country and the people they employ have good reason to be very grateful to the Import Duties Committee for having come to the conclusion in many recent Orders, and particularly in this one, that this is the only way to deal with what the Parliamentary Secretary referred to as abnormal importations or importations at abnormal prices. The only effective way of dealing with them is by a specific duty. Whatever other reasons the House has for amending this particular duty, that is a very strong reason in itself. It is a duty put into a form which will render it effective. No mere ad valorem duty can ever touch the imports of goods, for whatever reason and from whatever country, at wholly abnormal prices that bear no relation to the cost of production at which our people could be employed. This is a very useful departure that we have noticed in a great many of these Orders in the last couple of years. We have now adopted the plan of having specific duties to deal with these specific cases which could never be dealt with in any other way.
§ Question put, and agreed to.
That the Additional Import Duties (No. 7) Order, 1935, dated the twenty-eighth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-eighth day of March, nineteen hundred and thirty-five, be approved.
The following Notices of Motion stood upon the Order Paper:
That the Additional Import Duties (No. 8) Order, 1935, dated the twenty-ninth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of March, nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 9) Order, 1935, dated the third day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said third day of April, nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 10) Order, 1935, dated the fourth day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said fourth day of April, nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 11) Order, 1935, dated the eighth day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said eighth day of April, nineteen hundred and thirty-five, be approved."—[The Chancellor of the Exchequer.]
§ 3.29 p.m.
§ Dr. BURGIN
I beg to move,That the Additional Import Duties (No. 8) Order, 1935, dated the twenty-ninth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of March, nineteen hundred and thirty-five, be approved.With your permission, Mr. Speaker, I will deal with Orders No. 8, 9, 10 and 11 together, and make a short statement on them, and if any hon. Member has any questions to ask I shall answer them. This Order No. 8 deals with illuminating glassware, and follows rather conveniently upon the discussion we have just had changing an ad valorem to a specific duty. In this case I want exactly to reverse the process. It is an amusing position. The duty was changed from ad valorem to specific. Everyone thought that we should be perfectly happy, but the effect, curiously enough, has been to increase the rate of duty on the cheaper form of the article, and to reduce the duty on the more expensive form of imported articles. We want to provide for the imposition of a minimum rate of 20 per cent. ad valorem if, by any calculation, it is found to be more than the specific duty with regard to any one particular form of the article. The truth of the matter is that when we speak of illuminating glassware we are not speaking of one article but of an immense variety of articles which vary as to quality, country of origin, use, description and price, to an almost infinite extent. I 1572 think the Import Duties Advisory Committee made a miscalculation and that owing to the nature of the importation the change to the specific duty actually meant a lessening of the rate of protection that was accorded to the home industry. Certainly the House when they altered the duty were not conscious that they were making a reduction and therefore I am sure they will not mind a few words being added to make it clear that, although we are dealing with a specific duty, if it should be found on calculation to be less than the 20 per cent. then the 20 per cent. should apply.
§ Sir P. PETO
Does not the hon. Gentleman agree that that brings the duty which we are discussing into line with the last duty which we considered? That was to be 8d. per lb. or 20 per cent. which ever was the greater. In this case the specific duty by itself will not work, neither will the ad valorem duty by itself, and we are here bringing this Order into line with most of the other recent recommendations.
§ Dr. BURGIN
I think that is so, and perhaps I was a little cryptic in saying that it was convenient that the two Orders should follow each other. The process is reversed in this case but the final result in both cases is identical. The importations of this article come from Germany and Czechoslovakia and the firm which make it in this country are in Scotland, Northern England, the Midlands and the London area.
Order No. 9 deals with certain kinds of tubes made of copper or copper alloys and the recommendation is of an additional percentage duty. The Committee report that the general ad valorem duty had the effect of reducing the volume of imports for a time but there has recently been a marked increase in the rate of importation and this is merely a raising of the height of the wall over which these imports have to pass. I have the particulars of the home production and of the healthy and substantial increase in it. The trade appears to have benefited from the measure of protection previously granted but to have suffered some setback through an unexpected increase of imports which it was hoped the previous duty would have been high enough to keep in check.
1573 Order No.10 is concerned with insulated iron or steel staples and recommends such a rate of duty as will amount to 1s. per 1,000 or 20 per cent. of the value whichever is the greater. These are staples fitted with insulating fibre largely used in the electricity and wireless trades. Some years ago, the home market was in the hands of foreign firms but British firms have brought their machinery and methods to a high pitch of efficiency and have captured practically the whole of the market. During last summer foreign competition distinguishable from the home produced staples. The market is a constantly expanding one as the use of electric machinery and wireless appliances tends to expand but the British manufacturers share of the trade is ceasing to expand. In fact, there is a decline which appears clearly to be attributable to these imports from Japan. There seems to be no reasonable objection, once we have captured the market, to our retaining it and doing so efficiently by offering this further obstacle against foreign importation.
Then Order No. 11 in regard to parts of photographic spools the only Amendment to the existing law, which already provides a duty of 25 per cent. on spools, is that we are adding parts of spools. The House has already decided that photographic spools imported from abroad should be subject to a duty, but it was found that in order to get over that duty, the foreign supplier sent the spools in parts and then had them assembled, and the object of the Order is merely to stop that little loophole by making parts of spools, which taken together make a whole spool, subject to the same duty as if they had come in as a whole spool originally. I do not imagine the House will need much commendation from me of an Order of that character.
§ 3.37 p.m.
§ Mr. ATTLEE
The hon Member arguments are very illuminating—almost as illuminating as his principles are elastic. 1574 He can produce, it would appear, a different reason for anything that is going to be done. First he puts on a duty, and then he takes a duty off. When we have things imported that are shoddy, they must not be introduced, but the next thing is that the foreigner produces them so well that they must not be introduced. I admire the elasticity of an ex-Liberal free trader having to deal with a large number of tariffs.
§ 3.38 p.m.
§ Mr. GROVES
I am interested in Order No. 8, because it says in paragraph (iii):Unworked pressed or moulded lenses and prisms, and pressed or moulded blanks of unworked or worked lenses and prisms.I think that these are illuminating signs used for signs on the roads, and I think the Minister will find that they are to be used in connection with radiating signs. If I am wrong, any further remarks from me will be inapplicable, but I think these little round prisms come within the category of these illuminated glasses.
§ Dr. BURGIN
I do not know that I am in a position at the moment to say whether these prisms are of the kind which the hon. Member has in mind, although I suspect that that may be the case, but I can tell him that the only reason for including that sub-paragraph (iii) is not the reason that he has advanced. The necessity for the amendment of that sub-paragraph merely out of a defect in the wording of the original sub-paragraph. It was doubtful whether pressed or moulded blanks of worked lenses and prisms were covered by the previous paragraph, and this Order is merely a change of wording to remove a doubt.
§ Mr. GROVES
What disturbs me on this issue is that I put a question to the Minister of Transport this week, but I did not press it, because I understood the difficulty. I was perplexed and disturbed that the illuminating reflector prisms connected with the new signs in regard to the 30-miles an hour speed limit were made abroad.
§ Mr. GROVES
All that were being used, and I was disturbed about that. Therefore, I did not press my question, but the reply that I received from the 1575 Minister of Transport was to the effect that the first issue of these signs from this country was not effective—not that they were too dear. The Minister stated that the whole matter through his Department, and of course, it would include the Board of Trade, had been referred to the Department of Scientific Research. That satisfied me completely, but if in the interim, instead of relying upon the genius and engineering capacity of this country, we are to be precluded from having the cheaper and better article which is made in Poland, it is a matter of distress to many of us. I was perfectly satisfied when I received from the Minister of Transport an assurance that it would be referred to the Department of Scientific Research in order that the manufacturers of Britain could supply us with an article equal to that which could be produced abroad. But if this Order does not indicate that the scientific side has failed to rise to the occasion, why is the Minister proposing in the interim that an additional duty should be placed upon the article? Why not wait until Britain has responded with its technique and efficiency, and proved to the world that our brains are greater than tariffs in getting over difficulties? I put that seriously, because I am very concerned that the British worker should prove to the world by his brain and hand what he can do.
§ 3.43 p.m.
§ Dr. BURGIN
I can only speak again by the leave of the House. I entirely appreciate the hon. Member's anxiety, and would share it, if I may respectfully say so. The object of my intervention just now was to point out to him that the sub-paragraph in question had nothing at all to do with the subject he raised. This lens has had this particular duty upon it for a length of time. All that the sub-paragraph does is to clear up an ambiguity as to whether pressed or moulded blanks of worked lenses came within the previous heading, and it is to make that point clear that this proposal is made. This is merely drafting to clear up an ambiguity.
§ Question put, and agreed to.
That the Additional Import Duties (No. 8) Order, 1935, dated the twenty-ninth day of March, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said twenty-ninth day of March, nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 9) Order, 1935, dated the third day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said third day of April, nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 10) Order, 1935, dated the fourth day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said fourth clay of nineteen hundred and thirty-five, be approved.
That the Additional Import Duties (No. 11) Order, 1935, dated the eighth day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said eighth day of April, nineteen hundred and thirty-five, be approved."—[ Dr. Burgin.]